[Congressional Record Volume 149, Number 58 (Thursday, April 10, 2003)]
[House]
[Pages H3078-H3230]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       ENERGY POLICY ACT OF 2003

  Mr. HASTINGS of Washington. Mr. Speaker, by direction of the 
Committee on Rules, I call up House Resolution 189 and ask for its 
immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 189

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 6) to enhance energy conservation and research 
     and development, to provide for security and diversity in the 
     energy supply for the American people, and for other 
     purposes. The first reading of the bill shall be dispensed 
     with. All points of order against consideration of the bill 
     are waived. General debate shall be confined to the bill and 
     shall not exceed one hour and 30 minutes, with 30 minutes 
     equally divided and controlled by the chairman and ranking 
     minority member of the Committee on Energy and Commerce, and 
     20 minutes equally divided and controlled by the chairman and 
     ranking minority member of each of the Committees on Science, 
     Resources, and Ways and Means. After general debate the bill 
     shall be considered for amendment under the five-minute rule. 
     The bill shall be considered as read. No amendment shall be 
     in order except those printed in the report of the Committee 
     on Rules accompanying this resolution. Each amendment may be 
     offered only in the order printed in the report, may be 
     offered only by a Member designated in the report, shall be 
     considered as read, shall be debatable for the time specified 
     in the report equally divided and controlled by the proponent 
     and an opponent, shall not be subject to amendment, and shall 
     not be subject to a demand for division of the question in 
     the House or in the Committee of the Whole. All points of 
     order against such amendments are waived. At the conclusion 
     of consideration of the bill for amendment the Committee 
     shall rise and report the bill to the House with such 
     amendments as may have been adopted. The previous question 
     shall be considered as ordered on the bill and amendments 
     thereto to final passage without intervening motion except 
     one motion to recommit with or without instructions.

  The SPEAKER pro tempore. The gentleman from Washington (Mr. Hastings) 
is recognized for 1 hour.
  Mr. HASTINGS of Washington. Mr. Speaker, for the purpose of debate 
only, I yield the customary 30 minutes to the gentlewoman from New York 
(Ms. Slaughter), pending which I yield myself such time as I may 
consume. During consideration of this resolution, all time yielded is 
for the purpose of debate only.
  (Mr. HASTINGS of Washington asked and was given permission to revise 
and extend his remarks.)
  Mr. HASTINGS of Washington. Mr. Speaker, House Resolution 189 is a 
structured rule providing for the consideration of H.R. 6, the Energy 
Policy Act of 2003. The rule provides 1 hour and 30 minutes of general 
debate, with 30 minutes equally divided and controlled by the chairman 
and ranking minority member of the Committee on Energy and Commerce, 
and three periods of 20 minutes each to be equally divided and 
controlled by the chairman and ranking minority members of the 
Committees on Science, Resources, and Ways and Means.
  The rule waives all points of order against consideration of the 
bill, and makes in order only those amendments printed in the Committee 
on Rules report accompanying the resolution.
  The rule further provides that the amendments made in order may be 
offered only in the order printed in the report, may be offered only by 
a Member designated in the report, shall be considered as read, shall 
be debatable for the time specified in the report, equally divided and 
controlled by a proponent and opponent, shall not be subject to 
amendment, and shall not be subject to a demand for a division in the 
House or in the Committee of the Whole.
  Finally, the rule waives all points of order against the amendments 
printed in the report and provides one motion to recommit, with or 
without instructions.
  Mr. Speaker, H.R. 6 is a critically important piece of legislation 
that will provide for security and diversity in America's energy supply 
while enhancing energy conservation and research and development. The 
bill we will consider shortly is a comprehensive measure combining key 
elements from four separate bills reported by the respective committees 
of jurisdiction.
  The first section of the bill passed by the Committee on Energy and 
Commerce seeks to expand domestic energy sources while striking a 
balance between State and Federal regulation of the Nation's electrical 
power grid. This section of the bill would also increase the strategic 
petroleum reserve to 1 billion barrels and contains provisions for a 
renewable fuel standard that requires increased production in the use 
of ethanol.
  The second section of the bill passed by the Committee on Science 
authorizes $31 billion for energy-related research and development 
programs, including funding for the President's hydrogen initiative and 
FreedomCar program, with the balance of the funding going to 
improvement of renewable energy, energy efficiency, clean coal 
technology, and nuclear programs.
  The third section of the bill passed by the Committee on Resources 
includes a provision that would open the Alaskan National Wildlife 
Refuge, or ANWR, to much-needed oil exploration in a way designed to 
ensure maximum environmental protection of that significant national 
resource.
  Finally, the section of H.R. 6 reported by the Committee on Ways and 
Means means energy tax provisions amounting to $18.7 billion that would 
incentivize access to inexpensive energy, bolster our national security 
by decreasing U.S. dependence on foreign oil, and promote conservation 
and the use of renewable sources of energy.

                              {time}  1300

  As a Member of Congress from the Pacific Northwest, I am particularly 
pleased, Mr. Speaker, that the authors of this legislation have 
concluded provisions I have long supported which would streamline the 
process of renewing permits for major hydroelectric facilities. Many of 
those projects are located in our part of the country and provide a 
sizeable share of our region's electrical power needs.
  In closing, Mr. Speaker, let me say that the war in Iraq has once 
again highlighted the importance of ensuring America's energy 
independence. This bill is designed to do that in an environmentally 
responsible way. Accordingly, I urge my colleagues to support both the 
rule and the underlying bill.
  Mr. Speaker, I reserve the balance of my time.
  Ms. SLAUGHTER. Mr. Speaker, I yield myself such time as I may 
consume.
  (Ms. SLAUGHTER asked and was given permission to revise and extend 
her remarks, and include extraneous material.)
  Ms. SLAUGHTER. Mr. Speaker, I rise today to agree that the United 
States does indeed need a coherent, comprehensive energy plan. The 
events of the summer of 2001 clearly illustrate this. The raging power 
prices and the rolling blackouts in California and the historic 
implosion of Enron vividly showed America that our energy policies are 
broken and need to be fixed.
  A few weeks ago, the Federal Energy Regulatory Commission ruled that 
widespread manipulation and misconduct by Enron and 30 other energy 
companies and the failures of deregulation of the energy industry 
caused the energy crisis that plagued California in 2000 and 2001. 
Unfortunately, Mr. Speaker, the bill does not fix what is broken. H.R. 
6 does not address any of the lessons learned from the California 
energy crisis.
  The legislation does not provide the Federal Energy Regulatory 
Commission with any antifraud authority. It does not criminalize the 
legal abuses by energy corporations that contributed to the California 
energy crisis.
  Instead of providing stronger protections for consumers, the bill 
would repeal the Public Utility Holding Company Act, which protects 
both consumers and investors. In fact, some have argued that proper 
enforcement of the Public Utility Holding Company Act could have 
prevented the Enron disaster.
  The bill fails consumers, but it benefits the giant energy 
corporations.

[[Page H3079]]

When we are facing record deficits and tax cuts upwards of $700 
billion, H.R. 6 gives the energy companies $18.7 billion in tax breaks 
and incentives without paying for them. It is something that we just 
simply do not do in Congress. Even the executive branch sought only $9 
billion in tax incentives.
  Examination of these tax breaks reveals that consumers lose again. 
The lion's share of this money goes to companies for energy production, 
and only one-third of the tax breaks are aimed at conservation and 
alternative fuels. Instead of putting so much money into pumping more 
oil, should not our goal be to reduce the country's dependence on oil?
  Another windfall for energy companies is a generous royalty holiday. 
This legislation would waive royalty collections on large amounts of 
publicly owned oil and gas in the Gulf of Mexico and off the coast of 
Alaska. This amounts to a significant taxpayer subsidy of the oil and 
gas industry when there is no evidence that major oil companies, 
without the taxpayers' help, will abandon exploration in promising 
areas in the Gulf of Mexico and Alaska.
  Additionally, this bill would allow companies to pay in-kind 
royalties to the Federal Government. According to the GAO findings, 
there is no evidence that in-kind royalties generate as much revenue as 
traditional cash payments. Again, the public loses, and the gentlewoman 
from New York (Mrs. Maloney) with her amendment to cure that was not 
allowed.
  The environment and conservationists were also losers. In 1960, the 
Eisenhower administration protected the Arctic National Wildlife 
Refuge, recognizing it as an internationally important wildlife 
conservation area. This underlying area would allow leasing, 
exploration, and development of 1.6 million acres of the Arctic 
National Wildlife Refuge. Fortunately, we will be allowed a vote on a 
bipartisan amendment to preserve the current ban on drilling in ANWR.
  Mr. Speaker, several important amendments to this bill were barred by 
the Committee on Rules. H.R. 6 abandons the bipartisan consensus 
reached in the previous Congress and adopts changes to the 
hydroelectric licensing process for the benefit of the hydropower 
industry at the expense of the environment and wildlife.
  Yesterday, in the Committee on Rules hearing, the gentleman from 
Michigan (Mr. Dingell), the ranking Democrat on the Committee on Energy 
and Commerce, and the gentleman from New York (Mr. Boehlert), chairman 
of the Committee on Science, offered this agreement as a substitute 
amendment. Every Democrat on the Committee on Energy and Commerce, save 
one, voted for this amendment. However, the rule bars us from even 
considering the amendment.
  It is also disappointing that an amendment in the nature of a 
substitute to the resources portion of H.R. 6 is not in order. The 
amendment offered by the gentleman from West Virginia (Mr. Rahall), the 
ranking member on the Committee on Resources, would, among other 
things, ensure that the American people receive just compensation from 
the development of oil and gas resources on Federal lands and waters.
  Early this morning, the Committee on Rules, along party lines, 
refused to make in order an amendment by my friend, the gentleman from 
Florida (Mr. Hastings). This amendment would have the Secretary of 
Energy mitigate adverse and disproportionate effects that 
implementation of the energy bill may have on minority, rural, Native 
American, and other underserved communities.
  This seems like common sense. I would hope that these factors would 
be taken into consideration anyway. It is disappointing that this body 
is denied the opportunity to discuss this most important issue.
  Mr. Speaker, the need for a new and improved energy policy is great 
and the policy's effects ubiquitous. This is a major policy initiative 
that demands and deserves thorough deliberation. This special rule 
provides several hours of debate. In contrast, the other body has set 
aside 2 weeks for the consideration of energy policies.
  Further, this rule only allows 29 percent of the amendments submitted 
to the Committee on Rules to be offered on the floor. This is not, 
above all, this is not thorough deliberation.
  For all of these reasons and more, I urge my colleagues to oppose the 
rule and to oppose the underlying legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Washington. Mr. Speaker, I am pleased to yield 5 
minutes to the gentleman from Texas (Mr. Barton), chairman of the 
subcommittee that was dealing with the legislation that passed out of 
the Committee on Energy and Commerce.
  Mr. BARTON of Texas. Mr. Speaker, I thank the gentleman from the 
Committee on Rules for yielding time to me.
  Mr. Speaker, I rise in the strongest possible support of the rule for 
H.R. 6. I would like to point out a few facts.
  There are 22 amendments made in order under this rule. Fifteen of 
these 22 are either minority-sponsored amendments or bipartisan 
amendments that are sponsored by a member of the minority party and the 
majority party, 15 out of 22. That is over two-thirds of all the 
amendments that are going to be debated on the House floor either have 
a minority sponsor or a minority and a majority sponsor. I think that 
is exemplary in terms of bipartisanship.
  I would also point out that we have made in order under this rule 
1\1/2\ hours of general debate and 6 hours of debates on the 
amendments. That is 7\1/2\ hours of debate on H.R. 6. That is 
approximately double the average amount of time that is made in order 
under the House rules for authorization bills of this type. So I think 
the Committee on Rules has acted in a very appropriate fashion to make 
in order a large number of amendments, 22 amendments, which I believe 
are more amendments than were made in order for the bill last year. 
Again, 15 of the 22 have a minority sponsor or a minority and a 
majority sponsor.
  Let me talk about the base bill. H.R. 6 is a combination of bills 
that have come out of the Committee on Ways and Means that deal with 
the tax issues for energy; the Committee on Energy and Commerce, where 
the bulk of the bill originates from, and deals with the basic energy 
policy of this country; the Committee on Resources, which deals with 
the issue of ANWR and our Federal lands use; and the Committee on 
Science, which deals with the R&D component of our energy policy.
  I know the Committee on Energy and Commerce passed its bill on a 
bipartisan basis 36 to 17, with all the Republicans voting for it and 6 
of the 23 Democrats that voted that night voted for it, and I believe 
the other bills also had bipartisan majorities as they came out.
  What the bill attempts to do is set a broad-based energy policy for 
this country for all of our conventional energy sources and our 
emerging new energy resources, and combine that with a very 
comprehensive set of conservation and renewable environmental 
protections, and then begin to invest in the future in terms of the 
emerging issues like the hydrogen fuel initiative.
  For the first time in the House, we have, I think, a very, very 
comprehensive title on electricity. Fifty percent of our energy is 
generated in the form of electricity, and in the bill that we reported 
out last year we did not have an electricity title. This year we not 
only have an electricity title, we have an electricity title that has 
been voted on on a bipartisan basis in subcommittee, and it has been 
voted on on a bipartisan basis in full committee.
  What this electricity title would do if it becomes law, it would 
create a national transmission system for the 21st century for the 
movement of electricity around the country. It does this without 
violating States' rights. There are no Federal mandates in the 
electricity title where a State has to do this, a State has to join a 
regional transmission organization, a State has to allow Federal siting 
decisions. In fact, there is specific protection on the native load of 
closed States and those States that do not wish to subject their native 
load to any kind of Federal Energy Regulatory Commission jurisdiction.
  So the electricity title which has been, at least in the bill from 
the Committee on Energy and Commerce, the most controversial part of 
the bill, I think has been well tested and modified and amended so it 
would address

[[Page H3080]]

many of the needs of Members on both sides of the aisle.
  On the hydroelectric reform title that came out of the Committee on 
Energy and Commerce, the distinguished ranking member, the gentleman 
from Michigan (Mr. Dingell), is absolutely correct in that the House 
adopted a provision on hydro reform in last year's bill that he was 
very supportive of and very active in helping to reach a compromise.
  We took what we did in last year's bill and built on it. The primary 
difference between last year's bill and this year's bill on 
hydroelectricity reform is that we took the situation where we have a 
mandatory condition, that a Federal agency can set a mandatory 
condition to renew a license of an existing hydro project. Under 
current law, that Federal agency, there is no appeal of it; there is 
really no alternative input to that setting of that mandatory 
condition. This year's bill says there has to be an alternative allowed 
if the applicant wishes to put forward an alternative, and I think that 
is an improvement.
  Mr. Speaker, I rise in the strongest possible support and hope that 
we would pass this bill in a bipartisan fashion.
  Ms. SLAUGHTER. Mr. Speaker, I am pleased to yield 3 minutes to the 
gentleman from Michigan (Mr. Dingell).
  (Mr. DINGELL asked and was given permission to revise and extend his 
remarks and include extraneous material.)
  Mr. DINGELL. Mr. Speaker, I rise in opposition to the bill, I rise in 
opposition to the rule, and I rise in opposition to the previous 
question. None of them are in the public interest and none of them 
should be voted for.
  The simple fact of the matter is that if this bill is as good as the 
chairman of the subcommittee has just indicated, then they ought to 
give us a fair and an open rule. That is not before us today at all. It 
is a rule which denies a number of Members the opportunity to offer 
amendments, one of the traditional classical rights of a Member of this 
elected body, and one of the distinguishing characteristics of this 
body versus many of the others. That right is denied.
  Very specifically, with regard to the question of the conservation in 
the hydro relicensing provisions, that provision is a bad provision. It 
is opposed by State conservation organizations, by State regulatory 
entities, and it is also opposed by every hunting, fishing, 
conservationist, and environmentalist group in the United States.
  It is a bad provision. It puts the thumb of the electrical utility on 
the licensing and relicensing process. It denies citizens and citizens' 
groups rights to be heard before the Federal Energy Regulatory 
Commission. It sees to it that we have a skewed result.
  It does not, for example, require that fishways be included in dams 
which are relicensed, so as to denigrate the opportunity of fish to 
migrate up and down the stream.
  It does deny citizens the right to be heard before regulatory 
agencies. The communities of interest in this country oppose it. 
Conservationists say it denies them the right to be heard.
  I had sought to have an opportunity to offer an amendment to this, 
one which would be the exact same language that was bipartisan last 
year and on which the chairman of the Committee, the gentleman from 
Louisiana (Mr. Tauzin), sent a Dear Colleague letter around describing 
the amendment that I would like to have offered today, saying, ``The 
hydroelectric licensing language contained in Division A of H.R. 4 is a 
bipartisan consensus provision that carefully balances energy and 
environmental priorities to achieve the significant breakthrough in 
licensing reform.''

                              {time}  1315

  They are afraid of that. They will not allow that amendment to come 
to the floor so they say, you cannot offer it. The reason is, it 
probably would have carried.
  So if you were to believe that this is a bipartisan package, then my 
suggestion to you is, take a look at the rule and ask the Members of 
the Republican side why it is they do not allow us to offer amendments 
to this bill. What are they afraid of? Why is it they refuse to allow 
us to protect fish and wildlife and conservation values which were 
negotiated over many years with the industry in question and which 
would permit the industry a fair opportunity to be heard, but also the 
ordinary citizen?
  Vote ``no'' on the bill. Vote ``no'' on the rule, and vote ``no'' on 
the previous question. All of the above are outrageous.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield 3 minutes to the 
gentleman from Illinois (Mr. Weller), a member of the Committee on Ways 
and Means.
  Mr. WELLER. Mr. Speaker, first let me applaud and cheer the gentleman 
from California (Mr. Thomas), the gentleman from Louisiana (Mr. 
Tauzin), the gentleman from California (Mr. Pombo), and the gentleman 
from New York (Mr. Boehlert) for their leadership in bringing this 
very, very important legislation to the floor.
  This is important legislation. We are all very concerned about the 
economy today. This is the first major jobs-related legislation that 
has come to the floor. This legislation will create jobs and it will 
also reduce our dependence on imported sources of energy.
  Today, I want to draw attention to a key conservation component that 
is included in this legislation before us. Conservation is a key 
component of this balanced legislation, and it is also a big win for 
consumers and for homeowners. This legislation includes the Save 
America's Valuable Resources Act; H.R. 1459 was included in the Energy 
Policy Act in 2003. This legislation is a big win for consumers and 
homeowners because it provides up to a $2,000 tax credit for homeowners 
to make their homes more energy efficient.
  Think about this: Under this legislation they will be able to obtain 
up to a $2,000 tax credit, 20 percent of the first $10,000 they spend 
in making their homes more energy efficient. To qualify for this tax 
credit, homes must be made 30 percent more energy efficient according 
to the 2000 International Energy Conservation Code, a private-sector 
energy code used here in the United States. Covered supplies include 
windows, insulation, calking and sealers, air conditioning and heating 
units.
  If you think about it, if you look at the statistics, residential use 
matters. It has a big impact on our consumption of energy in America. 
Recent figures show that homes account for almost one-fifth of all the 
energy that is consumed; twenty percent of the energy that is consumed 
in our country is used by residential consumers. Today, it costs the 
average American $1,500 to heat and cool their homes each year. That 
amounts to a cost of $150 billion annually that is spent by homeowners 
and consumers on heating and cooling and use of energy in their homes.
  By simply making changes in energy efficiency in one's home, 
consumers can save real money. Consumers can save 10 percent or more on 
energy bills by simply reducing the number of air leaks in their homes 
by doing better sealing and calking. Double-paned windows with low-
emissivity coating can reduce heating bills by almost a third in places 
like Chicago. And if all households upgraded their insulation to meet 
the International Energy Conservation Code level, the Nation would 
experience a permanent reduction of annual electric consumption 
totaling 7 percent of the total consumed.
  This legislation is balanced. This legislation is a big win for 
consumers. It is also a big win for homeowners. This legislation 
reduces our energy dependence on foreign sources and creates jobs, our 
number one priority today in the Republican House of Representatives. 
It deserves bipartisan support.
  Ms. SLAUGHTER. Mr. Speaker, I yield 2 minutes to the gentleman from 
West Virginia (Mr. Rahall).
  Mr. RAHALL. Mr. Speaker, I thank the gentlewoman for New York (Ms. 
Slaughter) for yielding me time.
  Mr. Speaker, on behalf of majority of the Democratic Caucus of the 
Committee on Resources, I had sought to have made in order an amendment 
which would have substituted the Committee on Resources' provisions of 
H.R. 6. Unfortunately, this amendment was not made in order, and it is 
worthwhile to note what we did proposed in that substitute alternative.
  Rather than exploiting environmentally sensitive areas, we proposed 
to facilitate the delivery of over 35 trillion cubic feet of gas from 
developed

[[Page H3081]]

fields in the North Slope to the lower 48 States, and do so with the 
benefit of Buy American and project labor agreement protections.
  Rather than grant a royalty holiday to oil and gas companies, we 
proposed to ensure that the American people receive a fair return for 
the disposition of their resources by cracking down on royalty 
underpayments. Rather than potentially disrupting the distribution of 
western water to farmers and cities by emphasizing hydropower over all 
other purposes, we proposed to relieve transmission constraints in the 
western power grid.
  And, as Democrats, we also proposed to redouble the commitment to the 
Land and Water Conservation Fund.
  The Democratic alternative to the Committee on Resources Republican 
energy provision was about energy development, empowerment and 
endowment; the development of renewable energy resources on our public 
lands in offshore areas and the development of a more efficient 
electricity transmission highway in the 15 States that lie within the 
Western Area Power Administration's territory; the empowerment of 
Indian country and the contribution they can make to our national 
energy mix; and the endowment to coastal communities of pristine 
beaches, environmental wildlife habit, and the economic prosperity 
these attributes make; the endowment to the coal-field communities of 
the necessary resources to combat the constant threat they face from 
abandoned coal mines.
  Unfortunately, Mr. Speaker, the debate will not take place today on 
these issues due to the restrictive nature of the rules.
  I would echo the words of the dean of the House, the ranking member 
on the Committee on Energy and Commerce, the gentleman from Michigan 
(Mr. Dingell), and say, let us defeat the bill, let us defeat the rule, 
and let us defeat the previous question.
  Mr. HASTINGS of Washington. Mr. Speaker, I reserve the balance of my 
time.
  Ms. SLAUGHTER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Massachusetts (Mr. Markey).
  Mr. MARKEY. Mr. Speaker, I thank the gentlewoman for yielding me 
time.
  This rule does not allow the Democrats to make the amendments which 
are appropriate on the environmental side. The gentleman from West 
Virginia (Mr. Rahall) is looking at an innovative, more balanced 
approach to Federal lands, and the gentleman from Michigan (Mr. 
Dingell), to ensure that our hydroelectric laws are protected so that 
conservation and fishing and other issues are given the same weight as 
the generation of electricity.
  The Waxman amendment would reduce imported oil by 600,000 barrels. 
The amount that we import from Iraq, that is not put in order.
  The Oberstar amendment, which would change the relationship between 
the Clean Water Act and oil and gas drilling in the United States, 
reducing the amount of protections that are given against the water of 
our country being polluted.
  And at a higher level, this bill, in general, is completely 
unbalanced.
  I think the American people, as they are watching this debate, 
probably assume that since we put 70 percent of all of the oil which we 
consume in this country into gasoline tanks, that we will probably be 
changing that so we can reduce the amount of oil that SUVs and light 
trucks and automobiles consume in our country, so that Iran and Saudi 
Arabia and other countries, we are not sucked even deeper into their 
internal affairs. But no, the majority bill, the Republican bill, does 
not do anything about our dependence on imported oil, due to our ever-
increasing dependence on imported oil because of the inefficiency of 
our vehicles.
  The Democrats want to make these vehicles more efficient, keep the 
same size weight and the same safety, but make sure that they consume 
less oil. We are at 65 percent dependence upon imported oil today. We 
will be at 75 and 80 percent by 2010 and 2015 on imported oil unless we 
do something about where we put that oil after we bring it into our 
country.
  This is not a fair rule. Other amendments should have been put in 
order. I urge a ``no.''
  Mr. HASTINGS of Washington. Mr. Speaker, I yield 1 minute to the 
gentleman from Texas (Mr. Barton).
  Mr. BARTON of Texas. Mr. Speaker, I would like my good friend from 
Massachusetts (Mr. Markey) to come back to the microphone, please. I 
just want to ask my good friend if he is going to support the Boehlert-
Markey amendment that was made in order under the rule on CAFE.
  Is that one of the amendments that he is glad the rule made in order?
  Mr. MARKEY. Mr. Speaker, will the gentleman yield?
  Mr. BARTON of Texas. I yield to the gentleman from Massachusetts.
  Mr. MARKEY. Mr. Speaker, that is an excellent amendment. I am looking 
forward to the gentleman's support on that when we debate it, yes.
  Mr. BARTON of Texas. Mr. Speaker, what about the Markey-Johnson 
amendment that would prohibit drilling in ANWR? Is that an amendment 
that the gentleman is pleased that the rule made in order?
  Mr. MARKEY. Mr. Speaker, that, as well, is an amendment which we are 
hoping for support.
  Mr. BARTON of Texas. So it is not a totally bad rule. There are some 
amendments made in order under the rule that the gentleman thinks are 
appropriate?
  Mr. MARKEY. Mr. Speaker, I am not saying it is a totally bad rule. 
Obviously, there are some amendments which have been put in order that 
are appropriate.
  What we are saying is that the American people have an expectation 
that the Congress of our country, at a minimum, would look at all of 
the rest of the issues, as well, and not exclude them from debate here 
on the House floor.
  Ms. SLAUGHTER. Mr. Speaker, I yield 1 minute to the gentleman from 
New York (Mr. Engel).
  (Mr. ENGEL asked and was given permission to revise and extend his 
remarks.)
  Mr. ENGEL. Mr. Speaker, I thank the gentlewoman for yielding me time.
  I rise in opposition to this rule. Those of us who are on the 
committee wanted the opportunity, as we had in committee, to put 
forward some very, very important rules. We were denied that 
opportunity.
  We discussed the renewable fuel standards, for instance, last week in 
the markup in the committee, in the dark of night. Now the Committee on 
Rules is refusing to allow us to debate the ethanol mandate in the 
light of day. The ethanol mandate will increase gasoline prices in New 
York and wherever else it is not readily available.
  The Committee on Rules also refused to allow two amendments that I 
cosponsored to help reduce the impact that the ethanol mandate will 
have, particularly on New York. The first amendment was offered by the 
gentleman from California (Mr. Ose) and it would have allowed refiners 
to produce gas that is clean, if not cleaner than gas blended with 
ethanol, to receive a credit for ethanol.
  The second was offered by the gentlewoman from California (Mrs. 
Capps) that would have authorized a national phase-out of MTBE.
  I am deeply disappointed in this rule. We could have allowed one 
amendment, which really would have discussed the ethanol mandate, and 
it was rejected. It is really an unfair rule and I urge my colleagues 
to vote ``no.''
  Mr. HASTINGS of Washington. Mr. Speaker, I reserve the balance of my 
time.
  Mr. Speaker, may I inquire how much time is left?
  The SPEAKER pro tempore (Mr. LaHood). The gentleman from Washington 
(Mr. Hastings) has 17 minutes remaining. The gentlewoman from New York 
(Ms. Slaughter) has 16 minutes remaining.
  Ms. SLAUGHTER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Washington (Mr. Inslee).
  (Mr. Inslee asked and was given permission to revise and extend his 
remarks.)
  Mr. INSLEE. Mr. Speaker, there is nothing wrong with this rule except 
the fact that it will doom America to a failed energy policy that will 
not get us out of the problems we are now in.
  Everyone in this country knows that our addiction to Mideast oil is a 
chronic security threat in this Nation. But even the authors of this 
underlying bill will tell you it will not solve that addiction. It is 
an abject failure. Almost everyone in this country knows that

[[Page H3082]]

we have a problem with global warming that America needs to address, 
and even the authors of this bill will tell you this bill will be an 
abject failure in dealing with global warming and will do nothing about 
it.
  Almost everybody in this country knows that we want to stop 
hemorrhaging jobs to the Germans in solar energy and the Japanese in 
hybrid cars and the Danish in wind turbine technology, and even the 
authors of this bill will tell you this will be an abject failure in 
solving that challenge.
  This bill is weak tea, and this rule will deny a bold American plan 
to deal with it. We and a group of other Democrats offered a 
comprehensive package, a new Apollo Energy Project, an energy project 
which is akin to what John F. Kennedy suggested in 1961 when he said we 
should go to the moon in 10 years. We say we should be breaking 
addiction to Mideast oil and dealing with global climate change gasses 
in this decade. And you would not even allow a rule to allow a vote on 
that project.
  You yielded a lot of little dibs and dabs. You allowed hors 
d'oeuvres, but you did not allow the full meal deal for this Congress 
to work its will.
  If you are going to try and sell an Edsel policy to the U.S. 
Congress, you ought to at least allow a vote for a nice car, a nice, 
fuel-efficient car; and you did not do that.
  It seems to me that you ought to allow the U.S. Congress to have one 
small step for Congress and one giant leap for American energy policy. 
And you failed to allow us to work Democratic will.
  It is an irony to allow democracy in Iraq, but not on the floor of 
the House of Representatives. Defeat this rule.
  Mr. HASTINGS of Washington. Mr. Speaker, I reserve the balance of my 
time.
  Ms. SLAUGHTER. Mr. Speaker, I yield 3 minutes to the gentleman from 
Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. Mr. Speaker, I appreciate the gentlewoman yielding me 
time.

                              {time}  1330

  I enjoyed the exchange between the gentleman from Massachusetts and 
the gentleman from Texas about the elements that are in this rule, and 
I am here to express appreciation for at least being able to debate the 
big three, the big three being CAFE standards, Arctic and, of course, 
bicycles.
  Mr. BARTON of Texas. Mr. Speaker, will the gentleman yield?
  Mr. BLUMENAUER. I yield to the gentleman from Texas.
  Mr. BARTON of Texas. Mr. Speaker, who is the bicycle amendment from?
  Mr. BLUMENAUER. I think I was involved with that.
  However, the rule is a missed opportunity for taxpayers, the 
environment, and energy. It has some serious assaults on the 
environment that will mortgage the next 50 years of our environmental 
future because of a few short-term energy challenges. I am disappointed 
that the rule would not allow us to make it better.
  I did reference the bicycle pilot project. That is something that 
will enable the Federal Government to educate commuters and provide 
funds to zero in on exactly what benefits will accrue in terms of 
energy as a result of cycling, and I think that is important. It is a 
net benefit for the environment. Every mile that is spent cycling to 
work or shopping is a mile not traveled by a car. It reduces 
congestion, protects the environment, and reduces our dependence on 
foreign oil.
  I am sad that we were not able to correct the inequity in the current 
tax structure that subsidizes people to drive as opposed to using other 
alternatives. We should have the commuter choice alternative that would 
have provided balance so taxpayers can make the decision based on what 
is the best transportation and energy choice for them, not skewed by 
the Tax Code.
  It is a missed opportunity to debate amendments to reduce taxpayer 
subsidies for fossil fuels, reduce the negative impacts on the 
environment and oil consumption and shift to alternatives. I am sorry 
that we were not able to even debate the sense of Congress resolution 
that passed the other body unanimously that puts us on record to 
demonstrate leadership and responsibility to deal with global warming. 
This is a matter of life and death for the planet; and to me, it is 
inconceivable that we are not able to have it on the floor to debate 
it.
  Mr. Speaker, it seems to me instead of taking an opportunity to have 
conservation and clean sources of energy to address the concepts of 
global climate change, we are nibbling around the edges. This bill, 
even if we are able to get the amendments that are important, that are 
in order, if they were approved, it is still going to leave us with a 
flawed bill that is expensive, backward-looking, and too small.
  I appreciate the courtesy of the Committee on Rules as far as they 
went. I am looking forward to the debate, but I hope that we will be 
able to defeat the rule, defeat the bill. We can do better.
  Ms. SLAUGHTER. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
New York (Mrs. Maloney).
  Mrs. MALONEY. Mr. Speaker, I thank the gentlewoman for yielding time 
to me, and I rise in strong opposition to this rule for many reasons, 
but also because one of my amendments, an amendment that would have 
struck an anti-taxpayer, pro-industry provision that is a terrible 
idea, will cost more money and is a generous gift to the oil and gas 
industry, striking this provision was not permitted with my amendment. 
We should not be giving the Interior Secretary permanent ability to use 
a barter system to collect payment for oil and gas removed from public 
land instead of just collecting cash based on fair market value.
  The royalty-in-kind program, or this barter system, is a terrible 
idea, returning us to the murky days of industry dictating energy 
policy. The oil and gas industry has a long history of underpaying 
government and shortchanging the taxpayers; and in a bipartisan way, 
with former Member Steve Horn, we did a series of studies and reports 
that showed the industry was underpaying government. The Justice 
Department got in there and forced them to pay $425 million because 
they were underpaying the government.
  When we finally moved them to a rule that was fair-market value, the 
industry pushed for the barter idea, the royalty-in-kind program. We 
had a pilot program that the General Accounting Office says they cannot 
even figure out how it works. They say they cannot even figure out how 
the royalty-in-kind program works, and the CBO says that it costs more 
money.
  While the rest of the world is moving to the private sector managing 
resources under the direction of the oil and gas industry, the Federal 
Government, instead of taking cash or fair market dollars to the tune 
of $7 billion, now wants to manage these resources and resell them. It 
is a terrible idea. It costs money. It costs more money. It is a give-
back to the oil and gas industry. It is outrageous. It should be struck 
from this bill.
  Vote ``no'' on the rule.
  Ms. SLAUGHTER. Mr. Speaker, I yield 2 minutes to the gentleman from 
California (Mr. Schiff).
  Mr. SCHIFF. Mr. Speaker, I thank the gentlewoman for yielding the 
time to me.
  Mr. Speaker, I rise today to speak on the rule for H.R. 6 and, in 
particular, an amendment made in order by that rule, and that is the 
Markey-Johnson amendment to prohibit drilling in the Arctic National 
Wildlife Refuge.
  I strongly oppose drilling in the refuge, one of our Nation's most 
treasured places. The coastal plain is a priceless piece of American 
wilderness that has been set aside for future generations in 
recognition of its unique wildlife values. We should not steer our 
energy policy to drilling in this remote wilderness area, the 
biological heart of the refuge, home to caribou, polar bears, 
grizzlies, musk oxen, and migratory birds.
  Drilling in ANWR would be extremely shortsighted. The scant amount of 
oil we would wring from this pristine area, estimated by the U.S. 
Geological Survey to be the amount the U.S. consumes in just 6 months, 
would cause irreparable damage to the area. By drilling there, we would 
set a dangerous precedent that no wilderness is sacred.
  There is an even more important reason to oppose drilling in ANWR, 
and that is because ANWR is merely the most graphic example of the 
wrong-headed nature of our energy policy. We cannot drill our way out 
of our energy dependence. We cannot drill our way

[[Page H3083]]

out of our dependence on foreign sources of oil.
  I believe in the American entrepreneur. I believe in that spirit. I 
believe in our ability to develop technologies that will dramatically 
reduce our dependence on fossil fuels. Many of those technologies 
already exist. Many of them are on our roads. They have just to be 
incentivized, to be cultivated and developed further.
  The biggest lost opportunity of this administration has been the 
failure to set a goal for this country of cutting our dependence on 
fossil fuels in half in the next decade. This would wean us from 
foreign oil. This would clear our air, and this would preserve once and 
for all the sacred places like ANWR.
  Ms. SLAUGHTER. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Nevada (Ms. Berkley).
  Ms. BERKLEY. Mr. Speaker, I thank the gentlewoman for yielding time 
to me.
  Mr. Speaker, I rise in opposition to this rule and this bill. It is 
beyond comprehension that this Chamber is considering an energy policy 
that would increase our dependence on oil and nuclear power. This is 
20th century thinking, totally out of sync with 21st century realities.
  Let me remind my colleagues, there is no safe method to get rid of 
deadly nuclear waste. Yet the administration is pushing a massive and 
costly expansion of nuclear reactors, 50 more of them scattered 
throughout cities across this country. They will generate tens of 
thousands of tons of additional deadly nuclear waste.
  The shame of this policy, the shame of it is that there are 
responsible and clean alternatives to nuclear power. We should be 
investing in these clean, renewable energy alternatives, wind, solar, 
geothermal, not in nuclear energy. For the safety and security of our 
kids and future generations, I urge us not to pass this very foolish 
piece of legislation.
  My State of Nevada has made a wise decision to require that 
alternative energy sources provide a substantial amount of the power 
that Nevadans use. This is a forward-thinking policy that should be the 
model for the Nation so we can reduce our need for fossil fuels and 
nuclear power.
  The bill we are considering today is not balanced, and it clearly 
does not create a plan for America's energy viability or our future 
energy independence. I urge my colleagues to vote against this 
legislation.
  Mr. HASTINGS of Washington. Mr. Speaker, I am pleased to yield as 
much time as he may consume to the gentleman from California (Mr. 
Dreier), the distinguished chairman of the Committee on Rules.
  (Mr. DREIER asked and was given permission to revise and extend his 
remarks.)
  Mr. DREIER. Mr. Speaker, I rise in strong support of this rule. 
Contrary to many of the things that have been said by my colleagues on 
the other side of the aisle, we have literally turned ourselves inside 
out to try and accommodate the concern of the minority. Members of the 
Committee on Rules and staff stayed until two o'clock this morning, and 
the Committee on Rules convened at seven o'clock this morning, working 
very hard to go through the 77 amendments that had been filed for 
consideration.
  As we look at the committee process, my friend, the gentleman from 
Louisiana (Mr. Tauzin), is here, the gentleman from California (Mr. 
Pombo) is in the back of the Chamber, two very important authorization 
chairmen of the committees that considered this effort. We also had the 
gentleman from New York (Mr. Boehlert) and the gentleman from 
California (Mr. Thomas), the other two committees that considered this. 
In their work they went through 88 amendments through this process.
  I remember the gentleman from Louisiana (Mr. Tauzin) said in his 
testimony there were 32 votes that took place in his committee. Of the 
88 amendments that were considered through this whole process, 74 of 
them were offered by minority Members, and 14 were offered in either a 
bipartisan way or by majority Members.
  So we have obviously, through this process, with four very large 
committees involved, provided Members with an opportunity to consider a 
wide range of issues.
  I heard my dear friend and fellow Californian (Mr. Schiff), I am 
honored to represent the district that adjoins him, stand up and talk 
about the debate on the Arctic National Wildlife Refuge. We are going 
to have a very full and vigorous debate on that issue. This rule allows 
for consideration of that measure.
  We are going to have an opportunity to consider a wide range of other 
concerns that have come forward.
  Mr. Speaker, back in 1992, energy legislation was considered in this 
House; and quite frankly, the percentage of minority Members' 
amendments that were offered were 27 percent. Twenty-seven percent of 
the Members that were Republicans at that point in 1992 that offered 
amendments, 27 percent of the amendments that were made in order at 
that time were offered by Members of the minority.
  In this bill that we are going to be considering today, over 54 
percent of the total amendments are offered by minority Members. That 
is a 38.3 percent increase in the number of minority amendments allowed 
from the 1992 bill.
  We also have to realize that we have got four bipartisan amendments 
that are being offered of the total that we have made in order.
  Mr. Speaker, this is a very fair rule. We are going to have a debate 
on a wide range of very important issues. It has been 11 years since 
this place has really moved ahead with a full debate on energy 
legislation. We all know how important this is.
  Just down in Statuary Hall, Mr. Speaker, I was participating in a 
ceremony in which we are honoring our courageous men and women in 
uniform who have fought so vigorously over the past 21 days in Iraq, 
liberating the people of Iraq; and some have talked about the issue of 
that versus debate here. This is a very fair and balanced opportunity 
for us to consider a question that is going to be critical to our 
Nation's national security future and to our Nation's economic future, 
and so I hope very much that we can pass this rule in a bipartisan way.
  Let me say again, I hope that we will have a bipartisan vote in 
support of this rule because we have worked very hard to try and make 
as many minority amendments in order as possible so that we can have 
that free-flowing debate.
  Ms. SLAUGHTER. Mr. Speaker, I yield myself such time as I may 
consume.
  If I can take a moment first just to say to my good friend from 
California, and he is my good friend, that we are not sure that 10 
minutes is sufficient for a full debate on ANWR; but, nonetheless, that 
was my only remark.
  Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from New Jersey 
(Mr. Pallone).
  Mr. PALLONE. Mr. Speaker, I rise today to oppose the rule on H.R. 6. 
This rule does not allow for consideration of critically important 
amendments, including an amendment submitted by the gentleman from 
Michigan (Mr. Dingell) on hydropower relicensing reform.
  I oppose title 3 of this bill because it creates a superstatus for 
hydropower license applicants by creating new procedural rights that 
are not made available to other interested groups. It also reduces 
environmental protections by allowing Federal resources agencies to set 
new minimum standards for environmental performance, including land 
protections and fish passages requiring agencies to consider the 
private economic interests of applicants on an equal footing with 
public resources.
  I also strongly oppose this legislation because it places the 
interest of the applicant far above the interest of States 
conservationists, Indian tribes, sports fishermen and the general 
public.

                              {time}  1345

  This title prevents Indian tribes from participating in the 
relicensing process, even though more than 70 non-Federal hydropower 
projects today exist on tribal lands. It is unacceptable the tribes 
would not have an equal say in the impact on their resources and must 
be, they should be included in the process.
  This rule should have allowed the amendment of my colleague, the 
gentleman from Michigan (Mr. Dingell), as it provides for fair 
consideration of the interests of thousands of Americans and American 
Indians impacted

[[Page H3084]]

by hydropower projects as well as the licensed applicant.
  Mr. Speaker, I oppose the rule. I know the previous speaker said it 
is fair, but I do not think it is fair because it did not allow the 
Dingell amendment and other critically important amendments.
  Ms. SLAUGHTER. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman 
from Maryland (Mr. Wynn).
  Mr. WYNN. Mr. Speaker, I thank the gentlewoman for yielding me this 
time, and I rise to oppose the rule and oppose the underlying bill.
  We need to take our heads out of the sand. Energy independence is the 
most important issue facing America today. Fifty-eight percent of our 
oil needs come from foreign sources. Twenty percent of our imports come 
from the Persian Gulf, 40 percent from OPEC countries.
  What else do we know about this problem? We know that 45 percent of 
our oil consumption goes into cars, yet this bill fails to adequately 
address the problem of fuel efficiency standards. That is unfortunate. 
We need a strong regime of fuel efficiency standards.
  Their answer, on the other hand, is ANWR, let us drill in the Arctic 
Refuge. Unfortunately, according to the U.S. Geological Survey, this is 
inadequate. At best, it will yield 300,000 barrels a day. By the year 
2015, the United States will be consuming 24 million barrels a day. 
ANWR is not the solution.
  They will say, well, this will give us a little more oil. Yes, but 
they do not tell us that there is no prohibition against exporting that 
oil; that is to say, the people bringing it out of the ground could 
easily export it to France for more money and we would not get the 
benefit.
  What do we need to do? We need to talk about fuel efficiency and 
hydrogen cars. This bill woefully underfunds hydrogen fuel cell 
technology. It proposes $1.79 billion, and that would give us hydrogen 
cars by 2020. That is not good enough. I suggest we spend about $5.3 
billion, take on the task as Kennedy took on the task of putting a man 
on the moon, and say, we are going to do this quicker. We are going to 
do this in 10 years, and we are going to fund the technology necessary 
to give us energy independence through hydrogen fuel cell cars.
  I think we can do it, Mr. Speaker. I urge us to reject the bill and 
the rule.
  Ms. SLAUGHTER. Mr. Speaker, I yield myself the balance of my time.
  First, Mr. Speaker, I am going to ask for a ``no'' vote on the 
previous question. If the previous question is defeated, I will offer 
an amendment to the rule that will make in order all the Democratic 
amendments that were offered in the Committee on Rules yesterday. 
Fifty-five very responsible and thoughtful amendments were submitted by 
Democrats, but only 15 were made in order.
  Please vote ``no'' on the previous question so we can add those 
amendments rejected by the Committee on Rules.
  Mr. Speaker, I ask unanimous consent that a description of the 
amendments be printed in the Record immediately prior to the vote.
  The SPEAKER pro tempore (Mr. LaHood). Is there objection to the 
request of the gentlewoman from New York?
  There was no objection.
  Ms. SLAUGHTER. Mr. Speaker, I yield back the balance of my time.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield myself such time as 
I may consume to reiterate that this is a very fair rule. Over two-
thirds of the amendments made in order are either bipartisan or 
amendments from the Democrat side of the aisle.
  I also would like to say, Mr. Speaker, that the war in Iraq, I think, 
has awakened America to a need that we have to be more energy 
independent. This bill, this comprehensive bill, I think, allows for 
that in a long-term planning way, and I think it does it in a very 
environmentally friendly way.
  Ms. JACKSON-LEE of Texas. I represent Houston, TX, arguably the 
Energy Capital of the World. The American economy and the American way 
of life are critically dependent on access to stable sources of 
affordable energy. As our economy grows and develops, we must balance 
our energy needs with the needs of our environment, the needs of our 
children to have clean air to breathe, and the needs of future 
generations of Americans to be free from dependency on foreign nations. 
It is essential that we craft an excellent strategy for striking that 
balance, and providing for the energy needs of the 21st century. It is 
essential that the strategy be fair to all stakeholders, and be 
cognizant of evolving needs.
  A challenge so great deserves great attention to detail, a full 
exploration of varying ideas and opinions, and careful deliberation, 
and votes. This rule does not provide for such deliberation. When 
excellent amendments from my colleague from Michigan, Mr. Dingell, the 
Dean of the House and the Ranking Member on the Energy and Commerce 
Committee--and from my colleague from West Virginia, Mr. Rahall, the 
Ranking Member on the Resources Committee--are ruled out of order, 
something is wrong with this rule.
  There are many other amendments that should have also been made in 
order, such as an amendment that would have increased nuclear safety 
and saved money by requiring external regulation and monitoring of the 
Department of Energy. The amendment received bipartisan support in the 
Science Committee, because everyone knows that self-regulation is 
rarely effective. It passed in the Science Committee markup of H.R. 6, 
but mysteriously was cut out on the way to the floor of the House. That 
amendment, which followed recommendations from the National Academy of 
Sciences, and was accepted by the Science Committee, cannot even be 
debated on the floor of the House today--something is wrong with this 
rule.
  The list goes on and on. Again I state, energy is too important to 
the American lifestyle, and to the American economy. It deserves 
thoughtful debate. If we do not get this right, we could doom ourselves 
to another decade of California energy crises, Valdez oil spills, Enron 
disasters, global warming, and environmental non-compliance.
  I vote ``no'' on this rule. We must do better.
  Mr. TAUZIN. Mr. Speaker, I rise in strong support of this rule. Let 
me commend Chairman Dreier and the Members of his Committee for 
crafting a rule that will allow the House to work its will on the full 
range of energy policies that are contained in H.R. 6.
  This bill represents the very hard work of several committees of the 
House, including Energy and Commerce, Ways and Means, Resources, 
Financial Services, and Science. It also includes provisions in the 
jurisdiction of a number of other committees, including Transportation, 
Armed Services, and Judiciary, with whom we have been working very 
closely. We have not enacted a comprehensive energy bill in eleven 
years. Much has changed in the world since then, and it's time that we 
reconfigure our energy policy to fit the 21st Century.
  Division A of the bill before you--the bulk of my committee's work 
product--does just that. We dramatically increase energy efficiency and 
conservation measures. The bill provides for increased oil, gas, and 
hydropower production, and a safer nuclear future. We also modernize 
the Federal role in electricity regulation. And we have crafted a 
delicate compromise on reformulated gasoline that will provide 
environmental and energy-savings benefits.
  Let me note for the Record that, if anything, this rule is even more 
fair than the one we employed two years ago during the comprehensive 
energy debate. That rule allowed just sixteen amendments, while the one 
before us allows over 20. All Members will have a full and fair 
opportunity to debate the energy policy of this nation.
  Mr. HASTINGS of Washington. The material previously referred to by 
the gentlewoman from New York (Ms. Slaughter) is as follows:

  Previous Question for H. Res. 189--H.R. 6, the Energy Policy Act of 
                                  2003

       The following are the amendments made in order under the 
     rule:
       Berkely #67 Division A. Requires the General Accounting 
     Office to conduct a study to provide accurate and real costs 
     of indemnifying those who would be harmed by a potential 
     nuclear plant accident or attack.
       Berkley #71 Division A. Establishes a program to make loan 
     guarantees for qualifying businesses investing in renewable 
     energy solutions.
       Blumenauer #53 Division D. Extends the Transportation 
     Fringe Benefit to commuters who carpool, bicycle, or used 
     car-sharing and equalize the transit benefit with the current 
     level offered to qualified parking plans. Allows up to $50 
     per month for carpoolers, bicyclists, or those using car-
     sharing to commute to work. Increases the benefit available 
     to transit commuters to $190 per month, the same amount as 
     qualified parking plans.
       Boucher #6 Division A. Strikes the provision of the bill 
     related to the Federal Energy Regulatory Commission (FERC) 
     transmission siting authority on private lands and would 
     thereby leave decisions regarding the location of new 
     transmission facilities with individual states.
       Boucher #7 Division A. Strikes the provision of the bill 
     related to the Department of Energy (DOE) transmission siting 
     authority on federal lands and would thereby leave the 
     decisions regarding the location of new transmission 
     facilities with the federal entities responsible for managing 
     such lands (e.g. the Department of Interior, the Bureau of

[[Page H3085]]

     Land Management, the U.S. Forest Service, etc.).
       Capps #23 Division A. Adds four-year national phase-out 
     gasoline MTBE.
       Capps #25 Division A. Strikes section 12401 relating to 
     appeals for LNG siting decisions, the Coastal Zone Management 
     Act, and the National Environmental Protection Act.
       Carson #76 Division A. Strikes the ``Indiana Amendment'' 
     from the Uniform Tie Act of 1966.
       Costello/Calvert #8 Division B. Terminates the DOE's 
     authority to regulate itself with regard to nuclear and 
     worker safety at the Department's non-military energy 
     laboratories within two years of enactment. Transfers 
     regulatory authority to the Nuclear Regulatory Commission and 
     to the Occupational Safety and Health Administration (OSHA). 
     It is estimated that enacting the external regulation at the 
     labs would save DOE up to $41 million annually.
       Davis (VA)/Waxman #60 Division A. Requires that a small 
     percentage of the energy used to power federal facilities 
     come from renewable energy and fuel cells. Beginning in 2005, 
     federal agencies would be required to obtain from these 
     sources 1.5% of the energy used across their facilities, 
     gradually rising to 7% in 2012 and beyond. Agencies could 
     meet these requirements either by generating energy on-site 
     or by purchasing renewable electricity generated off-site. 
     Agencies would receive extra credit for on-site renewable 
     energy generation that also contributes to national security. 
     Allows the Secretary of Energy to waive the requirements if 
     the agency is taking all practicable steps and the 
     requirements would pose an unacceptable burden. Permits 
     federal agencies to count acquisitions of future technology 
     vehicles, such as fuel efficient hybrid-electric or fuel cell 
     vehicles, against alternative fuel vehicle acquisition 
     targets.
       DeFazio #11 Division A. Current law provides that the 
     Strategic Petroleum Reserve may be drawn down in the event of 
     a ``severe energy supply disruption,'' which results in ``a 
     major adverse impact on the national economy.'' The DeFazio 
     amendment would add ``or on a State or regional economy,'' 
     after ``national economy.''
       DeFazio #12 Division A. Adds ``anticompetitive conduct'' by 
     foreign countries, or producers, refiners, or marketers of 
     petroleum products, to the list of circumstances under which 
     the Strategic Petroleum Reserve may be drawn down.
       DeFazio #13 Division A. Strikes the section of H.R. 6 that 
     repeals Public Utility Holding Company Act (PUHCA). PUHCA's 
     restrictions on ownership of utilities, the diversification 
     of business operations, accounting, and mergers, among other 
     provisions, are critical to protecting consumers from the 
     business decisions of energy conglomerates.
       DeFazio #14 Division A. Strikes the section of H.R. 6 
     directing FERC to establish so-called ``incentive-based'' 
     rates for building transmission.
       DeFazio #15 Division A. Establishes an Office of Consumer 
     Advocacy at the Department of Justice to protect the 
     interests of residential and small business users of 
     electricity and natural gas in proceedings before FERC and 
     other federal entities.
       DeFazio #16 Division A. Sets benchmarks for the 
     commencement of regional transmission organizations (RTOs) on 
     FERC findings that such RTOs would result in net benefits to 
     consumers in each affected state and minimize cost shifts 
     among consumers. Also requires that RTOs have adequate 
     transmission capacity and no chronic congestion prior to 
     start-up, effective market monitoring, and that existing load 
     service obligations are protected, among other criteria.
       DeFazio #17 Division A. Prohibits market-based rates from 
     being considered ``just and reasonable'' under the Federal 
     Power Act if the rate raises above the cost-based rate that 
     would otherwise apply.
       DeGette #22 Division A. Holds the legislative branch to the 
     same acquisition requirements as all other federal agencies 
     regarding energy-using products, systems, or designs that 
     meet or exceed the energy efficiency standards established by 
     the Energy Star program of the Environmental Protection 
     Agency and the Department of Energy.
       Dingell/Boehlert #30 Division A. Substitute amendment for 
     the hydroelectric relicensing title of the bill, which is 
     identical to the version that passed the House last year. 
     Introduces flexibility into the licensing and re-licensing of 
     hydroelectric facilities by allowing any party to a licensing 
     proceeding to propose alternatives to the resource and 
     fishway prescriptions made by the resource agencies. The 
     Secretary must accept the alternative, so long as he or she 
     determines it provides the same level of protection for 
     resources, fish, and wildlife and either costs less to 
     implement or would result in more efficient operation of the 
     hydroelectric facility. Requires the resources agencies to 
     establish a process to expeditiously resolve any disputes 
     involving resource or fish and wildlife conditions. Strikes 
     the incentive payment program for hydro-power contained in 
     this title.
       Green (TX) #33. Division A. Changes the ``hold harmless'' 
     Low-Income Home Energy Assistance Program (LIHEAP) threshold 
     from $1.95 billion to $1 billion.
       Hastings (FL) #69 Division C. Directs the Secretary of 
     Energy to take all necessary steps and efforts to mitigate 
     any adverse impacts that U.S. energy policy and the 
     provisions of H.R. 6 may have on minority, rural, Native 
     American, and underserved communities. Requires the Secretary 
     of Energy to submit to Congress an annual report detailing 
     the Department's efforts to implement this requirement.
       Inslee-Holt-Spratt #74 Substitute. Strikes all after the 
     enacting clause. Sets Energy Performance Goals for the 
     country. Provides the tools needed to achieve the Energy 
     Performance Goals. These tools include innovative use of the 
     tax code, investment in R&D, and federal expenditures in 
     existing infrastructure needs. Requires the Administration to 
     set up a monitoring system to track progress towards the 
     Energy Performance Goals. Should measures be needed in 
     addition to the tools provided, the amendment directs the 
     President to initiate voluntary, regulatory, or other 
     actions that may be needed to achieve the Energy 
     Performance Goals. All expenses are offset by freezing the 
     upper income tax cuts scheduled for 2004, closure of the 
     offshore corporate tax loophole, and removal of abusive 
     tax shelters.
       Kind #27 Division C. Strikes heading for Title II of 
     Division C and inserts ``(Outer Continental Shelf).'' 
     Establishes a framework for permitting alternative-energy-
     related uses on the Outer Continental Shelf not already 
     expressly covered by existing statutes. Assigns authority for 
     this program to the Department of Interior's Minerals 
     Management Service which, under existing law, administers 
     federal leasing and operations for oil, gas, and other 
     mineral activities on the Outer Continental Shelf. Specifies 
     the types of areas that should be avoided, such as marine 
     protected areas, and provides for more State and public input 
     throughout the process. Provides a mechanism for identifying, 
     in advance, appropriate sites for developing offshore wind 
     energy facilities that provide the greatest source of energy 
     with the least damage to the environment. Also provides a 
     process for soliciting competing proposals for renewable 
     energy facilities in the same locations and compensation to 
     the government for the value of the license.
       Levin #72 Placeholder. Division A. Replaces the vehicle tax 
     incentives provisions in Section D, Title I, of H.R. 6 with a 
     modified version of the Clean, Efficient Automobiles 
     Resulting from Advanced Car Technologies Act of 2003 (CLEAR 
     Act). Expands the alternative vehicle tax incentives, covers 
     a broader array of advanced vehicle technologies, and 
     provides additional incentives for the purchase of 
     alternative vehicles.
       Maloney #20 Division C. Strikes Section 30201, a section 
     that makes permanent the Interior Secretary's authority to 
     take royalties-in-kind (RIK) instead of cash payments from 
     leaseholders for oil and gas removed from federal and Indian 
     lands.
       Nadler #59 Division A. Adds $30 billion to help purchase 
     and secure excess Russian plutonium and highly-enriched 
     uranium. Authorizes funding to purchase excess Russian 
     plutonium, convert Russian plutonium pits to oxide, and to 
     immobilize and irradiate up to 100 megatons of excess 
     plutonium. Provides for funding to purchase highly-enriched 
     uranium and to make improvements to the security of nuclear 
     material in Russia. Also provides funds to employ 
     knowledgeable nuclear personnel and to downsize facilities.
       Oberstar #44 Division A. Strikes section 12403 relating to 
     the permanent exemption for construction activities 
     associated with oil and gas exploratory and production 
     operations from storm-water discharge requirements of the 
     Clean Water Act.
       Rahall #3 Amendment in the Nature of a Substitute to 
     Division C. Title I--Alaska Natural Gas Pipeline Project; 
     Title II--Western Area Power Administration; Title III--
     Energy Alternatives and Efficiency Regarding Federal Lands; 
     Title IV--Establishment of Indian Energy Programs; Title V--
     Insular Areas Energy Security; Title VI--Sensible Development 
     of Renewable Energy Resources of the Outer Continental Shelf; 
     Title VII--Surface Owner Property Rights and Protection; 
     Title VIII--Royalty Fairness; Title IX--Reclamation of 
     Abandoned Coal Mine Sites; Title X--Land and Water 
     Conservation Fund Enhancement; and Title XI--Coastal 
     Withdrawals. This amendment is identical to the substitute 
     offered by Mr. Rahall to the Committee Print at the Resources 
     Committee's markup on April 2, 2003.
       Rahall #5 Division D. Strikes Section 42011 of Division D, 
     relating to the prepayment of premium liability for coal 
     industry health benefits.
       Sandlin #75 Replaces the tax division of H.R. 6 and 
     replaces it with the text of H.R. 1436, the Energy 
     Independence and Security Act. Additionally, the 
     Sandlin amendment would offset the cost of the energy tax 
     incentives contained within the amendment by freezing the 
     cut in the highest marginal tax rate.
       Stupak #47 Division C. Prohibits any new drilling to 
     extract oil or gas reserves from any bottomlands of the Great 
     Lakes under federal jurisdiction.
       Sessions/Hall #34 Division A. Establishes a process to 
     identify and implement actions the federal government can 
     take that will ensure, to the maximum extent practicable, the 
     production of domestic natural gas supplies sufficient to 
     provide residential consumers with natural gas at reasonable 
     and stable prices; provide industrial, manufacturing, and 
     commercial consumers with natural gas at prices that do not 
     result in plant closures and job losses; facilitate the 
     attainment of national amient air quality standards under the 
     Clean Air Act; allow for reductions in greenhouse gas 
     emissions; and to support development of the preliminary 
     phases of hydrogen-based energy sectors. States the goal of 
     the United States should

[[Page H3086]]

     be to produce from domestic natural gas reserves at least 85% 
     of the annual projected domestic demand for natural gas.
       Solis #29 Division A. Amends Section 12201 on hydraulic 
     fracturing by striking the current section and inserting 
     language that requires: a completed EPA hydraulic fracturing 
     study and independent scientific review by the National 
     Academy of Science; a regulatory determination by the 
     Administration of the EPA; preservation of federal authority 
     to respond in the future where endangerment or adverse health 
     effects are established. Citizens would be precluded from 
     filing lawsuits to force states to regulate under the Safe 
     Drinking Water Act.
       Udall (CO) #31 Division C. Provides for grants of up to $20 
     per ton to enable operators of biomass facilities to purchase 
     brush, small trees, and other material removed from forests 
     in order to reduce the risk of forest fires. Allows the grant 
     money to be used only to purchase material removed from 
     forest lands near communities.
       Udall (CO) #32 Division C. Requires companies developing 
     onshore federally-owned oil or gas to: replace any damaged 
     water supplies; assure any water injected underground does 
     not damage an aquifer; comply with all federal and state laws 
     applicable to water not injected underground; submit a 
     proposed water-management plan with the application for an 
     oil or gas lease.
       Udall (NM) #39 Division A. Requires retail electricity 
     suppliers (except for municipal and cooperative utilities) 
     obtain 15% of their power production from a portfolio of 
     renewable energy resources by 2020, increasing to 20% by 
     2025.
       Udall (NM) #41 Division C. Requires the creation of surface 
     use agreements between private landowners, ranchers and 
     farmers, and the oil and gas industry prior to any 
     development of subsurface mineral rights owned by the federal 
     government.
       Velazquez #28 Division A. Prevents a disproportionate share 
     of power plants from being sited in low-income and minority 
     communities. Gives citizens greater influence over the 
     permitting and siting process.
       Waxman #35 Division A. Sense of Congress that summarizes 
     the current scientific understanding of climate change, its 
     potential effects, and the position of the United States 
     regarding climate change. States that it is the sense of 
     Congress that the United States should demonstrate 
     international leadership and responsibility in addressing 
     climate change.
       Waxman #36 Division A. Requires the Administration to take 
     voluntary, regulatory, and other actions to reduce oil demand 
     in the United States by 600,000 barrels per day from 
     projected levels by 2010. Does not per se mandate changes to 
     C.A.F.E. standards.

  Mr. Speaker, I yield back the balance of my time, and I move the 
previous question on the resolution.
  The SPEAKER pro tempore. The question is on the previous question on 
the resolution.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Ms. SLAUGHTER. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  Pursuant to clause 9 of rule XX, the Chair will reduce to 5 minutes 
the minimum time for electronic voting, if ordered, on the question of 
agreeing to the resolution.
  The vote was taken by electronic device, and there were--yeas 226, 
nays 202, not voting 6, as follows:

                             [Roll No. 130]

                               YEAS--226

     Aderholt
     Akin
     Bachus
     Baker
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Bereuter
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Combest
     Cox
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Emerson
     English
     Everett
     Feeney
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Janklow
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (OK)
     Manzullo
     McCotter
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Tauzin
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--202

     Abercrombie
     Ackerman
     Alexander
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Ballance
     Becerra
     Bell
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Carson (OK)
     Case
     Clay
     Clyburn
     Conyers
     Cooper
     Costello
     Cramer
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley (CA)
     Doyle
     Edwards
     Emanuel
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gonzalez
     Gordon
     Green (TX)
     Grijalva
     Gutierrez
     Harman
     Hastings (FL)
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley (OR)
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     Kleczka
     Kucinich
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lucas (KY)
     Lynch
     Majette
     Maloney
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Sandlin
     Schakowsky
     Schiff
     Scott (GA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                             NOT VOTING--6

     Davis (IL)
     Gephardt
     Houghton
     McCarthy (MO)
     Paul
     Taylor (NC)


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. LaHood) (during the vote). Members are 
advised that 2 minutes remain in this vote.

                              {time}  1408

  Ms. WOOLSEY, Ms. CARSON of Indiana, and Messrs. OWENS, KLECZKA, HILL, 
CASE, and RUPPERSBERGER changed their vote from ``yea'' to ``nay.''
  So the previous question was ordered.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the resolution.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Ms. SLAUGHTER. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 236, 
noes 190, not voting 8, as follows:

[[Page H3087]]

                             [Roll No. 131]

                               AYES--236

     Aderholt
     Akin
     Baca
     Bachus
     Baker
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Bereuter
     Biggert
     Bilirakis
     Bishop (UT)
     Blackburn
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carson (OK)
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Combest
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Emerson
     English
     Everett
     Feeney
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Goss
     Granger
     Graves
     Green (TX)
     Green (WI)
     Greenwood
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hostettler
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Janklow
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (OK)
     Manzullo
     Markey
     McCotter
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Ortiz
     Osborne
     Ose
     Otter
     Oxley
     Pearce
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Pombo
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reyes
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ryan (WI)
     Ryun (KS)
     Sandlin
     Saxton
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Solis
     Souder
     Stearns
     Sullivan
     Sweeney
     Tancredo
     Tauzin
     Terry
     Thomas
     Thornberry
     Tiahrt
     Tiberi
     Toomey
     Turner (OH)
     Upton
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NOES--190

     Abercrombie
     Ackerman
     Alexander
     Allen
     Andrews
     Baird
     Baldwin
     Ballance
     Becerra
     Bell
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Case
     Clay
     Clyburn
     Conyers
     Cooper
     Costello
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley (CA)
     Doyle
     Edwards
     Emanuel
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gonzalez
     Gordon
     Grijalva
     Gutierrez
     Harman
     Hastings (FL)
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley (OR)
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     Kleczka
     Kucinich
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lucas (KY)
     Lynch
     Majette
     Maloney
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Michaud
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Scott (GA)
     Scott (VA)
     Serrano
     Sherman
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Spratt
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                             NOT VOTING--8

     Davis (IL)
     Gephardt
     Houghton
     McCarthy (MO)
     Olver
     Paul
     Platts
     Taylor (NC)


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised there 
are 2 minutes remaining to vote.

                              {time}  1415

  So the resolution was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mr. PLATTS. Mr. Speaker, on rollcall No. 131 I was inadvertently 
detained. Had I been present, I would have voted ``aye.''
  The SPEAKER pro tempore (Mr. LaHood). Pursuant to House Resolution 
189 and rule XVIII, the Chair declares the House in the Committee of 
the Whole House on the State of the Union for the consideration of the 
bill, H.R. 6.

                              {time}  1416


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 6) to enhance energy conservation and research and development, 
to provide for security and diversity in the energy supply for the 
American people, and for other purposes, with Mr. Simpson in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered as having 
been read the first time.
  Under the rule, the gentleman from Louisiana (Mr. Tauzin) and the 
gentleman from Michigan (Mr. Dingell) each will control 15 minutes. The 
gentlewoman from Illinois (Mrs. Biggert), the gentleman from Texas (Mr. 
Hall), the gentleman from California (Mr. Pombo), the gentleman from 
West Virginia (Mr. Rahall), the gentleman from Louisiana (Mr. McCrery) 
and the gentleman from Massachusetts (Mr. Neal) each will control 10 
minutes.
  The Chair recognizes the gentleman from Louisiana (Mr. Tauzin).
  Mr. TAUZIN. Mr. Chairman, I yield myself 5 minutes.
  Today we begin taking another step in doing what we have not done in 
over a decade, advancing a bipartisan, comprehensive American energy 
policy that will be signed into law. We came very close the last 
Congress to accomplishing that. Today, this year, with a strong vote on 
this floor, I believe we will go a long way to finishing the work of 
the last Congress.
  The bill we are considering today reflects America's 21st century 
values, its technology and certainly our security needs. It advances a 
balanced approach to energy production and use by encouraging a 
responsible, diverse mix of energy sources and options along with a 
significant investment in conservation and increased efficiency. The 
Energy Policy Act charts a path toward increased energy security and a 
cleaner environment, in short, secure, reliable, affordable energy for 
all Americans in a growing economy.
  I am proud of the bipartisan work our committee has done in writing 
several divisions of this bill. The gentleman from Texas (Mr. Barton), 
our Subcommittee on Energy and Air Quality chairman, forwarded his work 
to our full committee by a vote of 21 to 9, and just last week, after 
considering over 50 different amendments, the Committee on Energy and 
Commerce reported the bill by a vote of 36 to 17.
  The House owes a great deal of thanks to the gentleman from Texas 
(Chairman Barton) and to the gentleman from Virginia (Mr. Boucher), 
ranking member, for the extraordinary cooperation, assistance, hard 
work and willingness to work together. Today, I hope that bipartisan 
spirit continues. There is no reason why it should not.
  The Committee on Energy and Commerce components of the bill are very 
diverse. They cover everything from energy conservation to hydropower 
to nuclear energy and electricity, but particularly combined with the 
work product of the Committee on Resources, the Committee on Science, 
and the Committee on Ways and Means, they are really about our national 
security and our economy. Indeed, apart from the appropriations 
directly related to our war against terrorism and our remarkable 
success in Iraq, and God bless

[[Page H3088]]

those American heroes we have seen on television doing such a job for 
our country, this legislation may be the most important national 
security bill the Congress will vote on short of our national defense 
appropriations.
  The Committee on Energy and Commerce has pursued two broad and 
necessary approaches to energy policy. First, it is outlined in the oil 
and gas title, the hydroelectric title, the nuclear title, the vehicles 
and fuels, and the electricity titles. First is to increase domestic 
energy supplies, both the fuels and electricity. That is essential to 
reducing our Nation's vulnerability to the kind of disruption in the 
supplies of fuel that we use to power our way of life today.
  The other approach, covered in the titles on energy conservation, 
works on the demand side of energy by dramatically increasing energy 
efficiency by establishing energy efficiency goals for the Federal 
Government, by promoting new energy efficiency technologies, and other 
methods. This legislation will help close the gap between domestic 
energy supplies and consumption, and in the process, increase our 
security and our economic growth.
  Just as an example, according to the American Council on Energy 
Efficient Economy, our energy efficiency production features, these 
provisions to increase the conservation and efficiency, will save 2.8 
quadrillion Btus by the year 2020, eliminating the need for about 130 
new power plants by the year 2020. That is a remarkable savings in 
energy this bill will increase.
  The Members will hear a lot more about the incredible policy this 
bill advances, but let me conclude with this thought. Energy 
legislation has traditionally transcended party lines. What we did in 
legislating 2 years ago, we did on a bipartisan vote. We saw 
bipartisanship in the committees as they marked up these bills, and I 
hope and expect that spirit to prevail as we craft the energy policy 
for the 21st century.
  Mr. Chairman, I reserve the balance of my time.
  Mr. DINGELL. Mr. Chairman, I yield myself 2 minutes.
  (Mr. DINGELL asked and was given permission to revise and extend his 
remarks.)
  Mr. DINGELL. Mr. Chairman, this is a bad bill. It is an odd mishmash 
of special interest provisions, deregulatory actions, degradation of 
our environmental laws. It gives away billions of dollars to powerful 
industry, courtesy of the taxpayer. It undermines existing 
environmental protections.
  In the area of hydroelectric power, the bill undercuts safeguards for 
dam relicensing, jeopardizing not only fish but the overall health of 
our river systems. It weakens the Safe Drinking Water Act and 
environmental protections and safeguards in oil and gas production.
  H.R. 6 eliminates requirements for public participation and deference 
to the States in decisions where electric transmission lines can be 
sited and whether natural gas facilities should be constructed in 
coastal waters. It undercuts natural resource agencies' role in 
determining whether transmission lines should be constructed in our 
national forests and on other public lands.
  But that is not all. Certain favored industries get big benefits. 
Energy consumers are left unprotected. I guess average customers and 
consumers were not in the room when the Vice President held closed-door 
meetings of his Energy Task Force.
  It is hard to imagine a better case for increasing consumer 
protections than the debacle that took place in 2000-2001 in California 
and other West Coast electricity markets. In fact, a recent report by 
the Federal Energy Regulatory Commission, whose Chair was appointed 
during the administration, found that so many companies participated in 
Enron's scams that it was necessary to launch multiple new enforcement 
proceedings, many of which would be adversely impacted by this 
legislation.
  Most shocking, FERC found some practices that significantly raised 
consumer prices were not only not illegal under current law, but would 
be sanctified under this legislation.
  If there was ever a case for legislative reform, this is it, but this 
legislation is not legislative reform. It does not help consumers. It 
only includes cosmetic reforms while repealing important consumer 
protections under the Public Utility Holding Company Act and weakening 
protections under the Federal Power Act. Indeed, it also sanctifies 
fraud.
  So if the Members like fraud, vote for the bill.
  Mr. Chairman, I reserve the balance of my time.
  Mr. TAUZIN. Mr. Chairman, I yield 3 minutes to the gentleman from 
Texas (Mr. Barton), the distinguished chairman of the Subcommittee on 
Energy and Air Quality of the Committee on Energy and Commerce.
  (Mr. BARTON of Texas asked and was given permission to revise and 
extend his remarks.)
  Mr. BARTON of Texas. Mr. Chairman, I rise in very strong support of 
the bipartisan H.R. 6 comprehensive energy policy bill that is before 
this body at this point in time.
  Our Nation badly needs a comprehensive energy policy. This bill 
achieves it. Our economic competitiveness, our national security, and 
our way of life will all be helped if this bill becomes law.
  The bill before us today touches nearly every facet of our energy 
sector, including electricity. The first 68 pages of the bill are 
bipartisan measures on conservation and energy efficiency. They were 
agreed to during the energy conference last year. The bill also targets 
a diverse and stable portfolio of production so that we are never 
overly dependent on any one fuel.
  For our Nation's security, we will reauthorize and expand the 
Strategic Petroleum Reserve. We will open for environmentally safe 
production the portion of Alaska that Congress long ago set aside for 
that very purpose. We will act upon the President's call in the State 
of the Union address for hydrogen fuel cell vehicles and the fueling 
infrastructure that will be needed to make them successful.
  Today's bill is better than H.R. 4 that passed the last Congress. We 
include bipartisan reauthorization of the Price-Anderson Act, a much 
more sensible Renewable Fuels Standard, real changes to the 
hydroelectric relicensing process, and badly needed electricity 
reforms.
  Legislation before the House today puts our Nation on a forward path 
towards better electricity markets. It should further the transition to 
more effective electricity markets in the following ways: It would 
increase transmission capacity; it would improve the operation of 
existing transmission; and it would make wholesale competition even 
more successful than it currently is today.
  Mr. Chairman, I am very proud to be one of the authors of this bill. 
I am very proud of the work that the gentleman from Louisiana (Mr. 
Tauzin), my full committee chairman, has done, the gentleman from 
Michigan (Mr. Dingell) has done, the gentleman from Virginia (Mr. 
Boucher) has done and other members of the Committee on Energy and 
Commerce have done.
  I am also very pleased with the work product of the other three 
authorizing committees that are bringing us this joint bill. This will 
actually help our Nation. In my opinion, it is the most comprehensive 
positive energy bill that has been before the Congress in the last 50 
years, and I cannot do anything but strongly, strongly urge its 
adoption.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentleman from Virginia (Mr. Boucher).
  (Mr. BOUCHER asked and was given permission to revise and extend his 
remarks.)
  Mr. BOUCHER. Mr. Chairman, I thank the gentleman from Michigan for 
yielding me this time.
  I have a number of concerns regarding the measure that is before the 
House today, and I will take the occasion of these remarks to outline 
some of them in the hope that they can be addressed during the 
amendment process or in the conference with the other body.
  During committee consideration of the bill, I strongly urged that the 
electricity title be removed from the comprehensive bill and that it be 
considered on a separate track that would give us more time to focus on 
its complex and controversial provisions. That title unfortunately 
remains in the bill; and it is controversial, and I am concerned about 
its presence there.

[[Page H3089]]

  I am troubled by the provisions that relate to the relicensing of 
hydroelectric facilities. An agreement was achieved on a bipartisan 
basis during the course of the last Congress which would have provided 
flexibility in selecting alternative means for assuring protection of 
fish resources. That agreement was put aside in favor of language in 
this bill that offers far less protection to the fish when electricity 
facilities are relicensed.
  The bill opens ANWR to exploration and contains a needless mandate 
for ethanol use in motor fuels that applies throughout the Nation and 
will raise the price of gasoline without achieving any net benefit in 
terms of petroleum savings.
  I commend the gentleman from Louisiana (Mr. Tauzin) and the gentleman 
from Texas (Mr. Barton), both of whom have conducted an open process 
for both hearings and markup at subcommittee and full committee, and I 
look forward to continuing to work with them and with the gentleman 
from Michigan (Mr. Dingell) and other Members as we seek to address 
some of these concerns during the course of today and during the 
conference with the Senate.

                              {time}  1430

  Mr. TAUZIN. Mr. Chairman, I am pleased to yield 1 minute to the 
distinguished gentleman from Illinois (Mr. Shimkus).
  Mr. SHIMKUS. Mr. Chairman, our constituents are concerned about 
gasoline price volatility. This energy bill addresses part of these 
concerns by promoting the use of domestic renewable fuels like ethanol. 
However, current regulations prohibit retailers from commingling 
ethanol and non-ethanol blended gasoline in their storage tanks. This 
limits the ability of retailers to provide uninterrupted gasoline 
service at the best price for their customers and could lead to higher 
retail prices. We should correct this problem.
  I would like to ask my chairman to enter into a colloquy with me on 
this.
  Mr. TAUZIN. Mr. Chairman, will the gentleman yield?
  Mr. SHIMKUS. I yield to the gentleman from Louisiana.
  Mr. TAUZIN. Mr. Chairman, I thank the gentleman for his comments. I 
believe it is important that we provide flexibility to retailers who 
have to be responsible for the renewable fuels program contained in 
title VII of our bill. As the new renewable fuels program is 
implemented, consistent with the schedule and waivers available in this 
title, we should strive to make sure that the current regulations make 
common sense.
  We should not subject retailers to unnecessary requirements that do 
not provide discernible environmental or public benefit. As we prepare 
for conference with the Senate, I want the gentleman to know that we 
are going to work together to resolve this issue.
  Mr. SHIMKUS. Mr. Chairman, reclaiming my time, I thank the gentleman 
for his attention. I look forward to working with the chairman and the 
House conferees.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentlewoman from California (Ms. Eshoo).
  Ms. ESHOO. Mr. Chairman, I thank the distinguished ranking member for 
his leadership and acknowledge the leadership of the committee chairman 
and everybody else involved in this bill. But I rise today in strong 
opposition to it, and let me state why.
  I think we should recognize that this bill neither advances energy 
independence nor any kind of national security. Instead of becoming 
less dependent on foreign sources of oil and energy for our national 
security, this bill is a repeat of the past. What the bill does not 
improve is the efficiency of automobiles and trucks. Instead, it calls 
for the sixth government report on motor vehicle efficiency in 10 
years.
  As a Californian, I have to say that this is the biggest shortfall 
and loss of opportunity to address what the energy companies did to the 
State of California. They manipulated, they cheated, they lied, and 
they ripped Californians off: small businesses, large businesses, 
consumers, residential homeowners. This is what happened to California. 
This is no longer speculation. In this bill, there is not one sentence, 
there is not one phrase that says Californians deserve a refund.
  I tried with my colleagues to accomplish this. Thirty-two California 
Democrats signed on to that amendment and said that if it were offered 
on this floor today, we would support it. Unfortunately, not one 
Republican stands to say for their constituents that we deserve a 
refund. The chairman of the FERC said that the amendment was helpful. I 
have tried and tried and tried. This is a failure of this Congress to 
stand up and to do something about this; and I think it is an outrage, 
because I think it is one of the biggest heists in the history of this 
country.
  So I oppose the bill. It does not provide national security, it does 
not provide energy independence, and it certainly does not make the 
wrongs right.
  Mr. TAUZIN. Mr. Chairman, I am pleased to yield 1 minute to the 
honorable gentleman from Nebraska (Mr. Osborne).
  Mr. OSBORNE. Mr. Chairman, I thank the gentleman for the work he has 
done on this bill. It is a very good bill, very important to the 
security of our Nation.
  Mr. Chairman, we are currently concerned about our economy. We are 
talking about the need for an economic stimulus. Increasing ethanol 
production from 2.7 billion gallons currently to over 5 billion in the 
next 12 years will do this.
  Number one, it increases farm income by $51 billion; creates 214,000 
new American jobs; reduces government farm payments by $5.9 billion, 
which will be a tax savings to our taxpayers of $5.9 billion; and 
reduces the trade deficit by $34 billion.
  We currently import 60 percent of our oil, 500,000 barrels a day from 
Iraq, spend $100 billion a year on foreign oil; and this certainly 
remedies that problem. And, of course, it reduces air pollution. 
Ethanol use reduced carbon dioxide by 4.3 million tons in 2002. 
Finally, the current bill will reduce, not increase, the price of 
gasoline, which is excellent.
  So this energy bill is critical. It provides assurance to those who 
would invest in renewable fuels that there is a long-term Federal 
commitment.
  I thank the chairman for his work and urge passage of this 
legislation.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished 
gentleman from Texas (Mr. Green).
  Mr. GREEN of Texas. Mr. Chairman, I thank the ranking member on the 
Committee on Energy and Commerce for yielding me time.
  Mr. Chairman, I rise in support of H.R. 6. America needs movement on 
our energy policy. America needs more production of domestic oil and 
gas to keep our supply diverse, to keep prices moderate and to keep my 
State's largest employing industry from running out of gas, literally.
  Some have said that it is balanced, some will say it is not; but I 
think this is a good piece of legislation. The bill deals with a great 
deal of efficiency in title I and production in title II, so I think it 
is a good compromise on policy of electricity.
  Many Members have questions on this electricity policy; but the 
purpose is to apply equal treatment to all regions, with certainty for 
investors and consumers.
  The bill also is a good compromise on ethanol and gasoline. The fuels 
provision is more gradual than last year's version and provides 
assistance to help manufacturers adjust to the new Federal mandate.
  Mr. Chairman, this legislation also does a great deal for energy 
research, and I would like to thank my colleague, the gentleman from 
Beaumont, Texas (Mr. Lampson), for his work as ranking member on that 
subcommittee.
  At the same time we do work on efficiency, conservation and 
production, we have to invest in new technology. That is a balanced 
energy policy.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the gentleman from 
Massachusetts (Mr. Markey).
  Mr. MARKEY. Mr. Chairman, I thank the gentleman for yielding me time.
  Mr. Chairman, this is a momentous debate. With 250,000 young men and 
women in Iraq fighting for all of us, we know that this Congress has a 
tremendous responsibility as we consider our national energy policy for 
the next decade to make decisions which will make it less likely that 
we are drawn into global conflicts in the future because of our 
dependence upon imported oil. That is why the provision which the 
gentleman from Michigan (Mr. Dingell) and others asked to be put in

[[Page H3090]]

order out here on the House floor, that is why the Waxman amendment, 
that is why the Dingell amendment, which deals with fraud in the 
electricity marketplace, that is why the Rahall amendment and so many 
of the other issues we were talking about, are so central.
  The gentleman from Michigan (Mr. Dingell) is raising the issue in the 
electricity marketplace of whether or not we are going to deal with the 
issue of fraud, of ensuring that we have an audit trail, which is going 
to make it possible for us to track activity which undermines the 
integrity of the marketplace; and that debate is a critical one here 
today.
  In addition, we are going to debate whether or not we should be 
drilling in the pristine Arctic wilderness. Should we be going to the 
pristine wilderness of our country before we ensure that the motor 
vehicles in our country, the SUVs, the light trucks, the automobiles 
that are in our national fleet, are made more efficient.
  Under the majority provision here today, we do not do anything about 
that. Instead, we turn to this pristine area in our country first. I 
believe that that is morally wrong, that we have a responsibility first 
to deal with the technologies that consume the energy in our society.
  Mr. TAUZIN. Mr. Chairman, I yield myself 1 minute.
  Mr. Chairman, as we begin to debate the various titles of this bill, 
I think the American public will see that the work of the Committee on 
Ways and Means incentivizing energy production, incentivizing new 
fuels, incentivizing renewable fuels, combined with the work we have 
done in increasing programs like we do in this bill to make sure that 
clean coal technology is advanced, the STAR program on efficiency is 
advanced and other programs are advanced to increase conservation and 
efficiency in the country, as well as the programs that the Committee 
on Energy and Commerce will bring to us to make sure that we take full 
advantage of the resources of the lands that are producible in this 
country in an environmentally safe manner, when you look at all these 
provisions together, and the technology, science and technology 
provisions that the Committee on Science will bring, this is the most 
comprehensive energy package we have brought to the floor in many 
decades.
  This deserves to be the law of the land for more than just one 
reason, more than just national security. This country is ready for an 
economic revival. This is the first step. Stable energy prices and 
stable supplies mean solid economic performance. This is our first step 
in revitalizing the American economy.
  Mr. DINGELL. Mr. Chairman, I yield 2 minutes to the distinguished 
gentlewoman from California (Mrs. Capps).
  Mrs. CAPPS. Mr. Chairman, I thank my colleague for yielding me time.
  Mr. Chairman, I rise in strong opposition to this legislation. The 
bill has many problems. For example, it rejects the sensible, 
bipartisan compromise on hydro dam relicensing offered by the gentleman 
from Michigan (Mr. Dingell). Instead, the provisions in H.R. 6 would 
lead to a stunted review process that will weaken protection for 
wildlife and the environment.
  The electricity deregulation provisions do nothing to address most of 
the problems we saw in California, such as returning California's money 
that was stolen by pricing-gouging energy companies. The electricity 
provisions weaken important consumer and investor protections, possibly 
bringing on more Enron-type shenanigans in the future.
  The bill would also weaken States' abilities to protect their coasts 
and weigh in on proposals for liquid natural gas facilities.
  I am very disappointed that I was not allowed to offer my amendment 
to strike this harmful provision which weakens the important Coastal 
Zone Management Act.
  Finally, Mr. Chairman, I want to highlight problems in the motor 
fuels section. This part of H.R. 6 originally arose for two purposes: 
one, to get rid of gas additive and groundwater contaminant MTBE; and, 
second, to end an outdated clean air regulation on reformulated gas.
  The clean air issue was solved by the bill, and that is good. But we 
still do not ban MTBE, and it is still contaminating our groundwater. 
Incredibly, the bill gives the industry immunity from the damage it 
knowingly caused to our water and $750 million in taxpayer-funded 
subsidies. The bill also has a huge and unnecessary ethanol mandate and 
liability protection for ethanol producers as well.
  Achieving our original goal could have been done without all these 
industry goodies that will cost consumers millions. I am deeply 
disappointed that the amendment banning MTBE, offered by the gentleman 
from New York (Mr. Engel) and me, was not made in order, despite a very 
close vote on this issue in committee and an obvious need for action.
  Mr. Chairman, we should ban MTBE to protect our Nation's drinking 
water and not let the industry off the hook. For these reasons and for 
so many others, this is a bad bill; and we should vote it down.
  Mr. TAUZIN. Mr. Chairman, I am pleased to yield 1 minute to the 
gentleman from Texas (Mr. Barton), the chairman of the Subcommittee on 
Energy and Air Quality of the Committee on Energy and Commerce.
  Mr. BARTON of Texas. Mr. Chairman, I thank the distinguished full 
committee chairman for yielding me time.
  Mr. Chairman, I want to comment just briefly on the electricity title 
in the bill. We did not have an electricity title in last year's bill 
because we really did not have a consensus on the issue and we were 
hopeful that by moving it as a stand-alone bill, we might could get 
that consensus. Since that time, we have worked very hard with the very 
stakeholders, the investor-owned utilities, the municipalities, the co-
ops to try to get consensus.
  I will not say we have total consensus, but I think we have solved 
some of the most vexing issues. We have volunteer participation in what 
are called RTOs, regional transmission organizations; we have an 
excellent reliability title; we have some transparency rules to try to 
prevent what happened in California several years ago in the spot 
market for electricity; we have native load protection for the closed 
States that would rather not open their States to retail competition; 
we have some exemptions for the more open States that are voluntarily 
developing these RTOs. All in all it is a very balanced title; it is a 
very good title.

                              {time}  1445

  It would help the electricity industry regain market confidence and 
would help get more transmission lines built.
  Mr. DINGELL. Mr. Chairman, I yield such time as he may consume to the 
gentleman from Pennsylvania (Mr. Doyle).
  (Mr. DOYLE asked and was given permission to revise and extend his 
remarks.)
  Mr. DOYLE. Mr. Chairman, I rise in support of the bill.
  Mr. Chairman, creating a national energy policy is a challenging but 
vital process. This country needs a comprehensive policy that reflects 
our diverse energy portfolio and this bill achives that on many fronts.
  I am pleased that this bill makes some real strides toward increasing 
utilization of some alternative energy technologies also. Language I 
worked on to create an advanced building efficiency testbed is included 
which will allow a university consortium to develop innovations in 
building technologies that will improve the efficiency of the energy 
systems in residential and commercial buildings while also reducing 
pollution.
  During committee consideration, I offered with Lee Terry an amendment 
that will create an Advanced Power System Technology Incentive program. 
This will encourage further utilization of distributed power systems 
such as stationary fuel cells, turbines, and hybrid power systems. It 
will help reduce our dependence on foreign oil while also providing 
assured power to critical infrastructure facilities in a clean, 
environmentally friendly manner.
  These are just a couple of the innovations included in the bill 
before us. Now I do have real concern with regard to language in the 
bill that would be detrimental to the pension plans of thousands of our 
mineworkers, and also with the fact that the tax provisions did not 
include important incentives for clean coal technology. My 
understanding is that these problems are being addressed and rectified

[[Page H3091]]

however which is extremely important to me and thousands of others.
  The bill also contains an electricity title which, while not perfect, 
will allow the restructuring of our electricity industry to continue. 
Critics try to make blanket assertions that the restructuring path 
doesn't benefit the consumer, or won't produce any savings. But in my 
home State of Pennsylvania, we have found quite the contrary.
  Pennsylvania has been a pioneer in retail electric competition and it 
has worked well. In a recent report from Penn Future, a noted public 
interest group in my home State, they concluded ``electricity is 
generally becoming a bargain'', and they gave competition and 
restructuring much of the credit.
  The chairman of our Public Utility Commission, Glen Thomas, said in a 
recent interview that since restructuring in Pennsylvania:
  Consumers pay less for electricity.
  New generating facilities are being built to meet growing demand.
  The reliability of the grid has been strengthened.
  And consumers have more options to buy environmentally friendly 
``green'' power generated by renewable resources like hydroelectric and 
wind facilities.
  We need to continue these advances and expand the benefits throughout 
the entire country. I believe that the bill before us today will help 
those efforts and I urge Members to support it.
  Mr. DINGELL. Mr. Chairman, I have one more speaker and he is not here 
right at the moment.
  Mr. TAUZIN. Mr. Chairman, I am happy to yield 1 minute to the 
gentleman from Indiana (Mr. Buyer).
  Mr. BUYER. Mr. Chairman, I would just like to compliment the 
gentleman from Louisiana (Mr. Tauzin), the chairman of the full 
committee, and the gentleman from Texas (Mr. Barton), the chairman of 
the subcommittee, for their hard work, including the staff. Hopefully, 
we can get it done this time. We have gone down this path once before; 
I think this is the sequel.
  Mr. Chairman, our country, as the sole remaining superpower, needs a 
broad-based and balanced portfolio with regard to our energy resources. 
Imports of oil is a reality. Anybody can give a speech about how we are 
to lower the dependence. There are some things we also have to address.
  We have to address exploration. We have to be able to utilize what we 
have in our own country with regard to natural gas and coal. Clean coal 
technologies will be extremely important, and I am hopeful that the 
House will be receptive to that discussion at the conference.
  We also have to recognize that we have not even built a nuclear 
facility in our country in the last 20 years.
  Let us also get back on the glidepath on conservation and renewable 
sources of energy, whether it be by solar or wind, soy, diesel, 
ethanol, et cetera.
  So I want to compliment the chairman for his hard work. It will pay 
great dividends for the country.
  Mr. DINGELL. Mr. Chairman, I reserve the balance of my time.
  Mr. TAUZIN. Mr. Chairman, I am pleased to yield 3 minutes to the 
distinguished gentleman from Georgia (Mr. Norwood).
  Mr. NORWOOD. Mr. Chairman, I thank the chairman for yielding me this 
time, and I thank the chairman, both chairmen, for doing a tremendous 
job on this energy bill.
  In the last few years, we have seen repeatedly, I believe, the 
critical need for an efficiently working and comprehensive United 
States energy policy.
  To most Americans, energy policy is viewed rather simply, Mr. 
Chairman. Americans see it at the gas pump when they fill up their car, 
or they see it at the mailbox when they receive their home heating oil 
and natural gas bills in the winter months. Now, while prices have 
softened a bit in the last few weeks, the last year has been filled 
with volatile spikes in both natural gas and crude oil.
  Although enactment of this bill will likely have little effect on 
gasoline prices this summer, the bill will serve as a blueprint of 
change, an immensely positive change in policy for America going 
forward. Today, our responsibility now offers great opportunity.
  A truly comprehensive national energy plan should include the 
utilization of all domestic resources that can be extracted in an 
environmentally sound fashion, a diversified and well-balanced 
portfolio of fuel sources for electric generation, including nuclear, 
clean coal, hydro, and natural gas; improvements to transmission 
capacity ensuring the reliability of our electric transmission grid; 
efficient energy incentives; conservation measures and targeted 
research dollars with an eye on the future.
  Mr. Chairman, the chairman's bill achieves all of this. It strikes 
the necessary balance. I rise today in strong support. Not since early 
1992, and until this administration, has the importance of U.S. energy 
policy been prioritized again, where it should have been.
  Many, including me, were disappointed when the energy conference ran 
out of time last year, so I want to commend again the gentleman from 
Texas (Chairman Barton) and the gentleman from Louisiana (Chairman 
Tauzin), the House leadership, and this administration for their 
commitment to putting energy policy so quickly back on top of the 
Leaderboard.
  Today, we can take another step forward to uniquely reposition 
ourselves as a country in terms of energy independence and getting back 
ahead of the curve.
  Given true U.S. energy independence is paramount to our national 
security, I encourage all Members to support this sound, coherent, 
comprehensive policy for America.
  Mr. DINGELL. Mr. Chairman, I yield 3 minutes to the distinguished 
minority whip, my good friend, the gentleman from Maryland (Mr. Hoyer).
  Mr. HOYER. Mr. Chairman, I thank my friend for yielding me this time.
  Mr. Chairman, this legislation is a comprehensive energy bill, but it 
is an incomplete energy policy. We need an energy policy that is 
balanced; balanced regionally; balanced in terms of promoting energy 
development and protecting the environment; balanced in terms of 
production and delivery, in terms of streamlining regulations, while 
protecting consumer interests; and certainly, Mr. Chairman, balanced in 
terms of addressing short-term problems while creating long-term 
stability, and investing for the energy needs of future generations.
  Yet, there is no real commitment in this legislation, I think, to 
promote new alternative resources or conservation. We are missing a 
major opportunity to invest in the technologies of efficiency, to do 
more with less. To help us manage our consumption and create thousands 
of jobs at home.
  Democrats have amendments to address these deficiencies, but most, 
unfortunately, if not all, will be rejected, even though they are good 
policies that many of my friends on the other side of the aisle would 
want to support, but will not because the majority has made many parts 
of this rule partisan.
  I am especially concerned, Mr. Chairman, about the new issues in this 
debate, first, electricity restructuring. This bill ignores the lessons 
that should have been learned from Enron and from California. A poorly 
structured market is more susceptible to manipulation and fraud than a 
market that is properly designed. This legislation actually weakens the 
oversight and tools that our regulatory agencies need to provide the 
necessary checks and balances, therefore making matters worse.
  I urge my colleagues to support the thoughtful and reasonable 
provisions in the Dingell substitute to address these deficiencies.
  Secondly, the fuel provisions include mandates that ignore regional 
disparities in supply and distribution that will lead to increased 
prices at the pump for consumers on both the East and West Coasts.
  Mr. Chairman, we need a comprehensive energy policy that is balanced, 
competitively neutral, and that maximizes our resources. This bill, 
unfortunately, misses that opportunity. Thus, I urge my colleagues to 
oppose it.
  Mr. DINGELL. Mr. Chairman, before I yield my remaining 1 minute to 
the distinguished gentleman from Maryland (Mr. Hoyer) to close, I 
gather my good friend, the gentleman from Louisiana (Mr. Tauzin) has 
one speaker remaining, and that that speaker will be closing; is that 
right?
  Mr. TAUZIN. Mr. Chairman, our Speaker will be closing on behalf of 
this side.

[[Page H3092]]

  Mr. DINGELL. Mr. Chairman, I yield my remaining time to my good 
friend, the distinguished minority whip, the gentleman from Maryland 
(Mr. Hoyer).
  Mr. HOYER. Mr. Chairman, I thank my friend for yielding me the time 
to close.
  I talked about, in the first 3 minutes, a comprehensive energy 
policy. I want to tell my friend, the chairman of the committee, I know 
he and the gentleman from Michigan (Mr. Dingell) worked closely 
together on this bill. I think it is very unfortunate on a matter of 
such great importance to our country, to our national security, and to 
our people that we do not have a bill on the floor that both the 
gentleman from Louisiana and the gentleman from Michigan could have 
supported.
  Some amendments have been made in order. I would hope that perhaps 
the gentleman from Louisiana would support some of those amendments. I 
think they will improve the bill.
  Mr. TAUZIN. Mr. Chairman, will the gentleman yield?
  Mr. HOYER. I yield to the gentleman from Louisiana.
  Mr. TAUZIN. Mr. Chairman, just quickly, I want the gentleman to know 
that we will be accepting 9 of the 15 amendments that will be offered 
and supported by Democrats on the bill.
  Mr. HOYER. Mr. Chairman, I thank the gentleman.
  Mr. DINGELL. Mr. Chairman, briefly reclaiming my time, they have very 
carefully strained these amendments in the Committee on Rules so that 
they are either inoffensive to my Republican colleagues, or they are 
ones on which the Republican colleagues would lose. My Republican 
colleagues have also denied us the right to offer the amendments which 
we would most assuredly have won on.
  There is very great finesse in the Committee on Rules.
  Mr. Chairman, I again yield the remaining time to the gentleman from 
Maryland (Mr. Hoyer).
  Mr. HOYER. Mr. Chairman, in closing, let me say honestly that I think 
this issue is of such magnitude that we really ought to work together. 
We have missed an opportunity to do that. I hope in the future we will 
be able to do so.
  I think the gentleman's experience, matched with the experience of 
the gentleman from Louisiana (Mr. Tauzin) and the Members on both sides 
of the aisle can come up with an energy policy of which we can all be 
proud. I feel we have not done that this day, and I think we have lost 
an opportunity.
  Mr. TAUZIN. Mr. Chairman, let me take a second to say that, coming 
from the master himself, I take the words of the gentleman from 
Michigan (Mr. Dingell) as a compliment, but mainly to compliment him 
for the civility and the cooperation that he was provided as our 
committee has worked through these difficult issues.
  Mr. Chairman, I yield the balance of my time to close to the 
gentleman from Florida (Mr. Stearns).
  (Mr. STEARNS asked and was given permission to revise and extend his 
remarks.)
  Mr. STEARNS. Mr. Chairman, we are going to hear perhaps from the 
people on this side that we could have done more. Let me just say to my 
colleagues, the gentleman from Texas (Mr. Barton), who is chairman of 
the Subcommittee on Energy and Air Quality, had 35 hearings on this 
bill. We had an energy conference in the 107th Congress in which we 
tried for so many hours, so many days, to try and bring this bill 
together. We could not in the 107th.
  Here we are in the 108th, and now, nearly after 2 full days of markup 
by the gentleman from Louisiana (Mr. Tauzin), the distinguished 
chairman of the full committee, we went almost all night for 2 days we 
passed this bill. There is nobody in this Congress who is more 
bipartisan and willing to work the extra mile to get results. In fact, 
I call the gentleman from Louisiana (Mr. Tauzin) the Energizer Bunny. 
On this bill he has gone way over the top, he and the gentleman from 
Texas (Mr. Barton), to accommodate and to help Members bring their 
ideas into this bill, and they have been willing to also when necessary 
compromise.
  So there is no reason to think, as we come to mark up this bill on 
the floor, that we do not have the best product possible in this 
Congress. I think this product is good, and that is why I think it 
represents a balance of sensible production initiatives with 
conservation. It provides incentives for renewable energy production, 
clean coal technology, low-income energy assistance, and provides for 
certainty and reliable operation of our energy markets and increased 
domestic production.
  So I urge support for the bill.
  Mr. Chairman. I rise in support of H.R. 6, the Energy Policy Act of 
2003. We have worked to develop legislation that balances sensible 
production initiatives with conservation. This bill provides incentives 
for renewable energy production, clean coal technology, low-income 
energy assistance, provides for certainty and reliable operation of our 
energy markets, and increased domestic production.
  Regarding electricity, I am pleased that this bill addresses a number 
of arcane federal laws and mandates that have no place in the 
electricity markets today. The compromise we have regarding the 
prospective repeal of the mandatory purchase obligation under PURPA is 
the best approach to allow for legitimate Combined Heat and Power 
development, while allowing relief for electric utilities from a 
federal mandate that has not served its intended purpose and has 
resulted in billions in excess costs to consumers.
  The bill also increases penalties for sabotage or attempted sabotage 
of nuclear facilities. And authorizes a hydrogen fuel cell program with 
a goal of launching hydrogen fuel cell cars into the market by Model 
year 2020.
  H.R. 6 will have far reaching implications from the industry to the 
family room. It will allow our country to continue its path of 
prosperity and leadership. I urge my colleagues to support this 
legislation.
  The CHAIRMAN. The Chair will now recognize the gentlewoman from 
Illinois (Mrs. Biggert) and the gentleman from Texas (Mr. Hall), who 
each will control 10 minutes.
  The Chair recognizes the gentlewoman from Illinois (Mrs. Biggert).
  Mrs. BIGGERT. Mr. Chairman, as the chairman of the Subcommittee on 
Energy of the House Committee on Science, I rise today in strong 
support of H.R. 6, the Energy Policy Act of 2003 and, in particular, 
those provisions that originated in the Committee on Science.
  I want to start by commending the chairman of the Committee on 
Science, my friend and colleague, the gentleman from New York (Mr. 
Boehlert); the ranking member of the full committee, the gentleman from 
Texas (Mr. Hall); and the ranking member of the Subcommittee on Energy, 
the gentleman from Texas (Mr. Lampson), as well as the members of the 
Committee on Science from both sides of the aisle for all of their hard 
work on this bill.
  I would also like to thank the chairman of the Committee on Energy 
and Commerce, the gentleman from Louisiana (Mr. Tauzin) for his efforts 
to resolve a number of overlapping jurisdictional issues in a way that 
confirms our two committees' responsibilities and advances important 
energy issues in the bill.
  The resolution of these issues is reflected in an exchange of letters 
between the gentleman from New York (Chairman Boehlert) and the 
gentleman from Louisiana (Chairman Tauzin), and I ask that these 
letters be inserted in the Record at this time.

                                         House of Representatives,


                                         Committee on Science,

                                    Washington, DC, April 7, 2003.
     Hon. William J. Tauzin,
     Committee on Energy and Commerce, House of Representatives, 
         Washington, DC.
       Dear Mr. Chairman: This letter is intended to put in 
     writing the understandings about jurisdiction that informed 
     our negotiations over the structure and content of H.R. 6, 
     the Energy Policy Act of 2003.
       It was agreed that the structure of H.R. 6 has no bearing 
     on future decisions on jurisdiction and that neither our 
     Committee nor yours waived any jurisdictional claim as part 
     of the drafting of H.R. 6. No agreements concerning either 
     the language of H.R. 6 or the placement of any language 
     should be construed as a waiver of either Committee's 
     jurisdictional claims under Rule X or the precedents of the 
     House.
       Moreover, our two Committees agreed that both Committees 
     have jurisdiction over the Division of H.R. 6 pertaining to 
     the Hydrogen Initiative and FreedomCAR.
       I look forward to continuing to work with you as H.R. 6 
     moves through the legislative process.
           Sincerely,
                                             Sherwood L. Boehlert,
     Chairman.
                                  ____

                                         House of Representatives,


                             Committee on Energy and Commerce,

                                    Washington, DC, April 9, 2003.
     Hon. Sherwood L. Boehlert,
     Chairman, Committee on Science, House of Representatives, 
         Washington, DC.
       Dear Chairman Boehlert: Thank you for your letter regarding 
     the discussions our Committees held to draft H.R. 6.

[[Page H3093]]

       I agree that no agreements concerning either the language 
     of H.R. 6 or the placement of any language should be 
     construed as a waiver of either Committee's jurisdictional 
     claims under Rule X or the precedents of the House.
       Moreover, our two Committees agreed that both Committees 
     have jurisdiction over the Division of H.R. 6 pertaining to 
     the Hydrogen Initiative and FreedomCAR.
           Sincerely,
                                            W.J. ``Billy'' Tauzin,
                                                         Chairman.

                              {time}  1500

  Finally, let me express my appreciation for the extremely 
professional staff from all relevant committees, as well as key 
leadership staff, and some who have worked diligently on this bill for 
months and in some cases years to get us to this point. I know that 
many of them worked through the weekend to recraft major portions of 
this bill, which only made it better.
  Mr. Chairman, a national energy policy is urgently needed. Over the 
past 30 years, our national energy demand has increased 47 percent, and 
yet we now have half as many oil refineries, static pipeline capacity, 
and 12 different blends of gasoline in just my home State of Illinois 
alone.
  We have not built a large refinery in about 20 years, and our current 
refineries are operating at 95 percent capacity. Almost 60 percent of 
the oil consumed in America has to be imported because we are home to 
only 2 percent of the world's supply. Unless we begin to address some 
of these fundamental problems, we are going to experience high and 
volatile energy prices every year, well into perpetuity.
  America now has the motivation, perhaps like no other time since the 
oil crisis of the seventies, to find newer and better ways to meet our 
energy needs. Renewed violence in the Mideast, the wars against 
terrorism and in Iraq will continue to cause more volatility in energy 
prices and supplies. It does not take a chemical engineer or a foreign 
policy expert to understand what that portends: continued dependency on 
increasingly uncertain sources.
  At the same time, I do not believe that affordable energy and a clean 
and safe environment are mutually exclusive. America has the ingenuity 
and expertise to meet our future energy demands and promote energy 
conservation; and we can do it in environmentally responsible ways and 
set a standard for the world.
  President Bush 2 years ago emphasized the use of advanced technology 
to expand and diversify our energy supply while reducing our energy 
demand. But advanced technologies do not grow on trees; they grow out 
of scientific research, like that supported by the Department of Energy 
at our universities and national laboratories. This is exactly the kind 
of research and development that was authorized in the energy R&D bill 
approved by the Committee on Science last week and incorporated into 
the bill before us today.
  As was the case in the last Congress, the Committee on Science's 
energy provisions are bipartisan, comprehensive, forward-thinking, and 
balanced. They represent numerous bipartisan agreements developed 
through lengthy negotiations between House and Senate conferees on the 
R&D title of H.R. 4 in the last Congress.
  But the world of energy research does not stand still between the 
last Congress and now. There have been important developments since 
last November, which we addressed in several amendments, all of which 
were unanimously approved in our markup last week.
  First, to further the goal of developing energy from nuclear fusion, 
a potentially limitless source of safe and clean energy, this bill 
authorizes U.S. participation in the development and construction of 
ITER, the international fusion experiment.
  Second, I am particularly pleased to note that H.R. 6 includes higher 
authorization levels that I originally proposed in H.R. 34 for 
important basic research programs at the DOE's Office of Science, which 
is the Nation's primary supporter of research in the physical sciences, 
mathematics, and computing.
  Last, the bill of the Committee on Science, and division F of the 
bill before us, authorizes the Hydrogen Initiative announced by 
President Bush in this year's State of the Union Address. The vision of 
a hydrogen economy holds great promise for reducing our dependence on 
foreign oil while reducing air pollution, and we are pleased to support 
the President by authorizing this important initiative.
  Mr. Chairman, this is a fair and balanced bill. It takes a step in 
the right direction towards our goal of developing cleaner, more 
efficient, and abundant sources of domestic energy to enhance our 
country's economic energy and national security. I urge strong support 
for its passage.
  Mr. Chairman, as the Chairman of the Energy Subcommittee of the House 
Science Committee, I rise today in strong support of H.R. 6, the Energy 
Policy Act of 2003, and in particular those provisions that originated 
in the Science Committee.
  I want to start by commending the Chairman of the Science Committee, 
my friend and colleague Mr. Boehlert, the Ranking Member of the Full 
Committee, Mr. Hall, and the Ranking Member of the Energy Subcommittee, 
Mr. Lampson, as well as Members of the Science Committee from both 
sides of the aisle for all their hard work on this bill. Just last 
week, the Science Committee approved H.R. 238, ``The Energy Research, 
Development, Demonstration and Commercial Application Act of 2003,'' 
the vast majority of which is contained in the bill we are considering 
today. This is a testament to the important role science and technology 
will play in addressing our current and but also our future energy 
challenges.
  I also would like to thank the Chairman of the Energy and Commerce 
Committee, Mr. Tauzin, for his efforts to resolve a number of 
overlapping jurisdictional issues in a way that protects our two 
committees' programs and responsibilities and advances important energy 
issues in the bill. The resolution of these issues is reflected in an 
exchange of letters between Chairman Boehlert and Chairman Tauzin, and 
I ask that these letters be inserted in the record at this time.
  Finally, let me express my appreciation for the extremely 
professional staffs of all the relevant committees, as well as key 
leadership staff, who have worked diligently on this bill for months--
and in some cases, years--to get us to this point. I know that many of 
them worked through the weekend to re-craft those portions of the bill 
where that involved committee differences and jurisdictional issues. In 
particular, I would like to thank the staff of the Energy Subcommittee 
of the Science Committee, including Gabe Rozsa, Eli Hopson, Tina 
Kaarsberg, and Kevin Carroll on the majority side, and Charlie Cooke on 
the minority side, for all their hard work. Also deserving recognition 
for their tireless efforts are the full committee staff of the Science 
Committee, including David Goldston, John Mimikakis and Mike Bloomquist 
on the majority side, and Bob Palmer, Christopher King and Jim Turner 
on the minority side. The many contributions of those I've just 
mentioned have resulted in a better bill, and one that I would urge my 
colleagues to support.
  Mr. Chairman, a national energy policy is urgently needed. Over the 
past 30 years, our energy demand has increased 47 percent, and yet we 
now have half as many oil refineries, static pipeline capacity, and 12 
different blends of gasoline in just my home state of Illinois alone. 
We haven't built a large refinery in about 20 years and our current 
refineries are operating at 95 percent capacity. Almost 60 percent of 
the oil consumed in America has to be imported because we are home to 
only 2 percent of the world's supply. Ninety-seven percent of the power 
plants currently under construction use the same non-renewable fuel--
natural gas. Unless we begin to address some of these fundamental 
problems, we're going to experience high and volatile energy prices 
every year--well into perpetuity.

  America now has the motivation--perhaps like no other time since the 
oil crisis of the '70's--to find newer and better ways to meet our 
energy needs. Renewed violence in the Middle East, the wars against 
terrorism and in Iraq will continue to cause more volatility in energy 
prices and supplies. It doesn't take a chemical engineer or a foreign 
policy expert to understand what that portends--continued dependence on 
increasingly uncertain sources.
  At the same time, I do not believe that affordable energy and a clean 
and safe environment are mutually exclusive. America has the ingenuity 
and the expertise to meet our future energy demands and promote energy 
conservation, and we can do so in environmentally responsible ways that 
set a standard for the world. What I like most about the National 
Energy Policy proposed originally by President Bush two years ago is 
that it emphasizes the use of advanced technology to expand and 
diversify our energy supply while reducing our energy demand. But 
advanced technologies don't grow on trees. They grow out of scientific 
research like that supported by the Department of Energy at our 
universities and national laboratories.
  This is exactly the kind of research and development that was 
authorized in the energy R&D bill approved by the Science Committee 
last week and incorporated into the bill before

[[Page H3094]]

us today. As was the case in the last Congress, the Science Committee's 
energy provisions are bipartisan, comprehensive, forward-thinking and 
balanced. Our Committee started from a bill that was introduced by 
Chairman Boehlert and Ranking Member Hall during the first week of this 
Congress. The language in the bill was the text of bipartisan 
agreements developed through lengthy negotiations between House and 
Senate conferees on the research and development title of H.R. 4 in the 
last Congress.
  A lot of work went into that text.
  It, too, was fair and balanced, promoting R&D related to energy 
efficiency and renewable energy, nuclear energy and fossil fuels, as 
well as basis research in the DOE Office of Science. It included major 
initiatives, such as the new ultra-deep drilling program and the Clean 
Coal Program, which involved a compromise to ensure that DOE's R&D and 
technology programs actually increased energy production, improved 
energy efficiency, and led to a cleaner environment. I'm pleased to 
report that last year's agreements were the foundation of what we 
developed this year.

  But the world of energy research did not stand still between last 
Congress and now. There have been important developments since last 
November, which we addressed in several amendments, all of which were 
unanimously approved at our mark up last week.
  First, to further the goal of developing energy from nuclear fusion, 
a potentially limitless source of safe and clean energy, this bill 
authorizes U.S. participation in the development and construction of 
ITER, the international fusion experiment. This authorization contains 
strict limitations that minimize the financial exposure of the U.S., 
while allowing Congress to revisit the issue again before construction 
begins. It also makes clear that Congress does not intend for U.S. 
participation in ITER to reduce or diminish funding for our domestic 
fusion program at the DOE, which continues to support cutting edge 
fusion research. This is especially important, for as the New York 
Times reported on April 8, 2003, scientists at DOE's Sandia National 
Laboratory have now managed to achieve a controlled fusion reaction. 
These are the kinds of advances in energy research that a truly 
comprehensive energy bill should continue to support and preserve.
  Second, I am particularly pleased to note that H.R. 6 includes higher 
authorization levels that I originally proposed in H.R. 34 for 
important basic research programs at the DOE's Office of Science, which 
is the nation's primary supporter of research in the physical sciences, 
mathematics, and computing. In the past, funding for research in the 
physical sciences remains stagnant, with the budget for the DOE Office 
of Science at its 1990 level in constant dollars.
  In a report released at the end of August last year, the President's 
Council of Advisors on Science and Technology, or P-CAST, recommended 
that R&D for the physical sciences should be brought to parity with the 
life sciences over the next five budget cycles. What was P-CAST's 
rationale? Just a little over thirty years ago, support for the three 
major areas of research--physical and environmental sciences, life 
sciences, and engineering--was equally balanced. Today, the life 
sciences receive 48 percent of federal R&D funding compared to the 
physical sciences' 11 percent and engineering's 15 percent. This trend 
does not bode well for either the physical sciences or the life 
sciences. As the P-CAST report points out, ``It is widely understood 
and acknowledged that the interdependencies of the various disciplines 
require that all advance together.'' To further articulate the case for 
this much-needed funding, I would like to introduce into the Record the 
Executive Summary of a January 2003 report by the American Physical 
Society entitled ``Department of Energy Office of Science: The Case for 
Budget Increases.''
  Third, the bill approved by the Science Committee, and Division F in 
the bill before us now, authorizes the Hydrogen Initiative announced by 
President Bush in his State of the Union Address this year. The vision 
of a hydrogen economy, which relies on energy from hydrogen fuel cells 
in our homes, businesses, and cars, holds great promise for reducing 
our dependence on foreign oil and reducing air pollution. The Science 
Committee has a long history of supporting hydrogen research and 
development, and we are pleased to support the President by authorizing 
this important initiative. More specifically, the Science Committee's 
provisions: flesh out areas of R&D that the Initiative must cover; 
require the Department to undertake more extensive planning; and ensure 
that demonstration projects actually facilitate the transition to a 
hydrogen economy.

  Finally, let me also mention the role of the Science Committee in the 
development of the Clean Coal provisions in Division E of H.R. 6. 
Again, the provisions in H.R. 6 are based on language originally 
developed by the Science Committee in the 107th Congress, included in 
H.R. 4, and agreed to in the conference on that bill. On a bipartisan 
basis, the Science Committee agreed to further refine this language at 
the urging of my colleague from Illinois, Mr. Costello. The language in 
the Science Committee's reported bill represented a balanced program to 
promote new coal technology that will improve efficiency and reduce 
emissions from our most abundant domestic source of energy. While 
further changes were made during negotiations with the Energy and 
Commerce Committee, it was with the understanding that the two 
committees would allow no further concessions to weaken the protections 
that ensure that funds are used to advance clean coal technology in an 
environmentally and fiscally responsible way.
  Mr. Chairman, this is a fair and balanced bill. It takes a step in 
the right direction towards our goal of developing cleaner, more 
efficient and abundant sources of domestic energy to enhance our 
country's economic, energy, and national security. I urge strong 
support for its passage.

 American Physical Society--Securing the Future for the Department of 
       Energy's Office of Science--The Case for Budget Increases

                          I. Executive Summary


                                Overview

       A significant budget increase for the Department of 
     Energy's Office of Science (SC) is critically important for 
     meeting the nation's scientific and technological needs in 
     the 21st century. National security and economic growth 
     depend on a well-trained workforce and a vibrant scientific 
     base. For the DOE to capitalize on the extraordinary 
     scientific opportunities already identified by leaders in the 
     research community, funding for the Office of State would 
     have to increase more than two-fold. Since the DOE SC is the 
     principal federal custodian of the physical sciences, the 
     American Physical Society feels compelled to be one of the 
     prime advocates for its budgetary growth.
       The DOE Office of Science is by far the nation's largest 
     support of research in the physical sciences, and it plays a 
     dominant role in underwriting activities in mathematics and 
     computing. It has made extraordinary contributions over many 
     years to the nation's science and technology enterprise and 
     the benefits we derive from it. As a result of this work, we 
     are entering the 21st century with a new and deeper 
     understanding of how matter and energy shape the universe--
     new knowledge that allows us to improve life here on earth. 
     The SC was one of the developers of the Internet, began the 
     computational analysis of global climate change, initiated 
     the sequencing of human and other genomes, promoted early 
     advances in nanotechnology and protein crystallography. The 
     SC's unique capabilities remain central to both basic and 
     applied research, in fields as diverse as developing designer 
     drugs, accelerating computing speeds, and generating 
     sophisticated diagnostics for national security, medical and 
     industrial purposes.
       We have entered an era in which advancement in any 
     scientific discipline depends on an understanding of nature 
     in many disciplines, especially at the very small scale. 
     Furthering interdisciplinary activities and probing matter at 
     the smallest scale are fundamental strengths of the SC 
     research programs carried out in unversities and national 
     laboratories. Uniquely among civilian agencies, DOE's Office 
     of Science is responsible for operating big facilities 
     capable of tackling large-scale, complex, multi-disciplinary 
     problems, such as nanotechnology and genomics. The SC program 
     provides extraordinary value of its own, but it is also vital 
     for exploiting the investments made in other fields.
       Policy makers of virtually all stripes agree that the 
     federal government must play a central role in guaranteeing 
     that the United States maintain its position as the world's 
     leader in science and technology. Unfortunately, that 
     position is currently at risk. In teraflop computing, for 
     example, the Japanese new supercomputer ``Earth Simulator'' 
     threatens American dominance at the cutting edge of computer 
     technology and large-scale scientific simulations. The 
     federal investment in research is also an investment in the 
     next generation of scientists. Especially in the physical 
     sciences and engineering, our technically trained workforce 
     is aging and our nation is becoming ever more reliant on the 
     pipeline of foreign researchers. At a time when our nation 
     is so focused on homeland security, this trend is very 
     troublesome.


                          Budget Implications

       For more than a decade, budgets for the DOE Office of 
     Science have stagnated or declined. To reinvigorate these 
     programs and assure American scientific leadership, 
     significant increases in spending are required. The budget 
     increase required for the following three priorities of the 
     Office of Science will entail a 13 percent increase over FY02 
     spending:

            University Research and Grant Acceptance Levels

       Research conducted by university professors is vital to the 
     success of the DOE SC program and the training of a national 
     work force skilled in a wide parity of physical science 
     disciplines, including computing and engineering. 
     Approximately one quarter of

[[Page H3095]]

     the SC budget (projected to be $765 million in FY 2003) 
     supports competitive, peer-reviewed grants to about 2000 
     individual investigators at more than 250 universities and 
     institutions nationwide. In addition, university and 
     industrial scientists constitute a significant share of the 
     user community at the DOE's major facilities.
       The decline is physical science and engineering degrees for 
     US citizens is well-documented and a cause for concern, even 
     alarm, given the requirements of our economy and the shortage 
     of technical personnel to fulfill them. Although SC is the 
     prime supporter of the physical sciences and is responsible 
     for a major share of university research, SC is able to fund 
     only 10 percent of the grant applications it receives. Even 
     in a priority area such as nonosciences, SC has funds to 
     grant only 13.5 percent of submitted applications. By 
     comparison, NSF was able to fund 31 percent of grants 
     submitted in 2001 by a similar applicant pool, and NSF 
     projects a 32 percent acceptance rate in FY02 and FY03. Since 
     the DOE Office of Science is the primary source of research 
     funds for the physical sciences at universities, improving 
     SC's funding rate to at least 33 percent in all areas would 
     significantly impact scientific program in the physical 
     sciences. This increase in grant approval rates would bring 
     the total cost of the university grant program to $2524 
     million.

               Facilities and Infrastructure Improvement

       The nation has benefited enormously from investment in DOE 
     SC facilities over the years. DOE SC is solely responsible 
     for the facilities at National Labs; although users from many 
     scientific disciplines use DOE SC machines, DOE designs, 
     develops and operates them. Roughly half of the DOE SC budget 
     is devoted to user facilities. The more than 17,000 
     scientists and 3,000 graduate students who use these 
     facilities each year are employed by universities, federal 
     science agencies and private industry. Often DOE labs host 
     major collaborations to address complex problems of national 
     importance.
       Maintenance backlogs, facilities underutilization, and 
     delayed or dropped upgrades jeopardize the facilities 
     programs in the Office of Science. Currently the DOE SC is 
     able to only put $37 million per year towards the backlog of 
     facilities infrastructure needs. A report released in April 
     of 2001 by the Office of Science determined that an infusion 
     of $932 million was needed to address these problems, 
     including $460 million to upgrade buildings, $308 million to 
     replace outdated buildings, $92 million for utility projects, 
     and $72 million for environmental safety and health. Spread 
     out over a five-year span, DOE SC would need to spend at 
     least $186 million per year just to take care of the existing 
     queue; as facilities age with time, this backlog will 
     continue to grow. A yearly investment of $100-150 million per 
     year beyond FY07 will be needed to maintain and upgrade the 
     facilities. At least another $50 million per year is 
     necessary to run the DOE SC's facilities full-time at 
     capacity.

                              Initiatives

       The Office of Science has identified a set of key 
     initiatives that take advantage of emerging research 
     opportunities across the six program areas within DOE SC. 
     They are exemplified by a series of Occasional Papers issued 
     by that office: The Challenge and Promise of Scientific 
     Computing; The Beauty of Nanoscale Science, Using Nature's 
     Own Toolkit to Clean Up the Environment; Dark Energy--The 
     Mystery that Dominates the Universe; Bringing a Star to 
     Earth; and Biotechnology for Energy Security. The program 
     papers that constitute Part III of this document contain 
     detailed descriptions and cost estimates for the 
     opportunities in support of those key initiatives; the total 
     increase over FY02 is 76 percent. Short summaries of each of 
     the six papers follow.


                       summary of program papers

             Advanced Scientific Computing Research (ASCR)

       Advanced computing technology are needed to answer 
     otherwise intractable scientific questions. The Office of 
     Advanced Scientific Computing Research (OASCR) supports 
     fundamental research in mathematics, computer science and 
     networking. OASCR promotes programs that build a tight 
     coupling between Advanced Scientific Computing Research and 
     basic scientific research in other Office of Science 
     programs. The top priorities for OASCR over the next five to 
     ten years include (1) high-performance architectures, 
     networking, and software with an emphasis on scientific 
     application rather than pure computer speed; (2) new 
     mathematics and new algorithms for new problems, especially 
     in the treatment of multiple scales; and (3) improvements in 
     facilities and networking.

              Biological and Environmental Research (BER)

       The BER program seeks innovative solutions to key 
     scientific challenges by supporting research across the life, 
     environmental, and medical sciences. BER invests in 
     developing faster, cheaper and more accurate DNA sequencing 
     technology and advanced climate models; conducts fundamental 
     research on energy-related chemicals and particulate 
     matter emitted to the atmosphere; and supports world-class 
     competitive user facilities for structural biologists. BER 
     also supports fundamental research into methods to clean 
     up radioactive contamination on DOE sites, especially 
     where traditional clean up strategies may be ineffective 
     or too costly. The medical applications division of BER 
     coordinates its research with basic and clinical research 
     at the National Institutes of Health. The top priorities 
     for BER include (1) Genomes to Life, an initiative to 
     investigate and understand complex biological systems; (2) 
     climate change research; (3) field implementations of bio-
     remediation solutions; and (4) high-risk, upstream 
     research in advanced medical imaging.

                      Basic Energy Sciences (BES)

       The Basic Energy Sciences (BES) program supports basic 
     research in materials science and engineering, chemistry, 
     geosciences and energy biosciences. This research will 
     ultimately lead to the development of materials that improve 
     the efficiency, economy, environmental acceptability and 
     safety for a wide variety of applications. The top priorities 
     for BES include: (1) completion of the Spallation Neutron 
     Source, a next-generation neutron scattering facility 
     currently under construction, and neutron scattering 
     research; (2) nanoscale science and science research centers; 
     and (3) development of the next-generation synchrotron 
     radiation light source.

                      Fusion Energy Sciences (FES)

       The Office of Fusion Energy Sciences supports research on 
     advanced plasma science, fusion science, and fusion 
     technology with the ultimate objective of achieving a safe, 
     economic power source, free of greenhouse gases, using widely 
     available fuels, and with no long-lasting hazardous by-
     products. Advances in understanding the basic physical 
     processes of plasmas (ionized gases) will yield better 
     methods for sustaining, heating, and controlling plasmas in 
     regimes relevant to fusion power generation. Crucial to the 
     eventual utility of fusion as a power source is the burning 
     plasma experiments in which the fusion process itself is the 
     dominant source of heat. Priorities for FES include: (1) a 
     burning plasma facility such as the International 
     Thermonuclear Experimental Reactor; (2) developing an 
     integrated modeling capability for toroidal confinement 
     systems that incorporates recent theory, experimental 
     results, and advanced computation techniques; and (3) 
     enhanced materials modeling augmented by a major initiative 
     in innovative materials development. In addition, FES' 
     smaller facilities, located mostly at universities, need 
     additional capability to carry out their science programs. 
     This initiative includes funding for competitively selected 
     Frontier Fusion Science Centers.

                       High-Energy Physics (HEP)

       HEP supports research into the fundamental structure of 
     matter, energy, space and time. Experiments and theoretical 
     insights over the past several decades have led to a detailed 
     understanding of the most basic particles and forces, and how 
     they govern the evolution of the universe. Technologies 
     developed for HEP research have led to significant 
     applications in such areas as global communications, computer 
     and materials science, molecular biology, medical 
     diagnostics, and national security. Priority areas for 
     current and future research in HEP include: (1) exploring new 
     regions of energy where the forces of nature become unified 
     and new physics must emerge; (2) elucidating the properties 
     of neutrinos, including just discovered fact that neutrionos 
     change from one type to another, (3) understanding the subtle 
     differences between the behavior of matter and anti-matter; 
     and (4) learning about the nature of dark matter and dark 
     energy, through experiments on earth and in space.

                          Nuclear Physics (NP)

       NP scientists probe the properties of nuclei and nuclear 
     matter and of their ultimate constituents--quarks and 
     gluons--as well as investigating key interdisciplinary 
     questions, including the basis of fundamental symmetries in 
     nature, how matter emerged in the first moments of the 
     universe, the nature of supernovae, and the origin of 
     elements in the cosmos. NP supports research into the 
     structure of nucleons and nucleonic matter, the properties of 
     hot nuclear matter, and the fundamentals of nuclear 
     microphysics. More than half of nuclear-science Ph.D.'s apply 
     their training outside their field, most notably in medicine, 
     industry, and national defense. Current priorities for the 
     Nuclear Physics Program include: (1) Continuous Electron Beam 
     Accelerator Facility at the Jefferson National Accelerator 
     Facility and (2) the Relativistic Heavy-Ion Collider at 
     Brookhaven National Laboratory. In order to understand how 
     nuclei are constructed from their constituent parts, the 
     nuclear science community has proposed the Rare Isotope 
     Accelerator project, a new concept in exotic-beam facilities.

  Mr. Chairman, I reserve the balance of my time.
  Mr. HALL. Mr. Chairman, I yield myself such time as I may consume.
  I am pleased to support this legislation. It is the product of a lot 
of months of work, not only this year, but also in the last Congress we 
worked hard and worked on into the conference committee. We were able 
to preserve a lot of the language that was agreed to last year, but 
never formally adopted by the conferees. I was disappointed in that.
  The members of the Committee on Science have worked well together on 
both sides of the docket to produce provisions that make the Federal 
Government an enabling partner in energy research and development to 
enable us to

[[Page H3096]]

develop the technologies necessary to conserve energy and use it more 
efficiently. Provisions in this bill also jumpstart the transition to a 
hydrogen economy and take the next step of exploring the possibility of 
fusion energy.
  These, of course, are all high-risk, high-payoff, and long-lead time, 
and in my view an appropriate role for the Federal Government to play 
in energy.
  However, in order to survive to the long term, we have to ensure that 
supplies of domestic oil and natural gas continue to flow. The 
transition from an oil and gas economy to one based on fusion and 
renewable energy will be extremely long. The fact is that it is easy to 
find and produce oil and gas. That amount has already been consumed. 
The challenge is getting it, I think, at the more difficult producing 
horizons. This legislation, I think, does that.
  I have always said that the energy policy we need is an incentive to 
look for it and a reward for finding it. This program actually comes as 
close to that as any I have seen in the 20 years I have been here.
  I am pleased that the Committee on Science has included my ultradeep 
and unconventional onshore exploration and production R&D provisions in 
division B. Mr. Chairman, in reality this is actually an important 
production provision masquerading as an R&D provision.
  The estimated volumes of natural gas that can be produced from the 
middle and western Gulf of Mexico are truly astonishing, 69 trillion 
cubic feet by one estimate.
  Under these provisions, an industry-led consortium will lead a crash 
program to develop the technologies necessary to drill and produce 
these hydrocarbons at extreme depths. A companion program will develop 
the technologies necessary to drill and produce the hard-to-reach oil 
and gas on shore. I think a crash R&D program will go a long way to 
meeting the increased demands for natural gas that are expected to 
occur in the next 15 years.
  Mr. Chairman, I reserve the balance of my time.
  Mrs. BIGGERT. Mr. Chairman, I yield 2 minutes to the gentleman from 
California (Mr. Calvert), a distinguished member of the Committee on 
Science.
  Mr. CALVERT. Mr. Chairman, I rise in support of sound energy for 
American citizens.
  First, I would like to thank the Members and staff of the four 
committees, the Committee on Energy and the Committee on Science, the 
Committee on Resources, and the Committee on Ways and Means, who have 
all worked so hard to bring this bill to the floor.
  There are a few points that I would like to address that I believe 
are crucial for the future stability of energy in America.
  First, I commend the inclusion of the hydrogen provision in H.R. 6, 
which is consistent with the President's call for alternative fuel 
sources in the future. We must actively pursue increased efficiency of 
fuel, reduced energy consumption, and additional research into 
alternative fuels such as hydrogen. The future of our economy and 
prosperity will ultimately depend on our ability to discover new ways 
to provide energy for our cars, homes, and businesses.
  Another important aspect of energy policy is the reform of nuclear 
and worker safety regulation at the Department of Energy. The 
Department of Energy is the only Federal agency that self-regulates; 
and after 10 years of studies, it is time that we implement external 
regulation of nonmilitary labs, for the welfare of the workers and to 
the benefit of taxpayers.
  While not included in this legislation, I am hopeful that we can pass 
other legislation to enact this reform and bring much-needed external 
regulation of worker safety and health to the Department of Energy.
  I am also hopeful that as we confer with the other body we will 
broadly include innovations in the field of biosynthetic fuel. Again, I 
commend the efforts of the various committees which have brought this 
bill about and look forward to moving more options in the arena of 
energy policy for the benefit of the American public.
  Mr. HALL. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from 
Texas (Mr. Lampson).
  Mr. LAMPSON. Mr. Chairman, I thank the gentleman for yielding time to 
me. It has been great working with the gentleman from Texas (Mr. Hall) 
on the Committee on Science. I want to commend the gentlewoman from 
Illinois (Mrs. Biggert) for the work she has done as chairman of the 
Subcommittee on Research, but also the gentleman from New York (Mr. 
Boehlert) on the full committee.
  Mr. Chairman, I rise today in support of H.R. 6, the comprehensive 
energy bill, particularly the research and development title that is 
the product of the bipartisan efforts of this Committee on Science.
  With a major portion of our current oil supply coming from overseas, 
it is essential that we make significant national investments in 
Department of Energy research and development programs to give us 
greater control over our future national energy supply.
  I come from an area that is a significant producer, as well as a 
processor, of oil. There is no question but that we need to try our 
best to put more of the people who are out of work in that field, 
particularly in southeast Texas, in my district, back to work.
  But our efforts must be focused not just on fossil fuels, but across 
a broad spectrum of energy sources, including wind, solar, nuclear, 
hydroelectric, and others. Conservation energy-efficiency programs are 
also essential. H.R. 6 provides us with a balanced approach to address 
our future energy needs.
  The bill also includes two important amendments that I offered in the 
Committee on Science. The first would require the Department of Energy 
to complete a report that would lay out the design and cost of 
establishing a test center for the next-generation fuel cells.
  My second amendment requires the DOE to report back on efforts to 
increase collaboration between large and small institutions of higher 
education. Smaller minority-serving universities have so much to offer 
the Department of Energy through grants, contracts, and cooperative 
agreements. I believe DOE can do more to foster this type of 
collaboration.
  I support H.R. 6, and I encourage my colleagues to support this very 
important legislation.
  Mrs. BIGGERT. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman 
from Oklahoma (Mr. Sullivan), a member of the Committee on Science.
  Mr. SULLIVAN. Mr. Chairman, I rise in support of the comprehensive 
energy legislation before us today.
  While the bill has many excellent provisions, I want to focus on just 
a few that I believe are particularly important.
  Increasingly, our country is relying on natural gas to heat our 
homes, fuel industry, and to generate electricity. The good news is our 
country is blessed with vast reserves of natural gas, and additional 
reserves are nearby in Canada. Unfortunately, many of our existing 
producing reservoirs are declining. This means we must allow access to 
new reserves and encourage the building of the infrastructure necessary 
to get these reserves to market.
  I am pleased that the bill contains several important provisions 
designed to do just that. For example, the bill directs the Secretary 
of Energy to undertake a program to demonstrate technologies for 
improving production techniques, particularly from unconventional 
natural gas reservoirs, such as tight sand formations and coal bed 
methane.
  The bill also includes a number of tax provisions to encourage 
production and infrastructure development. For example, the bill 
extends the section 29 tax incentives so important to the development 
of unconventional gas reserves. It also provides royalty relief to 
encourage production in deeper offshore waters. It also sets a 7-year 
depreciation life for gathering lines and a 15-year life for 
distribution lines.
  The bill also calls for improvements in the leasing process of the 
Department of the Interior. Much of the reserves remaining in the 
continental United States are located on Federal lands. These reserves 
can be developed in an environmentally sensitive manner, but we must 
break through the bureaucracy and other barriers that delay or block 
making these lands available.
  In summary, Mr. Chairman, I applaud the work of the many committees 
involved in putting this package together. Enactment of comprehensive 
energy legislation will address a critical sector of our economy and 
our country's security. I appreciate the leadership of

[[Page H3097]]

Chairman Tauzin, Mr. Pombo, Mr. Thomas, Mr. Boehlert, and others 
involved in putting this bill together and I hope that we can reach our 
goal of signing a comprehensive energy bill into law.
  Mr. HALL. Mr. Chairman, I yield 2 minutes to the gentleman from 
Washington (Mr. McDermott).
  Mr. McDERMOTT. Mr. Chairman, I thank the gentleman from Texas (Mr. 
Hall) for yielding me the time.
  I am in opposition to this bill because today I believe we are 
preparing to pass the oil industry's dream plan. It was drawn up in the 
secrecy of the vice president of the oil dynasty's office, Mr. Cheney. 
He has fought every attempt to tell us who was even in the meeting, 
much less what they talked about.
  The bill was brought up to the Congress and the Committee on Ways and 
Means, and we could not get any amendments adopted, nothing. It has 
been put out by the White House, and that is good enough for the boys 
up in the Committee on Ways and Means.
  Now, Rumsfeld and Bechtel were involved in this whole business with 
Iraq back in 1983. In December of 1983, Mr. Rumsfeld was there 
negotiating for a $2 billion pipeline from the southern Iraq fields to 
Aqaba, the Gulf of Aqaba, across Jordan.
  Saddam negotiated with them a while, and then he said no. Ever since 
then, there has been all this interest in why can we not go in and have 
a regime change, because he would not roll over for what was going on.
  Now, this is at the time, when Rumsfeld was negotiating with Saddam 
Hussein is exactly the time when he was bombing the Iranians with 
chemical weapons. We are over there making an oil deal, and this guy is 
doing this stuff out there. People act like we have such clean hands in 
this. This administration is going to get out of here with a bunch of 
money for oil.
  I offered an amendment in the Committee on Ways and Means to put 
money up for buying solar panels. They did it in San Francisco; they 
passed a bond issue to put solar panels on every building in San 
Francisco. They are doing it all over California. Eight times the 
amount of energy they need in California falls out of the sky every 
day.
  For this bill the chairman of the Committee on Ways and Means would 
not even consider that amendment. This is an oil company bill. It is 
oil, oil, oil. It has a greasy feeling to it.

                              {time}  1515

  Mrs. BIGGERT. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman 
from Maryland (Mr. Gilchrest).
  Mr. GILCHREST. Mr. Chairman, I thank the gentlewoman for yielding me 
time.
  This is not the perfect bill. There are very few bills that come 
before the House that are perfect. I think there is a recognition that 
within a 20-year time frame the administration would like to relieve 
ourselves of the burden of fossil fuels, become independent of foreign 
sources of energy, and protect and improve the environment by burning 
hydrogen, fusion and other alternative sources.
  There are a number of things in this bill that we can work on and 
improve, and this is not our only shot at it. Our shot at the energy 
resources of this country and energy policy comes on an annual basis.
  The things that are good about this bill are, they do promote, maybe 
not as much as all of us want to, but they do promote alternative 
sources of fuel. One of the most exciting is fusion, which is not 
necessarily 50 years away, but maybe within a couple of decades.
  Another interim fuel source or another interim mechanism is hybrid 
vehicles.
  Another powerful, positive reachable energy source of fuel is 
hydrogen. Hydrogen is probably the most pervasive element in the 
universe. It is one of the most pervasive elements on the planet. And 
if we can do what the administration wants to do, perfect this 
technology, when you burn hydrogen, it is a source of independence for 
the United States; when you burn hydrogen, the exhaust is water.
  So there are a number of alternatives, there are a number of positive 
things about this bill.
  The CHAIRMAN. The gentleman from Texas (Mr. Hall) has 3\1/2\ minutes 
remaining.
  Mr. HALL. Mr. Chairman, I yield 1\1/2\ minutes to the gentlewoman 
from California (Ms. Watson).
  Ms. WATSON. Mr. Chairman, I rise today to strongly urge my colleagues 
to vote against H.R. 6.
  The electricity provisions contained in title VII of H.R. 6 would, 
among other things, repeal the Public Utility Holding Company Act 
enacted during the Great Depression era that has protected investors 
and consumers from unconstrained market power by huge utility holding 
companies.
  The title also includes transmission siting provisions which preempt 
not only State decisions about which new or expanded electricity lines 
should be built in local communities, but also Federal authority to 
decide whether lines should not built in our national parks and other 
public places.
  The Republican bill's aggressive efforts to deregulate the 
electricity market not only exacerbates the sort of manipulation that 
occurred in California's electricity market from 2000 through 2001 that 
cost consumers $45 billion, it ignores any lesson that could be learned 
from Enron and other fraudulent players' actions in my State, my State 
of California, and further weakens Federal and State oversight 
abilities.
  I strongly urge my colleagues to vote against the bill.
  Mr. HALL. Mr. Chairman, how much time do I have remaining?
  The CHAIRMAN. The gentleman from Texas (Mr. Hall) has 2 minutes 
remaining.
  Mr. HALL. Mr. Chairman, I yield the remainder of my time to the 
gentlewoman from Texas (Ms. Jackson-Lee), a very valuable member of our 
committee.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I thank the distinguished 
ranking member. It has been a pleasure to work with the Committee on 
Science on this very important legislation. We might be one of the few 
committees, Mr. Chairman, that has been able to look at this bill in a 
broad, global manner; and though I have some great concerns with some 
of the directions of this legislation, the drilling in ANWR that I 
believe can now be put on hold because of the very fine amendment that 
the Committee on Science worked on, the gentleman from Texas (Mr. 
Lampson) and myself, that asked the Interior Department to assess the 
value of deposits in the Gulf and to begin to reinforce further 
drilling in that area in an environmentally safe climate.
  We are trying to find constructive ways to deal with the energy issue 
of this Nation. We want this Nation to be strong and independent as it 
relates to energy; and so we worked in a bipartisan way. One of the 
amendments that was included is the question of utilizing secondary 
batteries, an amendment that I got in. I am very proud to note that the 
committee, in a bipartisan way, worked on bioenergy funding research 
for HBCU's and tribal- and Hispanic-serving institutions. We are trying 
to prepare our young people to be the future scientists of the world.
  Additionally, I think it is very important to note that we have an 
amendment that I authored that creates a relationship between the 
Department of Energy and NASA. Some of the technology on weather and 
other sciences that NASA has would be very useful to the Department of 
Energy. I believe we can get to the point of presenting a national 
energy agenda that respects the environmental approach to such, but as 
well recognizes that we have many wonderful resources, including oil 
and gas, that we can mine these, if I can use that terminology, in an 
environmentally safe manner, that we can promote job growth, that we 
can enhance the scientists and the researchers of the Nation by 
training our young people, by involving our historically black-, 
Hispanic- and tribal-serving institutions.
  We can do this in a bipartisan way. I hope the amendments that have 
been offered by my colleagues on the Democratic side will be accepted. 
And I hope, when we finish this, Mr. Chairman, we will have a bill that 
all of us will be able to enthusiastically vote for because it is in 
the national interest, and I believe it is important to move this 
legislation forward.
  I thank my colleagues in the Committee on Science for working in such 
a bipartisan manner.
  The CHAIRMAN. The Chair will now recognizes the gentleman from 
California (Mr. Pombo) and the gentleman

[[Page H3098]]

from West Virginia (Mr. Rahall) to control 10 minutes each.
  The Chair recognizes the gentleman from California (Mr. Pombo).
  Mr. POMBO. Mr. Chairman, I yield myself 3 minutes.
  Mr. Chairman, we have a number of challenges when it comes to 
developing a balanced energy policy for the future of our country.
  First of all, we have to look at the future, and all of us can talk 
about where we want to go in terms of our future energy needs and how 
those needs are going to be met. We can talk about wind power and solar 
power, about fuel cell technology and all of the new things that are 
coming on line, and the technology that is being developed; and I think 
that is great. I think we all know that one day that is how we will 
solve the energy challenges that we have as a country.
  But we also have to look at the needs of today and what we are 
currently using and what we are dependent on and how we meet those 
challenges. The solutions that we come up with in this bill identify 
both of those, needs and challenges. We have sections in the bill that 
deal with alternative energy and our future needs and how we are going 
to put money into research and technology, and the Committee on Science 
has done a great job with that and the Committee on Energy and Commerce 
has done a great job with that.
  In our committees, the Committee on Resources, we also addressed 
those alternative energy needs, and that is extremely important; but 
when we look at our needs of today and how we are going to meet those 
needs, we have to look at increasing production in this country to take 
away the demands on foreign energy and the reliance we have on 
countries like Iraq and others for bringing that energy into this 
country.
  Part of that is increasing production on public lands. The ANWR is 
part of that, the Arctic National Wildlife Refuge, and out of that 19-
million-acre refuge, we are proposing that we take a very small part of 
that to help solve our Nation's needs. I think as we look towards how 
we put together a balanced energy policy, this bill accomplishes that.
  Now, I know that we went through years in writing this bill. We went 
through hearing after hearing. We had mark-ups. We had amendments. We 
had more than a dozen amendments at the committee level, and many of 
those amendments came from my friends in the minority and several of 
them we accepted. And as we tried to put that bill together, we reached 
what was largely a bipartisan consensus on moving our titles of the 
bill. It passed out of committee with a 32-14 bipartisan vote coming 
out of the committee.
  There was general consensus amongst the members on the committee that 
this was the right way to approach all of our problems. That does not 
mean that we all agree on everything, that all of us got everything we 
wanted. But what it means is that it was a compromise, and it is a bill 
that we can all be proud of; and I urge my colleagues to support the 
bill.
  Mr. Chairman, I reserve the balance of my time.
  Mr. RAHALL. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, it is no secret that I oppose much of what is contained 
in H.R. 6 and especially provisions approved by the Committee on 
Resources. However, I do want to publicly thank the Committee on 
Resources chairman, the gentleman from California (Mr. Pombo), for his 
fairness, his fairness in allowing all the amendments to be heard 
during the committee consideration of this bill in a very judicious 
manner, and I appreciate that.
  Now, while I am disappointed that my substitute to the Committee on 
Resources provisions was not made in order, I do appreciate, as well, 
the Committee on Rules making in order my amendment to strike the 
Federal coal leasing provisions, as well as the gentleman from 
Wisconsin's (Mr. Kind) amendment to strike the non-ANWR oil and gas 
provisions.
  Finally, to my friend, the gentleman from California (Mr. Thomas) the 
distinguished chairman of the Committee on Ways and Means, I thank him 
for having an amendment made in order to strike from this bill 
provisions which would have done great harm to retired coal miners and 
their widows; and the chairman and I have personally discussed this 
issue.
  With that, Mr. Chairman, I end my kudos.
  Today, this body is considering legislation that represents an 
unprecedented assault on America's resources and on American taxpayers 
under the guise of contributing to our energy security. The fact of the 
matter is that there is little in the way of relief for Americans at 
the gas pump in this bill. Adding insult to injury, the legislation 
would gouge Americans even further through a whole host of taxpayer 
subsidies to energy producers. This is misguided relief.
  It is not for consumers but for multinational corporations drilling 
for oil and gas in Federal Gulf of Mexico waters by granting them a 
taxpayer-subsidized royalty holiday. They get to drill and the taxpayer 
foots the bill by forgoing royalty payments. An unwarranted drilling 
incentive at a time of high energy prices, a staggering budget deficit, 
and the yet unknown full cost of the war in Iraq.
  In fact, this legislation contains so many royalty reductions and 
kickbacks that the Treasury stands to lose a mint. There are royalty 
holidays for deep-water wells, shallow water/deep wells, and marginal 
wells. Just name the site and there is a good chance a company will be 
relieved of its debt to the country. It is probably easier to identify 
who would actually have to pay a royalty rather than who would not if 
this bill were to become law. Robin Hood must be turning in his grave.
  Even America's natural resource heritage would be placed at risk 
under this legislation, whether it be along the Rocky Mountain front, 
our national forests, ANWR or in Federal waters near beach communities. 
These areas are all targeted for increased energy development under the 
bill. Americans and the majority of Representatives in this body do not 
believe we must sacrifice our heritage and our prized natural treasures 
to achieve greater energy self-sufficiency.
  Americans need real relief from energy prices, yes, without a doubt, 
and potential natural gas shortages. When it comes to enhancing 
domestic gas, as well as petroleum supplies, I think we need to start 
thinking outside the box. This bill does not do that.
  In my view, a real energy policy could increase domestic gas supplies 
in a responsible fashion which would include the following element, 
which is also missing in H.R. 6:
  If we really want to think outside of the box, we should provide 
incentives to the utility sector to build coal gasification plants. We 
have been pouring money into Energy Department research on clean coal 
technologies for over 20 years. The technology is there. For instance, 
South Africa, for many decades, powers its entire country with 
synthetic gas and petroleum provided and produced from coal under what 
it calls the Sasol technology.

                              {time}  1530

  Yet, today, there are only two coal gasification plants in commercial 
operation because it is far less expensive and easier for utilities to 
build small gas turbine generators. I believe it would be worthy to 
provide the utilities with an incentive to actually build coal 
gasification plants.
  As my colleagues can see, I am not against well-thought-out, targeted 
energy incentives; but what I am opposed to are taxpayer subsidies for 
traditional oil and gas drilling at a time of high energy prices. That 
makes no sense. In my view, the economics of supply and demand will 
prevail without the government's meddling.
  Mr. Chairman, I reserve the balance of my time.
  Mr. POMBO. Mr. Chairman, I yield 2 minutes to the gentleman from 
Nevada (Mr. Gibbons), the vice-chairman of the committee.
  (Mr. GIBBONS asked and was given permission to revise and extend his 
remarks.)
  Mr. GIBBONS. Mr. Chairman, I want to thank the chairman of the 
committee for granting me the time to speak on this very important 
bill, and I rise in strong support of H.R. 6, the Energy Policy Act of 
2003.
  A keystone part of this bill is moving America into cleaner and 
better, cheaper fuels. This bill contains an important provision which 
will make geothermal power production on Federal

[[Page H3099]]

lands competitive with power produced from fossil fuels.
  Close to 75 percent of all geothermal resources suitable for 
generation of electricity are located on public lands. Nevada, where 
the Federal Government owns close to 90 percent of the land, has some 
of the best geothermal potential in the United States.
  Unless geothermal power derived from public land is more competitive 
with other power sources, little of Nevada's geothermal potential will 
be developed.
  This energy bill allows Nevada and more of our Nation as a whole to 
become more energy self-reliant. By promoting greater use of geothermal 
energy, a clean alternative energy source that is relatively abundant 
within Nevada and the West, our Nation will make great strides in 
reducing our dependence on foreign oil and other energy sources blamed 
for increasing pollution.
  I urge the adoption of H.R. 6, the Energy Policy Act of 2003, which 
will benefit not only my State but our entire Nation by encouraging 
alternative energy production and finally creating a national energy 
blueprint for greater self-reliance in the 21st century.
  Mr. RAHALL. Mr. Chairman, I yield 3 minutes to the gentleman from 
Wisconsin (Mr. Kind).
  Mr. KIND. Mr. Chairman, I thank my friend for yielding time to me, 
and I would also commend my ranking member on the Committee on 
Resources for the leadership that he has shown in regards to this 
issue.
  Mr. Chairman, I stand here today as the ranking member of the 
Subcommittee on Energy and Mineral Resources on the Committee on 
Resources, and stand here in great disappointment because I feel that 
this energy bill, which is so very important for the future of our 
growth needs and for our Nation as a whole, is a missed opportunity. 
Rather than coming forward with a very bold and innovative vision in 
regards to putting our Nation on track for true energy independence, 
this bill is more same-old, same-old. In fact, it is better suited for 
the challenges of a mid-20th century rather than the opportunities and 
the technological development that will present itself here in the 21st 
century.
  If anyone has any doubt in regards to the necessity of establishing 
this type of energy vision of greater energy independence for our 
Nation, we need only look at the conflict that is taking place in the 
Middle East right now and our overreliance on the importation of those 
oil supplies from the Middle East; and if we could do one thing that 
would benefit the people in the Middle East and their society, it is to 
require them to start drilling the human capital for economic growth in 
their own nations rather than drilling their own natural resources for 
their wealth because of the great demand for oil from other nations, 
primarily from us.
  Yet instead of putting forward an energy plan that calls on greater 
investment and reliance on alternative renewable energy supplies from 
wind, solar, geothermal, as my colleague just mentioned, and biofuels 
as well as the energy source of the future, hydrogen power, we are 
basically presenting a plan here which is to ``drill at taxpayer 
expense,'' increasing our reliance on oil consumption in our economy, 
rather than weaning ourselves off of it.
  We only hold 2 percent of the oil reserves in the entire world within 
our borders. Clearly, if we continue to puesue an increased reliance on 
this energy source, we are not going to achieve the independence that 
we need. Instead, we need a bolder vision, an Apollo energy plan, so to 
speak, similar to Kennedy's call to put a man on the Moon by the end of 
the decade.
  At the time when he said that in 1962, most of the best minds and 
scientists at the time looked at him and thought he was crazy. As we 
were launching the Saturn 2 and Jupiter missiles, we were lucky if they 
were not exploding on the launch pads. If they did get into the air, 
they did not last very long before they exploded into the ocean, let 
alone putting a human on top of one of those things, landing them on 
the Moon and safely returning them to the Earth. And yet that was 
achieved because the President presented a vision and the leadership 
and he marshalled the collective intellect and resources in our country 
to do it.
  We can do the same thing today with a bold energy policy by investing 
in the alternatives and renewables and a quicker development of 
hydrogen power. Yes, there are some programs in this bill that would 
point in that direction, but it is not anywhere near enough of where we 
need to go to wean ourselves off fossil fuels while also addressing the 
global consequences of global warming.
  Title II in particular, by granting royalty-in-kind and royalty 
holidays to the oil company, is nothing but a big subsidy, a big tax 
cut to these very companies at taxpayer expense. Something that then 
candidate Bush even opposed during his 2nd Presidential campaign.
  We can do better, and I would encourage my colleagues to vote ``no'' 
so we have a chance to do better.
  Mr. POMBO. Mr. Chairman, I yield 2 minutes to the gentleman from 
Montana (Mr. Rehberg).
  (Mr. REHBERG asked and was given permission to revise and extend his 
remarks.)
  Mr. REHBERG. Mr. Chairman, Montana is known as the Treasure State 
because of our natural beauty and the natural resources that we can 
provide for economic and energy independence; but Montanans, I have 
learned, do not care so much about energy portfolio, grids or Btus, and 
they sure as heck do not care so much about partisan politics; but they 
do care about, our seniors want to know that when they move up the 
little knob on their thermostats that they will have heat. Our mothers 
and fathers want to know that when they turn their ignition their cars 
will start so they can take their children to school, and our small 
businessmen and--women want to know when they try and open up in the 
morning, when they flip that switch, there is electricity.
  It is interesting for me to hear the opponents of this bill who have 
been in this Congress for 20, 30, 40, and almost 50 years talking about 
solving the problem. When is the bill perfect? Where has been the 
solution for the last 20 or 30 years? We are waiting for it. I remember 
as a young man standing in line to buy gasoline in 1979, and we talked 
about the energy independence of this country. When is the time? It is 
now. It is time to solve it now.
  This is a well-designed plan, a well-thought-out energy policy that 
may not be perfect in the long run, but is a vision to build America's 
future. The worst thing that we can do is create an energy debt for our 
next generation.
  I look all over this Capitol, and I see young men and women who 
someday may not have the opportunity to drill one more well, dig one 
more shovel full of coal. If we do not have a plan in place, where we 
can have used some of the new technologies to invent our way out of 
this problem, if we do not have a policy in place that has loans and 
grants to give to the young minds in the scientific community to invent 
our way out of this problem, if we do not have the technology and the 
infrastructure in place to take advantage of all of the exciting things 
with geothermal and such, we have done a real disservice. We have 
created an energy debt far more serious than a financial debt that we 
are creating.
  Let us not create an energy debt. Let us not wait another 20, 30, 40 
years. Let us solve the problem now. Vote for this bill.
  Mr. RAHALL. Mr. Chairman, how much time do I have remaining?
  The CHAIRMAN. The gentleman from West Virginia (Mr. Rahall) has 2\1/
2\ minutes remaining. The gentleman from California (Mr. Pombo) has 
3\1/2\ minutes remaining.
  Mr. RAHALL. Mr. Chairman, I yield 2 minutes to the gentleman from New 
York (Mr. Engel).
  (Mr. ENGEL asked and was given permission to revise and extend his 
remarks.)
  Mr. ENGEL. Mr. Chairman, I thank my friend for yielding to me.
  Mr. Chairman, there are four committees that have jurisdiction over 
this bill, and one of them is the committee on which I serve, the 
Committee on Energy and Commerce; and I thank the ranking member of the 
Committee on Resources for giving me this opportunity.
  This was not a bill that was crafted in the middle. This is not a 
bill that Republicans and Democrats got together to produce a bill that 
is moderate, that the American people want to see. This was a bill that 
was put together by the Republicans and jammed

[[Page H3100]]

down the throats of the entire Congress.
  We were in committee last week until one o'clock in the morning, and 
every single Democratic amendment was voted down on virtually a party 
line vote. This is not the way to craft an energy bill for America. We 
need the talents of all the Members of the House in both parties to 
come together for the American people.
  I am sorely disappointed that we are ignoring the underlying problem 
to national security, which is oil. There is nothing in this bill that 
reduces our consumption of oil. There is a lot of talking about 
drilling and production, but very little about conservation.
  Rather than stimulating research and development into renewable 
generation, we continue to cede the development of alternative energy 
technology to Europe and Japan. Whereas once we were the leaders in 
exporting renewable technologies such as solar panels and wind 
turbines, the U.S. now lags behind.
  At the same time, 72 percent of Americans believe that renewable 
energy sources should be our priority right now. We are missing a huge 
opportunity to create a renewable energy market that benefits both 
consumers and the environment. Our energy policy is tied to our 
national security and our economic well-being; and we need to ensure 
that this policy is diversified, reduces our dependence on oil, and 
creates skilled jobs by reducing energy costs.
  We are missing a tremendous opportunity. This bill does not create a 
market for renewables. It mandates a fixed market for ethanol, while 
providing liability relief for manufacturers. This is wrong.
  This bill does nothing to further laudable goals, and I urge my 
colleagues to join me in opposing H.R. 6.
  Mr. POMBO. Mr. Chairman, I yield 3 minutes to the gentlewoman from 
Wyoming (Mrs. Cubin).
  Mrs. CUBIN. Mr. Chairman, I rise today in strong support of H.R. 6, 
the Energy Policy Act of 2003. Many of the nations that we rely on for 
our energy needs prop up the very same regimes that our soldiers are 
battling against today. Just as our military is defending our national 
security, this Congress must act to defend our energy security because 
we are not secure as a Nation without energy security.
  This bill sets the United States on a focused course to reduce our 
dependence on foreign energy sources, all the while meeting and 
exceeding the most stringent environmental standards any government has 
ever imposed.
  Our Nation's public lands hold many treasures, from the Grand Tetons 
to Yosemite National Park; but some of our most valuable resources are 
clean-burning natural gas, oil and coal that can reduce our dependence 
on foreign energy sources and keep our environment clean.
  The Energy Policy Act will provide better access to these oil and gas 
reserves and create a reasonable rights-of-way fee structure for 
pipelines, electric transmission, and telecommunications 
infrastructure. This will benefit both our rural and urban communities. 
In addition, this act requires closer consultation between Federal 
agencies when leasing decisions are made for national forest system 
lands.
  The Energy Policy Act of 2003 will encourage more efficient 
government management of lands to reduce the backlog of pending lease 
decisions and permits to drill while maintaining America's unsurpassed 
environmental standards.
  This act will maximize the recovery of coal on Federal lands which 
provides over 20 percent of our Nation's total energy consumption.
  Mr. Chairman, the Committee on Resources developed this legislation 
only after holding well over a dozen hearings on energy production and 
hearing testimony from Members of Congress, local government officials, 
environmentalists, industry representatives, and administrative 
agencies.
  This is a good plan, and I commend it to my colleagues and urge its 
adoption. The time has finally come to follow President Bush's lead and 
ensure that the people of this Nation will have a secure and affordable 
source of energy.
  Mr. RAHALL. Mr. Chairman, I yield myself the remaining time.
  As I conclude, let me note that all is not lost just yet. There still 
will be opportunities to improve the Committee on Resources provisions. 
The gentleman from Wisconsin (Mr. Kind) will be offering an amendment 
to strike the non-ANWR oil and gas provisions, the giveaways, if you 
will, from this bill; and that means that one can be for drilling in 
ANWR. I am not, but my colleague can be for drilling and still vote for 
the Kind amendment.
  Then I will be offering an amendment to strike the Federal coal 
leasing provisions that are anticompetitive and do real harm to 
consumers and coal miners in many States.
  Mr. Chairman, I yield back the balance of my time.
  Mr. POMBO. Mr. Chairman, I yield myself the remaining time.
  In conclusion, I would just say that, unfortunately, the choice that 
a number of my colleagues have offered is a false choice. What they 
have put up is we either can have energy production for today, or we 
can protect our environment. I believe that is a false choice.
  I believe that we can take care of today's energy needs. We can 
develop the energy needs of the future, and we can protect our 
environment in the process.
  Stripping out all of the oil and gas provisions in the bill, 
stripping out all of the coal provisions in the bill, stripping ANWR 
out of the bill, taking away all of our current production, the 
increase in our current production that we need today is not a 
responsible energy policy.
  We agree on the future. We agree on the need for wind and solar and 
fuel cell technology. That we agree on, but we also have to agree on 
what we need today.
  This was a bipartisan vote coming out of committee. I urge my 
colleagues to support it here on the floor today.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The Chair now recognizes the gentleman from Louisiana 
(Mr. McCrery) and the gentleman from Massachusetts (Mr. Neal) to 
control 10 minutes each.
  The Chair recognizes the gentleman from Louisiana (Mr. McCrery).

                              {time}  1545

  Mr. McCRERY. Mr. Chairman, I yield myself such time as I may consume, 
and I rise in support of the entire bill, but particularly Division D 
of the bill.
  Mr. THOMAS. Mr. Chairman, will the gentleman yield?
  Mr. McCRERY. I yield to the gentleman from California for a colloquy 
between the chairman of the full Committee on Ways and Means and the 
gentleman from Kentucky (Mr. Lewis).
  Mr. THOMAS. Mr. Chairman, I thank the chairman of the Subcommittee on 
Select Revenue Measures for yielding. He has played a major role in 
putting together, with the members of the Committee on Ways and Means, 
the tax portion of the energy bill.
  Mr. Chairman, one of the more enjoyable things about this job, when 
we know we are going to conference with the other body, is trying to 
anticipate the concerns of those who are trying to look at what the 
product of a conference committee is going to be prior to the 
opportunity of actually having the conference and putting the product 
together. So one of the things that I think is important for us to do 
is to engage in a discussion at this point of what we anticipate the 
conference report will look like.
  As a first step, the gentleman from Kentucky (Mr. Lewis), as a member 
of the committee, certainly has some concerns, and that is not so 
surprising when we recognize the fact that he is from the State of 
Kentucky.
  Mr. LEWIS of Kentucky. Mr. Chairman, will the gentleman yield?
  Mr. McCRERY. I yield to the gentleman from Kentucky.
  Mr. LEWIS of Kentucky. Mr. Chairman, as my colleagues are aware, 
Division D, the Ways and Means tax portion of H.R. 6, includes 
provisions which will benefit the coal industry, such as repeal of the 
4.3 cent surtax on each gallon of fuel used by barges and railroads. As 
coal is a major user of these transportation systems, repeal will 
substantially reduce the cost of getting coal from the mines to the 
power plants.
  Further, the Committee on Energy and Commerce reported legislation, 
which, among other things, authorizes $200 million per year for 9 years 
for clean coal technology. This is the program to provide cleaner and 
more efficient electricity from coal-fired power

[[Page H3101]]

plants. Mr. Chairman, industry advocates believe this part of the 
program is not, by itself, sufficient to enable some new technologies 
to realize their potential.
  This year's Senate energy bill has a credit for investment in 
advanced clean coal technologies. I would like to inquire of the 
gentleman whether he might consider including some incentives in the 
conference report on H.R. 6.
  Mr. THOMAS. Mr. Chairman, if the gentleman will continue to yield.
  Mr. McCRERY. I continue to yield to the gentleman from California.
  Mr. THOMAS. I thank the gentleman for yielding, and the question of 
the gentleman from Kentucky is obviously important not only to the 
gentleman from Kentucky, but the gentlewoman from West Virginia (Mrs. 
Capito) and, I am sure, a number of other Members on both sides of the 
aisle.
  When we examine the Senate tax portion generated by the Committee on 
Finance of this energy bill, we find there are other credits that are 
not contained, for example, in the Ways and Means product, ethanol, 
biodiesel, coal and others. Similarly, the Ways and Means product has 
positions in it that are not in the Senate's. The goal would be to 
produce a product which picks up some of the more innovative approaches 
in the Senate bill, and we would hope, during the discussion, that the 
Senate would do the same.
  The particular provision that the gentleman mentioned, the 4.3 excise 
tax removal, happens to be one of the few items that is exactly 
identical in both bills. That is an important decision. It means that 
decision has already been made. I can assure the gentleman that, as we 
sit down with the Senate, a number of those items, such as those that 
the gentleman has suggested, will be part of the melding of the Senate 
and the House packages.
  Of course, it has to yet happen, and I know the gentleman will rely 
on me to provide a package from the House side that takes the important 
provisions of the House package and that the Senate will maintain the 
important provisions of its package. We will meld the two and bring it 
to the floor, and I am sure the gentleman will be very much in support 
of the conference report when we bring it to the floor.
  Mr. LEWIS of Kentucky. I thank the chairman for his consideration.
  Mr. McCRERY. Mr. Chairman, I reserve the balance of my time.
  Mr. NEAL of Massachusetts. Mr. Chairman, I yield myself such time as 
I may consume, and I rise in opposition to the legislation that is in 
front of us for a variety of reasons, but I want to speak specifically 
to a couple of issues in the tax portion of this bill that I think 
ought to raise the concern of every Member of this body.
  Earlier today, Mr. Chairman, this House voted for a resolution 
drafted by the majority which calls for an end to tax loopholes, and 
not 1 hour later did the House begin consideration of an energy bill 
which cements into law a $4 billion tax loophole. Now, I know this 
might sound strange this far after April Fool's Day, but sadly it is 
true.
  The bill we are considering today will protect all corporate 
expatriates who have already left. And for the viewers, understand 
these are corporations who have moved offshore for the purpose of 
avoiding American corporate taxes at the very same time that 400,000 
men and women in uniform are in Iraq. But let us, for a couple of 
moments here, discuss who these privileged few corporate expatriates 
are, why they are being protected in this bill, and what this means for 
America's energy sector.
  If Tyco, who left New Hampshire for Bermuda, paid the $400 million a 
year in U.S. taxes it now avoids through the Bermuda loophole, we could 
easily afford all of the new section 45 wind energy and other related 
credits called for in this bill.
  If Ingersoll-Rand, who left New Jersey for Bermuda, paid the $40 
million a year in U.S. taxes it now avoids, we could easily afford the 
new credit for energy efficiency improvements for existing homes called 
for in this bill.
  If Cooper Industries, who left Texas for Bermuda, paid the $55 
million a year in taxes it now avoids, in 1 year we could pay for an 
entire decade of business and nonbusiness-qualifying fuel cell tax 
credits called for in this bill.
  That is not enough? Well, if Weatherford, who left Texas for Bermuda, 
paid the $40 million a year in U.S. taxes it now avoids by the Bermuda 
loophole, we could easily pay for the new electric and clean fuel 
vehicle tax credits called for in this bill.
  Furthermore, if the loophole was closed today, rather than 
permanently granting special protection as this bill does, we could 
fund almost all of the conservation items in this bill. And yet, 
because we are not, we will be dipping into Social Security and 
Medicare to fund these broadly supported energy conservation 
incentives. Here is the frustration that the minority feels in this 
House.
  Last year, I filed a bill to close the loophole that allows U.S. 
corporations to set up phony shell headquarters in Bermuda and thereby 
avoid paying U.S. income taxes. For a whole year that bill has 
languished, thwarted by the Republican leadership, that refuses to 
allow a floor debate on closing the Bermuda tax loophole. Mr. Chairman, 
the American taxpayer deserves better.
  We are moving into the final weekend when average Americans are going 
to sort and move through a host of pieces of paper and receipts as they 
attempt to put together their tax obligation, and yet we cannot take 
the time over 12 months to close this Bermuda tax loophole.
  I have repeatedly said on this House floor that we should bring this 
legislation to the floor; that there will be more than 300 votes for 
this legislation in this House of Representatives. It will sail through 
here. People will break their wrists trying to get to these small 
voting devices on the back of the seats so that they can vote ``yes'' 
on this provision to close that Bermuda tax loophole, which saves $4 
billion as estimated by the Joint Tax Committee.
  We can do much better, Mr. Chairman. Let us close the Bermuda tax 
loophole. And I urge my colleagues here, because of this loophole, to 
vote down this bill.
  Mr. Chairman, I reserve the balance of my time.
  Mr. McCRERY. Mr. Chairman, I yield myself such time as I may consume.
  (Mr. McCRERY asked and was given permission to revise and extend his 
remarks.)
  Mr. McCRERY. Mr. Chairman, lest anybody forget, we are debating the 
energy bill here this afternoon, and I would hope that is what we would 
focus on. However, there is contained in our bill a provision which 
gets to the problem that my friend from Massachusetts just talked 
about; and I agree with him that there is a problem with companies 
artificially reincorporating offshore in order to gain tax advantages. 
I differ with my friend from Massachusetts, though, on how we ought to 
solve that problem.
  What we have done in this bill, though, is provide for a moratorium 
on any more such corporate inversions until we can work out a 
legislative solution that, I believe, will solve the problem without 
making our domestic United States corporations more vulnerable to 
foreign takeover.
  So with that issue aside now, I would like to get back to the issue 
at hand, which is energy and improving the energy situation here in 
this country.
  Our tax portion of this bill is a balanced approach. About one-third 
of the bill is for conservation; about one-third of the bill is for 
reliability, that is, making reliable our infrastructure for getting 
energy to the people who need it; and about one-third for increasing 
production, increasing the supply of energy resources here in this 
country.
  So, Mr. Chairman, the Committee on Ways and Means, after several 
hearings last year in my subcommittee and one of the other Ways and 
Means subcommittees, put together a bill that we believe delivers a 
nice bang for the buck. We did have to downsize the package this year 
from the one we passed through the House last year, but we believe that 
this package will significantly increase the ability of the United 
States to provide the energy that our country needs.
  Mr. Chairman, I reserve the balance of my time.
  Mr. NEAL of Massachusetts. Mr. Chairman, I yield 2 minutes to the 
gentleman from Washington (Mr. McDermott).
  Mr. McDERMOTT. Mr. Chairman, I thank the gentleman from Massachusetts 
for yielding me this time.

[[Page H3102]]

  The other day I saw something in The New York Times that gave me 
hope. The White House had put in solar panels on one of the sheds out 
there. And I thought, well, my goodness, they must have some 
enlightenment down there at the oil ministry.
  But when I offered an amendment in the Committee on Ways and Means 
that would have allowed us to have energy companies give tax-free bonds 
for the purpose of raising money for interest-free loans to homeowners 
to purchase solar equipment, every Republican in the committee voted 
``no.'' I guess they did not get the message from the White House.
  Mr. Chairman, it usually costs about $11,000 to put a solar panel on 
a home. It is not pie in the sky. Solar production has grown 600 
percent since 1996. So this is something that everywhere else in the 
world they are doing, but not here, and certainly not in the Committee 
on Ways and Means, in a committee controlled by the oil industry.
  We had a chance, if we had passed that amendment, to follow 
California. They always lead what is happening in this country. Watch 
and see. San Francisco puts panels on their buildings, Los Angeles, and 
Sacramento. They will be doing it, and all the rest of the country will 
be sitting around tied to these oil companies and saying to themselves, 
why is this?
  Now, we gave an opportunity for the House to begin a program that 
would have had 2 million families with secure, clean energy. We could 
have gone a long way down the road toward meeting the Kyoto Accords. 
The President walked away from that and said, We cannot clean up the 
environment; no, sir, we cannot.

                              {time}  1600

  We cannot do anything, we are just hopeless, we Americans.
  Well, if we put an area of 70 miles by 100 miles of solar panels in 
Nevada, we could provide all of the energy this country needs in one 
place. It can be done, and we have got to start it someday, but I guess 
this administration is going to keep drilling and drilling and 
drilling. It will not work, Mr. President.
  Mr. McCRERY. Mr. Chairman, I reserve the balance of my time.
  Mr. NEAL of Massachusetts. Mr. Chairman, I yield 3 minutes to the 
gentleman from Texas (Mr. Doggett).
  Mr. DOGGETT. Mr. Chairman, when we think of Texas stereotypes, we 
think of cowboys and oil wells, longnecks and roughnecks. While we are 
proud of our past south of the Red River, the future of Texas 
increasingly lies, like the future of this country, with technology. 
That has been central to the development of our economy in central 
Texas.
  Now the Clean Energy Incubator and the Austin Clean Energy Initiative 
are attracting national attention to our community. We are on the 
cutting edge of a new Texas that is creating jobs and helping preserve 
our precious natural resources with renewable energy solutions.
  That is why, as the poster of the armadillo and the State capitol 
shows, it is Austin and the Texas hill Country in the ``Journey to the 
center of the sustainable Earth''. One would think, given the 
tremendous cost, not only in money but in blood, of having an energy 
policy that can keep our economy going, that someone at some time would 
begin to focus on sustainable energy and a new national energy policy.
  This bill pays some pretense to supporting renewable energy, but the 
focus is not on conservation or sustainable energy. The focus is on the 
same type of oil-polluting industries where we have put most of our 
resources in the past.
  Energy security is national security.
  It is time we focused on renewable energy. Instead, this bill is not 
so much an energy policy as it is a collection of unjustified tax 
breaks, loopholes, and dodges masquerading as an energy policy.
  Nowhere is that more apparent than in this whole area of how we will 
treat those corporations that loved America so much that at a time of 
great national concern after the events of 9-11, a few corporations 
loved America so much that they left America. They refused to pay their 
fair share of the cost of our national security and homeland security.
  Those fleeing corporations, where do they go for protection? 
Naturally, to the House Republican leadership and to this bill, a so-
called national energy bill. What does it do for those corporations 
that abandon America at a time of great need? It grants them amnesty. 
It says ``go right ahead, do not pay your fair share of taxes on your 
American income. You do not have to do anything or rely on the Bermuda 
military for your protection.'' It says ``let those businesses and 
neighbors here in the United States that pay their fair share of taxes 
pay for those corporations that run off to Bermuda or Barbados.''
  In this bill, even worse than their last bill, they moved the date 
for amnesty up a full year, from March of last year, and they grant 
that amnesty, interestingly enough, until just after the next 
Presidential election when they are going to ``explore'' this issue 
some more. This is one of the most outrageous of many outrageous 
provisions in this bill. At a time when so many Americans are 
sacrificing, these corporations are heading for the sands of Bermuda to 
plant their mailboxes firmly there, while our flag is planted in sands 
elsewhere.
  Mr. McCRERY. Mr. Chairman, I yield myself such time as I may consume.
  There is a moratorium in this bill to keep corporations from doing 
just what the gentleman described. We are in agreement that should 
stop. The moratorium will give us time to plot the surest course to 
make sure that jobs are kept here in the United States and more jobs 
are created here in the United States.
  As for the energy bill providing incentives for conservation and 
renewable sources, though, the previous speaker did not, I think, give 
the bill justice. Let me give some examples of the provisions in this 
bill which will conserve energy and encourage the development of 
renewable sources of energy. Tax credits for the installation of solar 
power and solar water heaters; it enhances incentives to generate 
electricity from wind, open-loop biomass, gas emitted by landfills, and 
the combustion of municipal solid waste. It speeds the development of 
fuel cells as a clean, efficient energy source, encourages consumers to 
purchase more fuel-efficient and fuel cell cars. It includes tax 
credits for homeowners and home builders investing in energy-efficient 
upgrades, tax credits for the combined installation of combined heat 
and power systems. It repeals the 4.3 cent general fund surtax on rail 
or barge which will encourage the transportation by a more efficient 
means, saving energy. It encourages production of cleaner-burning 
diesel fuel by taxing only the fuel content of diesel-water emulsions. 
The conservation title of the bill is $6.67 billion, 36 percent of the 
total cost of the bill.
  Mr. Chairman, I would submit once again that this bill does do 
justice to the goal of conservation, but also recognizes the need for 
reliability of our infrastructure to get energy to consumers and also 
the need for more production of energy sources in this country.
  With that, I would urge adoption of H.R. 6, and particularly urge 
Members to look at division D of the bill to see why this will finally 
give us a sound energy policy for this country.
  Mr. HONDA. Mr. Chairman, I stand in opposition to the rule for 
consideration of H.R. 6. It is shameful, given the importance of energy 
to our national prosperity and the significance of the programs 
contained in this bill, that so little time was provided for debate on 
the bill and on the limited number of amendments that were made in 
order. Why does this rule so restrict the time for debate on 
amendments? The other side of the aisle will say we need to complete 
action on the bill before the recess, but no matter when we finish our 
bill, we will still have to wait for the other body to complete its 
work before the bill can go to conference.
  I think the real reason we are spending so little time debating this 
bill and these amendments is that those on the other side of the aisle 
are afraid to expose this bill to the bright light of scrutiny. If the 
American public were given a real chance to see what is contained in 
this bill, the outcry against it would be deafening, so we are rushing 
it through with a minimum of debate.
  There are very few things I like about the bill itself, either. 
However, I do support Division B, and I am proud to be a member of the 
Science Committee, which authored this portion of the bill. We have 
included such beneficial programs as energy efficiency and renewable 
energy research and development,

[[Page H3103]]

the next generation lighting initiative, and the clean school buses 
program.
  We have also increased support for the basic sciences at the 
Department of Energy generally and focused on several programs in 
particular, such as nanotechnology research and development, U.S. 
participation in the ITER fusion energy project, and advanced 
scientific computing for energy missions. I commend the bipartisan 
leadership of the Science Committee for including these important 
provisions in the bill.
  Unfortunately, I cannot say the same thing about the rest of the 
bill, and I urge my colleagues to support amendments that will be 
offered later by Chairman Boehlert, Mr. Dingell, Mr. Markey, Mr. Udall, 
and many of my colleagues from this side of the aisle.
  I stand in support of the Boehlert/Markey amendment. The auto 
industry has claimed that if CAFE standards are raised, they might have 
to stop making SUVs. Yet their actions directly contradict these words. 
Recently Ford, Toyota, and GM all announced plans to introduce SUVs 
that travel over 35 miles per gallon during the next couple of years. 
Toyota has demonstrated with the Prius, which I drive, that hybrid 
technology works and consumers love it. Auto companies are showing that 
they have the technology to improve fuel economy--without sacrificing 
safety.
  I stand in support of the Dingell amendment. The Federal Energy 
Regulatory Commission (FERC) has recently reported that during the 
California energy crisis, companies such as Enron, Reliant, and BP 
Energy deliberately manipulated the deregulated market to gouge 
consumers, but it is still not clear that consumers will receive the 
refunds they deserve. It seems clear to me that we need to improve 
consumer protections, not weaken them, but that is exactly what the 
H.R. 6 does. It promotes nationwide deregulation and repeals PUHCA (the 
Public Utility Holding Company Act). In contrast, the Dingell Amendment 
removes the deregulation provisions, increases FERC authority to combat 
fraud, and authorizes FERC to refund electricity overcharges back to 
the date when they began.

  I am in opposition to the Wilson amendment. This amendment grossly 
misrepresents the actual areas of the coastal plain of ANWR that will 
be affected. The Interior Department estimates that drilling would 
actually affect 12,500 acres with roads, drill pads, processing 
facilities and airports, spread over hundreds of square miles. Drilling 
would also require 1200 acres for gravel mines needed to construct 
gravel roads within the 2000 acres, roads that are not subject to the 
2000-acre rule. Existing oil field sprawl on the North Slope of Alaska 
has a ``footprint'' of 15,500 acres, but actually spreads across an 
area of more than 640,000 acres. I urge my colleagues to see the 2000-
acre scam for what it is
  I stand in support of the Markey/Johnson amendment. Why won't the 
other side of the aisle listen on this one? The public opposes drilling 
in ANWR. The other body voted to remove drilling provisions from the 
Budget. The distinguished chair of the other body's Energy Committee 
realizes that this will not be in a final energy bill and has said he 
will not bring it up. It isn't worth drilling in ANWR. There is less 
oil there than the U.S. consumes in 6 months, so it won't provide 
energy security. A policy that focuses on a clean, sustainable, and 
affordable energy supply would create more jobs than drilling in ANWR 
ever would, possibly 10 times as many. These would be permanent jobs, 
rather than the temporary jobs that ANWR drilling would bring. I urge 
my colleagues to protect our nation's largest and wildest natural 
treasure.
  Finally, I stand in support of the Wu/Johnson amendment. In May of 
2002, the General Accounting Office released a report that revealed an 
alarming disparity in salaries and rates of promotion between 
minorities when compared to white males in the same jobs at the 
Department of Energy's National Laboratories. GAO found that salaries 
for minority men and women and white women were lower than for white 
men, with the exceptions of Asian American men at Los Alamos and Sandia 
and Hispanic men at Lawrence Livermore. Comparing men and women of the 
same race/ethnicity, GAO found that White, Asian and Hispanic women 
earned less than their male counterparts.
  The report also found that there are further areas for investigation. 
For example, with over 300 Asian American professional staff at 
Lawrence Livermore, not one was promoted to a managerial position 
between 1998 and 2000. When the report was released, I called for 
Congressional hearings to determine the cause of these inequities so 
that we may remedy them to ensure that the Department of Energy can 
recruit and retain the highest quality ethnically diverse workforce.
  Unfortunately, the Science Committee took no action on this issue. 
The W/Johnson amendment would finally bring about some Congressional 
action, by requiring the Secretary of Energy to report to Congress on 
DOE lab's equal employment opportunity practices in promotion, pay 
raise, discipline, and recruitment and retention efforts.
  Mr. ALLEN. Mr. Chairman, America needs an energy policy that 
increases our national security, encourages new technologies, enhances 
economic growth, preserves the environment, and protects consumers.
  Our nation now spends nearly $200,000 per minute overseas to buy oil, 
mostly from undemocratic regimes. But this bill does not redirect 
American energy policy. H.R. 6 only reinforces the failed energy 
policies of the past, policies which have increased our dependence on 
fossil fuels.
  Unfortunately, this bill never escaped the circumstances of its 
conception in the secret, closed door meetings between Vice President 
Cheney and the CEOs of the energy industry. Instead of seeking a 
balanced, bipartisan energy policy, this legislation discards key 
compromises forged with the widespread support of Republicans and 
democrats in the 107th Congress. It puts the interests of big energy 
ahead of consumers and the environment.
  The bill before us rewards private industry at the expense of the 
public interest and national security. It provides a $200 million 
subsidy to the hydro industry; a $397 million subsidy for nuclear fuel 
reprocessing, a process banned since the Ford Administration; a $1.7 
billion hydrogen subsidy to the auto industry; and a $1.8 billion 
subsidy for clean coal technology.
  The legislation opens a pristine wilderness, the Arctic National 
Wildlife Refuge, to oil drilling. The bill opens the possibility of oil 
drilling in offshore areas of the Gulf of Maine. The bill even rewards 
oil companies for exploiting our public lands by lowering the rent they 
have to pay.
  The bill does not redirect energy policy because some businesses 
claim that they cannot compete in a cleaner, more efficient economy. I 
believe America's energy policy should actively promote policies that 
will allow American industry to catch up to other nations' advancing 
energy sectors. American companies trail behind Iceland in hydrogen and 
geothermal development; behind Denmark in wind energy; behind Japan in 
efficient vehicle development and home heating efficiency; and behind 
Germany in diesel powered engine efficiency.
  These are high growth industries. Wind energy is the fastest growing 
power segment in the world. America has the high tech work force, the 
research institutions, and the capital to lead in each of these 
industries. If we commit to supporting new technologies, our companies 
will again lead the world in the energy industry.
  Finally, this bill represents a missed opportunity to adopt a 
forward-looking energy policy. We should have seriously dealt with the 
challenge of climate change, raised CAFE standards that regulate the 
fuel efficiency of our cars and trucks, and established a renewable 
portfolio standard to encourage the development of new technologies.
  Mr. LEVIN. Mr. Chairman, I had hoped that I would be able to vote for 
the energy bill before the House today. Now more than ever, this 
country urgently needs a balanced, forward-looking policy to meet 
America's energy requirements in the 21st Century. Unfortunately, the 
energy legislation before the House falls far short of even the minimum 
requirements of a balanced, comprehensive energy program. I therefore 
urge my colleagues to join me in opposing passage of this bill today.
  The overarching flaw in this bill is its lack of balance. This 
legislation contains relatively few energy conservation provisions and 
instead places most of its emphasis on production of traditional energy 
sources. In so doing, the bill weakens important environmental 
protections and offers subsidies and incentives to industry, even in 
cases where none are required.
  I am also extremely disappointed that one provision of this bill 
would open the Arctic National Wildlife Refuge to oil and gas drilling. 
This provision would do serious environmental harm to one of the last 
pristine wilderness areas in America. It might be argued that doing so 
could be justified if drilling in the Refuge would substantially lessen 
U.S. dependence on foreign sources of oil. But we know that this is not 
the case. According to a 1998 U.S. Geological Survey study, the mean 
estimate of economically recoverable oil in the Refuge is 3.2 billion 
barrels, an amount roughly equal to the amount of oil the U.S. consumes 
in six months. We can't drill our way to energy self sufficiency. We 
need to look at alternatives to oil and make better use of advanced 
technology to lessen U.S. dependence on it.
  The $18.6 billion tax package contained in this legislation is 
similarly unbalanced. These incentives would overwhelmingly go to 
energy production and transmission at the expense of conservation, 
energy efficiency and developing alternative energy. In particular, the 
incentives provided for alternative fuel vehicles in the bill are 
inadequate.
  I believe consumer-based tax credits are needed to accelerate the 
introduction of hybrid and other alternative fuel vehicles. Sales of 
hybrids and all other dedicated alternative fuel

[[Page H3104]]

vehicles in 2002 represented just two-tenths of one-percent of total 
vehicle sales. For example, Ford produces 375,000 Taurus cars each 
year. Honda sells 360,000 Accords. By comparison, the most popular 
hybrid automobile--the Toyota Prius--sold just 18,000 vehicles in 2002. 
Clearly, we need a meaningful tax incentive to prime the pump on 
hybrids and other alternative fuel vehicles. The federal government has 
a vital role to play in encouraging manufacturers to build, and 
consumers to purchase, these advanced technology vehicles.
  If we go forward with an energy bill that lacks a meaningful 
incentive for alternative fuel vehicles, including an enhanced credit 
for hybrids, I believe we would be making a serious mistake.
  At the end of the day, the energy bill before the House is 
unbalanced, incoherent, and environmentally risky. It deserves to be 
defeated.
  Mrs. CHRISTENSEN. Mr. Chairman, I rise in support of Title VIII of 
H.R. 6, the Insular Areas Energy Security Act and I want to thank the 
Chairman of the Resources Committee, Mr. Pombo and especially the 
Ranking Member, Mr. Rahall.
  While I am pleased that H.R. 6 includes the Insular Areas Security 
Act, I am disappointed that a substitute amendment by Mr. Rahall was 
not made in order because I believe it was a better solution to the 
concerns over energy production we are having in our country. The 
Rahall amendment would have ensured that more domestic energy is 
introduced into the domestic market, relieve transmission constraints 
for our western States, encourage renewable energy on federal lands, 
assure fairness in oil royalties, and protect our environment and our 
nation's monuments and parks.
  The Insular Areas Energy Act will update a nearly twenty-year-old 
assessment of energy importation, consumption, and alterative 
indigenous sources that can be used by insular areas. A new part of 
this reassessment will be a recommendation and plan to protect energy 
transmission and distribution lines from the effects of hurricanes and 
typhoons. The amendment also gives the Interior Secretary the authority 
to fund such recommendations.
  We are all aware of the tragedy and destruction a hurricane or 
typhoon brings once it reaches land. The majority of Americans become 
aware of such a storm when it heads up the eastern seaboard or makes 
its way inland from the Gulf of Mexico. They are awesome and dangerous. 
And there is not much that can be done when it is headed your way. 
Those of us whose districts have been in the path of such storms can 
attest to the devastation.
  The Virgin Islands is affected by the strongest of storms, like Hugo 
and Maryland that eventually make their way to the U.S. mainland. But 
we are also all too frequent a target for lesser known hurricanes that 
never make it out of the Caribbean Basin but still manage to inflict 
just as much damage as those that reach Florida.
  Some of the costliest destruction is to the Virgin Island's 
electrical infrastructure. Island wide outrages are common in the wake 
of a storm because our lines are not as hardened as they could be from 
a storm's strength. Ideally, in any location that experiences as much 
hurricane activity as my district, transmission lines should be buried 
underground. To have the majority of our electrical lines above ground 
poses a great threat to residents during storms and makes our system 
vulnerable and costly to repair.
  I am pleased the Insular Areas energy act has been included in this 
bill which will work towards making our islands safer and less 
vulnerable to the devastation brought upon us by hurricanes.
  Ms. PELOSI. Mr. Chairman, today we should be bringing to the American 
people an energy policy that is worthy of the 21st century. A policy 
that sets us on a path toward reliable sources and supplies of energy, 
and a cleaner environment. A policy that promotes efficiency and 
innovation, and provides more protection for consumers.
  But the bill the Administration and the Republican leaders have 
brought to the Floor looks backward and not forward.
  The Republican bill authorizes drilling in the most fragile untouched 
wilderness of the Arctic in search of a six-month supply of oil that 
won't reach the market for another 10 years.
  The Republican bill makes our air less healthy and our water more 
dirty. It jeopardizes the health of our children. It allows companies 
to force diesel fuel into the ground in a way that could threaten the 
water table in order to fracture and retrieve oil deposits. It 
jeopardizes the protection of rivers and fish on behalf of 
hydroelectric companies.
  The Republican bill allows oil and gas development on sensitive 
coastal lands and exempts oil and gas drilling sites from water 
pollution requirements. It includes a variety of taxpayer handouts to 
oil and gas companies, and protects corporate expatriates that have 
already moved overseas by grandfathering in their tax breaks.
  And most significantly to those of us from California, this 
Republican bill strips out some of the few remaining federal 
protections for electricity consumers. In its place, we would be given 
a new, untested approach to electricity markets.
  I have a word of warning for my colleagues: ``Remember California.'' 
At first, our new competitive electricity market was hailed as a boon 
for consumers.
  Then came the price spikes and the blackouts, as energy companies 
learned how to game the system. On two particular days in June of 2000, 
an energy company shut down power plants to drive up electricity 
prices. These two days, alone, cost wholesale energy buyers at least an 
extra $13.8 million.
  Federal regulators stood by and watched as Californians paid and 
overpaid to keep the lights on. And we are still paying, and we will 
continue to pay for years to come.
  Finally, just last month, federal regulators announced that 37 energy 
companies and utilities violated energy trading rules.
  There will be more indictments and admissions related to manipulative 
practices in California. But most of the money is gone, never to be 
recovered.
  And yet, the energy policy the Republicans are bringing forward today 
will leave consumer all over the country even more vulnerable to the 
fraudulent and manipulative practices that led to the rolling brownouts 
and unreasonable prices we experienced in California.
  It repeals an essential federal consumer protection that limits 
concentration of market power within the utility sector and helps 
protect ratepayers from the risky investments of the electrical 
utilities that serve them.
  One of the laws repealed is more crucial today than ever to protect 
consumers from abuses in the utility industry. It is the law that 
prevents Enron from owning, and abusing, more than one electric 
utility.
  Just imagine what would happen if Enron had owned and used two 
utilities to manipulate prices two years ago.
  This is why it is important to vote for the Dingell amendment which 
would allow us to retain critical consumer protections and provide the 
Federal Energy Regulatory Commission broader authority to act against 
fraud in both electricity and natural gas markets.
  Mr. Speaker, the energy policy in this bill is not worthy of the 21st 
century. It is a policy mired in the past that offers the American 
people more of the same bad choices--fewer consumer protections, and 
greater jeopardy for public health and the environment.
  It is a policy that will lead to greater pollution of our lakes, our 
rivers, the air that we breathe and the water that we drink.
  And, of course, the budget-busting title full of corporate giveaways 
to oil and gas companies--at the end of the day--will not yield the 
energy independence we seek for our future.
  We can do better. We can look forward to 2050 instead of backward to 
1950. We can bring to the Floor an energy policy that looks toward 
investment for new technologies, better efficiency standards and 
conservation policies that will truly lead us down the path to energy 
independence.
  I urge my colleagues to have the vision to vote against this bill 
that takes us back to the past. Vote for the Democratic amendments that 
will take us into a secure and independent energy future.
  Mr. HASTINGS of Florida. Mr. Chairman, I rise today not in support or 
opposition to the legislation before this body, but rather to bring to 
this body's attention the Majority's lack of consideration and complete 
disregard to issues of environmental justice.
  Yesterday, during the Rules Committee hearing on H.R. 6, the Energy 
Policy Act of 2003, I offered an amendment that directed the Secretary 
of Energy to take all necessary steps and efforts to mitigate any 
adverse impacts that U.S. energy policy and the provision of H.R. 6 may 
have on minority, rural, Native American, and underserved communities. 
Additionally, it also requires the Secretary to submit to Congress an 
annual report detailing the Department's efforts to implement the 
requirement that I just described.
  My amendment, as my colleagues and I in the Democratic Party see it, 
was non-controversial and essentially a reinforcement of a policy that 
already exists in the Department of Energy's. However, like in so many 
instances since 1994, the Republican Majority has neglected the 
responsibility that the Constitution instills upon us to always protect 
the rights of the minority and speak up for those whose voices all too 
often go unheard.
  In 1994, then President Clinton signed Executive Order 12898 
establishing an Interagency Working Group on Environmental Justice and 
directed all federal agencies and departments to make environmental 
justice part of their mission. Included in the Working Group were 17 
departments and federal agencies, including the Department of Energy. 
The Working Group made a series of recommendations including the 
establishing of an Office of Environmental Justice within the 
Environmental Protection Agency (EPA). Under President Clinton, the EPA 
worked a great deal toward ensuring that environmental justice was a 
priority of all departments. However, like in so may other issues of 
equality

[[Page H3105]]

and justice, the Bush Administration and Republican Majority have done 
little to advance the cause. And in many instances, their policies 
create situations where environmental injustice thrives.
  Commitments that have been made by the Majority to consider issues 
facing minority communities when crafting legislation has been nothing 
more than lip service in the 108th Congress. Today's debate on H.R. 6 
provided a great opportunity for Congress to reaffirm its commitment to 
environmental justice. But Republicans on the Rule Committee, by a 
straight party line vote of 9 to 3, denied me the opportunity to offer 
my amendment on the floor of the House. In doing so, Republicans 
further denied House Members the opportunity to reaffirm to minority 
and other underserved communities that Congress is committed to 
ensuring environmental justice is a priority to U.S. policymakers. The 
only thing left is for me to question whether or not the Majority 
really is committed to protecting the rights of minorities--and in this 
case, Mr. Speaker, I'm not talking about political affiliation.

  Mr. Chairman, it is virtually impossible for Congress to consider 
energy policy without taking into consideration the effects that new 
and existing legislation will have on the environment and communities 
living in areas that are most impacted by such policies. If 
environmental justice is to be a policy of this government, then 
Congress must also look at the origins of the problem that exist.
  More times than not, environmental injustice arises as a result of 
poor energy policy. I am not just talking about toxic emissions into 
the air from unclean smokestacks disproportionately affecting minority 
and underserved communities living nearest to these plants. I am also 
talking about, for example, the siting of future factories, production 
of automobiles, and the location of a waste dump. All of these issues 
are part of this energy bill, and all of these issues adversely affect 
minority and other underserved communities.
  Environmental justice can no longer just be a part of the mission of 
the Executive Branch. Instead, it must also be the practice of federal 
departments and agencies, as well as the Congress.
  My amendment further links energy policy to issues of environmental 
justice. It does not change the policy or the mission of the Department 
of Energy. Instead, it recognizes that energy policy does play a role 
in achieving environmental justice and requires the Secretary of Energy 
to consider this reality in implementing the provisions of H.R. 6.
  Though the House will never have the opportunity to consider my 
amendment, I submit its text to the Record so that the American public 
can see the injustice that was done this morning by the Republican 
Majority when it denied consideration of my amendment.

              Amendment Offered by Mr. Hastings of Florida

       In Division C, title IX, after section 30908 add the 
     following:

     SEC. 30909. ENVIRONMENTAL JUSTICE.

       (a) Findings.--The Congress finds the following:
       (1) United States energy policy affects United States 
     environmental policy, and United States environmental policy 
     affects United States energy policy.
       (2) In 1990, the Environmental Protection Agency's Equity 
     Workgroup produced a report noting that racial minority and 
     low-income populations bear a higher environmental risk 
     burden than the general population.
       (3) Many people of color, and low-income and Native 
     American communities suffer a disproportionate burden of 
     health consequences due to the siting of industrial plants 
     and waste dumps.
       (4) Executive Order 12898 established an Interagency 
     Working Group on Environmental Justice comprised of 17 
     Federal departments and agencies, including the Department of 
     Energy, to ``coordinate with, provide guidance to, and serve 
     as a clearinghouse for, each Federal agency as it develops an 
     environmental justice strategy''.
       (5) Executive Order 12898 requires that ``[E]ach Federal 
     agency shall develop an agency wide environmental justice 
     strategy . . . that identifies and addressed 
     disproportionately high and adverse human health or 
     environmental effects of programs, policies, and activities 
     on minority populations and low-income populations''.
       (6) The Environmental Protection Agency defines 
     ``environmental justice'' as ``[T]he fair treatment and 
     meaningful involvement of all people regardless of race, 
     color, national origin, culture, education, or income with 
     respect to the development, implementation, and enforcement 
     of environmental laws, regulations, and policies''.
       (7) The Environmental Protection Agency further defines 
     ``fair treatment'' as, ``[N]o group of people, including 
     racial, ethnic, or socioeconomic group, should bear a 
     disproportionate share of the negative environmental 
     consequences resulting from industrial, municipal, and 
     commercial operations''.
       (8) The Environmental Protection Agency defines 
     ``meaningful involvement'' to require that ``the concerns of 
     all participants involved will be considered in the decision 
     making process and the decision makers seek out and 
     facilitate the involvement of those potentially affected''.
       (9) Energy policy in the United States should not hinder or 
     minimize the efforts of the Environmental Protection Agency, 
     the Department of Energy, and other members of the 
     Environmental Protection Agency's Interagency Working Group 
     on Environmental Justice which have made environmental 
     justice part of their mission.
       (b) Consideration of Environmental Justice.--In 
     implementing this act, the Secretary of Energy is directed to 
     take all necessary steps and effort to mitigate any adverse 
     and disproportionate effects that the implementation of this 
     Act may have on minority, rural, Native American, and other 
     underserved communities. When appropriate, the Secretary 
     shall coordinate with other Federal agencies to further 
     environmental justice efforts of the Federal Government.
       (c) Report to Congress.--Not later than 180 days after the 
     date of enactment of this Act, the Secretary of Energy shall 
     submit to the Congress a report detailing the efforts of the 
     Department of Energy to comply with subsection (b) of this 
     section. Following the initial report, the Secretary shall 
     submit subsequent reports annually detailing the efforts of 
     the Department to comply with subsection (b) and include 
     recommendations on how the Department and the Congress can 
     ensure environmental justice energy policy.
  Mr. FALEOMAVAEGA. Mr. Chairman, today I rise in support of H.R. 6, 
the Energy Policy Act of 2003. H.R. 6 is a bill that addresses the need 
for a coherent and comprehensive national energy policy. It is a bill 
aimed at developing a competitive oil and gas leasing program, and a 
bill that recognizes the need for development of alternative modes of 
energy.
  Mr. Chairman, I would like to take a moment to highlight a section in 
H.R. 6 of particular importance to the insular areas. The provision of 
this section requires a comprehensive energy report to be produced on 
consumption, importation, and potential for indigenous alternative 
energy in insular areas, which at present are highly dependent on 
energy imports. This provision is of vital importance to my district 
and those of my colleagues from the territories because it would 
provide for a process to help address some of the crucial energy needs 
of these insular areas.
  This section also provides for creation of a grant program to fund 
projects for electrical power and distribution lines within the 
territories, which are highly susceptible to damages caused by 
hurricanes and typhoons. It is my hope that this legislation will begin 
to address our needs and move us toward the goal of giving the insular 
areas the tools we need to develop local sources of energy in a 
balanced and environmentally sound manner.
  Mr. Chairman, I also want to express my support for opening the 
Arctic National Wildlife Refuge for oil and gas leasing programs. There 
has been much debate regarding this subject and I feel compelled to 
call attention to three key points.
  As a staunch supporter of self-determination and economic development 
of indigenous peoples, I feel it important to recognize the opinions of 
those communities directly affected by the opening of the ANWR region. 
Surveys suggest, and even the National Research Council reports, that 
the resident of Kaktovik largely support the environmentally sensitive 
development of the 1002 area because it would provide significant 
economic resources to the Inupiqaq people. Additionally, the Alaska 
Federation of Natives recognizes the potential economic benefits to 
Alaska Natives and Alaska Native Corporations through the State, and as 
a result passed a resolution in support of legislation for opening the 
ANWR region.
  Mr. Chairman, development of the ANWR also promises to provide jobs 
not only locally, but nationwide as well. Economic analyses forecast 
that as many as 735,000 jobs across the country could be created as a 
result of development of ANWR. As a nation we are enduring uncertain 
fiscal times and must consider all avenues available to help alleviate 
the burdens felt by states and individuals. The need for this 
legislation is reflected by that fact that many of the major labor 
unions, including the International Brotherhood of Teamsters, the 
Seafarers International Union, and the Laborers International Union, 
among others, back the development of 1002.
  I would also like to emphasize the success of the Prudhoe Bay oil 
development program thus far. Since North Slope oil production began, 
the Central Arctic Caribou herd has to been detrimentally affected. It 
has, in fact, flourished. Since 1978, the herd has increased from 5,000 
to approximately 30,000. We should look at the caribou as an example of 
how we can achieve a balance between technology and environment.
  Mr. Chairman, the Resources committee had the honor of hearing 
testimony Ms. Tara Sweeney of the Inupiat tribe, who so eloquently 
expressed her peoples support of the opening of the ANWR area. We have 
heard a multitude of strong arguments on both sides of this issue, but 
perhaps none so compelling as

[[Page H3106]]

Ms. Sweeney's, who said, ``As a native people we do not have a 
hierarchy for traditional food. The caribou is just as important to our 
souls as the whale. We cannot live without both. That is an important 
point to remember when deliberating this issue. We would not recommend 
development if it sacrificed our access to caribou.''
  While obviously there are many strong arguments both in favor and 
against development of ANWR, but the overwhelming support by the 
indigenous community in Alaska, along with the proven success of 
development thus far, is too often dismissed by opponents of this 
legislation. I am therefore supporting H.R. 6, and I urge my colleagues 
to support this bill as well.
  Mr. EVERETT. Mr. Chairman, the Energy Policy Act of 2003 (H.R. 6) if 
a comprehensive package that balances conservation and efficiency, 
domestic production, research, and tax credits and incentives to 
promote increased development of traditional and alternative fuel 
sources.
  The exploration for oil and natural gas in ANWR is a matter that has 
been hotly debated for the last two decades. However, this issue has 
come to the forefront due to recent high energy and gas prices, which 
have dramatically raised consumer concern.
  This debate centers on whether the United States' interest in having 
a viable domestic supply of oil is worth the environmental risk of 
drilling in the refuge. The information we know so far is that far less 
than 1 percent of the 19 million acre refuge would be used for oil and 
gas development. In addition, improved technologies would be available, 
such as horizontal drilling, which allows oil to be extracted from 
miles around from a single point without any additional disturbance to 
the surface. Experts also predict that this could be the second largest 
supply of natural gas in America. In reference to reducing U.S. 
reliance on foreign oil, it is predicted that the output from this 
field could equal thirty years of imports from Saudi Arabia or sixty 
years from Iraq. As a result, our national security could be 
strengthened and the U.S. could have more control over its vital energy 
supplies. As you may know, the U.S. currently spends approximately $300 
million per day from petroleum from overseas, which results in roughly 
$100 billion per year being sent overseas and thus helping to grow 
economies in those countries instead of ours.
  H.R. 6 represents a well balanced and long overdue national energy 
policy that will help our country secure the energy it needs and ensure 
a healthy economy into the 21st century. This measure will reduce our 
dependence on overseas sources of oil and create jobs here at home, 
while protecting our environment for future generations. I look forward 
to seeing this bill approved by the House and a final version signed 
into law so the American consumer can begin to realized the benefits.
  Mr. MARKEY. Mr. Chairman, I rise in opposition to this legislation.
  American needs a balanced and comprehensive national energy policy. 
But the bill before us today is neither balanced nor comprehensive.
  it is a polluting bill. It unnecessarily sweeps aside a wide range of 
environmental and anti-pollution protections in the name of increasing 
oil and gas drilling throughout the country, and burning more and more 
fossil fuels that spew pollutants into our air and water.
  It is also a dangerous bill. It rolls back key consumer protections 
in the electricity and natural gas markets, such as the Public Utility 
Holding Company Act, while simultaneously failing to give federal 
regulators the full power they need to serve as the ``cop on the beat'' 
and prevent the type of fraud and manipulation that we have seen in 
electricity and natural gas markets in recent years.
  We need a more balanced approach to national energy policy. Democrats 
support reasonable measures to increase energy production, but we also 
want to see measures aimed at improving energy efficiency and promoting 
alternative renewable generation technologies. For the most part, this 
bill ignores efficiency and renewables.
  Yes, there is a modest appliance efficiency title. But does that 
title direct the Department of Energy to stop trying to rollback 
central air conditioning efficiency standards from the standards 
adopted by the Clinton Administration? Does it fully address the 
problem President Bush has identified of ``energy vampire'' standby 
power or battery charger systems for VCRS, DVDs, computers, that waste 
electricity? No, it does not.
  And what about motor vehicle fuel efficiency? Two-thirds of all the 
oil we consume is used by the transportation sector. Does this bill do 
anything to improve automobile fuel efficiency or close the SUV 
loophole and require light trucks to use commercially available 
technologies that the National Academy of Sciences says could be 
deployed today? No, it does not.
  And on renewables, yes, there are some tax credits in this bill for 
renewables. But the House Republicans have now altered this provision 
so that a dirty facility that burns municipal solid waste to produce 
energy would now qualify for the renewables credit.
  Now, there are some provisions of this bill that I support. The 
Committee adopted the Cox-Markey amendments barring any indemnification 
of contractors that ship nuclear technology to North Korea or other 
countries on the terrorism list, and outlawing any exports, re-exports, 
or transfers of nuclear technology, materials or information to such 
countries. This amendment will effectively end any further efforts to 
transfer light water reactors to North Korea, and would prevent any 
similar efforts from being undertaken in Iran or Syria in the future. I 
commend the gentleman from California (Mr. Cox) for his work on these 
measures, and I have been pleased to work with and support him in his 
endeavors.
  The bill also contains amendments I attached to similar legislation 
in the last Congress which would require the NRC to issue new rules to 
increase the security of nuclear facilities on a permanent basis and 
the transportation of nuclear materials against the terrorist threat, 
and to assure public access to non-classified information about non-
public NRC meetings. It also contains some new NRC and DOE 
whistleblower protection measures I authored that would close loopholes 
in the law and strengthen protections for those brave individuals that 
report wrongdoing at the NRC, DOE, or their contractors. I thank 
Chairman Barton, Chairman Tauzin, and Ranking Members Dingell and 
Boucher for working with me to include these provisions in the bill.
  In addition, the bill includes an amendment I worked out with the 
gentleman from Louisiana and the gentleman from Texas directing the 
FERC to take action to assure public access to natural gas market price 
information. This provision is intended to ensure that FERC or its 
designee to obtain information from any party needed to enable it to 
compile accurate natural gas price indexes. A series of studies and 
investigations by FERC and other federal authorities has revealed 
widespread manipulation of existing natural gas price indexes, and this 
provision is aimed at ensuring that FERC, state regulators, and the 
public can obtain access to the type of information they need to 
monitor the markets or determine market prices. At the same time, the 
provision does not require sensitive, transaction-specific information 
to be made public--though such information would be accessible to 
federal or state regulators.

  These are useful and important provisions, and I support them. At the 
same time, I cannot support this legislation in its current form 
because of other harmful provisions in the bill.
  The electricity title contains provisions repealing the Public 
Utility Holding Company Act, enshrining incumbent utility monopolies 
with anti-competitive and discriminatory ``native load'' protections, 
so-called ``contract sanctity'' language that is clearly aimed at 
preventing FERC from assuring just and reasonable rates, and a figleaf 
``round-tripping'' provision that outlaws only one of the many 
manipulative practices we have seen in the electricity markets, while 
leaving the others untouched.
  The hydropower title replaces the bipartisan hydro agreement reached 
in the last Congress with an unfair provision that gives dam owners 
special status to change environmental or other conditions imposed as 
part of the re-licensing process. This upsets the balance between how 
power and non-power values (such as fish and habitat protection, 
recreation, navigation, and irrigation) are dealt with in the Federal 
Power Act.
  The oil and gas-related provisions in the Commerce and Resources 
titles would strip away environmental protections relating to the oil 
and gas industry. It would: Restrict the ability of California and 
other states to protect their coastal areas by amending the Coastal 
Zone Management Act; amend the Federal Water Pollution Control Act to 
allow more water pollution by creating a permanent exemption from the 
Environmental Protection Agency's (EPA) storm water rule; prevent the 
EPA from barring the injection of diesel fuel into underground sources 
of drinking water during hydraulic fracturing by excluding oil and gas 
operations from the Safe Drinking Water Act; grant multinational oil 
and gas companies licenses to drill on public lands and in coastal 
waters while avoiding obligations to pay hundreds of millions in 
royalties, depriving the U.S. Treasury of a key source of revenue; 
further add to the taxpayer's burden by allowing oil and gas companies 
to be reimbursed for the costs of permitting their activities under the 
National Environmental Policy Act, an estimated $165 million over ten 
years.
  If these provisions are not stripped from this bill, either today or 
later in the legislative process, H.R. 6 should be defeated.
  Mr. OXLEY. Mr. Chairman, I rise in support of H.R. 6--the ``Energy 
Policy Act of 2003.''
  This bill contains several provisions that are under the jurisdiction 
of the Financial Services Committee and are identical to agreements 
between the House and Senate Conferees

[[Page H3107]]

last year when considering the energy bill before the 107th Congress--
H.R. 4. These provisions are non-controversial and reflect last year's 
bipartisan and bicameral support.
  Division G, sections 70001 through 70010 include measures that will 
enhance energy efficiency in the housing arena as well as promote the 
idea that our country's representatives on the Board of Directors of 
the North American Development Bank encourage energy efficiency and 
conservations.
  Specifically, the housing provisions would allow funding to non-
profit organizations, including community development corporations and 
local cooperative associations, to promote activities relating to 
energy efficient, affordable housing and residential energy 
conservation measures that benefit low-income families.
  Other measures include increasing the public services cap by ten 
percent to allow eligible communities and states to use Community 
Development Block Grant (CDBG) funds to pursue energy conservation and 
efficiency. Currently, the law limits, to fifteen percent, the amount 
of CDBG funds that can be used for public services associated with 
employment, crime prevention, child care, health care, drug abuse, 
education energy conservation, welfare or recreations needs.
  In the real estate/housing market, the provisions would amend Federal 
Housing Administration (FHA) mortgage insurance programs to provide for 
an increase in loan limits up to thirty percent where the potential 
homeowner installs either a solar energy system or residential energy 
conservation measures.
  Under assisted housing, the provisions would update the model energy 
codes of the Council of American Building Officials and the American 
Society of Heating, Refrigeration and Air Conditioning Engineers with 
the 2000 International Energy Conservation Code by September 30, 2004. 
Moreover, other assisted housing programs at HUD, such as public 
housing and HOPE VI have similar provisions to encourage the use of 
energy-efficient appliances, fixtures and building materials.
  Mr. BEAUPREZ. Mr. Chairman, I rise today in support of House 
Resolution 6, legislation promoting the economic and environmental 
benefits of energy conservation, research and development. I commend 
this legislation for including further encouragement of the use of 
renewable energy sources. It is of the utmost importance in such 
internationally unstable times our great nation look for ways to 
improve the efficiency of fuel consumption within our own borders. It 
is imperative this body seeks and successfully implement sound 
renewable energy legislation.
  House Resolution 6 requires the Secretary of Energy, in partnership 
with the private sector, to carry out a program addressing the 
production of hydrogen from diverse energy sources, the safe storage 
and delivery of hydrogen or hydrogen-carrier fuels, the development of 
safe and affordable fuel cells, and the development of necessary 
standards and safety practices related to hydrogen and hydrogen-carrier 
fuels. Activities must facilitate the development of hydrogen energy 
and energy infrastructure, fuel cells, advanced vehicle technologies, 
and clean fuels in addition to hydrogen.
  But it doesn't stop there. I am encouraged to see that this visionary 
legislation also develops biomass as a source of renewable energy. 
Incenting the development of biomass as an energy resource will provide 
tremendous economic encouragement to implement effective forest 
management. From our existing hydropower infrastructure to new 
geothermal, wind and solar resources, this legislation proposes answers 
to the question--how do we power a modern society? It even looks to 
landfill gas as a source of energy.
  In my home district, the sharp team at the National Renewable Energy 
Lab is working diligently to bring renewable energy ideas to reality. 
For this, Mr. Chairman, I am pleased the House of Representatives has 
set forth such promising legislation that will strengthen renewable 
energy alternatives and set a precedent for future generations.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I rise in support of H.R. 6, 
the Energy Act of 2003. The bill is not perfect but it will make a 
great stride toward ensuring that the energy needs of America continue 
to be met in a changing world. Energy and energy policy re inextricably 
linked to the U.S. economy, and to the lifestyles of the American 
people. The business of energy is of critical importance to my 
constituents.
  I wish this bill had more conservation measures in it and included 
some excellent amendments from my Democratic Colleagues that were 
buried in the Rules Committee; however, I believe that it is time to 
move forward in the energy debate. We cannot risk going through another 
Congress withouta comprehensive energy policy. There is much good in 
this bill, much of which came from some creative ideas an hard work in 
the Science Committee on which I serve. There may be a chance in 
conference later to remove some of the most offensive provisions of the 
bill. So, I will support this bill.
  I come from Houston, Texas, what has been called the energy capital 
of the world, and I appreciate that oil and fossil fuels deserve much 
credit for driving our economy and prosperity over the past centuries. 
I know that coal, oil, and natural gas will continue to play a large 
role over the next century at meeting our energy needs. However, we all 
know that fossil fuels are not the wave of the new millennium. Our 
children, especially in the inner cities like in my District of 
Houston, have an epidemic of asthma from breathing smog and polluted 
air. We are overly dependent on foreign sources of oil, bought from 
people that we would prefer not to be reliant on. No matter how safe we 
try to be, shipping and pumping oil will occasionally lead to spills 
and leaks that have tremendous detrimental effects on the environment.

  As we craft our national energy strategy, we must balance the need to 
power our economy and our lives, with our responsibilities as stewards 
of the environment. As we have worked in Committee, and as I cast my 
votes today, I will strive to achieve that balance.
  I am pleased to see that four amendments that I offered in Science 
Committee in this and last congress have been incorporated into today's 
bill. Ensuring that our nation's Historically Black Colleges and 
Universities receive their fair share of research funding will allow us 
to harvest their great expertise and skills. It will also ensure that 
the next generation of leaders in the critical field of energy 
production and utilization will reflect the diversity of our great 
nation.
  Second, my provision for the secondary use of batteries will also 
help keep our environment clean and improve the efficiency of energy 
use in the future.
  Third, I am gratified to see that the spirit of the language offered 
by my colleague from Houston Nick Lampson and me has been preserved, 
requiring the Secretary of the Interior to report to the Congress as to 
the oil and natural gas reserves in waters off the coast of Louisiana 
and Texas. That idea was actually expanded into section 3020 of H.R. 6, 
which will lead to a much more comprehensive understanding of our 
nation's oil production capabilities. No matter how we decide to manage 
our resources in the future, it is important that we take stock and are 
informed about our options.
  One reason I felt it important to study the production potential in 
the waters off of Louisiana and Texas was that Gulf of Mexico oil has 
been successfully pumped and shipped for years. Thus, little additional 
impact on the environment would be expected if oil exploration were to 
be expanded in the future. Tapping such reserves satisfy our domestic 
needs, and will enable us not to pump oil of previously untouched 
areas--national treasures like the Arctic National Wildlife Refuge.

  New technologies are emerging rapidly to harvest the power of the 
sun, the wind, and of water to drive progress in the new millennium. 
Hydrogen holds great promise for becoming a fuel of the future to power 
our cars and trucks and even household devices with fuel cells. If we 
know that such technologies will be the way of the future--it is just 
smart policy to do all we can to stimulate the transition to go as 
efficiently and expeditiously as possible. We must also ensure that 
once the transition occurs, that it is American companies that are on 
the cutting edge of technology--leading and enjoying a good proportion 
of market share.
  Another amendment that I offered in the Science Committee markup, and 
is in H.R. 6, will help that transition occur. The provision will 
require the Department of Energy to enter into discussions with the 
NASA Administrator, which will enable DOE to tap into the vast 
expertise in energy gained from past and future research--in order to 
find technologies that could bolster the existing commercial 
applications programs at the DOE.
  Recently, six agencies, including NIST, DOE, NASA, and the Office of 
Energy Efficiency and Renewable Energy, launched an effort to improve 
the exchange of information about their technical programs and to 
collaborate, in order to ``enhance payoffs from federal investments.'' 
I applaud that effort. Unfortunately, they have limited their initial 
priority areas of focus to intelligence in manufacturing and 
nanotechnology.
  Energy security is absolutely vital to our nation's long-term 
survival, and the well-being of our environment. My amendment will 
build on the existing agreement between the six agencies, by broadening 
their focus to include DOE/NASA interactions meant to stimulate 
progress in development of alternative and renewable energy sources. It 
will have minimal costs, but could yield great benefits.
  Another way to improve energy security is to prevent fraud and abuse 
in the energy industry. I will support the Dingell amendment to 
decrease fraud in the electricity industry.
  I would also like to add my support to the excellent amendments being 
offered today by my Democratic Colleagues. Our energy needs

[[Page H3108]]

are complex. We need to be approaching energy policy from multiple 
directions, with diverse input, in a bipartisan fashion, in order to 
develop creative strategies for fueling the economy of the future in 
the sensitive global environment.
  I urge my colleagues to ensure that that spirit is reflected in the 
ultimate Energy Act that emerges from Conference. I will continue to 
work for smart sustainable energy policy, and I will vote for H.R. 6.
  Mr. McCRERY. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the bill is considered read for amendment under 
the 5-minute rule.
  The text of H.R. 6 is as follows:

                                 H.R. 6

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

     SECTION 1. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

                    DIVISION A--ENERGY AND COMMERCE

Sec. 10001. Short title.

                      TITLE I--ENERGY CONSERVATION

         Subtitle A--Federal Leadership in Energy Conservation

Sec. 11001. Energy and water saving measures in congressional 
              buildings.
Sec. 11002. Energy management requirements.
Sec. 11003. Energy use measurement and accountability.
Sec. 11004. Federal building performance standards.
Sec. 11005. Procurement of energy efficient products.
Sec. 11006. Energy savings performance contracts.
Sec. 11007. Voluntary commitments to reduce industrial energy 
              intensity.
Sec. 11008. Federal agency participation in demand reduction programs.
Sec. 11009. Advanced Building Efficiency Testbed.
Sec. 11010. Increased use of recovered mineral component in federally 
              funded projects involving procurement of cement or 
              concrete.

            Subtitle B--Energy Assistance and State Programs

Sec. 11021. LIHEAP and weatherization assistance.
Sec. 11022. State energy programs.
Sec. 11023. Energy efficient appliance rebate programs.
Sec. 11024. Energy efficient public buildings.
Sec. 11025. Low income community energy efficiency pilot program.

                 Subtitle C--Energy Efficient Products

Sec. 11041. Energy Star program.
Sec. 11042. Consumer education on energy efficiency benefits of air 
              conditioning, heating, and ventilation maintenance.
Sec. 11043. Additional definitions.
Sec. 11044. Additional test procedures.
Sec. 11045. Energy conservation standards for additional consumer and 
              commercial products.
Sec. 11046. Energy labeling.
Sec. 11047. Study of energy efficiency standards.

                         TITLE II--OIL AND GAS

                Subtitle A--Alaska Natural Gas Pipeline

Sec. 12001. Short title.
Sec. 12002. Findings and purposes.
Sec. 12003. Definitions.
Sec. 12004. Issuance of certificate of public convenience and 
              necessity.
Sec. 12005. Environmental reviews.
Sec. 12006. Pipeline expansion.
Sec. 12007. Federal Coordinator.
Sec. 12008. Judicial review.
Sec. 12009. State jurisdiction over in-State delivery of natural gas.
Sec. 12010. Study of alternative means of construction.
Sec. 12011. Clarification of ANGTA status and authorities.
Sec. 12012. Sense of Congress.
Sec. 12013. Participation of small business concerns.
Sec. 12014. Alaska pipeline construction training program.

                Subtitle B--Strategic Petroleum Reserve

Sec. 12101. Full capacity of Strategic Petroleum Reserve.
Sec. 12102. Strategic Petroleum Reserve expansion.
Sec. 12103. Permanent authority to operate the Strategic Petroleum 
              Reserve and other energy programs.

                    Subtitle C--Hydraulic Fracturing

Sec. 12201. Hydraulic fracturing.

   Subtitle D--Unproven Oil and Natural Gas Reserves Recovery Program

Sec. 12301. Program.
Sec. 12302. Eligible reservoirs.
Sec. 12303. Focus areas.
Sec. 12304. Limitation on location of activities.
Sec. 12305. Program administration.
Sec. 12306. Advisory Committee.
Sec. 12307. Limits on participation.
Sec. 12308. Payments to Federal Government.
Sec. 12309. Authorization of appropriations.
Sec. 12310. Public availability of project results and methodologies.
Sec. 12311. Sunset.
Sec. 12312. Definitions.

                       Subtitle E--Miscellaneous

Sec. 12401. Appeals relating to pipeline construction projects.
Sec. 12402. Natural gas market data transparency.
Sec. 12403. Oil and gas exploration and production defined.
Sec. 12404. Complex well technology testing facility.

                        TITLE III--HYDROELECTRIC

                   Subtitle A--Alternative Conditions

Sec. 13001. Alternative conditions and fishways.

                   Subtitle B--Additional Hydropower

Sec. 13201. Hydroelectric production incentives.
Sec. 13202. Hydroelectric efficiency improvement.
Sec. 13203. Small hydroelectric power projects.
Sec. 13204. Increased hydroelectric generation at existing Federal 
              facilities.

                       TITLE IV--NUCLEAR MATTERS

               Subtitle A--Price-Anderson Act Amendments

Sec. 14001. Short title.
Sec. 14002. Extension of indemnification authority.
Sec. 14003. Maximum assessment.
Sec. 14004. Department of Energy liability limit.
Sec. 14005. Incidents outside the United States.
Sec. 14006. Reports.
Sec. 14007. Inflation adjustment.
Sec. 14008. Price-Anderson treatment of modular reactors.
Sec. 14009. Applicability.
Sec. 14010. Prohibition on assumption by United States Government of 
              liability for certain foreign accidents.
Sec. 14011. Secure transfer of nuclear materials.
Sec. 14012. Nuclear facility threats.
Sec. 14013. Unreasonable risk consultation.
Sec. 14014. Financial accountability.
Sec. 14015. Civil penalties.

                   Subtitle B--Miscellaneous Matters

Sec. 14021. Licenses.
Sec. 14022. Nuclear Regulatory Commission meetings.
Sec. 14023. NRC training program.
Sec. 14024. Cost recovery from Government agencies.
Sec. 14025. Elimination of pension offset.
Sec. 14026. Carrying of firearms by licensee employees.
Sec. 14027. Unauthorized introduction of dangerous weapons.
Sec. 14028. Sabotage of nuclear facilities or fuel.
Sec. 14029. Cooperative research and development and special 
              demonstration projects for the uranium mining industry.
Sec. 14030. Uranium sales.
Sec. 14031. Medical isotope production.
Sec. 14032. Highly enriched uranium diversion threat report.
Sec. 14033. Whistleblower protection.
Sec. 14034. Preventing the misuse of nuclear materials and technology.
Sec. 14035. Limitation on legal fee reimbursement.

                      TITLE V--VEHICLES AND FUELS

                Subtitle A--Energy Policy Act Amendments

Sec. 15011. Credit for substantial contribution toward noncovered 
              fleets.
Sec. 15012. Credit for alternative fuel infrastructure.
Sec. 15013. Alternative fueled vehicle report.
Sec. 15014. Allocation of incremental costs.

                     Subtitle B--Advanced Vehicles

Sec. 15021. Definitions.
Sec. 15022. Pilot program.
Sec. 15023. Reports to Congress.
Sec. 15024. Authorization of appropriations.

           Subtitle C--Hydrogen Fuel Cell Heavy-Duty Vehicles

Sec. 15031. Definition.
Sec. 15032. Findings.
Sec. 15033. Hydrogen fuel cell buses.
Sec. 15034. Authorization of appropriations.

                       Subtitle D--Miscellaneous

Sec. 15041. Railroad efficiency.
Sec. 15042. Mobile emission reductions trading and crediting.
Sec. 15043. Idle reduction technologies.
Sec. 15044. Study of aviation fuel conservation and emissions.
Sec. 15045. Diesel fueled vehicles.
Sec. 15046. Waivers of alternative fueled vehicle fueling requirement.
Sec. 15047. Total integrated thermal systems.
Sec. 15048. Oil bypass filtration technology.
Sec. 15049. Natural gas condensate study.

                         TITLE VI--ELECTRICITY

                   Subtitle A--Transmission Capacity

Sec. 16011. Transmission infrastructure improvement rulemaking.
Sec. 16012. Siting of interstate electrical transmission facilities.
Sec. 16013. Transmission technologies.

                   Subtitle B--Transmission Operation

Sec. 16021. Open access transmission by certain utilities.
Sec. 16022. Regional transmission organizations.
Sec. 16023. Native load.

[[Page H3109]]

                        Subtitle C--Reliability

Sec. 16031. Electric reliability standards.

                      Subtitle D--PUHCA Amendments

Sec. 16041. Short title.
Sec. 16042. Definitions.
Sec. 16043. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 16044. Federal access to books and records.
Sec. 16045. State access to books and records.
Sec. 16046. Exemption authority.
Sec. 16047. Affiliate transactions.
Sec. 16048. Applicability.
Sec. 16049. Effect on other regulations.
Sec. 16050. Enforcement.
Sec. 16051. Savings provisions.
Sec. 16052. Implementation.
Sec. 16053. Transfer of resources.
Sec. 16054. Effective date.
Sec. 16055. Authorization of appropriations.
Sec. 16056. Conforming amendments to the Federal Power Act.

                      Subtitle E--PURPA Amendments

Sec. 16061. Real-time pricing and time-of-use metering standards.
Sec. 16062. Cogeneration and small power production purchase and sale 
              requirements.
Sec. 16063. Smart metering.

                      Subtitle F--Renewable Energy

Sec. 16071. Net metering.
Sec. 16072. Renewable energy production incentive.
Sec. 16073. Renewable energy on Federal lands.
Sec. 16074. Assessment of renewable energy resources.

 Subtitle G--Market Transparency, Round Trip Trading Prohibition, and 
                              Enforcement

Sec. 16081. Market transparency rules.
Sec. 16082. Prohibition on round trip trading.
Sec. 16083. Conforming changes.
Sec. 16084. Enforcement.

                    Subtitle H--Consumer Protections

Sec. 16091. Refund effective date.
Sec. 16092. Jurisdiction over interstate sales.
Sec. 16093. Consumer privacy.
Sec. 16094. Unfair trade practices.

          Subtitle I--Merger Review Reform and Accountability

Sec. 16101. Merger review reform and accountability.

                 Subtitle J--Study of Economic Dispatch

Sec. 16111. Study on the benefits of economic dispatch.

                         TITLE VII--MOTOR FUELS

                     Subtitle A--General Provisions

Sec. 17101. Renewable content of motor vehicle fuel.
Sec. 17102. Fuels safe harbor.
Sec. 17103. Findings and MTBE transition assistance.
Sec. 17104. Elimination of oxygen content requirement for reformulated 
              gasoline.
Sec. 17105. Analyses of motor vehicle fuel changes.
Sec. 17106. Data collection.
Sec. 17107. Fuel system requirements harmonization study.
Sec. 17108. Commercial byproducts from municipal solid waste loan 
              guarantee program.

                        Subtitle B--MTBE Cleanup

Sec. 17201. Funding for MTBE Contamination.

                   TITLE VIII--AUTOMOBILE EFFICIENCY

Sec. 18001. Authorization of appropriations for implementation and 
              enforcement of fuel economy standards.
Sec. 18002. Study of feasibility and effects of reducing use of fuel 
              for automobiles.

                          DIVISION B--SCIENCE

Sec. 20001. Purposes.
Sec. 20002. Goals.
Sec. 20003. Definitions.

                   TITLE I--RESEARCH AND DEVELOPMENT

                     Subtitle A--Energy Efficiency

                Part 1--Authorization of Appropriations

Sec. 21101. Energy efficiency.

                        Part 2--Lighting Systems

Sec. 21111. Next Generation Lighting Initiative.

                           Part 3--Buildings

Sec. 21121. National Building Performance Initiative.
Sec. 21122. Electric motor control technology.

                            Part 4--Vehicles

Sec. 21131. Definitions.
Sec. 21132. Establishment of secondary electric vehicle battery use 
              program.

              Part 5--Energy Efficiency Science Initiative

Sec. 21141. Energy Efficiency Science Initiative.

          Part 6--Advanced Energy Technology Transfer Centers

Sec. 21151. Advanced Energy Technology Transfer Centers.

       Subtitle B--Distributed Energy and Electric Energy Systems

                Part 1--Authorization of Appropriations

Sec. 21201. Distributed energy and electric energy systems.

                       Part 2--Distributed Power

Sec. 21211. Strategy.
Sec. 21212. High power density industry program.
Sec. 21213. Micro-cogeneration energy technology.

                      Part 3--Transmission Systems

Sec. 21221. Transmission infrastructure systems research, development, 
              demonstration, and commercial application.

                      Subtitle C--Renewable Energy

                Part 1--Authorization of Appropriations

Sec. 21301. Renewable energy.

                           Part 2--Bioenergy

Sec. 21311. Bioenergy programs.

                     Part 3--Miscellaneous Projects

Sec. 21321. Miscellaneous projects.
Sec. 21322. Renewable energy in public buildings.

                       Subtitle D--Nuclear Energy

                Part 1--Authorization of Appropriations

Sec. 21401. Nuclear energy.

                Part 2--Nuclear Energy Research Programs

Sec. 21411. Nuclear energy research programs.

                    Part 3--Advanced Fuel Recycling

Sec. 21421. Advanced fuel recycling program.

                      Part 4--University Programs

Sec. 21431. University nuclear science and engineering support.

               Part 5--Geological Isolation of Spent Fuel

Sec. 21441. Geological isolation of spent fuel.

                       Subtitle E--Fossil Energy

                Part 1--Authorization of Appropriations

Sec. 21501. Fossil energy.

                       Part 2--Research Programs

Sec. 21511. Fossil energy research programs.
Sec. 21512. Research and development for coal mining technologies.

   Part 3--Ultra-deepwater and Unconventional Natural Gas and Other 
                          Petroleum Resources

Sec. 21521. Program authority.
Sec. 21522. Ultra-deepwater program.
Sec. 21523. Unconventional natural gas and other petroleum resources 
              program.
Sec. 21524. Additional requirements for awards.
Sec. 21525. Advisory committees.
Sec. 21526. Limits on participation.
Sec. 21527. Fund.
Sec. 21528. Transfer of advanced oil and gas exploration and production 
              technologies.
Sec. 21529. Sunset.
Sec. 21530. Definitions.

                          Subtitle F--Science

                Part 1--Authorization of Appropriations

Sec. 21601. Science.

                     Part 2--Fusion Energy Sciences

Sec. 21611. ITER.
Sec. 21612. Plan for fusion experiment.
Sec. 21613. Plan for fusion energy sciences program.

                   Part 3--Spallation Neutron Source

Sec. 21621. Definition.
Sec. 21622. Report.
Sec. 21623. Limitations.

                         Part 4--Miscellaneous

Sec. 21631. Facility and infrastructure support for nonmilitary energy 
              laboratories.
Sec. 21632. Research regarding precious metal catalysis.
Sec. 21633. Nanotechnology research and development.
Sec. 21634. Advanced scientific computing for energy missions.
Sec. 21635. Nitrogen fixation.
Sec. 21636. Department of Energy Science and Technology Scholarship 
              Program.

                        Part 5--Genomes to Life

Sec. 21641. Genomes to life.

                   Subtitle G--Energy and Environment

Sec. 21701. Authorization of appropriations.
Sec. 21702. United States-Mexico energy technology cooperation.
Sec. 21703. Waste reduction and use of alternatives.
Sec. 21704. Coal gasification.
Sec. 21705. Petroleum coke gasification.
Sec. 21706. Other biopower and bioenergy.
Sec. 21707. Coal technology loan.
Sec. 21708. Fuel cell test center.
Sec. 21709. Fuel cell transit bus demonstration.

                         Subtitle H--Management

Sec. 21801. Availability of funds.
Sec. 21802. Cost sharing.
Sec. 21803. Merit review of proposals.
Sec. 21804. External technical review of departmental programs.
Sec. 21805. Improved coordination of technology transfer activities.
Sec. 21806. Small business advocacy and assistance.
Sec. 21807. Mobility of scientific and technical personnel.
Sec. 21808. National Academy of Sciences report.
Sec. 21809. Outreach.
Sec. 21810. Limits on use of funds.
Sec. 21811. Reprogramming.
Sec. 21812. Construction with other laws.
Sec. 21813. University collaboration.
Sec. 21814. Federal laboratory educational partners.
Sec. 21815. Interagency cooperation.

[[Page H3110]]

               TITLE II--DEPARTMENT OF ENERGY MANAGEMENT

Sec. 22001. External regulation of Department of Energy.
Sec. 22002. Improved coordination and management of civilian science 
              and technology programs.

                     TITLE III--CLEAN SCHOOL BUSES

Sec. 23001. Establishment of pilot program.
Sec. 23002. Fuel cell bus development and demonstration program.
Sec. 23003. Diesel retrofit program.
Sec. 23004. Authorization of appropriations.

                         DIVISION C--RESOURCES

                         TITLE I--INDIAN ENERGY

Sec. 30101. Indian energy.

                         TITLE II--OIL AND GAS

Sec. 30201. Program on oil and gas royalties in-kind.
Sec. 30202. Clarification of fair market rental value determinations 
              for public lands and Forest Service rights-of-way.
Sec. 30203. USGS estimates of oil and gas resources underlying onshore 
              Federal lands.
Sec. 30204. Royalty incentives for certain offshore areas.
Sec. 30205. Marginal property production incentives.
Sec. 30206. Federal onshore oil and gas leasing and permitting 
              practices.
Sec. 30207. Management of Federal oil and gas leasing programs.
Sec. 30208. Consultation regarding oil and gas leasing on public lands.
Sec. 30209. Oil and gas lease acreage limitations.
Sec. 30210. Federal reimbursement for orphan well reclamation.
Sec. 30211. Preservation of geological and geophysical data.
Sec. 30212. Compliance with Executive Order 13211; actions concerning 
              regulations that significantly affect energy supply, 
              distribution, or use.
Sec. 30213. Reimbursement for costs of NEPA analyses, documentation, 
              and studies.
Sec. 30214. Alternate energy-related uses on the Outer Continental 
              Shelf.
Sec. 30215. Deadline for decision on appeals of consistency 
              determinations under the Coastal Zone Management Act of 
              1972.
Sec. 30216. Task force on energy project streamlining.
Sec. 30217. Pilot program on Northern Rocky Mountains energy resource 
              management.
Sec. 30218. Energy development facilitator study.
Sec. 30219. Combined hydrocarbon leasing.
Sec. 30220. Comprehensive inventory of OCS oil and natural gas 
              resources.
Sec. 30221. Royalty payments under leases under the Outer Continental 
              Shelf Lands Act.

                       TITLE III--BIOMASS ENERGY

Sec. 30301. Grants to improve the commercial value of forest biomass 
              for electric energy, useful heat, transportation fuels, 
              petroleum-based product substitutes, and other commercial 
              purposes.

             TITLE IV--ARCTIC COASTAL PLAIN DOMESTIC ENERGY

Sec. 30401. Short title.
Sec. 30402. Definitions.
Sec. 30403. Leasing program for lands within the Coastal Plain.
Sec. 30404. Lease sales.
Sec. 30405. Grant of leases by the Secretary.
Sec. 30406. Lease terms and conditions.
Sec. 30407. Coastal Plain environmental protection.
Sec. 30408. Expedited judicial review.
Sec. 30409. Federal and State distribution of revenues.
Sec. 30410. Rights-of-way across the Coastal Plain.
Sec. 30411. Conveyance.
Sec. 30412. Local government impact aid and community service 
              assistance.

                          TITLE V--HYDROPOWER

Sec. 30501. Study and report on increasing electric power production 
              capability of existing facilities.
Sec. 30502. Study and implementation of increased operational 
              efficiencies in hydroelectric power projects.
Sec. 30503. Shift of project loads to off-peak periods.

                      TITLE VI--GEOTHERMAL ENERGY

Sec. 30601. Competitive lease sale requirements.
Sec. 30602. Special provisions regarding direct use of low temperature 
              geothermal energy resources.
Sec. 30603. Royalties and near-term production incentives.
Sec. 30604. Consultation regarding geothermal leasing and permitting on 
              public lands.
Sec. 30605. Review and report to Congress.
Sec. 30606. Reimbursement for costs of NEPA analyses, documentation, 
              and studies.
Sec. 30607. Assessment of geothermal energy potential.
Sec. 30608. Cooperative or unit plans.
Sec. 30609. Royalty on byproducts.
Sec. 30610. Repeal of authorities of Secretary to readjust terms, 
              conditions, rentals, and royalties.
Sec. 30611. Crediting of rental toward royalty.
Sec. 30612. Lease duration and work commitment requirements.
Sec. 30613. Advanced royalties required for suspension of production.
Sec. 30614. Annual rental.

                            TITLE VII--COAL

Sec. 30701. Short title.
Sec. 30702. Repeal of the 160-acre limitation for coal leases.
Sec. 30703. Mining plans.
Sec. 30704. Payment of advance royalties under coal leases.
Sec. 30705. Elimination of deadline for submission of coal lease 
              operation and reclamation plan.
Sec. 30706. Amendments relating to financial assurances with respect to 
              bonus bids.
Sec. 30707. Inventory requirement.
Sec. 30708. Application of amendments.

               TITLE VIII--INSULAR AREAS ENERGY SECURITY

Sec. 30801. Insular areas energy security.

                   TITLE IX--MISCELLANEOUS PROVISIONS

Sec. 30901. Report on energy facility rights-of-way and corridors on 
              Federal lands.
Sec. 30902. Electricity transmission line right-of-way, Cleveland 
              National Forest and adjacent public lands, California.
Sec. 30903. Consultation regarding energy rights-of-way on public 
              lands.
Sec. 30904. Enhancing energy efficiency in management of Federal lands.
Sec. 30905. Permitting of wind energy development projects on public 
              lands.
Sec. 30906. Sense of the Congress regarding generation capacity of 
              electricity from renewable energy resources on public 
              lands.
Sec. 30907. Assessment of ocean thermal energy resources.
Sec. 30908. Sense of the Congress regarding development of minerals 
              under Padre Island National Seashore.

                            DIVISION D--TAX

Sec. 40001. Short title; etc.

                         TITLE I--CONSERVATION

Sec. 41001. Credit for residential solar energy property.
Sec. 41002. Extension and expansion of credit for electricity produced 
              from renewable resources.
Sec. 41003. Credit for qualified fuel cell power plants.
Sec. 41004. Credit for energy efficiency improvements to existing 
              homes.
Sec. 41005. Business credit for construction of new energy efficient 
              home.
Sec. 41006. Energy credit for combined heat and power system property.
Sec. 41007. New nonrefundable personal credits allowed against regular 
              and minimum taxes.
Sec. 41008. Repeal of 4.3-cent motor fuel excise taxes on railroads and 
              inland waterway transportation which remain in general 
              fund.
Sec. 41009. Reduced motor fuel excise tax on certain mixtures of diesel 
              fuel.
Sec. 41010. Repeal of phaseouts for qualified electric vehicle credit 
              and deduction for clean fuel-vehicles.
Sec. 41011. Alternative motor vehicle credit.

                         TITLE II--RELIABILITY

Sec. 42001. Natural gas gathering lines treated as 7-year property.
Sec. 42002. Natural gas distribution lines treated as 15-year property.
Sec. 42003. Electric transmission property treated as 15-year property.
Sec. 42004. Expensing of capital costs incurred in complying with 
              environmental protection agency sulfur regulations.
Sec. 42005. Credit for production of low sulfur diesel fuel.
Sec. 42006. Determination of small refiner exception to oil depletion 
              deduction.
Sec. 42007. Sales or dispositions to implement Federal energy 
              regulatory commission or State electric restructuring 
              policy.
Sec. 42008. Modifications to special rules for nuclear decommissioning 
              costs.
Sec. 42009. Treatment of certain income of cooperatives.
Sec. 42010. Arbitrage rules not to apply to prepayments for natural 
              gas.
Sec. 42011. Prepayment of premium liability for coal industry health 
              benefits.

                         TITLE III--PRODUCTION

Sec. 43001. Oil and gas from marginal wells.
Sec. 43002. Temporary suspension of limitation based on 65 percent of 
              taxable income and extension of suspension of taxable 
              income limit with respect to marginal production.
Sec. 43003. Amortization of delay rental payments.
Sec. 43004. Amortization of geological and geophysical expenditures.
Sec. 43005. Extension and modification of credit for producing fuel 
              from a nonconventional source.
Sec. 43006. Business related energy credits allowed against regular and 
              minimum tax.
Sec. 43007. Temporary repeal of alternative minimum tax preference for 
              intangible drilling costs.
Sec. 43008. Allowance of enhanced recovery credit against the 
              alternative minimum tax.

[[Page H3111]]

                    TITLE IV--CORPORATE EXPATRIATION

Sec. 44001. Tax treatment of corporate expatriation.
Sec. 44002. Expressing the sense of the Congress that tax reform is 
              needed to address the issue of corporate expatriation.

                         DIVISION E--CLEAN COAL

Sec. 50001. Authorization of appropriations.
Sec. 50002. Project criteria.
Sec. 50003. Report.
Sec. 50004. Clean coal Centers of Excellence.

                          DIVISION F--HYDROGEN

Sec. 60001. Definitions.
Sec. 60002. Plan.
Sec. 60003. Program.
Sec. 60004. Interagency task force.
Sec. 60005. Advisory Committee.
Sec. 60006. External review.
Sec. 60007. Miscellaneous provisions.
Sec. 60008. Authorization of appropriations.
Sec. 60009. Fuel cell program at National Parks.
Sec. 60010. Advanced power system technology incentive program.

                          DIVISION G--HOUSING

Sec. 70001. Capacity building for energy-efficient, affordable housing.
Sec. 70002. Increase of CDBG public services cap for energy 
              conservation and efficiency activities.
Sec. 70003. FHA mortgage insurance incentives for energy efficient 
              housing.
Sec. 70004. Public Housing Capital Fund.
Sec. 70005. Grants for energy-conserving improvements for assisted 
              housing.
Sec. 70006. North American Development Bank.
Sec. 70007. Energy-efficient appliances.
Sec. 70008. Energy efficiency standards.
Sec. 70009. Energy strategy for HUD.

                    DIVISION A--ENERGY AND COMMERCE

     SEC. 10001. SHORT TITLE.

       This division may be cited as the ``Energy Policy Act of 
     2003''.

                      TITLE I--ENERGY CONSERVATION

         Subtitle A--Federal Leadership in Energy Conservation

     SEC. 11001. 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. 552. 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) 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) Table of Contents Amendment.--The table of contents of 
     the National Energy Conservation Policy Act is amended by 
     adding at the end of the items relating to part 3 of title V 
     the following new item:

``Sec. 552. Energy and water savings measures in congressional 
              buildings.''.
       (c) Repeal.--Section 310 of the Legislative Branch 
     Appropriations Act, 1999 (40 U.S.C. 166i), is repealed.
       (d) Energy Infrastructure.--The Architect of the Capitol, 
     building on the Master Plan Study completed in July 2000, 
     shall commission a study to evaluate the energy 
     infrastructure of the Capital Complex to determine how the 
     infrastructure could be augmented to become more energy 
     efficient, using unconventional and renewable energy 
     resources, in a way that would enable the Complex to have 
     reliable utility service in the event of power fluctuations, 
     shortages, or outages.
       (e) Authorization.--There are authorized to be appropriated 
     to the Architect of the Capitol to carry out subsection (d), 
     not more than $2,000,000 for fiscal years after the enactment 
     of this Act.

     SEC. 11002. ENERGY MANAGEMENT REQUIREMENTS.

       (a) Energy Reduction Goals.--
       (1) Amendment.--Section 543(a)(1) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8253(a)(1)) is amended by 
     striking ``its Federal buildings so that'' and all that 
     follows through the end and inserting ``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 
     2004 through 2013 is reduced, as compared with the energy 
     consumption per gross square foot of the Federal buildings of 
     the agency in fiscal year 2001, by the percentage specified 
     in the following table:

  ``Fiscal Year                                    Percentage reduction
    2004............................................................ 2 
    2005............................................................ 4 
    2006............................................................ 6 
    2007............................................................ 8 
    2008............................................................10 
    2009............................................................12 
    2010............................................................14 
    2011............................................................16 
    2012............................................................18 
    2013.........................................................20.''.
       (2) Reporting baseline.--The energy reduction goals and 
     baseline established in paragraph (1) of section 543(a) of 
     the National Energy Conservation Policy Act, as amended by 
     paragraph (1) of this subsection, supersede all previous 
     goals and baselines under such paragraph, and related 
     reporting requirements.
       (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, 2012, 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 fiscal years 2014 through 
     2023.''.
       (c) Exclusions.--Section 543(c)(1) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8253(c)(1)) is amended by 
     striking ``An agency may exclude'' and all that follows 
     through the end and inserting ``(A) An agency may exclude, 
     from the energy performance requirement for a fiscal 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, Executive 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) Retention of Energy Savings.--Section 546 of the 
     National Energy Conservation Policy Act (42 U.S.C. 8256) is 
     amended by adding at the end the following new subsection:
       ``(e) Retention of Energy Savings.--An agency may retain 
     any funds appropriated to that agency for energy 
     expenditures, at buildings subject to the requirements of 
     section 543(a) and (b), that are not made because of energy 
     savings. Except as otherwise provided by law, such funds may 
     be used only for energy efficiency or unconventional and 
     renewable energy resources projects.''.
       (g) 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''.
       (h) 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).''.

[[Page H3112]]

     SEC. 11003. 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, 2010, in accordance with 
     guidelines established by the Secretary under paragraph (2), 
     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. 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, 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 priorities for types and locations of 
     buildings to be metered and submetered based on cost-
     effectiveness and a schedule of 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 minimis 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. 11004. FEDERAL BUILDING PERFORMANCE 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, for new Federal buildings--
       ``(i) such buildings be designed so as to achieve energy 
     consumption levels at least 30 percent below those of the 
     most recent ASHRAE Standard 90.1 or the most recent version 
     of the International Energy Conservation Code, as 
     appropriate; and
       ``(ii) 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 owned, operated, 
     or controlled by the Federal agency; and
       ``(ii) a statement concerning whether the Federal buildings 
     meet or exceed the revised standards established under this 
     paragraph.''.

     SEC. 11005. 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. 553. 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 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 the head of the executive 
     agency finds in writing that--
       ``(A) an Energy Star product or FEMP designated product is 
     not cost-effective over the life of the product taking energy 
     cost savings into account; or
       ``(B) no Energy Star product or FEMP designated product is 
     reasonably available that meets the functional 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, 
     including guide specifications, project specifications, and 
     construction, renovation, and services contracts that include 
     provision of 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 products 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. The General 
     Services Administration or the Defense Logistics Agency shall 
     supply only Energy Star products or FEMP designated products 
     for all product categories covered by the Energy Star program 
     or the Federal Energy Management Program, except in cases 
     where the agency ordering a product specifies in writing that 
     no Energy Star product or FEMP designated product is 
     available to meet the buyer's functional requirements, or 
     that no Energy Star product or FEMP designated product is 
     cost-effective for the intended application over the life of 
     the product, taking energy cost savings into account.
       ``(d) 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 after the date of the enactment of 
     this section, after considering the recommendations of 
     associated electric motor manufacturers and energy efficiency 
     groups.
       ``(e) Regulations.--Not later than 180 days after the date 
     of the enactment of this section, the Secretary shall issue 
     guidelines to carry out this section.''.
       (b) Conforming Amendment.--The table of contents in section 
     101(b) of the National Energy Conservation Policy Act (42 
     U.S.C. 8201 note), as amended by section 11001(b) of this 
     division, is further amended by inserting after the item 
     relating to section 552 the following:

``Sec. 553. Federal procurement of energy efficient products.''.

     SEC. 11006. ENERGY SAVINGS PERFORMANCE CONTRACTS.

       (a) Permanent Extension.--Section 801(c) of the National 
     Energy Conservation Policy Act (42 U.S.C. 8287(c)) is 
     repealed.
       (b) Replacement Facilities.--Section 801(a) of the National 
     Energy Conservation Policy Act (42 U.S.C. 8287(a)) is amended 
     by adding at the end the following new paragraph:
       ``(3)(A) In the case of an energy savings contract or 
     energy savings performance contract providing for energy 
     savings through the construction and operation of one or more 
     buildings or facilities to replace one or more existing 
     buildings or facilities, benefits ancillary to the purpose of 
     such contract under paragraph (1) may include savings 
     resulting from reduced costs of operation and maintenance at 
     such replacement buildings or facilities when compared with 
     costs of operation and maintenance at the buildings or

[[Page H3113]]

     facilities being replaced, established through a methodology 
     set forth in the contract.
       ``(B) Notwithstanding paragraph (2)(B), aggregate annual 
     payments by an agency under an energy savings contract or 
     energy savings performance contract referred to in 
     subparagraph (A) may take into account (through the 
     procedures developed pursuant to this section) savings 
     resulting from reduced costs of operation and maintenance as 
     described in that subparagraph.''.
       (c) 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) a reduction in the cost of energy or water, from a 
     base cost established through a methodology set forth in the 
     contract, used in an existing federally owned building or 
     buildings or other federally owned facilities as a result 
     of--
       ``(i) the lease or purchase of operating equipment, 
     improvements, altered operation and maintenance, or technical 
     services;
       ``(ii) the increased efficient use of existing energy 
     sources by cogeneration or heat recovery, excluding any 
     cogeneration process for other than a federally owned 
     building or buildings or other federally owned facilities; or
       ``(iii) the increased efficient use of existing water 
     sources; or
       ``(B) in the case of a replacement building or facility 
     described in section 801(a)(3), a reduction in the cost of 
     energy, from a base cost established through a methodology 
     set forth in the contract, that would otherwise be utilized 
     in one or more existing federally owned buildings or other 
     federally owned facilities by reason of the construction and 
     operation of the replacement building or facility.''.
       (d) 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--
       ``(A) 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; or
       ``(B) energy savings through the construction and operation 
     of one or more buildings or facilities to replace one or more 
     existing buildings or facilities.
     Such contracts shall, with respect to an agency facility that 
     is a public building as such term is defined in section 13(1) 
     of the Public Buildings Act of 1959 (40 U.S.C. 3301), be in 
     compliance with the prospectus requirements and procedures of 
     section 7 of the Public Buildings Act of 1959 (40 U.S.C. 
     3307).''.
       (e) 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.''.
       (f) Review.--Within 180 days after the date of the 
     enactment of this section, 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. 11007. 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 2004 through 2014.
       (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, 2010 and June 30, 
     2014, 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. 11008. FEDERAL AGENCY PARTICIPATION IN DEMAND REDUCTION 
                   PROGRAMS.

       Section 546(c) of the National Energy Conservation Policy 
     Act (42 U.S.C. 8256(c)) is amended by adding at the end of 
     the following new paragraph:
       ``(6) Federal agencies are encouraged to participate in 
     State or regional demand side reduction programs. The 
     availability of such programs, including measures employing 
     onsite generation, and the savings resulting from such 
     participation, should be included in the evaluation of energy 
     options for Federal facilities.''.

     SEC. 11009. ADVANCED BUILDING EFFICIENCY TESTBED.

       (a) Establishment.--The Secretary of Energy, in 
     consultation with the Administrator of the General Services 
     Administration, shall establish an Advanced Building 
     Efficiency Testbed program for the development, testing, and 
     demonstration of advanced engineering systems, components, 
     and materials to enable innovations in building technologies. 
     The program shall evaluate efficiency concepts for government 
     and industry buildings, and demonstrate the ability of next 
     generation buildings to support individual and organizational 
     productivity and health as well as flexibility and 
     technological change to improve environmental sustainability. 
     Such program shall complement and not duplicate existing 
     national programs.
       (b) Participants.--The program established under subsection 
     (a) shall be led by a university with the ability to combine 
     the expertise from numerous academic fields including, at a 
     minimum, intelligent workplaces and advanced building systems 
     and engineering, electrical and computer engineering, 
     computer science, architecture, urban design, and 
     environmental and mechanical engineering. Such university 
     shall partner with other universities and entities who have 
     established programs and the capability of advancing 
     innovative building efficiency technologies.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Energy to carry out 
     this section $6,000,000 for each of the fiscal years 2004 
     through 2006, to remain available until expended. For any 
     fiscal year in which funds are expended under this section, 
     the Secretary shall provide one-third of the total amount to 
     the lead university described in subsection (b), and provide 
     the remaining two-thirds to the other participants referred 
     to in subsection (b) on an equal basis.

     SEC. 11010. INCREASED USE OF RECOVERED MINERAL COMPONENT IN 
                   FEDERALLY FUNDED PROJECTS INVOLVING PROCUREMENT 
                   OF CEMENT OR CONCRETE.

       (a) Amendment.--Subtitle F of the Solid Waste Disposal Act 
     (42 U.S.C. 6961 et seq.) is amended by adding at the end the 
     following new section:


  ``increased use of recovered mineral component in federally funded 
          projects involving procurement of cement or concrete

       ``Sec. 6005. (a) Definitions.--In this section:
       ``(1) 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.
       ``(2) 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.
       ``(3) Recovered mineral component.--The term `recovered 
     mineral component' 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 mineral component 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 section, 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 section (including 
     guidelines under section 6002) that provide for the use of 
     cement and concrete incorporating recovered mineral component 
     in cement or concrete projects.

[[Page H3114]]

       ``(2) Priority.--In carrying out paragraph (1) an agency 
     head shall give priority to achieving greater use of 
     recovered mineral component in cement or concrete projects 
     for which recovered mineral components historically have not 
     been used or have been used only minimally.
       ``(3) Conformance.--The Administrator and each agency head 
     shall carry out this subsection in accordance with section 
     6002.
       ``(c) Full Implementation Study.--
       ``(1) In general.--The Administrator, in cooperation with 
     the Secretary of Transportation and 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 environmental benefits attainable with substitution of 
     recovered mineral component in cement used in cement or 
     concrete projects.
       ``(2) Matters to be addressed.--The study shall--
       ``(A) quantify the extent to which recovered mineral 
     components are being substituted for Portland cement, 
     particularly as a result of current procurement requirements, 
     and the energy savings and environmental benefits associated 
     with that substitution;
       ``(B) identify all barriers in procurement requirements to 
     fuller realization of energy savings and environmental 
     benefits, including barriers resulting from exceptions from 
     current law; and
       ``(C)(i) identify potential mechanisms to achieve greater 
     substitution of recovered mineral component in types of 
     cement or concrete projects for which recovered mineral 
     components 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 
     mineral component in those cement or concrete projects; and
       ``(iii) identify any potential environmental or economic 
     effects that may result from greater substitution of 
     recovered mineral component in those cement or concrete 
     projects.
       ``(3) Report.--Not later than 30 months after the date of 
     enactment of this section, the Administrator shall submit to 
     the Committee on Appropriations and Committee on Environment 
     and Public Works of the Senate and the Committee on 
     Appropriations, Committee on Energy and Commerce, and 
     Committee on Transportation and Infrastructure of the House 
     of Representatives a report on the study.
       ``(d) Additional Procurement Requirements.--Unless the 
     study conducted under subsection (c) identifies any effects 
     or other problems described in subsection (c)(2)(C)(iii) that 
     warrant further review or delay, the Administrator and each 
     agency head shall, within 1 year of the release of the report 
     in accordance with subsection (c)(3), take additional actions 
     authorized under this Act to establish procurement 
     requirements and incentives that provide for the use of 
     cement and concrete with increased substitution of recovered 
     mineral component in the construction and maintenance of 
     cement or concrete projects, so as to--
       ``(1) realize more fully the energy savings and 
     environmental 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 (including the guidelines 
     and specifications for implementing those requirements).''.
       (b) Table of Contents Amendment.--The table of contents of 
     the Solid Waste Disposal Act is amended by adding after the 
     item relating to section 6004 the following new item:

``Sec. 6005. Increased use of recovered mineral component in federally 
              funded projects involving procurement of cement or 
              concrete.''.

            Subtitle B--Energy Assistance and State Programs

     SEC. 11021. LIHEAP AND WEATHERIZATION ASSISTANCE.

       (a) Low-Income Home Energy Assistance Program.--Section 
     2602(b) of the Low-Income Home Energy Assistance Act of 1981 
     (42 U.S.C. 8621(b)) is amended by striking ``each of fiscal 
     years 2002 through 2004'' and inserting ``each of fiscal 
     years 2002 and 2003, and $3,400,000,000 for each of fiscal 
     years 2004 through 2006''.
       (b) Weatherization.--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 
     2004, $400,000,000 for fiscal year 2005, and $500,000,000 for 
     fiscal year 2006''.
       (c) Report to Congress.--Not later than 1 year after the 
     date of enactment of this Act, the Secretary of Health and 
     Human Services shall transmit to the Congress a report on how 
     the Low-Income Home Energy Assistance Program could be used 
     more effectively to prevent loss of life from extreme 
     temperatures. In preparing such report, the Secretary shall 
     consult with appropriate officials in all 50 States and the 
     District of Columbia.

     SEC. 11022. STATE ENERGY PROGRAMS.

       (a) State Energy Conservation Plans.--Section 362 of the 
     Energy Policy and Conservation Act (42 U.S.C. 6322) is 
     amended by inserting at the end the following new subsection:
       ``(g) The Secretary shall, at least once every 3 years, 
     invite the Governor of each State to review and, if 
     necessary, revise the energy conservation plan of such State 
     submitted under subsection (b) or (e). Such reviews should 
     consider the energy conservation plans of other States within 
     the region, and identify opportunities and actions carried 
     out in pursuit of common energy conservation goals.''.
       (b) State Energy Efficiency Goals.--Section 364 of the 
     Energy Policy and Conservation Act (42 U.S.C. 6324) is 
     amended to read as follows:


                    ``state energy efficiency goals

       ``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 
     2003 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 2010 as compared to calendar 
     year 1990, and may contain interim goals.''.
       (c) Authorization of Appropriations.--Section 365(f) of the 
     Energy Policy and Conservation Act (42 U.S.C. 6325(f)) is 
     amended by striking ``for fiscal years 1999 through 2003 such 
     sums as may be necessary'' and inserting ``$100,000,000 for 
     each of the fiscal years 2004 and 2005 and $125,000,000 for 
     fiscal year 2006''.

     SEC. 11023. 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 (f) 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 $50,000,000 for 
     each of the fiscal years 2004 through 2008.

     SEC. 11024. ENERGY EFFICIENT PUBLIC BUILDINGS.

       (a) Grants.--The Secretary of Energy may make grants to 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

[[Page H3115]]

     no such agency exists, a State agency designated by the 
     Governor of the State, to assist units of local government in 
     the State in improving the energy efficiency of public 
     buildings and facilities--
       (1) through construction of new energy efficient public 
     buildings that use at least 30 percent less energy than a 
     comparable public building constructed in compliance with 
     standards prescribed in chapter 8 of the 2000 International 
     Energy Conservation Code, or a similar State code intended to 
     achieve substantially equivalent efficiency levels; or
       (2) through renovation of existing public buildings to 
     achieve reductions in energy use of at least 30 percent as 
     compared to the baseline energy use in such buildings prior 
     to renovation, assuming a 3-year, weather-normalized average 
     for calculating such baseline.
       (b) Administration.--State energy offices receiving grants 
     under this section shall--
       (1) maintain such records and evidence of compliance as the 
     Secretary may require; and
       (2) develop and distribute information and materials and 
     conduct programs to provide technical services and assistance 
     to encourage planning, financing, and design of energy 
     efficient public buildings by units of local government.
       (c) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated to the 
     Secretary of Energy such sums as may be necessary for each of 
     fiscal years 2004 through 2013. Not more than 30 percent of 
     appropriated funds shall be used for administration.

     SEC. 11025. 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 $20,000,000 for fiscal year 2004 and each 
     fiscal year thereafter through fiscal year 2006.

                 Subtitle C--Energy Efficient Products

     SEC. 11041. ENERGY STAR PROGRAM.

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

     ``SEC. 324A. ENERGY STAR PROGRAM.

       ``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 and other forms of 
     communication about 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.''.
       (b) Table of Contents Amendment.--The table of contents of 
     the Energy Policy and Conservation Act is amended by 
     inserting after the item relating to section 324 the 
     following new item:

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

     SEC. 11042. 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 shall carry out the program in 
     cooperation with the Administrator of the Environmental 
     Protection Agency and such other entities as the Secretary 
     considers appropriate, including industry trade associations, 
     industry members, and energy efficiency organizations.
       ``(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. 11043. 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 subparagraph (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

[[Page H3116]]

     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. 11044. 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 Version 2.0 of the Energy 
     Star program of the Environmental Protection Agency for 
     illuminated exit signs.
       ``(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.''.

     SEC. 11045. 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; except 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 this section 
     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 paragraph (2) 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 this 
     section and the criteria set forth in subparagraph (B) of 
     paragraph (2) 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 (relating to Energy Star Programs) 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 
     Version 2.0 Energy Star Program performance requirements for 
     illuminated exit signs prescribed by the Environmental 
     Protection Agency
       ``(x) Torchieres.--Torchieres manufactured on or after 
     January 1, 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.
       ``(aa) Effective Date of Section 327.--The provisions of 
     section 327 shall apply to products for which standards are 
     set in subsections (v) through (z) of this section after the 
     effective date for such standards.''.

     SEC. 11046. 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 2 years after 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 or the Commission, as appropriate, may 
     for covered products referred to in subsections (u) through 
     (z) of section 325, prescribe, by rule, pursuant to this 
     section, labeling requirements for such products after a test 
     procedure has been set pursuant to section 323.''.

[[Page H3117]]

     SEC. 11047. 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.

                         TITLE II--OIL AND GAS

                Subtitle A--Alaska Natural Gas Pipeline

     SEC. 12001. SHORT TITLE.

       This subtitle may be cited as the ``Alaska Natural Gas 
     Pipeline Act of 2003''.

     SEC. 12002. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds the following:
       (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.
       (b) Purposes.--The purposes of this subtitle are as 
     follows:
       (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 et seq.), 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 of 1976.

     SEC. 12003. DEFINITIONS.

       In this subtitle, the following definitions apply:
       (1) Alaska natural gas.--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) Alaska natural gas transportation project.--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 et seq.); or
       (B) section 12004.
       (3) Alaska natural gas transportation system.--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) Commission.--The term ``Commission'' means the Federal 
     Energy Regulatory Commission.
       (5) President's decision.--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. 
     719e) and approved by Public Law 95-158 (91 Stat. 1268).

     SEC. 12004. 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 et seq.), 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) In general.--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) Considerations.--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 12005.
       (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 12006, 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 12002(b)(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 not later than 120 
     days after the date of enactment of this Act.
       (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; except 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. 12005. 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 12004 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 12004. 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 12004 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. 12006. 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

[[Page H3118]]

     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. 12007. FEDERAL COORDINATOR.

       (a) Establishment.--There is established, as an independent 
     office in the executive branch, the Office of the Federal 
     Coordinator for Alaska Natural Gas Transportation Projects.
       (b) 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) Expedited reviews and actions.--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) Prohibition on certain terms and conditions.--Except 
     with respect to Commission actions under sections 12004, 
     12005, and 12006, 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) Prohibition on certain actions.--Except with respect to 
     Commission actions under sections 12004, 12005, and 12006, 
     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.
       (f) Transfer of Federal Inspector Functions and 
     Authority.--Upon appointment of the Federal Coordinator by 
     the President, all of the functions and authority of the 
     Office of Federal Inspector of Construction for the Alaska 
     Natural Gas Transportation System vested in the Secretary of 
     Energy pursuant to section 3012(b) of Public Law 102-486 (15 
     U.S.C. 719e(b)), including all functions and authority 
     described and enumerated in the Reorganization Plan No. 1 of 
     1979 (44 Fed. Reg. 33,663), Executive Order No. 12142 of June 
     21, 1979 (44 Fed. Reg. 36,927), and section 5 of the 
     President's decision, shall be transferred to the Federal 
     Coordinator.

     SEC. 12008. JUDICIAL REVIEW.

       (a) Exclusive Jurisdiction.--Except for review by the 
     Supreme Court of the United States on writ of certiorari, the 
     United States Court of Appeals for the District of Columbia 
     Circuit shall have original and 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 under this 
     subtitle; 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) for expedited 
     consideration, taking into account the national interest as 
     described in section 12002(a).
       (d) Amendment to ANGTA.--Section 10(c) of the Alaska 
     Natural Gas Transportation Act of 1976 (15 U.S.C. 719h) is 
     amended by inserting after paragraph (1) the following:
       ``(2) The United States Court of Appeals for the District 
     of Columbia Circuit shall set any action brought under this 
     section for expedited consideration, taking into account the 
     national interest described in section 2.''.

     SEC. 12009. 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(b)), 
     and therefore not subject to the jurisdiction of the 
     Commission.
       (b) Additional Pipelines.--Nothing in this subtitle, except 
     as provided in section 12004(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(b)), shall confer with the State of 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. 12010. 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 not later than 18 months after 
     the date of enactment of this Act, 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), the Secretary shall 
     submit a report containing the results of the study, the 
     Secretary's recommendations, and any proposals for 
     legislation to implement the Secretary's recommendations to 
     Congress.

     SEC. 12011. 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

[[Page H3119]]

     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. 12012. SENSE OF CONGRESS.

       It is the sense of Congress that an Alaska natural gas 
     transportation project will provide significant economic 
     benefits to the United States and Canada. In order to 
     maximize those benefits, Congress 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. 12013. PARTICIPATION OF SMALL BUSINESS CONCERNS.

       (a) Sense of Congress.--It is the sense of Congress that an 
     Alaska natural gas transportation project will provide 
     significant economic benefits to the United States and 
     Canada. In order to maximize those benefits, Congress urges 
     the sponsors of the pipeline project to maximize the 
     participation of small business concerns in contracts and 
     subcontracts awarded in carrying out the project.
       (b) Study.--
       (1) In general.--The Comptroller General shall conduct a 
     study on the extent to which small business concerns 
     participate in the construction of oil and gas pipelines in 
     the United States.
       (2) Report.--Not later that 1 year after the date of 
     enactment of this Act, the Comptroller General shall transmit 
     to Congress a report containing the results of the study.
       (3) Updates.--The Comptroller General shall update the 
     study at least once every 5 years and transmit to Congress a 
     report containing the results of the update.
       (4) Applicability.--After the date of completion of the 
     construction of an Alaska natural gas transportation project, 
     this subsection shall no longer apply.
       (c) Small Business Concern Defined.--In this section, the 
     term ``small business concern'' has the meaning given such 
     term in section 3(a) of the Small Business Act (15 U.S.C. 
     632(a)).

     SEC. 12014. ALASKA PIPELINE CONSTRUCTION TRAINING PROGRAM.

       (a) Establishment of Program.--The Secretary of Labor (in 
     this section referred to as the ``Secretary'') may make 
     grants to the Alaska Department of Labor and Workforce 
     Development to--
       (1) develop a plan to train, through the workforce 
     investment system established in the State of Alaska under 
     the Workforce Investment Act of 1998 (112 Stat. 936 et seq.), 
     adult and dislocated workers, including Alaska Natives, in 
     urban and rural Alaska in the skills required to construct 
     and operate an Alaska gas pipeline system; and
       (2) implement the plan developed pursuant to paragraph (1).
       (b) Requirements for Planning Grants.--The Secretary may 
     make a grant under subsection (a)(1) only if--
       (1) the Governor of Alaska certifies in writing to the 
     Secretary that there is a reasonable expectation that 
     construction of an Alaska gas pipeline will commence within 3 
     years after the date of such certification; and
       (2) the Secretary of the Interior concurs in writing to the 
     Secretary with the certification made under paragraph (1).
       (c) Requirements for Implementation Grants.--The Secretary 
     may make a grant under subsection (a)(2) only if--
       (1) the Secretary has approved a plan developed pursuant to 
     subsection (a)(1);
       (2) the Governor of Alaska requests the grant funds and 
     certifies in writing to the Secretary that there is a 
     reasonable expectation that the construction of an Alaska gas 
     pipeline system will commence within 2 years after the date 
     of such certification;
       (3) the Secretary of the Interior concurs in writing to the 
     Secretary with the certification made under paragraph (2) 
     after considering--
       (A) the status of necessary State and Federal permits;
       (B) the availability of financing for the pipeline project; 
     and
       (C) other relevant factors and circumstances.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Labor such sums as may 
     be necessary, but not to exceed $20,000,000, to carry out 
     this section.

                Subtitle B--Strategic Petroleum Reserve

     SEC. 12101. FULL CAPACITY OF STRATEGIC PETROLEUM RESERVE.

       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, with 
     consideration being given to domestically produced petroleum, 
     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.

     SEC. 12102. STRATEGIC PETROLEUM RESERVE EXPANSION.

       (a) Plan.--Not later than 180 days after the date of the 
     enactment of this Act, the Secretary of Energy shall transmit 
     to the Congress a plan for the expansion of the Strategic 
     Petroleum Reserve to 1,000,000,000 barrels, including--
       (1) plans for the elimination of infrastructure impediments 
     to maximum drawdown capability;
       (2) a schedule for the completion of all required 
     environmental reviews;
       (3) provision for consultation with Federal and State 
     environmental agencies;
       (4) a schedule and procedures for site selection; and
       (5) anticipated annual budget requests.
       (b) Construction of Additional Capacity.--The Secretary of 
     Energy shall acquire property and complete construction for 
     the expansion of the Strategic Petroleum Reserve in 
     accordance with the plan transmitted under subsection (a).
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Energy $1,500,000,000 
     for carrying out this section, to remain available until 
     expended.

     SEC. 12103. PERMANENT AUTHORITY TO OPERATE THE STRATEGIC 
                   PETROLEUM RESERVE AND OTHER ENERGY PROGRAMS.

       (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--


                   ``authorization of appropriations

       ``Sec. 166. There are authorized to be appropriated to the 
     Secretary such sums as may be necessary to carry out this 
     part and part D, to remain available until expended.'';
       (2) by striking section 186 (42 U.S.C. 6250e); and
       (3) by striking part E (42 U.S.C. 6251; relating to the 
     expiration of title I of the Act).
       (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 inserting before section 273 (42 U.S.C. 6283) the 
     following:

          ``Part C--Summer Fill and Fuel Budgeting Programs'';

       (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).
       (c) Technical Amendments.--The table of contents for the 
     Energy Policy and Conservation Act is amended--
       (1) by inserting after the items relating to part C of 
     title I the following:

              ``Part D--Northeast Home Heating Oil Reserve

``Sec. 181. Establishment.
``Sec. 182. Authority.
``Sec. 183. Conditions for release; plan.
``Sec. 184. Northeast Home Heating Oil Reserve Account.
``Sec. 185. Exemptions.'';

       (2) by amending the items relating to part C of title II to 
     read as follows:

           ``Part C--Summer Fill and Fuel Budgeting Programs

``Sec. 273. Summer fill and fuel budgeting programs.''; and
       (3) by striking the items relating to part D of title II.
       (d) Amendment to the Energy Policy and Conservation Act.--
     Section 183(b)(1) of the Energy Policy and Conservation Act 
     (42 U.S.C. 6250b(b)(1)) is amended by inserting ``(considered 
     as a heating season average)'' after ``mid-October through 
     March''.

                    Subtitle C--Hydraulic Fracturing

     SEC. 12201. HYDRAULIC FRACTURING.

       Paragraph (1) of section 1421(d) of the Safe Drinking Water 
     Act (42 U.S.C. 300h(d)) is amended to read as follows:
       ``(1) The term `underground injection'--
       ``(A) means the subsurface emplacement of fluids by well 
     injection; and
       ``(B) excludes--
       ``(i) the underground injection of natural gas for purposes 
     of storage; and
       ``(ii) the underground injection of fluids or propping 
     agents pursuant to hydraulic fracturing operations related to 
     oil or gas production activities.''.

   Subtitle D--Unproven Oil and Natural Gas Reserves Recovery Program

     SEC. 12301. PROGRAM.

       The Secretary shall carry out a program to demonstrate 
     technologies for the recovery of oil and natural gas reserves 
     from reservoirs described in section 12302.

     SEC. 12302. ELIGIBLE RESERVOIRS.

       The program under this subtitle shall only address oil and 
     natural gas reservoirs with 1 or more of the following 
     characteristics:
       (1) Complex geology involving rapid changes in the type and 
     quality of the oil reservoir across the reservoir.
       (2) Low reservoir pressure.
       (3) Unconventional natural gas reservoirs in coalbeds, 
     tight sands, or shales.

     SEC. 12303. FOCUS AREAS.

       The program under this subtitle may focus on areas 
     including coal-bed methane, deep drilling, natural gas 
     production from tight sands, natural gas production from gas

[[Page H3120]]

     shales, innovative production techniques (including 
     horizontal drilling, fracture detection methodologies, and 
     three-dimensional seismic), and enhanced recovery techniques.

     SEC. 12304. LIMITATION ON LOCATION OF ACTIVITIES.

       Activities under this subtitle shall be carried out only--
       (1) in--
       (A) areas onshore in the United States on public land 
     administered by the Secretary of the Interior available for 
     oil and gas leasing, where consistent with applicable law and 
     land use plans; and
       (B) areas onshore in the United States on State or private 
     land, subject to applicable law; and
       (2) with the approval of the appropriate Federal or State 
     land management agency or private land owner.

     SEC. 12305. PROGRAM ADMINISTRATION.

       (a) Role of the Secretary.--The Secretary shall have 
     ultimate responsibility for, and oversight of, all aspects of 
     the program under this subtitle.
       (b) Role of the Program Consortium.--
       (1) In general.--The Secretary shall contract with a 
     consortium to--
       (A) manage awards pursuant to subsection (e)(4);
       (B) make recommendations to the Secretary for project 
     solicitations;
       (C) disburse funds awarded under subsection (e) as directed 
     by the Secretary in accordance with the annual plan under 
     subsection (d); and
       (D) carry out other activities assigned to the program 
     consortium by this section.
       (2) Limitation.--The Secretary may not assign any 
     activities to the program consortium except as specifically 
     authorized under this section.
       (3) Conflict of interest.--(A) The Secretary shall 
     establish procedures--
       (i) to ensure that each board member, officer, or employee 
     of the program consortium who is in a decisionmaking capacity 
     under subsection (e)(3) or (4) shall disclose to the 
     Secretary any financial interests in, or financial 
     relationships with, applicants for or recipients of awards 
     under this section, including those of his or her spouse or 
     minor child, unless such relationships or interests would be 
     considered to be remote or inconsequential; and
       (ii) to require any board member, officer, or employee with 
     a financial relationship or interest disclosed under clause 
     (i) to recuse himself or herself from any review under 
     subsection (e)(3) or oversight under subsection (e)(4) with 
     respect to such applicant or recipient.
       (B) The Secretary may disqualify an application or revoke 
     an award under this section if a board member, officer, or 
     employee has failed to comply with procedures required under 
     subparagraph (A)(ii).
       (c) Selection of the Program Consortium.--
       (1) In general.--The Secretary shall select the program 
     consortium through an open, competitive process.
       (2) Members.--The program consortium may include 
     corporations and institutions of higher education. The 
     Secretary shall give preference in the selection of the 
     program consortium to applicants with broad representation 
     from the various major oil and natural gas basins in the 
     United States. After submitting a proposal under paragraph 
     (4), the program consortium may not add members without the 
     consent of the Secretary.
       (3) Tax status.--The program consortium shall be an entity 
     that is exempt from tax under section 501(c)(3) of the 
     Internal Revenue Code of 1986.
       (4) Schedule.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall solicit proposals 
     for the creation of the program consortium, which must be 
     submitted not less than 180 days after the date of enactment 
     of this Act. The Secretary shall select the program 
     consortium not later than 240 days after such date of 
     enactment.
       (5) Application.--Applicants shall submit a proposal 
     including such information as the Secretary may require. At a 
     minimum, each proposal shall--
       (A) list all members of the consortium;
       (B) fully describe the structure of the consortium, 
     including any provisions relating to intellectual property; 
     and
       (C) describe how the applicant would carry out the 
     activities of the program consortium under this section.
       (6) Eligibility.--To be eligible to be selected as the 
     program consortium, an applicant must be an entity whose 
     members collectively have demonstrated capabilities in 
     planning and managing programs for the production of oil or 
     natural gas.
       (7) Criterion.--The Secretary may consider the amount of 
     the fee an applicant proposes to receive under subsection (f) 
     in selecting a consortium under this section.
       (d) Annual Plan.--
       (1) In general.--The program under this subtitle shall be 
     carried out pursuant to an annual plan prepared by the 
     Secretary in accordance with paragraph (2).
       (2) Development.--(A) Before drafting an annual plan under 
     this subsection, the Secretary shall solicit specific written 
     recommendations from the program consortium for each element 
     to be addressed in the plan, including those described in 
     paragraph (4). The Secretary may request that the program 
     consortium submit its recommendations in the form of a draft 
     annual plan.
       (B) The Secretary shall submit the recommendations of the 
     program consortium under subparagraph (A) to the Advisory 
     Committee for review, and the Advisory Committee shall 
     provide to the Secretary written comments by a date 
     determined by the Secretary. The Secretary may also solicit 
     comments from any other experts.
       (C) The Secretary shall consult regularly with the program 
     consortium throughout the preparation of the annual plan.
       (3) Publication.--The Secretary shall transmit to the 
     Congress and publish in the Federal Register the annual plan, 
     along with any written comments received under paragraph 
     (2)(A) and (B). The annual plan shall be transmitted and 
     published not later than 60 days after the date of enactment 
     of an Act making appropriations for a fiscal year for the 
     program under this subtitle.
       (4) Contents.--The annual plan shall describe the ongoing 
     and prospective activities of the program under this subtitle 
     and shall include--
       (A) a list of any solicitations for awards that the 
     Secretary plans to issue to carry out activities, including 
     the topics for such work, who would be eligible to apply, 
     selection criteria, and the duration of awards; and
       (B) a description of the activities expected of the program 
     consortium to carry out subsection (e)(4).
       (e) Awards.--
       (1) In general.--The Secretary shall make awards to carry 
     out activities under the program under this subtitle. The 
     program consortium shall not be eligible to receive such 
     awards, but members of the program consortium may receive 
     such awards.
       (2) Proposals.--
       (A) Solicitation.--The Secretary shall solicit proposals 
     for awards under this subsection in such manner and at such 
     time as the Secretary may prescribe, in consultation with the 
     program consortium.
       (B) Contents.--Each proposal submitted shall include the 
     following:
       (i) An estimate of the potential unproven reserves in the 
     reservoir, established by a registered petroleum engineer.
       (ii) An estimate of the potential for success of the 
     project.
       (iii) A detailed project plan.
       (iv) A detailed analysis of the costs associated with the 
     project.
       (v) A time frame for project completion.
       (vi) Evidence that any lienholder on the project will 
     subordinate its interests to the extent necessary to ensure 
     that the Federal government receives its portion of any 
     revenues pursuant to section 12308.
       (vii) Such other matters as the Secretary considers 
     appropriate.
       (3) Review.--The Secretary shall make awards under this 
     subsection through a competitive process, which shall include 
     a review by individuals selected by the Secretary. Such 
     individuals shall include, for each application, Federal 
     officials, the program consortium, and non-Federal experts 
     who are not board members, officers, or employees of the 
     program consortium or of a member of the program consortium.
       (4) Oversight.--(A) The program consortium shall oversee 
     the implementation of awards under this subsection, 
     consistent with the annual plan under subsection (d), 
     including disbursing funds and monitoring activities carried 
     out under such awards for compliance with the terms and 
     conditions of the awards.
       (B) Nothing in subparagraph (A) shall limit the authority 
     or responsibility of the Secretary to oversee awards, or 
     limit the authority of the Secretary to review or revoke 
     awards.
       (C) The Secretary shall provide to the program consortium 
     the information necessary for the program consortium to carry 
     out its responsibilities under this paragraph.
       (f) Fee.--To compensate the program consortium for carrying 
     out its activities under this section, the Secretary shall 
     provide to the program consortium a fee in an amount not to 
     exceed 7.5 percent of the amounts awarded under subsection 
     (e) for each fiscal year.
       (g) Disallowed Expenses.--No portion of any award shall be 
     used by a recipient for general or administrative expenses of 
     any kind.
       (h) Audit.--The Secretary shall retain an independent, 
     commercial auditor to determine the extent to which funds 
     provided to the program consortium, and funds provided under 
     awards made under subsection (e), have been expended in a 
     manner consistent with the purposes and requirements of this 
     subtitle. The auditor shall transmit a report annually to the 
     Secretary, who shall transmit the report to Congress, along 
     with a plan to remedy any deficiencies cited in the report.

     SEC. 12306. ADVISORY COMMITTEE.

       (a) Establishment.--Not later than 270 days after the date 
     of enactment of this Act, the Secretary shall establish an 
     Advisory Committee.
       (b) Membership.--The Advisory Committee shall be composed 
     of members appointed by the Secretary and including--
       (1) individuals with extensive experience or operational 
     knowledge of oil and natural gas production, including 
     independent oil and gas producers;
       (2) individuals broadly representative of oil and natural 
     gas production; and
       (3) no individuals who are Federal employees.
       (c) Duties.--The Advisory Committee shall advise the 
     Secretary on the development and

[[Page H3121]]

     implementation of activities under this subtitle.
       (d) 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.
       (e) Prohibition.--The Advisory Committee shall not make 
     recommendations on funding awards to consortia or for 
     specific projects.

     SEC. 12307. LIMITS ON PARTICIPATION.

       An entity shall be eligible to receive an award under this 
     subtitle only if the Secretary finds--
       (1) that the entity's participation in the program under 
     this subtitle would be in the economic interest of the United 
     States;
       (2) that the entity is a United States-owned entity 
     organized under the laws of the United States with production 
     levels of less than 1,000 barrels per day of oil equivalent; 
     and
       (3) that the entity has demonstrated that nongovernmental 
     third party sources of financing are not available for the 
     proposal project.

     SEC. 12308. PAYMENTS TO FEDERAL GOVERNMENT.

       (a) Initial Rate.--Until the amount of a grant under this 
     subtitle has been fully repaid to the Federal Government 
     under this subsection, 95 percent of all revenues derived 
     from increased incremental production attributable to 
     participation in the program under this subtitle shall be 
     paid to the Secretary by the purchaser of such increased 
     production.
       (b) Rate After Repayment.--After the Federal Government has 
     been fully repaid under subsection (a), 5 percent of all 
     revenues derived from increased incremental production 
     attributable to participation in the program under this 
     subtitle shall be paid to the Secretary by the purchaser of 
     such increased production.

     SEC. 12309. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary 
     for carrying out this subtitle $100,000,000, to remain 
     available until expended.

     SEC. 12310. PUBLIC AVAILABILITY OF PROJECT RESULTS AND 
                   METHODOLOGIES.

       The results of any project undertaken pursuant to this 
     subtitle and the methodologies used to achieve those results 
     shall be made public by the Secretary. The methodologies used 
     shall not be proprietary so that such methodologies may be 
     used for other projects by persons not seeking awards 
     pursuant to this subtitle.

     SEC. 12311. SUNSET.

       The authority provided by this subtitle shall terminate on 
     September 30, 2010.

     SEC. 12312. DEFINITIONS.

       In this subtitle:
       (1) Program consortium.--The term ``program consortium'' 
     means the consortium selected under section 12305(c).
       (2) Remote or inconsequential.--The term ``remote or 
     inconsequential'' has the meaning given that term in 
     regulations issued by the Office of Government Ethics under 
     section 208(b)(2) of title 18, United States Code.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.

                       Subtitle E--Miscellaneous

     SEC. 12401. APPEALS RELATING TO PIPELINE CONSTRUCTION 
                   PROJECTS.

       (a) Agency of Record.--Any Federal administrative agency 
     proceeding that is an appeal or review of Federal authority 
     for an interstate natural gas pipeline construction project, 
     including construction of natural gas storage and liquefied 
     natural gas facilities, shall use as its exclusive record for 
     all purposes the record compiled by the Federal Energy 
     Regulatory Commission pursuant to such Commission's 
     proceeding under section 7 of the Natural Gas Act.
       (b) Sense of the Congress.--It is the sense of the Congress 
     that all Federal and State agencies with jurisdiction over 
     interstate natural gas pipeline construction activities 
     should coordinate their proceedings within the time frames 
     established by the Federal Energy Regulatory Commission while 
     it is acting pursuant to section 7 of the Natural Gas Act to 
     determine whether a proposed interstate natural gas pipeline 
     is in the public convenience and necessity.

     SEC. 12402. NATURAL GAS MARKET DATA TRANSPARENCY.

       (a) Establishment of System.--Not later than 180 days after 
     the date of enactment of this Act, the Federal Energy 
     Regulatory Commission shall issue rules authorizing or 
     establishing an electronic information system to provide the 
     Commission and the public with timely access to such 
     information as is necessary or appropriate to facilitate 
     price transparency and participation in natural gas markets. 
     Such system shall provide information about the market price 
     of natural gas sold in interstate commerce.
       (b) Data Subject to Disclosure.--Rules issued under 
     subsection (a) shall require public availability only of--
       (1) aggregate data; and
       (2) transaction-specific data that is otherwise required by 
     the Federal Energy Regulatory Commission to be made public.
       (c) Civil Penalty.--Any person who violates any provision 
     of a rule issued under subsection (a) shall be subject to a 
     civil penalty of not more than $1,000,000 for each day that 
     such violation continues. Such penalty shall be assessed by 
     the Federal Energy Regulatory Commission, after notice and 
     opportunity for public hearing. In determining the amount of 
     a proposed penalty, the Commission shall take into 
     consideration the seriousness of the violation and the 
     efforts of such person to remedy the violation in a timely 
     manner.

     SEC. 12403. OIL AND GAS EXPLORATION AND PRODUCTION DEFINED.

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

     SEC. 12404. COMPLEX WELL TECHNOLOGY TESTING FACILITY.

       The Secretary, in coordination with industry leaders in 
     extended reach drilling technology, shall establish a Complex 
     Well Technology Testing Facility at the Rocky Mountain 
     Oilfield Testing Center to increase the range of extended 
     drilling technology to 50,000 feet, so that more energy 
     resources can be realized with fewer drilling facilities.

                        TITLE III--HYDROELECTRIC

                   Subtitle A--Alternative Conditions

     SEC. 13001. ALTERNATIVE CONDITIONS AND FISHWAYS.

       (a) Federal Reservations.--Section 4(e) of the Federal 
     Power Act (16 U.S.C. 797(e)) is amended by inserting after 
     ``adequate protection and utilization of such reservation.'' 
     at the end of the first proviso the following: ``The license 
     applicant shall be entitled to a determination on the record, 
     after opportunity for an agency trial-type hearing of any 
     disputed issues of material fact, with respect to such 
     conditions.''.
       (b) Fishways.--Section 18 of the Federal Power Act (16 
     U.S.C. 811) is amended by inserting after ``and such fishways 
     as may be prescribed by the Secretary of Commerce.'' the 
     following: ``The license applicant shall be entitled to a 
     determination on the record, after opportunity for an agency 
     trial-type hearing of any disputed issues of material fact, 
     with respect to such fishways.''.
       (c) Alternative Conditions and Prescriptions.--Part I of 
     the Federal Power Act (16 U.S.C. 791a et seq.) is amended by 
     adding the following new section at the end thereof:

     ``SEC. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS.

       ``(a) Alternative Conditions.--(1) Whenever any person 
     applies for a license for any project works within any 
     reservation of the United States, and the Secretary of the 
     department under whose supervision such reservation falls 
     (referred to in this subsection as `the Secretary') deems a 
     condition to such license to be necessary under the first 
     proviso of section 4(e), the license applicant may propose an 
     alternative condition.
       ``(2) Notwithstanding the first proviso of section 4(e), 
     the Secretary 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 determines, based on substantial evidence provided 
     by the license applicant or otherwise available to the 
     Secretary, that such 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 section 
     4(e) or alternative condition it accepts under this section, 
     a written statement explaining the basis for such condition, 
     and reason for not accepting any alternative condition under 
     this section. The written statement must demonstrate that the 
     Secretary gave equal consideration to the effects of the 
     condition adopted and alternatives not accepted on energy 
     supply, distribution, cost, and use; flood control; 
     navigation; water supply; and air quality (in addition to the 
     preservation of other aspects of environmental quality); 
     based on such information as may be available to the 
     Secretary, including information voluntarily provided in a 
     timely manner by the applicant and others. The Secretary 
     shall also submit, together with the aforementioned written 
     statement, all studies, data, and other factual information 
     available to the Secretary and relevant to the Secretary's 
     decision.
       ``(4) Nothing in this section shall prohibit other 
     interested parties from proposing alternative conditions.
       ``(5) If the Secretary does not accept an applicant's 
     alternative condition under this section, and the Commission 
     finds that the Secretary's condition would be inconsistent 
     with the purposes of this part, or other applicable law, the 
     Commission may refer the dispute to the Commission's Dispute 
     Resolution Service. The Dispute Resolution Service shall 
     consult with the Secretary and the Commission and issue a 
     non-binding advisory within 90 days. The Secretary may accept 
     the Dispute Resolution Service advisory unless the Secretary 
     finds that the recommendation will not adequately protect the 
     reservation. The Secretary shall submit the advisory and the 
     Secretary's final written determination into the record of 
     the Commission's proceeding.

[[Page H3122]]

       ``(b) Alternative Prescriptions.--(1) Whenever the 
     Secretary of the Interior or the Secretary of Commerce 
     prescribes a fishway under section 18, the license applicant 
     or licensee may propose an alternative to such prescription 
     to construct, maintain, or operate a fishway. The alternative 
     may include a fishway or an alternative to a fishway.
       ``(2) Notwithstanding section 18, 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 or otherwise 
     available to the Secretary, that such alternative--
       ``(A) will be no less protective of the fish resources than 
     the fishway initially prescribed by the Secretary; and
       ``(B) will either--
       ``(i) cost less to implement; or
       ``(ii) result in improved operation of the project works 
     for electricity production,

     as compared to the fishway initially deemed necessary by the 
     Secretary.
       ``(3) The Secretary concerned shall submit into the public 
     record of the Commission proceeding with any prescription 
     under section 18 or alternative prescription it accepts under 
     this section, a written statement explaining the basis for 
     such prescription, and reason for not accepting any 
     alternative prescription under this section. The written 
     statement must demonstrate that the Secretary gave equal 
     consideration to the effects of the condition adopted and 
     alternatives not accepted on energy supply, distribution, 
     cost, and use; flood control; navigation; water supply; and 
     air quality (in addition to the preservation of other aspects 
     of environmental quality); based on such information as may 
     be available to the Secretary, including information 
     voluntarily provided in a timely manner by the applicant and 
     others. The Secretary shall also submit, together with the 
     aforementioned written statement, all studies, data, and 
     other factual information available to the Secretary and 
     relevant to the Secretary's decision.
       ``(4) Nothing in this section shall prohibit other 
     interested parties from proposing alternative prescriptions.
       ``(5) If the Secretary concerned does not accept an 
     applicant's alternative prescription under this section, and 
     the Commission finds that the Secretary's prescription would 
     be inconsistent with the purposes of this part, or other 
     applicable law, the Commission may refer the dispute to the 
     Commission's Dispute Resolution Service. The Dispute 
     Resolution Service shall consult with the Secretary and the 
     Commission and issue a non-binding advisory within 90 days. 
     The Secretary may accept the Dispute Resolution Service 
     advisory unless the Secretary finds that the recommendation 
     will not adequately protect the fish resources. The Secretary 
     shall submit the advisory and the Secretary's final written 
     determination into the record of the Commission's 
     proceeding.''.

                   Subtitle B--Additional Hydropower

     SEC. 13201. HYDROELECTRIC PRODUCTION INCENTIVES.

       (a) Incentive Payments.--For electric energy generated and 
     sold by a qualified hydroelectric facility during the 
     incentive period, the Secretary of Energy (referred to in 
     this section as the ``Secretary'') shall make, subject to the 
     availability of appropriations, incentive payments to the 
     owner or operator of such facility. The amount of such 
     payment made to any such owner or operator shall be as 
     determined under subsection (e) of this section. Payments 
     under this section may only be made upon receipt by the 
     Secretary of an incentive payment application which 
     establishes that the applicant is eligible to receive such 
     payment and which satisfies such other requirements as the 
     Secretary deems necessary. Such application shall be in such 
     form, and shall be submitted at such time, as the Secretary 
     shall establish.
       (b) Definitions.--For purposes of this section:
       (1) Qualified hydroelectric facility.--The term ``qualified 
     hydroelectric facility'' means a turbine or other generating 
     device owned or solely operated by a non-Federal entity which 
     generates hydroelectric energy for sale and which is added to 
     an existing dam or conduit.
       (2) Existing dam or conduit.--The term ``existing dam or 
     conduit'' means any dam or conduit the construction of which 
     was completed before the date of the enactment of this 
     section and which does not require any construction or 
     enlargement of impoundment or diversion structures (other 
     than repair or reconstruction) in connection with the 
     installation of a turbine or other generating device.
       (3) Conduit.--The term ``conduit'' has the same meaning as 
     when used in section 30(a)(2) of the Federal Power Act.

     The terms defined in this subsection shall apply without 
     regard to the hydroelectric kilowatt capacity of the facility 
     concerned, without regard to whether the facility uses a dam 
     owned by a governmental or nongovernmental entity, and 
     without regard to whether the facility begins operation on or 
     after the date of the enactment of this section.
       (c) Eligibility Window.--Payments may be made under this 
     section only for electric energy generated from a qualified 
     hydroelectric facility which begins operation during the 
     period of 10 fiscal years beginning with the first full 
     fiscal year occurring after the date of enactment of this 
     subtitle.
       (d) Incentive Period.--A qualified hydroelectric facility 
     may receive payments under this section for a period of 10 
     fiscal years (referred to in this section as the ``incentive 
     period''). Such period shall begin with the fiscal year in 
     which electric energy generated from the facility is first 
     eligible for such payments.
       (e) Amount of Payment.--
       (1) In general.--Payments made by the Secretary under this 
     section to the owner or operator of a qualified hydroelectric 
     facility shall be based on the number of kilowatt hours of 
     hydroelectric energy generated by the facility during the 
     incentive period. For any such facility, the amount of such 
     payment shall be 1.8 cents per kilowatt hour (adjusted as 
     provided in paragraph (2)), subject to the availability of 
     appropriations under subsection (g), except that no facility 
     may receive more than $750,000 in one calendar year.
       (2) Adjustments.--The amount of the payment made to any 
     person under this section as provided in paragraph (1) shall 
     be adjusted for inflation for each fiscal year beginning 
     after calendar year 2003 in the same manner as provided in 
     the provisions of section 29(d)(2)(B) of the Internal Revenue 
     Code of 1986, except that in applying such provisions the 
     calendar year 2003 shall be substituted for calendar year 
     1979.
       (f) Sunset.--No payment may be made under this section to 
     any qualified hydroelectric facility after the expiration of 
     the period of 20 fiscal years beginning with the first full 
     fiscal year occurring after the date of enactment of this 
     subtitle, and no payment may be made under this section to 
     any such facility after a payment has been made with respect 
     to such facility for a period of 10 fiscal years.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary to carry out the purposes 
     of this section $10,000,000 for each of the fiscal years 2004 
     through 2013.

     SEC. 13202. HYDROELECTRIC EFFICIENCY IMPROVEMENT.

       (a) Incentive Payments.--The Secretary of Energy shall make 
     incentive payments to the owners or operators of 
     hydroelectric facilities at existing dams to be used to make 
     capital improvements in the facilities that are directly 
     related to improving the efficiency of such facilities by at 
     least 3 percent.
       (b) Limitations.--Incentive payments under this section 
     shall not exceed 10 percent of the costs of the capital 
     improvement concerned and not more than one payment may be 
     made with respect to improvements at a single facility. No 
     payment in excess of $750,000 may be made with respect to 
     improvements at a single facility.
       (c) Authorization.--There is authorized to be appropriated 
     to carry out this section not more than $10,000,000 for each 
     of the fiscal years 2004 through 2013.

     SEC. 13203. SMALL HYDROELECTRIC POWER PROJECTS.

       Section 408(a)(6) of the Public Utility Regulatory Policies 
     Act of 1978 is amended by striking ``April 20, 1977'' and 
     inserting ``March 4, 2003''.

     SEC. 13204. INCREASED HYDROELECTRIC GENERATION AT EXISTING 
                   FEDERAL FACILITIES.

       (a) In General.--The Secretary of Energy, in consultation 
     with the Secretary of the Interior and Secretary of the Army, 
     shall conduct studies of the cost-effective opportunities to 
     increase hydropower generation at existing federally-owned or 
     operated water regulation, storage, and conveyance 
     facilities. Such studies shall be completed within two years 
     after the date of enactment of this subtitle and transmitted 
     to the Committee on Commerce of the House of Representatives 
     and the Committee on Energy and Natural Resources of the 
     Senate. An individual study shall be prepared for each of the 
     Nation's principal river basins. Each such study shall 
     identify and describe with specificity the following matters:
       (1) Opportunities to improve the efficiency of hydropower 
     generation at such facilities through, but not limited to, 
     mechanical, structural, or operational changes.
       (2) Opportunities to improve the efficiency of the use of 
     water supplied or regulated by Federal projects where such 
     improvement could, in the absence of legal or administrative 
     constraints, make additional water supplies available for 
     hydropower generation or reduce project energy use.
       (3) Opportunities to create additional hydropower 
     generating capacity at existing facilities through, but not 
     limited to, the construction of additional generating 
     facilities, the uprating of generators and turbines, and the 
     construction of pumped storage facilities.
       (4) Preliminary assessment of the costs and the economic 
     and environmental consequences of such measures.
       (b) Previous Studies.--If studies of the type required by 
     subsection (a) have been prepared by any agency of the United 
     States and published within the five years prior to the date 
     of enactment of this subtitle, the Secretary of Energy may 
     choose not to perform new studies and incorporate the 
     information in such studies into the studies required by 
     subsection (a).
       (c) Authorization.--There is authorized to be appropriated 
     such sums as may be necessary to carry out the purposes of 
     this section.

[[Page H3123]]

                       TITLE IV--NUCLEAR MATTERS

               Subtitle A--Price-Anderson Act Amendments

     SEC. 14001. SHORT TITLE.

       This subtitle may be cited as the ``Price-Anderson 
     Amendments Act of 2003''.

     SEC. 14002. EXTENSION OF INDEMNIFICATION AUTHORITY.

       (a) Indemnification of Nuclear Regulatory Commission 
     Licensees.--Section 170 c. 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 ``December 31, 2003'' each place it appears 
     and inserting ``August 1, 2017''.
       (b) Indemnification of Department of Energy Contractors.--
     Section 170 d.(1)(A) of the Atomic Energy Act of 1954 (42 
     U.S.C. 2210(d)(1)(A)) is amended by striking ``December 31, 
     2004'' and inserting ``August 1, 2017''.
       (c) Indemnification of Nonprofit Educational 
     Institutions.--Section 170 k. 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, 
     2017''.

     SEC. 14003. MAXIMUM ASSESSMENT.

       Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210) is amended--
       (1) in subsection b.(1), in the second proviso of the third 
     sentence--
       (A) by striking ``$63,000,000'' and inserting 
     ``$94,000,000''; and
       (B) by striking ``$10,000,000 in any 1 year'' and inserting 
     ``$15,000,000 in any 1 year (subject to adjustment for 
     inflation under subsection t.)''; and
       (2) in subsection t.--
       (A) by inserting ``total and annual'' after ``amount of the 
     maximum'';
       (B) by striking ``the date of the enactment of the Price-
     Anderson Amendments Act of 1988'' and inserting ``July 1, 
     2002''; and
       (C) by striking ``such date of enactment'' and inserting 
     ``July 1, 2002''.

     SEC. 14004. DEPARTMENT OF ENERGY LIABILITY LIMIT.

       (a) Indemnification of Department of Energy Contractors.--
     Section 170 d. 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 an agreement of indemnification entered into under 
     paragraph (1), the Secretary--
       ``(A) may require the contractor to provide and maintain 
     the 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 the 
     contract and for each nuclear incident, including such legal 
     costs of the contractor as are approved by the Secretary.''.
       (b) Contract Amendments.--Section 170 d. of the Atomic 
     Energy Act of 1954 (42 U.S.C. 2210(d)) is 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 enactment of the Price-
     Anderson Amendments Act of 2003, 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 170 e.(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. 14005. INCIDENTS OUTSIDE THE UNITED STATES.

       (a) Amount of Indemnification.--Section 170 d.(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 170 e.(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. 14006. REPORTS.

       Section 170 p. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210(p)) is amended by striking ``August 1, 1998'' and 
     inserting ``August 1, 2013''.

     SEC. 14007. INFLATION ADJUSTMENT.

       Section 170 t. 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. 14008. PRICE-ANDERSON TREATMENT OF MODULAR REACTORS.

       Section 170 b. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210(b)) is amended by adding at the end the following new 
     paragraph:
       ``(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 2 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. 14009. APPLICABILITY.

       The amendments made by sections 14003, 14004, and 14005 do 
     not apply to a nuclear incident that occurs before the date 
     of enactment of this Act.

     SEC. 14010. PROHIBITION ON ASSUMPTION BY UNITED STATES 
                   GOVERNMENT OF LIABILITY FOR CERTAIN FOREIGN 
                   ACCIDENTS.

       Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210) is amended by adding at the end the following new 
     subsection:
       ``u. Prohibition on Assumption of Liability for Certain 
     Foreign Accidents.--Notwithstanding this section or any other 
     provision of law, no officer of the United States or of any 
     department, agency, or instrumentality of the United States 
     Government may enter into any contract or other arrangement, 
     or into any amendment or modification of a contract or other 
     arrangement, the purpose or effect of which would be to 
     directly or indirectly impose liability on the United States 
     Government, or any department, agency, or instrumentality of 
     the United States Government, or to otherwise directly or 
     indirectly require an indemnity by the United States 
     Government, for nuclear accidents occurring in connection 
     with the design, construction, or operation of a production 
     facility or utilization facility in any country whose 
     government has been identified by the Secretary of State as 
     engaged in state sponsorship of terrorist activities 
     (specifically including any country the government of which, 
     as of September 11, 2001, had been determined by the 
     Secretary of State under section 620A(a) of the Foreign 
     Assistance Act of 1961, section 6(j)(1) of the Export 
     Administration Act of 1979, or section 40(d) of the Arms 
     Export Control Act to have repeatedly provided support for 
     acts of international terrorism).''.

     SEC. 14011. SECURE TRANSFER OF NUCLEAR MATERIALS.

       (a) Amendment.--Chapter 14 of the Atomic Energy Act of 1954 
     (42 U.S.C. 2201-2210b) is amended by adding at the end the 
     following new section:
       ``Sec. 170C. Secure Transfer of Nuclear Materials.--
       ``a. The Nuclear Regulatory Commission shall establish a 
     system to ensure that, with respect to activities by any 
     party pursuant to a license issued under this Act--
       ``(1) materials described in subsection b., when 
     transferred or received in the United States--
       ``(A) from a facility licensed by the Nuclear Regulatory 
     Commission;
       ``(B) from a facility licensed by an agreement State; or
       ``(C) from a country with whom the United States has an 
     agreement for cooperation under section 123,
     are accompanied by a manifest describing the type and amount 
     of materials being transferred;
       ``(2) each individual transferring or accompanying the 
     transfer of such materials has been subject to a security 
     background check by appropriate Federal entities; and
       ``(3) such materials are not transferred to or received at 
     a destination other than a facility licensed by the Nuclear 
     Regulatory Commission or an agreement State under this Act or 
     other appropriate Federal facility, or a destination outside 
     the United States in a country with whom the United States 
     has an agreement for cooperation under section 123.
       ``b. Except as otherwise provided by the Commission by 
     regulation, the materials referred to in subsection a. are 
     byproduct materials, source materials, special nuclear 
     materials, high-level radioactive waste, spent nuclear fuel, 
     transuranic waste, and low-level radioactive waste (as 
     defined in section 2(16) of the Nuclear Waste Policy Act of 
     1982 (42 U.S.C. 10101(16))).''.
       (b) Regulations.--Not later than 1 year after the date of 
     the enactment of this Act, and from time to time thereafter 
     as it considers necessary, the Nuclear Regulatory Commission 
     shall issue regulations identifying radioactive materials 
     that, consistent with the protection of public health and 
     safety and the common defense and security, are appropriate 
     exceptions to the requirements of section 170C of the Atomic 
     Energy Act of 1954, as added by subsection (a) of this 
     section.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall take effect upon the issuance of regulations under 
     subsection (b).
       (d) Effect on Other Law.--Nothing in this section or the 
     amendment made by this section shall waive, modify, or affect 
     the application of chapter 51 of title 49, United States 
     Code, part A of subtitle V of title 49, United States Code, 
     part B of subtitle VI of title 49, United States Code, and 
     title 23, United States Code.
       (e) Table of Sections Amendment.--The table of sections for 
     chapter 14 of the Atomic

[[Page H3124]]

     Energy Act of 1954 is amended by adding at the end the 
     following new item:

``Sec. 170C. Secure transfer of nuclear materials.''.

     SEC. 14012. NUCLEAR FACILITY THREATS.

       (a) Study.--The President, in consultation with the Nuclear 
     Regulatory Commission and other appropriate Federal, State, 
     and local agencies and private entities, shall conduct a 
     study to identify the types of threats that pose an 
     appreciable risk to the security of the various classes of 
     facilities licensed by the Nuclear Regulatory Commission 
     under the Atomic Energy Act of 1954. Such study shall take 
     into account, but not be limited to--
       (1) the events of September 11, 2001;
       (2) an assessment of physical, cyber, biochemical, and 
     other terrorist threats;
       (3) the potential for attack on facilities by multiple 
     coordinated teams of a large number of individuals;
       (4) the potential for assistance in an attack from several 
     persons employed at the facility;
       (5) the potential for suicide attacks;
       (6) the potential for water-based and air-based threats;
       (7) the potential use of explosive devices of considerable 
     size and other modern weaponry;
       (8) the potential for attacks by persons with a 
     sophisticated knowledge of facility operations;
       (9) the potential for fires, especially fires of long 
     duration; and
       (10) the potential for attacks on spent fuel shipments by 
     multiple coordinated teams of a large number of individuals.
       (b) Summary and Classification Report.--Not later than 180 
     days after the date of the enactment of this Act, the 
     President shall transmit to the Congress and the Nuclear 
     Regulatory Commission a report--
       (1) summarizing the types of threats identified under 
     subsection (a); and
       (2) classifying each type of threat identified under 
     subsection (a), in accordance with existing laws and 
     regulations, as either--
       (A) involving attacks and destructive acts, including 
     sabotage, directed against the facility by an enemy of the 
     United States, whether a foreign government or other person, 
     or otherwise falling under the responsibilities of the 
     Federal Government; or
       (B) involving the type of risks that Nuclear Regulatory 
     Commission licensees should be responsible for guarding 
     against.
       (c) Federal Action Report.--Not later than 90 days after 
     the date on which a report is transmitted under subsection 
     (b), the President shall transmit to the Congress a report on 
     actions taken, or to be taken, to address the types of 
     threats identified under subsection (b)(2)(A). Such report 
     may include a classified annex as appropriate.
       (d) Regulations.--Not later than 270 days after the date on 
     which a report is transmitted under subsection (b), the 
     Nuclear Regulatory Commission shall issue regulations, 
     including changes to the design basis threat, to ensure that 
     licensees address the threats identified under subsection 
     (b)(2)(B).
       (e) Physical Security Program.--The Nuclear Regulatory 
     Commission shall establish an operational safeguards response 
     evaluation program that ensures that the physical protection 
     capability and operational safeguards response for sensitive 
     nuclear facilities, as determined by the Commission 
     consistent with the protection of public health and the 
     common defense and security, shall be tested periodically 
     through Commission approved or designed, observed, and 
     evaluated force-on-force exercises to determine whether the 
     ability to defeat the design basis threat is being 
     maintained. For purposes of this subsection, the term 
     ``sensitive nuclear facilities'' includes at a minimum 
     commercial nuclear power plants, including associated spent 
     fuel storage facilities, spent fuel storage pools and dry 
     cask storage at closed reactors, independent spent fuel 
     storage facilities and geologic repository operations areas, 
     category I fuel cycle facilities, and gaseous diffusion 
     plants.
       (f) Control of Information.--In carrying out this section, 
     the President and the Nuclear Regulatory Commission shall 
     control the dissemination of restricted data, safeguards 
     information, and other classified national security 
     information in a manner so as to ensure the common defense 
     and security, consistent with chapter 12 of the Atomic Energy 
     Act of 1954.

     SEC. 14013. UNREASONABLE RISK CONSULTATION.

       Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210) is amended by adding at the end the following new 
     subsection:
       ``v. Unreasonable Risk Consultation.--(1) Before entering 
     into an agreement of indemnification under this section with 
     respect to a utilization facility, the Nuclear Regulatory 
     Commission shall consult with the Assistant to the President 
     for Homeland Security (or any successor official) concerning 
     whether the location of the proposed facility and the design 
     of that type of facility ensure that the facility provides 
     for adequate protection of public health and safety if 
     subject to a terrorist attack.
       ``(2) Before issuing a license or a license renewal for a 
     sensitive nuclear facility, the Nuclear Regulatory Commission 
     shall consult with the Secretary of Homeland Security or his 
     designee concerning the emergency evacuation plan for the 
     communities living near the sensitive nuclear facility. For 
     purposes of this paragraph, the term `sensitive nuclear 
     facility' has the meaning given that term in section 14012 of 
     the Energy Policy Act of 2003.''.

     SEC. 14014. FINANCIAL ACCOUNTABILITY.

       (a) Amendment.--Section 170 of the Atomic Energy Act of 
     1954 (42 U.S.C. 2210) is amended by adding at the end the 
     following new subsection:
       ``w. Financial Accountability.--(1) Notwithstanding 
     subsection d., the Attorney General may bring an action in 
     the appropriate United States district court to recover from 
     a contractor of the Secretary (or subcontractor or supplier 
     of such contractor) amounts paid by the Federal Government 
     under an agreement of indemnification under subsection d. for 
     public liability resulting from conduct which constitutes 
     intentional misconduct of any corporate officer, manager, or 
     superintendent of such contractor (or subcontractor or 
     supplier of such contractor).
       ``(2) The Attorney General may recover under paragraph (1) 
     an amount not to exceed the amount of the profit derived by 
     the defendant from the contract.
       ``(3) No amount recovered from any contractor (or 
     subcontractor or supplier of such contractor) under paragraph 
     (1) may be reimbursed directly or indirectly by the 
     Department of Energy.
       ``(4) Paragraph (1) shall not apply to any nonprofit entity 
     conducting activities under contract for the Secretary.
       ``(5) No waiver of a defense required under this section 
     shall prevent a defendant from asserting such defense in an 
     action brought under this subsection.
       ``(6) The Secretary shall, by rule, define the terms 
     `profit' and `nonprofit entity' for purposes of this 
     subsection. Such rulemaking shall be completed not later than 
     180 days after the date of the enactment of this 
     subsection.''.
       (b) Effective Date.--The amendment made by this section 
     shall not apply to any agreement of indemnification entered 
     into under section 170 d. of the Atomic Energy Act of 1954 
     (42 U.S.C. 2210(d)) before the date of the enactment of this 
     Act.

     SEC. 14015. CIVIL PENALTIES.

       (a) Repeal of Automatic Remission.--Section 234A b. (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 Nonprofit 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. Notwithstanding subsection a., a civil penalty for a 
     violation under subsection a. shall not exceed the amount of 
     any discretionary fee paid under the contract under which 
     such violation occurs for any nonprofit contractor, 
     subcontractor, or supplier--
       ``(1) described in section 501(c)(3) of the Internal 
     Revenue Code of 1986 and exempt from tax under section 501(a) 
     of such Code; or
       ``(2) identified by the Secretary by rule as appropriate to 
     be treated the same under this subsection as an entity 
     described in paragraph (1), consistent with the purposes of 
     this section.''.
       (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 the enactment of this Act.
       (d) Rulemaking.--Not later than 6 months after the date of 
     the enactment of this Act, the Secretary of Energy shall 
     issue a rule for the implementation of the amendment made by 
     subsection (b).

                   Subtitle B--Miscellaneous Matters

     SEC. 14021. LICENSES.

       Section 103 c. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2133(c)) is amended by inserting ``from the authorization to 
     commence operations'' after ``forty years''.

     SEC. 14022. NUCLEAR REGULATORY COMMISSION MEETINGS.

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

     SEC. 14023. 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 nuclear safety regulatory 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 
     2004 through 2007.
       (2) Availability.--Funds made available under paragraph (1) 
     shall remain available until expended.

     SEC. 14024. COST RECOVERY FROM GOVERNMENT AGENCIES.

       Section 161 w. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2201(w)) is amended--
       (1) by striking ``for or is issued'' and all that follows 
     through ``1702'' and inserting

[[Page H3125]]

     ``to the Commission for, or is issued by the Commission, a 
     license or certificate'';
       (2) by striking ``483a'' and inserting ``9701''; and
       (3) by striking ``, of applicants for, or holders of, such 
     licenses or certificates''.

     SEC. 14025. 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. 14026. CARRYING OF FIREARMS BY LICENSEE EMPLOYEES.

       Section 161 k. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2201(k)) is amended to read as follows:
       ``k. authorize such of its members, officers, and employees 
     as it deems necessary in the interest of the common defense 
     and security to carry firearms while in the discharge of 
     their official duties. The Commission may also authorize--
       ``(1) such of those employees of its contractors and 
     subcontractors (at any tier) engaged in the protection of 
     property under the jurisdiction of the United States located 
     at facilities owned by or contracted to the United States or 
     being transported to or from such facilities as it deems 
     necessary in the interests of the common defense and 
     security; and
       ``(2) such of those employees of persons licensed or 
     certified by the Commission (including employees of 
     contractors of licensees or certificate holders) engaged in 
     the protection of property of (A) facilities owned or 
     operated by a Commission licensee or certificate holder that 
     are designated by the Commission, or (B) property of 
     significance to the common defense and security located at 
     facilities owned or operated by a Commission licensee or 
     certificate holder or being transported to or from such 
     facilities;
     to carry firearms while in the discharge of their official 
     duties. A person authorized to carry firearms under this 
     subsection may, while in the performance of, and in 
     connection with, official duties, make arrests without 
     warrant for any offense against the United States committed 
     in that person's presence or for any felony cognizable under 
     the laws of the United States if that person has reasonable 
     grounds to believe that the individual to be arrested has 
     committed or is committing such felony. An employee of a 
     contractor or subcontractor or of a Commission licensee or 
     certificate holder (or a contractor of a licensee or 
     certificate holder) authorized to carry firearms under this 
     subsection may make such arrests only when the individual to 
     be arrested is within, or in direct flight from, the area of 
     such offense. A person granted authority to make arrests by 
     this subsection may exercise that authority only in the 
     enforcement of laws regarding the property of the United 
     States in the custody of the Department of Energy, the 
     Nuclear Regulatory Commission, or a contractor of the 
     Department of Energy or Nuclear Regulatory Commission or of a 
     licensee or certificate holder of the Commission, laws 
     applicable to facilities owned or operated by a Commission 
     licensee or certificate holder that are designated by the 
     Commission pursuant to this subsection and property of 
     significance to the common defense and security that is in 
     the custody of a licensee or certificate holder or a 
     contractor of a licensee or certificate holder of the 
     Commission, or any provision of this Act that may subject an 
     offender to a fine, imprisonment, or both. The arrest 
     authority conferred by this subsection is in addition to any 
     arrest authority under other laws. The Secretary and the 
     Commission, with the approval of the Attorney General, shall 
     issue guidelines to implement this subsection;''.

     SEC. 14027. UNAUTHORIZED INTRODUCTION OF DANGEROUS WEAPONS.

       Section 229 a. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2278a(a)) is amended by adding after ``custody of the 
     Commission'' the following: ``or subject to its licensing 
     authority or to certification by the Commission under this 
     Act or any other Act''.

     SEC. 14028. SABOTAGE OF NUCLEAR FACILITIES OR FUEL.

       Section 236 a. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2284(a)) is amended to read as follows:
       ``a. Any person who intentionally and willfully destroys or 
     causes physical damage to, or who intentionally and willfully 
     attempts to destroy or cause physical damage to--
       ``(1) any production facility or utilization facility 
     licensed under this Act;
       ``(2) any nuclear waste storage, treatment, or disposal 
     facility licensed under this Act;
       ``(3) any nuclear fuel for a utilization facility licensed 
     under this Act or any spent nuclear fuel from such a 
     facility;
       ``(4) any uranium enrichment or nuclear fuel fabrication 
     facility licensed or certified by the Nuclear Regulatory 
     Commission; or
       ``(5) any production, utilization, waste storage, waste 
     treatment, waste disposal, uranium enrichment, or nuclear 
     fuel fabrication facility subject to licensing or 
     certification under this Act during its construction where 
     the destruction or damage caused or attempted to be caused 
     could affect public health and safety during the operation of 
     the facility,
     shall be fined not more than $1,000,000 or imprisoned for up 
     to life in prison without parole, or both.''.

     SEC. 14029. COOPERATIVE RESEARCH AND DEVELOPMENT AND SPECIAL 
                   DEMONSTRATION PROJECTS FOR THE URANIUM MINING 
                   INDUSTRY.

       (a) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Energy $10,000,000 for 
     each of fiscal years 2004, 2005, and 2006 for--
       (1) cooperative, cost-shared agreements between the 
     Department of Energy and domestic uranium producers to 
     identify, test, and develop improved in situ leaching mining 
     technologies, including low-cost environmental restoration 
     technologies that may be applied to sites after completion of 
     in situ leaching operations; and
       (2) funding for competitively selected demonstration 
     projects with domestic uranium producers relating to--
       (A) enhanced production with minimal environmental impacts;
       (B) restoration of well fields; and
       (C) decommissioning and decontamination activities.
       (b) Domestic Uranium Producer.--For purposes of this 
     section, the term ``domestic uranium producer'' has the 
     meaning given that term in section 1018(4) of the Energy 
     Policy Act of 1992 (42 U.S.C. 2296b-7(4)), except that the 
     term shall not include any producer that has not produced 
     uranium from domestic reserves on or after July 30, 1998, in 
     Colorado, Nebraska, Texas, Utah, or Wyoming.

     SEC. 14030. URANIUM SALES.

       (a) Restrictions on 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 
     and sales authorized under subsections (b), (c), and (e), the 
     Secretary of Energy or the Secretary of the Army may transfer 
     or sell uranium subject to paragraph (2).
       ``(2) Except as provided in subsections (b), (c), and (e), 
     no sale or transfer of uranium shall be made under this 
     subsection by the Secretary of Energy or the Secretary of the 
     Army unless--
       ``(A) the President determines that the material is not 
     necessary for national security needs;
       ``(B) the price paid to the appropriate Secretary, if the 
     transaction is a sale, will not be less that the fair market 
     value of the material; and
       ``(C) the sale or transfer to end users is made pursuant to 
     a contract of at least 3 years duration.
       ``(3) The Secretary of Energy shall not make any transfer 
     or sale of uranium under this subsection that would cause the 
     total amount of uranium transferred or sold pursuant to this 
     subsection that is delivered for consumption by end users to 
     exceed--
       ``(A) 3 million pounds of U3O8 
     equivalent in fiscal year 2004, 2005, 2006, 2007, 2008, or 
     2009;
       ``(B) 5 million pounds of U3O8 
     equivalent in fiscal year 2010 or 2011;
       ``(C) 7 million pounds of U3O8 
     equivalent in fiscal year 2012; and
       ``(D) 10 million pounds of U3O8 
     equivalent in fiscal year 2013 or any fiscal year thereafter.
       ``(4) For the purposes of this subsection, the recovery of 
     uranium from uranium bearing materials transferred or sold by 
     the Secretary of Energy or the Secretary of the Army to the 
     domestic uranium industry shall be the preferred method of 
     making uranium available. The recovered uranium shall be 
     counted against the annual maximum deliveries set for in this 
     section, when such uranium is sold to end users.''.
       (b) Transfers to Corporation.--Section 3112 of the USEC 
     Privatization Act (42 U.S.C. 2297h-10) is further amended by 
     adding at the end the following new subsection:
       ``(g) Transfers to Corporation.--Notwithstanding subsection 
     (b)(2) and subsection (d)(2), the Secretary may transfer up 
     to 9,550 metric tons of uranium to the Corporation to replace 
     uranium that the Secretary transferred to the Corporation on 
     or about June 30, 1993, April 20, 1998, and May 18, 1998, and 
     that does not meet commercial specifications.''.
       (c) Services.--Section 3112 of the USEC Privatization Act 
     (42 U.S.C. 2297h-10) is further amended by adding at the end 
     the following new subsection:
       ``(h) Services.--(1) Notwithstanding any other provision of 
     this section, if the Secretary determines that if the 
     Corporation has failed, or may fail, to perform any 
     obligation under the Agreement between the Department of 
     Energy and the Corporation dated June 17, 2002, and as 
     amended thereafter, which failure could result in termination 
     of the Agreement, the Secretary shall notify the Committee on 
     Energy and Commerce of the House of Representatives and the 
     Committee on Energy and Natural Resources of the Senate, in 
     such a manner that affords the Committees an opportunity to 
     comment, prior to a determination by the Secretary whether 
     termination, waiver, or modification of the Agreement is 
     required. The Secretary is authorized to take such action as 
     he determines necessary under the Agreement to terminate, 
     waive, or modify provisions of the Agreement to achieve its 
     purposes.
       ``(2) Notwithstanding any other provision of this section, 
     if the Secretary determines in accordance with Article 2D of 
     the Agreement between the Department of Energy and the 
     Corporation dated June 17, 2002, and as amended thereafter, 
     to transition operation

[[Page H3126]]

     of the Paducah gaseous diffusion plant, the Secretary may 
     provide uranium enrichment services in a manner consistent 
     with Article 2D of such Agreement.''.
       (d) Report.--Within 3 years after the date of enactment of 
     this Act, the Secretary shall report to the Congress on the 
     implementation of this section. The report shall include a 
     discussion of available excess uranium inventories, all sales 
     or transfers made by the Secretary of Energy or the Secretary 
     of the Army, the impact of such sales or transfers on the 
     domestic uranium industry, the spot market uranium price, and 
     the national security interests of the United States, and any 
     steps taken to remediate any adverse impacts of such sales or 
     transfers.

     SEC. 14031. MEDICAL ISOTOPE PRODUCTION.

       Section 134 of the Atomic Energy Act of 1954 (42 U.S.C. 
     2160d) is amended--
       (1) by redesignating subsection b. as subsection f.;
       (2) by inserting after subsection a. the following:
       ``b. The Commission may issue a license authorizing the 
     export (including shipment to and use at intermediate and 
     ultimate consignees specified in the license) to a Recipient 
     Country of highly enriched uranium for medical isotope 
     production if, in addition to any other requirements of this 
     Act, the Commission determines that--
       ``(1) a Recipient Country that supplies an assurance letter 
     to the United States Government in connection with the 
     Commission's consideration of the export license application 
     has informed the United States Government that any 
     intermediate consignees and the ultimate consignee specified 
     in the application are required to use such highly enriched 
     uranium solely to produce medical isotopes; and
       ``(2) the highly enriched uranium for medical isotope 
     production will be irradiated only in a reactor in a 
     Recipient Country that--
       ``(A) uses an alternative nuclear reactor fuel; or
       ``(B) is the subject of an agreement with the United States 
     Government to convert to an alternative nuclear reactor fuel 
     when such fuel can be used in that reactor.
       ``c. Applications to the Commission for licenses 
     authorizing the export to a Recipient Country of highly 
     enriched uranium for medical isotope production shall be 
     subject to subsection b., and subsection a. shall not be 
     applicable to such exports.
       ``d. The Commission is authorized to specify, by rulemaking 
     or decision in connection with an export license application, 
     that a country other than a Recipient Country may receive 
     exports of highly enriched uranium for medical isotope 
     production in accordance with the same criteria established 
     by subsection b. for exports to a Recipient Country, upon the 
     Commission's finding that such additional country is a party 
     to the Treaty on the Nonproliferation of Nuclear Weapons and 
     the Convention on the Physical Protection of Nuclear Material 
     and will receive such highly enriched uranium pursuant to an 
     agreement with the United States concerning peaceful uses of 
     nuclear energy.
       ``e. The Commission shall review the adequacy of physical 
     protection requirements that are currently applicable to the 
     transportation of highly enriched uranium for medical isotope 
     production. If it determines that additional physical 
     protection measures are necessary, including any limits that 
     the Commission finds are necessary on the quantity of highly 
     enriched uranium contained in a single shipment for medical 
     isotope production, the Commission shall impose such 
     requirements, as license conditions or through other 
     appropriate means.''; and
       (3) in subsection f., as so redesignated by paragraph (1) 
     of this section--
       (A) by striking ``and'' at the end of paragraph (2);
       (B) by striking the period at the end of paragraph (3)(B) 
     and inserting a semicolon; and
       (C) by adding at the end the following:
       ``(4) the term `medical isotopes' means radioactive 
     isotopes, including Molybdenum 99, Iodine 131, and Xenon 133, 
     that are used to produce radiopharmaceuticals for diagnostic 
     or therapeutic procedures on patients, or in connection with 
     research and development of radiopharmaceuticals;
       ``(5) the term `highly enriched uranium for medical isotope 
     production' means highly enriched uranium contained in, or 
     for use in, targets to be irradiated for the sole purpose of 
     producing medical isotopes; -
       ``(6) the term `radiopharmaceuticals' means radioactive 
     isotopes containing byproduct material combined with chemical 
     or biological material that are designed to accumulate 
     temporarily in a part of the body, for therapeutic purposes 
     or for enabling the production of a useful image of the 
     appropriate body organ or function for use in diagnosis of 
     medical conditions; and
       ``(7) the term `Recipient Country' means Canada, Belgium, 
     France, Germany, and the Netherlands.''.

     SEC. 14032. HIGHLY ENRICHED URANIUM DIVERSION THREAT REPORT.

       Section 307 of the Energy Reorganization Act of 1974 (42 
     U.S.C. 5877) is amended by adding at the end the following 
     new subsection:
       ``(d) Not later than 6 months after the date of the 
     enactment of this Act, the Secretary of Energy shall transmit 
     to the Congress a report with recommendations on reducing the 
     threat resulting from the theft or diversion of highly 
     enriched uranium. Such report shall address--
       ``(1) monitoring of highly enriched uranium supplies at any 
     commercial companies who have access to substantial amounts 
     of highly enriched uranium;
       ``(2) assistance to companies described in paragraph (1) 
     with security and personnel checks;
       ``(3) acceleration of the process of blending down excess 
     highly enriched uranium into low-enriched uranium;
       ``(4) purchasing highly enriched uranium (except for 
     production of medical isotopes);
       ``(5) paying the cost of shipping highly enriched uranium;
       ``(6) accelerating the conversion of commercial research 
     reactors and energy reactors to the use of low-enriched 
     uranium fuel where they now use highly enriched uranium fuel; 
     and
       ``(7) minimizing, and encouraging transparency in, the 
     further enrichment of low-enriched uranium to highly enriched 
     uranium.''.

     SEC. 14033. WHISTLEBLOWER PROTECTION.

       (a) Definition of Employer.--Section 211(a)(2) of the 
     Energy Reorganization Act of 1974 (42 U.S.C. 5851(a)(2)) is 
     amended--
       (1) by striking ``and'' at the end of subparagraph (C);
       (2) in subparagraph (D), by striking ``that is 
     indemnified'' and all that follows through ``12344.'' and 
     inserting ``or the Commission; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(E) the Department of Energy and the Commission.''.
       (b) De Novo Review.--Subsection (b) of such section 211 is 
     amended by adding at the end the following new paragraph:
       ``(4) If the Secretary has not issued a final decision 
     within 180 days after the filing of a complaint under 
     paragraph (1), and there is no showing that such delay is due 
     to the bad faith of the claimant, the claimant may bring an 
     action at law or equity for de novo review in the appropriate 
     district court of the United States, which shall have 
     jurisdiction over such an action without regard to the amount 
     in controversy.''.

     SEC. 14034. PREVENTING THE MISUSE OF NUCLEAR MATERIALS AND 
                   TECHNOLOGY.

       (a) Amendment.--Chapter 14 of the Atomic Energy Act of 1954 
     (42 U.S.C. 2201 et seq.) is amended by adding at the end the 
     following new section:
       ``Sec. 170D. Preventing the Misuse of Nuclear Materials and 
     Technology.--
       ``a. In order to successfully promote the development of 
     nuclear energy as a safe and reliable source of electrical 
     energy, it is the policy of the United States to prevent any 
     nuclear materials, technology, components, substances, 
     technical information, or related goods or services from 
     being misused or diverted from peaceful nuclear energy 
     purposes.
       ``b. In order to further advance the policy set forth in 
     subsection a., notwithstanding any other provision of law, no 
     Federal agency shall issue any license, approval, or 
     authorization for the export or reexport, or the transfer or 
     retransfer, either directly or indirectly, to any country 
     whose government has been identified by the Secretary of 
     State as engaged in state sponsorship of terrorist activities 
     (specifically including any country the government of which, 
     as of September 11, 2001, had been determined by the 
     Secretary of State under section 620A(a) of the Foreign 
     Assistance Act of 1961, section 6(j)(1) of the Export 
     Administration Act of 1979, or section 40(d) of the Arms 
     Export Control Act to have repeatedly provided support for 
     acts of international terrorism) of--
       ``(1) any special nuclear material or byproduct material;
       ``(2) any nuclear production or utilization facilities; or
       ``(3) any components, technologies, substances, technical 
     information, or related goods or services used (or which 
     could be used) in a nuclear production or utilization 
     facility.
       ``c. Any license, approval, or authorization described in 
     subsection b. made prior to the date of enactment of this 
     section is hereby revoked.''.
       (b) Table of Contents Amendment.--The table of contents of 
     such chapter 14 is amended by adding at the end the following 
     item:

``Sec. 170D. Preventing the misuse of nuclear materials and 
              technology.''.

     SEC. 14035. LIMITATION ON LEGAL FEE REIMBURSEMENT.

       The Department of Energy shall not, except as required 
     under a contract entered into before the date of enactment of 
     this Act, reimburse any contractor or subcontractor of the 
     Department for any legal fees or expenses incurred with 
     respect to a complaint subsequent to--
       (1) an adverse determination on the merits with respect to 
     such complaint against the contractor or subcontractor by the 
     Director of the Department of Energy's Office of Hearings and 
     Appeals pursuant to section 708 of title 10, Code of Federal 
     Regulations, or by a Department of Labor Administrative Law 
     Judge pursuant to section 211 of the Energy Reorganization 
     Act of 1974 (42 U.S.C. 5851); or
       (2) an adverse final judgment by any State or Federal court 
     with respect to such complaint against the contractor or 
     subcontractor for wrongful termination or retaliation due to 
     the making of disclosures protected under chapter 12 of title 
     5, United States Code, section 211 of the Energy 
     Reorganization Act of 1974 (42 U.S.C. 5851), or any 
     comparable State law,

[[Page H3127]]

     unless the adverse determination or final judgment is 
     reversed upon further administrative or judicial review.

                      TITLE V--VEHICLES AND FUELS

                Subtitle A--Energy Policy Act Amendments

     SEC. 15011. CREDIT FOR SUBSTANTIAL CONTRIBUTION TOWARD 
                   NONCOVERED FLEETS.

       Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 
     13258) is amended by adding at the end the following new 
     subsection:
       ``(e) Credit for Substantial Contribution Toward Use of 
     Dedicated Vehicles in Noncovered Fleets.--
       ``(1) Definitions.--In this subsection:
       ``(A) Medium or heavy duty vehicle.--The term `medium or 
     heavy duty vehicle' means a dedicated vehicle that--
       ``(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.
       ``(B) Substantial contribution.--The term `substantial 
     contribution' means not less than $15,000 in cash or in kind 
     services, as determined by the Secretary.
       ``(2) Allocation of credits.--The Secretary shall allocate 
     a credit to a fleet or covered person under this section if 
     the fleet or person makes a substantial contribution toward 
     the acquisition and use of dedicated vehicles or neighborhood 
     electric 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 
     vehicles.--The Secretary shall issue 2 full credits to a 
     fleet or covered person under this section if the fleet or 
     person makes a substantial contribution toward the 
     acquisition and use of a medium or heavy duty 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 or neighborhood electric 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.--Except as provided in paragraph (3), no 
     more than 1 credit shall be allocated under this subsection 
     for each vehicle.''.

     SEC. 15012. CREDIT FOR ALTERNATIVE FUEL INFRASTRUCTURE.

       Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 
     13258), as amended by this division, is further amended by 
     adding at the end the following new subsection:
       ``(f) Credit for Investment in Alternative Fuel 
     Infrastructure.--
       ``(1) Definition.--In this subsection, 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) Allocation of credits.--The Secretary shall allocate 
     a credit to a fleet or covered person under this section 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. 15013. ALTERNATIVE FUELED VEHICLE REPORT.

       (a) Definitions.--In this section:
       (1) 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).
       (2) 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).
       (3) 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).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (b) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report on the effect that titles III, IV, and V of the 
     Energy Policy Act of 1992 have had on the development of 
     alternative fueled vehicle technology, the availability of 
     alternative fueled vehicles in the market, the cost of light 
     duty motor vehicles that are alternative fueled vehicles, and 
     the availability, cost, and use of alternative fuels and 
     biodiesel. Such report shall include any recommendations of 
     the Secretary for legislation concerning the alternative 
     fueled vehicle requirements under the Energy Policy Act of 
     1992, and shall examine, discuss, and determine the 
     following:
       (1) The number of alternative fueled vehicles acquired by 
     fleets or covered persons required to acquire alternative 
     fueled vehicles.
       (2) The extent to which fleets subject to alternative 
     fueled vehicle acquisition requirements have met those 
     requirements through the use of fuel mixtures that contain at 
     least 20 percent biodiesel pursuant to section 312 of the 
     Energy Policy Act of 1992 (42 U.S.C. 13220).
       (3) The amount of alternative fuel used in alternative 
     fueled vehicles acquired by fleets required to acquire 
     alternative fueled vehicles under the Energy Policy Act of 
     1992.
       (4) The amount of petroleum displaced by the use of 
     alternative fueled vehicles acquired by fleets or covered 
     persons.
       (5) The cost of compliance with vehicle acquisition 
     requirements under the Energy Policy Act of 1992, and the 
     benefits of using such fuel and vehicles.
       (6) Projections of the amount of biodiesel, the number of 
     alternative fueled vehicles, and the amount of alternative 
     fuel that will be used over the next decade by fleets 
     required to acquire alternative fueled vehicles under the 
     Energy Policy Act of 1992.
       (7) The existence of any obstacles to increased use of 
     alternative fuel and biodiesel in vehicles acquired or 
     maintained by fleets required to acquire alternative fueled 
     vehicles under the Energy Policy Act of 1992, and the 
     benefits of using such fuel and vehicles.

     SEC. 15014. ALLOCATION OF INCREMENTAL COSTS.

       Section 303(c) of the Energy Policy Act of 1992 (42 U.S.C. 
     13212(c)) is amended by striking ``may'' and inserting 
     ``shall''.

                     Subtitle B--Advanced Vehicles

     SEC. 15021. DEFINITIONS.

       For the purposes of this subtitle, the following 
     definitions apply:
       (1) Alternative fueled vehicle..--The term ``alternative 
     fueled vehicle'' means a vehicle propelled solely on an 
     alternative fuel as defined in section 301 of the Energy 
     Policy Act of 1992 (42 U.S.C. 13211), except the term does 
     not include any vehicle that the Secretary determines, by 
     rule, does not yield substantial environmental benefits over 
     a vehicle operating solely on gasoline or diesel derived from 
     fossil fuels.
       (2) Fuel cell vehicle.--The term ``fuel cell vehicle'' 
     means a vehicle propelled by an electric motor powered by a 
     fuel cell system that converts chemical energy into 
     electricity by combining oxygen (from air) with hydrogen fuel 
     that is stored on the vehicle or is produced onboard by 
     reformation of a hydrocarbon fuel. Such fuel cell system may 
     or may not include the use of auxiliary energy storage 
     systems to enhance vehicle performance.
       (3) Hybrid vehicle.--The term ``hybrid vehicle'' means a 
     medium or heavy duty vehicle propelled by an internal 
     combustion engine or heat engine using any combustible fuel 
     and an onboard rechargeable energy storage device.
       (4) Neighborhood electric vehicle.--The term ``neighborhood 
     electric vehicle'' means a motor vehicle capable of traveling 
     at speeds of 25 miles per hour that is--
       (A) a low-speed vehicle, as such term is defined in section 
     571.3(b) of title 49, Code of Federal Regulations;
       (B) a zero-emission vehicle, as such term is defined in 
     section 86.1702-99 of title 40, Code of Federal Regulations; 
     and
       (C) otherwise lawful to use on local streets.
       (5) Pilot program.--The term ``pilot program'' means the 
     competitive grant program established under section 15022.
       (6) Ultra-low sulfur diesel vehicle.--The term ``ultra-low 
     sulfur diesel vehicle'' means a vehicle manufactured in model 
     years 2002 through 2006 powered by a heavy-duty diesel engine 
     that--
       (A) is fueled by diesel fuel which contains sulfur at not 
     more than 15 parts per million; and
       (B) emits not more than the lesser of--
       (i) for vehicles manufactured in--

       (I) model years 2002 and 2003, 3.0 grams per brake 
     horsepower-hour of oxides of nitrogen and .01 grams per brake 
     horsepower-hour of particulate matter; and
       (II) model years 2004 through 2006, 2.5 grams per brake 
     horsepower-hour of nonmethane hydrocarbons and oxides of 
     nitrogen and .01 grams per brake horsepower-hour of 
     particulate matter; or

       (ii) the emissions of nonmethane hydrocarbons, oxides of 
     nitrogen, and particulate matter of the best performing 
     technology of ultra-low sulfur diesel vehicles of the same 
     class and application that are commercially available.

     SEC. 15022. PILOT PROGRAM.

       (a) Establishment.--The Secretary shall establish a 
     competitive grant pilot program, to be administered through 
     the Clean Cities Program of the Department of Energy, to 
     provide not more than 10 geographically dispersed project 
     grants to State governments, local governments, or 
     metropolitan transportation authorities to carry out a 
     project or projects for the purposes described in subsection 
     (b).

[[Page H3128]]

       (b) Grant Purposes.--Grants under this section may be used 
     for the following purposes:
       (1) The acquisition of alternative fueled vehicles or fuel 
     cell vehicles, including--
       (A) passenger vehicles including neighborhood electric 
     vehicles; and
       (B) motorized two-wheel bicycles, scooters, or other 
     vehicles for use by law enforcement personnel or other State 
     or local government or metropolitan transportation authority 
     employees.
       (2) The acquisition of alternative fueled vehicles, hybrid 
     vehicles, or fuel cell vehicles, including--
       (A) buses used for public transportation or transportation 
     to and from schools;
       (B) delivery vehicles for goods or services; and
       (C) ground support vehicles at public airports, including 
     vehicles to carry baggage or push airplanes away from 
     terminal gates.
       (3) The acquisition of ultra-low sulfur diesel vehicles.
       (4) Infrastructure necessary to directly support an 
     alternative fueled vehicle, fuel cell vehicle, or hybrid 
     vehicle project funded by the grant, including fueling and 
     other support equipment.
       (5) Operation and maintenance of vehicles, infrastructure, 
     and equipment acquired as part of a project funded by the 
     grant.
       (c) Applications.--
       (1) Requirements.--The Secretary shall issue requirements 
     for applying for grants under the pilot program. At a 
     minimum, the Secretary shall require that applications be 
     submitted by the head of a State or local government or a 
     metropolitan transportation authority, or any combination 
     thereof, and a registered participant in the Clean Cities 
     Program of the Department of Energy, and shall include--
       (A) a description of the projects proposed in the 
     application, including how they meet the requirements of this 
     subtitle;
       (B) an estimate of the ridership or degree of use of the 
     projects proposed in the application;
       (C) an estimate of the air pollution emissions reduced and 
     fossil fuel displaced as a result of the projects proposed in 
     the application, and a plan to collect and disseminate 
     environmental data, related to the projects to be funded 
     under the grant, over the life of the projects;
       (D) a description of how the projects proposed in the 
     application will be sustainable without Federal assistance 
     after the completion of the term of the grant;
       (E) a complete description of the costs of each project 
     proposed in the application, including acquisition, 
     construction, operation, and maintenance costs over the 
     expected life of the project;
       (F) a description of which costs of the projects proposed 
     in the application will be supported by Federal assistance 
     under this subtitle; and
       (G) documentation to the satisfaction of the Secretary that 
     diesel fuel containing sulfur at not more than 15 parts per 
     million is available for carrying out the projects, and a 
     commitment by the applicant to use such fuel in carrying out 
     the projects.
       (2) Partners.--An applicant under paragraph (1) may carry 
     out projects under the pilot program in partnership with 
     public and private entities.
       (d) Selection Criteria.--In evaluating applications under 
     the pilot program, the Secretary shall consider each 
     applicant's previous experience with similar projects and 
     shall give priority consideration to applications that--
       (1) are most likely to maximize protection of the 
     environment;
       (2) demonstrate the greatest commitment on the part of the 
     applicant to ensure funding for the proposed projects and the 
     greatest likelihood that each project proposed in the 
     application will be maintained or expanded after Federal 
     assistance under this subtitle is completed; and
       (3) exceed the minimum requirements of subsection 
     (c)(1)(A).
       (e) Pilot Project Requirements.--
       (1) Maximum amount.--The Secretary shall not provide more 
     than $20,000,000 in Federal assistance under the pilot 
     program to any applicant.
       (2) Cost sharing.--The Secretary shall not provide more 
     than 50 percent of the cost, incurred during the period of 
     the grant, of any project under the pilot program.
       (3) Maximum period of grants.--The Secretary shall not fund 
     any applicant under the pilot program for more than 5 years.
       (4) Deployment and distribution.--The Secretary shall seek 
     to the maximum extent practicable to ensure a broad 
     geographic distribution of project sites.
       (5) Transfer of information and knowledge.--The Secretary 
     shall establish mechanisms to ensure that the information and 
     knowledge gained by participants in the pilot program are 
     transferred among the pilot program participants and to other 
     interested parties, including other applicants that submitted 
     applications.
       (f) Schedule.--
       (1) Publication.--Not later than 3 months after the date of 
     the enactment of this Act, the Secretary shall publish in the 
     Federal Register, Commerce Business Daily, and elsewhere as 
     appropriate, a request for applications to undertake projects 
     under the pilot program. Applications shall be due within 6 
     months of the publication of the notice.
       (2) Selection.--Not later than 6 months after the date by 
     which applications for grants are due, the Secretary shall 
     select by competitive, peer review all applications for 
     projects to be awarded a grant under the pilot program.
       (g) Limit on Funding.--The Secretary shall provide not less 
     than 20 percent and not more than 25 percent of the grant 
     funding made available under this section for the acquisition 
     of ultra-low sulfur diesel vehicles.

     SEC. 15023. REPORTS TO CONGRESS.

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

     SEC. 15024. AUTHORIZATION OF APPROPRIATIONS.

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

           Subtitle C--Hydrogen Fuel Cell Heavy-Duty Vehicles

     SEC. 15031. DEFINITION.

       For the purposes of this subtitle, the term ``advanced 
     vehicle technologies program'' means the program created 
     pursuant to section 5506 of title 49, United States Code.

     SEC. 15032. FINDINGS.

       The Congress makes the following findings:
       (1) The Department of Energy and the Department of 
     Transportation jointly developed the consortium-based 
     advanced vehicle technologies program to develop energy 
     efficient and clean heavy-duty vehicles in 1998.
       (2) The majority of clean fuel vehicles in operation today 
     are transit buses.
       (3) Hydrogen fuel cell heavy-duty vehicle bus deployments 
     can most appropriately advance hydrogen fuel cell technology 
     development due to centralized refueling, stable duty cycles, 
     and fixed routes.
       (4) Hydrogen fuel cell heavy-duty vehicle bus deployments 
     are the most effective manner in which to advance technology 
     developments for public awareness, consumption, and 
     acceptance.

     SEC. 15033. HYDROGEN FUEL CELL BUSES.

       The Secretary of Energy, through the advanced vehicle 
     technologies program, in coordination with the Secretary of 
     Transportation, shall advance the development of fuel cell 
     bus technologies by providing funding for 4 demonstration 
     sites that--
       (1) have or will soon have hydrogen infrastructure for fuel 
     cell bus operation; and
       (2) are operated by entities with experience in the 
     development of fuel cell bus technologies,
     to enable the widespread utilization of fuel cell buses. Such 
     demonstrations shall address the reliability of fuel cell 
     heavy-duty vehicles, expense, infrastructure, containment, 
     storage, safety, training, and other issues.

     SEC. 15034. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary of 
     Energy $10,000,000 for each of the fiscal years 2004 through 
     2008 for carrying out this subtitle.

                       Subtitle D--Miscellaneous

     SEC. 15041. RAILROAD EFFICIENCY.

       (a) Establishment.--The Secretary shall, in conjunction 
     with the Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency, establish a public-
     private research partnership involving the Federal 
     Government, the railroad industry, locomotive manufacturers 
     and equipment suppliers, and the research facility owned by 
     the Federal Railroad Administration and operated by contract. 
     The goal of the research partnership shall include developing 
     and demonstrating locomotive technologies that increase fuel 
     economy, reduce emissions, and lower costs.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out the requirements of this 
     section $25,000,000 for fiscal year 2004, $30,000,000 for 
     fiscal year 2005, and $35,000,000 for fiscal year 2006.

     SEC. 15042. MOBILE EMISSION REDUCTIONS TRADING AND CREDITING.

       Within 180 days after the date of enactment of this Act, 
     the Administrator of the Environmental Protection Agency 
     shall provide a report to the Congress on the Environmental 
     Protection Agency's experience with the trading of mobile 
     source emission reduction credits for use by owners and 
     operators

[[Page H3129]]

     of stationary source emission sources to meet emission offset 
     requirements within a nonattainment area. The report shall 
     describe--
       (1) projects approved by the Environmental Protection 
     Agency that include the trading of mobile source emission 
     reduction credits for use by stationary sources in complying 
     with offset requirements, including project and stationary 
     sources location, volumes of emissions offset and traded, a 
     description of the sources of mobile emission reduction 
     credits, and, if available, the cost of the credits;
       (2) the significant issues identified by the Environmental 
     Protection Agency in its consideration and approval of 
     trading in such projects;
       (3) the requirements for monitoring and assessing the air 
     quality benefits of any approved project;
       (4) the statutory authority upon which the Environmental 
     Protection Agency has based approval of such projects;
       (5) an evaluation of how the resolution of issues in 
     approved projects could be utilized in other projects; and
       (6) any other issues the Environmental Protection Agency 
     considers relevant to the trading and generation of mobile 
     source emission reduction credits for use by stationary 
     sources or for other purposes.

     SEC. 15043. IDLE REDUCTION TECHNOLOGIES.

       (a) Definitions.--For purposes of this section:
       (1) Idle reduction technology.--The term ``idle reduction 
     technology'' means a device or system of devices utilized to 
     reduce long-duration idling of a heavy-duty vehicle.
       (2) Heavy-duty vehicle.--The term ``heavy-duty vehicle'' 
     means a vehicle that has a gross vehicle weight rating 
     greater than 26,000 pounds and is powered by a diesel engine.
       (3) Long-duration idling.--The term ``long-duration 
     idling'' means the operation of a main drive engine, for a 
     period greater than 15 consecutive minutes, where the main 
     drive engine is not engaged in gear. Such term does not apply 
     to routine stoppages associated with traffic movement or 
     congestion.
       (b) Studies of the Benefits of Idle Reduction 
     Technologies.--
       (1) Potential fuel savings.--Not later than 90 days after 
     the date of enactment of this section, the Secretary of 
     Energy shall, in consultation with the Secretary of 
     Transportation, commence a study to analyze the potential 
     fuel savings resulting from use of idle reduction 
     technologies.
       (2) Recognition of benefits of advanced idle reduction 
     technologies.--Within 90 days after the date of enactment of 
     this section, the Administrator of the Environmental 
     Protection Agency is directed to commence a review of the 
     Agency's mobile source air emissions models used under the 
     Clean Air Act to determine whether such models accurately 
     reflect the emissions resulting from long-duration idling of 
     heavy-duty trucks and other vehicles and engines, and shall 
     update those models as the Administrator deems appropriate. 
     Additionally, within 90 days after the date of enactment of 
     this section, the Administrator shall commence a review as to 
     the appropriate emissions reductions credit that should be 
     allotted under the Clean Air Act for the use of advanced idle 
     reduction technologies, and whether such credits should be 
     subject to an emissions trading system, and shall revise 
     Agency regulations and guidance as the Administrator deems 
     appropriate.
       (3) Idling technologies.--Not later than 180 days after the 
     date of the enactment of this section, the Secretary of 
     Energy, in consultation with the Secretary of Transportation 
     and the Administrator of the Environmental Protection Agency, 
     shall commence a study to analyze where heavy duty and other 
     vehicles stop for long duration idling.
       (c) Vehicle Weight Exemption.--Section 127(a) of title 23, 
     United States Code, is amended by adding at the end the 
     following: ``In instances where an idle reduction technology 
     is installed onboard a motor vehicle, the maximum gross 
     vehicle weight limit and the axle weight limit for any motor 
     vehicle equipped with an idling reduction system may be 
     increased by an amount necessary to compensate for the 
     additional weight of the idling reduction system, except that 
     the weight limit increase shall be no greater than 400 
     pounds.''.

     SEC. 15044. STUDY OF AVIATION FUEL CONSERVATION AND 
                   EMISSIONS.

       The Administrator of the Federal Aviation Administration 
     and the Administrator of the Environmental Protection Agency 
     shall jointly commence a study within 60 days after the date 
     of enactment of this Act to identify the impact of aircraft 
     emissions on air quality in nonattainment areas and to 
     identify ways to promote fuel conservation measures for 
     aviation, enhance fuel efficiency, and reduce emissions. As 
     part of this study, the Administrator of the Federal Aviation 
     Administration and the Administrator of the Environmental 
     Protection Agency shall focus on how air traffic management 
     inefficiencies, such as aircraft idling at airports, result 
     in unnecessary fuel burn and air emissions. Within 180 days 
     after the commencement of the study, the Administrator of the 
     Federal Aviation Administration and the Administrator of the 
     Environmental Protection Agency shall submit a report to the 
     Committees on Energy and Commerce and Transportation and 
     Infrastructure of the House of Representatives and the 
     Committees on Environment and Public Works and Commerce, 
     Science, and Transportation of the Senate containing the 
     results of the study and recommendations as to how 
     unnecessary fuel use and emissions affecting air quality may 
     be reduced, without impacting safety and security, increasing 
     individual aircraft noise, and taking into account all 
     aircraft emissions and their relative impact on human health.

     SEC. 15045. DIESEL FUELED VEHICLES.

       (a) Diesel Combustion and After Treatment Technologies.--
     The Secretary of Energy shall accelerate efforts to improve 
     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. 15046. WAIVERS OF ALTERNATIVE FUELED VEHICLE FUELING 
                   REQUIREMENT.

       Section 400AA(a)(3)(E) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6374(a)(3)(E)) is amended to read 
     as follows:
       ``(E)(i) Dual fueled vehicles acquired pursuant to this 
     section shall be operated on alternative fuels unless the 
     Secretary determines that an agency needs a waiver of such 
     requirement for vehicles in the fleet of the agency in a 
     particular geographic area where--
       ``(I) the alternative fuel otherwise required to be used in 
     the vehicle is not reasonably available to retail purchasers 
     of the fuel, as certified to the Secretary by the head of the 
     agency; or
       ``(II) the cost of the alternative fuel otherwise required 
     to be used in the vehicle is unreasonably more expensive 
     compared to gasoline, as certified by the head of the agency.
       ``(ii) The Secretary shall monitor compliance with this 
     subparagraph by all such fleets and shall report annually to 
     the Congress on the extent to which the requirements of this 
     subparagraph are being achieved. The report shall include 
     information on annual reductions achieved of petroleum-based 
     fuels and the problems, if any, encountered in acquiring 
     alternative fuels.''.

     SEC. 15047. TOTAL INTEGRATED THERMAL SYSTEMS.

       The Secretary shall--
       (1) conduct a study of the benefits of total integrated 
     thermal systems in reducing demand for oil and protecting the 
     environment; and
       (2) examine the feasibility of using total integrated 
     thermal systems in Department of Defense and other Federal 
     motor vehicle fleets.

     SEC. 15048. OIL BYPASS FILTRATION TECHNOLOGY.

       The Secretary of Energy and the Administrator of the 
     Environmental Protection Agency shall--
       (1) conduct a joint study of the benefits of oil bypass 
     filtration technology in reducing demand for oil and 
     protecting the environment; and
       (2) examine the feasibility of using oil bypass filtration 
     technology in Federal motor vehicle fleets.

     SEC. 15049. NATURAL GAS CONDENSATE STUDY.

       Not later than 18 months after the date of enactment of 
     this Act, the Secretary of Energy, in consultation with the 
     Administrator of the Environmental Protection Agency, shall 
     transmit to the Congress the results of a study to consider 
     fuels derived from natural gas condensate and the appropriate 
     blending of such condensates. The study shall consider--
       (1) usage options;
       (2) potential volume capacities;
       (3) costs;
       (4) air emissions;
       (5) fuel efficiencies; and
       (6) potential use in the Federal fleet program under title 
     III of the Energy Policy Act of 1992 (42 U.S.C. 13201 et 
     seq.).

                         TITLE VI--ELECTRICITY

                   Subtitle A--Transmission Capacity

     SEC. 16011. TRANSMISSION INFRASTRUCTURE IMPROVEMENT 
                   RULEMAKING.

       Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is 
     amended by adding the following new section at the end 
     thereof:

     ``SEC. 215. TRANSMISSION INFRASTRUCTURE IMPROVEMENT 
                   RULEMAKING.

       ``(a) Rulemaking Requirement.--Within 1 year after the 
     enactment of this section, the Commission shall establish, by 
     rule, incentive-based (including but not limited to 
     performance-based) transmission rate treatments to promote 
     capital investment in the enlargement and improvement of 
     facilities for the transmission of electric energy in 
     interstate commerce as appropriate to--
       ``(1) promote economically efficient transmission and 
     generation of electricity;
       ``(2) provide a return on equity that attracts new 
     investment in transmission facilities and reasonably reflects 
     the risks taken by public utilities in restructuring control 
     of transmission assets; and

[[Page H3130]]

       ``(3) encourage deployment of transmission technologies and 
     other measures to increase the capacity and efficiency of 
     existing transmission facilities and improve the operation of 
     such facilities.
     The Commission may, from time to time, revise such rule.
       ``(b) Funding of Certain Facilities.--The rule promulgated 
     pursuant to this section shall provide that, upon the request 
     of a regional transmission organization or other Commission-
     approved transmission organization, new transmission 
     facilities that increase the transfer capability of the 
     transmission system shall be participant funded. In such 
     rules, the Commission shall also provide guidance as to what 
     types of facilities may be participant funded.
       ``(c) Just and Reasonable Rates.--With respect to any 
     transmission rate filed with the Commission on or after the 
     effective date of the rule promulgated under this section, 
     the Commission shall, in its review of such rate under 
     sections 205 and 206, apply the rules adopted pursuant to 
     this section, including any revisions thereto. Nothing in 
     this section shall be construed to override, weaken, or 
     conflict with the procedural and other requirements of this 
     part, including the requirement of sections 205 and 206 that 
     all rates, charges, terms, and conditions be just and 
     reasonable and not unduly discriminatory or preferential.''.

     SEC. 16012. SITING OF INTERSTATE ELECTRICAL TRANSMISSION 
                   FACILITIES.

       (a) Amendment of Federal Power Act.--Part II of the Federal 
     Power Act is amended by adding at the end the following:

     ``SEC. 216. SITING OF INTERSTATE ELECTRICAL TRANSMISSION 
                   FACILITIES.

       ``(a) Transmission Studies.--Within one year after the 
     enactment of this section, and every 3 years thereafter, the 
     Secretary of Energy shall conduct a study of electric 
     transmission congestion. After considering alternatives and 
     recommendations from interested parties the Secretary shall 
     issue a report, based on such study, which may designate one 
     or more geographic areas experiencing electric energy 
     transmission congestion as `interstate congestion areas'.
       ``(b) Construction Permit.--The Commission is authorized, 
     after notice and an opportunity for hearing, to issue permits 
     for the construction or modification of electric transmission 
     facilities in interstate congestion areas designated by the 
     Secretary under subsection (a) if the Commission makes each 
     of the following findings:
       ``(1) A finding that--
       ``(A) the State in which the transmission facilities are to 
     be constructed or modified is without authority to approve 
     the siting of the facilities, or
       ``(B) a State commission or body in the State in which the 
     transmission facilities are to be constructed or modified 
     that has authority to approve the siting of the facilities 
     has withheld approval, conditioned its approval in such a 
     manner that the proposed construction or modification will 
     not significantly reduce transmission congestion in 
     interstate commerce and is otherwise not economically 
     feasible, or delayed final approval for more than one year 
     after the filing of an application seeking approval or one 
     year after the designation of the relevant interstate 
     congestion area, whichever is later.
       ``(2) A finding that the facilities to be authorized by the 
     permit will be used for the transmission of electric energy 
     in interstate commerce.
       ``(3) A finding that the proposed construction or 
     modification is consistent with the public interest.
       ``(4) A finding that the proposed construction or 
     modification will significantly reduce transmission 
     congestion in interstate commerce.
     The Commission may include in a permit issued under this 
     section conditions consistent with the public interest.
       ``(c) Permit Applications.--Permit applications under 
     subsection (b) shall be made in writing to the Commission and 
     verified under oath. The Commission shall issue rules setting 
     forth the form of the application, the information it is to 
     contain, and the manner of service of notice of the permit 
     application upon interested persons.
       ``(d) Comments.--In any proceeding before the Commission 
     under subsection (b), the Commission shall afford each State 
     in which a transmission facility covered by the permit is or 
     will be located, each affected Federal agency and Indian 
     tribe, private property owners, and other interested persons, 
     a reasonable opportunity to present their views and 
     recommendations with respect to the need for and impact of a 
     facility covered by the permit.
       ``(e) Rights-of-Way.--In the case of a permit under 
     subsection (b) for electric transmission facilities to be 
     located on property other than property owned by the United 
     States or a State, if the permit holder cannot acquire by 
     contract, or is unable to agree with the owner of the 
     property to the compensation to be paid for, the necessary 
     right-of-way to construct or modify such transmission 
     facilities, the permit holder may acquire the right-of-way by 
     the exercise of the right of eminent domain in the district 
     court of the United States for the district in which the 
     property concerned is located, or in the appropriate court of 
     the State in which the property is located. The practice and 
     procedure in any action or proceeding for that purpose in the 
     district court of the United States shall conform as nearly 
     as may be with the practice and procedure in similar action 
     or proceeding in the courts of the State where the property 
     is situated.
       ``(f) State Law.--Nothing in this section shall preclude 
     any person from constructing any transmission facilities 
     pursuant to State law.
       ``(g) Compliance With Other Laws.--Commission action under 
     this section shall be subject to the National Environmental 
     Policy Act of 1969 (42 U.S.C. 4321 et seq.) and all other 
     applicable Federal laws.
       ``(h) Compensation.--Any exercise of eminent domain 
     authority pursuant to this section shall be considered a 
     taking of private property for which just compensation is 
     due. Just compensation shall be an amount equal to the full 
     fair market value of the property taken on the date of the 
     exercise of eminent domain authority, except that the 
     compensation shall exceed fair market value if necessary to 
     make the landowner whole for decreases in the value of any 
     portion of the land not subject to eminent domain. Any parcel 
     of land acquired by eminent domain under this subsection 
     shall be transferred back to the owner from whom it was 
     acquired (or his heirs or assigns) if the land is not used 
     for power line construction or modification within a 
     reasonable period of time after the acquisition. Property 
     acquired under this subsection may not be used for any 
     heritage area, recreational trail, or park, or for any other 
     purpose (other than power line construction or modification, 
     and for power line operation and maintenance) without the 
     consent of the owner of the parcel from whom the property was 
     acquired (or his heirs or assigns).
       ``(i) ERCOT.--Nothing in this section shall be construed to 
     authorize any interconnection with any facility owned or 
     operated by an entity referred to in section 212(k)(2)(B).
       ``(j) Rights of Way on Federal Lands.--
       ``(1) Lead agency.--If an applicant, or prospective 
     applicant, for Federal authorization related to an 
     electricity transmission or distribution facility so 
     requests, the Department of Energy (DOE) shall act as the 
     lead agency for purposes of coordinating all applicable 
     Federal authorization and related environmental review of the 
     facility. The term `Federal authorization' shall mean any 
     authorization required under Federal law in order to site a 
     transmission or distribution facility, including but not 
     limited to such permits, special use authorizations, 
     certifications, opinions, or other approvals as may be 
     required, whether issued by a Federal or a State agency. To 
     the maximum extent practicable under applicable Federal law, 
     the Secretary of Energy shall coordinate this Federal 
     authorization and review process with any Indian tribes, 
     multi-State entities, and State agencies that are responsible 
     for conducting any separate permitting and environmental 
     reviews of the facility, to ensure timely and efficient 
     review and permit decisions.
       ``(2) Authority to set deadlines.--As lead agency, the 
     Department of Energy, in consultation with other Federal and, 
     as appropriate, with Indian tribes, multi-State entities, and 
     State agencies that are willing to coordinate their own 
     separate permitting and environmental reviews with the 
     Federal authorization and environmental reviews, shall 
     establish prompt and binding intermediate milestones and 
     ultimate deadlines for the review of and Federal 
     authorization decisions relating to the proposed facility. 
     The Secretary of Energy shall ensure that once an application 
     has been submitted with such data as the Secretary deems 
     necessary, all permit decisions and related environmental 
     reviews under all applicable Federal laws shall be completed 
     within 1 year or, if a requirement of another provision of 
     Federal law makes this impossible, as soon thereafter as is 
     practicable. The Secretary of Energy also shall provide an 
     expeditious pre-application mechanism for prospective 
     applicants to confer with the agencies involved to have each 
     such agency determine and communicate to the prospective 
     applicant within 60 days of when the prospective applicant 
     submits a request for such information concerning--
       ``(A) the likelihood of approval for a potential facility; 
     and
       ``(B) key issues of concern to the agencies and public.
       ``(3) Consolidated environmental review and record of 
     decision.--The Secretary of Energy, in consultation with the 
     affected agencies, shall prepare a single environmental 
     review document, which shall be used as the basis for all 
     decisions on the proposed project under Federal law. The 
     document may be an environmental assessment or environmental 
     impact statement under the National Environmental Policy Act 
     of 1969 if warranted, or such other form of analysis as may 
     be warranted. DOE and other agencies shall streamline the 
     review and permitting of transmission and distribution 
     facilities within corridors designated under section 503 of 
     the Federal Land Policy and Management Act (43 U.S.C. 1763) 
     by fully taking into account prior analyses and decisions as 
     to the corridors. The document under this section may consist 
     of or include an environmental assessment, if allowed by law, 
     or an environmental impact statement, if warranted or 
     required by law, or such other form of analysis as warranted, 
     consistent with any requirement of the National Environmental 
     Policy Act, the Federal Land Policy and Management Act, or 
     any other applicable law. Such document shall include 
     consideration by the relevant agencies of any applicable 
     criteria or other matters as required under applicable laws.

[[Page H3131]]

       ``(4) Appeals.--In the event that any agency has denied a 
     Federal authorization required for a transmission or 
     distribution facility, or has failed to act by the deadline 
     established by the Secretary pursuant to this section for 
     deciding whether to issue the authorization, the applicant or 
     any State in which the facility would be located may file an 
     appeal with the Secretary of Energy, who shall, in 
     consultation with the affected agency, review the denial or 
     take action on the pending application. Based on the overall 
     record and in consultation with the affected agency, the 
     Secretary may then either issue the necessary authorization 
     with any appropriate conditions, or deny the application. The 
     Secretary shall issue a decision within 90 days of the filing 
     of the appeal. In making a decision under this paragraph, the 
     Secretary shall comply with all applicable requirements of 
     Federal law, including any requirements of the Endangered 
     Species Act, the Clean Water Act, the National Forest 
     Management Act, the National Environmental Policy Act, and 
     the Federal Land Management and Policy Act.
       ``(5) Conforming regulations and memoranda of agreement.--
     Not later than 18 months after the date of enactment of this 
     section, the Secretary of Energy shall issue any regulations 
     necessary to implement the foregoing provisions. Not later 
     than 1 year after the date of enactment of this section, the 
     Secretary and the heads of all relevant Federal departments 
     and non-departmental agencies shall, and interested Indian 
     tribes, multi-State entities, and State agencies may, enter 
     into Memoranda of Agreement to ensure the timely and 
     coordinated review and permitting of electricity transmission 
     and distribution facilities. The head of each Federal 
     department or non-departmental agency with approval authority 
     shall designate a senior responsible official and dedicate 
     sufficient other staff and resources to ensure that the DOE 
     regulations and any Memoranda are fully implemented.
       ``(6) Miscellaneous.--Each Federal authorization for an 
     electricity transmission or distribution facility shall be 
     issued for a duration, as determined by the Secretary of 
     Energy, commensurate with the anticipated use of the facility 
     and with appropriate authority to manage the right-of-way for 
     reliability and environmental protection. Further, when such 
     authorizations expire, they shall be reviewed for renewal 
     taking fully into account reliance on such electricity 
     infrastructure, recognizing its importance for public health, 
     safety and economic welfare and as a legitimate use of 
     Federal lands.
       ``(7) Maintaining and enhancing the transmission 
     infrastructure.--In exercising the responsibilities under 
     this section, the Secretary of Energy shall consult regularly 
     with the Federal Energy Regulatory Commission (FERC) and 
     FERC-approved Regional Transmission Organizations and 
     Independent System Operators.
       ``(k) Interstate Compacts.--The consent of Congress is 
     hereby given for States to enter into interstate compacts 
     establishing regional transmission siting agencies to 
     facilitate coordination among the States within such areas 
     for purposes of siting future electric energy transmission 
     facilities and to carry out State electric energy 
     transmission siting responsibilities. The Secretary of Energy 
     may provide technical assistance to regional transmission 
     siting agencies established under this subsection.
       ``(l) Savings Clause.--Nothing in this section shall be 
     construed to affect any requirement of the environmental laws 
     of the United States, including, but not limited to, the 
     National Environmental Policy Act of 1969. This section shall 
     not apply to any component of the National Wilderness 
     Preservation System, the National Wild and Scenic Rivers 
     System, or the National Park system (including National 
     Monuments therein).''.
       (b) Federal Corridors.--The Secretary of the Interior, the 
     Secretary of Energy, the Secretary of Agriculture, and the 
     Chairman of the Council on Environmental Quality shall, 
     within 90 days of the date of enactment of this subsection, 
     submit a joint report to Congress identifying the following:
       (1) all existing designated transmission and distribution 
     corridors on Federal land and the status of work related to 
     proposed transmission and distribution corridor designations, 
     the schedule for completing such work, any impediments to 
     completing the work, and steps that Congress could take to 
     expedite the process;
       (2) the number of pending applications to locate 
     transmission and distribution facilities on Federal lands, 
     key information relating to each such facility, how long each 
     application has been pending, the schedule for issuing a 
     timely decision as to each facility, and progress in 
     incorporating existing and new such rights-of-way into 
     relevant land use and resource management plans or their 
     equivalent; and
       (3) the number of existing transmission and distribution 
     rights-of-way on Federal lands that will come up for renewal 
     within the following 5, 10, and 15 year periods, and a 
     description of how the Secretaries plan to manage such 
     renewals.

     SEC. 16013. TRANSMISSION TECHNOLOGIES.

       The Federal Energy Regulatory Commission shall shall take 
     affirmative steps in the exercise of its authorities under 
     the Federal Power Act to encourage the deployment of 
     transmission technologies that utilize real time monitoring 
     and analytical software to increase and maximize the capacity 
     and efficiency of transmission networks and to reduce line 
     losses.

                   Subtitle B--Transmission Operation

     SEC. 16021. OPEN ACCESS TRANSMISSION BY CERTAIN UTILITIES.

       Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is 
     amended by inserting after section 211 the following:

     ``SEC. 211A. OPEN ACCESS BY UNREGULATED TRANSMITTING 
                   UTILITIES.

       ``(a) In General.--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 which such unregulated 
     transmitting utility provides transmission services to itself 
     and that are not unduly discriminatory or preferential.
       ``(b) Exemptions.--
       ``(1) In general.--The Commission shall exempt from any 
     rule or order under this subsection any unregulated 
     transmitting utility that--
       ``(A)(i) sells no more than 4,000,000 megawatt hours of 
     electricity per year; and
       ``(ii) is a distribution utility; or
       ``(B) does not own or operate any transmission facilities 
     that are necessary for operating an interconnected 
     transmission system (or any portion thereof); or
       ``(C) meets other criteria the Commission determines to be 
     in the public interest.
       ``(2) Local distribution.-- The requirements of subsection 
     (a) shall not apply to facilities used in local distribution.
       ``(c) Rate Changing Procedures.--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) Remand.--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) Section 211 Requests.--The provision of transmission 
     services under subsection (a) does not preclude a request for 
     transmission services under section 211.
       ``(f) Definitions.--For purposes of this section--
       ``(1) The term `unregulated transmitting utility' means an 
     entity that--
       ``(A) owns or operates facilities used for the transmission 
     of electric energy in interstate commerce, and
       ``(B) is either an entity described in section 201(f) or a 
     rural electric cooperative.
       ``(2) The term `distribution utility' means an unregulated 
     transmitting utility that serves at least ninety percent of 
     its electric customers at retail.''.

     SEC. 16022. REGIONAL TRANSMISSION ORGANIZATIONS.

       (a) Sense of the Congress on RTOs.--It is the sense of 
     Congress that, in order to promote fair, open access to 
     electric transmission service, benefit retail consumers, 
     facilitate wholesale competition, improve efficiencies in 
     transmission grid management, promote grid reliability, 
     remove opportunities for unduly discriminatory or 
     preferential transmission practices, and provide for the 
     efficient development of transmission infrastructure needed 
     to meet the growing demands of competitive wholesale power 
     markets, all transmitting utilities in interstate commerce 
     should voluntarily become members of independently 
     administered regional transmission organizations that have 
     operational control of interstate transmission facilities and 
     do not own or control generation facilities used to supply 
     electric energy for sale at wholesale.
       (b) Sense of the Congress on Capital Investment.--It is the 
     sense of the Congress that the Federal Energy Regulatory 
     Commission should provide to any transmitting utility that 
     becomes a member of an operational regional transmitting 
     organization approved by the Commission a return on equity 
     sufficient to attract new investment capital for expansion of 
     transmission capacity, in accordance with sections 205 and 
     206 of the Federal Power Act (16 U.S.C. 824d and 824e), 
     including the requirement that rates be just and reasonable.
       (c) Report on Pending Applications.--Not later than 120 
     days after the date of enactment of this section, the Federal 
     Energy Regulatory Commission shall submit to the Committee on 
     Energy and Commerce of the United States House of 
     Representatives and the Committee on Energy and Natural 
     Resources of the United States Senate a report containing the 
     following:
       (1) A list of all regional transmission organization 
     applications filed at the Commission pursuant to the 
     Commission's Order No. 2000, including an identification of 
     each public utility and other entity included within the 
     proposed membership of the regional transmission 
     organization.
       (2) A table showing the date each such application was 
     filed, the date of any revised filings of such application, 
     the date of each preliminary or final Commission order 
     regarding such application, and a statement of whether the 
     application has been rejected, preliminarily approved, 
     finally approved, or has some other status (including a 
     description of that status).

[[Page H3132]]

       (3) For any application that has not been finally approved 
     by the Commission, a detailed description of every aspect of 
     the application that the Commission has determined does not 
     conform to the requirements of Order No. 2000.
       (4) For any application that has not been finally approved 
     by the Commission, an explanation by the Commission of why 
     the items described pursuant to paragraph (3) constitute 
     material noncompliance with the requirements of the 
     Commission's Order No. 2000 sufficient to justify denial of 
     approval by the Commission.
       (5) For all regional transmission organization applications 
     filed pursuant to the Commission's Order No. 2000, whether 
     finally approved or not--
       (A) a discussion of that regional transmission 
     organization's efforts to minimize rate seams between itself 
     and--
       (i) other regional transmission organizations; and
       (ii) entities not participating in a regional transmission 
     organization; and
       (B) a discussion of the impact of such seams on consumers 
     and wholesale competition; and
       (C) a discussion of minimizing cost-shifting on consumers.
       (d) Federal Utility Participation in RTOS.--
       (1) Definitions.--For purposes of this section--
       (A) The term ``appropriate Federal regulatory authority'' 
     means--
       (i) with respect to a Federal power marketing agency, the 
     Secretary of Energy, except that the Secretary may designate 
     the Administrator of a Federal power marketing agency to act 
     as the appropriate Federal regulatory authority with respect 
     to the transmission system of that Federal power marketing 
     agency; and
       (ii) with respect to the Tennessee Valley Authority, the 
     Board of Directors of the Tennessee Valley Authority.
       (B) The term ``Federal utility'' means a Federal power 
     marketing agency or the Tennessee Valley Authority.
       (C) The term ``transmission system'' means electric 
     transmission facilities owned, leased, or contracted for by 
     the United States and operated by a Federal utility.
       (2) Transfer.--The appropriate Federal regulatory authority 
     is authorized to enter into a contract, agreement or other 
     arrangement transferring control and use of all or part of 
     the Federal utility's transmission system to a regional 
     transmission organization approved by the Federal Energy 
     Regulatory Commission. Such contract, agreement or 
     arrangement shall include--
       (A) performance standards for operation and use of the 
     transmission system that the head of the Federal utility 
     determines necessary or appropriate, including standards that 
     assure recovery of all the Federal utility's costs and 
     expenses related to the transmission facilities that are the 
     subject of the contract, agreement or other arrangement, 
     consistency with existing contracts and third-party financing 
     arrangements, and consistency with said Federal utility's 
     statutory authorities, obligations, and limitations;
       (B) provisions for monitoring and oversight by the Federal 
     utility of the regional transmission organization's 
     fulfillment of the terms and conditions of the contract, 
     agreement or other arrangement, including a provision that 
     may provide for the resolution of disputes through 
     arbitration or other means with the regional transmission 
     organization or with other participants, notwithstanding the 
     obligations and limitations of any other law regarding 
     arbitration; and
       (C) a provision that allows the Federal utility to withdraw 
     from the regional transmission organization and terminate the 
     contract, agreement or other arrangement in accordance with 
     its terms.
     Neither this section, actions taken pursuant to it, nor any 
     other transaction of a Federal utility using a regional 
     transmission organization shall serve to confer upon the 
     Federal Energy Regulatory Commission jurisdiction or 
     authority over the Federal utility's electric generation 
     assets, electric capacity or energy that the Federal utility 
     is authorized by law to market, or the Federal utility's 
     power sales activities.
       (3) Existing statutory and other obligations.--
       (A) System operation requirements.--Any statutory provision 
     requiring or authorizing a Federal utility to transmit 
     electric power or to construct, operate or maintain its 
     transmission system shall not be construed to prohibit a 
     transfer of control and use of its transmission system 
     pursuant to, and subject to all requirements of paragraph 
     (2).
       (B) Other obligations.--This subsection shall not be 
     construed to--
       (i) suspend, or exempt any Federal utility from, any 
     provision of existing Federal law, including but not limited 
     to any requirement or direction relating to the use of the 
     Federal utility's transmission system, environmental 
     protection, fish and wildlife protection, flood control, 
     navigation, water delivery, or recreation; or
       (ii) authorize abrogation of any contract or treaty 
     obligation.

     SEC. 16023. NATIVE LOAD.

       Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is 
     amended by adding the following new section at the end 
     thereof:

     ``SEC. 217. SERVICE OBLIGATIONS OF LOAD-SERVING ENTITIES.

       ``(a) In General.--In exercising authority under this Act, 
     the Commission shall ensure that any load-serving entity that 
     either--
       ``(1) owns transmission facilities for the transmission of 
     electric energy in interstate commerce used to purchase or 
     deliver electric energy to meet--
       ``(A) a service obligation to customers; or
       ``(B) an existing wholesale contractual obligation; or
       ``(2) holds a contract or service agreement for firm 
     transmission service used to purchase or deliver electric 
     energy to meet--
       ``(A) a service obligation to customers; or
       ``(B) an existing wholesale contractual obligation

     shall be entitled to use such transmission facilities or 
     equivalent transmission rights to meet such obligations 
     before transmission capacity is made available for other 
     uses.
       ``(b) Use by Successor in Interest.--To the extent that all 
     or a portion of the service obligation or contractual 
     obligation covered by subsection (a) is transferred to 
     another load serving entity, the successor shall be entitled 
     to use such transmission facilities or firm transmission 
     rights associated with the transferred service obligation 
     consistent with subsection (a). Subsequent transfers to 
     another load serving entity, or back to the original load-
     serving entity, shall be entitled to the same rights.
       ``(c) Other Entities.--The Commission may exercise 
     authority under this Act to make transmission rights not used 
     to meet an obligation covered by subsection (a) available to 
     other entities in a manner determined by the Commission to be 
     not unduly discriminatory or preferential.
       ``(d) Definitions.--For the purposes of this section:
       ``(1) The term `load-serving entity' means an electric 
     utility, transmitting utility or Federal power marketing 
     agency that has an obligation under Federal, State, or local 
     law, or under long-term contracts, to provide electric 
     service to either--
       ``(A) electric consumers (as defined in section 3(5) of the 
     Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
     2602(5)); or
       ``(B) an electric utility as defined in section 3(4) of the 
     Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
     2602(5)) that has an obligation to provide electric service 
     to electric consumers.

     Such obligations shall be deemed `service obligations'.
       ``(2) The term `existing wholesale contractual obligation' 
     means an obligation under a firm long-term wholesale contract 
     that was in effect on March 28, 2003. A contract modification 
     after March 28, 2003 (other than one that increases the 
     quantity of electric energy sold under the contract) shall 
     not affect the status of such contract as an existing 
     wholesale contractual obligation.
       ``(e) Relationship to Other Provisions.--To the extent that 
     a transmitting utility reserves transmission capacity (or 
     reserves the equivalent amount of tradable transmission 
     rights) to provide firm transmission service to meet service 
     obligations or firm long-term wholesale contractual 
     obligations pursuant to subsection (a), that transmitting 
     utility shall not be considered as engaging in undue 
     discrimination or preference under this Act.
       ``(f) Jurisdiction.--This section shall not apply to an 
     entity located in an area referred to in section 
     212(k)(2)(A).
       ``(g) Savings Clause.--Nothing in this section shall affect 
     any allocation of transmission rights by the PJM 
     Interconnection, the New York Independent System Operator, 
     the New England Independent System Operator, the Midwest 
     Independent System Operator, or the California Independent 
     System Operator. Nothing in this section shall provide a 
     basis for abrogating any contract for firm transmission 
     service or rights in effect as of the date of enactment of 
     this section.''.

                        Subtitle C--Reliability

     SEC. 16031. ELECTRIC RELIABILITY STANDARDS.

       Part II of the Federal Power Act (16 U.S.C 824 et seq.) is 
     amended by inserting the following new section at the end 
     thereof:

     ``SEC. 218. ELECTRIC RELIABILITY.

       ``(a) Definitions.--For purposes of this section--
       ``(1) The term `bulk-power system' means--
       ``(A) facilities and control systems necessary for 
     operating an interconnected electric energy transmission 
     network (or any portion thereof); and
       ``(B) electric energy from generation facilities needed to 
     maintain transmission system reliability.

     The term does not include facilities used in the local 
     distribution of electric energy.
       ``(2) The terms `Electric Reliability Organization' and 
     `ERO' mean the organization certified by the Commission under 
     subsection (c) the purpose of which is to establish and 
     enforce reliability standards for the bulk-power system, 
     subject to Commission review.
       ``(3) The term `reliability standard' means a requirement, 
     approved by the Commission under this section, to provide for 
     reliable operation of the bulk-power system. The term 
     includes requirements for the operation of existing bulk-
     power system facilities and the design of planned additions 
     or modifications to such facilities to the extent necessary 
     to provide for reliable operation of the bulk-power system, 
     but the term does not include any requirement to enlarge such 
     facilities or to construct new transmission capacity or 
     generation capacity.

[[Page H3133]]

       ``(4) The term `reliable operation' means operating the 
     elements of the bulk-power system within equipment and 
     electric system thermal, voltage, and stability limits so 
     that instability, uncontrolled separation, or cascading 
     failures of such system will not occur as a result of a 
     sudden disturbance or unanticipated failure of system 
     elements.
       ``(5) The term `Interconnection' means a geographic area in 
     which the operation of bulk-power system components is 
     synchronized such that the failure of one or more of such 
     components may adversely affect the ability of the operators 
     of other components within the system to maintain reliable 
     operation of the facilities within their control.
       ``(6) The term `transmission organization' means a regional 
     transmission organization, independent system operator, 
     independent transmission provider, or other transmission 
     organization finally approved by the Commission for the 
     operation of transmission facilities.
       ``(7) The term `regional entity' means an entity having 
     enforcement authority pursuant to subsection (e)(4).
       ``(b) Jurisdiction and Applicability.--(1) The Commission 
     shall have jurisdiction, within the United States, over the 
     ERO certified by the Commission under subsection (c), 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 established under this section 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.
       ``(2) 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.
       ``(c) Certification.--Following the issuance of a 
     Commission rule under subsection (b)(2), any person may 
     submit an application to the Commission for certification as 
     the Electric Reliability Organization (ERO). The Commission 
     may certify one such ERO if the Commission determines that 
     such ERO--
       ``(1) has the ability to develop and enforce, subject to 
     subsection (e)(2), reliability standards that provide for an 
     adequate level of reliability of the bulk-power system;
       ``(2) has established rules that--
       ``(A) 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 ERO committee or 
     subordinate organizational structure;
       ``(B) allocate equitably reasonable dues, fees, and other 
     charges among end users for all activities under this 
     section;
       ``(C) provide fair and impartial procedures for enforcement 
     of reliability standards through the imposition of penalties 
     in accordance with subsection (e) (including limitations on 
     activities, functions, or operations, or other appropriate 
     sanctions);
       ``(D) 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; and
       ``(E) provide for taking, after certification, appropriate 
     steps to gain recognition in Canada and Mexico.
       ``(d) Reliability Standards.--(1) The Electric Reliability 
     Organization shall file each reliability standard or 
     modification to a reliability standard that it proposes to be 
     made effective under this section with the Commission.
       ``(2) The Commission may approve, by rule or order, 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 and to the 
     technical expertise of a regional entity organized on an 
     Interconnection-wide basis with respect to a reliability 
     standard to be applicable within that Interconnection, but 
     shall not defer with respect to the effect of a standard on 
     competition. A proposed standard or modification shall take 
     effect upon approval by the Commission.
       ``(3) The Electric Reliability Organization 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 the 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.
       ``(6) The final rule adopted under subsection (b)(2) shall 
     include fair processes for the identification and timely 
     resolution of any conflict between a reliability standard and 
     any function, rule, order, tariff, rate schedule, or 
     agreement accepted, approved, or ordered by the Commission 
     applicable to a transmission organization. Such transmission 
     organization shall continue to comply with such function, 
     rule, order, tariff, rate schedule or agreement accepted 
     approved, or ordered by the Commission until--
       ``(A) the Commission finds a conflict exists between a 
     reliability standard and any such provision;
       ``(B) the Commission orders a change to such provision 
     pursuant to section 206 of this part; and
       ``(C) the ordered change becomes effective under this part.

     If the Commission determines that a reliability standard 
     needs to be changed as a result of such a conflict, it shall 
     order the ERO to develop and file with the Commission a 
     modified reliability standard under paragraph (4) or (5) of 
     this subsection.
       ``(e) Enforcement.--(1) The ERO may impose, subject to 
     paragraph (2), a penalty on a user or owner or operator of 
     the bulk-power system for a violation of a reliability 
     standard approved by the Commission under subsection (d) if 
     the ERO, after notice and an opportunity for a hearing--
       ``(A) finds that the user or owner or operator has violated 
     a reliability standard approved by the Commission under 
     subsection (d); and
       ``(B) files notice and the record of the proceeding with 
     the Commission.
       ``(2) A penalty imposed under paragraph (1) may take effect 
     not earlier than the 31st day after the electric reliability 
     organization files with the Commission notice of the penalty 
     and the record of proceedings. Such penalty shall be subject 
     to review by the Commission, on its own motion or upon 
     application by the user, owner or operator that is the 
     subject of the penalty filed within 30 days after the date 
     such notice is filed with the Commission. Application to the 
     Commission for review, or the initiation of review by the 
     Commission on its own motion, shall not operate as a stay of 
     such penalty unless the Commission otherwise orders upon its 
     own motion or upon application by the user, owner or operator 
     that is the subject of such penalty. In any proceeding to 
     review a penalty imposed under paragraph (1), the Commission, 
     after notice and opportunity for hearing (which hearing may 
     consist solely of the record before the electric reliability 
     organization and opportunity for the presentation of 
     supporting reasons to affirm, modify, or set aside the 
     penalty), shall by order affirm, set aside, reinstate, or 
     modify the penalty, and, if appropriate, remand to the 
     electric reliability organization for further proceedings. 
     The Commission shall implement expedited procedures for such 
     hearings.
       ``(3) 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 engaged or is about to engage in 
     any acts or practices that constitute or will constitute a 
     violation of a reliability standard.
       ``(4) The Commission shall establish regulations 
     authorizing the ERO to enter into an agreement to delegate 
     authority to a regional entity for the purpose of proposing 
     reliability standards to the ERO and enforcing reliability 
     standards under paragraph (1) if--
       ``(A) the regional entity is governed by--
       ``(i) an independent board;
       ``(ii) a balanced stakeholder board; or
       ``(iii) a combination independent and balanced stakeholder 
     board.
       ``(B) the regional entity otherwise satisfies the 
     provisions of subsection (c)(1) and (2); and
       ``(C) the agreement promotes effective and efficient 
     administration of bulk-power system reliability.

     The Commission may modify such delegation. The ERO 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 ERO's authority to enforce reliability standards 
     under paragraph (1) directly to a regional entity consistent 
     with the requirements of this paragraph.
       ``(5) The Commission may take such action as is necessary 
     or appropriate against the ERO or a regional entity to ensure 
     compliance with a reliability standard or any Commission 
     order affecting the ERO or a regional entity.
       ``(6) Any penalty imposed under this section shall bear a 
     reasonable relation to the seriousness of the violation and 
     shall take into consideration the efforts of such user, 
     owner, or operator to remedy the violation in a timely 
     manner.
       ``(f) Changes in Electricity Reliability Organization 
     Rules.--The 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

[[Page H3134]]

     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).
       ``(g) Reliability Reports.--The Electric Reliability 
     Organization shall conduct periodic assessments of the 
     reliability and adequacy of the bulk-power system in North 
     America.
       ``(h) Coordination with Canada and Mexico.--The President 
     is urged to negotiate 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.
       ``(i) Savings Provisions.--(1) The Electric Reliability 
     Organization shall have authority to develop and enforce 
     compliance with reliability standards for only the bulk-power 
     system.
       ``(2) This section does not authorize the Electric 
     Reliability Organization or the Commission 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, except that the State of New York 
     may establish rules that result in greater reliability within 
     that State, as long as such action does not result in lesser 
     reliability outside the State than that provided by the 
     reliability standards.
       ``(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 
     consideration any recommendation of the Electric Reliability 
     Organization.
       ``(5) The Commission, after consultation with the Electric 
     Reliability Organization and the State taking action, may 
     stay the effectiveness of any State action, pending the 
     Commission's issuance of a final order.
       ``(j) 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 or 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 
     entity, or the Commission regarding the governance of an 
     existing or proposed regional 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.
       ``(k) Application to Alaska and Hawaii.--The provisions of 
     this section do not apply to Alaska or Hawaii.''.

                      Subtitle D--PUHCA Amendments

     SEC. 16041. SHORT TITLE.

       This subtitle may be cited as the ``Public Utility Holding 
     Company Act of 2003''.

     SEC. 16042. 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.
       (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. 16043. 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. 16044. 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. 16045. STATE ACCESS TO BOOKS AND RECORDS.

       (a) In General.--Upon the written request of a State 
     commission having jurisdiction to

[[Page H3135]]

     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. 16046. 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 16044 
     (relating to Federal access to books and records) 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 16044 
     (relating to Federal access to books and records) 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. 16047. 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. 16048. 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. 16049. 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. 16050. 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. 16051. 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 date of enactment of this Act, so long as 
     that person continues to comply with the terms of any such 
     authorization, whether by rule or by order.
       (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. 16052. IMPLEMENTATION.

       Not later than 12 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 
     16045, relating to State access to books and records); 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. 16053. 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. 16054. EFFECTIVE DATE.

       This subtitle shall take effect 12 months after the date of 
     enactment of this subtitle.

     SEC. 16055. AUTHORIZATION OF APPROPRIATIONS.

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

     SEC. 16056. 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)(5) of the Federal 
     Power Act (16 U.S.C. 824(g)(5)) is amended by striking 
     ``1935'' and inserting ``2003''.
       (2) Section 214 of the Federal Power Act (16 U.S.C. 824m) 
     is amended by striking ``1935'' and inserting ``2003''.

                      Subtitle E--PURPA Amendments

     SEC. 16061. 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. 16062. 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--

[[Page H3136]]

       ``(A) the qualifying cogeneration facility or qualifying 
     small power production facility has access to
       ``(i) independently administered, auction-based day ahead 
     and real time wholesale markets for the sale of electric 
     energy, and
       ``(ii) long-term wholesale markets for the sale of capacity 
     and electric energy;
       ``(B) the qualifying cogeneration facility or qualifying 
     small power production facility has access to a competitive 
     wholesale market for the sale of electric energy that 
     provides such qualifying cogeneration facility or qualifying 
     small power production facility with opportunities to sell 
     electric energy that, at a minimum, are comparable to the 
     opportunities provided by the markets, or some minimum 
     combination thereof, described in subparagraph (A); or
       ``(C) the qualifying cogeneration facility does not meet 
     criteria established by the Commission pursuant to the 
     rulemaking set forth in subparagraph (n) and has not filed 
     with the Commission a notice of self-certification or an 
     application for Commission certification under 18 C.F.R. 
     292.207 prior to the date of enactment of this subsection.
       ``(2) Commission review.--(A) Any electric utility may file 
     an application with the Commission for relief from the 
     mandatory purchase obligation pursuant to this subsection on 
     a utility-wide basis. Such application shall set forth the 
     reasons why such relief is appropriate and describe how the 
     conditions set forth in subparagraphs (A) and (B) of 
     paragraph (1) of this subsection have been met.
       ``(B) After notice, including sufficient notice to 
     potentially affected qualifying facilities, and an 
     opportunity for comment, and within 90 days of the filing of 
     an application under subparagraph (A), the Commission shall 
     make a final determination as to whether the conditions set 
     forth in subparagraphs (A) and (B) of paragraph (1) have been 
     met. The Commission shall not be authorized to issue a 
     tolling order regarding such application or otherwise delay a 
     final decision regarding such application.
       ``(3) Reinstatement of obligation to purchase.--(A) At any 
     time after the Commission makes a finding under paragraph (2) 
     relieving an electric utility of its obligation to purchase 
     electric energy, a qualifying cogeneration facility or a 
     qualifying small power production facility may apply to the 
     Commission for an order reinstating the electric utility's 
     obligation to purchase electric energy under this section. 
     Such application shall set forth the reasons why such relief 
     is no longer appropriate and describe how the tests set forth 
     in subparagraphs (A) and (B) of paragraph (1) of this 
     subsection are no longer met.
       ``(B) After notice, including sufficient notice to 
     potentially affected utilities, and opportunity for comment, 
     and within 90 days of the filing of an application under 
     subparagraph (A), the Commission shall issue an order 
     reinstating the electric utility's obligation to purchase 
     electric energy under this section if the Commission finds 
     that the condition in paragraph (1), which relieved the 
     obligation to purchase, is no longer met. The Commission 
     shall not be authorized to issue a tolling order regarding 
     such application or otherwise delay a final decision 
     regarding such application.
       ``(4) 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 if--
       ``(A) competing retail electric suppliers are willing and 
     able to provide electric energy to the qualifying 
     cogeneration facility or qualifying small power production 
     facility, and
       ``(B) the electric utility is not required by State law to 
     sell electric energy in its service territory.
       ``(5) 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 or pending 
     approval before the appropriate State regulatory authority or 
     nonregulated electric utility on the date of enactment of 
     this subsection, to purchase electric energy or capacity from 
     or to sell electric energy or capacity to a facility under 
     this Act (including the right to recover costs of purchasing 
     electric energy or capacity).
       ``(6) 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 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 recover 
     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.).
       ``(n) Rulemaking for new facilities.--
       ``(1) In general.--Not later than 180 days after the date 
     of enactment of this subsection, the Commission shall issue a 
     rule revising the criteria for qualifying cogeneration 
     facilities in 18 C.F.R. 292.205. In particular, the 
     Commission shall evaluate the rules regarding qualifying 
     facility criteria and revise such rules, as necessary, to 
     ensure--
       ``(A) that the thermal energy output of a new qualifying 
     cogeneration facility is used in a productive and beneficial 
     manner;
       ``(B) the electrical and thermal output of the cogeneration 
     facility is used predominantly for commercial or industrial 
     processes and not intended predominantly for sale to an 
     electric utility; and
       ``(C) continuing progress in the development of efficient 
     electric energy generating technology.
       ``(2) Applicability.--Any revisions made to operating and 
     efficiency standards shall be applicable only to a 
     cogeneration facility that--
       ``(A) was not a qualifying cogeneration facility, or
       ``(B) had not filed with the Commission a notice of self-
     certification or an application for Commission certification 
     under 18 C.F.R. 292.207

     prior to the date of enactment of this subsection.
       ``(3) Definition.--For purposes of this subsection, the 
     term `commercial processes' includes uses of thermal and 
     electric energy for educational and healthcare facilities.
       ``(o) Rules for Existing Facilities.-- Notwithstanding rule 
     revisions under subsection (n), the Commission's rules in 
     effect prior to the effective date of any revised rules 
     prescribed under subsection (n) shall continue to apply to 
     any cogeneration facility or small power production facility 
     that--
       ``(1) was a qualifying cogeneration facility or a 
     qualifying small power production facility, or
       ``(2) had filed with the Commission a notice of self-
     certification or an application for Commission certification 
     under 18 C.F.R. 292.207

     prior to the date of enactment of subsections (m) and (n).''.
       (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.''.
       (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. 16063. SMART METERING.

       (a) In General.--Section 111(d) of the Public Utilities 
     Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is 
     amended by adding at the end the following:
       ``(13) Time-based metering and communications.--(A) Not 
     later than eighteen (18) months after the date of enactment 
     of this paragraph, each electric utility shall offer each of 
     its customer classes, and provide individual customers upon 
     customer request, a time-based rate schedule under which the 
     rate charged by the electric utility varies during different 
     time periods and reflects the variance in the costs of 
     generating and purchasing electricity at the wholesale level. 
     The time-based rate schedule shall enable the electric 
     consumer to manage energy use and cost through advanced 
     metering and communications technology.
       ``(B) The types of time-based rate schedules that may be 
     offered under the schedule referred to in subparagraph (A) 
     include, among others, each the following:
       ``(i) Time-Of-Use pricing whereby electricity prices are 
     set for a specific time period on an advance or forward 
     basis, typically not changing more often than twice a year. 
     Prices paid for energy consumed during these periods shall be 
     pre-established and known to consumers in advance of such 
     consumption, allowing them to vary their demand and usage in 
     response to such prices and manage their energy costs by 
     shifting usage to a lower cost period or reducing their 
     consumption overall.
       ``(ii) Critical Peak Pricing whereby time-of-use prices are 
     in effect except for certain peak days, when prices may 
     reflect the costs of generating and purchasing electricity at 
     the wholesale level and when consumers may receive additional 
     discounts for reducing peak period energy consumption.
       ``(iii) Real-Time pricing whereby electricity prices are 
     set for a specific time period on an advanced or forward 
     basis and may change as often as hourly.
       ``(C) Each electric utility subject to subparagraph (A) 
     shall provide each customer requesting a time-based rate with 
     a time-based meter capable of enabling the utility and 
     customer to offer and receive such rate, respectively.
       ``(D) 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.
       ``(E) In a State that permits third-party marketers to sell 
     electric energy to retail electric consumers, such consumers 
     shall be entitled to receive that same time-based metering 
     and communications device and service as a retail electric 
     consumer of the electric utility.

[[Page H3137]]

       ``(F) Notwithstanding subsections (b) and (c) of section 
     112, each State regulatory authority shall, not later than 
     twelve (12) months after enactment of this paragraph conduct 
     an investigation in accordance with section 115(i) and issue 
     a decision whether it is appropriate to implement the 
     standards set out in subparagraphs (A) and (C).''.
       (b) State Investigation of Demand Response and Time-Based 
     Metering.--
       Section 115 of the Public Utilities Regulatory Policies Act 
     of 1978 (16 U.S.C. 2625) is amended by adding the at the end 
     the following:
       ``(k) Time-Based Metering and Communications.--Each State 
     regulatory authority shall, not later than twelve (12) months 
     after enactment of this subsection, conduct an investigation 
     and issue a decision whether or not it is appropriate for 
     electric utilities to provide and install time-based meters 
     and communications devices for each of their customers which 
     enable such customers to participate in time-based pricing 
     rate schedules and other demand response programs.''.
       (c) Federal Assistance on Demand Response.--Section 132(a) 
     of the Public Utility Regulatory Polices Act of 1978 (16 
     U.S.C. 2642(a)) is amended by striking ``and'' at the end of 
     paragraph (3), striking the period at the end of paragraph 
     (4) and inserting ``; and'', and by adding the following at 
     the end thereof:
       ``(5) technologies, techniques and rate-making methods 
     related to advanced metering and communications and the use 
     of these technologies, techniques and methods in demand 
     response programs.''.
       (d) Federal Guidance.--Section 132 of the Public Utility 
     Regulatory Policies Act of 1978 (16 U.S.C. 2643) is amended 
     by adding the following at the end thereof:
       ``(d) Demand Response.--The Secretary shall be responsible 
     for each of the following:
       ``(1) Educating consumers on the availability, advantages 
     and benefits of advanced metering and communications 
     technologies including the funding of demonstration or pilot 
     projects.
       ``(2) Working with States, utilities, other energy 
     providers and advanced metering and communications experts to 
     identify and address barriers to the adoption of demand 
     response programs, and
       ``(3) Within 6 months of enactment, provide the Congress 
     with a report that identifies and quantifies the national 
     benefits of demand response and provides policy 
     recommendations as to how to achieve specific levels of such 
     benefits by January 1, 2005.''.
       (e) Demand Response and Regional Coordination.--
       (1) Policy.--It is the policy of the United States to 
     encourage States to coordinate, on a regional basis, State 
     energy policies to provide reliable and affordable demand 
     response services to the public.
       (2) 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--
       (A) identifying the areas with the greatest demand response 
     potential;
       (B) identifying and resolving problems in transmission and 
     distribution networks, including through the use of demand 
     response; and
       (C) developing plans and programs to use demand response to 
     respond to peak demand or emergency needs.
       (3) Report.--The Federal Energy Regulatory Commission shall 
     prepare and publish an annual report, by appropriate region, 
     that assesses demand response resources, including those 
     available from all consumer classes, and which identifies and 
     reviews each of the following:
       (A) Saturation and penetration rate of advanced meters and 
     communications technologies, devices and systems.
       (B) Existing demand response programs and time-based rate 
     programs.
       (C) The annual resource contribution of demand resources, 
     including the prior year and following years.
       (D) The potential for demand response as a quantifiable, 
     reliable resource for regional planning purposes.
       (E) Steps taken to ensure that, in regional transmission 
     planning and operations, that demand resources are provided 
     equitable treatment as a quantifiable, reliable resource 
     relative to the resource obligations of any load-serving 
     entity, transmission provider or transmitting party.
       (f) Cost Recovery of Demand Response Devices.--It is the 
     policy of the United States that time-based pricing and other 
     forms of demand response, whereby electricity customers are 
     provided with electricity price signals and the ability to 
     benefit by responding to them, shall be encouraged and the 
     deployment of such technology and devices that enable 
     electricity customers to participate in such pricing and 
     demand response systems shall be facilitated. It is further 
     the policy of the United States that the benefits of such 
     demand response that accrue to those not deploying such 
     technology and devices, but who are part of the same regional 
     electricity entity, shall be recognized.

                      Subtitle F--Renewable Energy

     SEC. 16071. 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 amended by adding at the end the following:
       ``(14) 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 amended by adding at the end the following:
       ``(l) Net Metering.--In undertaking the consideration and 
     making the determination under section 111 with respect to 
     the standard concerning net metering established by section 
     111(d)(14), the term `net metering service' shall mean a 
     service provided in accordance with the following standards:
       ``(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 service fuel 
     cells or combined heat and power.
       ``(D) The term `net metering' 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.''

     SEC. 16072. 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 ``. If there are 
     insufficient appropriations to make full payments for 
     electric production

[[Page H3138]]

     from all qualified renewable energy facilities in any given 
     year, the Secretary shall assign 60 percent of appropriated 
     funds for that year to facilities that use solar, wind, 
     geothermal, or closed-loop (dedicated energy crops) biomass 
     technologies to generate electricity, and assign the 
     remaining 40 percent to other projects. The Secretary may, 
     after transmitting to the Congress an explanation of the 
     reasons therefor, alter the percentage requirements of the 
     preceding sentence.''.
       (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 ``a not-for-profit electric cooperative, a public 
     utility described in section 115 of the Internal Revenue Code 
     of 1986, 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 of 
     subdivision thereof,''; and
       (2) by inserting ``landfill gas,'' 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 ``after October 1, 2003, and 
     before October 1, 2013''.
       (d) 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,'' after ``wind, biomass,''.
       (e) 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''.
       (f) Authorization of Appropriations.--Section 1212(g) of 
     the Energy Policy Act of 1992 (42 U.S.C. 13317(g)) is amended 
     to read as follows:
       ``(g) 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) Availability of funds.--Funds made available under 
     paragraph (1) shall remain available until expended.''.

     SEC. 16073. RENEWABLE ENERGY ON FEDERAL LANDS.

       (a) Report to Congress.--Within 24 months after the date of 
     enactment of this section, the Secretary of the Interior, in 
     cooperation with the Secretary of Agriculture, shall develop 
     and report to the Congress recommendations on opportunities 
     to develop renewable energy on public lands under the 
     jurisdiction of the Secretary of the Interior and National 
     Forest System lands under the jurisdiction of the Secretary 
     of Agriculture. The report shall include--
       (1) 5-year plans developed by the Secretary of the Interior 
     and the Secretary of Agriculture, respectively, for 
     encouraging the development of wind and solar energy 
     consistent with applicable law and management plans; and
       (2) an analysis of--
       (A) the use of rights-of-ways, leases, or other methods to 
     develop wind and solar energy on such lands;
       (B) the anticipated benefits of grants, loans, tax credits, 
     or other provisions to promote wind and solar energy 
     development on such lands; and
       (C) any issues that the Secretary of the Interior or the 
     Secretary of Agriculture have encountered in managing wind or 
     solar energy projects on such lands, or believe are likely to 
     arise in relation to the development of wind or solar energy 
     on such lands;
       (3) a list, developed in consultation with the Secretary of 
     Energy and the Secretary of Defense, of lands under the 
     jurisdiction of the Department of Energy or Defense that 
     would be suitable for development for wind or solar energy, 
     and any recommended statutory and regulatory mechanisms for 
     such development; and
       (4) any recommendations pertaining to the issues addressed 
     in the report.
       (b) National Academy of Sciences Study.--
       (1) In general.--Within 90 days after the date of the 
     enactment of this Act, the Secretary of the Interior shall 
     contract with the National Academy of Sciences to--
       (A) study the potential for the development of wind, solar, 
     and ocean energy on the Outer Continental Shelf;
       (B) assess existing Federal authorities for the development 
     of such resources; and
       (C) recommend statutory and regulatory mechanisms for such 
     development.
       (2) Transmittal of results.--The results of the study shall 
     be transmitted to the Congress within 24 months after the 
     date of the enactment of this Act.

     SEC. 16074. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

       (a) Resource Assessment.--Not later than 3 months after the 
     date of enactment of this Act, 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 Act, 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 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.

 Subtitle G--Market Transparency, Round Trip Trading Prohibition, and 
                              Enforcement

     SEC. 16081. MARKET TRANSPARENCY RULES.

       Part II of the Federal Power Act is amended by adding the 
     following new section at the end thereof:

     ``SEC. 219. 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 the Commission and the public with access to such 
     information as is necessary or appropriate to facilitate 
     price transparency and participation in markets subject to 
     the Commission's jurisdiction. Such systems shall provide 
     information about the availability and market price of sales 
     of electric energy at wholesale in interstate commerce and 
     transmission of electric energy in interstate commerce to the 
     Commission, State commissions, buyers and sellers of 
     wholesale electric energy, users of transmission services, 
     and the public on a timely basis. The Commission shall have 
     authority to obtain such information from any person, and any 
     entity described in section 201(f), who sells electric energy 
     at wholesale in interstate commerce or provides transmission 
     services in interstate commerce.
       ``(b) Exemptions.--The Commission shall exempt from 
     disclosure information it determines would, if disclosed, (1) 
     be detrimental to the operation of an effective market; or 
     (2) jeopardize system security. This section shall not apply 
     to an entity described in section 212(k)(2)(B) with respect 
     to transactions for the purchase or sale of wholesale 
     electric energy and transmission services within the area 
     described in section 212(k)(2)(A).''.

     SEC. 16082. PROHIBITION ON ROUND TRIP TRADING.

       Part II of the Federal Power Act is amended by adding the 
     following new section at the end thereof:

     ``SEC. 220. PROHIBITION ON ROUND TRIP TRADING.

       ``(a) Prohibition.--It shall be a violation of this Act for 
     any person, and any entity described in section 201(f), 
     willfully and knowingly to enter into any contract or other 
     arrangement to execute a round-trip trade for the purchase or 
     sale of electric energy at wholesale.
       ``(b) Definition of Round-Trip Trade.--For the purposes of 
     this section, the term `round-trip trade' means a 
     transaction, or combination of transactions, in which a 
     person or other entity--
       ``(1) enters into a contract or other arrangement to 
     purchase from, or sell to, any other person or other entity 
     electric energy at wholesale;
       ``(2) simultaneously with entering into the contract 
     described in paragraph (1), arranges a financially offsetting 
     trade with such other person or entity for the same quantity 
     of electric energy so that, collectively, the purchase and 
     sale transactions in themselves result in no financial gain 
     or loss; and
       ``(3) has a specific intent to distort reported revenues, 
     trading volumes, or prices.''.

     SEC. 16083. CONFORMING CHANGES.

       Section 201(e) of the Federal Power Act is amended by 
     striking ``or 212'' and inserting ``212, 215, 216, 217, 218, 
     219, or 220''. Section 201(b)(2) of such Act is amended by 
     striking ``and 212'' and inserting ``212, 215, 216, 217, 218, 
     219, and 220''.

     SEC. 16084. 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) Review of Commission Orders.--Section 313(a) of the 
     Federal Power Act (16 U.S.C. 8251) is amended by inserting 
     ``electric utility,'' after ``person,'' in the first place it 
     appears and by striking ``any person unless such person'' and 
     inserting ``any entity unless such entity''.
       (c) Criminal Penalties.--Section 316 of the Federal Power 
     Act (16 U.S.C. 825o) is amended--
       (1) in subsection (a), by striking ``$5,000'' and inserting 
     ``$1,000,000'', and by striking ``two years'' and inserting 
     ``five years'';
       (2) in subsection (b), by striking ``$500'' and inserting 
     ``$25,000''; and
       (3) by striking subsection (c).
       (d) Civil Penalties.--Section 316A of the Federal Power Act 
     (16 U.S.C. 825-1) is amended--
       (1) in subsections (a) and (b), by striking ``section 211, 
     212, 213, or 214'' each place it appears and inserting ``Part 
     II''; and
       (2) in subsection (b), by striking ``$10,000'' and 
     inserting ``$1,000,000''.

[[Page H3139]]

                    Subtitle H--Consumer Protections

     SEC. 16091. 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'';
       (3) striking ``expiration of such 60-day period'' in the 
     third sentence and inserting ``publication date''; and
       (4) in the fifth sentence after ``rendered by the'' insert 
     ``date 60 days after the''.

     SEC. 16092. JURISDICTION OVER INTERSTATE SALES.

       (a) Scope of Authority.--Section 206 of the Federal Power 
     Act (16 U.S.C. 824e) is amended by adding the following new 
     subsection at the end thereof:
       ``(e)(1) If an entity that is not a public utility 
     (including an entity referred to in section 201(f)) 
     voluntarily makes a spot market sale of electric energy and 
     such sale violates Commission rules in effect at the time of 
     such sale, such entity shall be subject to the Commission's 
     refund authority under this section with respect to such 
     violation.
       ``(2) This section shall not apply to any entity that is 
     either--
       ``(A) an entity described in section 201(f); or
       ``(B) a rural electric cooperative

     that does not sell more than 4,000,000 megawatt hours of 
     electricity per year.
       ``(3) For purposes of this subsection, the term `spot 
     market sale' means an agreement for the sale of electric 
     energy at wholesale in interstate commerce that is for 24 
     hours or less and that is entered into the day of, or the day 
     prior to, delivery.''.
       (b) Conforming Amendments.--(1) Section 206 of the Federal 
     Power Act (16 U.S.C. 824e) is amended as follows:
       (A) In subsection (b), in the seventh sentence, by striking 
     ``the public utility to make''.
       (B) In the first sentence of subsection (a), by striking 
     ``hearing had'' and inserting ``hearing held''.
       (2) Section 201(b)(2) of such Act (16 U.S.C. 824(b)(2)) is 
     amended as follows:
       (A) In the first sentence by striking ``sections 210'' and 
     inserting ``sections 206(f), 210''.
       (B) In the second sentence by striking ``section 210'' and 
     inserting ``section 206(f), 210,''.
       (3) Section 201(e) of the Federal Power Act is amended by 
     striking ``section 210'' and inserting ``section 206(f), 
     210''.
       (c) Uniform Investigation Authority.--Section 307(a) of the 
     Federal Power Act (16 U.S.C. 825f(a)) is amended as follows:
       (1) By inserting ``, electric utility, transmitting 
     utility, or other entity'' after ``person'' each time it 
     appears.
       (2) By striking the period at the end of the first sentence 
     and inserting the following: ``or in obtaining information 
     about the sale of electric energy at wholesale in interstate 
     commerce and the transmission of electric energy in 
     interstate commerce.''.
       (d) Sanctity of Contract.--(1) The Federal Energy 
     Regulatory Commission shall have no authority to abrogate or 
     modify any provision of a contract, except upon a finding, 
     after notice and opportunity for a hearing, that such action 
     is necessary to protect the public interest, unless such 
     contract expressly provides for a different standard of 
     review.
       (2) For purposes of this subsection, a contract is any 
     agreement, in effect and subject to the jurisdiction of the 
     Commission--
       (A) under section 4 of the Natural Gas Act or section 205 
     of the Federal Power Act; and
       (B) that is not for sales in an organized exchange or 
     auction spot market.
       (3) This subsection shall not apply to any contract 
     executed before the date of enactment of this section unless 
     such contract is an interconnection agreement, nor shall this 
     subsection affect the outcome in any proceeding regarding any 
     contract for sales of electric power executed before the date 
     of enactment of this section.

     SEC. 16093. CONSUMER PRIVACY.

       (a) In General.--The Federal Trade Commission shall issue 
     rules protecting the privacy of electric consumers from the 
     disclosure of consumer information obtained in connection 
     with the sale or delivery of electric energy to electric 
     consumers. The Federal Trade Commission shall proceed in 
     accordance with section 553 of title 5, United States Code, 
     when prescribing a rule under this section.
       (b) State Authority.--If the Federal Trade Commission 
     determines that a State's regulations provide equivalent or 
     greater protection than the provisions of this section, such 
     State regulations shall apply in that State in lieu of the 
     regulations issued by the Commission under this section.

     SEC. 16094. UNFAIR TRADE PRACTICES.

       (a) Slamming.--The Federal Trade Commission shall issue 
     rules prohibiting the change of selection of an electric 
     utility except with the informed consent of the electric 
     consumer or if approved by the appropriate State regulatory 
     authority.
       (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.
       (c) Rulemaking.--The Federal Trade Commission shall proceed 
     in accordance with section 553 of title 5, United States 
     Code, when prescribing a rule under this section.
       (d) State Authority.--If the Federal Trade Commission 
     determines that a State's regulations provide equivalent or 
     greater protection than the provisions of this section, such 
     State regulations shall apply in that State in lieu of the 
     regulations issued by the Commission under this section.

          Subtitle I--Merger Review Reform and Accountability

     SEC. 16101. MERGER REVIEW REFORM AND ACCOUNTABILITY.

       (a) Merger Review Reform.--Within 180 days after the date 
     of enactment of this Act, the Secretary of Energy, in 
     consultation with the Federal Energy Regulatory Commission 
     and the Department of Justice, shall prepare, and transmit to 
     the Committee on Energy and Commerce of the House of 
     Representatives and the Committee on Energy and Natural 
     Resources of the Senate each of the following:
       (1) A study of the extent to which the authorities vested 
     in the Federal Energy Regulatory Commission under section 203 
     of the Federal Power Act are duplicative of authorities 
     vested in--
       (A) other agencies of Federal and State government; and
       (B) the Federal Energy Regulatory Commission, including 
     under sections 205 and 206 of the Federal Power Act.
       (2) Recommendations on reforms to the Federal Power Act 
     that would eliminate any unnecessary duplication in the 
     exercise of regulatory authority or unnecessary delays in the 
     approval (or disapproval) of applications for the sale, 
     lease, or other disposition of public utility facilities.
       (b) Merger Review Accountability.--Not later than 1 year 
     after the date of enactment of this Act and annually 
     thereafter, with respect to all orders issued within the 
     preceding year that impose a condition on a sale, lease, or 
     other disposition of public utility facilities under section 
     203(b) of the Federal Power Act, the Federal Energy 
     Regulatory Commission shall transmit a report to the 
     Committee on Energy and Commerce of the House of 
     Representatives and the Committee on Energy and Natural 
     Resources of the Senate explaining each of the following:
       (1) The condition imposed.
       (2) Whether the Commission could have imposed such 
     condition by exercising its authority under any provision of 
     the Federal Power Act other than under section 203(b).
       (3) If the Commission could not have imposed such condition 
     other than under section 203(b), why the Commission 
     determined that such condition was consistent with the public 
     interest.

                 Subtitle J--Study of Economic Dispatch

     SEC. 16111. STUDY ON THE BENEFITS OF ECONOMIC DISPATCH.

       (a) Study.--The Secretary of Energy, in coordination and 
     consultation with the States, shall conduct a study on--
       (1) the procedures currently used by electric utilities to 
     perform economic dispatch,
       (2) identifying possible revisions to those procedures to 
     improve the ability of nonutility generation resources to 
     offer their output for sale for the purpose of inclusion in 
     economic dispatch; and
       (3) the potential benefits to residential, commercial, and 
     industrial electricity consumers nationally and in each state 
     if economic dispatch procedures were revised to improve the 
     ability of nonutility generation resources to offer their 
     output for inclusion in economic dispatch.
       (b) Definition.--The term ``economic dispatch'' when used 
     in this section means the operation of generation facilities 
     to produce energy at the lowest cost to reliably serve 
     consumers, recognizing any operational limits of generation 
     and transmission facilities.
       (c) Report to Congress and the States.--Not later than 90 
     days after the date of enactment of this Act, and on a yearly 
     basis following, the Secretary of Energy shall submit a 
     report to the Congress and the States on the results of the 
     study conducted under subsection (a), including 
     recommendations to the Congress and the States for any 
     suggested legislative or regulatory changes.

                         TITLE VII--MOTOR FUELS

                     Subtitle A--General Provisions

     SEC. 17101. 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 Program.--
       ``(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, including poultry fats and poultry 
     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--

[[Page H3140]]

       ``(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)) and any blending components derived from renewable 
     fuel (provided that only the renewable fuel portion of any 
     such blending component shall be considered part of the 
     applicable volume under the renewable fuel program 
     established by this subsection).
       ``(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 contiguous 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 2005.
       ``(B) Applicable volume.--
       ``(i) Calendar years 2005 through 2015.--For the purpose of 
     subparagraph (A), the applicable volume for any of calendar 
     years 2005 through 2015 shall be determined in accordance 
     with the following table:

                  Applicable volume of renewable fuel

  ``Calendar year:                             (In billions of gallons)
    2005...........................................................2.7 
    2006...........................................................2.7 
    2007...........................................................2.9 
    2008...........................................................2.9 
    2009...........................................................3.4 
    2010...........................................................3.4 
    2011...........................................................3.4 
    2012...........................................................4.2 
    2013...........................................................4.2 
    2014...........................................................4.2 
    2015...........................................................5.0.
       ``(ii) Calendar year 2016 and thereafter.--For the purpose 
     of subparagraph (A), the applicable volume for calendar year 
     2016 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 2015.
       ``(3) Applicable percentages.--Not later than October 31 of 
     each calendar year after 2002, 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 after 2003, determine and publish in the 
     Federal Register, the renewable fuel obligation, on a volume 
     percentage of gasoline basis, applicable to refiners, 
     blenders, 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 2005 through 2015, 
     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--
       ``(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;
       ``(ii) a pattern of excessive seasonal variation described 
     in clause (i) will continue in subsequent calendar years; and
       ``(iii) promulgating regulations or other requirements to 
     impose a 35% or more seasonal use of renewable fuels will not 
     prevent or interfere with the attainment of national ambient 
     air quality standards or significantly increase the price of 
     motor fuels to the consumer.
       ``(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 
     2005 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 have a significant 
     and meaningful adverse impact on the economy or environment 
     of a State, a region, or the United States, or will prevent 
     or interfere with the attainment of a national ambient air 
     quality standard in any area of a State; 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. If the Administrator does not 
     act to approve or disapprove a State petition for a waiver 
     within 90 days, the Administrator shall publish a notice 
     setting forth the reasons for not acting within the required 
     90-day period.
       ``(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 
     2005, 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

[[Page H3141]]

     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 2005. 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) or paragraph (9), pertaining to waivers.
       ``(9) Assessment and waiver.--The Secretary of Energy, in 
     consultation with the Administrator of the Environmental 
     Protection Agency and the Secretary of Agriculture on his own 
     motion, or upon petition of any State shall evaluate the 
     requirement of paragraph (2) and determine, prior to January 
     1, 2007, or prior to January 1 of any subsequent year in 
     which the applicable volume of renewable fuel is increased 
     under paragraph (2)(B), whether the requirement of paragraph 
     (2), including the applicable volume of renewable fuel 
     contained in paragraph (2)(B) should remain in effect, in 
     whole or in part, during 2007 or any year or years subsequent 
     to 2007. In evaluating the requirement of paragraph (2) and 
     in making any determination under this section, the Secretary 
     shall consider the best available information and data 
     collected by accepted methods or best available means 
     regarding--
       ``(A) the capacity of renewable fuel producers to supply an 
     adequate amount of renewable fuel at competitive prices to 
     fulfill the requirement in paragraph (2);
       ``(B) the potential of the requirement in paragraph (2) to 
     significantly raise the price of gasoline, food or heating 
     oil for consumers in any significant area or region of the 
     country above the price that would otherwise apply to such 
     commodities in the absence of the requirement;
       ``(C) the potential of the requirement in paragraph (2) to 
     interfere with the supply of fuel in any significant gasoline 
     market or region of the country, including interference with 
     the efficient operation of refiners, blenders, importers, 
     wholesale suppliers, and retail vendors of gasoline, and 
     other motor fuels; and
       ``(D) the potential of the requirement to cause or promote 
     exceedences of Federal, State, or local air quality 
     standards.

     If the Secretary determines, after public notice and the 
     opportunity for comment, that the requirement of paragraph 
     (2) would have significant and meaningful adverse impact on 
     the supply of fuel and related infrastructure or on the 
     economy, environment, public health or environment of any 
     significant area or region of the country, the Secretary may 
     waive, in whole or in part, the requirement of paragraph (2) 
     in any one year or period of years as well as reduce the 
     applicable volume of renewable fuel contained in paragraph 
     (2)(B) in any one year or period of years.
       ``(10) Small refineries.--
       ``(A) In general.--The requirement of paragraph (2) shall 
     not apply to small refineries until the first calendar year 
     beginning more than 5 years after the first year set forth in 
     the table in paragraph (2)(B)(i). 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) Survey of Renewable Fuel Market.--
       (1) Survey and report.--Not later than December 1, 2006, 
     and annually thereafter, the Administrator of the 
     Environmental Protection Agency (in consultation with the 
     Secretary of Energy acting through the Administrator of the 
     Energy Information Administration) 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.
       (4) Calculation of market shares.--Market shares for 
     conventional gasoline and reformulated gasoline use areas 
     will be calculated on a statewide basis using information 
     collected under paragraph (2) and other information available 
     to the Administrator. Market share information may be based 
     upon gasoline distribution patterns that include multistate 
     use areas.

     SEC. 17102. FUELS SAFE HARBOR.

       (a) In General.--Notwithstanding any other provision of 
     Federal or State law, no renewable fuel, as defined by 
     section 211(o)(1) of the Clean Air Act, or fuel containing 
     MTBE, used or intended to be used as a motor vehicle fuel, 
     nor any motor vehicle fuel containing such renewable fuel or 
     MTBE, shall be deemed defective in design or manufacture by 
     virtue of the fact that it is, or contains, such a renewable 
     fuel or MTBE, if it does not violate a control or prohibition 
     imposed by the Administrator under section 211 of such Act, 
     and the manufacturer is in compliance with all requests for 
     information under subsection (b) of such section 211(b) of 
     the Clean Air Act. If the safe harbor provided by this 
     section does not apply, the existence of a design defect or 
     manufacturing defect shall be determined under otherwise 
     applicable law. Nothing in this paragraph shall be construed 
     to affect the liability of any person for environmental 
     remediation costs, drinking water contamination, negligence, 
     public nuisance or any other liability other than liability 
     for a defect in design or manufacture of a motor vehicle 
     fuel.
       (b) Effective Date.--This section shall be effective as of 
     the date of enactment and shall apply with respect to all 
     claims filed on or after that date.

     SEC. 17103. FINDINGS AND MTBE TRANSITION ASSISTANCE.

       (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 
     would 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 was aware that gasoline and its component 
     additives can and do leak from storage tanks;
       (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) Congress has--
       (A) reconsidered the relative value of the oxygenate 
     requirement for reformulated gasoline; and
       (B) decided to provide for the elimination of the oxygenate 
     requirement for reformulated gasoline and to provide for a 
     renewable content requirement for motor fuel; and
       (7) 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 the elimination of the oxygenate 
     requirement for reformulated gasoline.
       (b) Purposes.--The purpose of this section is to provide 
     assistance to merchant producers of MTBE in making the 
     transition from producing MTBE to producing other fuel 
     additives.
       (c) MTBE Merchant Producer Conversion Assistance.--Section 
     211(c) of the Clean Air Act (42 U.S.C. 7545(c)) is amended by 
     adding at the end the following:
       ``(5) MTBE merchant producer conversion assistance.--

[[Page H3142]]

       ``(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 this 
     subsection--
       ``(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 
     before April 1, 2003 and ceased production at any time after 
     the date of enactment.
       ``(D) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this paragraph $250,000,000 
     for each of fiscal years 2004 through 2006, to remain 
     available until expended.''.
       (d) Effect on State Law.--The amendments made to the Clean 
     Air Act by this title have no effect regarding any available 
     authority of States to limit the use of methyl tertiary butyl 
     ether in motor vehicle fuel.

     SEC. 17104. 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, 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 (ii) 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 either 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 or the adjustment of standards 
     applicable to a specific refinery or importer made under such 
     prior regulations and the Administrator may apply such 
     adjustments to the standards applicable to such refinery or 
     importer under clause (iii)(I) of section 211(k)(1)(B) of the 
     Clean Air Act, except that--
       (1) the Administrator shall revise such adjustments to be 
     based only on calendar years 1999-2000, and
       (2) for adjustments based on toxic air pollutant emissions 
     from reformulated gasoline significantly below the national 
     annual average emissions of toxic air pollutants from all 
     reformulated gasoline, the Administrator may revise such 
     adjustments to take account of the scope of any lawful and 
     enforceable Federal or State prohibition on methyl tertiary 
     butyl ether imposed after the effective date of the enactment 
     of this paragraph, except that any such adjustment shall 
     require such refiner or importer, to the greatest extent 
     practicable, to maintain the reduction achieved during 
     calendar year 1999-2000 in the average annual aggregate 
     emissions of toxic air pollutants from reformulated gasoline 
     produced or distributed by the refinery or importer. Any such 
     adjustment shall not be made at a level below the average 
     percentage of reductions of emissions of toxic air pollutants 
     for reformulated gasoline supplied to PADD I during calendar 
     years 1999-2000.

     SEC. 17105. ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

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

[[Page H3143]]

     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 title VII of the 
     Energy Policy Act of 2003.
       ``(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. 17106. 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) Renewable Fuels Survey.--(1) 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 demand 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 both on a national 
     and regional basis, including--
       ``(A) the quantity of renewable fuels produced;
       ``(B) the quantity of renewable fuels blended;
       ``(C) the quantity of renewable fuels imported;
       ``(D) the quantity of renewable fuels demanded;
       ``(E) market price data; and
       ``(F) such other analyses or evaluations as the 
     Administrator finds is necessary to achieve the purposes of 
     this section.
       ``(2) The Administrator shall also collect or estimate 
     information both on a national and regional basis, pursuant 
     to subparagraphs (A) through (F) of paragraph (1), for the 
     five years prior to implementation of this subsection.
       ``(3) This subsection does not affect the authority of the 
     Administrator to collect data under section 52 of the Federal 
     Energy Administration Act of 1974 (15 U.S.C. 790a).''.

     SEC. 17107. 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 consumers in various States and 
     localities;
       (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 improving air quality at the national, regional and 
     local levels consistent with the attainment of national 
     ambient air quality standards, 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;
       (F) the feasibility of providing incentives, to promote 
     cleaner burning motor vehicle fuel; and
       (G) the extent to which improvements in air quality and any 
     increases or decreases in the price of motor fuel can be 
     projected to result from the Environmental Protection 
     Agency's Tier II requirements for conventional gasoline and 
     vehicle emission systems, the reformulated gasoline program, 
     the renewable content requirements established by this 
     subtitle, State programs regarding gasoline volatility, and 
     any other requirements imposed by States or localities 
     affecting the composition of motor fuel.
       (b) Report.--
       (1) In general.--Not later than December 31, 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. 17108. 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 a 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--MTBE Cleanup

     SEC. 17201. FUNDING FOR MTBE CONTAMINATION.

       Notwithstanding any other provision of law, there is 
     authorized to be appropriated to the Administrator of the 
     United States Environmental Protection Agency from the 
     Leaking Underground Storage Tank Trust

[[Page H3144]]

     Fund not more than $850,000,000 to be used for taking such 
     action limited to site assessment (including exposure 
     assessment), corrective action, inspection of underground 
     storage tank systems, and groundwater monitoring as the 
     Administrator deems necessary to protect human health, 
     welfare, and the environment from underground storage tank 
     releases of fuel containing fuel oxygenates.

                   TITLE VIII--AUTOMOBILE EFFICIENCY

     SEC. 18001. AUTHORIZATION OF APPROPRIATIONS FOR 
                   IMPLEMENTATION AND ENFORCEMENT OF FUEL ECONOMY 
                   STANDARDS.

       In addition to any other funds authorized by law, there are 
     authorized to be appropriated to the National Highway Traffic 
     Safety Administration to implement and enforce average fuel 
     economy standards $5,000,000 for fiscal years 2004 through 
     2006.

     SEC. 18002. STUDY OF FEASIBILITY AND EFFECTS OF REDUCING USE 
                   OF FUEL FOR AUTOMOBILES.

       (a) In General.--Not later than 30 days after the date of 
     the enactment of this Act, the Administrator of the National 
     Highway Traffic Safety Administration shall study the 
     feasibility and effects of reducing by model year 2012, by a 
     significant percentage, the use of fuel for automobiles.
       (b) Subjects of Study.--The study under this section shall 
     include--
       (1) examination of, and recommendation of alternatives to, 
     the policy under current Federal law of establishing average 
     fuel economy standards for automobiles and requiring each 
     automobile manufacturer to comply with average fuel economy 
     standards that apply to the automobiles it manufactures;
       (2) examination of how automobile manufacturers could 
     contribute toward achieving the reduction referred to in 
     subsection (a);
       (3) examination of the potential of fuel cell technology in 
     motor vehicles in order to determine the extent to which such 
     technology may contribute to achieving the reduction referred 
     to in subsection (a); and
       (4) examination of the effects of the reduction referred to 
     in subsection (a) on--
       (A) gasoline supplies;
       (B) the automobile industry, including sales of automobiles 
     manufactured in the United States;
       (C) motor vehicle safety; and
       (D) air quality.
       (c) Report.--The Administrator shall submit to the Congress 
     a report on the findings, conclusion, and recommendations of 
     the study under this section by not later than 1 year after 
     the date of the enactment of this Act.

                          DIVISION B--SCIENCE

     SEC. 20001. PURPOSES.

       The purposes of this division are to--
       (1) contribute to a national energy strategy through an 
     energy research and development program that supports basic 
     energy research and provides mechanisms to develop, 
     demonstrate, and promote the commercial application of new 
     energy technologies in partnership with industry;
       (2) protect and strengthen the Nation's economy, standard 
     of living, and national security by reducing dependence on 
     imported energy;
       (3) meet future needs for energy services at the lowest 
     total cost to the Nation, giving balanced and comprehensive 
     consideration to technologies that improve the efficiency of 
     energy end uses and that enhance energy supply;
       (4) reduce the environmental impacts of energy production, 
     distribution, transportation, and use;
       (5) help increase domestic production of energy, increase 
     the availability of hydrocarbon reserves, and lower energy 
     prices; and
       (6) stimulate economic growth and enhance the ability of 
     United States companies to compete in future markets for 
     advanced energy technologies.

     SEC. 20002. GOALS.

       (a) In General.--In order to achieve the purposes of this 
     division, the Secretary shall conduct a balanced set of 
     programs of energy research, development, demonstration, and 
     commercial application, guided by the following goals:
       (1) Energy efficiency.--
       (A) Buildings.--Develop, in partnership with industry, 
     technologies, designs, and production methods that will 
     enable an average 25 percent increase by 2010 in the energy 
     efficiency of all new buildings, as compared to a new 
     building in 1996.
       (B) Industry.--Develop, in partnership with industry, 
     technologies, designs, and production methods that will 
     enable the energy intensity of the major energy-consuming 
     industries to improve by at least 25 percent by 2010 as 
     compared to 1991.
       (C) Vehicles.--Develop, in partnership with industry, 
     technologies that will enable--
       (i) by 2010, mid-sized passenger automobiles with a fuel 
     economy of 80 miles per gallon;
       (ii) by 2010, light trucks (classes 1 and 2a) with a fuel 
     economy of 60 miles per gallon;
       (iii) by 2010, medium trucks and buses (classes 2b through 
     6 and class 8 transit buses) with a fuel economy, in ton-
     miles per gallon for trucks and passenger miles per gallon 
     for buses, that is 3 times that of year 2000 equivalent 
     vehicles;
       (iv) by 2010, heavy trucks (classes 7 and 8) with a fuel 
     economy, in ton-miles per gallon, that is 2 times that of 
     year 2000 equivalent vehicles; and
       (v) by 2020, meeting the goal of the President's Hydrogen 
     Initiative.
       (2) Distributed energy and electric energy systems.--
       (A) Distributed generation.--Develop, in partnership with 
     industry, technologies based on natural gas that achieve 
     electricity generating efficiencies greater than 40 percent 
     by 2015 for on-site, or distributed, generation technologies.
       (B) Electric energy systems and storage.--Develop, in 
     partnership with industry--
       (i) technologies for generators and transmission, 
     distribution, and storage systems that combine high capacity 
     with high efficiency (particularly for electric transmission 
     facilities in rural and remote areas);
       (ii) new transmission and distribution technologies, 
     including flexible alternating current transmission systems, 
     composite conductor materials, advanced protection devices, 
     and controllers;
       (iii) technologies for interconnection of distributed 
     energy resources with electric power systems;
       (iv) high-temperature superconducting materials for power 
     delivery equipment such as transmission and distribution 
     cables, transformers, and generators; and
       (v) real-time transmission and distribution system control 
     technologies that provide for continual exchange of 
     information between generation, transmission, distribution, 
     and end-user facilities.
       (3) Renewable energy.--
       (A) Wind power.--Develop, in partnership with industry, 
     technologies and designs that will--
       (i) reduce the cost of wind power by 40 percent by 2012 as 
     compared to 2000; and
       (ii) expand utilization of class 3 and 4 winds.
       (B) Photovoltaics.--Develop, in partnership with industry, 
     total photovoltaic systems with installed costs of $5,000 per 
     peak kilowatt by 2005 and $2000 per peak kilowatt by 2015.
       (C) Solar thermal systems.--Develop, in partnership with 
     industry, solar power technologies (including baseload solar 
     power) that combine high-efficiency and high-temperature 
     receivers with advanced thermal storage and power cycles to 
     accommodate peak loads and reduce lifecycle costs.
       (D) Geothermal energy.--Develop, in partnership with 
     industry, technologies and processes based on advanced 
     hydrothermal systems and advanced heat and power systems, 
     including geothermal or ground source heat pump technology, 
     with a specific focus on--
       (i) improving exploration and characterization technology 
     to increase the probability of drilling successful wells from 
     20 percent to 40 percent by 2010;
       (ii) reducing the cost of drilling by 2008 to an average 
     cost of $225 per foot;
       (iii) developing enhanced geothermal systems technology 
     with the potential to double the usable geothermal resource 
     base, as compared to the date of enactment of this Act; and
       (iv) reducing the cost of installing the ground loop of 
     ground-source heat pumps by 30 percent by 2007 compared to 
     the cost in 2000.
       (E) Biomass-based power systems.--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, through co-production of 
     fuels, chemicals, and other products under subparagraph (F).
       (F) Biofuels.--Develop, in partnership with industry, new 
     and emerging technologies and biotechnology processes capable 
     of making--
       (i) gaseous and liquid biofuels that are price-competitive, 
     by 2010, with gasoline or diesel in either internal 
     combustion engines or fuel cells; and
       (ii) biofuels, biobased polymers, and chemicals, including 
     those derived from lignocellulosic feedstock, with particular 
     emphasis on developing biorefineries that use enzyme-based 
     processing systems.
       (G) Hydropower.--Develop, in partnership with industry, a 
     new generation of turbine technologies that will increase 
     generating capacity and be less damaging to fish and aquatic 
     ecosystems.
       (4) Fossil energy.--
       (A) Power generation.--Develop, in partnership with 
     industry, technologies, including precombustion technologies, 
     by 2015 with the capability of realizing--
       (i) electricity generating efficiencies of 75 percent 
     (lower heating value) for natural gas; and
       (ii) widespread commercial application of combined heat and 
     power with thermal efficiencies of more than 85 percent 
     (higher heating value).
       (B) Offshore oil and gas resources.--Develop, in 
     partnership with industry, technologies to--
       (i) extract methane hydrates in coastal waters of the 
     United States; and
       (ii) develop natural gas and oil reserves in the ultra-
     deepwater of the Central and Western Gulf of Mexico, with a 
     focus on improving, while lowering costs and reducing 
     environmental impacts, the safety and efficiency of--

       (I) the recovery of ultra-deepwater resources; and
       (II) sub-sea production technology used for such recovery.

[[Page H3145]]

       (C) Onshore oil and gas resources.--Advance the science and 
     technology available to domestic onshore petroleum producers, 
     particularly independent producers of oil or gas, through--
       (i) advances in technology for exploration and production 
     of domestic petroleum resources, particularly those not 
     accessible with current technology;
       (ii) improvement in the ability to extract hydrocarbons 
     (including heavy oil) from known reservoirs and classes of 
     reservoirs; and
       (iii) development of technologies and practices that reduce 
     the impact on the environment from petroleum exploration and 
     production.
       (D) Transportation fuels.--Increase the availability of 
     transportation fuels by focusing research on--
       (i) reducing the cost of producing transportation fuels 
     from coal and natural gas; and
       (ii) indirect liquefaction of coal and biomass.
       (5) Nuclear energy.--
       (A) Existing reactors.--Support research to extend the 
     lifetimes of existing United States nuclear power reactors, 
     and increase their reliability while optimizing their current 
     operations for greater efficiencies.
       (B) Advanced reactors.--Develop, in partnership with 
     industry--
       (i) advanced, efficient, lower cost, and passively safe 
     reactor designs;
       (ii) proliferation-resistant and high-burn-up nuclear 
     fuels; and
       (iii) technologies to minimize generation of radioactive 
     materials and improve the management of nuclear waste.
       (C) Nuclear scientists and engineers.--Attract new students 
     and faculty to the nuclear sciences, nuclear engineering, and 
     related fields (including health physics, nuclear medicine, 
     nuclear chemistry, and radiochemistry).
       (6) Hydrogen.--Carry out programs related to hydrogen in 
     the Fossil Fuel Program and the Nuclear Energy Program.
       (b) Review and Assessment of Goals.--
       (1) Evaluation and modification.--Based on amounts 
     appropriated and developments in science and technology, the 
     Secretary shall evaluate the goals set forth in subsection 
     (a) at least once every 5 years, and shall report to the 
     Congress any proposed modifications to the goals.
       (2) Consultation.--In evaluating and proposing 
     modifications to the goals as provided in paragraph (1), the 
     Secretary shall solicit public input.
       (3) Public comment.--(A) After consultation under paragraph 
     (2), the Secretary shall publish in the Federal Register a 
     set of draft modifications to the goals for public comment.
       (B) Not later than 60 days after the date of publication of 
     draft modifications under subparagraph (A), and after 
     consideration of any public comments received, the Secretary 
     shall publish the final modifications, including a summary of 
     the public comments received, in the Federal Register.
       (4) Effective date.--No modification to goals under this 
     section shall take effect before the date which is 5 years 
     after the date of enactment of this Act.
       (c) Effect of Goals.--(1) Nothing in paragraphs (1) through 
     (6) of subsection (a), or any subsequent modification to the 
     goals therein pursuant to subsection (b), shall--
       (A) create any new--
       (i) authority for any Federal agency; or
       (ii) requirement for any other person;
       (B) be used by a Federal agency to support the 
     establishment of regulatory standards or regulatory 
     requirements; or
       (C) alter the authority of the Secretary to make grants or 
     other awards.
       (2) Nothing in this subsection shall be construed to limit 
     the authority of the Secretary to impose conditions on grants 
     or other awards based on the goals in subsection (a) or any 
     subsequent modification thereto.

     SEC. 20003. DEFINITIONS.

       For purposes of this division:
       (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) Independent producer of oil or gas.--
       (A) In general.--The term ``independent producer of oil or 
     gas'' means any person who produces oil or gas other than a 
     person to whom subsection (c) of section 613A of the Internal 
     Revenue Code of 1986 does not apply by reason of paragraph 
     (2) (relating to certain retailers) or paragraph (4) 
     (relating to certain refiners) of section 613A(d) of such 
     Code.
       (B) Rules for applying paragraphs (2) and (4) of section 
     613a(d).--For purposes of subparagraph (A), paragraphs (2) 
     and (4) of section 613A(d) of the Internal Revenue Code of 
     1986 shall be applied by substituting ``calendar year'' for 
     ``taxable year'' each place it appears in such paragraphs.
       (4) 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)).
       (5) Joint venture.--The term ``joint venture'' has the 
     meaning given that term under section 2 of the National 
     Cooperative Research and Production Act of 1993 (15 U.S.C. 
     4301).
       (6) National laboratory.--The term ``National Laboratory'' 
     means any of the following laboratories owned by the 
     Department:
       (A) Ames National Laboratory.
       (B) Argonne National Laboratory.
       (C) Brookhaven National Laboratory.
       (D) Fermi National Laboratory.
       (E) Idaho National Engineering and Environmental 
     Laboratory.
       (F) Lawrence Berkeley National Laboratory.
       (G) Lawrence Livermore National Laboratory.
       (H) Los Alamos National Laboratory.
       (I) National Energy Technology Laboratory.
       (J) National Renewable Energy Laboratory.
       (K) Oak Ridge National Laboratory.
       (L) Pacific Northwest National Laboratory.
       (M) Princeton Plasma Physics Laboratory.
       (N) Sandia National Laboratories.
       (O) Thomas Jefferson National Accelerator Facility.
       (7) Nonmilitary energy laboratory.--The term ``nonmilitary 
     energy laboratory'' means any of the following laboratories 
     of the Department:
       (A) Ames National Laboratory.
       (B) Argonne National Laboratory.
       (C) Brookhaven National Laboratory.
       (D) Fermi National Laboratory.
       (E) Lawrence Berkeley National Laboratory.
       (F) Oak Ridge National Laboratory.
       (G) Pacific Northwest National Laboratory.
       (H) Princeton Plasma Physics Laboratory.
       (I) Stanford Linear Accelerator Center.
       (J) Thomas Jefferson National Accelerator Facility.
       (8) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (9) Single-purpose research facility.--The term ``single-
     purpose research facility'' means any of the following 
     primarily single-purpose entities owned by the Department:
       (A) East Tennessee Technology Park.
       (B) Fernald Environmental Management Project.
       (C) Kansas City Plant.
       (D) Nevada Test Site.
       (E) New Brunswick Laboratory.
       (F) Pantex Weapons Facility.
       (G) Savannah River Technology Center.
       (H) Stanford Linear Accelerator Center.
       (I) Y-12 facility at Oak Ridge National Laboratory.
       (J) Waste Isolation Pilot Plant.
       (K) Any other similar organization of the Department 
     designated by the Secretary that engages in technology 
     transfer, partnering, or licensing activities.

                   TITLE I--RESEARCH AND DEVELOPMENT

                     Subtitle A--Energy Efficiency

                PART 1--AUTHORIZATION OF APPROPRIATIONS

     SEC. 21101. ENERGY EFFICIENCY.

       (a) In General.--The following sums are authorized to be 
     appropriated to the Secretary for energy efficiency and 
     conservation research, development, demonstration, and 
     commercial application activities, including activities 
     authorized under this subtitle:
       (1) For fiscal year 2004, $616,000,000.
       (2) For fiscal year 2005, $695,000,000.
       (3) For fiscal year 2006, $772,000,000.
       (4) For fiscal year 2007, $865,000,000.
       (b) Allocations.--From amounts authorized under subsection 
     (a), the following sums are authorized:
       (1) Lighting systems.--For activities under section 21111, 
     $50,000,000 for each of fiscal years 2004 through 2007.
       (2) Electric motor control technology.--For activities 
     under section 21122, $2,000,000 for each of fiscal years 2004 
     through 2007.
       (3) Secondary electric vehicle battery use program.--For 
     activities under section 21132--
       (A) for fiscal year 2004, $4,000,000;
       (B) for fiscal year 2005, $7,000,000;
       (C) for fiscal year 2006, $7,000,000; and
       (D) for fiscal year 2007, $7,000,000.
       (4) Energy efficiency science initiative.--For activities 
     under section 21141--
       (A) for fiscal year 2004, $20,000,000;
       (B) for fiscal year 2005, $25,000,000;
       (C) for fiscal year 2006, $30,000,000; and
       (D) for fiscal year 2007, $35,000,000.
       (c) Extended Authorization.--There are authorized to be 
     appropriated to the Secretary for activities under section 
     21111, $50,000,000 for each of fiscal years 2008 through 
     2012.
       (d) Limits on Use of Funds.--None of the funds authorized 
     to be appropriated under this section may be used for--
       (1) the promulgation and implementation of energy 
     efficiency regulations;
       (2) the Weatherization Assistance Program under part A of 
     title IV of the Energy Conservation and Production Act;
       (3) the State Energy Program under part D of title III of 
     the Energy Policy and Conservation Act; or
       (4) the Federal Energy Management Program under part 3 of 
     title V of the National Energy Conservation Policy Act.

                        PART 2--LIGHTING SYSTEMS

     SEC. 21111. NEXT GENERATION LIGHTING INITIATIVE.

       (a) In General.--The Secretary shall carry out a Next 
     Generation Lighting Initiative in accordance with this 
     section to support research, development, demonstration, and 
     commercial application activities related to advanced solid-
     state lighting technologies based on white light emitting 
     diodes.

[[Page H3146]]

       (b) Objectives.--The objectives of the initiative shall 
     be--
       (1) to develop, by 2012, 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) to develop an inorganic white light emitting diode that 
     has an efficiency of 160 lumens per watt and a 10-year 
     lifetime; and
       (3) 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, such as mercury, 
     typical of fluorescent lamps.
       (c) Fundamental Research.--
       (1) Consortium.--The Secretary shall carry out the 
     fundamental research activities of the Next Generation 
     Lighting Initiative through a private consortium (which may 
     include private firms, trade associations and institutions of 
     higher education), which the Secretary shall select through a 
     competitive process. Each proposed consortium shall submit to 
     the Secretary such information as the Secretary may require, 
     including a program plan agreed to by all participants of the 
     consortium.
       (2) Joint venture.--The consortium shall be structured as a 
     joint venture among the participants of the consortium. The 
     Secretary shall serve on the governing council of the 
     consortium.
       (3) Eligibility.--To be eligible to be selected as the 
     consortium under paragraph (1), an applicant must be broadly 
     representative of United States solid-state lighting 
     research, development, and manufacturing expertise as a 
     whole.
       (4) Grants.--(A) The Secretary shall award grants for 
     fundamental research to the consortium, which the consortium 
     may disburse to researchers, including those who are not 
     participants of the consortium.
       (B) To receive a grant, the consortium must provide a 
     description to the Secretary of the proposed research and 
     list the parties that will receive funding.
       (C) Grants shall be matched by the consortium pursuant to 
     section 21802.
       (5) National laboratories.--National Laboratories may 
     participate in the research described in this section, and 
     may receive funds from the consortium.
       (6) Intellectual property.--Participants in the consortium 
     and the Federal Government shall have royalty-free 
     nonexclusive rights to use intellectual property derived from 
     research funded pursuant to this subsection.
       (d) Development, Demonstration, and Commercial 
     Application.--The Secretary shall carry out the development, 
     demonstration, and commercial application activities of the 
     Next Generation Lighting Initiative through awards to private 
     firms, trade associations, and institutions of higher 
     education. In selecting awardees, the Secretary may give 
     preference to members of the consortium selected pursuant to 
     subsection (c).
       (e) Plans and Assessments.--(1) The consortium shall 
     formulate an annual operating plan which shall include 
     research priorities, technical milestones, and plans for 
     technology transfer, and which shall be subject to approval 
     by the Secretary.
       (2) The Secretary shall enter into an arrangement with the 
     National Academy of Sciences to conduct periodic reviews of 
     the Next Generation Lighting Initiative. The Academy shall 
     review the research priorities, technical milestones, and 
     plans for technology transfer established under paragraph (1) 
     and evaluate the progress toward achieving them. The 
     Secretary shall consider the results of such reviews in 
     evaluating the plans submitted under paragraph (1).
       (f) Audit.--The Secretary shall retain an independent, 
     commercial auditor to perform an audit of the consortium to 
     determine the extent to which the funds authorized by this 
     section have been expended in a manner consistent with the 
     purposes of this section. The auditor shall transmit a report 
     annually to the Secretary, who shall transmit the report to 
     the Congress, along with a plan to remedy any deficiencies 
     cited in the report.
       (g) Sunset.--The Next Generation Lighting Initiative shall 
     terminate no later than September 30, 2013.
       (h) Definitions.--As used 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) Fundamental research.--The term ``fundamental 
     research'' includes basic research on both solid-state 
     materials and manufacturing processes.
       (3) 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.
       (4) 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.

                           PART 3--BUILDINGS

     SEC. 21121. NATIONAL BUILDING PERFORMANCE INITIATIVE.

       (a) Interagency Group.--Not later than 3 months after the 
     date of enactment of this Act, the Director of the Office of 
     Science and Technology Policy shall establish an interagency 
     group to develop, in coordination with the advisory committee 
     established under subsection (e), a National Building 
     Performance Initiative (in this section referred to as the 
     ``Initiative''). The interagency group shall be cochaired by 
     appropriate officials of the Department and the Department of 
     Commerce, who shall jointly arrange for the provision of 
     necessary administrative support to the group.
       (b) Integration of Efforts.--The Initiative, working with 
     the National Institute of Building Sciences, shall integrate 
     Federal, State, and voluntary private sector efforts to 
     reduce the costs of construction, operation, maintenance, and 
     renovation of commercial, industrial, institutional, and 
     residential buildings.
       (c) Plan.--Not later than 1 year after the date of 
     enactment of this Act, the interagency group shall submit to 
     Congress a plan for carrying out the appropriate Federal role 
     in the Initiative. The plan shall be based on whole building 
     principles and shall include--
       (1) research, development, demonstration, and commercial 
     application of systems and materials for new construction and 
     retrofit relating to the building envelope and building 
     system components; and
       (2) the collection, analysis, and dissemination of research 
     results and other pertinent information on enhancing building 
     performance to industry, government entities, and the public.
       (d) Department of Energy Role.--Within the Federal portion 
     of the Initiative, the Department shall be the lead agency 
     for all aspects of building performance related to use and 
     conservation of energy.
       (e) Advisory Committee.--
       (1) Establishment.--The Director of the Office of Science 
     and Technology Policy shall establish an advisory committee 
     to--
       (A) analyze and provide recommendations on potential 
     private sector roles and participation in the Initiative; and
       (B) review and provide recommendations on the plan 
     described in subsection (c).
       (2) Membership.--Membership of the advisory committee shall 
     include representatives with a broad range of appropriate 
     expertise, including expertise in--
       (A) building research and technology;
       (B) architecture, engineering, and building materials and 
     systems; and
       (C) the residential, commercial, and industrial sectors of 
     the construction industry.
       (f) Construction.--Nothing in this section provides any 
     Federal agency with new authority to regulate building 
     performance.

     SEC. 21122. ELECTRIC MOTOR CONTROL TECHNOLOGY.

       The Secretary shall conduct a research, development, 
     demonstration, and commercial application program on advanced 
     control devices to improve the energy efficiency of electric 
     motors used in heating, ventilation, air conditioning, and 
     comparable systems.

                            PART 4--VEHICLES

     SEC. 21131. DEFINITIONS.

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

     SEC. 21132. ESTABLISHMENT OF SECONDARY ELECTRIC VEHICLE 
                   BATTERY USE PROGRAM.

       (a) Program.--The Secretary shall establish and conduct a 
     research, development, demonstration, and commercial 
     application program for the secondary use of batteries. Such 
     program shall be--
       (1) designed to demonstrate the use of batteries in 
     secondary application, including utility and commercial power 
     storage and power quality;
       (2) structured to evaluate the performance, including 
     useful service life and costs, of such batteries in field 
     operations, and evaluate the necessary supporting 
     infrastructure, including reuse and disposal of batteries; 
     and
       (3) coordinated with ongoing secondary battery use programs 
     at the National Laboratories and in industry.
       (b) Solicitation.--(1) Not later than 6 months after the 
     date of the enactment of this Act, the Secretary shall 
     solicit proposals to demonstrate the secondary use of 
     batteries and associated equipment and supporting 
     infrastructure in geographic locations throughout the United 
     States. The Secretary may make additional solicitations for 
     proposals if the Secretary determines that such solicitations 
     are necessary to carry out this section.
       (2)(A) Proposals submitted in response to a solicitation 
     under this section shall include--
       (i) a description of the project, including the batteries 
     to be used in the project, the proposed locations and 
     applications for the batteries, the number of batteries to be 
     demonstrated, and the type, characteristics, and estimated 
     life-cycle costs of the batteries compared to other energy 
     storage devices currently used;
       (ii) the contribution, if any, of State or local 
     governments and other persons to the demonstration project;
       (iii) the type of associated equipment and supporting 
     infrastructure to be demonstrated; and

[[Page H3147]]

       (iv) any other information the Secretary considers 
     appropriate.
       (B) If the proposal includes a lease arrangement, the 
     proposal shall indicate the terms of such lease arrangement 
     for the batteries and associated equipment.
       (c) Selection of Proposals.--(1)(A) The Secretary shall, 
     not later than 3 months after the closing date established by 
     the Secretary for receipt of proposals under subsection (b), 
     select at least 5 proposals to receive financial assistance 
     under this section.
       (B) No one project selected under this section shall 
     receive more than 25 percent of the funds authorized under 
     this section. No more than 3 projects selected under this 
     section shall demonstrate the same battery type.
       (2) In selecting a proposal under this section, the 
     Secretary shall consider--
       (A) the ability of the proposer to acquire the batteries 
     and associated equipment and to successfully manage and 
     conduct the demonstration project, including satisfying the 
     reporting requirements set forth in paragraph (3)(B);
       (B) the geographic and climatic diversity of the projects 
     selected;
       (C) the long-term technical and competitive viability of 
     the batteries to be used in the project and of the original 
     manufacturer of such batteries;
       (D) the suitability of the batteries for their intended 
     uses;
       (E) the technical performance of the batteries, including 
     the expected additional useful life and the batteries' 
     ability to retain energy;
       (F) the environmental effects of the use of and disposal of 
     the batteries proposed to be used in the project selected;
       (G) the extent of involvement of State or local government 
     and other persons in the demonstration project and whether 
     such involvement will--
       (i) permit a reduction of the Federal cost share per 
     project; or
       (ii) otherwise be used to allow the Federal contribution to 
     be provided to demonstrate a greater number of batteries; and
       (H) such other criteria as the Secretary considers 
     appropriate.
       (3) Conditions.--The Secretary shall require that--
       (A) as a part of a demonstration project, the users of the 
     batteries provide to the proposer information regarding the 
     operation, maintenance, performance, and use of the 
     batteries, and the proposer provide such information to the 
     battery manufacturer, for 3 years after the beginning of the 
     demonstration project;
       (B) the proposer provide to the Secretary such information 
     regarding the operation, maintenance, performance, and use of 
     the batteries as the Secretary may request;
       (C) the proposer provide to the Secretary such information 
     regarding the disposal of the batteries as the Secretary may 
     require to ensure that the proposer disposes of the batteries 
     in accordance with applicable law; and
       (D) the proposer provide at least 50 percent of the costs 
     associated with the proposal.

              PART 5--ENERGY EFFICIENCY SCIENCE INITIATIVE

     SEC. 21141. ENERGY EFFICIENCY SCIENCE INITIATIVE.

       (a) Establishment.--The Secretary shall establish 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 shall submit to the Congress, 
     along with the President's annual budget request under 
     section 1105(a) of title 31, United States Code, a 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.

          PART 6--ADVANCED ENERGY TECHNOLOGY TRANSFER CENTERS

     SEC. 21151. ADVANCED ENERGY TECHNOLOGY TRANSFER CENTERS.

       (a) Grants.--Not later than 18 months after the date of the 
     enactment of this Act, the Secretary shall make grants to 
     nonprofit institutions, State and local governments, or 
     universities (or consortia thereof), to establish a 
     geographically dispersed network of Advanced Energy 
     Technology Transfer Centers, to be located in areas the 
     Secretary determines have the greatest need of the services 
     of such Centers.
       (b) Activities.--(1) Each Center shall operate a program to 
     encourage demonstration and commercial application of 
     advanced energy methods and technologies through education 
     and outreach to building and industrial professionals, and to 
     other individuals and organizations with an interest in 
     efficient energy use.
       (2) Each Center shall establish an advisory panel to advise 
     the Center on how best to accomplish the activities under 
     paragraph (1).
       (c) Application.--A person seeking a grant under this 
     section shall submit to the Secretary an application in such 
     form and containing such information as the Secretary may 
     require. The Secretary may award a grant under this section 
     to an entity already in existence if the entity is otherwise 
     eligible under this section.
       (d) Selection Criteria.--The Secretary shall award grants 
     under this section on the basis of the following criteria, at 
     a minimum:
       (1) The ability of the applicant to carry out the 
     activities in subsection (b).
       (2) The extent to which the applicant will coordinate the 
     activities of the Center with other entities, such as State 
     and local governments, utilities, and educational and 
     research institutions.
       (e) Matching Funds.--The Secretary shall require a non-
     Federal matching requirement of at least 50 percent of the 
     costs of establishing and operating each Center.
       (f) Advisory Committee.--The Secretary shall establish an 
     advisory committee to advise the Secretary on the 
     establishment of Centers under this section. The advisory 
     committee shall be composed of individuals with expertise in 
     the area of advanced energy methods and technologies, 
     including at least 1 representative from--
       (1) State or local energy offices;
       (2) energy professionals;
       (3) trade or professional associations;
       (4) architects, engineers, or construction professionals;
       (5) manufacturers;
       (6) the research community; and
       (7) nonprofit energy or environmental organizations.
       (g) Definitions.--For purposes of this section--
       (1) the term ``advanced energy methods and technologies'' 
     means all methods and technologies that promote energy 
     efficiency and conservation, including distributed generation 
     technologies, and life-cycle analysis of energy use;
       (2) the term ``Center'' means an Advanced Energy Technology 
     Transfer Center established pursuant to this section; and
       (3) the term ``distributed generation'' means an electric 
     power generation facility that is designed to serve retail 
     electric consumers at or near the facility site.

       Subtitle B--Distributed Energy and Electric Energy Systems

                PART 1--AUTHORIZATION OF APPROPRIATIONS

     SEC. 21201. DISTRIBUTED ENERGY AND ELECTRIC ENERGY SYSTEMS.

       (a) In General.--The following sums are authorized to be 
     appropriated to the Secretary for distributed energy and 
     electric energy systems activities, including activities 
     authorized under this subtitle:
       (1) For fiscal year 2004, $190,000,000.
       (2) For fiscal year 2005, $200,000,000.
       (3) For fiscal year 2006, $220,000,000.
       (4) For fiscal year 2007, $240,000,000.
       (b) Micro-Cogeneration Energy Technology.--From amounts 
     authorized under subsection (a), the following sums shall be 
     available for activities under section 21213:
       (1) For fiscal year 2004, $5,000,000.
       (2) For fiscal year 2005, $5,500,000.
       (3) For fiscal year 2006, $6,000,000.
       (4) For fiscal year 2007, $6,500,000.

                       PART 2--DISTRIBUTED POWER

     SEC. 21211. STRATEGY.

       (a) Requirement.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall develop and 
     transmit to the Congress a strategy for a comprehensive 
     research, development, demonstration, and commercial 
     application program to develop hybrid distributed power 
     systems that combine--
       (1) one or more renewable electric power generation 
     technologies of 10 megawatts or less located near the site of 
     electric energy use; and
       (2) nonintermittent electric power generation technologies 
     suitable for use in a distributed power system.
       (b) Contents.--The strategy shall--
       (1) identify the needs best met with such hybrid 
     distributed power systems and the technological barriers to 
     the use of such systems;
       (2) provide for the development of methods to design, test, 
     integrate into systems, and operate such hybrid distributed 
     power systems;
       (3) include, as appropriate, research, development, 
     demonstration, and commercial application on related 
     technologies needed for the adoption of such hybrid 
     distributed power systems, including energy storage devices 
     and environmental control technologies;
       (4) include research, development, demonstration, and 
     commercial application of interconnection technologies for 
     communications and controls of distributed generation 
     architectures, particularly technologies promoting real-time 
     response to power market information and physical conditions 
     on the electrical grid; and
       (5) describe how activities under the strategy will be 
     integrated with other research, development, demonstration, 
     and commercial application activities supported by the 
     Department of Energy related to electric power technologies.

     SEC. 21212. HIGH POWER DENSITY INDUSTRY PROGRAM.

       The Secretary shall establish a comprehensive research, 
     development, demonstration, and commercial application 
     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.

[[Page H3148]]

     SEC. 21213. MICRO-COGENERATION ENERGY TECHNOLOGY.

       The Secretary shall make competitive, merit-based grants to 
     consortia for the development of micro-cogeneration energy 
     technology. The consortia shall explore the use of small-
     scale combined heat and power in residential heating 
     appliances.

                      PART 3--TRANSMISSION SYSTEMS

     SEC. 21221. TRANSMISSION INFRASTRUCTURE SYSTEMS RESEARCH, 
                   DEVELOPMENT, DEMONSTRATION, AND COMMERCIAL 
                   APPLICATION.

       (a) Program Authorized.--The Secretary shall develop and 
     implement a comprehensive research, development, 
     demonstration, and commercial application program to promote 
     improved reliability and efficiency of electrical 
     transmission systems. Such program may include--
       (1) advanced energy technologies, materials, and systems;
       (2) advanced grid reliability and efficiency technology 
     development;
       (3) technologies contributing to significant load 
     reductions;
       (4) advanced metering, load management, and control 
     technologies;
       (5) technologies to enhance existing grid components;
       (6) the development and use of high-temperature 
     superconductors to--
       (A) enhance the reliability, operational flexibility, or 
     power-carrying capability of electric transmission or 
     distribution systems; or
       (B) increase the efficiency of electric energy generation, 
     transmission, distribution, or storage systems;
       (7) integration of power systems, including systems to 
     deliver high-quality electric power, electric power 
     reliability, and combined heat and power;
       (8) any other infrastructure technologies, as appropriate; 
     and
       (9) technology transfer and education.
       (b) Program Plan.--Not later than 1 year after the date of 
     the enactment of this Act, the Secretary, in consultation 
     with other appropriate Federal agencies, shall prepare and 
     transmit to Congress a 5-year program plan to guide 
     activities under this section. In preparing the program plan, 
     the Secretary shall consult with utilities, energy services 
     providers, manufacturers, institutions of higher education, 
     other appropriate State and local agencies, environmental 
     organizations, professional and technical societies, and any 
     other persons the Secretary considers appropriate.
       (c) Report.--Not later than 2 years after the transmittal 
     of the plan under subsection (b), the Secretary shall 
     transmit a report to Congress describing the progress made 
     under this section and identifying any additional resources 
     needed to continue the development and commercial application 
     of transmission infrastructure technologies.

                      Subtitle C--Renewable Energy

                PART 1--AUTHORIZATION OF APPROPRIATIONS

     SEC. 21301. RENEWABLE ENERGY.

       (a) In General.--The following sums are authorized to be 
     appropriated to the Secretary for renewable energy research, 
     development, demonstration, and commercial application 
     activities, including activities authorized under this 
     subtitle:
       (1) For fiscal year 2004, $380,000,000.
       (2) For fiscal year 2005, $420,000,000.
       (3) For fiscal year 2006, $460,000,000.
       (4) For fiscal year 2007, $499,000,000.
       (b) Bioenergy.--From the amounts authorized under 
     subsection (a), the following sums are authorized to be 
     appropriated to carry out section 21311 and section 21706:
       (1) For fiscal year 2004, $135,425,000.
       (2) For fiscal year 2005, $155,600,000.
       (3) For fiscal year 2006, $167,650,000.
       (4) For fiscal year 2007, $180,000,000.
       (c) Public Buildings.--From the amounts authorized under 
     subsection (a), $30,000,000 for each of the fiscal years 2004 
     through 2007 are authorized to be appropriated to carry out 
     section 21322.
       (d) Limits on Use of Funds.--
       (1) Exclusion.--None of the funds authorized to be 
     appropriated under this section may be used for Renewable 
     Support and Implementation.
       (2) Bioenergy.--Of the funds authorized under subsection 
     (b), not less than $5,000,000 for each fiscal year shall be 
     made available for grants to Historically Black Colleges and 
     Universities, Tribal Colleges, and Hispanic-Serving 
     Institutions.
       (3) Rural and remote locations.--In carrying out this 
     section, the Secretary, in consultation with the Secretary of 
     Agriculture, shall demonstrate 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.
       (4) Regional field verification.--Of the funds authorized 
     under subsection (a), not less than $4,000,000 for each 
     fiscal year shall be made available for the Regional Field 
     Verification Program of the Department.
       (5) Hydropower demonstration projects.--Of the funds 
     authorized under subsection (a), such sums as may be 
     necessary shall be made available for demonstration projects 
     of off-stream pumped storage hydropower.

                           PART 2--BIOENERGY

     SEC. 21311. BIOENERGY PROGRAMS.

       The Secretary shall conduct a program of research, 
     development, demonstration, and commercial application for 
     bioenergy, including--
       (1) biopower energy systems;
       (2) biofuels;
       (3) integrated applications of both biopower and biofuels;
       (4) cross-cutting research and development in feedstocks; 
     and
       (5) economic analysis.

                     PART 3--MISCELLANEOUS PROJECTS

     SEC. 21321. MISCELLANEOUS PROJECTS.

       (a) Programs.--The Secretary shall conduct research, 
     development, demonstration, and commercial application 
     programs for--
       (1) ocean energy, including wave energy;
       (2) the combined use of renewable energy technologies with 
     one another and with other energy technologies, including the 
     combined use of wind power and coal gasification 
     technologies; and
       (3) hydrogen carrier fuels.
       (b) Study.--(1) The Secretary shall enter into an 
     arrangement with the National Academy of Sciences to conduct 
     a study on--
       (A) the feasibility of various methods of renewable 
     generation of energy from the ocean, including energy from 
     waves, tides, currents, and thermal gradients; and
       (B) the research, development, demonstration, and 
     commercial application activities required to make marine 
     renewable energy generation competitive with other forms of 
     electricity generation.
       (2) Not later than 1 year after the date of the enactment 
     of this Act, the Secretary shall transmit the study to the 
     Congress along with the Secretary's recommendations for 
     implementing the results of the study.

     SEC. 21322. RENEWABLE ENERGY IN PUBLIC BUILDINGS.

       (a) Demonstration and Technology Transfer Program.--The 
     Secretary shall establish a program for the demonstration of 
     innovative technologies for solar and other renewable energy 
     sources in buildings owned or operated by a State or local 
     government, and for the dissemination of information 
     resulting from such demonstration to interested parties.
       (b) Limit on Federal Funding.--The Secretary shall provide 
     under this section no more than 40 percent of the incremental 
     costs of the solar or other renewable energy source project 
     funded.
       (c) Requirement.--As part of the application for awards 
     under this section, the Secretary shall require all 
     applicants--
       (1) to demonstrate a continuing commitment to the use of 
     solar and other renewable energy sources in buildings they 
     own or operate; and
       (2) to state how they expect any award to further their 
     transition to the significant use of renewable energy.

                       Subtitle D--Nuclear Energy

                PART 1--AUTHORIZATION OF APPROPRIATIONS

     SEC. 21401. NUCLEAR ENERGY.

       (a) In General.--The following sums are authorized to be 
     appropriated to the Secretary for nuclear energy research, 
     development, demonstration, and commercial application 
     activities, including activities authorized under this 
     subtitle:
       (1) For fiscal year 2004, $388,000,000.
       (2) For fiscal year 2005, $416,000,000.
       (3) For fiscal year 2006, $445,000,000.
       (4) For fiscal year 2007, $474,000,000.
       (b) Allocations.--From amounts authorized under subsection 
     (a), the following sums are authorized:
       (1) Nuclear infrastructure support.--For activities under 
     section 21411(e)--
       (A) for fiscal year 2004, $125,000,000;
       (B) for fiscal year 2005, $130,000,000;
       (C) for fiscal year 2006, $135,000,000; and
       (D) for fiscal year 2007, $140,000,000.
       (2) Advanced fuel recycling program.--For activities under 
     section 21421--
       (A) for fiscal year 2004, $80,000,000;
       (B) for fiscal year 2005, $93,000,000;
       (C) for fiscal year 2006, $106,000,000; and
       (D) for fiscal year 2007, $120,000,000.
       (3) University programs.--For activities under section 
     21431--
       (A) for fiscal year 2004, $35,200,000, of which--
       (i) $3,000,000 shall be for activities under subsection 
     (b)(1) of that section;
       (ii) $4,275,000 shall be for activities under subsection 
     (b)(2) of that section;
       (iii) $8,000,000 shall be for activities under subsection 
     (b)(3) of that section;
       (iv) $500,000 shall be for activities under subsection 
     (b)(5) of that section;
       (v) $7,000,000 shall be for activities under subsection 
     (c)(1) of that section;
       (vi) $700,000 shall be for activities under subsection 
     (c)(2) of that section;
       (vii) $10,000,000 shall be for activities under subsection 
     (c)(3) of that section;
       (viii) $1,000,000 shall be for activities under subsection 
     (d)(1) of that section; and
       (ix) $725,000 shall be for activities under subsection 
     (d)(2) of that section;
       (B) for fiscal year 2005, $44,350,000, of which--
       (i) $3,100,000 shall be for activities under subsection 
     (b)(1) of that section;
       (ii) $6,275,000 shall be for activities under subsection 
     (b)(2) of that section;
       (iii) $12,000,000 shall be for activities under subsection 
     (b)(3) of that section;
       (iv) $550,000 shall be for activities under subsection 
     (b)(5) of that section;
       (v) $7,500,000 shall be for activities under subsection 
     (c)(1) of that section;
       (vi) $1,100,000 shall be for activities under subsection 
     (c)(2) of that section;
       (vii) $12,000,000 shall be for activities under subsection 
     (c)(3) of that section;

[[Page H3149]]

       (viii) $1,100,000 shall be for activities under subsection 
     (d)(1) of that section; and
       (ix) $725,000 shall be for activities under subsection 
     (d)(2) of that section;
       (C) for fiscal year 2006, $49,200,000, of which--
       (i) $3,200,000 shall be for activities under subsection 
     (b)(1) of that section;
       (ii) $7,150,000 shall be for activities under subsection 
     (b)(2) of that section;
       (iii) $13,000,000 shall be for activities under subsection 
     (b)(3) of that section;
       (iv) $600,000 shall be for activities under subsection 
     (b)(5) of that section;
       (v) $8,000,000 shall be for activities under subsection 
     (c)(1) of that section;
       (vi) $1,200,000 shall be for activities under subsection 
     (c)(2) of that section;
       (vii) $14,000,000 shall be for activities under subsection 
     (c)(3) of that section;
       (viii) $1,200,000 shall be for activities under subsection 
     (d)(1) of that section; and
       (ix) $850,000 shall be for activities under subsection 
     (d)(2) of that section; and
       (D) for fiscal year 2007, $54,950,000, of which--
       (i) $3,200,000 shall be for activities under subsection 
     (b)(1) of that section;
       (ii) $8,150,000 shall be for activities under subsection 
     (b)(2) of that section;
       (iii) $15,000,000 shall be for activities under subsection 
     (b)(3) of that section;
       (iv) $650,000 shall be for activities under subsection 
     (b)(5) of that section;
       (v) $8,500,000 shall be for activities under subsection 
     (c)(1); of that section;
       (vi) $1,300,000 shall be for activities under subsection 
     (c)(2) of that section;
       (vii) $16,000,000 shall be for activities under subsection 
     (c)(3) of that section;
       (viii) $1,300,000 shall be for activities under subsection 
     (d)(1) of that section; and
       (ix) $850,000 shall be for activities under subsection 
     (d)(2) of that section.
       (c) Limit on Use of Funds.--None of the funds authorized 
     under this section may be used for decommissioning the Fast 
     Flux Test Facility.

                PART 2--NUCLEAR ENERGY RESEARCH PROGRAMS

     SEC. 21411. NUCLEAR ENERGY RESEARCH PROGRAMS.

       (a) Nuclear Energy Research Initiative.--The Secretary 
     shall carry out a Nuclear Energy Research Initiative for 
     research and development related to nuclear energy.
       (b) Nuclear Energy Plant Optimization Program.--The 
     Secretary shall carry out a Nuclear Energy Plant Optimization 
     Program to support research and development activities 
     addressing reliability, availability, productivity, and 
     component aging in existing nuclear power plants.
       (c) Nuclear Power 2010 Program.--The Secretary shall carry 
     out a Nuclear Power 2010 Program, consistent with 
     recommendations in the October 2001 report entitled ``A 
     Roadmap to Deploy New Nuclear Power Plants in the United 
     States by 2010'' issued by the Nuclear Energy Research 
     Advisory Committee of the Department. The Program shall--
       (1) rely on the expertise and capabilities of the National 
     Laboratories in the areas of advanced nuclear fuels cycles 
     and fuels testing;
       (2) pursue an approach that considers a variety of reactor 
     designs;
       (3) include participation of international collaborators in 
     research, development, and design efforts as appropriate; and
       (4) encourage industry participation.
       (d) Generation IV Nuclear Energy Systems Initiative.--The 
     Secretary shall carry out a Generation IV Nuclear Energy 
     Systems Initiative to develop an overall technology plan and 
     to support research and development necessary to make an 
     informed technical decision about the most promising 
     candidates for eventual commercial application. The 
     Initiative shall examine advanced proliferation-resistant and 
     passively safe reactor designs, including designs that--
       (1) are economically competitive with other electric power 
     generation plants;
       (2) have higher efficiency, lower cost, and improved safety 
     compared to reactors in operation on the date of enactment of 
     this Act;
       (3) use fuels that are proliferation resistant and have 
     substantially reduced production of high-level waste per unit 
     of output; and
       (4) utilize improved instrumentation.
       (e) Nuclear Infrastructure Support.--The Secretary shall 
     develop and implement a strategy for the facilities of the 
     Office of Nuclear Energy, Science, and Technology and shall 
     transmit a report containing the strategy along with the 
     President's budget request to the Congress for fiscal year 
     2005. Such strategy shall provide a cost-effective means 
     for--
       (1) maintaining existing facilities and infrastructure, as 
     needed;
       (2) closing unneeded facilities;
       (3) making facility upgrades and modifications; and
       (4) building new facilities.

                    PART 3--ADVANCED FUEL RECYCLING

     SEC. 21421. ADVANCED FUEL RECYCLING PROGRAM.

       (a) In General.--The Secretary, through the Director of the 
     Office of Nuclear Energy, Science and Technology, shall 
     conduct an advanced fuel recycling technology research and 
     development program to evaluate proliferation-resistant fuel 
     recycling and transmutation technologies which minimize 
     environmental or public health and safety impacts as an 
     alternative to aqueous reprocessing technologies deployed as 
     of the date of enactment of this Act in support of evaluation 
     of alternative national strategies for spent nuclear fuel and 
     the Generation IV advanced reactor concepts, subject to 
     annual review by the Secretary's Nuclear Energy Research 
     Advisory Committee or other independent entity, as 
     appropriate. Opportunities to enhance progress of this 
     program through international cooperation should be sought.
       (b) Reports.--The Secretary shall report on the activities 
     of the advanced fuel recycling technology research and 
     development program, as part of the Department's annual 
     budget submission.

                      PART 4--UNIVERSITY PROGRAMS

     SEC. 21431. UNIVERSITY NUCLEAR SCIENCE AND ENGINEERING 
                   SUPPORT.

       (a) Establishment.--The Secretary shall support a program 
     to invest in human resources 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) establish a graduate and undergraduate fellowship 
     program to attract new and talented students;
       (2) establish a Junior Faculty Research Initiation Grant 
     Program to assist institutions of higher education in 
     recruiting and retaining new faculty in the nuclear sciences 
     and engineering;
       (3) support fundamental nuclear sciences and engineering 
     research through the Nuclear Engineering Education Research 
     Program;
       (4) encourage collaborative nuclear research among 
     industry, National Laboratories, and institutions of higher 
     education through the Nuclear Energy Research Initiative; and
       (5) support communication and outreach related to nuclear 
     science and engineering.
       (c) Strengthening University Research and Training Reactors 
     and Associated Infrastructure.--Activities under this section 
     may include--
       (1) converting research reactors currently using high-
     enrichment fuels to low-enrichment fuels, upgrading 
     operational instrumentation, and sharing of reactors among 
     institutions of higher education;
       (2) providing technical assistance, in collaboration with 
     the United States nuclear industry, in relicensing and 
     upgrading training reactors as part of a student training 
     program; and
       (3) providing funding, through the Innovations in Nuclear 
     Infrastructure and Education Program, 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 professors at 
     institutions of higher education 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 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 
     research reactor at an institution of higher education used 
     in the research project.

               PART 5--GEOLOGICAL ISOLATION OF SPENT FUEL

     SEC. 21441. GEOLOGICAL ISOLATION OF SPENT FUEL.

       The Secretary shall conduct a study to determine the 
     feasibility of deep borehole disposal of spent nuclear fuel 
     and high-level radioactive waste. The study shall emphasize 
     geological, chemical, and hydrological characterization of, 
     and design of engineered structures for, deep borehole 
     environments. Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall transmit the study 
     to the Congress.

                       Subtitle E--Fossil Energy

                PART 1--AUTHORIZATION OF APPROPRIATIONS

     SEC. 21501. FOSSIL ENERGY.

       (a) In General.--The following sums are authorized to be 
     appropriated to the Secretary for fossil energy research, 
     development, demonstration, and commercial application 
     activities, other than those described in subsection (b), 
     including activities authorized under this subtitle but not 
     including activities authorized under division E:
       (1) For fiscal year 2004, $530,000,000.
       (2) For fiscal year 2005, $556,000,000.
       (3) For fiscal year 2006, $583,000,000.
       (4) For fiscal year 2007, $611,000,000.

     No less than 60 percent of the amount appropriated for each 
     fiscal year under this subsection shall be available for 
     activities related to the coal research program under section 
     21511(a).
       (b) Ultra-Deepwater and Unconventional Resources.--
       (1) Oil and gas lease income.--For each of fiscal years 
     2004 through 2010, from any royalties, rents, and bonuses 
     derived from Federal onshore and offshore oil and gas leases

[[Page H3150]]

     issued under the Outer Continental Shelf Lands Act and the 
     Mineral Leasing Act which are deposited in the Treasury, and 
     after distribution of any such funds as described in 
     paragraph (2), an amount equal to 7.5 percent of the amount 
     of royalties, rents, and bonuses derived from those leases 
     deposited in the Treasury shall be deposited into the Ultra-
     Deepwater and Unconventional Natural Gas and Other Petroleum 
     Research Fund (in this subsection referred to as the Fund). 
     For purposes of this subsection, the term ``royalties'' 
     excludes proceeds from the sale of royalty production taken 
     in kind and royalty production that is transferred under 
     section 27(a)(3) of the Outer Continental Shelf Lands Act (43 
     U.S.C. 1353(a)(3)). Monies in the Fund shall be available to 
     the Secretary for obligation under part 3, without fiscal 
     year limitation, to the extent provided in advance in 
     appropriations Acts.
       (2) Prior distributions.--The distributions described in 
     paragraph (1) are those required by law--
       (A) to States and to the Reclamation Fund under the Mineral 
     Leasing Act (30 U.S.C. 191(a)); and
       (B) to other funds receiving monies from Federal oil and 
     gas leasing programs, including--
       (i) any recipients pursuant to section 8(g) of the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1337(g));
       (ii) the Land and Water Conservation Fund, pursuant to 
     section 2(c) of the Land and Water Conservation Fund Act of 
     1965 (16 U.S.C. 4601-5(c)); and
       (iii) the Historic Preservation Fund, pursuant to section 
     108 of the National Historic Preservation Act (16 U.S.C. 
     470h).
       (3) Allocation.--Amounts made available under this 
     subsection in each fiscal year shall be allocated as follows:
       (A) 67.5 percent shall be for ultra-deepwater natural gas 
     and other petroleum activities under section 21522;
       (B) 22.5 percent shall be for unconventional natural gas 
     and other petroleum resource activities under section 21523; 
     and
       (C) 10 percent shall be for research complementary to 
     research under section 21521(b)(1) through (3).
       (c) Allocations.--From amounts authorized under subsection 
     (a), the following sums are authorized:
       (1) Fuel cell proton exchange membrane technology.--For 
     activities under section 21511(c)(2), $28,000,000 for each of 
     the fiscal years 2004 through 2007.
       (2) Coal mining technologies.--For activities under section 
     21512--
       (A) for fiscal year 2004, $12,000,000; and
       (B) for fiscal year 2005, $15,000,000.
       (3) Office of arctic energy.--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), $25,000,000 for each of fiscal years 2004 through 
     2007.
       (d) Extended Authorization.--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), 
     $25,000,000 for each of fiscal years 2008 through 2011.
       (e) Limits on Use of Funds.--
       (1) Exclusions.--None of the funds authorized under this 
     section may be used for--
       (A) Fossil Energy Environmental Restoration; or
       (B) Import/Export Authorization.
       (2) University coal mining research.--Of the funds 
     authorized under subsection (c)(2), not less than 20 percent 
     of the funds appropriated for each fiscal year shall be 
     dedicated to research and development carried out at 
     institutions of higher education.

                       PART 2--RESEARCH PROGRAMS

     SEC. 21511. FOSSIL ENERGY RESEARCH PROGRAMS.

       (a) Coal Research.--(1) In addition to the Clean Coal Power 
     Initiative authorized under division E, the Secretary shall 
     conduct a program of research, development, demonstration, 
     and commercial application for coal and power systems, 
     including--
       (A) central systems;
       (B) sequestration research and development;
       (C) fuels;
       (D) advanced research; and
       (E) advanced separation technologies.
       (2) Not later than 6 months after the date of enactment of 
     this Act, the Secretary shall transmit to the Congress a 
     report providing--
       (A) a detailed description of how proposals will be 
     solicited and evaluated;
       (B) a list of activities and technical milestones; and
       (C) a description of how these activities will complement 
     and not duplicate the Clean Coal Power Initiative authorized 
     under division E.
       (b) Oil and Gas Research.--The Secretary shall conduct a 
     program of research, development, demonstration, and 
     commercial application on oil and gas, including--
       (1) exploration and production;
       (2) gas hydrates;
       (3) reservoir life and extension;
       (4) transportation and distribution infrastructure;
       (5) ultraclean fuels;
       (6) heavy oil and oil shale; and
       (7) environmental research.
       (c) Fuel Cells.--(1) The Secretary shall conduct a program 
     of research, development, demonstration, and commercial 
     application on fuel cells for low-cost, high-efficiency, 
     fuel-flexible, modular power systems.
       (2) The demonstrations shall include fuel cell proton 
     exchange membrane technology for commercial, residential, and 
     transportation applications, and distributed generation 
     systems, utilizing improved manufacturing production and 
     processes.
       (d) Technology Transfer.--To the maximum extent 
     practicable, existing technology transfer mechanisms shall be 
     used to implement oil and gas exploration and production 
     technology transfer programs.

     SEC. 21512. RESEARCH AND DEVELOPMENT FOR COAL MINING 
                   TECHNOLOGIES.

       (a) Establishment.--The Secretary shall carry out a program 
     of research and development on coal mining technologies. The 
     Secretary shall cooperate with appropriate Federal agencies, 
     coal producers, trade associations, equipment manufacturers, 
     institutions of higher education with mining engineering 
     departments, and other relevant entities.
       (b) Program.--The research and development activities 
     carried out under this section shall--
       (1) be based on the mining research and development 
     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; and
       (2) expand mining research capabilities at institutions of 
     higher education.

   PART 3--ULTRA-DEEPWATER AND UNCONVENTIONAL NATURAL GAS AND OTHER 
                          PETROLEUM RESOURCES

     SEC. 21521. PROGRAM AUTHORITY.

       (a) In General.--The Secretary shall carry out a program 
     under this part of research, development, demonstration, and 
     commercial application of technologies for ultra-deepwater 
     and unconventional natural gas and other petroleum resource 
     exploration and production, including safe operations and 
     environmental mitigation (including reduction of greenhouse 
     gas emissions and sequestration of carbon).
       (b) Program Elements.--The program under this part shall 
     address the following areas, including improving safety and 
     minimizing environmental impacts of activities within each 
     area:
       (1) Ultra-deepwater technology.
       (2) Ultra-deepwater architecture.
       (3) Unconventional natural gas and other petroleum resource 
     exploration and production technology.
       (c) Limitation on Location of Field Activities.--Field 
     activities under the program under this part shall be carried 
     out only--
       (1) in--
       (A) areas in the territorial waters of the United States 
     not under any Outer Continental Shelf moratorium as of 
     September 30, 2002;
       (B) areas onshore in the United States on public land 
     administered by the Secretary of the Interior available for 
     oil and gas leasing, where consistent with applicable law and 
     land use plans; and
       (C) areas onshore in the United States on State or private 
     land, subject to applicable law; and
       (2) with the approval of the appropriate Federal or State 
     land management agency or private land owner.
       (d) Research at National Energy Technology Laboratory.--The 
     Secretary, through the National Energy Technology Laboratory, 
     shall carry out research complementary to research under 
     subsection (b).
       (e) Consultation with Secretary of the Interior.--In 
     carrying out this part, the Secretary shall consult regularly 
     with the Secretary of the Interior.

     SEC. 21522. ULTRA-DEEPWATER PROGRAM.

       (a) In General.--The Secretary shall carry out the 
     activities under paragraphs (1) and (2) of section 21521(b), 
     to maximize the value of the ultra-deepwater natural gas and 
     other petroleum resources of the United States by increasing 
     the supply of such resources and by reducing the cost and 
     increasing the efficiency of exploration for and production 
     of such resources, while improving safety and minimizing 
     environmental impacts.
       (b) Role of the Secretary.--The Secretary shall have 
     ultimate responsibility for, and oversight of, all aspects of 
     the program under this section.
       (c) Role of the Program Consortium.--
       (1) In general.--The Secretary shall contract with a 
     consortium to--
       (A) manage awards pursuant to subsection (f)(4);
       (B) make recommendations to the Secretary for project 
     solicitations;
       (C) disburse funds awarded under subsection (f) as directed 
     by the Secretary in accordance with the annual plan under 
     subsection (e); and
       (D) carry out other activities assigned to the program 
     consortium by this section.
       (2) Limitation.--The Secretary may not assign any 
     activities to the program consortium except as specifically 
     authorized under this section.
       (3) Conflict of interest.--(A) The Secretary shall 
     establish procedures--
       (i) to ensure that each board member, officer, or employee 
     of the program consortium who is in a decisionmaking capacity 
     under subsection (f)(3) or (4) shall disclose to the 
     Secretary any financial interests in, or financial 
     relationships with, applicants for or recipients of awards 
     under this section, including those of his or her spouse or 
     minor child, unless such relationships or interests would be 
     considered to be remote or inconsequential; and
       (ii) to require any board member, officer, or employee with 
     a financial relationship or

[[Page H3151]]

     interest disclosed under clause (i) to recuse himself or 
     herself from any review under subsection (f)(3) or oversight 
     under subsection (f)(4) with respect to such applicant or 
     recipient.
       (B) The Secretary may disqualify an application or revoke 
     an award under this section if a board member, officer, or 
     employee has failed to comply with procedures required under 
     subparagraph (A)(ii).
       (d) Selection of the Program Consortium.--
       (1) In general.--The Secretary shall select the program 
     consortium through an open, competitive process.
       (2) Members.--The program consortium may include 
     corporations, institutions of higher education, National 
     Laboratories, or other research institutions. After 
     submitting a proposal under paragraph (4), the program 
     consortium may not add members without the consent of the 
     Secretary.
       (3) Tax status.--The program consortium shall be an entity 
     that is exempt from tax under section 501(c)(3) of the 
     Internal Revenue Code of 1986.
       (4) Schedule.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall solicit proposals 
     for the creation of the program consortium, which must be 
     submitted not less than 180 days after the date of enactment 
     of this Act. The Secretary shall select the program 
     consortium not later than 240 days after such date of 
     enactment.
       (5) Application.--Applicants shall submit a proposal 
     including such information as the Secretary may require. At a 
     minimum, each proposal shall--
       (A) list all members of the consortium;
       (B) fully describe the structure of the consortium, 
     including any provisions relating to intellectual property; 
     and
       (C) describe how the applicant would carry out the 
     activities of the program consortium under this section.
       (6) Eligibility.--To be eligible to be selected as the 
     program consortium, an applicant must be an entity whose 
     members collectively have demonstrated capabilities in 
     planning and managing research, development, demonstration, 
     and commercial application programs in natural gas or other 
     petroleum exploration or production.
       (7) Criterion.--The Secretary may consider the amount of 
     the fee an applicant proposes to receive under subsection (g) 
     in selecting a consortium under this section.
       (e) Annual Plan.--
       (1) In general.--The program under this section shall be 
     carried out pursuant to an annual plan prepared by the 
     Secretary in accordance with paragraph (2).
       (2) Development.--(A) Before drafting an annual plan under 
     this subsection, the Secretary shall solicit specific written 
     recommendations from the program consortium for each element 
     to be addressed in the plan, including those described in 
     paragraph (4). The Secretary may request that the program 
     consortium submit its recommendations in the form of a draft 
     annual plan.
       (B) The Secretary shall submit the recommendations of the 
     program consortium under subparagraph (A) to the Ultra-
     Deepwater Advisory Committee established under section 
     21525(a) for review, and such Advisory Committee shall 
     provide to the Secretary written comments by a date 
     determined by the Secretary. The Secretary may also solicit 
     comments from any other experts.
       (C) The Secretary shall consult regularly with the program 
     consortium throughout the preparation of the annual plan.
       (3) Publication.--The Secretary shall transmit to the 
     Congress and publish in the Federal Register the annual plan, 
     along with any written comments received under paragraph 
     (2)(A) and (B). The annual plan shall be transmitted and 
     published not later than 60 days after the date of enactment 
     of an Act making appropriations for a fiscal year for the 
     program under this section.
       (4) Contents.--The annual plan shall describe the ongoing 
     and prospective activities of the program under this section 
     and shall include--
       (A) a list of any solicitations for awards that the 
     Secretary plans to issue to carry out research, development, 
     demonstration, or commercial application activities, 
     including the topics for such work, who would be eligible to 
     apply, selection criteria, and the duration of awards; and
       (B) a description of the activities expected of the program 
     consortium to carry out subsection (f)(4).
       (f) Awards.--
       (1) In general.--The Secretary shall make awards to carry 
     out research, development, demonstration, and commercial 
     application activities under the program under this section. 
     The program consortium shall not be eligible to receive such 
     awards, but members of the program consortium may receive 
     such awards.
       (2) Proposals.--The Secretary shall solicit proposals for 
     awards under this subsection in such manner and at such time 
     as the Secretary may prescribe, in consultation with the 
     program consortium.
       (3) Review.--The Secretary shall make awards under this 
     subsection through a competitive process, which shall include 
     a review by individuals selected by the Secretary. Such 
     individuals shall include, for each application, Federal 
     officials, the program consortium, and non-Federal experts 
     who are not board members, officers, or employees of the 
     program consortium or of a member of the program consortium.
       (4) Oversight.--(A) The program consortium shall oversee 
     the implementation of awards under this subsection, 
     consistent with the annual plan under subsection (e), 
     including disbursing funds and monitoring activities carried 
     out under such awards for compliance with the terms and 
     conditions of the awards.
       (B) Nothing in subparagraph (A) shall limit the authority 
     or responsibility of the Secretary to oversee awards, or 
     limit the authority of the Secretary to review or revoke 
     awards.
       (C) The Secretary shall provide to the program consortium 
     the information necessary for the program consortium to carry 
     out its responsibilities under this paragraph.
       (g) Fee.--
       (1) In general.--To compensate the program consortium for 
     carrying out its activities under this section, the Secretary 
     shall provide to the program consortium a fee in an amount 
     not to exceed 7.5 percent of the amounts awarded under 
     subsection (f) for each fiscal year.
       (2) Advance.--The Secretary shall advance funds to the 
     program consortium upon selection of the consortium, which 
     shall be deducted from amounts to be provided under paragraph 
     (1).
       (h) Audit.--The Secretary shall retain an independent, 
     commercial auditor to determine the extent to which funds 
     provided to the program consortium, and funds provided under 
     awards made under subsection (f), have been expended in a 
     manner consistent with the purposes and requirements of this 
     part. The auditor shall transmit a report annually to the 
     Secretary, who shall transmit the report to Congress, along 
     with a plan to remedy any deficiencies cited in the report.

     SEC. 21523. UNCONVENTIONAL NATURAL GAS AND OTHER PETROLEUM 
                   RESOURCES PROGRAM.

       (a) In General.--The Secretary shall carry out activities 
     under section 21521(b)(3), to maximize the value of the 
     onshore unconventional natural gas and other petroleum 
     resources of the United States by increasing the supply of 
     such resources and by reducing the cost and increasing the 
     efficiency of exploration for and production of such 
     resources, while improving safety and minimizing 
     environmental impacts.
       (b) Awards.--
       (1) In general.--The Secretary shall carry out this section 
     through awards made through an open, competitive process.
       (2) Consortia.--In carrying out paragraph (1), the 
     Secretary shall give preference to making awards to 
     consortia.
       (c) Audit.--The Secretary shall retain an independent, 
     commercial auditor to determine the extent to which funds 
     provided under awards made under this section have been 
     expended in a manner consistent with the purposes and 
     requirements of this part. The auditor shall transmit a 
     report annually to the Secretary, who shall transmit the 
     report to Congress, along with a plan to remedy any 
     deficiencies cited in the report.
       (d) Focus Areas.--Awards under this section may focus on 
     areas including advanced coal-bed methane, deep drilling, 
     natural gas production from tight sands, natural gas 
     production from gas shales, innovative exploration and 
     production techniques, enhanced recovery techniques, and 
     environmental mitigation of unconventional natural gas and 
     other petroleum resources exploration and production.
       (e) Activities by the United States Geological Survey.--The 
     Secretary of the Interior, through the United States 
     Geological Survey, shall, where appropriate, carry out 
     programs of long-term research to complement the programs 
     under this section.

     SEC. 21524. ADDITIONAL REQUIREMENTS FOR AWARDS.

       (a) Demonstration Projects.--An application for an award 
     under this part for a demonstration project shall describe 
     with specificity the intended commercial use of the 
     technology to be demonstrated.
       (b) Flexibility in Locating Demonstration Projects.--
     Subject to the limitation in section 21521(c), a 
     demonstration project under this part relating to an ultra-
     deepwater technology or an ultra-deepwater architecture may 
     be conducted in deepwater depths.
       (c) Intellectual Property Agreements.--If an award under 
     this part is made to a consortium (other than the program 
     consortium), the consortium shall provide to the Secretary a 
     signed contract agreed to by all members of the consortium 
     describing the rights of each member to intellectual property 
     used or developed under the award.
       (d) Technology Transfer.--Each recipient of an award under 
     this part shall conduct technology transfer activities, as 
     appropriate, and outreach activities pursuant to section 
     21809.
       (e) Cost-Sharing Reduction for Independent Producers.--In 
     applying the cost-sharing requirements under section 21802 to 
     an award under this part made solely to an independent 
     producer of oil or gas, the Secretary may reduce the 
     applicable non-Federal requirement in such section to a level 
     not less than 10 percent of the cost of the project.

     SEC. 21525. ADVISORY COMMITTEES.

       (a) Ultra-Deepwater Advisory Committee.--
       (1) Establishment.--Not later than 270 days after the date 
     of enactment of this section, the Secretary shall establish 
     an advisory committee to be known as the Ultra-Deepwater 
     Advisory Committee.

[[Page H3152]]

       (2) Membership.--The advisory committee under this 
     subsection shall be composed of members appointed by the 
     Secretary and including--
       (A) individuals with extensive research experience or 
     operational knowledge of offshore natural gas and other 
     petroleum exploration and production;
       (B) individuals broadly representative of the affected 
     interests in ultra-deepwater natural gas and other petroleum 
     production, including interests in environmental protection 
     and safe operations;
       (C) no individuals who are Federal employees; and
       (D) no individuals who are board members, officers, or 
     employees of the program consortium.
       (3) Duties.--The advisory committee under this subsection 
     shall--
       (A) advise the Secretary on the development and 
     implementation of programs under this part related to ultra-
     deepwater natural gas and other petroleum resources; and
       (B) carry out section 21522(e)(2)(B).
       (4) Compensation.--A member of the advisory committee under 
     this subsection 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.
       (b) Unconventional Resources Technology Advisory 
     Committee.--
       (1) Establishment.--Not later than 270 days after the date 
     of enactment of this section, the Secretary shall establish 
     an advisory committee to be known as the Unconventional 
     Resources Technology Advisory Committee.
       (2) Membership.--The advisory committee under this 
     subsection shall be composed of members appointed by the 
     Secretary and including--
       (A) individuals with extensive research experience or 
     operational knowledge of unconventional natural gas and other 
     petroleum resource exploration and production, including 
     independent oil and gas producers;
       (B) individuals broadly representative of the affected 
     interests in unconventional natural gas and other petroleum 
     resource exploration and production, including interests in 
     environmental protection and safe operations; and
       (C) no individuals who are Federal employees.
       (3) Duties.--The advisory committee under this subsection 
     shall advise the Secretary on the development and 
     implementation of activities under this part related to 
     unconventional natural gas and other petroleum resources.
       (4) Compensation.--A member of the advisory committee under 
     this subsection 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.
       (c) Prohibition.--No advisory committee established under 
     this section shall make recommendations on funding awards to 
     consortia or for specific projects.

     SEC. 21526. LIMITS ON PARTICIPATION.

       (a) In General.--An entity shall be eligible to receive an 
     award under this part only if the Secretary finds--
       (1) that the entity's participation in the program under 
     this part would be in the economic interest of the United 
     States; and
       (2) that either--
       (A) the entity is a United States-owned entity organized 
     under the laws of the United States; or
       (B) the entity is organized under the laws of the United 
     States and has a parent entity organized under the laws of a 
     country which affords--
       (i) to United States-owned entities opportunities, 
     comparable to those afforded to any other entity, to 
     participate in any cooperative research venture similar to 
     those authorized under this part;
       (ii) to United States-owned entities local investment 
     opportunities comparable to those afforded to any other 
     entity; and
       (iii) adequate and effective protection for the 
     intellectual property rights of United States-owned entities.
       (b) Sense of Congress and Report.--It is the Sense of the 
     Congress that ultra-deepwater technology developed under this 
     part is to be developed primarily for production of ultra-
     deepwater natural gas and other petroleum resources of the 
     United States, and that this priority is to be reflected in 
     the terms of grants, contracts, and cooperative agreements 
     entered under this part. As part of the annual Departmental 
     budget submission, the Secretary shall report on all steps 
     taken to implement the policy described in this subsection.

     SEC. 21527. FUND.

       There is hereby established in the Treasury of the United 
     States a separate fund to be known as the ``Ultra-Deepwater 
     and Unconventional Natural Gas and Other Petroleum Research 
     Fund''.

     SEC. 21528. TRANSFER OF ADVANCED OIL AND GAS EXPLORATION AND 
                   PRODUCTION TECHNOLOGIES.

       (a) Assessment.--The Secretary shall review technology 
     programs throughout the Federal Government to assess the 
     suitability of technologies developed thereunder for use in 
     ultradeep drilling research, development, demonstration, and 
     commercial application.
       (b) Technology Transfer.--Not later than 1 year after the 
     date of enactment of this Act, the Secretary shall issue a 
     solicitation seeking organizations knowledgeable of the 
     technology needs of the ultradeep drilling industry. The 
     Secretary shall select the most qualified applicant to manage 
     a program to transfer technologies the Secretary determines 
     suitable under subsection (a) to appropriate entities. The 
     organization selected under section 21522(d) shall not be 
     eligible for selection under this subsection.
       (c) Funding.--From the funds available under section 
     21501(b)(3)(C), $1,000,000 shall be available to carry out 
     this section in each of the fiscal years 2004 through 2007.

     SEC. 21529. SUNSET.

       The authority provided by this part shall terminate on 
     September 30, 2010.

     SEC. 21530. DEFINITIONS.

       In this part:
       (1) Deepwater.--The term ``deepwater'' means a water depth 
     that is greater than 200 but less than 1,500 meters.
       (2) Program consortium.--The term ``program consortium'' 
     means the consortium selected under section 21522(d).
       (3) Remote or inconsequential.--The term ``remote or 
     inconsequential'' has the meaning given that term in 
     regulations issued by the Office of Government Ethics under 
     section 208(b)(2) of title 18, United States Code.
       (4) Ultra-deepwater.--The term ``ultra-deepwater'' means a 
     water depth that is equal to or greater than 1,500 meters.
       (5) Ultra-deepwater architecture.--The term ``ultra-
     deepwater architecture'' means the integration of 
     technologies for the exploration for, or production of, 
     natural gas or other petroleum resources located at ultra-
     deepwater depths.
       (6) Ultra-deepwater technology.--The term ``ultra-deepwater 
     technology'' means a discrete technology that is specially 
     suited to address one or more challenges associated with the 
     exploration for, or production of, natural gas or other 
     petroleum resources located at ultra-deepwater depths.
       (7) Unconventional natural gas and other petroleum 
     resource.--The term ``unconventional natural gas and other 
     petroleum resource'' means natural gas and other petroleum 
     resource located onshore in an economically inaccessible 
     geological formation.

                          Subtitle F--Science

                PART 1--AUTHORIZATION OF APPROPRIATIONS

     SEC. 21601. SCIENCE.

       (a) In General.--The following sums are authorized to be 
     appropriated to the Secretary for research, development, 
     demonstration, and commercial application activities of the 
     Office of Science, including activities authorized under this 
     subtitle, including the amounts authorized under the 
     amendment made by section 21634(c)(2)(C), and including basic 
     energy sciences, advanced scientific and computing research, 
     biological and environmental research, fusion energy 
     sciences, high energy physics, nuclear physics, and research 
     analysis and infrastructure support:
       (1) For fiscal year 2004, $3,785,000,000.
       (2) For fiscal year 2005, $4,153,000,000.
       (3) For fiscal year 2006, $4,618,000,000.
       (4) For fiscal year 2007, $5,310,000,000.
       (b) Allocations.--From amounts authorized under subsection 
     (a), the following sums are authorized:
       (1) Fusion energy sciences.--(A) For the Fusion Energy 
     Sciences Program, excluding activities under sections 21611 
     and 21612--
       (i) for fiscal year 2004, $276,000,000;
       (ii) for fiscal year 2005, $300,000,000;.
       (iii) for fiscal year 2006, $340,000,000; and
       (iv) for fiscal year 2007, $350,000,000.
       (B) For activities under section 21611 and for the project 
     described in section 21612--
       (i) for fiscal year 2004, $12,000,000;
       (ii) for fiscal year 2005, $20,000,000;
       (iii) for fiscal year 2006, $50,000,000; and
       (iv) for fiscal year 2007, $75,000,000.
       (2) Spallation neutron source.--
       (A) Construction.--For construction of the Spallation 
     Neutron Source--
       (i) for fiscal year 2004, $124,600,000;
       (ii) for fiscal year 2005, $79,800,000; and
       (iii) for fiscal year 2006, $41,100,000 for completion of 
     construction.
       (B) Other project funding.--For other project costs 
     (including research and development necessary to complete the 
     project, preoperations costs, and capital equipment related 
     to construction) of the Spallation Neutron Source, 
     $103,279,000 for the period encompassing fiscal years 2003 
     through 2006, to remain available until expended through 
     September 30, 2006.
       (3) Nanotechnology research and development.--For 
     activities under section 21633--
       (A) for fiscal year 2004, $265,000,000;
       (B) for fiscal year 2005, $292,000,000;
       (C) for fiscal year 2006, $322,000,000; and
       (D) for fiscal year 2007, $355,000,000.
       (4) Science and technology scholarship program.--For 
     activities under section 21636--
       (A) for fiscal year 2004, $800,000;
       (B) for fiscal year 2005, $1,600,000;
       (C) for fiscal year 2006, $2,000,000; and
       (D) for fiscal year 2007, $2,000,000.
       (5) Genomes to life.--For activities under section 21641--
       (A) $100,000,000 for fiscal year 2004; and
       (B) such sums as may be necessary for fiscal years 2005 
     through 2007.
       (c) Limits on Use of Funds.--Of the funds authorized under 
     subsection (b)(1), no funds shall be available for 
     implementation of the plan described in section 21612.

[[Page H3153]]

                     PART 2--FUSION ENERGY SCIENCES

     SEC. 21611. ITER.

       (a) In General.--The United States is authorized to 
     participate in ITER in accordance with the provisions of this 
     section.
       (b) Agreement.--(1) The Secretary is authorized to 
     negotiate an agreement for United States participation in 
     ITER.
       (2) Any agreement for United States participation in ITER 
     shall, at a minimum--
       (A) clearly define the United States financial contribution 
     to construction and operating costs;
       (B) ensure that the share of ITER's high-technology 
     components manufactured in the United States is at least 
     proportionate to the United States financial contribution to 
     ITER;
       (C) ensure that the United States will not be financially 
     responsible for cost overruns in components manufactured in 
     other ITER participating countries;
       (D) guarantee the United States full access to all data 
     generated by ITER;
       (E) enable United States researchers to propose and carry 
     out an equitable share of the experiments at ITER;
       (F) provide the United States with a role in all collective 
     decisionmaking related to ITER; and
       (G) describe the process for discontinuing or 
     decommissioning ITER and any United States role in those 
     processes.
       (c) Plan.--The Secretary, in consultation with the Fusion 
     Energy Sciences Advisory Committee, shall develop a plan for 
     the participation of United States scientists in ITER that 
     shall include the United States research agenda for ITER, 
     methods to evaluate whether ITER is promoting progress toward 
     making fusion a reliable and affordable source of power, and 
     a description of how work at ITER will relate to other 
     elements of the United States fusion program. The Secretary 
     shall request a review of the plan by the National Academy of 
     Sciences.
       (d) Limitation.--No funds shall be expended for the 
     construction of ITER until the Secretary has transmitted to 
     the Congress--
       (1) the agreement negotiated pursuant to subsection (b) and 
     120 days have elapsed since that transmission;
       (2) a report describing the management structure of ITER 
     and providing a fixed dollar estimate of the cost of United 
     States participation in the construction of ITER, and 120 
     days have elapsed since that transmission;
       (3) a report describing how United States participation in 
     ITER will be funded without reducing funding for other 
     programs in the Office of Science, including other fusion 
     programs, and 60 days have elapsed since that transmission; 
     and
       (4) the plan required by subsection (c) (but not the 
     National Academy of Sciences review of that plan), and 60 
     days have elapsed since that transmission.
       (e) Definitions.--In this section--
       (1) the term ``construction'' means the physical 
     construction of the ITER facility, and the physical 
     construction, purchase, or manufacture of equipment or 
     components that are specifically designed for the ITER 
     facility, but does not mean the design of the facility, 
     equipment, or components; and
       (2) the term ``ITER'' means the international burning 
     plasma fusion research project in which the President 
     announced United States participation on January 30, 2003.

     SEC. 21612. PLAN FOR FUSION EXPERIMENT.

       (a) In General.--If at any time during the negotiations on 
     ITER, the Secretary determines that construction and 
     operation of ITER is unlikely or infeasible, the Secretary 
     shall send to Congress, as part of the budget request for the 
     following year, a plan for implementing the domestic burning 
     plasma experiment known as FIRE, including costs and 
     schedules for such a plan. The Secretary shall refine such 
     plan in full consultation with the Fusion Energy Sciences 
     Advisory Committee and shall also transmit such plan to the 
     National Academy of Sciences for review.
       (b) Definitions.--As used in this section--
       (1) the term ``ITER'' has the meaning given that term in 
     section 21611; and
       (2) the term ``FIRE'' means the Fusion Ignition Research 
     Experiment, the fusion research experiment for which design 
     work has been supported by the Department as a possible 
     alternative burning plasma experiment in the event that ITER 
     fails to move forward.

     SEC. 21613. PLAN FOR FUSION ENERGY SCIENCES PROGRAM.

       (a) Declaration of Policy.--It shall be the policy of the 
     United States to conduct research, development, 
     demonstration, and commercial application to provide for the 
     scientific, engineering, and commercial infrastructure 
     necessary to ensure that the United States is competitive 
     with other nations in providing fusion energy for its own 
     needs and the needs of other nations, including by 
     demonstrating electric power or hydrogen production for the 
     United States energy grid utilizing fusion energy at the 
     earliest date possible.
       (b) Fusion Energy Plan.--
       (1) In general.--Within 6 months after the date of 
     enactment of this Act, the Secretary shall transmit to 
     Congress a plan for carrying out the policy set forth in 
     subsection (a), including cost estimates, proposed budgets, 
     potential international partners, and specific programs for 
     implementing such policy.
       (2) Requirements of plan.--Such plan shall also ensure 
     that--
       (A) existing fusion research facilities are more fully 
     utilized;
       (B) fusion science, technology, theory, advanced 
     computation, modeling, and simulation are strengthened;
       (C) new magnetic and inertial fusion research facilities 
     are selected based on scientific innovation, cost 
     effectiveness, and their potential to advance the goal of 
     practical fusion energy at the earliest date possible;
       (D) such facilities that are selected are funded at a cost-
     effective rate;
       (E) communication of scientific results and methods between 
     the fusion energy science community and the broader 
     scientific and technology communities is improved;
       (F) inertial confinement fusion facilities are utilized to 
     the extent practicable for the purpose of inertial fusion 
     energy research and development; and
       (G) attractive alternative inertial and magnetic fusion 
     energy approaches are more fully explored.
       (3) Report on fusion materials and technology project.--In 
     addition, the plan required by this subsection shall also 
     address the status of, and to the degree possible, the costs 
     and schedules for--
       (A) the design and implementation of international or 
     national facilities for the testing of fusion materials; and
       (B) the design and implementation of international or 
     national facilities for the testing and development of key 
     fusion technologies.

                   PART 3--SPALLATION NEUTRON SOURCE

     SEC. 21621. DEFINITION.

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

     SEC. 21622. REPORT.

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

     SEC. 21623. LIMITATIONS.

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

                         PART 4--MISCELLANEOUS

     SEC. 21631. FACILITY AND INFRASTRUCTURE SUPPORT FOR 
                   NONMILITARY ENERGY LABORATORIES.

       (a) Facility Policy.--The Secretary shall develop and 
     implement a strategy for the nonmilitary energy laboratories 
     and facilities of the Office of Science. Such strategy shall 
     provide a cost-effective means for--
       (1) maintaining existing facilities and infrastructure, as 
     needed;
       (2) closing unneeded facilities;
       (3) making facility modifications; and
       (4) building new facilities.
       (b) Report.--
       (1) Transmittal.--The Secretary shall prepare and transmit, 
     along with the President's budget request to the Congress for 
     fiscal year 2005, a report containing the strategy developed 
     under subsection (a).
       (2) Contents.--For each nonmilitary energy laboratory and 
     facility, such report shall contain--
       (A) the current priority list of proposed facilities and 
     infrastructure projects, including cost and schedule 
     requirements;
       (B) a current ten-year plan that demonstrates the 
     reconfiguration of its facilities and infrastructure to meet 
     its missions and to address its long-term operational costs 
     and return on investment;
       (C) the total current budget for all facilities and 
     infrastructure funding; and
       (D) the current status of each facilities and 
     infrastructure project compared to the original baseline 
     cost, schedule, and scope.

     SEC. 21632. RESEARCH REGARDING PRECIOUS METAL CATALYSIS.

       From the amounts authorized to be appropriated to the 
     Secretary under section 21601, such sums as may be necessary 
     for each of the fiscal years 2004, 2005, and 2006 may be used 
     to carry out research in the use of precious metals 
     (excluding platinum, palladium, and rhodium) in catalysis.

     SEC. 21633. NANOTECHNOLOGY RESEARCH AND DEVELOPMENT.

       (a) In General.--The Secretary, acting through the Office 
     of Science, shall implement a Nanotechnology Research and 
     Development Program to promote nanotechnology research, 
     development, demonstration, education, technology transfer, 
     and commercial application activities as necessary to ensure 
     continued United States leadership in nanotechnology across 
     scientific and engineering disciplines.
       (b) Program Activities.--The activities of the 
     Nanotechnology Research and Development Program shall be 
     designed to--
       (1) provide sustained support for nanotechnology research 
     and development through--
       (A) grants to individual investigators and 
     interdisciplinary teams of investigators; and
       (B) establishment of interdisciplinary research centers and 
     advanced technology user facilities;
       (2) ensure that solicitation and evaluation of proposals 
     under the Program encourage interdisciplinary research;

[[Page H3154]]

       (3) expand education and training of undergraduate and 
     graduate students in interdisciplinary nanotechnology science 
     and engineering;
       (4) accelerate the commercial application of nanotechnology 
     innovations in the private sector;
       (5) ensure that societal and ethical concerns will be 
     addressed as the technology is developed by--
       (A) establishing a research program to identify societal 
     and ethical concerns related to nanotechnology, and ensuring 
     that the results of such research are widely disseminated; 
     and
       (B) integrating, insofar as possible, research on societal 
     and ethical concerns with nanotechnology research and 
     development; and
       (6) ensure that the potential of nanotechnology to produce 
     or facilitate the production of clean, inexpensive energy is 
     realized by supporting nanotechnology energy applications 
     research and development.
       (c) Definitions.--For the purposes of this section--
       (1) the term ``nanotechnology'' means science and 
     engineering aimed at creating materials, devices, and systems 
     at the atomic and molecular level; and
       (2) the term ``advanced technology user facility'' means a 
     nanotechnology research and development facility supported, 
     in whole or in part, by Federal funds that is open to all 
     United States researchers on a competitive, merit-reviewed 
     basis.
       (d) Report.--Within 2 years after the date of enactment of 
     this Act, the Secretary shall transmit to the Congress a 
     report describing the projects to identify societal and 
     ethical concerns related to nanotechnology and the funding 
     provided to support these projects.

     SEC. 21634. ADVANCED SCIENTIFIC COMPUTING FOR ENERGY 
                   MISSIONS.

       (a) In General.--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;
       (4) develop and maintain a robust scientific computing 
     hardware infrastructure to ensure that the computing 
     resources needed to address departmental missions are 
     available; and
       (5) explore new computing approaches and technologies that 
     promise to advance scientific computing.
       (c) High-Performance Computing Act of 1991 Amendments.--The 
     High-Performance Computing Act of 1991 is amended--
       (1) in section 4 (15 U.S.C. 5503)--
       (A) in paragraph (3)--
       (i) by striking ``means'' and inserting ``and `networking 
     and information technology' mean''; and
       (ii) by striking ``(including vector supercomputers and 
     large scale parallel systems)''; and
       (B) in paragraph (4), by striking ``packet switched''; and
       (2) in section 203 (15 U.S.C. 5523)--
       (A) in subsection (a), by striking all after ``As part of 
     the'' and inserting ``Networking and Information Technology 
     Research and Development Program, the Secretary of Energy 
     shall conduct basic and applied research in networking and 
     information technology, with emphasis on--
       ``(1) supporting fundamental research in the physical 
     sciences and engineering, and energy applications;
       ``(2) providing supercomputer access and advanced 
     communication capabilities and facilities to scientific 
     researchers; and
       ``(3) developing tools for distributed scientific 
     collaboration.'';
       (B) in subsection (b), by striking ``Program'' and 
     inserting ``Networking and Information Technology Research 
     and Development Program''; and
       (C) by amending subsection (e) to read as follows:
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary of Energy to 
     carry out the Networking and Information Technology Research 
     and Development Program such sums as may be necessary for 
     fiscal years 2004 through 2007.''.
       (d) Coordination.--The Secretary shall ensure that the 
     program under this section is integrated and consistent 
     with--
       (1) the Accelerated Strategic Computing Initiative of the 
     National Nuclear Security Administration; and
       (2) other national efforts related to advanced scientific 
     computing for science and engineering.
       (e) Report.--(1) Before undertaking any new initiative to 
     develop new advanced architecture for high-speed computing, 
     the Secretary, through the Director of the Office of Science, 
     shall transmit a report to the Congress describing--
       (A) the expected duration and cost of the initiative;
       (B) the technical milestones the initiative is designed to 
     achieve;
       (C) how institutions of higher education and private firms 
     will participate in the initiative; and
       (D) why the goals of the initiative could not be achieved 
     through existing programs.
       (2) No funds may be expended on any initiative described in 
     paragraph (1) until 30 days after the report required by that 
     paragraph is transmitted to the Congress.

     SEC. 21635. NITROGEN FIXATION.

       The Secretary, acting through the Office of Science, shall 
     support a program of research, development, demonstration, 
     and commercial application on biological nitrogen fixation, 
     including plant genomics research relevant to the development 
     of commercial crop varieties with enhanced nitrogen fixation 
     efficiency and ability.

     SEC. 21636. DEPARTMENT OF ENERGY SCIENCE AND TECHNOLOGY 
                   SCHOLARSHIP PROGRAM.

       (a) Establishment of Program.--
       (1) In general.--The Secretary shall establish a Department 
     of Energy Science and Technology Scholarship Program to award 
     scholarships to individuals that is designed to recruit and 
     prepare students for careers in the Department.
       (2) Competitive process.--Individuals shall be selected to 
     receive scholarships under this section through a competitive 
     process primarily on the basis of academic merit, with 
     consideration given to financial need and the goal of 
     promoting the participation of individuals identified in 
     section 33 or 34 of the Science and Engineering Equal 
     Opportunities Act (42 U.S.C. 1885a or 1885b).
       (3) Service agreements.--To carry out the Program the 
     Secretary shall enter into contractual agreements with 
     individuals selected under paragraph (2) under which the 
     individuals agree to serve as full-time employees of the 
     Department, for the period described in subsection (f)(1), in 
     positions needed by the Department and for which the 
     individuals are qualified, in exchange for receiving a 
     scholarship.
       (b) Scholarship Eligibility.--In order to be eligible to 
     participate in the Program, an individual must--
       (1) be enrolled or accepted for enrollment as a full-time 
     student at an institution of higher education in an academic 
     program or field of study described in the list made 
     available under subsection (d);
       (2) be a United States citizen; and
       (3) at the time of the initial scholarship award, not be a 
     Federal employee as defined in section 2105 of title 5 of the 
     United States Code.
       (c) Application Required.--An individual seeking a 
     scholarship under this section shall submit an application to 
     the Secretary at such time, in such manner, and containing 
     such information, agreements, or assurances as the Secretary 
     may require.
       (d) Eligible Academic Programs.--The Secretary shall make 
     publicly available a list of academic programs and fields of 
     study for which scholarships under the Program may be 
     utilized, and shall update the list as necessary.
       (e) Scholarship Requirement.--
       (1) In general.--The Secretary may provide a scholarship 
     under the Program for an academic year if the individual 
     applying for the scholarship has submitted to the Secretary, 
     as part of the application required under subsection (c), a 
     proposed academic program leading to a degree in a program or 
     field of study on the list made available under subsection 
     (d).
       (2) Duration of eligibility.--An individual may not receive 
     a scholarship under this section for more than 4 academic 
     years, unless the Secretary grants a waiver.
       (3) Scholarship amount.--The dollar amount of a scholarship 
     under this section for an academic year shall be determined 
     under regulations issued by the Secretary, but shall in no 
     case exceed the cost of attendance.
       (4) Authorized uses.--A scholarship provided under this 
     section may be expended for tuition, fees, and other 
     authorized expenses as established by the Secretary by 
     regulation.
       (5) Contracts regarding direct payments to institutions.--
     The Secretary may enter into a contractual agreement with an 
     institution of higher education under which the amounts 
     provided for a scholarship under this section for tuition, 
     fees, and other authorized expenses are paid directly to the 
     institution with respect to which the scholarship is 
     provided.
       (f) Period of Obligated Service.--
       (1) Duration of service.--The period of service for which 
     an individual shall be obligated to serve as an employee of 
     the Department is, except as provided in subsection (h)(2), 
     24 months for each academic year for which a scholarship 
     under this section is provided.
       (2) Schedule for service.--(A) Except as provided in 
     subparagraph (B), obligated service under paragraph (1) shall 
     begin not later than 60 days after the individual obtains the 
     educational degree for which the scholarship was provided.
       (B) The Secretary may defer the obligation of an individual 
     to provide a period of service

[[Page H3155]]

     under paragraph (1) if the Secretary determines that such a 
     deferral is appropriate. The Secretary shall prescribe the 
     terms and conditions under which a service obligation may be 
     deferred through regulation.
       (g) Penalties for Breach of Scholarship Agreement.--
       (1) Failure to complete academic training.--Scholarship 
     recipients who fail to maintain a high level of academic 
     standing, as defined by the Secretary by regulation, who are 
     dismissed from their educational institutions for 
     disciplinary reasons, or who voluntarily terminate academic 
     training before graduation from the educational program for 
     which the scholarship was awarded, shall be in breach of 
     their contractual agreement and, in lieu of any service 
     obligation arising under such agreement, shall be liable to 
     the United States for repayment within 1 year after the date 
     of default of all scholarship funds paid to them and to the 
     institution of higher education on their behalf under the 
     agreement, except as provided in subsection (h)(2). The 
     repayment period may be extended by the Secretary when 
     determined to be necessary, as established by regulation.
       (2) Failure to begin or complete the service obligation or 
     meet the terms and conditions of deferment.--Scholarship 
     recipients who, for any reason, fail to begin or complete 
     their service obligation after completion of academic 
     training, or fail to comply with the terms and conditions of 
     deferment established by the Secretary pursuant to subsection 
     (f)(2)(B), shall be in breach of their contractual agreement. 
     When recipients breach their agreements for the reasons 
     stated in the preceding sentence, the recipient shall be 
     liable to the United States for an amount equal to--
       (A) the total amount of scholarships received by such 
     individual under this section; plus
       (B) the interest on the amounts of such awards which would 
     be payable if at the time the awards were received they were 
     loans bearing interest at the maximum legal prevailing rate, 
     as determined by the Treasurer of the United States,

     multiplied by 3.
       (h) Waiver or Suspension of Obligation.--
       (1) Death of individual.--Any obligation of an individual 
     incurred under the Program (or a contractual agreement 
     thereunder) for service or payment shall be canceled upon the 
     death of the individual.
       (2) Impossibility or extreme hardship.--The Secretary shall 
     by regulation provide for the partial or total waiver or 
     suspension of any obligation of service or payment incurred 
     by an individual under the Program (or a contractual 
     agreement thereunder) whenever compliance by the individual 
     is impossible or would involve extreme hardship to the 
     individual, or if enforcement of such obligation with respect 
     to the individual would be contrary to the best interests of 
     the Government.
       (i) Definitions.--In this section the following definitions 
     apply:
       (1) Cost of attendance.--The term ``cost of attendance'' 
     has the meaning given that term in section 472 of the Higher 
     Education Act of 1965 (20 U.S.C. 1087ll).
       (2) 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)).
       (3) Program.--The term ``Program'' means the Department of 
     Energy Science and Technology Scholarship Program established 
     under this section.

                        PART 5--GENOMES TO LIFE

     SEC. 21641. GENOMES TO LIFE.

       (a) Program.--
       (1) Establishment.--The Secretary shall establish a 
     research, development, and demonstration program in genetics, 
     protein science, and computational biology of microbes and 
     plants to support the energy and environmental mission of the 
     Department.
       (2) Grants.--The program shall support individual 
     investigators and multidisciplinary teams of investigators 
     through competitive, merit-reviewed grants.
       (3) Consultation.--In carrying out the program, the 
     Secretary shall consult with other Federal agencies that 
     conduct genetic and protein research.
       (b) Goals.--The program shall have the goal of developing 
     technologies and methods based on the biological functions of 
     microbes and plants that --
       (1) can facilitate the production of fuels, including 
     hydrogen;
       (2) convert carbon dioxide to organic carbon; and
       (3) detoxify soils and water at Department facilities 
     contaminated with heavy metals and radiological materials.
       (c) Plan.--
       (1) Development of plan.--Within one year after the date of 
     enactment of this Act, the Secretary shall prepare and 
     transmit to the Congress a research plan describing how the 
     program authorized pursuant to this section will be 
     undertaken to accomplish the program goals established in 
     subsection (b).
       (2) Review of plan.--The Secretary shall contract with the 
     National Academy of Sciences to review the research plan 
     developed under this subsection. The Secretary shall transmit 
     the review to the Congress not later than 6 months after 
     transmittal of the research plan under paragraph (1), along 
     with the Secretary's response to the recommendations 
     contained in the review.
       (d) Facilities.--In carrying out the program under this 
     section, the Secretary may construct, acquire, and operate 
     facilities necessary to carry out this section.
       (e) Prohibition on Biomedical or Human Subject Research.--
     (1) In carrying out this program, the Secretary shall not 
     conduct biomedical research.
       (2) Nothing in this section shall authorize the Secretary 
     to conduct any research or demonstrations--
       (A) on human cells or human subjects; or
       (B) designed to have any application with respect to human 
     cells or human subjects.

                   Subtitle G--Energy and Environment

     SEC. 21701. AUTHORIZATION OF APPROPRIATIONS.

       (a) United States-Mexico Energy Technology Cooperation.--
     The following sums are authorized to be appropriated to the 
     Secretary to carry out activities under section 21702:
       (1) For fiscal year 2004, $5,000,000.
       (2) For fiscal year 2005, $6,000,000.
       (3) For fiscal year 2006, $6,000,000.
       (4) For fiscal year 2007, $6,000,000.
       (b) Waste Reduction and Use of Alternatives.--There are 
     authorized to be appropriated to the Secretary to carry out 
     activities under section 21703, $500,000 for fiscal year 
     2004.

     SEC. 21702. UNITED STATES-MEXICO ENERGY TECHNOLOGY 
                   COOPERATION.

       (a) Program.--The Secretary shall establish a research, 
     development, demonstration, and commercial application 
     program to be carried out in collaboration with entities in 
     Mexico and the United States to promote energy efficient, 
     environmentally sound economic development along the United 
     States-Mexico border.
       (b) Program Management.--The program under subsection (a) 
     shall be managed by the Department of Energy Carlsbad 
     Environmental Management Field Office.
       (c) Technology Transfer.--In carrying out projects and 
     activities under this section, the Secretary shall assess the 
     applicability of technology developed under the Environmental 
     Management Science Program of the Department.
       (d) Intellectual Property.--In carrying out this section, 
     the Secretary shall comply with the requirements of any 
     agreement entered into between the United States and Mexico 
     regarding intellectual property protection.

     SEC. 21703. WASTE REDUCTION AND USE OF ALTERNATIVES.

       (a) Grant Authority.--The Secretary is authorized to make a 
     single grant to a qualified institution to examine and 
     develop the feasibility of burning post-consumer carpet in 
     cement kilns as an alternative energy source. The purposes of 
     the grant shall include determining--
       (1) how post-consumer carpet can be burned without 
     disrupting kiln operations;
       (2) the extent to which overall kiln emissions may be 
     reduced;
       (3) the emissions of air pollutants and other relevant 
     environmental impacts; and
       (4) how this process provides benefits to both cement kiln 
     operations and carpet suppliers.
       (b) Qualified Institution.--For the purposes of subsection 
     (a), a qualified institution is a research-intensive 
     institution of higher education with demonstrated expertise 
     in the fields of fiber recycling and logistical modeling of 
     carpet waste collection and preparation.

     SEC. 21704. COAL GASIFICATION.

       The Secretary is authorized to provide loan guarantees for 
     a project to produce energy from a plant using integrated 
     gasification combined cycle technology of at least 400 
     megawatts in capacity that produces power at competitive 
     rates in deregulated energy generation markets and that does 
     not receive any subsidy (direct or indirect) from ratepayers.

     SEC. 21705. PETROLEUM COKE GASIFICATION.

       The Secretary is authorized to provide loan guarantees for 
     at least one petroleum coke gasification polygeneration 
     project.

     SEC. 21706. OTHER BIOPOWER AND BIOENERGY.

       The Secretary shall conduct a program to assist in the 
     planning, design, and implementation of projects to convert 
     rice straw, rice hulls, soybean matter, poultry fat, poultry 
     waste, sugarcane bagasse, forest thinnings, and barley grain 
     into biopower and biofuels.

     SEC. 21707. COAL TECHNOLOGY LOAN.

       There are authorized to be appropriated to the Secretary 
     $125,000,000 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.

     SEC. 21708. FUEL CELL TEST CENTER.

       (a) Study.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall transmit to the 
     Congress a report on the results of a study of the 
     establishment of a test center for next-generation fuel cells 
     at an institution of higher education that has available a 
     continuous source of hydrogen and access to the electric 
     transmission grid. Such report shall include a conceptual 
     design for such test center and a projection of the costs of 
     establishing the test center.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary for carrying out this 
     section $500,000.

[[Page H3156]]

     SEC. 21709. FUEL CELL TRANSIT BUS DEMONSTRATION.

       The Secretary shall establish a transit bus demonstration 
     program to make competitive, merit-based awards for five-year 
     projects to demonstrate not more than 12 fuel cell transit 
     buses (and necessary infrastructure) in three geographically 
     dispersed localities. In selecting projects under this 
     section, the Secretary shall give preference to projects that 
     are most likely to mitigate congestion and improve air 
     quality. There are authorized to be appropriated to the 
     Secretary $10,000,000 for each of the fiscal years 2004 
     through 2007 for carrying out this section.

                         Subtitle H--Management

     SEC. 21801. AVAILABILITY OF FUNDS.

       Funds authorized to be appropriated to the Department under 
     this title shall remain available until expended.

     SEC. 21802. COST SHARING.

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

     SEC. 21803. MERIT REVIEW OF PROPOSALS.

       Awards of funds authorized under this title shall be made 
     only after an impartial review of the scientific and 
     technical merit of the proposals for such awards has been 
     carried out by or for the Department.

     SEC. 21804. EXTERNAL TECHNICAL REVIEW OF DEPARTMENTAL 
                   PROGRAMS.

       (a) National Energy Research and Development Advisory 
     Boards.--(1) The Secretary shall establish one or more 
     advisory boards to review Department research, development, 
     demonstration, and commercial application programs in the 
     following areas:
       (A) Energy efficiency.
       (B) Renewable energy.
       (C) Nuclear energy.
       (D) Fossil energy.
       (2) The Secretary may designate an existing advisory board 
     within the Department to fulfill the responsibilities of an 
     advisory board under this subsection, and may enter into 
     appropriate arrangements with the National Academy of 
     Sciences to establish such an advisory board.
       (b) Office of Science Advisory Committees.--
       (1) Utilization of existing committees.--The Secretary 
     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.
       (2) Science advisory committee.--
       (A) Establishment.--There shall be in the Office of Science 
     a Science Advisory Committee that includes the chairs of each 
     of the advisory committees described in paragraph (1).
       (B) Responsibilities.--The Science Advisory Committee 
     shall--
       (i) serve as the science advisor to the Assistant Secretary 
     for Science created under section 209 of the Department of 
     Energy Organization Act, as added by section 22001 of this 
     Act;
       (ii) advise the Assistant Secretary with respect to the 
     well-being and management of the National Laboratories and 
     single-purpose research facilities;
       (iii) advise the Assistant Secretary with respect to 
     education and workforce training activities required for 
     effective short-term and long-term basic and applied research 
     activities of the Office of Science; and
       (iv) advise the Assistant Secretary with respect to the 
     well being of the university research programs supported by 
     the Office of Science.
       (c) Membership.--Each advisory board under this section 
     shall consist of persons with appropriate expertise 
     representing a diverse range of interests.
       (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 commercial application 
     program or programs. The advisory board shall also review the 
     measurable cost and performance-based goals for such programs 
     as established under section 20002, and the progress on 
     meeting such goals.
       (e) Periodic Reviews and Assessments.--The Secretary shall 
     enter into appropriate arrangements with the National Academy 
     of Sciences to conduct periodic reviews and assessments of 
     the programs authorized by this title, the measurable cost 
     and performance-based goals for such programs as established 
     under section 20002, if any, and the progress on meeting such 
     goals. Such reviews and assessments shall be conducted every 
     5 years, or more often as the Secretary considers necessary, 
     and the Secretary shall transmit to the Congress reports 
     containing the results of all such reviews and assessments.

     SEC. 21805. IMPROVED COORDINATION OF TECHNOLOGY TRANSFER 
                   ACTIVITIES.

       (a) Technology Transfer Coordinator.--The Secretary shall 
     designate 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 
     Transfer Working Group, and shall oversee the expenditure of 
     funds allocated to the Technology Transfer Working Group, and 
     shall coordinate with each technology partnership ombudsman 
     appointed under section 11 of the Technology Transfer 
     Commercialization Act of 2000 (42 U.S.C. 7261c).
       (b) Technology Transfer Working Group.--The Secretary shall 
     establish a Technology Transfer 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, including alternative approaches to resolution of 
     disputes involving intellectual property rights and other 
     technology transfer matters; and
       (3) develop and disseminate to the public and prospective 
     technology partners information about opportunities and 
     procedures for technology transfer with the Department, 
     including those related to alternative approaches to 
     resolution of disputes involving intellectual property rights 
     and other technology transfer matters.
       (c) Technology Transfer Responsibility.--Nothing in this 
     section shall affect the technology transfer responsibilities 
     of Federal employees under the Stevenson-Wydler Technology 
     Innovation Act of 1980.

     SEC. 21806. 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 designate 
     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, and information 
     related to alternative approaches to resolution of disputes 
     involving intellectual property rights and other technology 
     transfer matters;
       (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.
       (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. 21807. MOBILITY OF SCIENTIFIC AND TECHNICAL PERSONNEL.

       Not later than 2 years after the date of enactment of this 
     section, the Secretary shall transmit a report to the 
     Congress identifying any policies or procedures of a 
     contractor operating a National Laboratory or single-purpose 
     research facility that create disincentives to the temporary 
     transfer of scientific

[[Page H3157]]

     and technical personnel among the contractor-operated 
     National Laboratories or contractor-operated single-purpose 
     research facilities.

     SEC. 21808. NATIONAL ACADEMY OF SCIENCES REPORT.

       Within 90 days after the date of enactment of this Act, the 
     Secretary shall enter into an arrangement with the National 
     Academy of Sciences for the Academy to--
       (1) conduct studies on--
       (A) the obstacles to accelerating the commercial 
     application of energy technology; and
       (B) the adequacy of Department policies and procedures for, 
     and oversight of, technology transfer-related disputes 
     between contractors of the Department and the private sector; 
     and
       (2) report to the Congress on recommendations developed as 
     a result of the studies.

     SEC. 21809. OUTREACH.

       The Secretary shall ensure that each program authorized by 
     this title includes an outreach component to provide 
     information, as appropriate, to manufacturers, consumers, 
     engineers, architects, builders, energy service companies, 
     institutions of higher education, facility planners and 
     managers, State and local governments, and other entities.

     SEC. 21810. LIMITS ON USE OF FUNDS.

       (a) Competitive Procedure Requirement.--None of the funds 
     authorized to be appropriated to the Secretary by this title 
     may be used to award a management and operating contract for 
     a nonmilitary energy laboratory of the Department unless such 
     contract is competitively awarded or the Secretary grants, on 
     a case-by-case basis, a waiver to allow for such a deviation. 
     The Secretary may not delegate the authority to grant such a 
     waiver.
       (b) Congressional Notice.--At least 2 months before a 
     contract award for which the Secretary intends to grant such 
     a waiver, the Secretary shall submit to the Congress a report 
     notifying the Congress of the waiver and setting forth the 
     reasons for the waiver.

     SEC. 21811. REPROGRAMMING.

       (a) Distribution Report.--Not later than 60 days after the 
     date of the enactment of an Act appropriating amounts 
     authorized under this title, the Secretary shall transmit to 
     the appropriate authorizing committees of the Congress a 
     report explaining how such amounts will be distributed among 
     the authorizations contained in this title.
       (b) Prohibition.--(1) No amount identified under subsection 
     (a) shall be reprogrammed if such reprogramming would result 
     in an obligation which changes an individual distribution 
     required to be reported under subsection (a) by more than 5 
     percent unless the Secretary has transmitted to the 
     appropriate authorizing committees of the Congress a report 
     described in subsection (c) and a period of 30 days has 
     elapsed after such committees receive the report.
       (2) In the computation of the 30-day period described in 
     paragraph (1), there shall be excluded any day on which 
     either House of Congress is not in session because of an 
     adjournment of more than 3 days to a day certain.
       (c) Reprogramming Report.--A report referred to in 
     subsection (b)(1) shall contain a full and complete statement 
     of the action proposed to be taken and the facts and 
     circumstances relied on in support of the proposed action.

     SEC. 21812. CONSTRUCTION WITH OTHER LAWS.

       Except as otherwise provided in this title, the Secretary 
     shall carry out the research, development, demonstration, and 
     commercial application programs, projects, and activities 
     authorized by this title in accordance with the applicable 
     provisions of the Atomic Energy Act of 1954 (42 U.S.C. 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.), the Stevenson-Wydler Technology 
     Innovation Act of 1980 (15 U.S.C. 3701 et seq.), chapter 18 
     of title 35, United States Code (commonly referred to as the 
     Bayh-Dole Act), and any other Act under which the Secretary 
     is authorized to carry out such activities.

     SEC. 21813. UNIVERSITY COLLABORATION.

       Not later than 2 years after the date of enactment of this 
     Act, the Secretary shall transmit to the Congress a report 
     that examines the feasibility of promoting collaborations 
     between large institutions of higher education and small 
     institutions of higher education through grants, contracts, 
     and cooperative agreements made by the Secretary for energy 
     projects. The Secretary shall also consider providing 
     incentives for the inclusion of small institutions of higher 
     education, including minority-serving institutions, in energy 
     research grants, contracts, and cooperative agreements.

     SEC. 21814. FEDERAL LABORATORY EDUCATIONAL PARTNERS.

       (a) Distribution of Royalties Received by Federal 
     Agencies.--Section 14(a)(1)(B)(v) of the Stevenson-Wydler 
     Technology Innovation Act of 1980 (15 U.S.C. 
     3710c(a)(1)(B)(v)), is amended to read as follows:
       ``(v) for scientific research and development and for 
     educational assistance and other purposes consistent with the 
     missions and objectives of the Department of Energy and the 
     laboratory.''.
       (b) Cooperative Research and Development Agreements.--
     Section 12(b)(5)(C) of the Stevenson-Wydler Technology 
     Innovation Act of 1980 (15 U.S.C. 3710a(b)(5)(C)) is amended 
     to read as follows:
       ``(C) for scientific research and development and for 
     educational assistance consistent with the missions and 
     objectives of the Department of Energy and the laboratory.''.

     SEC. 21815. INTERAGENCY COOPERATION.

       The Secretary shall enter into discussions with the 
     Administrator of the National Aeronautics and Space 
     Administration with the goal of reaching an interagency 
     working agreement between the 2 agencies that would make the 
     National Aeronautics and Space Administration's expertise in 
     energy, gained from its existing and planned programs, more 
     readily available to the relevant research, development, 
     demonstration, and commercial applications programs of the 
     Department. Technologies to be discussed should include the 
     National Aeronautics and Space Administration's modeling, 
     research, development, testing, and evaluation of new energy 
     technologies, including solar, wind, fuel cells, and hydrogen 
     storage and distribution.

               TITLE II--DEPARTMENT OF ENERGY MANAGEMENT

     SEC. 22001. EXTERNAL REGULATION OF DEPARTMENT OF ENERGY.

       (a) Department of Energy Report.--Not later than 18 months 
     after the date of enactment of this Act, the Secretary shall 
     transmit to the Congress a report on the assumption by the 
     Nuclear Regulatory Commission of the Department's regulatory 
     and enforcement responsibilities with respect to nuclear 
     safety, and the assumption by the Occupational Safety and 
     Health Administration of the Department's regulatory and 
     enforcement responsibilities with respect to occupational 
     safety and health, at any nonmilitary energy laboratory owned 
     or operated by the Department. The report shall include--
       (1) a detailed transition plan, drafted in coordination 
     with the Nuclear Regulatory Commission and the Occupational 
     Safety and Health Administration, for termination of self-
     regulation authority, including the activities to be 
     coordinated with the Nuclear Regulatory Commission and the 
     Occupational Safety and Health Administration;
       (2) a description of any issues that would require 
     resolution with the Nuclear Regulatory Commission, the 
     Occupational Safety and Health Administration, or other 
     external regulators; and
       (3) an estimate of--
       (A) the annual cost of administering and implementing 
     external regulation of the nuclear safety and occupational 
     safety and health responsibilities at nonmilitary energy 
     laboratories owned or operated by the Department;
       (B) the number of Federal and contractor employees required 
     to administer and implement such external regulation; and
       (C) the extent and schedule by which the Department and the 
     staffs at its nonmilitary energy laboratories would be 
     reduced, and the anticipated cost savings from that 
     reduction.
       (b) General Accounting Office Reporting Requirement.--The 
     Comptroller General shall provide a report not later than 20 
     months after the date of enactment of this Act that compares 
     the Department's transition plan with the Department's 
     implementation of nuclear safety and occupational safety and 
     health responsibilities under sections 234A and 234C of the 
     Atomic Energy Act of 1954.

     SEC. 22002. IMPROVED COORDINATION AND MANAGEMENT OF CIVILIAN 
                   SCIENCE AND TECHNOLOGY PROGRAMS.

       (a) Reconfiguration of Position of Director of the Office 
     of Science.--Section 209 of the Department of Energy 
     Organization Act (42 U.S.C. 7139) is amended by--
       (1) striking ``a Director'' and inserting ``an Assistant 
     Secretary, in addition to those appointed under section 
     203(a),''; and
       (2) striking ``Director'' and inserting ``Assistant 
     Secretary''.
       (b) Technical and Conforming Amendments.--(1) 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 (7)''.
       (2) 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.'';
       (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.''.

                     TITLE III--CLEAN SCHOOL BUSES

     SEC. 23001. ESTABLISHMENT OF PILOT PROGRAM.

       (a) Establishment.--The Secretary of Energy, in 
     consultation with the Administrator of the Environmental 
     Protection Agency, shall establish a pilot program for 
     awarding grants on a competitive basis to eligible entities 
     for the demonstration and commercial application of 
     alternative fuel school buses and ultra-low sulfur diesel 
     school buses.
       (b) Requirements.--Not later than 3 months after the date 
     of the enactment of this Act, the Secretary shall establish 
     and publish in the Federal register grant requirements on 
     eligibility for assistance, and on

[[Page H3158]]

     implementation of the program established under subsection 
     (a), including certification requirements to ensure 
     compliance with this title.
       (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 or State governmental entity responsible for 
     providing school bus service to one or more public school 
     systems or responsible for the purchase of school buses; or
       (2) to a contracting entity that provides school bus 
     service to one or more public school systems, if the grant 
     application is submitted jointly with the school system or 
     systems which the buses will serve.
       (e) Types of Grants.--
       (1) In general.--Grants under this section shall be for the 
     demonstration and commercial application of technologies to 
     facilitate the use of alternative fuel school buses and 
     ultra-low sulfur diesel school buses in lieu of buses 
     manufactured before model year 1977 and diesel-powered buses 
     manufactured before model year 1991.
       (2) No economic benefit.--Other than the receipt of the 
     grant, a recipient of a grant under this section may not 
     receive any economic benefit in connection with the receipt 
     of the grant.
       (3) Priority of grant applications.--The Secretary shall 
     give priority to awarding grants to applicants who can 
     demonstrate the use of alternative fuel buses and ultra-low 
     sulfur diesel school buses in lieu of buses manufactured 
     before model year 1977.
       (f) Conditions of Grant.--A grant provided under this 
     section shall include the following conditions:
       (1) All buses acquired with funds provided under the grant 
     shall be operated as part of the school bus fleet for which 
     the grant was made for a minimum of 5 years.
       (2) Funds provided under the grant may only be used--
       (A) to pay the cost, except as provided in paragraph (3), 
     of new alternative fuel school buses or ultra-low sulfur 
     diesel school buses, including State taxes and contract fees; 
     and
       (B) to provide--
       (i) up to 10 percent of the price of the alternative fuel 
     buses acquired, for necessary alternative fuel infrastructure 
     if the infrastructure will only be available to the grant 
     recipient; and
       (ii) up to 15 percent of the price of the alternative fuel 
     buses acquired, for necessary alternative fuel infrastructure 
     if the infrastructure will be available to the grant 
     recipient and to other bus fleets.
       (3) The grant recipient shall be required to provide at 
     least the lesser of 15 percent of the total cost of each bus 
     received or $15,000 per bus.
       (4) In the case of a grant recipient receiving a grant to 
     demonstrate ultra-low sulfur diesel school buses, the grant 
     recipient shall be required to provide documentation to the 
     satisfaction of the Secretary that diesel fuel containing 
     sulfur at not more than 15 parts per million is available for 
     carrying out the purposes of the grant, and a commitment by 
     the applicant to use such fuel in carrying out the purposes 
     of the grant.
       (g) Buses.--Funding under a grant made under this section 
     may be used to demonstrate the use only of new alternative 
     fuel school buses or ultra-low sulfur diesel school buses--
       (1) with a gross vehicle weight of greater than 14,000 
     pounds;
       (2) that are powered by a heavy duty engine;
       (3) that, in the case of alternative fuel school buses 
     manufactured in model years 2003 through 2006, emit not more 
     than 1.8 grams per brake horsepower-hour of nonmethane 
     hydrocarbons and oxides of nitrogen and .01 grams per brake 
     horsepower-hour of particulate matter; and
       (4) that, in the case of ultra-low sulfur diesel school 
     buses, emit not more than--
       (A) for buses manufactured in model year 2003, 3.0 grams 
     per brake horsepower-hour of oxides of nitrogen and .01 grams 
     per brake horsepower-hour of particulate matter; and
       (B) for buses manufactured in model years 2004 through 
     2006, 2.5 grams per brake horsepower-hour of nonmethane 
     hydrocarbons and oxides of nitrogen and .01 grams per brake 
     horsepower-hour of particulate matter,

     except that under no circumstances shall buses be acquired 
     under this section that emit nonmethane hydrocarbons, oxides 
     of nitrogen, or particulate matter at a rate greater than the 
     best performing technology of the same class of ultra-low 
     sulfur diesel school buses commercially available at the time 
     the grant is made.
       (h) Deployment and Distribution.--The Secretary shall seek 
     to the maximum extent practicable to achieve nationwide 
     deployment of alternative fuel school buses and ultra-low 
     sulfur diesel 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) 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, consistent with the health, safety, and 
     welfare of students and the proper operation and maintenance 
     of school buses, to reduce the incidence of unnecessary 
     school bus idling at schools when picking up and unloading 
     students.
       (k) Annual Report.--Not later than January 31 of each year, 
     the Secretary of Energy shall provide a report evaluating 
     implementation of the program under this title to the 
     Congress. Such report shall include the total number of grant 
     applications received, the number and types of alternative 
     fuel buses and ultra-low sulfur diesel school buses requested 
     in grant applications, a list of grants awarded and the 
     criteria used to select the grant recipients, certified 
     engine emission levels of all buses purchased under the 
     program, and any other information the Secretary considers 
     appropriate.
       (l) 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 operating an engine while 
     remaining stationary for more than approximately 15 minutes, 
     except that such term does not apply to routine stoppages 
     associated with traffic movement or congestion; 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.

     SEC. 23002. FUEL CELL BUS DEVELOPMENT AND DEMONSTRATION 
                   PROGRAM.

       (a) Establishment of Program.--The Secretary shall 
     establish a program for entering into cooperative agreements 
     with private sector fuel cell bus developers for the 
     development of fuel cell-powered school buses, and 
     subsequently with not less than 2 units of local government 
     using natural gas-powered school buses and such private 
     sector fuel cell bus developers to demonstrate the use of 
     fuel cell-powered school buses.
       (b) Cost Sharing.--The non-Federal contribution for 
     activities funded under this section shall be not less than--
       (1) 20 percent for fuel infrastructure development 
     activities; and
       (2) 50 percent for demonstration activities and for 
     development activities not described in paragraph (1).
       (c) Funding.--No more than $25,000,000 of the amounts 
     authorized under section 23004(a) may be used for carrying 
     out this section for the period encompassing fiscal years 
     2004 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 Congress 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. 23003. DIESEL RETROFIT PROGRAM.

       (a) Establishment.--The Administrator of the Environmental 
     Protection Agency and the Secretary shall establish a pilot 
     program for awarding grants on a competitive basis to 
     eligible recipients for the demonstration and commercial 
     application of retrofit technologies for diesel school buses.
       (b) Eligible Recipients.--A grant shall be awarded under 
     this section only--
       (1) to a local or State governmental entity responsible for 
     providing school bus service to one or more public school 
     systems; or
       (2) to a contracting entity that provides school bus 
     service to one or more public school systems, if the grant 
     application is submitted jointly with the school system or 
     systems which the buses will serve.
       (c) Conditions of Grant.--A grant provided under this 
     section may be used only to demonstrate the use of retrofit 
     emissions-control technology on diesel buses that--
       (1) operate on ultra-low sulfur diesel fuel; and
       (2) were manufactured in model year 1991 or later.
       (d) Verification.--Not later than 3 months after the date 
     of enactment of this Act, the Administrator shall publish in 
     the Federal Register procedures to verify--
       (1) the retrofit emissions-control technology to be 
     demonstrated; and
       (2) that buses on which retrofit emissions-control 
     technology are to be demonstrated will operate on diesel fuel 
     containing not more than 15 parts per million of sulfur.

     SEC. 23004. AUTHORIZATION OF APPROPRIATIONS.

       (a) School Bus Grants.--There are authorized to be 
     appropriated to the Secretary for carrying out this title, to 
     remain available until expended--
       (1) $90,000,000 for fiscal year 2004;
       (2) $100,000,000 for fiscal year 2005; and
       (3) $110,000,000 for fiscal year 2006.
       (b) Retrofit Grants.--There are authorized to be 
     appropriated to the Administrator of the Environmental 
     Protection Agency and the Secretary such sums as may be 
     necessary for carrying out section 23003.

[[Page H3159]]

                         DIVISION C--RESOURCES

                         TITLE I--INDIAN ENERGY

     SEC. 30101. INDIAN ENERGY.

       Title XXVI of the Energy Policy Act of 1992 (25 U.S.C. 3501 
     et seq.) is amended to read as follows:

                      ``TITLE XXVI--INDIAN ENERGY

     ``SEC. 2601. DEFINITIONS.

       ``In this title:
       ``(1) Indian.--The term `Indian' means an individual member 
     of an Indian tribe who owns land or an interest in land, the 
     title to which land--
       ``(A) is held in trust by the United States; or
       ``(B) is subject to a restriction against alienation 
     imposed by the United States.
       ``(2) Indian land.--The term `Indian land' means--
       ``(A) any land located within the boundaries of an Indian 
     reservation, pueblo, or rancheria; or
       ``(B) any land not located within the boundaries of an 
     Indian reservation, pueblo, or rancheria, the title to which 
     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.
       ``(3) Indian reservation.--The term `Indian reservation' 
     includes--
       ``(A) an Indian reservation in existence as of the date of 
     the enactment of this paragraph;
       ``(B) a public domain Indian allotment;
       ``(C) a former reservation in the State of Oklahoma; and
       ``(D) a dependent Indian community located within the 
     borders of the United States, regardless of whether the 
     community is located--
       ``(i) on original or acquired territory of the community; 
     or
       ``(ii) within or outside the boundaries of any particular 
     State.
       ``(4) Indian tribe.--The term `Indian tribe' has the 
     meaning given that term in section 4 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450b), 
     except the term, for the purposes of this title, shall not 
     include any Native Corporation.
       ``(5) Native corporation.--The term `Native Corporation' 
     has the meaning given the term in section 3 of the Alaska 
     Native Claims Settlement Act (43 U.S.C. 1602).
       ``(6) Secretary.--The term `Secretary' means the Secretary 
     of the Interior.
       ``(7) Tribal consortium.--The term `tribal consortium' 
     means an organization that consists of at least 3 entities, 
     at least 1 of which is an Indian tribe.

     ``SEC. 2602. INDIAN TRIBAL RESOURCE REGULATION.

       ``To the maximum extent practicable, the Secretary and the 
     Secretary of Energy shall make available to Indian tribes, 
     tribal consortia, and Native Corporations scientific and 
     technical data for use in the development and management of 
     energy resources on Indian land and on land conveyed to a 
     Native Corporation.

     ``SEC. 2603. LEASES, BUSINESS AGREEMENTS, AND RIGHTS-OF-WAY 
                   INVOLVING ENERGY DEVELOPMENT OR TRANSMISSION.

       ``(a) In General.--Notwithstanding any other provision of 
     law--
       ``(1) an Indian or Indian tribe may enter into a lease or 
     business agreement for the purpose of energy development, 
     including a lease or business agreement for--
       ``(A) exploration for, extraction of, processing of, or 
     other development of energy resources; and
       ``(B) construction or operation of--
       ``(i) an electric generation, transmission, or distribution 
     facility located on Indian land; or
       ``(ii) a facility to process or refine energy resources 
     developed on Indian land; and
       ``(2) a lease or business agreement described in paragraph 
     (1) shall not require the approval of the Secretary if--
       ``(A) the lease or business agreement is executed under 
     tribal regulations approved by the Secretary under subsection 
     (e); and
       ``(B) the term of the lease or business agreement does not 
     exceed 30 years.
       ``(b) Rights-of-Way for Pipelines or Electric Transmission 
     or Distribution Lines.--An Indian tribe may grant a right-of-
     way over the Indian land of the Indian tribe for a pipeline 
     or an electric transmission or distribution line without 
     specific approval by the Secretary if--
       ``(1) the right-of-way is executed under and complies with 
     tribal regulations approved by the Secretary under subsection 
     (e);
       ``(2) the term of the right-of-way does not exceed 30 
     years; and
       ``(3) the pipeline or electric transmission or distribution 
     line serves--
       ``(A) an electric generation, transmission, or distribution 
     facility located on Indian land; or
       ``(B) a facility located on Indian land that processes or 
     refines renewable or nonrenewable energy resources developed 
     on Indian land.
       ``(c) Renewals.--A lease or business agreement entered into 
     or a right-of-way granted by an Indian tribe under this 
     section may be renewed at the discretion of the Indian tribe, 
     in accordance with this section.
       ``(d) Validity.--No lease, business agreement, or right-of-
     way under this section shall be valid unless the lease, 
     business agreement, or right-of-way is authorized in 
     accordance with tribal regulations approved by the Secretary 
     under subsection (e).
       ``(e) Tribal Regulatory Requirements.--
       ``(1) In general.--An Indian tribe may submit to the 
     Secretary for approval tribal regulations governing leases, 
     business agreements, and rights-of-way under this section.
       ``(2) Approval or disapproval.--
       ``(A) In general.--Not later than 120 days after the date 
     on which the Secretary receives tribal regulations submitted 
     by an Indian tribe under paragraph (1) (or such later date as 
     may be agreed to by the Secretary and the Indian tribe), the 
     Secretary shall approve or disapprove the regulations.
       ``(B) Conditions for approval.--The Secretary shall approve 
     tribal regulations submitted under paragraph (1) only if the 
     regulations include provisions that, with respect to a lease, 
     business agreement, or right-of-way under this section--
       ``(i) ensure the acquisition of necessary information from 
     the applicant for the lease, business agreement, or right-of-
     way;
       ``(ii) address the term of the lease or business agreement 
     or the term of conveyance of the right-of-way;
       ``(iii) address amendments and renewals;
       ``(iv) address consideration for the lease, business 
     agreement, or right-of-way;
       ``(v) address technical or other relevant requirements;
       ``(vi) establish requirements for environmental review in 
     accordance with subparagraph (C);
       ``(vii) ensure compliance with all applicable environmental 
     laws;
       ``(viii) identify final approval authority;
       ``(ix) provide for public notification of final approvals; 
     and
       ``(x) establish a process for consultation with any 
     affected States concerning potential off-reservation impacts 
     associated with the lease, business agreement, or right-of-
     way.
       ``(C) Environmental review process.--Tribal regulations 
     submitted under paragraph (1) shall establish, and include 
     provisions to ensure compliance with, an environmental review 
     process that, with respect to a lease, business agreement, or 
     right-of-way under this section, provides for--
       ``(i) the identification and evaluation of all significant 
     environmental impacts (as compared with a no-action 
     alternative);
       ``(ii) the identification of proposed mitigation;
       ``(iii) a process for ensuring that the public is informed 
     of and has an opportunity to comment on any proposed lease, 
     business agreement, or right-of-way before tribal approval of 
     the lease, business agreement, or right-of-way (or any 
     amendment to or renewal of a lease, business agreement, or 
     right-of-way); and
       ``(iv) sufficient administrative support and technical 
     capability to carry out the environmental review process.
       ``(3) Public participation.--The Secretary may provide 
     notice and opportunity for public comment on tribal 
     regulations submitted under paragraph (1).
       ``(4) Disapproval.--If the Secretary disapproves tribal 
     regulations submitted by an Indian tribe under paragraph (1), 
     the Secretary shall--
       ``(A) notify the Indian tribe in writing of the basis for 
     the disapproval;
       ``(B) identify what changes or other actions are required 
     to address the concerns of the Secretary; and
       ``(C) provide the Indian tribe with an opportunity to 
     revise and resubmit the regulations.
       ``(5) Execution of lease or business agreement or granting 
     of right-of-way.--If an Indian tribe executes a lease or 
     business agreement or grants a right-of-way in accordance 
     with tribal regulations approved under this subsection, the 
     Indian tribe shall provide to the Secretary--
       ``(A) a copy of the lease, business agreement, or right-of-
     way document (including all amendments to and renewals of the 
     document); and
       ``(B) in the case of tribal regulations or a lease, 
     business agreement, or right-of-way that permits payment to 
     be made directly to the Indian tribe, documentation of those 
     payments sufficient to enable the Secretary to discharge the 
     trust responsibility of the United States as appropriate 
     under applicable law.
       ``(6) Liability.--The United States shall not be liable for 
     any loss or injury sustained by any party (including an 
     Indian tribe or any member of an Indian tribe) to a lease, 
     business agreement, or right-of-way executed in accordance 
     with tribal regulations approved under this subsection.
       ``(7) compliance review.--
       ``(A) In general.--After exhaustion of tribal remedies, any 
     person may submit to the Secretary, in a timely manner, a 
     petition to review compliance of an Indian tribe with tribal 
     regulations of the Indian tribe approved under this 
     subsection.
       ``(B) Action by secretary.--The Secretary shall--
       ``(i) not later than 60 days after the date on which the 
     Secretary receives a petition under subparagraph (A), review 
     compliance of an Indian tribe described in subparagraph (A); 
     and
       ``(ii) on completion of the review, if the Secretary 
     determines that an Indian tribe is not in compliance with 
     tribal regulations approved under this subsection, take such 
     action as is necessary to compel compliance, including--

[[Page H3160]]

       ``(I)(aa) rescinding a lease, business agreement, or right-
     of-way under this section; or
       ``(bb) suspending a lease, business agreement, or right-of-
     way under this section until an Indian tribe is in compliance 
     with tribal regulations; and
       ``(II) rescinding approval of the tribal regulations and 
     reassuming the responsibility for approval of leases, 
     business agreements, or rights-of-way associated with an 
     energy pipeline or distribution line described in subsection 
     (b).

       ``(C) Compliance.--If the Secretary seeks to compel 
     compliance of an Indian tribe with tribal regulations under 
     subparagraph (B)(ii), the Secretary shall--
       ``(i) make a written determination that describes the 
     manner in which the tribal regulations have been violated;
       ``(ii) provide the Indian tribe with a written notice of 
     the violation together with the written determination; and
       ``(iii) before taking any action described in subparagraph 
     (B)(ii) or seeking any other remedy, provide the Indian tribe 
     with a hearing and a reasonable opportunity to attain 
     compliance with the tribal regulations.
       ``(D) Appeal.--An Indian tribe described in subparagraph 
     (C) shall retain all rights to appeal as provided in 
     regulations promulgated by the Secretary.
       ``(f) Agreements.--
       ``(1) In general.--Any agreement by an Indian tribe that 
     relates to the development of an electric generation, 
     transmission, or distribution facility, or a facility to 
     process or refine renewable or nonrenewable energy resources 
     developed on Indian land, shall not require the specific 
     approval of the Secretary under section 2103 of the Revised 
     Statutes (25 U.S.C. 81) if the activity that is the subject 
     of the agreement is carried out in accordance with this 
     section.
       ``(2) Liability.--The United States shall not be liable for 
     any loss or injury sustained by any person (including an 
     Indian tribe or any member of an Indian tribe) resulting from 
     an action taken in performance of an agreement entered into 
     under this subsection.
       ``(g) No Effect on Other Law.--Nothing in this section 
     affects the application of any provision of--
       ``(1) the Act of May 11, 1938 (commonly known as the Indian 
     Mineral Leasing Act of 1938; 25 U.S.C. 396a et seq.);
       ``(2) the Indian Mineral Development Act of 1982 (25 U.S.C. 
     2101 et seq.);
       ``(3) the Surface Mining Control and Reclamation Act of 
     1977 (30 U.S.C. 1201 et seq.); or
       ``(4) any Federal environmental law.
       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section, to remain available until 
     expended.''.

                         TITLE II--OIL AND GAS

     SEC. 30201. PROGRAM ON OIL AND GAS ROYALTIES IN-KIND.

       (a) Applicability of Section.--Notwithstanding any other 
     provision of law, the provisions of this section shall apply 
     to all royalty in-kind accepted by the Secretary of the 
     Interior on or after the date of the enactment of this Act 
     under any Federal oil or gas lease or permit under section 36 
     of the Mineral Leasing Act (30 U.S.C. 192), section 27 of the 
     Outer Continental Shelf Lands Act (43 U.S.C. 1353), or any 
     other Federal law governing leasing of Federal lands for oil 
     and gas development.
       (b) Terms and Conditions.--All royalty accruing to the 
     United States shall, on the demand of the Secretary of the 
     Interior, be paid in oil or gas. If the Secretary of the 
     Interior makes such a demand, the following provisions apply 
     to such payment:
       (1) Delivery by, or on behalf of, the lessee of the royalty 
     amount and quality due under the lease satisfies the lessee's 
     royalty obligation for the amount delivered, except that 
     transportation and processing reimbursements paid to, or 
     deductions claimed by, the lessee shall be subject to review 
     and audit.
       (2)(A) Royalty production shall be placed in marketable 
     condition by the lessee at no cost to the United States.
       (B) In this paragraph, the term ``in marketable condition'' 
     means sufficiently free from impurities and otherwise in a 
     condition that it will be accepted by a purchaser under a 
     sales contract typical of the field or area in which the 
     royalty production was produced.
       (3) The Secretary of the Interior may--
       (A) sell or otherwise dispose of any royalty production 
     taken in-kind (other than oil or gas transferred under 
     section 27(a)(3) of the Outer Continental Shelf Lands Act (43 
     U.S.C. 1353(a)(3)) for not less than the market price; and
       (B) transport or process (or both) any royalty production 
     taken in-kind.
       (4) The Secretary of the Interior may, notwithstanding 
     section 3302 of title 31, United States Code, retain and use 
     a portion of the revenues from the sale of oil and gas 
     royalties taken in-kind that otherwise would be deposited to 
     miscellaneous receipts, without regard to fiscal year 
     limitation, or may use royalty production, to pay the cost 
     of--
       (A) transporting the royalty production;
       (B) processing the royalty production;
       (C) disposing of the royalty production; or
       (D) any combination of transporting, processing, and 
     disposing of the royalty production.
       (5) The Secretary of the Interior may use a portion of the 
     revenues from the sale of oil royalties taken in-kind, 
     without fiscal year limitation, to pay transportation costs, 
     salaries, and other administrative costs directly related to 
     filling the Strategic Petroleum Reserve.
       (c) Reimbursement of Cost.--If the lessee, pursuant to an 
     agreement with the United States or as provided in the lease, 
     processes the royalty gas or delivers the royalty oil or gas 
     at a point not on or adjacent to the lease area, the 
     Secretary of the Interior shall--
       (1) reimburse the lessee for the reasonable costs of 
     transportation (not including gathering) from the lease to 
     the point of delivery or for processing costs; or
       (2) at the discretion of the Secretary of the Interior, 
     allow the lessee to deduct such transportation or processing 
     costs in reporting and paying royalties in value for other 
     Federal oil and gas leases.
       (d) Benefit to the United States Required.--The Secretary 
     of the Interior may receive oil or gas royalties in-kind only 
     if the Secretary determines that receiving such royalties 
     provides benefits to the United States greater than or equal 
     to those likely to have been received had royalties been 
     taken in value.
       (e) Report to Congress.--By June 30, 2004, the Secretary of 
     the Interior shall provide a report to the Congress that 
     describes actions taken to develop an organization, business 
     processes, and automated systems to support a full royalty 
     in-kind capability to be used in tandem with the royalty in 
     value approach to managing Federal oil and gas revenues.
       (f) Deduction of Expenses.--
       (1) In general.--Before making payments under section 35 of 
     the Mineral Leasing Act (30 U.S.C. 191) or section 8(g) of 
     the Outer Continental Shelf Lands Act (43 U.S.C. 1337(g)) of 
     revenues derived from the sale of royalty production taken 
     in-kind from a lease, the Secretary of the Interior shall 
     deduct amounts paid or deducted under subsections (b)(4) and 
     (c), and shall deposit such amounts to miscellaneous 
     receipts.
       (2) Accounting for deductions.--If the Secretary of the 
     Interior allows the lessee to deduct transportation or 
     processing costs under subsection (c), the Secretary may not 
     reduce any payments to recipients of revenues derived from 
     any other Federal oil and gas lease as a consequence of that 
     deduction.
       (g) Consultation With States.--The Secretary of the 
     Interior--
       (1) shall consult with a State before conducting a royalty 
     in-kind program under this title within the State, and may 
     delegate management of any portion of the Federal royalty in-
     kind program to such State except as otherwise prohibited by 
     Federal law; and
       (2) shall consult annually with any State from which 
     Federal oil or gas royalty is being taken in-kind to ensure 
     to the maximum extent practicable that the royalty in-kind 
     program provides revenues to the State greater than or equal 
     to those likely to have been received had royalties been 
     taken in-value.
       (h) Provisions for Small Refineries.--
       (1) Preference.--If the Secretary of the Interior 
     determines that sufficient supplies of crude oil are not 
     available in the open market to refineries not having their 
     own source of supply for crude oil, the Secretary may grant 
     preference to such refineries in the sale of any royalty oil 
     accruing or reserved to the United States under Federal oil 
     and gas leases issued under any mineral leasing law, for 
     processing or use in such refineries at private sale at not 
     less than the market price.
       (2) Proration among refineries in production area.--In 
     disposing of oil under this subsection, the Secretary of the 
     Interior may, at the discretion of the Secretary, prorate 
     such oil among such refineries in the area in which the oil 
     is produced.
       (i) Disposition to Federal Agencies.--
       (1) Onshore royalty.--Any royalty oil or gas taken by the 
     Secretary of the Interior in-kind from onshore oil and gas 
     leases may be sold at not less than the market price to any 
     department or agency of the United States.
       (2) Offshore royalty.--Any royalty oil or gas taken in-kind 
     from Federal oil and gas leases on the outer Continental 
     Shelf may be disposed of only under section 27 of the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1353).
       (j) Preference for Federal Low-Income Energy Assistance 
     Programs.--In disposing of royalty oil or gas taken in-kind 
     under this section, the Secretary may grant a preference to 
     any person, including any State or Federal agency, for the 
     purpose of providing additional resources to any Federal low-
     income energy assistance program.

     SEC. 30202. CLARIFICATION OF FAIR MARKET RENTAL VALUE 
                   DETERMINATIONS FOR PUBLIC LANDS AND FOREST 
                   SERVICE RIGHTS-OF-WAY.

       (a) Linear Rights-of-Way Under Federal Land Policy and 
     Management Act.--Section 504 of the Federal Land Policy and 
     Management Act of 1976 (43 U.S.C. 1764) is amended by adding 
     at the end the following:
       ``(k) Determination of Fair Market Value of Linear Rights-
     of-Way.--(1) Effective upon the issuance of the rules 
     required by paragraph (2), for purposes of subsection (g), 
     the Secretary concerned shall determine the fair market 
     rental for the use of land encumbered by a linear right-of-
     way granted, issued, or renewed under this title using the 
     valuation method described in paragraphs (2), (3), and (4).
       ``(2) Not later than 1 year after the date of enactment of 
     this subsection, and in accordance with subsection (k), the 
     Secretary of the Interior shall amend section 2803.1-2 of 
     title 43, Code of Federal Regulations, as in effect on the 
     date of enactment of this subsection, to revise the per acre 
     rental fee zone

[[Page H3161]]

     value schedule by State, county, and type of linear right-of-
     way use to reflect current values of land in each zone. The 
     Secretary of Agriculture shall make the same revisions for 
     linear rights-of-way granted, issued, or renewed under this 
     title on National Forest System lands.
       ``(3) The Secretary concerned shall update annually the 
     schedule revised under paragraph (2) by multiplying the 
     current year's rental per acre by the annual change, second 
     quarter to the second quarter (June 30 to June 30) in the 
     Gross National Product Implicit Price Deflator Index 
     published in the Survey of Current Business of the Department 
     of Commerce, Bureau of Economic Analysis.
       ``(4) Whenever the cumulative change in the index referred 
     to in paragraph (3) exceeds 30 percent, or the change in the 
     3-year average of the 1-year Treasury interest rate used to 
     determine per acre rental fee zone values exceeds plus or 
     minus 50 percent, the Secretary concerned shall conduct a 
     review of the zones and rental per acre figures to determine 
     whether the value of Federal land has differed sufficiently 
     from the index referred to in paragraph (3) to warrant a 
     revision in the base zones and rental per acre figures. If, 
     as a result of the review, the Secretary concerned determines 
     that such a revision is warranted, the Secretary concerned 
     shall revise the base zones and rental per acre figures 
     accordingly.''.
       (b) Rights-of-Way Under Mineral Leasing Act.--Section 28(l) 
     of the Mineral Leasing Act (30 U.S.C. 185(l)) is amended by 
     inserting before the period at the end the following: ``using 
     the valuation method described in section 2803.1-2 of title 
     43, Code of Federal Regulations, as revised pursuant to 
     section 504(k) of the Federal Land Policy and Management Act 
     of 1976 (43 U.S.C. 1764(k))''.

     SEC. 30203. USGS ESTIMATES OF OIL AND GAS RESOURCES 
                   UNDERLYING ONSHORE FEDERAL LANDS.

       Section 604(a) of the Energy Act of 2000 (42 U.S.C. 6217) 
     is amended--
       (1) in subsection (a)(1)--
       (A) by striking ``reserve''; and
       (B) by striking ``and'' after the semicolon;
       (2) by striking subsection (a)(2) and inserting the 
     following:
       ``(2) the extent and nature of any restrictions or 
     impediments to the development of such resources, including--
       ``(A) impediments to the timely granting of leases; and
       ``(B) post-lease restrictions, impediments, or delays on 
     development, involving conditions of approval, applications 
     for permits to drill, or processing of environmental permits; 
     and
       ``(C) permits or restrictions associated with transporting 
     the resources for entry into commerce; and
       ``(3) the amount of resources not produced or introduced 
     into commerce because of those restrictions.''; and
       (3) in subsection (b)--
       (A) by striking ``reserve'' and inserting ``resource''; and
       (B) by striking ``publically'' and inserting ``publicly''.

     SEC. 30204. ROYALTY INCENTIVES FOR CERTAIN OFFSHORE AREAS.

       (a) Outer Continental Shelf Shallow Water Deep Gas Royalty 
     Relief.--
       (1) Short title.--This subsection may be cited as the 
     ``Outer Continental Shelf Shallow Water Deep Gas Royalty 
     Relief Act''.
       (2) Purposes.--The purposes of this subsection are the 
     following:
       (A) To accelerate natural gas exploration, development, and 
     production from wells drilled to deep depths on existing 
     shallow water lease tracts on the Outer Continental Shelf.
       (B) To provide royalty incentives for the production of 
     natural gas from such tracts.
       (C) To provide royalty incentives for development of new 
     technologies and the exploration and development of the new 
     frontier of deep drilling on the Outer Continental Shelf.
       (3) Royalty incentives under existing leases for production 
     of deep gas in shallow water in the gulf of mexico.--
       (A) Suspension of royalties.--
       (i) In general.--The Secretary of the Interior shall grant 
     royalty relief for natural gas produced under leases issued 
     under the Outer Continental Shelf Lands Act (43 U.S.C. 1301 
     et seq.) prior to January 1, 2001, from deep wells on oil and 
     gas lease tracts in shallow waters of the Gulf of Mexico 
     located wholly west of 87 degrees, 30 minutes west longitude.
       (ii) Amount of relief.--The Secretary shall grant royalty 
     relief to eligible leases in the following amounts:

       (I) A suspension volume of at least 15 billion cubic feet 
     of natural gas produced from a successful deep well with a 
     total vertical depth of 15,000 feet to 17,999 feet.
       (II) A suspension volume of at least 25 billion cubic feet 
     of natural gas produced from a successful deep well with a 
     total vertical depth of 18,000 feet to 19,999 feet.
       (III) A suspension volume of at least 35 billion cubic feet 
     of natural gas produced from any ultra deep well.
       (IV) A suspension volume of at least 5 billion cubic feet 
     of natural gas per well for up to 2 unsuccessful wells 
     drilled to a depth of at least 18,000 feet on a lease tract 
     that subsequently produces natural gas from a successful deep 
     well.

       (iii) Limitation.--The Secretary shall not grant the 
     royalty incentives outlined in this subparagraph if the 
     average annual NYMEX natural gas price exceeds for one full 
     calendar year the threshold price of $5 per million Btu, 
     adjusted from the year 2000 for inflation.
       (B) Definitions.--For purposes of this paragraph:
       (i) The term ``deep well'' means a well drilled with a 
     perforated interval, the top of which is at least 15,000 feet 
     true vertical depth below the datum at mean sea level.
       (ii) The term ``eligible lease'' means a lease that--

       (I) was issued in a lease sale held before January 1, 2001;

       (II) is for a tract located in the Gulf of Mexico entirely 
     in water depths less than 200 meters on a block wholly west 
     of 87 degrees, 30 minutes west longitude; and

       (III) is for a tract that has not produced gas or oil from 
     a well that commenced drilling before March 26, 2003, with a 
     completion 15,000 feet true vertical depth below the datum at 
     mean sea level or deeper.

       (iii) The term ``shallow water'' means water less than 200 
     meters deep.
       (iv) The term ``ultra deep well'' means a well drilled with 
     a perforated interval, the top of which is at least 20,000 
     feet true vertical depth below the datum at mean sea level.
       (4) Sunset.--This subsection shall have no force or effect 
     after the end of the 5-year period beginning on the date of 
     the enactment of this Act.
       (b) Deep Water Areas.--Section 8(a) of the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1337(a)) is amended by 
     adding at the end the following:
       ``(9)(A) For all tracts located in water depths of greater 
     than 400 meters in the Western and Central Planning Area of 
     the Gulf of Mexico, including that portion of the Eastern 
     Planning Area of the Gulf of Mexico encompassing whole lease 
     blocks lying west of 87 degrees, 30 minutes West longitude, 
     and for all tracts in a frontier area offshore Alaska, any 
     oil or gas lease sale under this Act occurring after the date 
     of the enactment of this paragraph and before July 1, 2007, 
     shall use the bidding system authorized in paragraph (1)(H), 
     except that the suspension of royalties shall be set at a 
     volume of not less than the following:
       ``(i) 5 million barrels of oil equivalent for each lease in 
     water depths of 400 to 800 meters.
       ``(ii) 9 million barrels of oil equivalent for each lease 
     in water depths of 800 to 1,600 meters.
       ``(iii) 12 million barrels of oil equivalent for each lease 
     in water depths greater than 1,600 meters.
       ``(B) For purposes of this paragraph, the term `frontier 
     area offshore Alaska' includes, at a minimum, those areas 
     offshore Alaska with seasonal ice, long distances to existing 
     pipelines and ports, or a lack of production 
     infrastructure.''.
       (c) Application of Other Existing Authority to Offshore 
     Alaska.--Section 8(a)(3)(B) of the Outer Continental Shelf 
     Lands Act (43 U.S.C. 1337(a)(3)(B)) is amended--
       (1) by striking ``and the portion'' and inserting ``, the 
     portion''; and
       (2) by inserting after ``longitude,'' the following: ``and 
     in the planning areas offshore Alaska,''.
       (d) Relationship to Existing Authority.--Except as 
     expressly provided in this section, nothing in this section 
     is intended to limit the authority of the Secretary of the 
     Interior under the Outer Continental Shelf Lands Act (43 
     U.S.C. 1331 et seq.) to provide royalty suspension.
       (e) Savings Clause.--Nothing in this section shall be 
     construed to affect any offshore preleasing, leasing, or 
     development moratorium, including any moratorium applicable 
     to the Eastern Planning Area of the Gulf of Mexico located 
     off the Gulf Coast of Florida.

     SEC. 30205. MARGINAL PROPERTY PRODUCTION INCENTIVES.

       (a) Purpose.--The purpose of this section is to provide to 
     independent producers incentives for extended production from 
     Federal oil and gas leases that are still producible but 
     approaching abandonment due to economic factors.
       (b) Marginal Property Defined.--
       (1) In general.--Until such time as the Secretary of the 
     Interior promulgates rules under subsection (f) that 
     prescribe a different definition, for purposes of the royalty 
     relief granted under this section the term ``marginal 
     property'' means an onshore unit, communitization agreement, 
     or lease not within a unit or communitization agreement, that 
     produces on average the combined equivalent of less than 15 
     barrels of oil per well per day or 90 million British thermal 
     units of gas per well per day.
       (2) Calculation of average per well production.--In 
     calculating the average per well production under paragraph 
     (1), the lessee and the Secretary shall--
       (A) include those wells that produce more than half the 
     days in the three most recent production months; and
       (B) calculate the average over the three most recent 
     production months.
       (c) Conditions for Reduction of Royalty Rate.--Until such 
     time as the Secretary of the Interior promulgates rules under 
     subsection (f) that prescribe different thresholds or 
     standards--
       (1) the Secretary shall, upon request by the operator of a 
     marginal property who is an independent producer, reduce the 
     royalty rate on oil production from the marginal property as 
     prescribed in subsection (d) when the spot price of West 
     Texas Intermediate

[[Page H3162]]

     crude oil at Cushing, Oklahoma, is, on average, less than $15 
     per barrel for 90 consecutive trading days; and
       (2) the Secretary shall, upon request by the operator of a 
     marginal property who is an independent producer, reduce the 
     royalty rate on gas production from the marginal property to 
     the rate prescribed in subsection (d) when the spot price of 
     natural gas delivered at Henry Hub, Louisiana, is, on 
     average, less than $2 per million British thermal units for 
     90 consecutive trading days.
       (d) Reduced Royalty Rate.--
       (1) In general.--The reduced royalty rate under this 
     subsection shall be the lesser of--
       (A) 5 percent; or
       (B) the applicable rate under any other statutory or 
     regulatory royalty relief provision that applies to the 
     affected production.
       (2) Effective date.--The reduced royalty rate under this 
     subsection shall be effective on the first day of the 
     production month following the date on which the applicable 
     price standard prescribed in subsection (c) is met.
       (e) Termination of Reduced Royalty Rate.--A royalty rate 
     prescribed in subsection (d)(1) shall terminate--
       (1) for oil production from a marginal property, on the 
     first day of the production month following the date on 
     which--
       (A) the spot price of West Texas Intermediate crude oil at 
     Cushing, Oklahoma, on average, exceeds $15 per barrel for 90 
     consecutive trading days, or
       (B) the property no longer qualifies as a marginal property 
     under subsection (b); and
       (2) for gas production from a marginal property, on the 
     first day of the production month following the date on 
     which--
       (A) the spot price of natural gas delivered at Henry Hub, 
     Louisiana, on average, exceeds $2 per million British thermal 
     units for 90 consecutive trading days, or
       (B) the property no longer qualifies as a marginal property 
     under subsection (b).
       (f) Rules Prescribing Different Relief.--
       (1) In general.--The Secretary of the Interior, after 
     consultation with the Secretary of Energy, may by rule 
     prescribe different parameters, standards, and requirements 
     for, and a different degree or extent of, royalty relief for 
     marginal properties in lieu of those prescribed in 
     subsections (b) through (d).
       (2) Marginal properties.--The Secretary of the Interior, 
     after consultation with the Secretary of Energy, and within 1 
     year after the date of enactment of this Act, shall--
       (A) by rule prescribe standards and requirements for, and 
     the extent of royalty relief for, marginal properties for oil 
     and gas leases on the outer Continental Shelf; and
       (B) by rule define what constitutes a marginal property on 
     the outer Continental Shelf for purposes of this section.
       (3) Considerations.--In promulgating rules under this 
     subsection, the Secretary of the Interior may consider--
       (A) oil and gas prices and market trends;
       (B) production costs;
       (C) abandonment costs;
       (D) Federal and State tax provisions and their effects on 
     production economics;
       (E) other royalty relief programs;
       (F) regional differences in average wellhead prices;
       (G) national energy security issues; and
       (H) other relevant matters.
       (g) Savings Provision.--Nothing in this section shall 
     prevent a lessee from receiving royalty relief or a royalty 
     reduction pursuant to any other law or regulation that 
     provides more relief than the amounts provided by this 
     section.
       (h) Independent Producer Defined.--In this section the term 
     ``independent producer'' means a person who is not an 
     integrated oil company, as that term is defined in section 
     219(b)(4) of the Internal Revenue Code of 1986 (26 U.S.C. 
     291(b)(4)).

     SEC. 30206. FEDERAL ONSHORE OIL AND GAS LEASING AND 
                   PERMITTING PRACTICES.

       (a) Review of Onshore Oil and Gas Leasing Practices.--The 
     Secretary of the Interior, in cooperation with the Secretary 
     of Agriculture with respect to National Forest System lands 
     under the jurisdiction of the Department of Agriculture, 
     shall perform an internal review of Federal onshore oil and 
     gas leasing and permitting practices. The review shall 
     include the following:
       (1) The process by which Federal land managers accept or 
     reject an offer to lease, including the timeframes in which 
     such offers are acted upon, and any recommendations for 
     improving and expediting the process.
       (2) The process for considering applications for permits to 
     drill, including the timeframes in which such applications 
     are considered, and any recommendations for improving and 
     expediting the process.
       (3) The process for considering surface use plans of 
     operation, including the timeframes in which such plans are 
     considered, and any recommendations for improving and 
     expediting the process.
       (4) The process for administrative appeal of decisions or 
     orders of officers or employees of the Bureau of Land 
     Management with respect to a Federal oil or gas lease, 
     including the timeframes in which such appeals are heard and 
     decided, and any recommendations for improving and expediting 
     the process.
       (5) The process by which Federal land managers identify 
     stipulations to address site-specific concerns and 
     conditions, including those relating to the environment and 
     resource use conflicts, whether stipulations are effective in 
     addressing resource values, and any recommendations for 
     expediting and improving the identification and effectiveness 
     of stipulations.
       (6) The process by which the Federal land management 
     agencies coordinate planning and analysis with planning of 
     Federal, State, and local agencies having jurisdiction over 
     adjacent areas and other land uses, and any recommendations 
     for improving and expediting the process.
       (7) The documentation provided to lease applicants and 
     lessees with respect to determinations to reject lease 
     applications or to require modification of proposed surface 
     use plans of operation and recommendations regarding 
     improvement of such documentation to more clearly set forth 
     the basis for the decision.
       (b) Report.--The Secretaries shall report to the Committee 
     on Resources of the House of Representatives and to the 
     Committee on Energy and Natural Resources of the Senate no 
     later than 1 year after the date of the enactment of this 
     Act, summarizing the findings of their respective reviews 
     undertaken pursuant to this section and the actions they have 
     taken or plan to take to improve the Federal onshore oil and 
     gas leasing program.

     SEC. 30207. MANAGEMENT OF FEDERAL OIL AND GAS LEASING 
                   PROGRAMS.

       (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 the public; and
       (3) improve the collection, storage, and retrieval of 
     information related to such leasing activities.
       (b) Best Management Practices.--
       (1) In general.--Within 18 months after the date of 
     enactment of this Act, the Secretary of the Interior shall 
     develop and implement best management practices to improve 
     the administration of the onshore oil and gas leasing program 
     pursuant to the Mineral Leasing Act (30 U.S.C. 181, et seq.) 
     and ensure timely action on oil and gas leases and 
     applications for permits to drill on lands otherwise 
     available for leasing.
       (2) Consideration and consultation.--In developing such 
     best management practices the Secretary shall consider the 
     recommendations resulting from the review under section 
     30206.
       (3) Regulations.--Within 180 days after the development of 
     best management practices under paragraph (1), the Secretary 
     shall publish for public comment proposed regulations that 
     set forth specific timeframes for processing leases and 
     applications in accordance with those practices, including 
     deadlines for--
       (A) approving or disapproving--
       (i) resource management plans and related documents;
       (ii) lease applications;
       (iii) applications for permits to drill; and
       (iv) surface use plans; and
       (B) related administrative appeals.

     SEC. 30208. CONSULTATION REGARDING OIL AND GAS LEASING ON 
                   PUBLIC LANDS.

       (a) In General.--Not later than six months after the date 
     of enactment of this Act, the Secretary of the Interior and 
     the Secretary of Agriculture shall enter into, and submit to 
     the Congress, a memorandum of understanding in accordance 
     with this section regarding oil and gas leasing on public 
     lands within the jurisdiction of the Secretary of the 
     Interior and National Forest System lands within the 
     jurisdiction of the Secretary of Agriculture.
       (b) Contents.--The memorandum of understanding shall 
     include provisions that--
       (1) establish an administrative procedure for timely 
     processing of oil and gas lease applications, including lines 
     of authority, steps in application processing, and timeframes 
     for application processing;
       (2) establish an administrative procedure for timely 
     processing of surface use plans of operation and applications 
     for permits to drill, including lines of authority and steps 
     for processing such plans and applications within 30 days 
     after receipt by the Secretary concerned;
       (3) provide for coordination of planning relating to oil 
     and gas development;
       (4) provide for coordination of environmental compliance 
     efforts to avoid duplication of effort;
       (5) provide for coordination of use of lease stipulations 
     to achieve consistency;
       (6) ensure that lease stipulations are only as restrictive 
     as is necessary to protect the resource for which the 
     stipulations are applied; and
       (7) establish reasonable timeframes to process applications 
     for permits to drill.
       (c) Data Retrieval System.--
       (1) In general.--The Secretary of the Interior and the 
     Secretary of Agriculture shall establish a joint data 
     retrieval system that is capable of tracking applications and 
     formal requests made pursuant to procedures of the Federal 
     onshore oil and gas leasing program and providing information 
     as to the status of such applications and requests within the 
     Department of the Interior and the Department of Agriculture.
       (2) Availability of data.--Data in the joint data retrieval 
     system shall be made available to the public, consistent with 
     applicable laws and regulations regarding confidentiality and 
     proprietary data.
       (3) Resource mapping.--The Secretary of the Interior and 
     the Secretary of Agriculture shall establish a joint GIS 
     mapping system for use in tracking surface resource values to

[[Page H3163]]

     aid in resource management and processing of surface use 
     plans of operation and applications for permits to drill.

     SEC. 30209. 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. 30210. FEDERAL REIMBURSEMENT FOR ORPHAN WELL 
                   RECLAMATION.

       (a) Definitions.--In this section:
       (1) Lessee.--The term ``lessee'' means a person who owns a 
     lease, working interest, or operating rights in an oil and 
     gas lease on lands owned by the United States.
       (2) Orphan well.--The term ``orphan well'' means any oil or 
     gas well--
       (A) that is located on lands owned by the United States;
       (B) that requires plugging and abandonment under the 
     regulations of the Department of the Interior; and
       (C) for which the Secretary is unable to find any person 
     who is legally responsible and has the financial resources to 
     reclaim the well.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior or the Secretary's designee.
       (b) Reimbursement for Reclaiming Wells on Lands Subject to 
     New Leases.--If the Secretary issues a new oil and gas lease 
     on federally owned lands on which 1 or more orphaned wells 
     are located, the Secretary--
       (1) may require, as a condition of the lease, that the 
     lessee reclaim pursuant to the Secretary's standards all 
     orphaned wells on the land leased; and
       (2) shall provide to the lessee a credit against royalties 
     due under the lease for 100 percent of the reasonable actual 
     costs of reclaiming the orphaned well pursuant to such 
     requirement.
       (c) Royalty Credits for Reclaiming Orphan Wells on Other 
     Lands.--The Secretary--
       (1) may authorize any lessee under an oil and gas lease on 
     federally owned lands to reclaim pursuant to the Secretary's 
     standards--
       (A) an orphan well on unleased federally owned lands or 
     unleased lands on the outer Continental Shelf; or
       (B) an orphan well located on an existing lease on 
     federally owned lands or the outer Continental Shelf for the 
     reclamation of which the lessee is not legally responsible; 
     and
       (2) shall provide to the lessee a credit against royalties 
     under the lessee's lease of 115 percent of the reasonable 
     actual costs of reclaiming the orphan well.
       (d) Reporting and Application of Royalty Credits.--
       (1) In general.--Any credit against royalties required to 
     be provided to a lessee under this section may be reported 
     against royalties on production from any oil and gas lease on 
     federally owned lands, or on the outer Continental Shelf, 
     administered by the Secretary, that are owed by--
       (A) a lessee;
       (B) any wholly owned affiliate or wholly commonly owned 
     affiliate of a lessee; or
       (C) any wholly owned affiliate or wholly commonly owned 
     affiliate of the person conducting the reclamation work on an 
     orphan well.
       (2) Reporting by designees.--Credits against royalties 
     required to be provided to a lessee under this section may be 
     reported by a designee (as defined in section 3 of the 
     Federal Oil and Gas Royalty Simplification and Fairness Act 
     of 1982 (30 U.S.C. 1702)), when the designee reports and pays 
     royalty on behalf of the lessee.
       (e) Implementing Regulations.--The Secretary may promulgate 
     such regulations as may be necessary and appropriate to 
     implement this section.
       (f) Protection Against Liability.--No person who reclaims 
     an orphan well under this section shall be liable under any 
     provision of Federal law for any costs or damages as a result 
     of action taken or omitted in the course of carrying out a 
     reclamation plan approved by the Secretary under this 
     section. This section shall not preclude liability for costs 
     or damages as a result of a gross negligence or intentional 
     misconduct by the person carrying out an approved reclamation 
     plan. For purposes of the preceding sentence, reckless, 
     willful, or wanton misconduct shall constitute gross 
     negligence.

     SEC. 30211. PRESERVATION OF GEOLOGICAL AND GEOPHYSICAL DATA.

       (a) Short Title.--This section may be cited as the 
     ``National Geological and Geophysical Data Preservation 
     Program Act of 2003''.
       (b) Program.--The Secretary of the Interior shall carry out 
     a National Geological and Geophysical Data Preservation 
     Program in accordance with this section--
       (1) to archive geologic, geophysical, and engineering data, 
     maps, well logs, and samples;
       (2) to provide a national catalog of such archival 
     material; and
       (3) to provide technical and financial assistance related 
     to the archival material.
       (c) Plan.--Within 1 year after the date of the enactment of 
     this Act, the Secretary shall develop and submit to the 
     Committee on Resources of the House of Representatives and 
     the Committee on Energy and Natural Resources of the Senate a 
     plan for the implementation of the Program.
       (d) Data Archive System.--
       (1) Establishment.--The Secretary shall establish, as a 
     component of the Program, a data archive system, which shall 
     provide for the storage, preservation, and archiving of 
     subsurface, surface, geological, geophysical and engineering 
     data and samples. The Secretary, in consultation with the 
     Advisory Committee, shall develop guidelines relating to the 
     data archive system, including the types of data and samples 
     to be preserved.
       (2) System components.--The system shall be comprised of 
     State agencies and agencies within the Department of the 
     Interior that maintain geological and geophysical data and 
     samples that are designated by the Secretary in accordance 
     with this subsection. The Program shall provide for the 
     storage of data and samples through data repositories 
     operated by such agencies.
       (3) Limitation of designation.--The Secretary may not 
     designate a State agency as a component of the data archive 
     system unless it is the agency that acts as the geological 
     survey in the State.
       (4) Data from federal lands.--The data archive system shall 
     provide for the archiving of relevant subsurface data and 
     samples obtained from Federal lands--
       (A) in the most appropriate repository designated under 
     paragraph (2), with preference being given to archiving data 
     in the State in which the data was collected; and
       (B) consistent with all applicable law and requirements 
     relating to confidentiality and proprietary data.
       (e) National Catalog.--
       (1) In general.--As soon as practicable after the date of 
     the enactment of this section, the Secretary shall develop 
     and maintain, as a component of the Program, a national 
     catalog that identifies--
       (A) data and samples available in the data archive system 
     established under subsection (d);
       (B) the repository for particular material in such system; 
     and
       (C) the means of accessing the material.
       (2) Availability.--The Secretary shall make the national 
     catalog accessible to the public on the site of the Survey on 
     the World Wide Web, consistent with all applicable 
     requirements related to confidentiality and proprietary data.
       (f) Advisory Committee.--
       (1) In general.--The Advisory Committee shall advise the 
     Secretary on planning and implementation of the Program.
       (2) New duties.--In addition to its duties under the 
     National Geologic Mapping Act of 1992 (43 U.S.C. 31b et 
     seq.), the Advisory Committee shall perform the following 
     duties:
       (A) Advise the Secretary on developing guidelines and 
     procedures for providing assistance for facilities in 
     subsection (g)(1).
       (B) Review and critique the draft implementation plan 
     prepared by the Secretary pursuant to subsection (c).
       (C) Identify useful studies of data archived under the 
     Program that will advance understanding of the Nation's 
     energy and mineral resources, geologic hazards, and 
     engineering geology.
       (D) Review the progress of the Program in archiving 
     significant data and preventing the loss of such data, and 
     the scientific progress of the studies funded under the 
     Program.
       (E) Include in the annual report to the Secretary required 
     under section 5(b)(3) of the National Geologic Mapping Act of 
     1992 (43 U.S.C. 31d(b)(3)) an evaluation of the progress of 
     the Program toward fulfilling the purposes of the Program 
     under subsection (b).
       (g) Financial Assistance.--
       (1) Archive facilities.--Subject to the availability of 
     appropriations, the Secretary shall provide financial 
     assistance to a State agency that is designated under 
     subsection (d)(2), for providing facilities to archive energy 
     material.
       (2) Studies.--Subject to the availability of 
     appropriations, the Secretary shall provide financial 
     assistance to any State agency designated under subsection 
     (d)(2) for studies that enhance understanding, 
     interpretation, and use of materials archived in the data 
     archive system established under subsection (d).
       (3) Federal share.--The Federal share of the cost of an 
     activity carried out with assistance under this subsection 
     shall be no more than 50 percent of the total cost of that 
     activity.
       (4) Private contributions.--The Secretary shall apply to 
     the non-Federal share of the cost of an activity carried out 
     with assistance under this subsection the value of private 
     contributions of property and services used for that 
     activity.
       (h) Report.--The Secretary shall include in each report 
     under section 8 of the National Geologic Mapping Act of 1992 
     (43 U.S.C. 31g)--
       (1) a description of the status of the Program;
       (2) an evaluation of the progress achieved in developing 
     the Program during the period covered by the report; and
       (3) any recommendations for legislative or other action the 
     Secretary considers necessary and appropriate to fulfill the 
     purposes of the Program under subsection (b).
       (i) Definitions.--As used in this section:

[[Page H3164]]

       (1) Advisory committee.--The term ``Advisory Committee'' 
     means the advisory committee established under section 5 of 
     the National Geologic Mapping Act of 1992 (43 U.S.C. 31d).
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior acting through the Director of the United 
     States Geological Survey.
       (3) Program.--The term ``Program'' means the National 
     Energy Data Preservation Program carried out under this 
     section.
       (4) Survey.--The term ``Survey'' means the United States 
     Geological Survey.
       (j) Maintenance of State Effort.--It is the intent of the 
     Congress that the States not use this section as an 
     opportunity to reduce State resources applied to the 
     activities that are the subject of the Program.
       (k) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary $30,000,000 for each of 
     fiscal years 2004 through 2008 for carrying out this section.

     SEC. 30212. COMPLIANCE WITH EXECUTIVE ORDER 13211; ACTIONS 
                   CONCERNING REGULATIONS THAT SIGNIFICANTLY 
                   AFFECT ENERGY SUPPLY, DISTRIBUTION, OR USE.

       (a) Requirement.--The Secretary of the Interior shall--
       (1) require that before any person takes any action that 
     could have a significant adverse effect on the supply of 
     domestic energy resources from Federal public lands, the 
     person shall comply with Executive Order 13211; and
       (2) within 180 days after the date of the enactment of this 
     Act, publish guidance for purposes of this section describing 
     what constitutes a significant adverse effect on the supply 
     of domestic energy resources under Executive Order 13211.
       (b) MOU.--The Secretary of the Interior and the Secretary 
     of Agriculture shall include in the memorandum of 
     understanding under section 30208 provisions regarding 
     implementation of subsection (a)(1) of this section.

     SEC. 30213. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES, 
                   DOCUMENTATION, AND STUDIES.

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


   ``reimbursement for costs of certain analyses, documentation, and 
                                studies

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

     SEC. 30214. ALTERNATE ENERGY-RELATED USES ON THE OUTER 
                   CONTINENTAL SHELF.

       (a) Purposes.--The purposes of this section are as follows:
       (1) To protect the economic and land use interests of the 
     Federal Government in the management of the Outer Continental 
     Shelf for energy-related and certain other purposes.
       (2) To provide an administrative framework for the 
     oversight and management of energy-related activities on the 
     Outer Continental Shelf, consistent with other applicable 
     laws.
       (3) To expedite projects to increase the production, 
     transmission, or conservation of energy on the Outer 
     Continental Shelf.
       (4) To provide for interagency coordination in the siting 
     and permitting of energy-related activities on the Outer 
     Continental Shelf.
       (5) To ensure that energy-related activities on the Outer 
     Continental Shelf are conducted in a manner that provides for 
     safety, protection of the environment, prevention of waste, 
     conservation of natural resources, protection of correlative 
     rights, and protection of national security interests.
       (6) To authorize alternate uses of existing structures and 
     facilities previously permitted under the Outer Continental 
     Shelf Lands Act (43 U.S.C. 1331 note).
       (7) To ensure that the Federal Government receives a fair 
     return for any easement or right-of-way granted under section 
     8(p) of the Outer Continental Shelf Lands Act.
       (b) Amendment to Outer Continental Shelf Lands Act.--
     Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 
     1337) is amended by adding at the end the following new 
     subsection:
       ``(p) Easements or Rights-of-Way for Energy and Related 
     Purposes.--
       ``(1) The Secretary, in consultation with the Secretary of 
     the Department in which the Coast Guard is operating and 
     other relevant departments and agencies of the Federal 
     Government, may grant an easement or right-of-way on the 
     Outer Continental Shelf for activities not otherwise 
     authorized in this Act, the Deepwater Port Act of 1974 (33 
     U.S.C. 1501 et seq.), or the Ocean Thermal Energy Conversion 
     Act of 1980 (42 U.S.C. 9101 et seq.), or other applicable law 
     when such activities--
       ``(A) support exploration, development, production, 
     transportation, or storage of oil, natural gas, or other 
     minerals;
       ``(B) produce or support production, transportation, or 
     transmission of energy from sources other than oil and gas; 
     or
       ``(C) use facilities currently or previously used for 
     activities authorized under this Act.
       ``(2)(A) The Secretary shall establish reasonable forms of 
     annual or one-time payments for any easement or right-of-way 
     granted under this subsection. Such payments shall not be 
     assessed on the basis of throughput or production. The 
     Secretary may establish fees, rentals, bonus, or other 
     payments by rule or by agreement with the party to whom the 
     easement or right-of-way is granted.
       ``(B) Before exercising the authority granted under this 
     subsection, the Secretary shall consult with the Secretary of 
     Defense and other appropriate agencies concerning issues 
     related to national security and navigational obstruction.
       ``(C) The Secretary is authorized to issue an easement or 
     right-of-way for energy and related purposes as described in 
     paragraph (1) on a competitive or noncompetitive basis. In 
     determining whether such easement or right-of-way shall be 
     granted competitively or noncompetitively, the Secretary 
     shall consider such factors as prevention of waste and 
     conservation of natural resources, economic viability of an 
     energy project, protection of the environment, national 
     interest, national security, human safety, protection of 
     correlative rights, and potential return for the easement or 
     right-of-way.
       ``(3) The Secretary, in consultation with the Secretary of 
     the Department in which the Coast Guard is operating and 
     other relevant departments and agencies of the Federal 
     Government and affected States, shall prescribe any necessary 
     regulations to assure safety, protection of the environment, 
     prevention of waste, and conservation of the natural 
     resources of the Outer Continental Shelf, protection of 
     national security interests, and protection of correlative 
     rights therein.
       ``(4) The Secretary shall require the holder of an easement 
     or right-of-way granted under this subsection to furnish a 
     surety bond or other form of security, as prescribed by the 
     Secretary, and to comply with such other requirements as the 
     Secretary may deem necessary to protect the interests of the 
     United States.
       ``(5) Nothing in this subsection shall be construed to 
     displace, supersede, limit, or modify the jurisdiction, 
     responsibility, or authority of any Federal or State agency 
     under any other Federal law.
       ``(6) This subsection shall not apply to any area on the 
     Outer Continental Shelf designated as a National Marine 
     Sanctuary.''.
       (c) Conforming Amendment.--The text of the heading for 
     section 8 of the Outer Continental Shelf Lands Act is amended 
     to read as follows: ``Leases, Easements, and Rights-of-Way on 
     the Outer Continental Shelf.''.

     SEC. 30215. DEADLINE FOR DECISION ON APPEALS OF CONSISTENCY 
                   DETERMINATIONS UNDER THE COASTAL ZONE 
                   MANAGEMENT ACT OF 1972.

       (a) In General.--Section 319 of the Coastal Zone Management 
     Act of 1972 (16 U.S.C. 1465) is amended to read as follows:


                       ``appeals to the secretary

       ``Sec. 319. (a) Notice.--The Secretary shall publish an 
     initial notice in the Federal Register within 30 days after 
     the date of the filing of any appeal to the Secretary of a 
     consistency determination under section 307.
       ``(b) Closure of Record.--(1) No later than the end of 360-
     day period beginning on the date of publication of an initial 
     notice under subsection (a), the Secretary shall receive no 
     more filings on the appeal and the record of decision 
     regarding the appeal shall be closed.
       ``(2) Upon the closure of the record of decision, the 
     Secretary shall immediately publish a notice that the record 
     of decision has been closed.
       ``(3) The Secretary may extend the period specified in 
     paragraph (1) with respect to an appeal--
       ``(A) in accordance with the mutual agreement of the 
     parties to the appeal; or
       ``(B) as needed to complete the development of any 
     environmental analyses required under the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4331 et seq.).
       ``(c) Deadline for Decision.--The Secretary shall issue a 
     decision in any appeal filed under section 307 no later than 
     90 days after the publication of a notice under subsection 
     (b)(2).
       ``(d) Application.-- This section applies to appeals 
     initiated by the Secretary and appeals filed by an 
     applicant.''.
       (b) Application.--The amendment made by subsection (a)--
       (1) shall apply with respect to any appeal initiated or 
     filed on or after the date of the enactment of this Act; and

[[Page H3165]]

       (2) shall not affect any appeal initiated or filed before 
     the date of the enactment of this Act.

     SEC. 30216. TASK FORCE ON ENERGY PROJECT STREAMLINING.

       (a) Findings.--The Congress finds that--
       (1) increased production and transmission of energy in a 
     safe and environmentally sound manner is essential to the 
     well-being of the American people;
       (2) on May 18, 2001, President George W. Bush signed 
     Executive Order 13212 requiring agencies to expedite their 
     review of permits of other actions as necessary to accelerate 
     the completion of energy-related projects, while maintaining 
     safety, public health, and environmental protections; and
       (3) Executive Order 13212 established an interagency task 
     force chaired by the Chairman of the Council on Environmental 
     Quality to monitor and assist agencies in their efforts to 
     expedite review of actions consistent with the Executive 
     order, and to monitor and assist agencies in setting up 
     appropriate mechanisms to coordinate Federal, State, tribal, 
     and local permitting in geographic areas where increased 
     permitting activity is expected.
       (b) Sense of Congress.--It is the sense of the Congress 
     that the Task Force established pursuant to Executive Order 
     13212 should remain in existence until such time as the 
     President finds that the needs for which it was established 
     have been met.

     SEC. 30217. PILOT PROGRAM ON NORTHERN ROCKY MOUNTAINS ENERGY 
                   RESOURCE MANAGEMENT.

       (a) Findings.--The Congress finds that the task force 
     established by President George W. Bush by the issuance of 
     Executive Order 13212, and headed by the Chairman of the 
     Council on Environmental Quality, has developed a pilot 
     project the goals of which are--
       (1) to reduce conflict, uncertainty, and the time involved 
     in making decisions on energy resource management in the 
     Northern Rocky Mountains;
       (2) to establish a mechanism to provide for the 
     coordination of Federal and State policy guidance regarding 
     the development of regional energy resources and their 
     transmission to markets;
       (3) to institutionalize early collaboration and 
     participation of all parties involved in regional decisions 
     on environmental, economic and energy issues related to the 
     exploration, development, and production of energy resources; 
     and
       (4) to take a long-term and regional view on how best to 
     manage the energy resources in the Northern Rocky Mountains.
       (b) Sense of the Congress.--It is the sense of the Congress 
     that the task force should carry out this pilot project and 
     report to the Congress no later than 36 months after the date 
     of enactment of this Act on the progress it has made in 
     accomplishing the goals set forth in subsection (a) of this 
     section.

     SEC. 30218. ENERGY DEVELOPMENT FACILITATOR STUDY.

       (a) In General.--The Chairman of the Council on 
     Environmental Quality shall conduct a study to determine the 
     feasibility of establishing under the Council the position of 
     Facilitator for Energy Development, to coordinate Federal 
     agency actions relating to energy project permitting. The 
     study shall consider, among other matters--
       (1) the ways in which a facilitator can facilitate the 
     long-term coordination of energy projects on Federal lands; 
     and
       (2) the role of a facilitator in ensuring that the 
     questions or concerns of permit applicants and other persons 
     involved in energy projects are addressed in the agency.
       (b) Report.--Not later than 12 months after the date of 
     enactment of this section, the Chairman shall submit a report 
     to the Committee on Resources of the House of Representatives 
     and the Committee on Energy and Natural Resources of the 
     Senate detailing the findings of the study required by 
     subsection (a), and including any legislative recommendations 
     of the Chairman with respect to the establishment of the 
     position studied.

     SEC. 30219. COMBINED HYDROCARBON LEASING.

       (a) Special Provisions Regarding Leasing.--Section 17(b)(2) 
     of the Mineral Leasing Act (30 U.S.C. 226(b)(2)) is amended--
       (1) by inserting ``(A)'' after ``(2)''; and
       (2) by adding at the end the following:
       ``(B) For any area that contains any combination of tar 
     sand and oil or gas (or both), the Secretary may issue under 
     this Act, separately--
       ``(i) a lease for exploration for and extraction of tar 
     sand; and
       ``(ii) a lease for exploration for and development of oil 
     and gas.
       ``(C) A lease issued for tar sand shall be issued using the 
     same bidding process, annual rental, and posting period as a 
     lease issued for oil and gas, except that the minimum 
     acceptable bid required for a lease issued for tar sand shall 
     be $2 per acre.
       ``(D) The Secretary may waive, suspend, or alter any 
     requirement under section 26 that a permittee under a permit 
     authorizing prospecting for tar sand must exercise due 
     diligence, to promote any resource covered by a combined 
     hydrocarbon lease.''.
       (b) Conforming Amendment.--Section 17(b)(1)(B) of the 
     Mineral Leasing Act (30 U.S.C. 226(b)(1)(B)) is amended in 
     the second sentence by inserting ``, subject to paragraph 
     (2)(B),'' after ``The Secretary''.
       (c) Regulations.--Within 45 days after the date of the 
     enactment of this Act, the Secretary of the Interior shall 
     issue final regulations to implement this section.

     SEC. 30220. COMPREHENSIVE INVENTORY OF OCS OIL AND NATURAL 
                   GAS RESOURCES.

       (a) In General.--The Secretary of the Interior, in 
     consultation with the Secretary of Energy, key stakeholders 
     including coastal States, and the oil and gas industry, shall 
     conduct an inventory and analysis of oil and natural gas 
     resources for areas beneath all of the United States waters 
     of the Outer Continental Shelf. The inventory and analysis 
     shall--
       (1) provide resource estimates of oil and gas resources 
     underlying those waters and estimate how those resource 
     estimates may change if--
       (A) geological and geophysical data could be gathered and 
     analyzed;
       (B) targeted exploration was allowed; and
       (C) full resource development was allowed following 
     successful exploration;
       (2) analyze how resource estimates for such areas, 
     including areas such as the deepwater and subsalt areas in 
     the Gulf of Mexico, have changed over time as--
       (A) geological and geophysical data was gathered;
       (B) initial exploration occurred; and
       (C) full field development occurred;
       (3) identify and explain how legislative, regulatory, and 
     administrative programs or processes restrict or impede the 
     development of identified resources and the extent to which 
     they will affect domestic supply, including with respect to--
       (A) leasing moratoria;
       (B) lease terms and conditions;
       (C) operational stipulations and requirements;
       (D) approval delays by the Federal government and coastal 
     States; and
       (E) local zoning restrictions for onshore processing 
     facilities and pipeline landings; and
       (4) analyze the effect that understated oil and gas 
     resource inventories have on domestic energy investments.
       (b) Process Recommendations.--In conjunction with the 
     inventory and analysis, the Secretary of the Interior, in 
     consultation with the Secretary of Energy, shall consult with 
     key stakeholders to make recommendations for achieving a more 
     balanced and environmentally sound energy policy for the 
     Outer Continental Shelf. Key stakeholders to be consulted 
     include Governors, conservation and environmental 
     organizations, academia, the oil and gas industry, and the 
     scientific and business communities. The Secretary of the 
     Interior shall also make recommendations regarding processes 
     that could be implemented that would lead to additional Outer 
     Continental Shelf leasing and development of those resources 
     for the benefit of the American public.
       (c) Regular Updates.--After completion of the inventory, 
     the Secretary shall regularly update estimates and 
     identifications of restrictions to offshore development 
     included in the inventory, and make such updates publicly 
     available.
       (d) Submission to Congress.--The inventory, analysis, and 
     recommendations shall be provided to the Committee on 
     Resources of the House of Representatives and the Committee 
     on Energy and Natural Resources of the Senate within 6 months 
     after the date of enactment of this section.
       (e) Methane Hydrate Study.--
       (1) In general.--The Secretary of the Interior shall study 
     the occurrence and distribution of methane hydrates in the 
     United States.
       (2) Report.--The Secretary of the Interior shall submit a 
     report to the Congress on the results of the study by not 
     later than 3 years after the date of the enactment of this 
     Act, including an estimate of the methane hydrate resources 
     in the United States.

     SEC. 30221. ROYALTY PAYMENTS UNDER LEASES UNDER THE OUTER 
                   CONTINENTAL SHELF LANDS ACT.

       (a) Royalty Relief.--
       (1) In general.--For purposes of providing compensation for 
     lessees and a State for which amounts are authorized by 
     section 6004(c) of the Oil Pollution Act of 1980 (Public Law 
     101-380), a lessee may withhold from payment any royalty due 
     and owing to the United States under any lease under the 
     Outer Continental Shelf Lands Act (43 U.S.C. 1301 et seq.) 
     for offshore oil or gas production from a covered lease tract 
     if, on or before the date that the payment is due and payable 
     to the United States, the lessee makes a payment to the State 
     of 44 cents for every $1 of royalty withheld.
       (2) Treatment of withheld amounts.--Any royalty withheld by 
     a lessee in accordance with this section shall be treated as 
     paid for purposes of satisfaction of the royalty obligations 
     of the lessee to the United States.
       (3) Certification of withheld amounts.--The Secretary of 
     the Treasury shall--
       (A) determine the amount of royalty withheld by a lessee 
     under this section; and
       (B) promptly publish a certification when the total amount 
     of royalty withheld by the lessee under this section is equal 
     to the lessee's share of the total drainage claim for the 
     West Delta field (with interest) as described at page 47 of 
     Senate Report number 101-534.
       (b) Period of Royalty Relief.--Subsection (a) shall apply 
     to royalty amounts that are due and payable in the period 
     beginning on January 1, 2003, and ending on the date on which 
     the Secretary publishes a certification under subsection 
     (a)(3)(B).
       (c) Definitions.--As used in this section:

[[Page H3166]]

       (1) Covered lease tract.--The term ``covered lease tract'' 
     means a leased tract (or portion of a leased tract)--
       (A) lying seaward of the zone defined and governed by 
     section 8(g) of the Outer Continental Shelf Lands Act (43 
     U.S.C. 1337(g)); or
       (B) lying within such zone but to which such section does 
     not apply.
       (2) Lessee.--The term ``lessee'' means a person (including 
     a successor or assign of a person) that, on the date of the 
     enactment of the Oil Pollution Act of 1980, was a lessee 
     referred to in section 6004(c) of that Act (as in effect on 
     that date of the enactment), but did not hold lease rights in 
     Federal offshore lease OCS-G-5669.

                       TITLE III--BIOMASS ENERGY

     SEC. 30301. GRANTS TO IMPROVE THE COMMERCIAL VALUE OF FOREST 
                   BIOMASS FOR ELECTRIC ENERGY, USEFUL HEAT, 
                   TRANSPORTATION FUELS, PETROLEUM-BASED PRODUCT 
                   SUBSTITUTES, AND OTHER COMMERCIAL PURPOSES.

       (a) Findings.--Congress finds the following:
       (1) Thousands of communities in the United States, many 
     located near Federal lands, are at risk to wildfire. 
     Approximately 190,000,000 acres of land managed by the 
     Secretary of Agriculture and the Secretary of the Interior 
     are at risk of catastrophic fire in the near future. The 
     accumulation of heavy forest fuel loads continues to increase 
     as a result of disease, insect infestations, and drought, 
     further raising the risk of fire each year.
       (2) In addition, more than 70,000,000 acres across all land 
     ownerships are at risk to higher than normal mortality over 
     the next 15 years from insect infestation and disease. High 
     levels of tree mortality from insects and disease result in 
     increased fire risk, loss of old growth, degraded watershed 
     conditions, and changes in species diversity and 
     productivity, as well as diminished fish and wildlife habitat 
     and decreased timber values.
       (3) Preventive treatments such as removing fuel loading, 
     ladder fuels, and hazard trees, planting proper species mix 
     and restoring and protecting early successional habitat, and 
     other specific restoration treatments designed to reduce the 
     susceptibility of forest land, woodland, and rangeland to 
     insect outbreaks, disease, and catastrophic fire present the 
     greatest opportunity for long-term forest health by creating 
     a mosaic of species-mix and age distribution. Such prevention 
     treatments are widely acknowledged to be more successful and 
     cost effective than suppression treatments in the case of 
     insects, disease, and fire.
       (4) The by-products of preventive treatment (wood, brush, 
     thinnings, chips, slash, and other hazardous fuels) removed 
     from forest lands, woodlands and rangelands represent an 
     abundant supply of biomass for biomass-to-energy facilities 
     and raw material for business. There are currently few 
     markets for the extraordinary volumes of by-products being 
     generated as a result of the necessary large-scale preventive 
     treatment activities.
       (5) The United States should--
       (A) promote economic and entrepreneurial opportunities in 
     using by-products removed through preventive treatment 
     activities related to hazardous fuels reduction, disease, and 
     insect infestation; and
       (B) develop and expand markets for traditionally underused 
     wood and biomass as an outlet for by-products of preventive 
     treatment activities.
       (b) Definitions.--In this section:
       (1) Biomass.--The term ``biomass'' means trees and woody 
     plants, including limbs, tops, needles, and other woody 
     parts, and by-products of preventive treatment, such as wood, 
     brush, thinnings, chips, and slash, that are removed--
       (A) to reduce hazardous fuels; or
       (B) to reduce the risk of or to contain disease or insect 
     infestation.
       (2) Indian tribe.--The term ``Indian tribe'' has the 
     meaning given the term in section 4(e) of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 
     450b(e)).
       (3) Person.--The term ``person'' includes--
       (A) an individual;
       (B) a community (as determined by the Secretary concerned);
       (C) an Indian tribe;
       (D) a small business, micro-business, or a corporation that 
     is incorporated in the United States; and
       (E) a nonprofit organization.
       (4) Preferred community.--The term ``preferred community'' 
     means--
       (A) any town, township, municipality, or other similar unit 
     of local government (as determined by the Secretary 
     concerned) that--
       (i) has a population of not more than 50,000 individuals; 
     and
       (ii) the Secretary concerned, in the sole discretion of the 
     Secretary concerned, determines contains or is located near 
     land, the condition of which is at significant risk of 
     catastrophic wildfire, disease, or insect infestation or 
     which suffers from disease or insect infestation; or
       (B) any county that--
       (i) is not contained within a metropolitan statistical 
     area; and
       (ii) the Secretary concerned, in the sole discretion of the 
     Secretary concerned, determines contains or is located near 
     land, the condition of which is at significant risk of 
     catastrophic wildfire, disease, or insect infestation or 
     which suffers from disease or insect infestation.
       (5) Secretary concerned.--The term ``Secretary concerned'' 
     means--
       (A) the Secretary of Agriculture with respect to National 
     Forest System lands; and
       (B) the Secretary of the Interior with respect to Federal 
     lands under the jurisdiction of the Secretary of the Interior 
     and Indian lands.
       (c) Biomass Commercial Use Grant Program.--
       (1) In general.--The Secretary concerned may make grants to 
     any person that owns or operates a facility that uses biomass 
     as a raw material to produce electric energy, sensible heat, 
     transportation fuels, or substitutes for petroleum-based 
     products to offset the costs incurred to purchase biomass for 
     use by such facility.
       (2) Grant amounts.--A grant under this subsection may not 
     exceed $20 per green ton of biomass delivered.
       (3) Monitoring of grant recipient activities.--As a 
     condition of a grant under this subsection, the grant 
     recipient shall keep such records as the Secretary concerned 
     may require to fully and correctly disclose the use of the 
     grant funds and all transactions involved in the purchase of 
     biomass. Upon notice by a representative of the Secretary 
     concerned, the grant recipient shall afford the 
     representative reasonable access to the facility that 
     purchases or uses biomass and an opportunity to examine the 
     inventory and records of the facility.
       (d) Improved Biomass Use Grant Program.--
       (1) In general.--The Secretary concerned may make grants to 
     persons to offset the cost of projects to develop or research 
     opportunities to improve the use of, or add value to, 
     biomass. In making such grants, the Secretary concerned shall 
     give preference to persons in preferred communities.
       (2) Selection.--The Secretary concerned shall select a 
     grant recipient under paragraph (1) after giving 
     consideration to the anticipated public benefits of the 
     project, including the potential to develop thermal or 
     electric energy resources or affordable energy, opportunities 
     for the creation or expansion of small businesses and micro-
     businesses, and the potential for new job creation.
       (3) Grant amount.--A grant under this subsection may not 
     exceed $100,000.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated $50,000,000 for each of the fiscal years 
     2004 through 2014 to carry out this section.
       (f) Report.--Not later than October 1, 2010, the Secretary 
     of Agriculture, in consultation with the Secretary of the 
     Interior, shall submit to the Committee on Energy and Natural 
     Resources and the Committee on Agriculture, Nutrition, and 
     Forestry of the Senate and the Committee on Resources and the 
     Committee on Agriculture of the House of Representatives a 
     report describing the results of the grant programs 
     authorized by this section. The report shall include the 
     following:
       (1) An identification of the size, type, and the use of 
     biomass by persons that receive grants under this section.
       (2) The distance between the land from which the biomass 
     was removed and the facility that used the biomass.
       (3) The economic impacts, particularly new job creation, 
     resulting from the grants to and operation of the eligible 
     operations.

             TITLE IV--ARCTIC COASTAL PLAIN DOMESTIC ENERGY

     SEC. 30401. SHORT TITLE.

       This title may be cited as the ``Arctic Coastal Plain 
     Domestic Energy Security Act of 2003''.

     SEC. 30402. DEFINITIONS.

       In this title:
       (1) Coastal plain.--The term ``Coastal Plain'' means that 
     area identified as such in the map entitled ``Arctic National 
     Wildlife Refuge'', dated August 1980, as referenced in 
     section 1002(b) of the Alaska National Interest Lands 
     Conservation Act of 1980 (16 U.S.C. 3142(b)(1)), comprising 
     approximately 1,549,000 acres, and as described in appendix I 
     to part 37 of title 50, Code of Federal Regulations.
       (2) Secretary.--The term ``Secretary'', except as otherwise 
     provided, means the Secretary of the Interior or the 
     Secretary's designee.

     SEC. 30403. LEASING PROGRAM FOR LANDS WITHIN THE COASTAL 
                   PLAIN.

       (a) In General.--The Secretary shall take such actions as 
     are necessary--
       (1) to establish and implement in accordance with this Act 
     a competitive oil and gas leasing program under the Mineral 
     Leasing Act (30 U.S.C. 181 et seq.) that will result in an 
     environmentally sound program for the exploration, 
     development, and production of the oil and gas resources of 
     the Coastal Plain; and
       (2) to administer the provisions of this title through 
     regulations, lease terms, conditions, restrictions, 
     prohibitions, stipulations, and other provisions that ensure 
     the oil and gas exploration, development, and production 
     activities on the Coastal Plain will result in no significant 
     adverse effect on fish and wildlife, their habitat, 
     subsistence resources, and the environment, and including, in 
     furtherance of this goal, by requiring the application of the 
     best commercially available technology for oil and gas 
     exploration, development, and production to all exploration, 
     development, and production operations under this title in a 
     manner that ensures the receipt of fair market value by the 
     public for the mineral resources to be leased.

[[Page H3167]]

       (b) Repeal.--Section 1003 of the Alaska National Interest 
     Lands Conservation Act of 1980 (16 U.S.C. 3143) is repealed.
       (c) Compliance With Requirements Under Certain Other 
     Laws.--
       (1) Compatibility.--For purposes of the National Wildlife 
     Refuge System Administration Act of 1966, the oil and gas 
     leasing program and activities authorized by this section in 
     the Coastal Plain are deemed to be compatible with the 
     purposes for which the Arctic National Wildlife Refuge was 
     established, and that no further findings or decisions are 
     required to implement this determination.
       (2) Adequacy of the department of the interior's 
     legislative environmental impact statement.--The ``Final 
     Legislative Environmental Impact Statement'' (April 1987) on 
     the Coastal Plain prepared pursuant to section 1002 of the 
     Alaska National Interest Lands Conservation Act of 1980 (16 
     U.S.C. 3142) and section 102(2)(C) of the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)) is 
     deemed to satisfy the requirements under the National 
     Environmental Policy Act of 1969 that apply with respect to 
     actions authorized to be taken by the Secretary to develop 
     and promulgate the regulations for the establishment of a 
     leasing program authorized by this title before the conduct 
     of the first lease sale.
       (3) Compliance with nepa for other actions.--Before 
     conducting the first lease sale under this title, the 
     Secretary shall prepare an environmental impact statement 
     under the National Environmental Policy Act of 1969 with 
     respect to the actions authorized by this title that are not 
     referred to in paragraph (2). Notwithstanding any other law, 
     the Secretary is not required to identify nonleasing 
     alternative courses of action or to analyze the environmental 
     effects of such courses of action. The Secretary shall only 
     identify a preferred action for such leasing and a single 
     leasing alternative, and analyze the environmental effects 
     and potential mitigation measures for those two alternatives. 
     The identification of the preferred action and related 
     analysis for the first lease sale under this title shall be 
     completed within 18 months after the date of the enactment of 
     this Act. The Secretary shall only consider public comments 
     that specifically address the Secretary's preferred action 
     and that are filed within 20 days after publication of an 
     environmental analysis. Notwithstanding any other law, 
     compliance with this paragraph is deemed to satisfy all 
     requirements for the analysis and consideration of the 
     environmental effects of proposed leasing under this title.
       (d) Relationship to State and Local Authority.--Nothing in 
     this title shall be considered to expand or limit State and 
     local regulatory authority.
       (e) Special Areas.--
       (1) In general.--The Secretary, after consultation with the 
     State of Alaska, the city of Kaktovik, and the North Slope 
     Borough, may designate up to a total of 45,000 acres of the 
     Coastal Plain as a Special Area if the Secretary determines 
     that the Special Area is of such unique character and 
     interest so as to require special management and regulatory 
     protection. The Secretary shall designate as such a Special 
     Area the Sadlerochit Spring area, comprising approximately 
     4,000 acres as depicted on the map referred to in section 
     402(1).
       (2) Management.--Each such Special Area shall be managed so 
     as to protect and preserve the area's unique and diverse 
     character including its fish, wildlife, and subsistence 
     resource values.
       (3) Exclusion from leasing or surface occupancy.--The 
     Secretary may exclude any Special Area from leasing. If the 
     Secretary leases a Special Area, or any part thereof, for 
     purposes of oil and gas exploration, development, production, 
     and related activities, there shall be no surface occupancy 
     of the lands comprising the Special Area.
       (4) Directional drilling.--Notwithstanding the other 
     provisions of this subsection, the Secretary may lease all or 
     a portion of a Special Area under terms that permit the use 
     of horizontal drilling technology from sites on leases 
     located outside the area.
       (f) Limitation on Closed Areas.--The Secretary's sole 
     authority to close lands within the Coastal Plain to oil and 
     gas leasing and to exploration, development, and production 
     is that set forth in this title.
       (g) Regulations.--
       (1) In general.--The Secretary shall prescribe such 
     regulations as may be necessary to carry out this title, 
     including rules and regulations relating to protection of the 
     fish and wildlife, their habitat, subsistence resources, and 
     environment of the Coastal Plain, by no later than 15 months 
     after the date of the enactment of this Act.
       (2) Revision of regulations.--The Secretary shall 
     periodically review and, if appropriate, revise the rules and 
     regulations issued under subsection (a) to reflect any 
     significant biological, environmental, or engineering data 
     that come to the Secretary's attention.

     SEC. 30404. LEASE SALES.

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

     SEC. 30405. GRANT OF LEASES BY THE SECRETARY.

       (a) In General.--The Secretary may grant to the highest 
     responsible qualified bidder in a lease sale conducted 
     pursuant to section 30404 any lands to be leased on the 
     Coastal Plain upon payment by the lessee of such bonus as may 
     be accepted by the Secretary.
       (b) Subsequent Transfers.--No lease issued under this title 
     may be sold, exchanged, assigned, sublet, or otherwise 
     transferred except with the approval of the Secretary. Prior 
     to any such approval the Secretary shall consult with, and 
     give due consideration to the views of, the Attorney General.

     SEC. 30406. LEASE TERMS AND CONDITIONS.

       (a) In General.--An oil or gas lease issued pursuant to 
     this title shall--
       (1) provide for the payment of a royalty of not less than 
     12\1/2\ percent in amount or value of the production removed 
     or sold from the lease, as determined by the Secretary under 
     the regulations applicable to other Federal oil and gas 
     leases;
       (2) provide that the Secretary may close, on a seasonal 
     basis, portions of the Coastal Plain to exploratory drilling 
     activities as necessary to protect caribou calving areas and 
     other species of fish and wildlife;
       (3) require that the lessee of lands within the Coastal 
     Plain shall be fully responsible and liable for the 
     reclamation of lands within the Coastal Plain and any other 
     Federal lands that are adversely affected in connection with 
     exploration, development, production, or transportation 
     activities conducted under the lease and within the Coastal 
     Plain by the lessee or by any of the subcontractors or agents 
     of the lessee;
       (4) provide that the lessee may not delegate or convey, by 
     contract or otherwise, the reclamation responsibility and 
     liability to another person without the express written 
     approval of the Secretary;
       (5) provide that the standard of reclamation for lands 
     required to be reclaimed under this title shall be, as nearly 
     as practicable, a condition capable of supporting the uses 
     which the lands were capable of supporting prior to any 
     exploration, development, or production activities, or upon 
     application by the lessee, to a higher or better use as 
     approved by the Secretary;
       (6) contain terms and conditions relating to protection of 
     fish and wildlife, their habitat, and the environment as 
     required pursuant to section 30403(a)(2);
       (7) provide that the lessee, its agents, and its 
     contractors use best efforts to provide a fair share, as 
     determined by the level of obligation previously agreed to in 
     the 1974 agreement implementing section 29 of the Federal 
     Agreement and Grant of Right of Way for the Operation of the 
     Trans-Alaska Pipeline, of employment and contracting for 
     Alaska Natives and Alaska Native Corporations from throughout 
     the State;
       (8) prohibit the export of oil produced under the lease; 
     and
       (9) contain such other provisions as the Secretary 
     determines necessary to ensure compliance with the provisions 
     of this title and the regulations issued under this title.
       (b) Project Labor Agreements.--The Secretary, as a term and 
     condition of each lease under this title and in recognizing 
     the Government's proprietary interest in labor stability and 
     in the ability of construction labor and management to meet 
     the particular needs and conditions of projects to be 
     developed under the leases issued pursuant to this title and 
     the special concerns of the parties to such leases, shall 
     require that the lessee and its agents and contractors 
     negotiate to obtain a project labor agreement for the 
     employment of laborers and mechanics on production, 
     maintenance, and construction under the lease.

     SEC. 30407. COASTAL PLAIN ENVIRONMENTAL PROTECTION.

       (a) No Significant Adverse Effect Standard To Govern 
     Authorized Coastal Plain Activities.--The Secretary shall, 
     consistent with the requirements of section 30403, administer 
     the provisions of this title through regulations, lease 
     terms, conditions, restrictions, prohibitions, stipulations, 
     and other provisions that--
       (1) ensure the oil and gas exploration, development, and 
     production activities on the Coastal Plain will result in no 
     significant adverse effect on fish and wildlife, their 
     habitat, and the environment; and
       (2) require the application of the best commercially 
     available technology for oil and

[[Page H3168]]

     gas exploration, development, and production on all new 
     exploration, development, and production operations.
       (b) Site-Specific Assessment and Mitigation.--The Secretary 
     shall also require, with respect to any proposed drilling and 
     related activities, that--
       (1) a site-specific analysis be made of the probable 
     effects, if any, that the drilling or related activities will 
     have on fish and wildlife, their habitat, and the 
     environment;
       (2) a plan be implemented to avoid, minimize, and mitigate 
     (in that order and to the extent practicable) any significant 
     adverse effect identified under paragraph (1); and
       (3) the development of the plan shall occur after 
     consultation with the agency or agencies having jurisdiction 
     over matters mitigated by the plan.
       (c) Regulations To Protect Coastal Plain Fish and Wildlife 
     Resources, Subsistence Users, and the Environment.--Before 
     implementing the leasing program authorized by this title, 
     the Secretary shall prepare and promulgate regulations, lease 
     terms, conditions, restrictions, prohibitions, stipulations, 
     and other measures designed to ensure that the activities 
     undertaken on the Coastal Plain under this title are 
     conducted in a manner consistent with the purposes and 
     environmental requirements of this title.
       (d) Compliance With Federal and State Environmental Laws 
     and Other Requirements.--The proposed regulations, lease 
     terms, conditions, restrictions, prohibitions, and 
     stipulations for the leasing program under this title shall 
     require compliance with all applicable provisions of Federal 
     and State environmental law and shall also require the 
     following:
       (1) Standards at least as effective as the safety and 
     environmental mitigation measures set forth in items 1 
     through 29 at pages 167 through 169 of the ``Final 
     Legislative Environmental Impact Statement'' (April 1987) on 
     the Coastal Plain.
       (2) Seasonal limitations on exploration, development, and 
     related activities, where necessary, to avoid significant 
     adverse effects during periods of concentrated fish and 
     wildlife breeding, denning, nesting, spawning, and migration.
       (3) That exploration activities, except for surface 
     geological studies, be limited to the period between 
     approximately November 1 and May 1 each year and that 
     exploration activities shall be supported by ice roads, 
     winter trails with adequate snow cover, ice pads, ice 
     airstrips, and air transport methods, except that such 
     exploration activities may occur at other times, if the 
     Secretary finds that such exploration will have no 
     significant adverse effect on the fish and wildlife, their 
     habitat, and the environment of the Coastal Plain.
       (4) Design safety and construction standards for all 
     pipelines and any access and service roads, that--
       (A) minimize, to the maximum extent possible, adverse 
     effects upon the passage of migratory species such as 
     caribou; and
       (B) minimize adverse effects upon the flow of surface water 
     by requiring the use of culverts, bridges, and other 
     structural devices.
       (5) Prohibitions on public access and use on all pipeline 
     access and service roads.
       (6) Stringent reclamation and rehabilitation requirements, 
     consistent with the standards set forth in this title, 
     requiring the removal from the Coastal Plain of all oil and 
     gas development and production facilities, structures, and 
     equipment upon completion of oil and gas production 
     operations, except that the Secretary may exempt from the 
     requirements of this paragraph those facilities, structures, 
     or equipment that the Secretary determines would assist in 
     the management of the Arctic National Wildlife Refuge and 
     that are donated to the United States for that purpose.
       (7) Appropriate prohibitions or restrictions on access by 
     all modes of transportation.
       (8) Appropriate prohibitions or restrictions on sand and 
     gravel extraction.
       (9) Consolidation of facility siting.
       (10) Appropriate prohibitions or restrictions on use of 
     explosives.
       (11) Avoidance, to the extent practicable, of springs, 
     streams, and river system; the protection of natural surface 
     drainage patterns, wetlands, and riparian habitats; and the 
     regulation of methods or techniques for developing or 
     transporting adequate supplies of water for exploratory 
     drilling.
       (12) Avoidance or reduction of air traffic-related 
     disturbance to fish and wildlife.
       (13) Treatment and disposal of hazardous and toxic wastes, 
     solid wastes, reserve pit fluids, drilling muds and cuttings, 
     and domestic wastewater, including an annual waste management 
     report, a hazardous materials tracking system, and a 
     prohibition on chlorinated solvents, in accordance with 
     applicable Federal and State environmental law.
       (14) Fuel storage and oil spill contingency planning.
       (15) Research, monitoring, and reporting requirements.
       (16) Field crew environmental briefings.
       (17) Avoidance of significant adverse effects upon 
     subsistence hunting, fishing, and trapping by subsistence 
     users.
       (18) Compliance with applicable air and water quality 
     standards.
       (19) Appropriate seasonal and safety zone designations 
     around well sites, within which subsistence hunting and 
     trapping shall be limited.
       (20) Reasonable stipulations for protection of cultural and 
     archeological resources.
       (21) All other protective environmental stipulations, 
     restrictions, terms, and conditions deemed necessary by the 
     Secretary.
       (e) Considerations.--In preparing and promulgating 
     regulations, lease terms, conditions, restrictions, 
     prohibitions, and stipulations under this section, the 
     Secretary shall consider the following:
       (1) The stipulations and conditions that govern the 
     National Petroleum Reserve-Alaska leasing program, as set 
     forth in the 1999 Northeast National Petroleum Reserve-Alaska 
     Final Integrated Activity Plan/Environmental Impact 
     Statement.
       (2) The environmental protection standards that governed 
     the initial Coastal Plain seismic exploration program under 
     parts 37.31 to 37.33 of title 50, Code of Federal 
     Regulations.
       (3) The land use stipulations for exploratory drilling on 
     the KIC-ASRC private lands that are set forth in Appendix 2 
     of the August 9, 1983, agreement between Arctic Slope 
     Regional Corporation and the United States.
       (f) Facility Consolidation Planning.--
       (1) In general.--The Secretary shall, after providing for 
     public notice and comment, prepare and update periodically a 
     plan to govern, guide, and direct the siting and construction 
     of facilities for the exploration, development, production, 
     and transportation of Coastal Plain oil and gas resources.
       (2) Objectives.--The plan shall have the following 
     objectives:
       (A) Avoiding unnecessary duplication of facilities and 
     activities.
       (B) Encouraging consolidation of common facilities and 
     activities.
       (C) Locating or confining facilities and activities to 
     areas that will minimize impact on fish and wildlife, their 
     habitat, and the environment.
       (D) Utilizing existing facilities wherever practicable.
       (E) Enhancing compatibility between wildlife values and 
     development activities.
       (g) Access to Public Lands.--The Secretary shall--
       (1) manage public lands in the Coastal Plain subject to 
     section subsections (a) and (b) of section 811 of the Alaska 
     National Interest Lands Conservation Act (16 U.S.C. 3121); 
     and
       (2) ensure that local residents shall have reasonable 
     access to public lands in the Coastal Plain for traditional 
     uses.

     SEC. 30408. EXPEDITED JUDICIAL REVIEW.

       (a) Filing of Complaint.--
       (1) Deadline.--Subject to paragraph (2), any complaint 
     seeking judicial review of any provision of this title or any 
     action of the Secretary under this title shall be filed in 
     any appropriate district court of the United States--
       (A) except as provided in subparagraph (B), within the 90-
     day period beginning on the date of the action being 
     challenged; or
       (B) in the case of a complaint based solely on grounds 
     arising after such period, within 90 days after the 
     complainant knew or reasonably should have known of the 
     grounds for the complaint.
       (2) Venue.--Any complaint seeking judicial review of an 
     action of the Secretary under this title may be filed only in 
     the United States Court of Appeals for the District of 
     Columbia.
       (3) Limitation on scope of certain review.--Judicial review 
     of a Secretarial decision to conduct a lease sale under this 
     title, including the environmental analysis thereof, shall be 
     limited to whether the Secretary has complied with the terms 
     of this title and shall be based upon the administrative 
     record of that decision. The Secretary's identification of a 
     preferred course of action to enable leasing to proceed and 
     the Secretary's analysis of environmental effects under this 
     title shall be presumed to be correct unless shown otherwise 
     by clear and convincing evidence to the contrary.
       (b) Limitation on Other Review.--Actions of the Secretary 
     with respect to which review could have been obtained under 
     this section shall not be subject to judicial review in any 
     civil or criminal proceeding for enforcement.

     SEC. 30409. FEDERAL AND STATE DISTRIBUTION OF REVENUES.

       (a) In General.--Notwithstanding any other provision of 
     law, of the amount of adjusted bonus, rental, and royalty 
     revenues from oil and gas leasing and operations authorized 
     under this title--
       (1) 50 percent shall be paid to the State of Alaska; and
       (2) except as provided in section 30412(d) the balance 
     shall be deposited into the Treasury as miscellaneous 
     receipts.
       (b) Payments to Alaska.--Payments to the State of Alaska 
     under this section shall be made semiannually.

     SEC. 30410. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN.

       (a) Exemption.--Title XI of the Alaska National Interest 
     Lands Conservation Act of 1980 (16 U.S.C. 3161 et seq.) shall 
     not apply to the issuance by the Secretary under section 28 
     of the Mineral Leasing Act (30 U.S.C. 185) of rights-of-way 
     and easements across the Coastal Plain for the transportation 
     of oil and gas.
       (b) Terms and Conditions.--The Secretary shall include in 
     any right-of-way or easement referred to in subsection (a) 
     such terms and conditions as may be necessary to ensure that 
     transportation of oil and gas does not result in a 
     significant adverse effect on the fish and wildlife, 
     subsistence resources,

[[Page H3169]]

     their habitat, and the environment of the Coastal Plain, 
     including requirements that facilities be sited or designed 
     so as to avoid unnecessary duplication of roads and 
     pipelines.
       (c) Regulations.--The Secretary shall include in 
     regulations under section 30403(g) provisions granting 
     rights-of-way and easements described in subsection (a) of 
     this section.

     SEC. 30411. CONVEYANCE.

       In order to maximize Federal revenues by removing clouds on 
     title to lands and clarifying land ownership patterns within 
     the Coastal Plain, the Secretary, notwithstanding the 
     provisions of section 1302(h)(2) of the Alaska National 
     Interest Lands Conservation Act (16 U.S.C. 3192(h)(2)), shall 
     convey--
       (1) to the Kaktovik Inupiat Corporation the surface estate 
     of the lands described in paragraph 1 of Public Land Order 
     6959, to the extent necessary to fulfill the Corporation's 
     entitlement under section 12 of the Alaska Native Claims 
     Settlement Act (43 U.S.C. 1611) in accordance with the terms 
     and conditions of the Agreement between the Department of the 
     Interior, the United States Fish and Wildlife Service, the 
     Bureau of Land Management, and the Kaktovik Inupiat 
     Corporation effective January 22, 1993; and
       (2) to the Arctic Slope Regional Corporation the remaining 
     subsurface estate to which it is entitled pursuant to the 
     August 9, 1983, agreement between the Arctic Slope Regional 
     Corporation and the United States of America.

     SEC. 30412. LOCAL GOVERNMENT IMPACT AID AND COMMUNITY SERVICE 
                   ASSISTANCE.

       (a) Financial Assistance Authorized.--
       (1) In general.--The Secretary may use amounts available 
     from the Coastal Plain Local Government Impact Aid Assistance 
     Fund established by subsection (d) to provide timely 
     financial assistance to entities that are eligible under 
     paragraph (2) and that are directly impacted by the 
     exploration for or production of oil and gas on the Coastal 
     Plain under this title.
       (2) Eligible entities.--The North Slope Borough, Kaktovik, 
     and other boroughs, municipal subdivisions, villages, and any 
     other community organized under Alaska State law shall be 
     eligible for financial assistance under this section.
       (b) Use of Assistance.--Financial assistance under this 
     section may be used only for--
       (1) planning for mitigation of the potential effects of oil 
     and gas exploration and development on environmental, social, 
     cultural, recreational and subsistence values;
       (2) implementing mitigation plans and maintaining 
     mitigation projects;
       (3) developing, carrying out, and maintaining projects and 
     programs that provide new or expanded public facilities and 
     services to address needs and problems associated with such 
     effects, including firefighting, police, water, waste 
     treatment, medivac, and medical services; and
       (4) establishment of a coordination office, by the North 
     Slope Borough, in the City of Kaktovik, which shall--
       (A) coordinate with and advise developers on local 
     conditions, impact, and history of the areas utilized for 
     development; and
       (B) provide to the Committee on Resources of the Senate and 
     the Committee on Energy and Resources of the Senate an annual 
     report on the status of coordination between developers and 
     the communities affected by development.
       (c) Application.--
       (1) In general.--Any community that is eligible for 
     assistance under this section may submit an application for 
     such assistance to the Secretary, in such form and under such 
     procedures as the Secretary may prescribe by regulation.
       (2) North slope borough communities.--A community located 
     in the North Slope Borough may apply for assistance under 
     this section either directly to the Secretary or through the 
     North Slope Borough.
       (3) Application assistance.--The Secretary shall work 
     closely with and assist the North Slope Borough and other 
     communities eligible for assistance under this section in 
     developing and submitting applications for assistance under 
     this section.
       (d) Establishment of Fund.--
       (1) In general.--There is established in the Treasury the 
     Coastal Plain Local Government Impact Aid Assistance Fund.
       (2) Use.--Amounts in the fund may be used only for 
     providing financial assistance under this section.
       (3) Deposits.--Subject to paragraph (4), there shall be 
     deposited into the fund amounts received by the United States 
     as revenues derived from rents, bonuses, and royalties under 
     on leases and lease sales authorized under this title.
       (4) Limitation on deposits.--The total amount in the fund 
     may not exceed $11,000,000.
       (5) Investment of balances.--The Secretary of the Treasury 
     shall invest amounts in the fund in interest bearing 
     government securities.
       (e) Authorization of Appropriations.--To provide financial 
     assistance under this section there is authorized to be 
     appropriated to the Secretary from the Coastal Plain Local 
     Government Impact Aid Assistance Fund $5,000,000 for each 
     fiscal year.

                          TITLE V--HYDROPOWER

     SEC. 30501. STUDY AND REPORT ON INCREASING ELECTRIC POWER 
                   PRODUCTION CAPABILITY OF EXISTING FACILITIES.

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

     SEC. 30502. STUDY AND IMPLEMENTATION OF INCREASED OPERATIONAL 
                   EFFICIENCIES IN HYDROELECTRIC POWER PROJECTS.

       (a) In General.--The Secretary of Interior shall conduct a 
     study of operational methods and water scheduling techniques 
     at all hydroelectric power plants under the administrative 
     jurisdiction of the Secretary that have an electric power 
     production capacity greater than 50 megawatts, to--
       (1) determine whether such power plants and associated 
     river systems are operated so as to optimize energy and 
     capacity capabilities; and
       (2) identify measures that can be taken to improve 
     operational flexibility at such plants to achieve such 
     optimization.
       (b) Report.--The Secretary shall submit a report on the 
     findings, conclusions, and recommendations of the study under 
     this section by not later than 18 months after the date of 
     the enactment of this Act, including a summary of the 
     determinations and identifications under paragraphs (1) and 
     (2) of subsection (a). The Secretary shall include in the 
     report the impact of optimized hydroelectric power production 
     on irrigation, fish, wildlife, Indian tribes, river health, 
     water quality, navigation, recreation, fishing, and flood 
     control.
       (c) Cooperation with Federal Power Marketing 
     Administrations.--The Secretary shall coordinate with the 
     Administrator of each Federal power marketing administration 
     in determining how the value of electric power produced by 
     each hydroelectric power facility that produces power 
     marketed by the administration can be optimized.

     SEC. 30503. SHIFT OF PROJECT LOADS TO OFF-PEAK PERIODS.

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

[[Page H3170]]

                      TITLE VI--GEOTHERMAL ENERGY

     SEC. 30601. COMPETITIVE LEASE SALE REQUIREMENTS.

       (a) In General.--Section 4 of the Geothermal Steam Act of 
     1970 (30 U.S.C. 1003) is amended to read as follows:


                          ``leasing procedures

       ``Sec. 4. (a) In General.--
       ``(1) Nominations.--The Secretary shall accept nominations 
     at any time from qualified companies and individuals of areas 
     to be leased under this Act.
       ``(2) Competitive lease sale required.--The Secretary shall 
     hold a competitive lease sale at least once every 2 years for 
     lands in a State in that are located areas with respect to 
     which there are nominations pending under paragraph (1).
       ``(3) Noncompetitive leasing.--The Secretary shall make 
     available for a period of 2 years for noncompetitive leasing 
     any lands for which a competitive lease sale is held, but for 
     which the Secretary does not receive any bids in a 
     competitive lease sale.''.
       (b) Pending Lease Applications.--Not later than 6 months 
     after the date of the enactment of this Act, the Secretary of 
     the Interior shall initiate competitive lease sales under the 
     Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.), as 
     amended by this Act, for areas with respect to which 
     applications for leasing are pending on the date of the 
     enactment of this Act.

     SEC. 30602. SPECIAL PROVISIONS REGARDING DIRECT USE OF LOW 
                   TEMPERATURE GEOTHERMAL ENERGY RESOURCES.

       (a) Leasing Procedure.--Section 4 of the Geothermal Steam 
     Act of 1970 (30 U.S.C. 1003) is further amended by adding at 
     the end the following:
       ``(b) Leasing of Low Temperature Geothermal Resources.--
     Lands leased under this Act exclusively for qualified 
     development and direct utilization of low temperature 
     geothermal resources shall be leased to any qualified 
     applicant who first applies for such lease under regulations 
     formulated by the Secretary.''.
       (b) Limitation on Lease Area.--Section 7 of the Geothermal 
     Steam Act of 1970 (30 U.S.C. 1006) is amended--
       (1) in the first sentence by striking ``A geothermal 
     lease'' and inserting ``(a) In General.--Except as provided 
     in subsection (b), a geothermal lease''; and
       (2) by adding at the end the following:
       ``(b) Leasing of Low Temperature Geothermal Resources.--A 
     geothermal lease for qualified development and direct 
     utilization of low temperature geothermal resources shall 
     embrace not more than the minimum amount of acreage 
     determined by the Secretary to be reasonably necessary for 
     such utilization.''.
       (c) Annual Payment.--Section 5 of the Geothermal Steam Act 
     of 1970 (30 U.S.C. 1004) is amended--
       (1) in paragraph (c) by redesignating subparagraphs (1) and 
     (2) as subparagraphs (A) and (B);
       (2) by redesignating paragraphs (a) through (d) in order as 
     paragraphs (1) through (4);
       (3) by inserting ``(a) In General.--'' after ``Sec. 5.''; 
     and
       (4) by adding at the end the following:
       ``(b) Exemption for Use of Low Temperature Resources.--
       ``(1) In general.--In lieu of any royalty or rental under 
     subsection (a), a lease for qualified development and direct 
     utilization of low temperature geothermal resources shall 
     provide for payment by the lessee of an annual fee per well 
     of not less than $100, and not more than $1,000, in 
     accordance with the schedule issued under paragraph (2).
       ``(2) Schedule.--The Secretary shall issue a schedule of 
     fees under this section under which a fee is based on the 
     scale of development and utilization to which the fee 
     applies.''.
       (d) Definitions.--Section 2 of the Geothermal Steam Act of 
     1970 (30 U.S.C. 1001) is amended--
       (1) in paragraph (f) by redesignating subparagraphs (1) 
     through (4) in order as subparagraphs (A) through (D);
       (2) by redesignating paragraphs (a) through (f) in order as 
     paragraphs (1) through (6); and
       (3) by adding at the end the following:
       ``(7) Low temperature geothermal resources.--The term `low 
     temperature geothermal resources' means geothermal steam and 
     associated geothermal resources having a wellhead temperature 
     of less than 195 degrees Fahrenheit.
       ``(8) Qualified development and direct utilization.--The 
     term `qualified development and direct utilization' means 
     development and utilization in which all products of 
     geothermal resources, other than any heat utilized, are 
     returned to the geothermal formation from which they are 
     produced.''.
       (e) Existing Leases.--
       (1) Application to convert.--Any lessee under a lease under 
     the Geothermal Steam Act of 1970 that was issued before the 
     date of the enactment of this Act may apply to the Secretary 
     of the Interior, by not later than 18 months after the date 
     of the enactment of this Act, to convert such lease to a 
     lease for qualified development and direct utilization of low 
     temperature geothermal resources in accordance with the 
     amendments made by this section.
       (2) Conversion.--The Secretary shall approve such an 
     application and convert such a lease to a lease in accordance 
     with the amendments by not later than 180 days after receipt 
     of such application, unless the Secretary determines that the 
     applicant is not a qualified applicant with respect to the 
     lease.

     SEC. 30603. ROYALTIES AND NEAR-TERM PRODUCTION INCENTIVES.

       (a) Royalty.--Section 5 of the Geothermal Steam Act of 1970 
     (30 U.S.C. 1004) is further amended in subsection (a) by 
     striking paragraph (1) and inserting the following:
       ``(1) a royalty on direct use of geothermal steam and 
     associated geothermal resources, other than low temperature 
     geothermal resources, which shall be--
       ``(A) 3.5 percent of the gross proceeds from the sale of 
     electricity produced by such resources; and
       ``(B) 0.75 percent of the gross proceeds from the sale of 
     items produced by the direct use of such resources;''.
       (b) Near-Term Production Incentive.--
       (1) In general.--Notwithstanding section 5(a) of the 
     Geothermal Steam Act of 1970, as amended by subsection (a), 
     or any provision of any lease under that Act, the royalty 
     required to be paid--
       (A) under any qualified geothermal energy lease with 
     respect to commercial production of heat or energy from a 
     facility that begins such production in the 6-year period 
     beginning on the date of the enactment of this Act; or
       (B) on qualified expansion geothermal energy;

     shall be 50 percent of the amount of royalty otherwise 
     required to be paid under those provisions.
       (2) State share.--Notwithstanding section 20 of the 
     Geothermal Steam Act of 1970 (30 U.S.C. 1019), section 35 of 
     the Mineral Leasing Act (30 U.S.C.191), or section 6 of the 
     Mineral Leasing Act for Acquired Lands (30 U.S.C. 355), in 
     the case of monies received by the United States from royalty 
     described in subparagraph (A) or (B) of paragraph (1), the 
     percentage required to be paid by the Secretary of the 
     Treasury to a State under those sections shall be 100 
     percent.
       (3) 4-year application.--Paragraphs (1) and (2) apply only 
     to commercial production of heat or energy from a facility in 
     the first 4 years of such production.
       (4) No effect on state portion.--This subsection shall not 
     be construed to reduce the amount of royalty required to be 
     paid to a State.
       (c) Definitions.--In this section:
       (1) Qualified expansion geothermal energy.--The term 
     ``qualified expansion geothermal energy'' means geothermal 
     energy produced from a generation facility for which--
       (A) the production is increased by more than 10 percent as 
     a result of expansion of the facility carried out in the 6-
     year period beginning on the date of the enactment of this 
     Act; and
       (B) such production increase is greater than 10 percent of 
     the average production by the facility during the 5-year 
     period preceding the expansion of the facility.
       (2) Qualified geothermal energy lease.--The term 
     ``qualified geothermal energy lease'' means a lease under the 
     Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.)--
       (A) that was executed before the end of the 6-year period 
     beginning on the date of the enactment of this Act; and
       (B) under which no commercial production of any form of 
     heat or energy occurred before the date of the enactment of 
     this Act.
       (d) Royalty Existing Leases.--
       (1) In general.--Any lessee under a lease issued under the 
     Geothermal Steam Act of 1970 before the date of the enactment 
     of this Act may modify the terms of the lease relating to 
     payment of royalties to comply with the amendment made by 
     subsection (a), by applying to the Secretary of the Interior 
     by not later than 18 months after the date of the enactment 
     of this Act.
       (2) Application of modification.--Such modification shall 
     apply to any use of geothermal steam and associated 
     geothermal resources to which the amendment applies that 
     occurs after the date of that application.

     SEC. 30604. CONSULTATION REGARDING GEOTHERMAL LEASING AND 
                   PERMITTING ON PUBLIC LANDS.

       (a) In General.--Not later than 6 months after the date of 
     the enactment of this Act, the Secretary of the Interior and 
     the Secretary of Agriculture shall enter into and submit to 
     the Congress a memorandum of understanding in accordance with 
     this section regarding leasing and permitting, for geothermal 
     development, of public lands under their respective 
     administrative jurisdictions.
       (b) Lease and Permit Applications.--The memorandum of 
     understanding shall include provisions that--
       (1) identify known geothermal areas on public lands within 
     the National Forest System and when necessary review 
     management plans to consider leasing under the Geothermal 
     Steam Act of 1970 (30 U.S.C. 1001 et seq.) as a land use;
       (2) establish an administrative procedure for processing 
     geothermal lease applications, including lines of authority, 
     steps in application processing, and timeframes for 
     application processing;
       (3) provide that the Secretary concerned shall--
       (A) within 14 days after receiving an application for a 
     lease, determine whether the application contains sufficient 
     information to allow processing of the application; and
       (B) if the application is found not to contain sufficient 
     information to allow processing the application the Secretary 
     shall, before the end of such 14-day period, provide written 
     notification to the lease applicant that the application is 
     being returned to the

[[Page H3171]]

     applicant without processing and itemizing the deficiencies 
     in the application that prevent processing;
       (4) provide that the Secretary concerned shall within 30 
     days after receiving a lease application, provide written 
     notice to the lease applicant regarding the status of the 
     application, including an estimation of the time that will be 
     required to complete action on the application; and
       (5) establish an administrative procedure for processing 
     geothermal development permits, including lines of authority, 
     steps in permit processing, and timeframes for permit 
     processing.
       (c) Five-Year Leasing Plan.--The memorandum of 
     understanding shall develop a 5-year plan for leasing under 
     the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) of 
     public land in the National Forest System. The plan for 
     geothermal leasing shall be updated every 5 years.
       (d) Data Retrieval System.--The memorandum of understanding 
     shall establish a joint data retrieval system that is capable 
     of tracking lease and permit applications and requests and 
     providing to the applicant or requester information as to 
     their status within the Departments of the Interior and 
     Agriculture, including an estimate of the time required for 
     administrative action.

     SEC. 30605. REVIEW AND REPORT TO CONGRESS.

       The Secretary of the Interior shall promptly review and 
     report to the Congress within 3 years after the date of the 
     enactment of this Act regarding the status of all moratoria 
     on and withdrawals from leasing under the Geothermal Steam 
     Act of 1970 (30 U.S.C. 1001 et seq.) of known geothermal 
     resources areas (as that term is defined in section 2 of that 
     Act (30 U.S.C. 1001), specifying for each such area whether 
     the basis for such moratoria or withdrawal still applies.

     SEC. 30606. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES, 
                   DOCUMENTATION, AND STUDIES.

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


   ``reimbursement for costs of certain analyses, documentation, and 
                                studies

       ``Sec. 30. (a) In General.--The Secretary of the Interior 
     may, through royalty credits, reimburse a person who is a 
     lessee, operator, operating rights owner, or applicant for a 
     lease under this Act for reasonable amounts paid by the 
     person for preparation by the Secretary (or a contractor or 
     other person selected by the Secretary) of any project-level 
     analysis, documentation, or related study required under the 
     National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
     seq.) with respect to the lease.
       ``(b) Conditions.--The Secretary may provide reimbursement 
     under subsection (a) only if--
       ``(1) adequate funding to enable the Secretary to timely 
     prepare the analysis, documentation, or related study is not 
     appropriated;
       ``(2) the person paid the amounts voluntarily; and
       ``(3) the person maintains records of its costs in 
     accordance with regulations prescribed by the Secretary.''.
       (b) Application.--The amendments made by this section shall 
     apply with respect to any lease entered into before, on, or 
     after the date of the enactment of this Act.
       (c) Deadline for Regulations.--The Secretary shall issue 
     regulations implementing the amendments made by this section 
     by not later than 90 days after the date of the enactment of 
     this Act.

     SEC. 30607. ASSESSMENT OF GEOTHERMAL ENERGY POTENTIAL.

       The Secretary of Interior, acting through the Director of 
     the United States Geological Survey, shall update the 1978 
     Assessment of Geothermal Resources, and submit that updated 
     assessment to the Committee on Resources of the House of 
     Representatives and the Committee on Energy and Natural 
     Resources of the Senate--
       (1) within 3 years after the date of enactment of this Act; 
     and
       (2) thereafter as the availability of data and developments 
     in technology warrant.

     SEC. 30608. COOPERATIVE OR UNIT PLANS.

       (a) In General.--Section 18 of the Geothermal Steam Act of 
     1970 (30 U.S.C. 1017) is amended to read as follows:


                      ``COOPERATIVE OR UNIT PLANS

       ``Sec. 18. (a) Adoption of Plan by Lessees.--
       ``(1) In general.--For the purpose of more properly 
     conserving the natural resources of any geothermal field, or 
     like area, or any part thereof (whether or not any part of 
     the geothermal field, or like area, is then subject to any 
     cooperative or unit plan of development or operation), 
     lessees thereof and their representatives may unite with each 
     other, or jointly or separately with others, in collectively 
     adopting and operating under a cooperative or unit plan of 
     development or operation of such field, or like area, or any 
     part thereof, if determined and certified by the Secretary to 
     be necessary or advisable in the public interest.
       ``(2) Modification of lease requirements by secretary.--The 
     Secretary may, in the discretion of the Secretary, and with 
     the consent of the holders of leases involved, establish, 
     alter, change, or revoke drilling, producing, rental, minimum 
     royalty, and royalty requirements of such leases and to make 
     such regulations with reference to such leases, with the 
     consent of the lessees, in connection with the institution 
     and operation of any such cooperative or unit plan as the 
     Secretary may deem necessary or proper to secure the proper 
     protection of the public interest.
       ``(b) Requirement of Plans Under New Leases.--The 
     Secretary--
       ``(1) may provide that geothermal leases issued under this 
     Act after the date of the enactment of this section shall 
     contain a provision requiring the lessee to operate under 
     such a reasonable cooperative or unit plan; and
       ``(2) may prescribe such a plan under which such lessee 
     shall operate, which shall adequately protect the rights of 
     all parties in interest, including the United States.
       ``(c) Modification of Rate of Prospecting, Development, and 
     Production.--The Secretary may require that any plan 
     authorized by the this section that applies to lands owned by 
     the United States contain a provision under which authority 
     is vested in the Secretary, or any person, committee, or 
     State or Federal officer or agency as may be designated in 
     the plan, to alter or modify from time to time the rate of 
     prospecting and development and the quantity and rate of 
     production under such plan.
       ``(d) Exclusion From Determination of Holding or Control.--
     Any lands that are subject to any plan approved or prescribed 
     by the Secretary under this section shall not be considered 
     in determining holdings or control under any provision of 
     this Act.
       ``(e) Pooling of Certain Lands.--If separate tracts of 
     lands cannot be independently developed and operated to use 
     geothermal steam and associated geothermal resources pursuant 
     to this Act in conformity with an established development 
     program--
       ``(1) any such lands, or a portion thereof, may be pooled 
     with other lands, whether or not owned by the United States, 
     for purposes of such development and operation under a 
     communitization agreement providing for an apportionment of 
     production or royalties among the separate tracts of land 
     comprising the production unit, if such pooling is determined 
     by the Secretary to be in the public interest; and
       ``(2) operation or production pursuant to such an agreement 
     shall be treated as operation or production with respect to 
     each tract of land that is subject to the agreement.
       ``(f) Plan Review.--No more than 5 years after approval of 
     any cooperative or unit plan of development or operation, and 
     at least every 5 years thereafter, the Secretary shall review 
     each such plan and, after notice and opportunity for comment, 
     eliminate from inclusion in such plan any lands that the 
     Secretary determines are not reasonably necessary for 
     cooperative or unit operations under the plan. Such 
     elimination shall be based on scientific evidence, and shall 
     occur only if it is determined by the Secretary to be for the 
     purpose of conserving and properly managing the geothermal 
     resource. Any land so eliminated shall be eligible for an 
     extension under subsection (c) or (g) of section 6 if it 
     meets the requirements for such an extension.
       ``(g) Approval by Secretary.--The Secretary may, on such 
     conditions as the Secretary may prescribe, approve operating, 
     drilling, or development contracts made by one or more 
     lessees of geothermal leases, with one or more persons, 
     associations, or corporations if, in the discretion of the 
     Secretary, the conservation of natural resources or the 
     public convenience or necessity may require or the interests 
     of the United States may be best served thereby. All leases 
     operated under such approved operating, drilling, or 
     development contracts, and interests thereunder, shall be 
     excepted in determining holdings or control under section 7 
     of this Act.''.

     SEC. 30609. ROYALTY ON BYPRODUCTS.

       Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 
     1004) is further amended in subsection (a) by striking 
     paragraph (2) and inserting the following:
       ``(2) a royalty on any byproduct that is a mineral named in 
     the first section of the Mineral Leasing Act (30 U.S.C. 181), 
     and that is derived from production under the lease, at the 
     rate of the royalty that applies under that Act to production 
     of such mineral under a lease under that Act;''.

     SEC. 30610. REPEAL OF AUTHORITIES OF SECRETARY TO READJUST 
                   TERMS, CONDITIONS, RENTALS, AND ROYALTIES.

       Section 8 of the Geothermal Steam Act of 1970 (30 U.S.C. 
     1007) is amended by repealing subsections (a) and (b), and by 
     striking ``(c)''.

     SEC. 30611. CREDITING OF RENTAL TOWARD ROYALTY.

       Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 
     1004) is further amended--
       (1) in subsection (a)(2) by inserting ``and'' after the 
     semicolon at the end;
       (2) in subsection (a)(3) by striking ``; and'' and 
     inserting a period;
       (3) by striking paragraph (4) of subsection (a); and
       (4) by adding at the end the following:
       ``(c) Crediting of Rental Toward Royalty.--Any annual 
     rental under this section that is paid with respect to a 
     lease before the first day of the year for which the annual 
     rental is owed shall be credited to the amount of royalty 
     that is required to be paid under the lease for that year.''.

     SEC. 30612. LEASE DURATION AND WORK COMMITMENT REQUIREMENTS.

       (a) In General.--Section 6 of the Geothermal Steam Act of 
     1970 (30 U.S.C. 1005) is amended--
       (1) by striking so much as precedes subsection (c), and 
     striking subsections (e), (g), (h), (i), and (j);

[[Page H3172]]

       (2) by redesignating subsections (c), (d), and (f) in order 
     as subsections (g), (h), and (i);
       (3) by inserting before subsection (g), as so redesignated, 
     the following:


             ``lease term and work commitment requirements

       ``Sec. 6. (a) Primary Term.--
       ``(1) In general.--A geothermal lease shall be for a 
     primary term of ten years.
       ``(2) Initial extension.--The Secretary shall extend the 
     primary term of a geothermal lease for 5 years if, for each 
     year after the fifth year of the lease--
       ``(A) the Secretary determined under subsection (c) that 
     the lessee satisfied the work commitment requirements that 
     applied to the lease for that year; or
       ``(B) the lessee paid in accordance with subsection (d) the 
     value of any work that was not completed in accordance with 
     those requirements.
       ``(3) Additional extension.--The Secretary shall extend the 
     primary term of a geothermal lease (after an extension under 
     paragraph (2)) for an additional 5 years if, for each year 
     after the fifteenth year of the lease, the Secretary 
     determined under subsection (c) that the lessee satisfied the 
     work commitment requirements that applied to the lease for 
     that year.
       ``(b) Requirement to Satisfy Annual Work Commitment 
     Requirement.--
       ``(1) In general.--The lessee for a geothermal lease shall, 
     for each year after the fifth year of the lease, satisfy work 
     commitment requirements prescribed by the Secretary that 
     apply to the lease for that year.
       ``(2) Prescription of work commitment requirements.--The 
     Secretary shall issue regulations prescribing minimum work 
     commitment requirements for geothermal leases, that--
       ``(A) require that a lessee, in each year after the fifth 
     year of the primary term of a geothermal lease, diligently 
     work to achieve commercial production or utilization of steam 
     under the lease;
       ``(B) require that in each year to which work commitment 
     requirements under the regulations apply, the lessee shall 
     significantly reduce the amount of work that remains to be 
     done to achieve such production or utilization;
       ``(C) describe specific work that must be completed by a 
     lessee by the end of each year to which the work commitment 
     requirements apply;
       ``(D) carry forward and apply to work commitment 
     requirements for a year, work completed in any year in the 
     preceding 3-year period that was in excess of the work 
     required to be performed in that preceding year; and
       ``(E) establish transition rules for leases issued before 
     the date of the enactment of this subsection.
       ``(3) Termination of application of requirements.--Work 
     commitment requirements prescribed under this subsection 
     shall not apply to a geothermal lease after the date on which 
     geothermal steam is produced or utilized under the lease in 
     commercial quantities.
       ``(c) Determination of Whether Requirements Satisfied.--The 
     Secretary shall, by not later than 21 days after the end of 
     each year for which work commitment requirements under 
     subsection (b) apply to a geothermal lease--
       ``(1) determine whether the lessee has satisfied the 
     requirements that apply for that year;
       ``(2) notify the lessee of that determination; and
       ``(3) in the case of a notification that the lessee did not 
     satisfy work commitment requirements for the year, include in 
     the notification--
       ``(A) a description of the specific work that was not 
     completed by the lessee in accordance with the requirements; 
     and
       ``(B) the amount of the dollar value of such work that was 
     not completed, reduced by the amount of expenditures made for 
     work completed in a prior year that is carried forward 
     pursuant to subsection (b)(2)(D).
       ``(d) Payment of Value of Uncompleted Work.--
       ``(1) In general.--If the Secretary notifies a lessee that 
     the lessee failed to satisfy work commitment requirements 
     under subsection (b), the lessee shall pay to the Secretary, 
     by not later than the end of the 60-day period beginning on 
     the date of the notification, the dollar value of work that 
     was not completed by the lessee, in the amount stated in the 
     notification (as reduced under subsection (c)(3)(B)).
       ``(2) Failure to pay value of uncompleted work.--If a 
     lessee fails to pay such amount to the Secretary before the 
     end of that period, the lease shall terminate upon the 
     expiration of the period.
       ``(e) Continuation After Commercial Production or 
     Utilization.--If geothermal steam is produced or utilized in 
     commercial quantities within the primary term of the lease 
     under subsection (a) (including any extension of the lease 
     under subsection (a)), such lease shall continue until the 
     date on which geothermal steam is no longer produced or 
     utilized in commercial quantities.
       ``(f) Conversion of Geothermal Lease to Mineral Lease.--The 
     lessee under a lease that has produced geothermal steam for 
     electrical generation, has been determined by the Secretary 
     to be incapable of any further commercial production or 
     utilization of geothermal steam, and that is producing any 
     valuable byproduct in payable quantities may, within 6 months 
     after such determination--
       ``(1) convert the lease to a mineral lease under the 
     Mineral Leasing Act (30 U.S.C. 181 et seq.) or under the 
     Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et 
     seq.), if the lands that are subject to the lease can be 
     leased under that Act for the production of such byproduct; 
     or
       ``(2) convert the lease to a mining claim under the general 
     mining laws, if the byproduct is a locatable mineral.''.
       (b) Conforming Amendment.--
       (1) Section 18 of the Geothermal Steam Act of 1970 (30 
     U.S.C. 1017) is amended by striking ``subsection (c) or (g)'' 
     and inserting ``subsection (g)''.
       (2) Section 20 of the Geothermal Steam Act of 1970 (30 
     U.S.C. 1019) is amended by striking ``, including the 
     payments referred to in section 6(i),''.

     SEC. 30613. ADVANCED ROYALTIES REQUIRED FOR SUSPENSION OF 
                   PRODUCTION.

       Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 
     1004) is further amended by adding at the end the following:
       ``(d) Advanced Royalties Required for Suspension of 
     Production.--(1) If production of heat or energy under a 
     geothermal lease is suspended after the date of any such 
     production for which royalty is required under section 5(a), 
     the Secretary shall require the lessee, until the end of such 
     suspension, to pay royalty in advance at the monthly pro-rata 
     rate of the average annual rate at which such royalty was 
     paid each year in the 5-year-period preceding the date of 
     suspension.
       ``(2) Paragraph (1) shall not apply if the suspension is 
     required or otherwise caused by the Secretary, the Secretary 
     of a military department, or a State or local government.''.

     SEC. 30614. ANNUAL RENTAL.

       (a) Annual Rental Rate.--Section 5 of the Geothermal Steam 
     Act of 1970 (30 U.S.C. 1004) is further amended in subsection 
     (a) in paragraph (3) by striking ``$1 per acre or fraction 
     thereof for each year of the lease'' and all that follows 
     through the end of the paragraph and inserting ``$1 per acre 
     or fraction thereof for each year of the lease in the case of 
     a lease awarded in a noncompetitive lease sale; or $2 per 
     acre or fraction thereof for the first year, $3 per acre or 
     fraction thereof for each of the second through tenth years, 
     and $5 per acre or fraction thereof for each year after the 
     10th year thereof, in the case of a lease awarded in a 
     competitive lease sale; and''.
       (b) Termination of Lease for Failure to Pay Rental.--
     Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 
     1004) is further amended by adding at the end the following:
       ``(e) Termination of Lease For Failure to Pay Rental.--
       ``(1) In general.--The Secretary shall terminate any lease 
     with respect to which rental is not paid in accordance with 
     this Act and the terms of the lease under which the rental is 
     required, upon the expiration of the 45-day period beginning 
     on the date of the failure to pay such rental.
       ``(2) Notification.--The Secretary shall promptly notify a 
     lessee that has not paid rental required under the lease that 
     the lease will be terminated at the end of the period 
     referred to in paragraph (1).
       ``(3) Reinstatement.--A lease that would otherwise 
     terminate under paragraph (1) shall not terminate under that 
     paragraph if the lessee pays to the Secretary, before the end 
     of the period referred to in paragraph (1), the amount of 
     rental due plus a late fee equal to 10 percent of such 
     amount.''.

                            TITLE VII--COAL

     SEC. 30701. SHORT TITLE.

       This title may be cited as the ``Coal Leasing Amendments 
     Act of 2003''.

     SEC. 30702. REPEAL OF THE 160-ACRE LIMITATION FOR COAL 
                   LEASES.

       Section 3 of the Mineral Leasing Act (30 U.S.C. 203) is 
     amended in the first sentence by striking ``such lease,'' and 
     all that follows through the end of the sentence and 
     inserting ``such lease.''.

     SEC. 30703. MINING PLANS.

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

     SEC. 30704. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.

       (a) In General.--Section 7(b) of the Mineral Leasing Act of 
     1920 (30 U.S.C. 207(b)) is amended to read as follows:
       ``(b)(1) Each lease shall be subjected to the condition of 
     diligent development and continued operation of the mine or 
     mines, except where operations under the lease are 
     interrupted by strikes, the elements, or casualties not 
     attributable to the lessee.
       ``(2)(A) The Secretary of the Interior, upon determining 
     that the public interest will be served thereby, may suspend 
     the condition of continued operation upon the payment of 
     advance royalties.
       ``(B) Such advance royalties shall be computed based on the 
     average price for coal sold in the spot market from the same 
     region during the last month of each applicable continued 
     operation year.
       ``(C) The aggregate number of years during the initial and 
     any extended term of any lease for which advance royalties 
     may be accepted in lieu of the condition of continued 
     operation shall not exceed 20.

[[Page H3173]]

       ``(3) The amount of any production royalty paid for any 
     year shall be reduced (but not below zero) by the amount of 
     any advance royalties paid under such lease to the extent 
     that such advance royalties have not been used to reduce 
     production royalties for a prior year.
       ``(4) This subsection shall be applicable to any lease or 
     logical mining unit in existence on the date of the enactment 
     of this paragraph or issued or approved after such date.
       ``(5) Nothing in this subsection shall be construed to 
     affect the requirement contained in the second sentence of 
     subsection (a) relating to commencement of production at the 
     end of 10 years.''.
       (b) Authority To Waive, Suspend, or Reduce Advance 
     Royalties.--Section 39 of the Mineral Leasing Act (30 U.S.C. 
     209) is amended by striking the last sentence.

     SEC. 30705. ELIMINATION OF DEADLINE FOR SUBMISSION OF COAL 
                   LEASE OPERATION AND RECLAMATION PLAN.

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

     SEC. 30706. AMENDMENTS RELATING TO FINANCIAL ASSURANCES WITH 
                   RESPECT TO BONUS BIDS.

       (a) Prohibition on Requiring Surety Bonds.--Section 2(a) of 
     the Mineral Leasing Act (30 U.S.C. 201(a)) is amended by 
     adding at the end the following:
       ``(4) The Secretary shall not require a surety bond or any 
     other financial assurance to guarantee payment of deferred 
     bonus bid installments with respect to any coal lease issued 
     based upon a cash bonus bid.
       ``(5) Notwithstanding any other provision of law, if the 
     lessee under a coal lease fails to pay any installment of a 
     deferred cash bonus bid within 10 days after the Secretary 
     provides written notice that payment of such installment is 
     past due--
       ``(A) such lease shall automatically terminate;
       ``(B) any deferred bonus payments that have not been paid 
     to the United States with respect to such lease shall no 
     longer be owed to the United States; and
       ``(C) any bonus payments already made to the United States 
     with respect to such lease shall not be returned to the 
     lessee or credited in any future lease sale.''.
       (b) Conforming Amendment.--Section 2(a)(1) of the Mineral 
     Leasing Act (30 U.S.C. 201(a)(1)) is amended by striking 
     ``Upon default or cancellation of any coal lease for which 
     bonus payments are due, any unpaid remainder of the bid shall 
     be immediately payable to the United States.''.

     SEC. 30707. INVENTORY REQUIREMENT.

       (a) Review of Assessments.--
       (1) In general.--The Secretary of the Interior, in 
     consultation with the Secretary of Agriculture and the 
     Secretary of Energy, shall review coal assessments and other 
     available data to identify--
       (A) public lands with coal resources;
       (B) the extent and nature of any restrictions or 
     impediments to the development of coal resources on public 
     lands identified under paragraph (1); and
       (C) with respect to areas of such lands for which 
     sufficient data exists, resources of compliant coal and 
     supercompliant coal.
       (2) Definitions.--For purposes of this subsection--
       (A) the term ``compliant coal'' means coal that contains 
     not less than 1.0 and not more than 1.2 pounds of sulfur 
     dioxide per million Btu; and
       (B) the term ``supercompliant coal'' means coal that 
     contains less than 1.0 pounds of sulfur dioxide per million 
     Btu.
       (b) Completion and Updating of the Inventory.--The 
     Secretary--
       (1) shall complete the inventory under subsection (a) by 
     not later than 2 years after the date of the enactment of 
     this Act; and
       (2) shall update the inventory as the availability of data 
     and developments in technology warrant.
       (c) Report.--The Secretary shall submit to the Committee on 
     Resources of the House of Representatives and to the 
     Committee on Energy and Natural Resources of the Senate and 
     make publicly available--
       (1) a report containing the inventory under this section, 
     by not later than 2 years after the effective date of this 
     section; and
       (2) each update of such inventory.

     SEC. 30708. APPLICATION OF AMENDMENTS.

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

               TITLE VIII--INSULAR AREAS ENERGY SECURITY

     SEC. 30801. INSULAR AREAS ENERGY SECURITY.

       Section 604 of the Act entitled ``An Act to authorize 
     appropriations for certain insular areas of the United 
     States, and for other purposes'', approved December 24, 1980 
     (Public Law 96-597; 94 Stat. 3480-3481), is amended--
       (1) in subsection (a)(4) by striking the period and 
     inserting a semicolon;
       (2) by adding at the end of subsection (a) the following 
     new paragraphs:
       ``(5) electric power transmission and distribution lines in 
     insular areas are inadequate to withstand damage caused by 
     the hurricanes and typhoons which frequently occur in insular 
     areas and such damage often costs millions of dollars to 
     repair; and
       ``(6) the refinement of renewable energy technologies since 
     the publication of the 1982 Territorial Energy Assessment 
     prepared pursuant to subsection (c) reveals the need to 
     reassess the state of energy production, consumption, 
     infrastructure, reliance on imported energy, and indigenous 
     sources in regard to the insular areas.'';
       (3) by amending subsection (e) to read as follows:
       ``(e)(1) The Secretary of the Interior, in consultation 
     with the Secretary of Energy and the chief executive officer 
     of each insular area, shall update the plans required under 
     subsection (c) by--
       ``(A) updating the contents required by subsection (c);
       ``(B) drafting long-term energy plans for such insular 
     areas with the objective of reducing, to the extent feasible, 
     their reliance on energy imports by the year 2010 and 
     maximizing, to the extent feasible, use of indigenous energy 
     sources; and
       ``(C) drafting long-term energy transmission line plans for 
     such insular areas with the objective that the maximum 
     percentage feasible of electric power transmission and 
     distribution lines in each insular area be protected from 
     damage caused by hurricanes and typhoons.
       ``(2) Not later than May 31, 2004, the Secretary of the 
     Interior shall submit to the Congress the updated plans for 
     each insular area required by this subsection.''; and
       (4) by amending subsection (g)(4) to read as follows:
       ``(4) Power line grants for territories.--
       ``(A) In general.--The Secretary of the Interior is 
     authorized to make grants to governments of territories of 
     the United States to carry out eligible projects to protect 
     electric power transmission and distribution lines in such 
     territories from damage caused by hurricanes and typhoons.
       ``(B) Eligible projects.--The Secretary may award grants 
     under subparagraph (A) only to governments of territories of 
     the United States that submit written project plans to the 
     Secretary for projects that meet the following criteria:
       ``(i) The project is designed to protect electric power 
     transmission and distribution lines located in one or more of 
     the territories of the United States from damage caused by 
     hurricanes and typhoons.
       ``(ii) The project is likely to substantially reduce the 
     risk of future damage, hardship, loss, or suffering.
       ``(iii) The project addresses one or more problems that 
     have been repetitive or that pose a significant risk to 
     public health and safety.
       ``(iv) The project is not likely to cost more than the 
     value of the reduction in direct damage and other negative 
     impacts that the project is designed to prevent or mitigate. 
     The cost benefit analysis required by this criterion shall be 
     computed on a net present value basis.
       ``(v) The project design has taken into consideration long-
     term changes to the areas and persons it is designed to 
     protect and has manageable future maintenance and 
     modification requirements.
       ``(vi) The project plan includes an analysis of a range of 
     options to address the problem it is designed to prevent or 
     mitigate and a justification for the selection of the project 
     in light of that analysis.
       ``(vii) The applicant has demonstrated to the Secretary 
     that the matching funds required by subparagraph (D) are 
     available.
       ``(C) Priority.--When making grants under this paragraph, 
     the Secretary shall give priority to grants for projects 
     which are likely to--
       ``(i) have the greatest impact on reducing future disaster 
     losses; and
       ``(ii) best conform with plans that have been approved by 
     the Federal Government or the government of the territory 
     where the project is to be carried out for development or 
     hazard mitigation for that territory.
       ``(D) Matching requirement.--The Federal share of the cost 
     for a project for which a grant is provided under this 
     paragraph shall not exceed 75 percent of the total cost of 
     that project. The non-Federal share of the cost may be 
     provided in the form of cash or services.
       ``(E) Treatment of funds for certain purposes.--Grants 
     provided under this paragraph shall not be considered as 
     income, a resource, or a duplicative program when determining 
     eligibility or benefit levels for Federal major disaster and 
     emergency assistance.
       ``(F) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this paragraph $5,000,000 for 
     each fiscal year beginning after the date of the enactment of 
     this paragraph.''.

                   TITLE IX--MISCELLANEOUS PROVISIONS

     SEC. 30901. REPORT ON ENERGY FACILITY RIGHTS-OF-WAY AND 
                   CORRIDORS ON FEDERAL LANDS.

       (a) Report to Congress.--
       (1) In general.--Not later than 1 year after the date of 
     the enactment of this section, the Secretary of Agriculture 
     and the Secretary of the Interior, in consultation with the 
     Secretaries of Commerce, Defense, and Energy and the Federal 
     Energy Regulatory Commission, shall submit to the Committees 
     on Energy and Commerce and Resources of the House of 
     Representatives and the Committee on Energy and Natural 
     Resources of the Senate a joint report--
       (A) addressing--
       (i) the location of existing rights-of-way and designated 
     and de facto corridors for oil and gas pipelines and electric 
     transmission and distribution facilities on Federal lands; 
     and
       (ii) opportunities for additional oil and gas pipeline and 
     electric transmission capacity within such rights-of-way and 
     corridors; and

[[Page H3174]]

       (B) containing a plan for making available, upon request, 
     to the appropriate Federal, State, and local agencies, tribal 
     governments, and other persons involved in the siting of oil 
     and gas pipelines and electricity transmission facilities 
     Geographic Information System-based information regarding the 
     location of such existing rights-of-way and corridors and any 
     planned rights-of-way and corridors.
       (2) Consultations and considerations.--In undertaking the 
     report, the Secretary of the Interior and the Secretary of 
     Agriculture shall consult with--
       (A) other agencies of Federal, State, tribal, or local 
     units of government as appropriate;
       (B) persons involved in the siting of oil and gas pipelines 
     and electric transmission facilities; and
       (C) other interested members of the public.
       (3) Limitation.--The Secretary of the Interior and the 
     Secretary of Agriculture shall limit the distribution of the 
     report and Geographic Information System-based information 
     referred to in paragraph (1) as necessary for national and 
     infrastructure security reasons, if either Secretary 
     determines that such information is authorized to be withheld 
     from public disclosure pursuant to a national security or 
     other exception under section 552(b) of title 5, United 
     States Code (popularly known as the ``Freedom of Information 
     Act'').
       (b) Corridor Designations.--
       (1) Within the 11 contiguous western states.--Not later 
     than 24 months after the date of the enactment of this 
     section, the Secretaries of Agriculture, Commerce, Defense, 
     Energy, and the Interior, in consultation with the Federal 
     Energy Regulatory Commission and the affected utility 
     industries, jointly shall--
       (A) designate, pursuant to title 5 of the Federal Land 
     Policy and Management Act of 1976 (43 U.S.C. 1761 et seq.), 
     and other applicable Federal laws, corridors needed or useful 
     for oil and gas pipelines and electricity transmission and 
     facilities on Federal lands in the eleven contiguous Western 
     States as that term is defined in section 103(o) of the 
     Federal Land Policy and Management Act of 1976 (43 U.S.C. 
     1702(o));
       (B) perform any environmental reviews that may be required 
     to complete the designations of corridors for such facilities 
     on Federal lands in those States; and
       (C) incorporate the designated corridors into the relevant 
     departmental and agency land use and resource management 
     plans or the equivalent.
       (2) Within the remaining states.--Not later than 4 years 
     after the date of the enactment of this section, the 
     Secretaries of Agriculture, Commerce, Defense, Energy, and 
     the Interior, in consultation with the Federal Energy 
     Regulatory Commission and the affected utility industries, 
     jointly shall identify corridors needed or useful for oil and 
     gas pipelines and electricity transmission and distribution 
     facilities on Federal lands in the States other than those 
     described in paragraph (1), and shall schedule prompt action 
     to identify, designate, and incorporate these corridors into 
     the land use plan.
       (3) Ongoing responsibilities.--The Secretaries of 
     Agriculture, Commerce, Defense, Energy, and the Interior, in 
     consultation with the Federal Energy Regulatory Commission 
     and the affected utility industries, shall ensure that 
     additional corridors as may be needed or useful for oil and 
     gas pipelines and electricity transmission and distribution 
     facilities on Federal lands are promptly designated. The 
     Secretaries shall provide a process for the prompt review of 
     applications for such corridors.
       (c) Factors to Consider.--When carrying out this section, 
     the Secretaries shall take into account the need for upgraded 
     and new electricity transmission and distribution facilities 
     to improve reliability, relieve congestion, and enhance the 
     capability of the national grid to deliver electricity.
       (d) Definition of Corridor.--As used in this section and 
     for purposes of title V of the Federal Land Policy and 
     Management Act of 1976, the term `corridor' shall mean a 
     linear strip of land without definite width, but limited by 
     technological, environmental, and topographical factors, and 
     that contains or may in the future contain one or more 
     utility, communication, or transportation facilities. A 
     corridor is a land use designation identified for the purpose 
     of establishing policy direction as to the preferred location 
     of compatible linear facilities and compatible and 
     conflicting land uses. It does not imply entitlement of use 
     or limits as to siting facilities in additional locations. 
     Appropriate environmental review and regulatory permitting 
     reflecting work already undertaken in the designation of a 
     corridor shall precede occupancy on a project-specific basis.

     SEC. 30902. ELECTRICITY TRANSMISSION LINE RIGHT-OF-WAY, 
                   CLEVELAND NATIONAL FOREST AND ADJACENT PUBLIC 
                   LANDS, CALIFORNIA.

       (a) Issuance.--Subject to subsection (c), the Secretary of 
     the Interior and the Secretary of Agriculture shall issue all 
     necessary grants, easements, permits, plan amendments, and 
     other approvals to allow for the siting and construction of a 
     high-voltage electricity transmission line right-of-way 
     running approximately north to south through the Trabuco 
     Ranger District of the Cleveland National Forest in the State 
     of California and adjacent lands under the jurisdiction of 
     the Bureau of Land Management and the Forest Service. The 
     right-of-way approvals shall provide all necessary Federal 
     authorization from the Secretary of the Interior and the 
     Secretary of Agriculture for the routing, construction, 
     operation, and maintenance of a 500 KV transmission line 
     capable of meeting the long-term electricity transmission 
     needs of the region between the existing Valley-Serrano 
     transmission line to the north and the Telega-Escondido 
     transmission line to the south, and for connecting to future 
     generating capacity that may be developed in the region.
       (b) Protection of Wilderness Areas.--The Secretary of the 
     Interior and the Secretary of Agriculture shall not allow any 
     portion of a transmission line right-of-way corridor 
     identified in subsection (a) to enter any identified 
     wilderness area in existence as of the date of the enactment 
     of this section.
       (c) Environmental and Administrative Reviews.--
       (1) Department of interior or local agency.--The Secretary 
     of the Interior, acting through the Bureau of Land 
     Management, shall be the lead Federal agency with overall 
     responsibility to ensure completion of required environmental 
     and other reviews of the approvals to be issued under 
     subsection (a).
       (2) National forest system land.--For the portions of the 
     corridor on National Forest System lands, the Secretary of 
     Agriculture shall complete all required environmental reviews 
     and administrative actions in coordination with the Secretary 
     of the Interior.
       (3) Expeditious completion.--The reviews required for 
     issuance of the approvals under subsection (a) shall be 
     completed not later than 1 year after the date of the 
     enactment of this Act.
       (d) Time for Issuance.--The necessary grants, easements, 
     permits, plan amendments, and other approvals for the 
     transmission line right-of-way shall be issued not later than 
     60 days after the completion of the environmental reviews 
     under subsection (c).
       (e) Other Terms and Conditions.--The transmission line 
     right-of-way shall be subject to such terms and conditions as 
     the Secretary of the Interior and the Secretary of 
     Agriculture consider necessary, as a result of the 
     environmental reviews under subsection (c), to protect the 
     value of historic, cultural, and natural resources under the 
     jurisdiction of the Department of the Interior or the 
     Department of Agriculture.
       (f) Preference Among Proposals.--The Secretary of the 
     Interior and the Secretary of Agriculture shall give a 
     preference to any application or preapplication proposal for 
     a transmission line right-of-way, as described in subsection 
     (a), that was submitted before December 31, 2002, over all 
     other applications and proposals for the same or similar 
     right-of-way submitted on or after that date.

     SEC. 30903. CONSULTATION REGARDING ENERGY RIGHTS-OF-WAY ON 
                   PUBLIC LANDS.

       (a) In General.--Not later than 6 months after the date of 
     the enactment of this Act, the Secretary of the Interior and 
     the Secretary of Agriculture shall enter into, and submit to 
     the Congress, a memorandum of understanding in accordance 
     with this section regarding the processing of new 
     applications for linear rights of way for electrical 
     transmission lines and oil or gas pipelines on public lands 
     within the jurisdiction of the Secretary of the Interior and 
     National Forest System lands within the jurisdiction of the 
     Secretary of Agriculture.
       (b) Contents.--The memorandum of understanding shall 
     include provisions that--
       (1) establish an administrative procedure for processing 
     right-of-way applications, including lines of authority, 
     steps in application processing, and timeframes for 
     application processing;
       (2) provide for coordination of planning relating to the 
     granting of these rights-of-way;
       (3) provide for coordination of environmental compliance 
     efforts to avoid duplication of effort; and
       (4) provide for coordination of use of right-of-way 
     stipulations to achieve consistency.

     SEC. 30904. ENHANCING ENERGY EFFICIENCY IN MANAGEMENT OF 
                   FEDERAL LANDS.

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

     SEC. 30905. PERMITTING OF WIND ENERGY DEVELOPMENT PROJECTS ON 
                   PUBLIC LANDS.

       (a) Required Policies and Procedures.--The Secretary of the 
     Interior shall process right-of-way applications for wind 
     energy site testing and monitoring facilities on public lands 
     administered by the Bureau of Land

[[Page H3175]]

     Management in accordance with policies and procedures that 
     are substantially the same as those set forth in Bureau of 
     Land Management Instruction Memorandum No. 2003-020, dated 
     October 16, 2002.
       (b) Limitation on Rent and Other Charges.--
       (1) In general.--The Secretary of the Interior may not 
     impose rent and other charges with respect to any wind energy 
     development project on public lands that, in the aggregate, 
     exceed 50 percent of the maximum amount of rent that could be 
     charged with respect to that project under the terms of the 
     Bureau of Land Management Instruction Memorandum referred to 
     in subsection (a).
       (2) Termination.--Paragraph (1) shall not apply after the 
     earlier of--
       (A) the date on which the Secretary of the Interior 
     determines there exists at least 10,000 megawatts of 
     electricity generating capacity from non-hydropower renewable 
     energy resources on public lands; or
       (B) the end of the 10-year period beginning on the date of 
     the enactment of this Act.
       (3) State share not affected.--This subsection shall not 
     affect any State share of rent and other charges with respect 
     to any wind energy development project on public lands.

     SEC. 30906. SENSE OF THE CONGRESS REGARDING GENERATION 
                   CAPACITY OF ELECTRICITY FROM RENEWABLE ENERGY 
                   RESOURCES ON PUBLIC LANDS.

       It is the sense of the Congress that the Secretary of the 
     Interior shall, within the next 10 years after the date of 
     the enactment of this Act, seek to have approved non-
     hydropower renewable energy projects located on the public 
     lands with a generation capacity of at least 10,000 megawatts 
     of electricity.

     SEC. 30907. ASSESSMENT OF OCEAN THERMAL ENERGY RESOURCES.

       (a) Resource Assessment.--Not later than 3 months after the 
     date of the enactment of this Act, and each year thereafter, 
     the Secretary of the Interior shall--
       (1) review assessments of ocean thermal energy resources, 
     other than resources of any area of the Outer Continental 
     Shelf that is subject to a moratorium on leasing for energy 
     exploration or development, that are available in the United 
     States and its territories and possessions; and
       (2) undertake new assessments of such resources as 
     necessary.
       (b) Considerations.--In reviewing and undertaking 
     assessments under subsection (a), the Secretary shall take 
     into account changes in market conditions, available 
     technologies, and other relevant factors.
       (c) Reports.--Not later than 1 year after the date of the 
     enactment of this Act, and each year thereafter, the 
     Secretary shall publish a report on reviews and assessments 
     under subsection (a). Each report shall contain--
       (1) a detailed inventory of the available amount and 
     characteristics of ocean thermal energy resources;
       (2) estimates of the costs of actions needed to develop and 
     accelerate efforts to commercialize ocean thermal energy 
     conversion; and
       (3) such other information as the Secretary considers would 
     be useful in developing ocean thermal energy resources.

     SEC. 30908. SENSE OF THE CONGRESS REGARDING DEVELOPMENT OF 
                   MINERALS UNDER PADRE ISLAND NATIONAL SEASHORE.

       (a) Findings.--The Congress finds the following:
       (1) Pursuant to Public Law 87-712 (16 U.S.C. 459d et seq.; 
     popularly known as the ``Federal Enabling Act'') and various 
     deeds and actions thereunder, the United States is the owner 
     of the surface estate only of certain lands constituting the 
     Padre Island National Seashore.
       (2) Ownership of the oil, gas, and other minerals in the 
     subsurface estate of the lands constituting the Padre Island 
     National Seashore was never acquired by the United States and 
     ownership of those interests are held by the State of Texas 
     and private parties.
       (3) The Federal Enabling Act expressly contemplated that 
     the United States would recognize the ownership and future 
     development of the oil, gas, and other minerals in the 
     subsurface estate of the lands constituting the Padre Island 
     National Seashore by the owners and their mineral lessees and 
     recognized that approval of the State of Texas was required 
     to create Padre Island National Seashore.
       (4) Approval was given for the creation of Padre Island 
     National Seashore by the State of Texas through Tex. Rev. 
     Civ. Stat. Ann. Art. 6077(t) (Vernon 1970), which expressly 
     recognized that development of the oil, gas, and other 
     minerals in the subsurface of the lands constituting Padre 
     Island National Seashore would be conducted with full rights 
     of ingress and egress under the laws of the State of Texas.
       (b) Sense of the Congress.--With regard to Federal law, any 
     regulation of the development of oil, gas, or other minerals 
     in the subsurface of the lands constituting Padre Island 
     National Seashore should be made as if those lands retained 
     the status that they had on September 27, 1962.

                            DIVISION D--TAX

     SEC. 40001. SHORT TITLE; ETC.

       (a) Short Title.--This division may be cited as the 
     ``Energy Tax Policy Act of 2003''.
       (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 I--CONSERVATION

     SEC. 41001. CREDIT FOR RESIDENTIAL SOLAR ENERGY 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 SOLAR ENERGY 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, and
       ``(2) 15 percent of the qualified solar water heating 
     property expenditures made by the taxpayer during the taxable 
     year.
       ``(b) Limitations.--
       ``(1) Maximum credit.--The credit allowed under subsection 
     (a) shall not exceed--
       ``(A) $2,000 for each system of property described in 
     subsection (c)(1), and
       ``(B) $2,000 for each system of property described in 
     subsection (c)(2).
       ``(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 equipment, such 
     equipment 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, and
       ``(B) in the case of a photovoltaic system, such system 
     meets appropriate fire and electric code requirements.
       ``(c) 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 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 which uses solar energy to generate 
     electricity for use in 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) Labor costs.--Expenditures for labor costs properly 
     allocable to the onsite preparation, assembly, or original 
     installation of the property described in paragraph (1) or 
     (2) and for piping or wiring to interconnect such property to 
     the dwelling unit shall be taken into account for purposes of 
     this section.
       ``(5) 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.
       ``(d) Special Rules.--
       ``(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 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.
       ``(C) Subparagraphs (A) and (B) shall be applied separately 
     with respect to qualified solar water heating property 
     expenditures and qualified photovoltaic property 
     expenditures.
       ``(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 he owns, such individual shall be 
     treated as having made his proportionate share of any 
     expenditures of such association.

[[Page H3176]]

       ``(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.--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 into account expenditures which are made 
     from subsidized energy financing (as defined in section 
     48(a)(4)(A)).
       ``(e) 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.
       ``(f) Termination.--The credit allowed under this section 
     shall not apply to taxable years beginning after December 31, 
     2006 (December 31, 2008, with respect to qualified 
     photovoltaic property expenditures).''.
       (b) Conforming Amendments.--
       (1) Subsection (a) of section 1016 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 25C(e), in the 
     case of amounts with respect to which a credit has been 
     allowed under section 25C.''.
       (2) 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 solar energy property.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after December 31, 2003.

     SEC. 41002. EXTENSION AND EXPANSION OF CREDIT FOR ELECTRICITY 
                   PRODUCED FROM RENEWABLE RESOURCES.

       (a) Extension of Credit for Wind and Closed-Loop Biomass 
     Facilities.--Subparagraphs (A) and (B) of section 45(c)(3) 
     are each amended by striking ``2004'' and inserting ``2007''.
       (b) Expansion of Credit for Open-Loop Biomass, Landfill Gas 
     Facilities, and Trash Combustion Facilities.--Paragraph (3) 
     of section 45(c) is amended by adding at the end the 
     following new subparagraphs:
       ``(D) Open-loop biomass facilities.--In the case of a 
     facility using open-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, 2007.
       ``(E) Landfill gas facilities.--In the case of a facility 
     producing electricity from gas derived from the 
     biodegradation of municipal solid waste, the term `qualified 
     facility' means any facility owned by the taxpayer which is 
     originally placed in service before January 1, 2007.
       ``(F) Trash combustion facilities.--In the case of a 
     facility which burns municipal solid waste 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.''.
       (c) Definition and Special Rules.--Subsection (c) of 
     section 45 is amended by adding at the end the following new 
     paragraphs:
       ``(5) Open-loop biomass.--The term `open-loop 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,
       ``(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.

     Such term shall not include closed-loop biomass.
       ``(6) Reduced credit for certain preeffective date 
     facilities.--In the case of any facility described in 
     subparagraph (D) or (E) of paragraph (3) which is placed in 
     service before the date of the enactment of this paragraph--
       ``(A) subsection (a)(1) shall be applied by substituting 
     `1.0 cents' for `1.5 cents', and
       ``(B) the 5-year period beginning on the date of the 
     enactment of this paragraph shall be substituted in lieu of 
     the 10-year period in subsection (a)(2)(A)(ii).
       ``(7) Credit eligibility for open-loop biomass 
     facilities.--In the case of any facility described in 
     paragraph (3)(D) which is placed in service before the date 
     of enactment of this paragraph, 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.
       ``(8) Limit on reductions for grants, etc., for open-loop 
     biomass facilities.--If the amount of the credit determined 
     under subsection (a) with respect to any open-loop biomass 
     facility is required to be reduced under paragraph (3) of 
     subsection (b), the fraction under such paragraph shall in no 
     event be greater than \1/2\.
       ``(9) Coordination with section 29.--The term `qualified 
     facility' shall not include any facility the production from 
     which is allowed as a credit under section 29 for the taxable 
     year or any prior taxable year.''.
       (d) Qualified Energy Resources.--Paragraph (1) of section 
     45(c) (relating to qualified energy resources) is amended to 
     read as follows:
       ``(1) Qualified energy resources.--The term `qualified 
     energy resources' means any resource described in paragraph 
     (3) which is used to generate electricity at a qualified 
     facility.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to electricity sold after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.

     SEC. 41003. CREDIT FOR QUALIFIED FUEL CELL POWER PLANTS.

       (a) Business Property.--
       (1) 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) equipment which is part of a qualified fuel cell 
     power plant,''.
       (2) Qualified fuel cell power plant.--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 power plant.--For purposes of 
     this subsection--
       ``(A) In general.--The term `qualified fuel cell power 
     plant' means a fuel cell power plant that has an electricity-
     only generation efficiency greater than 30 percent.
       ``(B) Limitation.--The energy credit with respect to any 
     qualified fuel cell power plant for any taxable year shall 
     not exceed--
       ``(i) $500 for each \1/2\ kilowatt of capacity of the power 
     plant, reduced by
       ``(ii) the aggregate energy credits allowed with respect to 
     such power plant for all prior taxable years.
       ``(C) 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.
       ``(D) Termination.--Such term shall not include any 
     property placed in service after December 31, 2006.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2003, 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).
       (b) Nonbusiness Property.--
       (1) In general.--Subpart A of part IV of subchapter A of 
     chapter 1 (relating to nonrefundable personal credits) is 
     amended by inserting after section 25C the following new 
     section:

     ``SEC. 25D. NONBUSINESS QUALIFIED FUEL CELL POWER PLANT.

       ``(a) In General.--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 qualified fuel cell power plant expenditures which are 
     paid or incurred during such year.
       ``(b) Limitations.--The credit allowed under subsection (a) 
     with respect to any qualified fuel cell power plant for any 
     taxable year shall not exceed--
       ``(1) $500 for each \1/2\ kilowatt of capacity of the power 
     plant, reduced by
       ``(2) the aggregate energy credits allowed with respect to 
     such power plant for all prior taxable years.
       ``(c) Qualified Fuel Cell Power Plant Expenditures.--For 
     purposes of this section, the term `qualified fuel cell power 
     plant expenditures' means expenditures by the taxpayer for 
     any qualified fuel cell power plant (as defined in section 
     48(a)(4))--
       ``(1) which meets the requirements of subparagraphs (B) and 
     (D) of section 48(a)(3), and
       ``(2) which is installed on or in connection with a 
     dwelling unit--

[[Page H3177]]

       ``(A) which is located in the United States, and
       ``(B) which is used by the taxpayer as a residence.

     Such term includes expenditures for labor costs properly 
     allocable to the onsite preparation, assembly, or original 
     installation of the property.
       ``(d) Special Rules.--For purposes of this section, rules 
     similar to the rules of section 25C(d) shall apply.
       ``(e) 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.
       ``(f) Termination.--This section shall not apply to any 
     expenditure made after December 31, 2006.''.
       (2) Conforming amendments.--
       (A) Subsection (a) of section 1016 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 25D(e), in the 
     case of amounts with respect to which a credit has been 
     allowed under section 25D.''.
       (B) 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 25C the following new item:

``Sec. 25D. Nonbusiness qualified fuel cell power plant.''.

       (3) Effective date.--The amendments made by this subsection 
     shall apply to expenditures paid or incurred after December 
     31, 2003, in taxable years ending after such date.

     SEC. 41004. 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) is 
     amended by inserting after section 25D the following new 
     section:

     ``SEC. 25E. 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 20 
     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 $2,000.
       ``(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 $2,000 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 such 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 meets the prescriptive criteria for 
     such component established by the 2000 International Energy 
     Conservation Code (or, in the case of metal roofs with 
     appropriate pigmented coatings, meets the Energy Star program 
     requirements), if--
       ``(1) such component 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 commences with the 
     taxpayer, and
       ``(3) such component reasonably can be expected to remain 
     in use for at least 5 years.

     If the aggregate cost of such components with respect to any 
     dwelling exceeds $1,000, such components shall be treated as 
     qualified energy efficiency improvements only if such 
     components are also certified in accordance with subsection 
     (e) as meeting such criteria.
       ``(e) Certification.--The certification described in 
     subsection (d) shall be--
       ``(1) determined on the basis of the technical 
     specifications or applicable ratings (including product 
     labeling requirements) for the measurement of energy 
     efficiency, based upon energy use or building envelope 
     component performance, for the energy efficient building 
     envelope component,
       ``(2) provided by a local building regulatory authority, a 
     utility, a manufactured home production inspection primary 
     inspection agency (IPIA), or an accredited home energy rating 
     system provider who is accredited by or otherwise authorized 
     to use approved energy performance measurement methods by the 
     Residential Energy Services Network (RESNET), and
       ``(3) made in writing in a manner that specifies in readily 
     verifiable fashion the energy efficient building envelope 
     components installed and their respective energy efficiency 
     levels.
       ``(f) Definitions and Special Rules.--
       ``(1) 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.
       ``(2) 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 he owns, such individual shall be 
     treated as having paid his 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.
       ``(3) Building envelope component.--The term `building 
     envelope component' means insulation material or system which 
     is specifically and primarily designed to reduce the heat 
     loss or gain of a dwelling when installed in or on such 
     dwelling, exterior windows (including skylights) and doors, 
     and metal roofs with appropriate pigmented coatings which are 
     specifically and primarily designed to reduce the heat gain 
     of a dwelling when installed in or on such dwelling.
       ``(4) 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 (section 3280 of title 24, Code of Federal 
     Regulations, as in effect on April 3, 2003).
       ``(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.--This section shall apply to 
     qualified energy efficiency improvements installed after 
     December 31, 2003, and before January 1, 2007.''.
       (b) Conforming Amendments.--
       (1) Subsection (c) of section 23 is amended by striking 
     ``section 1400C'' and inserting ``sections 25E and 1400C''.
       (2) Subsection (a) of section 1016 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 25E(g), in the 
     case of amounts with respect to which a credit has been 
     allowed under section 25E.''.
       (3) Subsection (d) of section 1400C is amended by inserting 
     ``and section 25E'' after ``this section''.
       (4) 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 25D the following new item:

``Sec. 25E. Energy efficiency improvements to existing homes.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after December 31, 2003.

     SEC. 41005. BUSINESS 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) is amended 
     by inserting after section 45F the following new section:

     ``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 qualified new energy efficient home during 
     construction of such home.
       ``(b) Limitations.--
       ``(1) Maximum credit.--
       ``(A) In general.--The credit allowed by this section with 
     respect to a dwelling shall not exceed $2,000.
       ``(B) Prior credit amounts on same dwelling taken into 
     account.--If a credit was allowed 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 
     $2,000 reduced by the sum of the credits allowed under 
     subsection (a) with respect to the dwelling 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

[[Page H3178]]

     attributable to qualified rehabilitation expenditures (as 
     defined in section 47(c)(2)) 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 new energy efficient 
     home, or in the case of a manufactured home which conforms to 
     Federal Manufactured Home Construction and Safety Standards 
     (section 3280 of title 24, Code of Federal Regulations, as in 
     effect on April 3, 2003), 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 appliance.
       ``(3) Qualified new energy efficient home.--The term 
     `qualified new energy efficient home' means a dwelling--
       ``(A) located in the United States,
       ``(B) the construction of which is substantially completed 
     after December 31, 2003,
       ``(C) the original use of which is as a principal residence 
     (within the meaning of section 121) which commences with the 
     person who acquires such dwelling from the eligible 
     contractor, and
       ``(D) which is certified to have a level of annual heating 
     and cooling energy consumption that is at least 30 percent 
     below the annual level of heating and cooling energy 
     consumption of a comparable dwelling constructed in 
     accordance with the standards of the 2000 International 
     Energy Conservation Code and to have building envelope 
     component improvements account for \1/3\ of such 30 percent.
       ``(4) Construction.--The term `construction' includes 
     reconstruction and rehabilitation.
       ``(5) Acquire.--The term `acquire' includes purchase and, 
     in the case of reconstruction and rehabilitation, such term 
     includes a binding written contract for such reconstruction 
     or rehabilitation.
       ``(6) Building envelope component.--The term `building 
     envelope component' means insulation material or system which 
     is specifically and primarily designed to reduce the heat 
     loss or gain of a dwelling when installed in or on such 
     dwelling, exterior windows (including skylights) and doors, 
     and metal roofs with appropriate pigmented coatings which are 
     specifically and primarily designed to reduce the heat gain 
     of a dwelling when installed in or on such dwelling.
       ``(7) Manufactured home included.--The term `dwelling' 
     includes a manufactured home conforming to Federal 
     Manufactured Home Construction and Safety Standards (section 
     3280 of title 24, Code of Federal Regulations, as in effect 
     on April 3, 2003).
       ``(d) Certification.--
       ``(1) Method.--A certification described in subsection 
     (c)(3)(D) shall be determined on the basis of one of the 
     following methods:
       ``(A) The technical specifications or applicable ratings 
     (including product labeling requirements) for the measurement 
     of energy efficiency for the energy efficient building 
     envelope component or energy efficient heating or cooling 
     appliance, based upon energy use or building envelope 
     component performance.
       ``(B) An energy performance measurement method that 
     utilizes computer software approved by organizations 
     designated by the Secretary.
       ``(2) Provider.--Such certification shall be provided by--
       ``(A) in the case of a method described in paragraph 
     (1)(A), a local building regulatory authority, a utility, a 
     manufactured home production inspection primary inspection 
     agency (IPIA), or an accredited home energy rating systems 
     provider who is accredited by, or otherwise authorized to 
     use, approved energy performance measurement methods by the 
     Home Energy Ratings Systems Council or the National 
     Association of State Energy Officials, or
       ``(B) in the case of a method described in paragraph 
     (1)(B), an individual recognized by an organization 
     designated by the Secretary for such purposes.
       ``(3) Form.--Such certification 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 appliances installed and their 
     respective energy efficiency levels, and in the case of a 
     method described in subparagraph (B) of paragraph (1), 
     accompanied by written analysis documenting the proper 
     application of a permissible energy performance measurement 
     method to the specific circumstances of such dwelling.
       ``(4) Regulations.--
       ``(A) In general.--In prescribing regulations under this 
     subsection for energy performance measurement methods, the 
     Secretary shall prescribe procedures for calculating annual 
     energy costs for heating and cooling and cost savings and for 
     the reporting of the results. Such regulations shall--
       ``(i) be based on the National Home Energy Rating Technical 
     Guidelines of the National Association of State Energy 
     Officials, the Home Energy Rating Guidelines of the Home 
     Energy Rating Systems Council, or the modified 2001 
     California Residential ACM manual,
       ``(ii) provide that any calculation procedures be developed 
     such that the same energy efficiency measures allow a home to 
     qualify for the credit under this section regardless of 
     whether the house uses a gas or oil furnace or boiler or an 
     electric heat pump, and
       ``(iii) require that any computer software allow for the 
     printing of the Federal tax forms necessary for the credit 
     under this section and explanations for the homebuyer of the 
     energy efficient features that were used to comply with the 
     requirements of this section.
       ``(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 National Association 
     of State Energy Officials.
       ``(e) Basis Adjustment.--For purposes of this subtitle, if 
     a credit is determined 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 determined.
       ``(f) Application of Section.--Subsection (a) shall apply 
     to dwellings purchased during the period beginning on January 
     1, 2004, and ending on December 31, 2006.''.
       (b) Credit Made Part of General Business Credit.--
     Subsection (b) of section 38 (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 thereof the following new paragraph:
       ``(16) the new energy efficient home credit determined 
     under section 45G.''.
       (c) Denial of Double Benefit.--Section 280C (relating to 
     certain expenses for which credits are allowable) is amended 
     by adding at the end thereof the following new subsection:
       ``(d) New Energy Efficient Home Expenses.--No deduction 
     shall be allowed for that portion of expenses for a new 
     energy efficient 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.''.
       (d) Limitation on Carryback.--Subsection (d) of section 39 
     is amended by adding at the end the following new paragraph:
       ``(11) 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 before January 1, 2004.''.
       (e) Deduction for Certain Unused Business Credits.--
     Subsection (c) of section 196 is amended by striking ``and'' 
     at the end of paragraph (9), by striking the period at the 
     end of paragraph (10) and inserting ``, and'', and by adding 
     after paragraph (10) the following new paragraph:
       ``(11) the new energy efficient home credit determined 
     under section 45G.''.
       (f) 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 45F 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 December 31, 2003.

     SEC. 41006. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM 
                   PROPERTY.

       (a) In General.--Subparagraph (A) of section 48(a)(3) 
     (defining energy property) 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 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

[[Page H3179]]

       ``(v) which is placed in service after December 31, 2003, 
     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
       ``(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)(1)), 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 in 
     paragraph (3) which follows subparagraph (D) shall not apply 
     to combined heat and power system property.

       ``(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 is amended by adding at the end 
     the following new paragraph:
       ``(12) 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, 
     2004.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2003, in taxable years ending after such date.

     SEC. 41007. NEW NONREFUNDABLE PERSONAL CREDITS ALLOWED 
                   AGAINST REGULAR AND MINIMUM TAXES.

       (a) In General.--
       (1) Section 25C.--Section 25C(b), as added by section 
     41001, 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 25E) and section 
     27 for the taxable year.''.
       (2) Section 25D.--Section 25D(b), as added by section 103, 
     is amended to read as follows:
       ``(b) Limitations.--
       ``(1) In general.--The credit allowed under subsection (a) 
     with respect to any qualified fuel cell power plant for any 
     taxable year shall not exceed--
       ``(A) $500 for each \1/2\ kilowatt of capacity of the power 
     plant, reduced by
       ``(B) the aggregate energy credits allowed with respect to 
     such power plant for all prior taxable years.
       ``(2) 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 25E) and section 27 for 
     the taxable year.''.
       (3) Section 25E.--Section 25E(b), as added by section 
     41004, 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 27 for the taxable 
     year.''.
       (b) Conforming Amendments.--
       (1) Section 23(b)(4)(B) is amended by inserting ``and 
     sections 25C, 25D, and 25E'' after ``this section''.
       (2) Section 24(b)(3)(B) is amended by striking ``and 25B'' 
     and inserting ``, 25B, 25C, 25D, and 25E''.
       (3) Section 25(e)(1)(C) is amended by inserting ``25C, 25D, 
     and 25E'' after ``25B,''.
       (4) Section 25B(g)(2) is amended by striking ``section 23'' 
     and inserting ``sections 23, 25C, 25D, and 25E''.
       (5) Section 25E(c), as added by section 41004, 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)''.
       (6) Section 26(a)(1) is amended by striking ``and 25B'' and 
     inserting ``25B, 25C, 25D, and 25E''.
       (7) Section 904(h) is amended by striking ``and 25B'' and 
     inserting ``25B, 25C, 25D, and 25E''.
       (8) Section 1400C(d) is amended by striking ``and 25B'' and 
     inserting ``25B, 25C, 25D, and 25E''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2003.

     SEC. 41008. REPEAL OF 4.3-CENT MOTOR FUEL EXCISE TAXES ON 
                   RAILROADS AND INLAND WATERWAY TRANSPORTATION 
                   WHICH REMAIN IN GENERAL FUND.

       (a) Taxes on Trains.--
       (1) In general.--Subparagraph (A) of section 4041(a)(1) is 
     amended by striking ``or a diesel-powered train'' each place 
     it appears and by striking ``or train''.
       (2) Conforming amendments.--
       (A) Subparagraph (C) of section 4041(a)(1) is amended by 
     striking clause (ii) and by redesignating clause (iii) as 
     clause (ii).
       (B) Subparagraph (C) of section 4041(b)(1) is amended by 
     striking all that follows ``section 6421(e)(2)'' and 
     inserting a period.
       (C) Subsection (d) of section 4041 is amended by 
     redesignating paragraph (3) as paragraph (4) and by inserting 
     after paragraph (2) the following new paragraph:
       ``(3) Diesel fuel used in trains.--There is hereby imposed 
     a tax of 0.1 cent per gallon on any liquid other than 
     gasoline (as defined in section 4083)--
       ``(A) sold by any person to an owner, lessee, or other 
     operator of a diesel-powered train for use as a fuel in such 
     train, or
       ``(B) used by any person as a fuel in a diesel-powered 
     train unless there was a taxable sale of such fuel under 
     subparagraph (A).

     No tax shall be imposed by this paragraph on the sale or use 
     of any liquid if tax was imposed on such liquid under section 
     4081.''
       (D) Subsection (f) of section 4082 is amended by striking 
     ``section 4041(a)(1)'' and inserting ``subsections (d)(3) and 
     (a)(1) of section 4041, respectively''.
       (E) Paragraph (3) of section 4083(a) is amended by striking 
     ``or a diesel-powered train''.
       (F) Paragraph (3) of section 6421(f) is amended to read as 
     follows:
       ``(3) Gasoline used in trains.--In the case of gasoline 
     used as a fuel in a train, this section shall not apply with 
     respect to the Leaking Underground Storage Tank Trust Fund 
     financing rate under section 4081.''
       (G) Paragraph (3) of section 6427(l) is amended to read as 
     follows:
       ``(3) Refund of certain taxes on fuel used in diesel-
     powered trains.--For purposes of this subsection, the term 
     `nontaxable use' includes fuel used in a diesel-powered 
     train. The preceding sentence shall not apply to the tax 
     imposed by section 4041(d) and the Leaking Underground 
     Storage Tank Trust Fund financing rate under section 4081 
     except with respect to fuel sold for exclusive use by a State 
     or any political subdivision thereof.''
       (b) Fuel Used on Inland Waterways.--
       (1) In general.--Paragraph (1) of section 4042(b) is 
     amended by adding ``and'' at the end of subparagraph (A), by 
     striking ``, and'' at the end of subparagraph (B) and 
     inserting a period, and by striking subparagraph (C).
       (2) Conforming amendment.--Paragraph (2) of section 4042(b) 
     is amended by striking subparagraph (C).
       (c) Effective Date.--The amendments made by this section 
     shall take effect on January 1, 2004.

     SEC. 41009. REDUCED MOTOR FUEL EXCISE TAX ON CERTAIN MIXTURES 
                   OF DIESEL FUEL.

       (a) In General.--Paragraph (2) of section 4081(a) is 
     amended by adding at the end the following:
       ``(C) Diesel-water fuel emulsion.--In the case of diesel-
     water fuel emulsion at least 14 percent of which is water and 
     with respect to which the emulsion additive is registered by 
     a United States manufacturer with the Environmental 
     Protection Agency pursuant to section 211 of the Clean Air 
     Act (as in effect on March 31, 2003), subparagraph (A)(iii) 
     shall be applied by substituting `19.7 cents' for `24.3 
     cents'.''.
       (b) Special Rules for Diesel-Water Fuel Emulsions.--
       (1) Refunds for tax-paid purchases.--Section 6427 is 
     amended by redesignating subsections (m) through (p) as 
     subsections (n) through (q), respectively, and by inserting 
     after subsection (l) the following new subsection:
       ``(m) Diesel Fuel Used To Produce Emulsion.--
       ``(1) In general.--Except as provided in subsection (k), if 
     any diesel fuel on which tax was imposed by section 4081 at 
     the regular tax rate is used by any person in producing an 
     emulsion described in section 4081(a)(2)(C) 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 
     excess of the regular tax rate over the incentive tax rate 
     with respect to such fuel.
       ``(2) Definitions.--For purposes of paragraph (1)--
       ``(A) Regular tax rate.--The term `regular tax rate' means 
     the aggregate rate of tax imposed by section 4081 determined 
     without regard to section 4081(a)(2)(C).
       ``(B) Incentive tax rate.--The term `incentive tax rate' 
     means the aggregate rate of tax imposed by section 4081 
     determined with regard to section 4081(a)(2)(C).''.

[[Page H3180]]

       (2) Later separation of fuel.--
       (A) In general.--Section 4081 (relating to imposition of 
     tax) is amended by redesignating subsections (d) and (e) as 
     subsections (e) and (f), respectively, and by inserting after 
     subsection (c) the following new subsection:
       ``(d) Later Separation of Fuel From Diesel-Water Fuel 
     Emulsion.--If any person separates the taxable fuel from a 
     diesel-water fuel emulsion on which tax was imposed under 
     subsection (a) at a rate determined under subsection 
     (a)(2)(C) (or with respect to which a credit or payment was 
     allowed or made by reason of section 6427), such person shall 
     be treated as the refiner of such taxable fuel. The amount of 
     tax imposed on any removal of such fuel by such person shall 
     be reduced by the amount of tax imposed (and not credited or 
     refunded) on any prior removal or entry of such fuel.''.
       (B) Conforming amendment.--Subsection (d) of section 6416 
     is amended by striking ``section 4081(e)'' and inserting 
     ``section 4081(f)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2003.

     SEC. 41010. REPEAL OF PHASEOUTS FOR QUALIFIED ELECTRIC 
                   VEHICLE CREDIT AND DEDUCTION FOR CLEAN FUEL-
                   VEHICLES.

       (a) Credit for Qualified Electric Vehicles.--Subsection (b) 
     of section 30 (relating to limitations) is amended by 
     striking paragraph (2) and redesignating paragraph (3) as 
     paragraph (2).
       (b) Deduction for Clean-Fuel Vehicles and Certain Refueling 
     Property.--Paragraph (1) of section 179A(b) (relating to 
     qualified clean-fuel vehicle property) is amended to read as 
     follows:
       ``(1) Qualified clean-fuel vehicle property.-- The cost 
     which may be taken into account under subsection (a)(1)(A) 
     with respect to any motor vehicle shall not exceed--
       ``(A) in the case of a motor vehicle not described in 
     subparagraph (B) or (C), $2,000,
       ``(B) in the case of any truck or van with a gross vehicle 
     weight rating greater than 10,000 pounds but not greater than 
     26,000 pounds, $5,000, or
       ``(C) $50,000 in the case of--
       ``(i) a truck or van with a gross vehicle weight rating 
     greater than 26,000 pounds, or
       ``(ii) any bus which has a seating capacity of at least 20 
     adults (not including the driver).''.

     SEC. 41011. 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:

     ``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), and
       ``(2) the advanced lean burn technology motor vehicle 
     credit determined under subsection (c).
       ``(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,
       ``(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:

The 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 or 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 or 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 2004 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) Advanced Lean Burn Technology Motor Vehicle Credit.--
       ``(1) In general.--For purposes of subsection (a), the 
     advanced lean burn technology motor vehicle credit determined 
     under this subsection with respect to a new qualified 
     advanced lean burn technology motor vehicle placed in service 
     by the taxpayer during the taxable year is the credit amount 
     determined under paragraph (2).
       ``(2) Credit amount.--
       ``(A) Increase for fuel efficiency.--The credit amount 
     determined under this paragraph shall be--
       ``(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

[[Page H3181]]

       ``(vi) $3,000, if such vehicle achieves at least 250 
     percent of the 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.
       ``(B) Conservation credit.--The amount determined under 
     subparagraph (A) with respect to an advanced lean burn 
     technology motor vehicle shall be increased by--
       ``(i) $250, if such vehicle achieves a lifetime fuel 
     savings of at least 1,500 gallons of gasoline, and
       ``(ii) $500, if such vehicle achieves a lifetime fuel 
     savings of at least 2,500 gallons of gasoline.
       ``(C) Option to use like vehicle.--At the option of the 
     vehicle manufacturer, the increase for fuel efficiency and 
     conservation credit may be calculated by comparing the new 
     advanced lean-burn technology motor vehicle to a like 
     vehicle.
       ``(3) Definitions.--For purposes of this subsection--
       ``(A) Advanced lean burn technology motor vehicle.--The 
     term `advanced lean burn technology motor vehicle' means a 
     motor vehicle with an internal combustion engine that--
       ``(i) is designed to operate primarily using more air than 
     is necessary for complete combustion of the fuel,
       ``(ii) incorporates direct injection,
       ``(iii) achieves at least 125 percent of the 2000 model 
     year city fuel economy, and
       ``(iv) for 2004 and later model vehicles, has received a 
     certificate that such vehicle meets or exceeds the Bin 8 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.
       ``(B) Like vehicle.--The term `like vehicle' for an 
     advanced lean burn technology motor vehicle derived from a 
     conventional production vehicle produced in the same model 
     year means a model that is equivalent in the following areas:
       ``(i) Body style (2-door or 4-door).
       ``(ii) Transmission (automatic or manual).
       ``(iii) Acceleration performance ( 0.05 seconds).
       ``(iv) Drivetrain (2-wheel drive or 4-wheel drive).
       ``(v) Certification by the Administrator of the 
     Environmental Protection Agency.
       ``(C) Lifetime fuel savings.--The term `lifetime fuel 
     savings' shall be calculated by dividing 120,000 by the 
     difference between the 2000 model year city fuel economy for 
     the vehicle inertia weight class and the city fuel economy 
     for the new qualified hybrid motor vehicle.
       ``(d) Limitation Based on Amount of Tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(1) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(2) the sum of the credits allowable under subpart A and 
     sections 27, 29, and 30A for the taxable year.
       ``(e) 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) 2000 model year city fuel economy.--The 2000 model 
     year city fuel economy with respect to any vehicle shall be 
     measured under rules similar to the rules under section 
     4064(c).
       ``(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, 
     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 paragraph) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(6) No double benefit.--The amount of any deduction or 
     credit allowable under this chapter (other than the credit 
     allowable under this section), with respect to a vehicle 
     described under subsection (b), 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 in any sale or lease document 
     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) 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 (d) for such taxable year 
     (referred to as the `unused credit year' in this paragraph), 
     such excess shall be allowed as a credit carryforward for 
     each of the 20 taxable years following the unused credit 
     year.
       ``(B) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the 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.
       ``(f) Regulations.--
       ``(1) In general.--The Secretary shall promulgate such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(2) Determination of motor vehicle eligibility.--The 
     Secretary, 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.
       ``(g) Termination.--This section shall not apply to any 
     property placed in service after--
       ``(1) in the case of a new qualified fuel cell motor 
     vehicle (as described in subsection (b)), December 31, 2012, 
     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 (30), by striking the period at the end of 
     paragraph (31) and inserting ``, and'', and by adding at the 
     end the following:
       ``(32) to the extent provided in section 30B(e)(5).''.
       (2) Section 6501(m) is amended by inserting ``30B(e)(10),'' 
     after ``30(d)(4),''.
       (3) 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:

``Sec. 30B. Alternative motor vehicle credit.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2003, in taxable years ending after such date.

                         TITLE II--RELIABILITY

     SEC. 42001. 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 is amended by adding after paragraph (15) 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:

``(C)(ii).........................................................10''.

       (d) Alternative Minimum Tax Exception.--Subparagraph (B) of 
     section 56(a)(1) is amended by inserting before the period 
     the following: ``, or in section 168(e)(3)(C)(ii)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to property

[[Page H3182]]

     placed in service after the date of the enactment of this 
     Act, in taxable years ending after such date.

     SEC. 42002. 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) is amended by inserting after the item relating 
     to subparagraph (E)(iii) the following:

``(E)(iv).........................................................20''.

       (c) Alternative Minimum Tax Exception.--Subparagraph (B) of 
     section 56(a)(1) is amended by inserting before the period 
     the following: ``, or in section 168(e)(3)(E)(iv)''.
       (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. 42003. ELECTRIC TRANSMISSION PROPERTY 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 (iii), by striking 
     the period at the end of clause (iv) and by inserting ``, 
     and'', and by adding at the end the following new clause:
       ``(v) any section 1245 property (as defined in section 
     1245(a)(3)) used in the transmission at 69 or more kilovolts 
     of electricity for sale.''.
       (b) Alternative System.--The table contained in section 
     168(g)(3)(B) is amended by inserting after the item relating 
     to subparagraph (E)(iv) the following:

``(E)(v)..........................................................20''.

       (c) Alternative Minimum Tax Exception.--Subparagraph (B) of 
     section 56(a)(1) is amended by inserting before the period 
     the following: ``, or in section 168(e)(3)(E)(v)''.
       (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. 42004. 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) is amended by inserting after section 179A the 
     following new section:

     ``SEC. 179B. DEDUCTION FOR CAPITAL COSTS INCURRED IN 
                   COMPLYING WITH ENVIRONMENTAL PROTECTION AGENCY 
                   SULFUR REGULATIONS.

       ``(a) Treatment as Expenses.--A small business refiner (as 
     defined in section 45H(c)(1)) may elect to treat 75 percent 
     of qualified capital costs (as defined in section 45H(c)(2)) 
     which are paid or incurred by the taxpayer during the taxable 
     year as expenses which are not chargeable to capital account. 
     Any cost so treated shall be allowed as a deduction for the 
     taxable year in which paid or incurred.
       ``(b) Reduced Percentage.--In the case of a small business 
     refiner with average daily domestic refinery runs for the 1-
     year period ending on March 31, 2003, in excess of 155,000 
     barrels, the number of percentage points described in 
     subsection (a) shall be reduced (not below zero) by the 
     product of such number (before the application of this 
     subsection) and the ratio of such excess to 50,000 barrels.
       ``(c) Basis Reduction.--
       ``(1) In general.--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).
       ``(2) Ordinary income recapture.--For purposes of section 
     1245, the amount of the deduction allowable under subsection 
     (a) with respect to any property which 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) 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 adding at the 
     end the following new subparagraph:
       ``(I) expenditures for which a deduction is allowed under 
     section 179B.''.
       (2) Section 312(k)(3)(B) is amended--
       (A) by striking ``section 179 or 179A'' each place it 
     appears and inserting ``section 179, 179A, or 179B'', and
       (B) in the heading, by striking ``179 or 179A'' and 
     inserting ``179, 179A, or 179B''.
       (3) Section 1016(a) 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 179B(c).''
       (4) Paragraphs (2)(C) and (3)(C) of section 1245(a) are 
     each amended by inserting ``179B,'' after ``179A,''.
       (5) The table of sections for part VI of subchapter B of 
     chapter 1 is amended by inserting after the item relating to 
     section 179A the following new item:

``Sec. 179B. 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 March 31, 
     2003, in taxable years ending after such date.

     SEC. 42005. CREDIT FOR PRODUCTION OF LOW SULFUR DIESEL FUEL.

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

     ``SEC. 45H. CREDIT FOR PRODUCTION OF LOW SULFUR DIESEL FUEL.

       ``(a) In General.--For purposes of section 38, the amount 
     of the low sulfur diesel fuel production credit determined 
     under this section with respect to any facility of a small 
     business refiner is an amount equal to 5 cents for each 
     gallon of low sulfur diesel fuel produced during the taxable 
     year by such small business refiner at such facility.
       ``(b) Maximum Credit.--
       ``(1) In general.--The aggregate credit determined under 
     subsection (a) for any taxable year with respect to any 
     facility shall not exceed--
       ``(A) 25 percent of the qualified capital costs incurred by 
     the small business refiner with respect to such facility, 
     reduced by
       ``(B) the aggregate credits determined under this section 
     for all prior taxable years with respect to such facility.
       ``(2) Reduced percentage.--In the case of a small business 
     refiner with average daily domestic refinery runs for the 1-
     year period ending on March 31, 2003, in excess of 155,000 
     barrels, the number of percentage points described in 
     paragraph (1) shall be reduced (not below zero) by the 
     product of such number (before the application of this 
     paragraph) and the ratio of such excess to 50,000 barrels.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Small business refiner.--The term `small business 
     refiner' means, with respect to any taxable year, a refiner 
     of crude oil with respect to which not more than 1,500 
     persons are engaged in the refinery operations of the 
     business on any day during such taxable year and whose 
     average daily domestic refinery run for the 1-year period 
     ending on March 31, 2003, did not exceed 205,000 barrels.
       ``(2) Qualified capital costs.--The term `qualified capital 
     costs' means, with respect to any facility, those costs paid 
     or incurred during the applicable period for compliance with 
     the applicable EPA regulations with respect to such facility, 
     including expenditures for the construction of new process 
     operation units or the dismantling and reconstruction of 
     existing process units to be used in the production of low 
     sulfur diesel fuel, associated adjacent or offsite equipment 
     (including tankage, catalyst, and power supply), engineering, 
     construction period interest, and sitework.
       ``(3) Applicable epa regulations.--The term `applicable EPA 
     regulations' means the Highway Diesel Fuel Sulfur Control 
     Requirements of the Environmental Protection Agency.
       ``(4) Applicable period.--The term `applicable period' 
     means, with respect to any facility, the period beginning on 
     April 1, 2003, 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.
       ``(5) Low sulfur diesel fuel.--The term `low sulfur diesel 
     fuel' means diesel fuel with a sulfur content of 15 parts per 
     million or less.
       ``(d) Reduction in Basis.--For purposes of this subtitle, 
     if a credit is determined under this section for any 
     expenditure with respect to any property, the increase in 
     basis of such property which would (but for this subsection) 
     result from such expenditure shall be reduced by the amount 
     of the credit so determined.
       ``(e) Certification.--
       ``(1) Required.--Not later than the date which is 30 months 
     after the first day of the first taxable year in which the 
     low sulfur diesel fuel production credit is allowed with 
     respect to a facility, the small business refiner must obtain 
     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.
       ``(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.
       ``(f) Controlled Groups.--For purposes of this section, all 
     persons treated as a single

[[Page H3183]]

     employer under subsection (b), (c), (m), or (o) of section 
     414 shall be treated as 1 taxpayer.''.
       (b) Credit Made Part of General Business Credit.--
     Subsection (b) of section 38 (relating to general business 
     credit) 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) in the case of a small business refiner, the low 
     sulfur diesel fuel production credit determined under section 
     45H(a).''.
       (c) Denial of Double Benefit.--Section 280C (relating to 
     certain expenses for which credits are allowable) is amended 
     by adding after subsection (d) the following new subsection:
       ``(e) Low Sulfur Diesel Fuel Production 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 45H(a).''.
       (d) Basis Adjustment.--Section 1016(a) (relating to 
     adjustments to basis) 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) in the case of a facility with respect to which a 
     credit was allowed under section 45H, to the extent provided 
     in section 45H(d).''.
       (e) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 is amended by 
     adding at the end the following new item:

``Sec. 45H. Credit for production of low sulfur diesel fuel.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to expenses paid or incurred after March 31, 
     2003, in taxable years ending after such date.

     SEC. 42006. 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 a 
     related person 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 
     the related person for the taxable year exceed 75,000 
     barrels. For purposes of this paragraph, the average daily 
     refinery runs for any taxable year shall be determined by 
     dividing the aggregate 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, 
     2003.

     SEC. 42007. 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.--In the case of any qualifying electric 
     transmission transaction to which the taxpayer elects the 
     application of this section, qualified gain from such 
     transaction shall be recognized--
       ``(A) in the taxable year which includes the date of such 
     transaction to the extent the amount realized from such 
     transaction exceeds--
       ``(i) the cost of exempt utility property which is 
     purchased by the taxpayer during the 4-year period beginning 
     on such date, reduced (but not below zero) by
       ``(ii) any portion of such cost previously taken into 
     account under this subsection, and
       ``(B) ratably over the 8-taxable year period beginning with 
     the taxable year which includes the date of such transaction, 
     in the case of any such gain not recognized under 
     subparagraph (A).
       ``(2) Qualified gain.--For purposes of this subsection, the 
     term `qualified gain' means, with respect to any 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 
     the amount described in subparagraph (A) which is required to 
     be included in gross income for such taxable year (determined 
     without regard to this subsection).
       ``(3) 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 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.
       ``(4) Independent transmission company.--For purposes of 
     this subsection, the term `independent transmission company' 
     means--
       ``(A) an independent transmission provider 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) or by 
     declaratory order is not a market participant within the 
     meaning of such Commission's rules applicable to independent 
     transmission providers, 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 
     independent transmission provider before the close of the 
     period specified in such authorization, but not later than 
     the close of the period applicable under subsection (a)(2)(B) 
     as extended under paragraph (2), or
       ``(C) in the case of facilities subject to the jurisdiction 
     of the Public Utility Commission of Texas--
       ``(i) a person which is approved by that Commission as 
     consistent with Texas State law regarding an independent 
     transmission provider, or
       ``(ii) a political subdivision or affiliate thereof whose 
     transmission facilities are under the operational control of 
     a person described in clause (i).
       ``(5) Exempt utility property.--For purposes of this 
     subsection--
       ``(A) In general.--The term `exempt utility property' means 
     property used in the trade or business of--
       ``(i) generating, transmitting, distributing, or selling 
     electricity, or
       ``(ii) producing, transmitting, distributing, or selling 
     natural gas.
       ``(B) Nonrecognition of gain by reason of acquisition of 
     stock.--Acquisition of control of a corporation shall be 
     taken into account under this subsection with respect to a 
     qualifying electric transmission transaction only if the 
     principal trade or business of such corporation is a trade or 
     business referred to in subparagraph (A).
       ``(6) Special rule for consolidated groups.--In the case of 
     a corporation which is a member of an affiliated group filing 
     a consolidated return, any exempt utility property purchased 
     by another member of such group shall be treated as purchased 
     by such corporation for purposes of applying paragraph 
     (1)(A).
       ``(7) Time for assessment of deficiencies.--If the taxpayer 
     has made the election under paragraph (1) and any gain is 
     recognized by such taxpayer as provided in paragraph (1)(B), 
     then--
       ``(A) the statutory period for the assessment of any 
     deficiency, for any taxable year in which any part of the 
     gain on the transaction is realized, attributable to such 
     gain shall not expire prior to the expiration of 3 years from 
     the date the Secretary is notified by the taxpayer (in such 
     manner as the Secretary may by regulations prescribe) of the 
     purchase of exempt utility property or of an intention not to 
     purchase such property, and
       ``(B) such deficiency may be assessed before the expiration 
     of such 3-year period notwithstanding any law or rule of law 
     which would otherwise prevent such assessment.
       ``(8) Purchase.--For purposes of this subsection, the 
     taxpayer shall be considered to have purchased any property 
     if the unadjusted basis of such property is its cost within 
     the meaning of section 1012.
       ``(9) Election.--An election under paragraph (1) shall be 
     made at such time and in such manner as the Secretary may 
     require and, once made, shall be irrevocable.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions occurring after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.

     SEC. 42008. 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.--
       ``(1) In general.--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.
       ``(2) Contributions after funding period.--Notwithstanding 
     any other provision of this section, a taxpayer may pay into 
     the Fund in any taxable year after the last taxable year to 
     which the ruling amount applies. Payments may not be made 
     under the preceding sentence to the extent such payments 
     would cause the assets of the Fund to exceed the nuclear 
     decommissioning costs allocable to the taxpayer's current or 
     former interest in the nuclear power plant to which the Fund 
     relates. The limitation under the preceding sentence shall be 
     determined by taking into account a reasonable rate of 
     inflation for the nuclear decommissioning costs and a 
     reasonable after-tax rate of return on the assets of the Fund 
     until such assets are anticipated to be expended.''.
       (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

[[Page H3184]]

     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) Treatment of Certain Decommissioning Costs.--
       (1) In general.--Section 468A is amended by redesignating 
     subsections (f) and (g) as subsections (g) and (h), 
     respectively, and by inserting after subsection (e) the 
     following new subsection:
       ``(f) Transfers Into Qualified Funds.--
       ``(1) In general.--Notwithstanding subsection (b), any 
     taxpayer maintaining a Fund to which this section applies 
     with respect to a nuclear power plant may transfer into such 
     Fund up to an amount equal to the excess of the total nuclear 
     decommissioning costs with respect to such nuclear power 
     plant over the portion of such costs taken into account in 
     determining the ruling amount in effect immediately before 
     the transfer.
       ``(2) Deduction for amounts transferred.--
       ``(A) In general.--Except as provided in subparagraph (C), 
     the deduction allowed by subsection (a) for any transfer 
     permitted by this subsection shall be allowed ratably over 
     the remaining estimated useful life (within the meaning of 
     subsection (d)(2)(A)) of the nuclear power plant beginning 
     with the taxable year during which the transfer is made.
       ``(B) Denial of deduction for previously deducted 
     amounts.--No deduction shall be allowed for any transfer 
     under this subsection of an amount for which a deduction was 
     previously allowed or a corresponding amount was not included 
     in gross income. For purposes of the preceding sentence, a 
     ratable portion of each transfer shall be treated as being 
     from previously deducted or excluded amounts to the extent 
     thereof.
       ``(C) Transfers of qualified funds.--If--
       ``(i) any transfer permitted by this subsection is made to 
     any Fund to which this section applies, and
       ``(ii) such Fund is transferred thereafter,

     any deduction under this subsection for taxable years ending 
     after the date that such Fund is transferred shall be allowed 
     to the transferor for the taxable year which includes such 
     date.
       ``(D) Special rules.--
       ``(i) Gain or loss not recognized.--No gain or loss shall 
     be recognized on any transfer permitted by this subsection.
       ``(ii) Transfers of appreciated property.--If appreciated 
     property is transferred in a transfer permitted by this 
     subsection, the amount of the deduction shall be the adjusted 
     basis of such property.
       ``(3) New ruling amount required.--Paragraph (1) shall not 
     apply to any transfer unless the taxpayer requests from the 
     Secretary a new schedule of ruling amounts in connection with 
     such transfer.
       ``(4) No basis in qualified funds.--Notwithstanding any 
     other provision of law, the taxpayer's basis in any Fund to 
     which this section applies shall not be increased by reason 
     of any transfer permitted by this subsection.''.
       (2) New ruling amount to take into account total costs.--
     Subparagraph (A) of section 468A(d)(2) is amended to read as 
     follows:
       ``(A) fund the total nuclear decommissioning costs with 
     respect to such power plant over the estimated useful life of 
     such power plant, and''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2003.

     SEC. 42009. 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 provision or sale of transmission service 
     or ancillary services if such services are provided on a 
     nondiscriminatory open access basis under an independent 
     transmission provider agreement approved by FERC (other than 
     income received or accrued directly or indirectly from a 
     member),
       ``(iii) from any nuclear decommissioning transaction, or
       ``(iv) from any asset exchange or conversion 
     transaction.''.
       (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), the term `FERC' 
     means the Federal Energy Regulatory Commission and references 
     to such term shall be treated as including 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))).
       ``(F) For purposes of subparagraph (C)(iii), 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) For purposes of subparagraph (C)(iv), 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, Etc.--
     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 do 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.
       ``(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) For purposes of subparagraph (A), in the case of a 
     mutual or cooperative electric company, income 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. 42010. ARBITRAGE RULES NOT TO APPLY TO PREPAYMENTS FOR 
                   NATURAL GAS.

       (a) In General.--Subsection (b) of section 148 (relating to 
     higher yielding investments) is amended by adding at the end 
     the following new paragraph:
       ``(4) Safe harbor for prepaid natural gas.--
       ``(A) In general.--The term `investment-type property' does 
     not include a prepayment under a qualified natural gas supply 
     contract.
       ``(B) Qualified natural gas supply contract.--For purposes 
     of this paragraph, the term `qualified natural gas supply 
     contract' means any contract to acquire natural gas for 
     resale by a utility owned by a governmental unit if the 
     amount of gas permitted

[[Page H3185]]

     to be acquired under the contract by the utility during any 
     year does not exceed the sum of--
       ``(i) the annual average amount during the testing period 
     of natural gas purchased (other than for resale) by customers 
     of such utility who are located within the service area of 
     such utility, and
       ``(ii) the amount of natural gas to be used to transport 
     the prepaid natural gas to the utility during such year.
       ``(C) Natural gas used to generate electricity.--Natural 
     gas used to generate electricity shall be taken into account 
     in determining the average under subparagraph (B)(i)--
       ``(i) only if the electricity is generated by a utility 
     owned by a governmental unit, and
       ``(ii) only to the extent that the electricity is sold 
     (other than for resale) to customers of such utility who are 
     located within the service area of such utility.
       ``(D) Adjustments for changes in customer base.--
       ``(i) New business customers.--If--

       ``(I) after the close of the testing period and before the 
     date of issuance of the issue, the utility owned by a 
     governmental unit enters into a contract to supply natural 
     gas (other than for resale) for a business use at a property 
     within the service area of such utility, and
       ``(II) the utility did not supply natural gas to such 
     property during the testing period or the ratable amount of 
     natural gas to be supplied under the contract is 
     significantly greater than the ratable amount of gas supplied 
     to such property during the testing period,

     then a contract shall not fail to be treated as a qualified 
     natural gas supply contract by reason of supplying the 
     additional natural gas under the contract referred to in 
     subclause (I).
       ``(ii) Lost customers.--The average under subparagraph 
     (B)(i) shall not exceed the annual amount of natural gas 
     reasonably expected to be purchased (other than for resale) 
     by persons who are located within the service area of such 
     utility and who, as of the date of issuance of the issue, are 
     customers of such utility.
       ``(E) Ruling requests.--The Secretary may increase the 
     average under subparagraph (B)(i) for any period if the 
     utility owned by the governmental unit establishes to the 
     satisfaction of the Secretary that, based on objective 
     evidence of growth in natural gas consumption or population, 
     such average would otherwise be insufficient for such period.
       ``(F) Adjustment for natural gas otherwise on hand.--
       ``(i) In general.--The amount otherwise permitted to be 
     acquired under the contract for any period shall be reduced 
     by--

       ``(I) the applicable share of natural gas held by the 
     utility on the date of issuance of the issue, and
       ``(II) the natural gas (not taken into account under 
     subclause (I)) which the utility has a right to acquire 
     during such period (determined as of the date of issuance of 
     the issue).

       ``(ii) Applicable share.--For purposes of the clause (i), 
     the term `applicable share' means, with respect to any 
     period, the natural gas allocable to such period if the gas 
     were allocated ratably over the period to which the 
     prepayment relates.
       ``(G) Intentional acts.--Subparagraph (A) shall cease to 
     apply to any issue if the utility owned by the governmental 
     unit engages in any intentional act to render the volume of 
     natural gas acquired by such prepayment to be in excess of 
     the sum of--
       ``(i) the amount of natural gas needed (other than for 
     resale) by customers of such utility who are located within 
     the service area of such utility, and
       ``(ii) the amount of natural gas used to transport such 
     natural gas to the utility.
       ``(H) Testing period.--For purposes of this paragraph, the 
     term `testing period' means, with respect to an issue, the 
     most recent 5 calendar years ending before the date of 
     issuance of the issue.
       ``(I) Service area.--For purposes of this paragraph, the 
     service area of a utility owned by a governmental unit shall 
     be comprised of--
       ``(i) any area throughout which such utility provided at 
     all times during the testing period--

       ``(I) in the case of a natural gas utility, natural gas 
     transmission or distribution services, and
       ``(II) in the case of an electric utility, electricity 
     distribution services,

       ``(ii) any area within a county contiguous to the area 
     described in clause (i) in which retail customers of such 
     utility are located if such area is not also served by 
     another utility providing natural gas or electricity 
     services, as the case may be, and
       ``(iii) any area recognized as the service area of such 
     utility under State or Federal law.''.
       (b) Private Loan Financing Test Not To Apply to Prepayments 
     for Natural Gas.--Paragraph (2) of section 141(c) (providing 
     exceptions to the private loan financing test) is amended by 
     striking ``or'' at the end of subparagraph (A), by striking 
     the period at the end of subparagraph (B) and inserting ``, 
     or'', and by adding at the end the following new 
     subparagraph:
       ``(C) is a qualified natural gas supply contract (as 
     defined in section 148(b)(4)).''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 42011. PREPAYMENT OF PREMIUM LIABILITY FOR COAL INDUSTRY 
                   HEALTH BENEFITS.

       (a) In General.--Section 9704 (relating to liability of 
     assigned operators) is amended by adding at the end the 
     following new subsection:
       ``(j) Prepayment of Premium Liability.--
       ``(1) In general.--If--
       ``(A) any assigned operator who is a member of a controlled 
     group of corporations (within the meaning of section 52(a)) 
     makes a payment meeting the requirements of paragraph (2) to 
     the Combined Fund, and
       ``(B) the common parent of such group--
       ``(i) is jointly and severally liable for any premium which 
     would (but for this subsection) be required to be paid by 
     such operator, and
       ``(ii) provides security which meets the requirements of 
     paragraph (3),

     then no person (other than such common parent) shall be 
     liable for any premium for which such operator would 
     otherwise be liable.
       ``(2) Requirements.--A payment meets the requirements of 
     this paragraph if--
       ``(A) the amount of the payment is not less than the 
     present value of the total premium liability of the assigned 
     operator for its assignees under this chapter with respect to 
     the Combined Fund (as determined by the operator's enrolled 
     actuary, as defined in section 7701(a)(35)), using actuarial 
     methods and assumptions each of which is reasonable and which 
     are reasonable in the aggregate, as determined by such 
     enrolled actuary,
       ``(B) a signed actuarial report is filed with the Secretary 
     of Labor by such enrolled actuary containing--
       ``(i) the date of the actuarial valuation applicable to the 
     report, and
       ``(ii) a statement by the enrolled actuary signing the 
     report that to the best of the actuary's knowledge the report 
     is complete and accurate and that in the actuary's opinion 
     the actuarial assumptions used are in the aggregate 
     reasonably related to the experience of the operator and to 
     reasonable expectations,
       ``(C) a description of the security described in paragraph 
     (3) is filed with the Secretary of Labor by the common 
     parent, and
       ``(D) 30 calendar days have elapsed after the report 
     required by subparagraph (B), and the description required by 
     subparagraph (C), are filed with the Secretary of Labor, and 
     the Secretary of Labor has not notified the assigned operator 
     in writing that the requirements of this paragraph have not 
     been satisfied.
       ``(3) Security.--Security meets the requirements of this 
     paragraph if--
       ``(A) the security (in the form of a bond, letter of 
     credit, or cash escrow) is provided to the trustees of the 
     1992 UMWA Benefit Plan, solely for the purpose of paying 
     premiums for beneficiaries described in section 
     9712(b)(2)(B), equal in amount to one year's liability of the 
     assigned operator under section 9711, determined by using the 
     average cost of such operator's liability during its prior 3 
     calendar years; and
       ``(B) the security will remain in place for 5 years.
       ``(4) Use of prepayment.--Any payment to which this 
     subsection applies (and earnings thereon) shall be used 
     exclusively to pay premiums which would (but for this 
     subsection) be required to be paid by the assigned operator 
     making such payment.''
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

                         TITLE III--PRODUCTION

     SEC. 43001. OIL AND GAS FROM MARGINAL WELLS.

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

     ``SEC. 45I. 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 2003, each of the 
     dollar amounts contained in subparagraph (A) shall be 
     increased to an amount equal to such dollar

[[Page H3186]]

     amount multiplied by the inflation adjustment factor for such 
     calendar year (determined under section 43(b)(3)(B) by 
     substituting `2002' 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 or 
     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.''.
       (b) Credit Treated as Business Credit.--Section 38(b) 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:
       ``(18) the marginal oil and gas well production credit 
     determined under section 45I(a).''.
       (c) Carryback.--Subsection (a) of section 39 (relating to 
     carryback and carryforward of unused credits generally) is 
     amended by adding at the end the following:
       ``(3) 10-year carryback for marginal oil and gas well 
     production credit.--In the case of the marginal oil and gas 
     well production credit--
       ``(A) this section shall be applied separately from the 
     business credit (other than the marginal oil and gas well 
     production credit),
       ``(B) paragraph (1) shall be applied by substituting `10 
     taxable years' for `1 taxable years' in subparagraph (A) 
     thereof, and
       ``(C) paragraph (2) shall be applied--
       ``(i) by substituting `31 taxable years' for `21 taxable 
     years' in subparagraph (A) thereof, and
       ``(ii) by substituting `30 taxable years' for `20 taxable 
     years' in subparagraph (A) thereof.''.
       (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 is amended by 
     adding at the end the following:

``Sec. 45I. 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 
     December 31, 2003.

     SEC. 43002. TEMPORARY SUSPENSION OF LIMITATION BASED ON 65 
                   PERCENT OF TAXABLE INCOME AND EXTENSION OF 
                   SUSPENSION OF TAXABLE INCOME LIMIT WITH RESPECT 
                   TO MARGINAL PRODUCTION.

       (a) Limitation Based on 65 Percent of Taxable Income.--
     Subsection (d) of section 613A (relating to limitation on 
     percentage depletion in case of oil and gas wells) is amended 
     by adding at the end the following new paragraph:
       ``(6) Temporary suspension of taxable income limit.--
     Paragraph (1) shall not apply to taxable years beginning 
     after December 31, 2003, and before January 1, 2007, 
     including with respect to amounts carried under the second 
     sentence of paragraph (1) to such taxable years.''.
       (b) Extension of Suspension of Taxable Income Limit With 
     Respect to Marginal Production.--Subparagraph (H) of section 
     613A(c)(6) (relating to temporary suspension of taxable 
     income limit with respect to marginal production) is amended 
     by striking ``2004'' and inserting ``2007''.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2003.

     SEC. 43003. AMORTIZATION OF DELAY RENTAL PAYMENTS.

       (a) In General.--Section 167 (relating to depreciation) is 
     amended by redesignating subsection (h) as subsection (i) and 
     by inserting after subsection (g) the following new 
     subsection:
       ``(h) Amortization of Delay Rental Payments for Domestic 
     Oil and Gas Wells.--
       ``(1) In general.--Any delay rental payment paid or 
     incurred in connection with the development of oil or gas 
     wells within the United States (as defined in section 638) 
     shall be allowed as a deduction ratably over the 24-month 
     period beginning on the date that such payment was paid or 
     incurred.
       ``(2) Half-year convention.--For purposes of paragraph (1), 
     any payment paid or incurred during the taxable year shall be 
     treated as paid or incurred on the mid-point of such taxable 
     year.
       ``(3) Exclusive method.--Except as provided in this 
     subsection, no depreciation or amortization deduction shall 
     be allowed with respect to such payments.
       ``(4) Treatment upon abandonment.--If any property to which 
     a delay rental payment relates is retired or abandoned during 
     the 24-month period described in paragraph (1), no deduction 
     shall be allowed on account of such retirement or abandonment 
     and the amortization deduction under this subsection shall 
     continue with respect to such payment.
       ``(5) Delay rental payments.--For purposes of this 
     subsection, 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) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after December 31, 2003.

     SEC. 43004. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL 
                   EXPENDITURES.

       (a) In General.--Section 167 (relating to depreciation) is 
     amended by redesignating subsection (i) as subsection (j) and 
     by inserting after subsection (h) the following new 
     subsection:
       ``(i) Amortization of Geological and Geophysical 
     Expenditures.--
       ``(1) In general.--Any geological and geophysical expenses 
     paid or incurred in connection with the exploration for, or 
     development of, oil or gas within the United States (as 
     defined in section 638) shall be allowed as a deduction 
     ratably over the 24-month period beginning on the date that 
     such expense was paid or incurred.
       ``(2) Special rules.--For purposes of this subsection, 
     rules similar to the rules of paragraphs (2), (3), and (4) of 
     subsection (h) shall apply.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to costs paid or incurred in taxable years 
     beginning after December 31, 2003.

     SEC. 43005. 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) Extension for oil and certain gas.--In the case of a 
     well for producing qualified fuels described in subparagraph 
     (A) or (B)(i) of subsection (c)(1)--
       ``(A) Application of credit for new wells.--Notwithstanding 
     subsection (f), this section shall apply with respect to such 
     fuels--
       ``(i) which are produced from a well drilled after the date 
     of the enactment of this subsection and before January 1, 
     2007, and
       ``(ii) which are sold not later than the close of the 4-
     year period beginning on the date that such well is drilled, 
     or, if earlier, January 1, 2010.
       ``(B) Extension of credit for old wells.--Subsection (f)(2) 
     shall be applied by substituting `2007' for `2003' with 
     respect to wells described in subsection (f)(1)(A) with 
     respect to such fuels.
       ``(2) Extension for facilities producing qualified fuel 
     from landfill gas.--
       ``(A) In general.--In the case of a facility for producing 
     qualified fuel from landfill gas

[[Page H3187]]

     which was placed in service after June 30, 1998, and before 
     January 1, 2007, this section shall apply to fuel produced at 
     such facility during the 5-year period beginning on the later 
     of--
       ``(i) the date such facility was placed in service, or
       ``(ii) the date of the enactment of this subsection.
       ``(B) Reduction of credit for certain landfill 
     facilities.--In the case of a facility to which paragraph (1) 
     applies and which is located at a landfill which is required 
     pursuant to section 60.751(b)(2) or section 60.33c of title 
     40, Code of Federal Regulations (as in effect on April 3, 
     2003) to install and operate a collection and control system 
     which captures gas generated within the landfill, subsection 
     (a)(1) shall be applied to gas so captured by substituting 
     `$2' for `$3' for the taxable year during which such system 
     is required to be installed and operated.
       ``(3) Special rules.--In determining the amount of credit 
     allowable under this section solely by reason of this 
     subsection--
       ``(A) Daily limit.--The amount of qualified fuels sold 
     during any taxable year which may be taken into account by 
     reason of this subsection with respect to any project shall 
     not exceed an average barrel-of-oil equivalent of 200,000 
     cubic feet of natural gas per day. Days before the date the 
     project is placed in service shall not be taken into account 
     in determining such average.
       ``(B) Extension period to commence with unadjusted credit 
     amount.--In the case of fuels sold during 2003, the dollar 
     amount applicable under subsection (a)(1) shall be $3 
     (without regard to subsection (b)(2)). In the case of fuels 
     sold after 2003, subparagraph (B) of subsection (d)(2) shall 
     be applied by substituting `2003' for `1979'.''.
       (b) Treatment as Business Credit.--
       (1) Credit moved to subpart relating to business related 
     credits.--The Internal Revenue Code of 1986 is amended by 
     redesignating section 29 as section 45J and by moving section 
     45J (as so redesignated) from subpart B of part IV of 
     subchapter A of chapter 1 to the end of subpart D of part IV 
     of subchapter A of chapter 1.
       (2) Credit Treated as Business Credit.--Section 38(b) 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:
       ``(19) the nonconventional source production credit 
     determined under section 45J(a).''.
       (3) Conforming Amendments.--
       (A) Section 30(b)(2)(A), as redesignated by section 110(a), 
     is amended by striking ``sections 27 and 29'' and inserting 
     ``section 27''.
       (B) Section 30B(d), as added by section 41011, is amended 
     by striking ``, 29,''.
       (C) Section 39(d) is amended by adding at the end the 
     following new paragraph:
       ``(13) No carryback for nonconventional source production 
     credit.--No portion of the unused business credit for any 
     taxable year which is attributable to the credit under 
     section 45J may be carried back to a taxable year ending 
     before April 1, 2003.''.
       (D) Sections 43(b)(2), 45I(b)(2)(C) (as added by section 
     43001), and 613A(c)(6)(C) are each amended by striking 
     ``section 29(d)(2)(C)'' and inserting ``section 
     45J(d)(2)(C)''.
       (E) Paragraph (9) of section 45(c), as added by section 
     41002(c), is amended by striking ``section 29'' and inserting 
     ``section 45J'' and by striking ``section 29'' in the heading 
     of such paragraph and inserting ``section 45J''.
       (F) Section 45I(d)(3), as added by section 43001, is 
     amended by striking ``section 29'' each place it appears and 
     inserting ``section 45J''.
       (G) Section 45J(a), as amended by section 43001(d) and 
     redesignated by paragraph (1), is amended by striking ``At 
     the election of the taxpayer, there shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year'' and inserting ``For purposes of section 38, if 
     the taxpayer elects to have this section apply, the 
     nonconventional source production credit determined under 
     this section for the taxable year is''.
       (H) Section 45J(b), as so redesignated, is amended by 
     striking paragraph (6).
       (I) Section 53(d)(1)(B)(iii) is amended by striking ``under 
     section 29'' and all that follows through ``or not allowed''.
       (J) Section 55(c)(2) is amended by striking ``29(b)(6),''.
       (K) Subsection (a) of section 772 is amended by inserting 
     ``and'' at the end of paragraph (9), by striking paragraph 
     (10), and by redesignating paragraph (11) as paragraph (10).
       (L) Paragraph (5) of section 772(d) is amended by striking 
     ``the foreign tax credit, and the credit allowable under 
     section 29'' and inserting ``and the foreign tax credit''.
       (M) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by striking the item 
     relating to section 29.
       (N) 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 45I the following new item:

``Sec. 45J. Credit for producing fuel from a nonconventional source.''.

       (c) Effective Dates.--
       (1) In general.--The amendment made by subsection (a) shall 
     apply to fuel sold after March 31, 2003, in taxable years 
     ending after such date.
       (2) Treatment as business credit.--The amendments made by 
     subsection (b) shall apply to taxable years ending after 
     March 31, 2003.

     SEC. 43006. BUSINESS RELATED ENERGY CREDITS ALLOWED AGAINST 
                   REGULAR AND MINIMUM TAX.

       (a) In General.--Subsection (c) of section 38 (relating to 
     limitation based on amount of tax) is amended by 
     redesignating paragraph (4) as paragraph (5) and by inserting 
     after paragraph (3) the following new paragraph:
       ``(4) Special rules for specified energy credits.--
       ``(A) In general.--In the case of specified energy 
     credits--
       ``(i) this section and section 39 shall be applied 
     separately with respect to such credits, and
       ``(ii) in applying paragraph (1) to such credits--

       ``(I) the tentative minimum tax shall be treated as being 
     zero, and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the specified 
     energy credits).

       ``(B) Specified energy credits.--For purposes of this 
     subsection, the term `specified energy credits' means the 
     credits determined under sections 45G, 45H, and 45I.
       ``(C) Special rule for qualified wind facilities.--For 
     purposes of this subsection, the term `specified energy 
     credits' shall include the credit determined under section 45 
     to the extent that such credit is attributable to electricity 
     produced--
       ``(i) at a facility using wind to produce electricity which 
     is originally placed in service after the date of the 
     enactment of this paragraph, and
       ``(ii) during the 4-year period beginning on the date that 
     such facility was originally placed in service.''.
       (b) Conforming Amendments.--Paragraphs (2)(A)(ii)(II) and 
     (3)(A)(ii)(II) of section 38(c) are each amended by inserting 
     ``or the specified energy credits'' after ``employee 
     credit''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. 43007. TEMPORARY REPEAL OF ALTERNATIVE MINIMUM TAX 
                   PREFERENCE FOR INTANGIBLE DRILLING COSTS.

       (a) In General.--Clause (ii) of section 57(a)(2)(E) is 
     amended by adding at the end the following new sentence: 
     ``The preceding sentence shall not apply to taxable years 
     beginning after December 31, 2003, and before January 1, 
     2006.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2003.

     SEC. 43008. ALLOWANCE OF ENHANCED RECOVERY CREDIT AGAINST THE 
                   ALTERNATIVE MINIMUM TAX.

       (a) In General.--Subparagraph (B) of section 38(c)(4), as 
     amended by section 43006, is amended by adding at the end the 
     following new sentence: ``For taxable years beginning after 
     December 31, 2003, and before January 1, 2006, such term 
     includes the credit determined under section 43.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2003.

                    TITLE IV--CORPORATE EXPATRIATION

     SEC. 44001. TAX TREATMENT OF CORPORATE EXPATRIATION.

       (a) In General.--Subchapter C of chapter 80 (relating to 
     provisions affecting more than one subtitle) is amended by 
     adding at the end the following new section:

     ``SEC. 7874. TAX TREATMENT OF CORPORATE EXPATRIATION.

       ``(a) Inverted Corporations Treated as Domestic 
     Corporations.--
       ``(1) In general.--If a foreign incorporated entity is 
     treated as an inverted domestic corporation, then, 
     notwithstanding section 7701(a)(4), such entity shall be 
     treated for purposes of this title as a domestic corporation.
       ``(2) Inverted domestic corporation.--For purposes of this 
     section, a foreign incorporated entity shall be treated as an 
     inverted domestic corporation if, pursuant to a plan (or a 
     series of related transactions)--
       ``(A) the entity completes after March 4, 2003, the direct 
     or indirect acquisition of substantially all of the 
     properties held directly or indirectly by a domestic 
     corporation or substantially all of the properties 
     constituting a trade or business of a domestic partnership,
       ``(B) after the acquisition at least 80 percent of the 
     stock (by vote or value) of the entity is held--
       ``(i) in the case of an acquisition with respect to a 
     domestic corporation, by former shareholders of the domestic 
     corporation by reason of holding stock in the domestic 
     corporation, or
       ``(ii) in the case of an acquisition with respect to a 
     domestic partnership, by former partners of the domestic 
     partnership by reason of holding a capital or profits 
     interest in the domestic partnership, and
       ``(C) the expanded affiliated group which after the 
     acquisition includes the entity does not have substantial 
     business activities in the foreign country in which or under 
     the law of which the entity is created or organized when 
     compared to the total business activities of such expanded 
     affiliated group.
       ``(3) Termination.--This subsection shall not apply to any 
     acquisition completed after December 31, 2004.
       ``(b) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Foreign incorporated entity.--The term `foreign 
     incorporated entity' means any

[[Page H3188]]

     entity which is, or but for subsection (a) would be, treated 
     as a foreign corporation for purposes of this title.
       ``(2) Expanded affiliated group.--The term `expanded 
     affiliated group' means an affiliated group as defined in 
     section 1504(a) but without regard to paragraphs (2), (3), 
     and (4) of section 1504(b), except that section 1504(a) shall 
     be applied by substituting `more than 50 percent' for `at 
     least 80 percent' each place it appears.
       ``(3) Certain stock disregarded.--There shall not be taken 
     into account in determining ownership under subsection 
     (a)(3)(B)--
       ``(A) stock held by members of the expanded affiliated 
     group which includes the foreign incorporated entity, or
       ``(B) stock of such foreign incorporated entity which is 
     sold in a public offering related to the acquisition 
     described in subsection (a)(3)(A).
       ``(4) Plan deemed in certain cases.--If a foreign 
     incorporated entity acquires directly or indirectly 
     substantially all of the properties of a domestic corporation 
     or partnership during the 4-year period beginning on the date 
     which is 2 years before the ownership requirements of 
     subsection (a)(3)(B) are met, such actions shall be treated 
     as pursuant to a plan.
       ``(5) Certain transfers disregarded.--The transfer of 
     properties or liabilities (including by contribution or 
     distribution) shall be disregarded if such transfers are part 
     of a plan a principal purpose of which is to avoid the 
     purposes of this section.
       ``(6) Special rule for related partnerships.--For purposes 
     of applying subsection (a)(3)(B) to the acquisition of a 
     domestic partnership, except as provided in regulations, all 
     partnerships which are under common control (within the 
     meaning of section 482) shall be treated as 1 partnership.
       ``(7) Regulations.--The Secretary shall prescribe such 
     regulations as may be appropriate to determine whether a 
     corporation is an inverted domestic corporation, including 
     regulations--
       ``(A) to treat warrants, options, contracts to acquire 
     stock, convertible debt interests, and other similar 
     interests as stock, and
       ``(B) to treat stock as not stock.
       ``(c) Special Rule for Treaties.--Nothing in section 894 or 
     7852(d) or in any other provision of law shall be construed 
     as permitting an exemption, by reason of any treaty 
     obligation of the United States heretofore or hereafter 
     entered into, from the provisions of this section.
       ``(d) Regulations.--The Secretary shall provide such 
     regulations as are necessary to carry out this section, 
     including regulations providing for such adjustments to the 
     application of this section as are necessary to prevent the 
     avoidance of the purposes of this section, including the 
     avoidance of such purposes through--
       ``(1) the use of related persons, pass-through or other 
     noncorporate entities, or other intermediaries, or
       ``(2) transactions designed to have persons cease to be (or 
     not become) members of expanded affiliated groups or related 
     persons.''.
       (b) Conforming Amendment.--The table of sections for 
     subchapter C of chapter 80 is amended by adding at the end 
     the following new item:

``Sec. 7874. Tax treatment of corporate expatriation.''

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after March 4, 2003.

     SEC. 44002. EXPRESSING THE SENSE OF THE CONGRESS THAT TAX 
                   REFORM IS NEEDED TO ADDRESS THE ISSUE OF 
                   CORPORATE EXPATRIATION.

       (a) Findings.--The Congress finds that--
       (1) the tax laws of the United States are overly complex;
       (2) the tax laws of the United States are among the most 
     burdensome and uncompetitive in the world;
       (3) the tax laws of the United States make it difficult for 
     domestically-owned United States companies to compete abroad 
     and in the United States;
       (4) a domestically-owned corporation is disadvantaged 
     compared to a United States subsidiary of a foreign-owned 
     corporation; and
       (5) international competitiveness is forcing many United 
     States corporations to make a choice they do not want to 
     make-go out of business, sell the business to a foreign 
     competitor, or become a subsidiary of a foreign corporation 
     (i.e., engage in an inversion transaction).
       (b) Sense of Congress.--It is the sense of Congress that 
     passage of legislation to fix the underlying problems with 
     our tax laws is essential and should occur as soon as 
     possible, so United States corporations will not face the 
     current pressures to engage in inversion transactions.

                         DIVISION E--CLEAN COAL

     SEC. 50001. AUTHORIZATION OF APPROPRIATIONS.

       (a) Clean Coal Power Initiative.--Except as provided in 
     subsection (b), there are authorized to be appropriated to 
     the Secretary to carry out the activities authorized by this 
     division $200,000,000 for each of the fiscal years 2004 
     through 2012, to remain available until expended.
       (b) Limit on Use of Funds.--The Secretary shall transmit to 
     the Committee on Energy and Commerce and the Committee on 
     Science of the House of Representatives, and to the Senate, 
     the report required by this subsection not later than March 
     31, 2005. Notwithstanding subsection (a), no funds may be 
     used to carry out the activities authorized by this division 
     after September 30, 2005, unless the report has been 
     transmitted and one month has elapsed since that 
     transmission. The report shall include, with respect to 
     subsection (a), a 10-year plan containing--
       (1) a detailed assessment of whether the aggregate funding 
     levels provided under subsection (a) are the appropriate 
     funding levels for that program;
       (2) a detailed description of how proposals will be 
     solicited and evaluated, including a list of all activities 
     expected to be undertaken;
       (3) a detailed list of technical milestones for each coal 
     and related technology that will be pursued; and
       (4) a detailed description of how the program will avoid 
     problems enumerated in General Accounting Office reports on 
     the Clean Coal Technology Program, including problems that 
     have resulted in unspent funds and projects that failed 
     either financially or scientifically.
       (c) Applicability.--Subsection (b) shall not apply to any 
     project begun before September 30, 2005.

     SEC. 50002. PROJECT CRITERIA.

       (a) In General.--The Secretary shall not provide funding 
     under this division for any project that does not advance 
     efficiency, environmental performance, and cost 
     competitiveness well beyond the level of technologies that 
     are in commercial service or have been demonstrated on a 
     scale that the Secretary determines is sufficient to 
     demonstrate that commercial service is viable as of the date 
     of the enactment of this Act.
       (b) Technical Criteria for Clean Coal Power Initiative.--
       (1) Gasification.--(A) In allocating the funds made 
     available under section 50001(a), the Secretary shall ensure 
     that at least 60 percent of the funds are used only for 
     projects on coal-based gasification technologies, including 
     gasification combined cycle, gasification fuel cells, 
     gasification coproduction, and hybrid gasification/
     combustion.
       (B) The Secretary shall periodically set technical 
     milestones specifying the emission and thermal efficiency 
     levels that coal gasification projects must be designed to 
     and reasonably expected to achieve. The technical milestones 
     shall get more restrictive during the life of the program. 
     The Secretary shall set the periodic milestones so as to 
     achieve by 2020 coal gasification projects able--
       (i) to remove 99 percent of sulfur dioxide;
       (ii) to emit no more than .05 lbs of NOx per million BTU;
       (iii) to achieve substantial reductions in mercury 
     emissions; and
       (iv) to achieve a thermal efficiency of--
       (I) 60 percent for coal of more than 9,000 Btu;
       (II) 59 percent for coal of 7,000 to 9,000 Btu; and
       (III) 50 percent for coal of less than 7,000 Btu.
       (2) Other projects.--The Secretary shall periodically set 
     technical milestones for projects not described in paragraph 
     (1). The milestones shall specify the emission and thermal 
     efficiency levels that projects funded under this paragraph 
     must be designed to and reasonably expected to achieve. The 
     technical milestones shall get more restrictive during the 
     life of the program. The Secretary shall set the periodic 
     milestones so as to achieve by 2010 projects able--
       (A) to remove 97 percent of sulfur dioxide;
       (B) to emit no more than .08 lbs of NOx per million BTU;
       (C) to achieve substantial reductions in mercury emissions; 
     and
       (D) to achieve a thermal efficiency of--
       (i) 45 percent for coal of more than 9,000 Btu;
       (ii) 44 percent for coal of 7,000 to 9,000 Btu; and
       (iii) 40 percent for coal of less than 7,000 Btu.
       (3) Consultation.--Before setting the technical milestones 
     under paragraphs (1)(B) and (2), the Secretary shall consult 
     with the Administrator of the Environmental Protection Agency 
     and interested entities, including coal producers, industries 
     using coal, organizations to promote coal or advanced coal 
     technologies, environmental organizations, and organizations 
     representing workers.
       (4) Existing units.--In the case of projects at existing 
     units, in lieu of the thermal efficiency requirements set 
     forth in paragraph (1)(B)(iv) and (2)(D), the milestones 
     shall be designed to achieve an overall thermal design 
     efficiency improvement compared to the efficiency of the unit 
     as operated, of not less than--
       (A) 7 percent for coal of more than 9,000 Btu;
       (B) 6 percent for coal of 7,000 to 9,000 Btu; or
       (C) 4 percent for coal of less than 7,000 Btu.
       (5) Permitted uses.--In allocating funds made available 
     under section 50001, the Secretary may fund projects that 
     include, as part of the project, the separation and capture 
     of carbon dioxide.
       (c) Financial Criteria.--The Secretary shall not provide a 
     funding award under this division unless the recipient has 
     documented to the satisfaction of the Secretary that--
       (1) the award recipient is financially viable without the 
     receipt of additional Federal funding;
       (2) the recipient will provide sufficient information to 
     the Secretary for the Secretary

[[Page H3189]]

     to ensure that the award funds are spent efficiently and 
     effectively; and
       (3) a market exists for the technology being demonstrated 
     or applied, as evidenced by statements of interest in writing 
     from potential purchasers of the technology.
       (d) Financial Assistance.--The Secretary shall provide 
     financial assistance to projects that meet the requirements 
     of subsections (a), (b), and (c) and are likely to--
       (1) achieve overall cost reductions in the utilization of 
     coal to generate useful forms of energy;
       (2) improve the competitiveness of coal among various forms 
     of energy in order to maintain a diversity of fuel choices in 
     the United States to meet electricity generation 
     requirements; and
       (3) demonstrate methods and equipment that are applicable 
     to 25 percent of the electricity generating facilities, using 
     different types of coal, that use coal as the primary 
     feedstock as of the date of the enactment of this Act.
       (e) Federal Share.--The Federal share of the cost of a coal 
     or related technology project funded by the Secretary under 
     this division shall not exceed 50 percent.
       (f) Applicability.--No technology, or level of emission 
     reduction, shall be treated as adequately demonstrated for 
     purposes of section 111 of the Clean Air Act, achievable for 
     purposes of section 169 of that Act, or achievable in 
     practice for purposes of section 171 of that Act solely by 
     reason of the use of such technology, or the achievement of 
     such emission reduction, by one or more facilities receiving 
     assistance under this division.

     SEC. 50003. REPORT.

       Not later than 1 year after the date of the enactment of 
     this Act, and once every 2 years thereafter through 2011, the 
     Secretary, in consultation with other appropriate Federal 
     agencies, shall transmit to the Committee on Energy and 
     Commerce and the Committee on Science of the House of 
     Representatives, and to the Senate, a report describing--
       (1) the technical milestones set forth in section 50002 and 
     how those milestones ensure progress toward meeting the 
     requirements of subsections (b)(1)(B) and (b)(2) of section 
     50002; and
       (2) the status of projects funded under this division.

     SEC. 50004. CLEAN COAL CENTERS OF EXCELLENCE.

       As part of the program authorized in section 50001, the 
     Secretary shall award competitive, merit-based grants to 
     universities for the establishment of Centers of Excellence 
     for Energy Systems of the Future. The Secretary shall provide 
     grants to universities that can show the greatest potential 
     for advancing new clean coal technologies.

                          DIVISION F--HYDROGEN

     SEC. 60001. DEFINITIONS.

       In this division:
       (1) The term ``Advisory Committee'' means the Hydrogen 
     Technical and Fuel Cell Advisory Committee established under 
     section 60005 of this Act.
       (2) The term ``Department'' means the Department of Energy.
       (3) The term ``fuel cell'' means a device that directly 
     converts the chemical energy of a fuel and an oxidant into 
     electricity by an electrochemical process taking place at 
     separate electrodes in the device.
       (4) The term ``infrastructure'' means the equipment, 
     systems, or facilities used to produce, distribute, deliver, 
     or store hydrogen and other advanced clean fuels.
       (5) The term ``light duty vehicle'' means a car or truck, 
     classified by the Department of Transportation as a Class I 
     or IIA vehicle.
       (6) The term ``Secretary'' means the Secretary of Energy.

     SEC. 60002. PLAN.

       Not later than six months after the date of enactment of 
     this Act, the Secretary shall transmit to the Congress a 
     coordinated plan for the programs described in this division 
     and any other programs of the Department that are directly 
     related to fuel cells or hydrogen. The plan shall describe, 
     at a minimum--
       (1) the agenda for the next five years for the programs 
     authorized under this division, including the agenda for each 
     activity enumerated in section 60003(a);
       (2) the types of entities that will carry out the 
     activities under this division and what role each entity is 
     expected to play;
       (3) the milestones that will be used to evaluate the 
     programs for the next five years;
       (4) the most significant technical and nontechnical hurdles 
     that stand in the way of achieving the goals described in 
     section 60003(b), and how the programs will address those 
     hurdles; and
       (5) the policy assumptions that are implicit in the plan, 
     including any assumptions that would affect the sources of 
     hydrogen or the marketability of hydrogen-related products.

     SEC. 60003. PROGRAM.

       (a) Activities.--The Secretary, in partnership with the 
     private sector, shall conduct a program to address--
       (1) production of hydrogen from diverse energy sources, 
     including--
       (A) fossil fuels, which may include carbon capture and 
     sequestration;
       (B) hydrogen-carrier fuels (including ethanol and 
     methanol);
       (C) renewable energy resources; and
       (D) nuclear energy;
       (2) the safe delivery of hydrogen or hydrogen-carrier 
     fuels, including--
       (A) transmission by pipeline and other distribution 
     methods; and
       (B) convenient and economic refueling of vehicles either at 
     central refueling stations or through distributed on-site 
     generation;
       (3) advanced vehicle technologies, including--
       (A) engine and emission control systems;
       (B) energy storage, electric propulsion, and hybrid 
     systems;
       (C) automotive materials;
       (D) clean fuels in addition to hydrogen; and
       (E) other advanced vehicle technologies;
       (4) storage of hydrogen or hydrogen-carrier fuels, 
     including development of materials for safe and economic 
     storage in gaseous, liquid, or solid form at refueling 
     facilities and onboard vehicles;
       (5) development of safe, durable, affordable, and efficient 
     fuel cells, including research and development on fuel-
     flexible fuel cell power systems, improved manufacturing 
     processes, high-temperature membranes, cost-effective fuel 
     processing for natural gas, fuel cell stack and system 
     reliability, low temperature operation, and cold start 
     capability; and
       (6) development of necessary codes and standards (including 
     international codes and standards) and safety practices for 
     the production, distribution, storage, and use of hydrogen, 
     hydrogen-carrier fuels and related products.
       (b) Program Goals.--
       (1) Vehicles.--For vehicles, the goals of the program are--
       (A) to enable a commitment by automakers no later than year 
     2015 to offer safe, affordable, and technically viable 
     hydrogen fuel cell vehicles in the mass consumer market; and
       (B) to enable production, delivery, and acceptance by 
     consumers of model year 2020 hydrogen fuel cell and other 
     vehicles that will have--
       (i) a range of at least three hundred miles;
       (ii) improved performance and ease of driving;
       (iii) safety and performance comparable to vehicle 
     technologies in the market;
       (iv) when compared to light duty vehicles in model year 
     2003--

       (I) a fuel economy that is two and one half times the 
     equivalent fuel economy of comparable light duty vehicles in 
     model year 2003; and
       (II) near zero emissions of air pollutants; and

       (v) vehicle fuel system crash integrity and occupant 
     protection.
       (2) Hydrogen energy and energy infrastructure.--For 
     hydrogen energy and energy infrastructure, the goals of the 
     program are to enable a commitment not later than 2015 that 
     will lead to infrastructure by 2020 that will provide--
       (A) safe and convenient refueling;
       (B) improved overall efficiency;
       (C) widespread availability of hydrogen from domestic 
     energy sources through--
       (i) production, with consideration of emissions levels;
       (ii) delivery, including transmission by pipeline and other 
     distribution methods for hydrogen; and
       (iii) storage, including storage in surface transportation 
     vehicles;
       (D) hydrogen for fuel cells, internal combustion engines, 
     and other energy conversion devices for portable, stationary, 
     and transportation applications; and
       (E) other technologies consistent with the Department's 
     plan.
       (3) Fuel cells.--The goals for fuel cells and their 
     portable, stationary, and transportation applications are to 
     enable--
       (A) safe, economical, and environmentally sound hydrogen 
     fuel cells;
       (B) fuel cells for light duty and other vehicles; and
       (C) other technologies consistent with the Department's 
     plan.
       (c) Demonstration.--In carrying out the program under this 
     section, the Secretary shall fund a limited number of 
     demonstration projects. In selecting projects under this 
     subsection, the Secretary shall, to the extent practicable 
     and in the public interest, select projects that--
       (1) involve using hydrogen and related products at 
     facilities or installations that would exist without the 
     demonstration program, such as existing office buildings, 
     military bases, vehicle fleet centers, transit bus 
     authorities, or parks;
       (2) depend on reliable power from hydrogen to carry out 
     essential activities;
       (3) lead to the replication of hydrogen technologies and 
     draw such technologies into the marketplace;
       (4) integrate in a single project both mobile and 
     stationary applications of hydrogen fuel cells;
       (5) address the interdependency of demand for hydrogen fuel 
     cell applications and hydrogen fuel infrastructure; and
       (6) raise awareness of hydrogen technology among the 
     public.
       (d) Deployment.--In carrying out the program under this 
     section, the Secretary shall, in partnership with the private 
     sector, conduct activities to facilitate the deployment of--
       (1) hydrogen energy and energy infrastructure;
       (2) fuel cells;
       (3) advanced vehicle technologies; and
       (4) clean fuels in addition to hydrogen.
       (e) Funding.--(1) The Secretary shall carry out the program 
     under this section using a competitive, merit-review process 
     and consistent with the generally applicable Federal

[[Page H3190]]

     laws and regulations governing awards of financial 
     assistance, contracts, or other agreements.
       (2) Activities under this section may be carried out by 
     funding nationally recognized university-based research 
     centers.
       (3) The Secretary shall endeavor to avoid duplication or 
     displacement of other research and development programs and 
     activities.
       (f) Cost Sharing.--
       (1) Requirement.--For projects carried out through grants, 
     cooperative agreements, or contracts under this section, the 
     Secretary shall require a commitment from non-Federal sources 
     of at least--
       (A) 20 percent of the cost of a project, except projects 
     carried out under subsections (c) and (d); and
       (B) 50 percent of the cost of a project carried out under 
     subsection (c) or (d).
       (2) Reduction.--The Secretary may reduce the non-Federal 
     requirement under paragraph (1) if the Secretary determines 
     that--
       (A) the reduction is appropriate considering the 
     technological risks involved; or
       (B) the project is for technical analyses or other 
     activities that the Secretary does not expect to result in a 
     marketable product.
       (3) Size of non-federal share.--The Secretary may consider 
     the size of the non-Federal share in selecting projects.

     SEC. 60004. INTERAGENCY TASK FORCE.

       (a) Establishment.--Not later than 120 days after the date 
     of enactment of this Act, the President shall establish an 
     interagency task force chaired by the Secretary or his 
     designee with representatives from each of the following:
       (1) The Office of Science and Technology Policy within the 
     Executive Office of the President.
       (2) The Department of Transportation.
       (3) The Department of Defense.
       (4) The Department of Commerce (including the National 
     Institute of Standards and Technology).
       (5) The Environmental Protection Agency.
       (6) The National Aeronautics and Space Administration.
       (7) Other Federal agencies as the Secretary determines 
     appropriate.
       (b) Duties.--
       (1) Planning.--The interagency task force shall work 
     toward--
       (A) a safe, economical, and environmentally sound fuel 
     infrastructure for hydrogen and hydrogen-carrier fuels, 
     including an infrastructure that supports buses and other 
     fleet transportation;
       (B) fuel cells in government and other applications, 
     including portable, stationary, and transportation 
     applications;
       (C) distributed power generation, including the generation 
     of combined heat, power, and clean fuels including hydrogen;
       (D) uniform hydrogen codes, standards, and safety 
     protocols; and
       (E) vehicle hydrogen fuel system integrity safety 
     performance.
       (2) Activities.--The interagency task force may organize 
     workshops and conferences, may issue publications, and may 
     create databases to carry out its duties. The interagency 
     task force shall--
       (A) foster the exchange of generic, nonproprietary 
     information and technology among industry, academia, and 
     government;
       (B) develop and maintain an inventory and assessment of 
     hydrogen, fuel cells, and other advanced technologies, 
     including the commercial capability of each technology for 
     the economic and environmentally safe production, 
     distribution, delivery, storage, and use of hydrogen;
       (C) integrate technical and other information made 
     available as a result of the programs and activities under 
     this division;
       (D) promote the marketplace introduction of infrastructure 
     for hydrogen and other clean fuel vehicles; and
       (E) conduct an education program to provide hydrogen and 
     fuel cell information to potential end-users.
       (c) Agency Cooperation.--The heads of all agencies, 
     including those whose agencies are not represented on the 
     interagency task force, shall cooperate with and furnish 
     information to the interagency task force, the Advisory 
     Committee, and the Department.

     SEC. 60005. ADVISORY COMMITTEE.

       (a) Establishment.--The Hydrogen Technical and Fuel Cell 
     Advisory Committee is established to advise the Secretary on 
     the programs and activities under this division.
       (b) Membership.--
       (1) Members.--The Advisory Committee is comprised of not 
     fewer than 12 nor more than 25 members. These members shall 
     be appointed by the Secretary to represent domestic industry, 
     academia, professional societies, government agencies, and 
     financial, environmental, and other appropriate organizations 
     based on the Department's assessment of the technical and 
     other qualifications of committee members and the needs of 
     the Advisory Committee.
       (2) Terms.--The term of a member of the Advisory Committee 
     shall not be more than 3 years. The Secretary may appoint 
     members of the Advisory Committee in a manner that allows the 
     terms of the members serving at any time to expire at spaced 
     intervals so as to ensure continuity in the functioning of 
     the Advisory Committee. A member of the Advisory Committee 
     whose term is expiring may be reappointed.
       (3) Chairperson.--The Advisory Committee shall have a 
     chairperson, who is elected by the members from among their 
     number.
       (c) Review.--The Advisory Committee shall review and make 
     recommendations to the Secretary on--
       (1) the implementation of programs and activities under 
     this division;
       (2) the safety, economical, and environmental consequences 
     of technologies for the production, distribution, delivery, 
     storage, or use of hydrogen energy and fuel cells; and
       (3) the plan under section 60002.
       (d) Response.--(1) The Secretary shall consider, but need 
     not adopt, any recommendations of the Advisory Committee 
     under subsection (c).
       (2) The Secretary shall transmit a biennial report to the 
     Congress describing any recommendations made by the Advisory 
     Committee since the previous report. The report shall include 
     a description of how the Secretary has implemented or plans 
     to implement the recommendations, or an explanation of the 
     reasons that a recommendation will not be implemented. The 
     report shall be transmitted along with the President's budget 
     proposal.
       (e) Support.--The Secretary shall provide resources 
     necessary in the judgment of the Secretary for the Advisory 
     Committee to carry out its responsibilities under this 
     division.

     SEC. 60006. EXTERNAL REVIEW.

       (a) Plan.--The Secretary shall enter into an arrangement 
     with a competitively selected nongovernmental entity, such as 
     the National Academy of Sciences, to review the plan prepared 
     under section 60002, which shall be completed not later than 
     six months after the entity receives the plan. Not later than 
     45 days after receiving the review, the Secretary shall 
     transmit the review to the Congress along with a plan to 
     implement the review's recommendations or an explanation of 
     the reasons that a recommendation will not be implemented.
       (b) Additional Review.--The Secretary shall enter into an 
     arrangement with a competitively selected nongovernmental 
     entity, such as the National Academy of Sciences, under which 
     the entity will review the program under section 60003 during 
     the fourth year following the date of enactment of this Act. 
     The entity's review shall include the research priorities and 
     technical milestones, and evaluate the progress toward 
     achieving them. The review shall be completed no later than 
     five years after the date of enactment of this Act. Not later 
     than 45 days after receiving the review, the Secretary shall 
     transmit the review to the Congress along with a plan to 
     implement the review's recommendations or an explanation for 
     the reasons that a recommendation will not be implemented.

     SEC. 60007. MISCELLANEOUS PROVISIONS.

       (a) Representation.--The Secretary may represent the United 
     States interests with respect to activities and programs 
     under this division, in coordination with the Department of 
     Transportation, the National Institute of Standards and 
     Technology, and other relevant Federal agencies, before 
     governments and nongovernmental organizations including--
       (1) other Federal, State, regional, and local governments 
     and their representatives;
       (2) industry and its representatives, including members of 
     the energy and transportation industries; and
       (3) in consultation with the Department of State, foreign 
     governments and their representatives including international 
     organizations.
       (b) Regulatory Authority.--Nothing in this division shall 
     be construed to alter the regulatory authority of the 
     Department.

     SEC. 60008. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to carry out this 
     division, in addition to any amounts made available for these 
     purposes under other Acts--
       (1) $273,500,000 for fiscal year 2004;
       (2) $325,000,000 for fiscal year 2005;
       (3) $375,000,000 for fiscal year 2006;
       (4) $400,000,000 for fiscal year 2007; and
       (5) $425,000,000 for fiscal year 2008.''.

     SEC. 60009. FUEL CELL PROGRAM AT NATIONAL PARKS.

       The Secretary of Energy, in cooperation with the Secretary 
     of Interior and the National Park Service, is authorized to 
     establish a program to provide matching funds to assist in 
     the deployment of fuel cells at one or more prominent 
     National Parks. The Secretary of Energy shall transmit to 
     Congress within 1 year, and annually thereafter, a report 
     describing any activities taken pursuant to such program. The 
     report shall address whether activities taken pursuant to 
     such program reduce the environmental impacts of energy use 
     at National Parks. There are authorized to be appropriated 
     $2,000,000 for each of fiscal years 2004 through 2010 to 
     carry out the purposes of this section.

     SEC. 60010. ADVANCED POWER SYSTEM TECHNOLOGY INCENTIVE 
                   PROGRAM.

       (a) Program.--The Secretary of Energy is authorized to 
     establish an Advanced Power System Technology Incentive 
     Program to support the deployment of certain advanced power 
     system technologies and to improve and protect certain 
     critical governmental, industrial, and commercial processes. 
     Funds provided under this section shall be used by the 
     Secretary to make incentive payments to eligible owners or 
     operators of advanced power system technologies to increase 
     power generation through enhanced operational, economic, and 
     environmental performance. Payments under this section may 
     only be made upon receipt by the Secretary of an incentive 
     payment application establishing an applicant as either--

[[Page H3191]]

       (1) a qualifying advanced power system technology facility; 
     or
       (2) a qualifying security and assured power facility.
       (b) Incentives.--Subject to availability of funds, a 
     payment of 1.8 cents per kilowatt-hour shall be paid to the 
     owner or operator of a qualifying advanced power system 
     technology facility under this section for electricity 
     generated at such facility. An additional 0.7 cents per 
     kilowatt-hour shall be paid to the owner or operator of a 
     qualifying security and assured power facility for 
     electricity generated at such facility. Any facility 
     qualifying under this section shall be eligible for an 
     incentive payment for up to, but not more than, the first 
     10,000,000 kilowatt-hours produced in any fiscal year.
       (c) Eligibility.--For purposes of this section--
       (1) the term ``qualifying advanced power system technology 
     facility'' means a facility using an advanced fuel cell, 
     turbine, or hybrid power system or power storage system to 
     generate or store electric energy; and
       (2) the term ``qualifying security and assured power 
     facility'' means a qualifying advanced power system 
     technology facility determined by the Secretary of Energy, in 
     consultation with the Secretary of Homeland Security, to be 
     in critical need of secure, reliable, rapidly available, 
     high-quality power for critical governmental, industrial, or 
     commercial applications.
       (d) Authorization.--There are authorized to be appropriated 
     to the Secretary of Energy for the purposes of this section, 
     $10,000,000 for each of the fiscal years 2004 through 2010.

                          DIVISION G--HOUSING

     SEC. 70001. 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. 70002. 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. 70003. 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)(ii)(IV) (relating to solar energy 
     systems), 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)(IV) of the 
     National Housing Act (12 U.S.C. 1715k(d)(3)(B)(iii)(IV)) 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.--Section 
     231(c)(2)(C) of the National Housing Act (12 U.S.C. 
     1715v(c)(2)(C)) 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. 70004. PUBLIC HOUSING CAPITAL FUND.

       Section 9 of the United States Housing Act of 1937 (42 
     U.S.C. 1437g) is amended--
       (1) in subsection (d)(1)--
       (A) in subparagraph (I), by striking ``and'' at the end;
       (B) in subparagraph (J), by striking the period at the end 
     and inserting a semicolon; and
       (C) by adding at the end the following new subparagraphs:
       ``(K) 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; 
     and
       ``(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, and 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 not exceed 20 years to allow 
     longer payback periods for retrofits, including windows, 
     heating system replacements, wall insulation, site-based 
     generations, advanced energy savings technologies, including 
     renewable energy generation, and other such retrofits.''.

     SEC. 70005. 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 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. 70006. 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. 70007. ENERGY-EFFICIENT APPLIANCES.

       In purchasing appliances, a public housing agency shall 
     purchase energy-efficient appliances that are Energy Star 
     products or FEMP-designated products, as such terms are 
     defined in section 552 of the National Energy Policy and 
     Conservation Act (as amended by this Act), unless the 
     purchase of energy-efficient appliances is not cost-effective 
     to the agency.

     SEC. 70008. 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 ``1 year after the date of the enactment of 
     the Energy Policy Act of 1992'' and inserting ``September 30, 
     2004'';
       (ii) in subparagraph (A), by striking ``and'' at the end;
       (iii) in subparagraph (B), by striking the period at the 
     end and inserting ``; and''; 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 
     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 ``90.1-1989')'' and inserting 
     ``2000 International Energy Conservation Code'';
       (2) in subsection (b)--
       (A) by striking ``1 year after the date of the enactment of 
     the Energy Policy Act of 1992'' and inserting ``September 30, 
     2004''; 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. 70009. ENERGY STRATEGY FOR HUD.

       The Secretary of Housing and Urban Development shall 
     develop and implement an integrated strategy to reduce 
     utility expenses

[[Page H3192]]

     through cost-effective energy conservation and efficiency 
     measures and energy efficient design and construction of 
     public and assisted housing. The energy strategy shall 
     include the development of energy reduction goals and 
     incentives for public housing agencies. The Secretary shall 
     submit a report to Congress, not later than one year after 
     the date of the enactment of this Act, on the energy strategy 
     and the actions taken by the Department of Housing and Urban 
     Development to monitor the energy usage of public housing 
     agencies and shall submit an update every two years 
     thereafter on progress in implementing the strategy.
  The CHAIRMAN. No amendment to the bill shall be in order except those 
printed in House Report 108-69. Each amendment may be offered only in 
the order printed in the report, may be offered only by a Member 
designated in the report, shall be considered read, debatable for the 
time specified in the report, equally divided and controlled by the 
proponent and an opponent, shall not be subject to amendment, and shall 
not be subject to a demand for division of the question.
  It is now in order to consider amendment No. 1 printed in House 
Report 108-69.


                Amendment No. 1 Offered by Mr. Boehlert

  Mr. BOEHLERT. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Boehlert:
       In division A, at the end of title VIII add the following:

     SEC. __. AVERAGE FUEL ECONOMY STANDARDS.

       (a) In General.--Section 32902 of title 49, United States 
     Code, is amended by redesignating subsections (i) and (j) in 
     order as subsections (j) and (k), and by inserting after 
     subsection (h) the following:
       ``(i) Standards For Model Years After 2004.--The Secretary 
     of Transportation shall prescribe by regulation average fuel 
     economy standards for automobiles manufactured by a 
     manufacturer in model years after model year 2004, that 
     ensure that the total amount of oil required for fuel for use 
     by automobiles in the United States in 2010 and each year 
     thereafter is at least 5 percent less than the total amount 
     of oil that would be required for fuel for such use if the 
     average fuel economy standards remained at the same level as 
     in 2004.''.
       (b) Conforming Amendments.--Such section is further 
     amended--
       (1) in subsection (c)(1) in the first sentence by inserting 
     ``and subsection (i)'' after ``of this subsection''; and
       (2) in subsection (k) (as redesignated by subsection (a)) 
     by striking ``or (g)'' and inserting ``(g), or (i)''.

  The CHAIRMAN. Pursuant to House Resolution 189, the gentleman from 
New York (Mr. Boehlert) and a Member opposed each will control 15 
minutes.
  The Chair recognizes the gentleman from New York (Mr. Boehlert).
  Mr. BOEHLERT. Mr. Chairman, I ask unanimous consent to yield 7 
minutes to the gentleman from Massachusetts (Mr. Markey) for the 
purpose of control.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
New York?
  There was no objection.
  Mr. TAUZIN. Mr. Chairman, I claim the time in opposition, and I ask 
unanimous consent to yield 7 minutes to the gentleman from Michigan 
(Mr. Dingell).
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Louisiana?
  There was no objection.
  The CHAIRMAN. The gentleman from New York (Mr. Boehlert) will control 
8 minutes and the gentleman from Massachusetts (Mr. Markey) will 
control 7 minutes as proponents to the amendment. The gentleman from 
Louisiana (Mr. Tauzin) will control 8 minutes and the gentleman from 
Michigan (Mr. Dingell) will control 7 minutes in opposition.
  Mr. BOEHLERT. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I think all Members know what this amendment is about. 
In fact, we had a lengthy debate on a similar amendment by the 
gentleman from Massachusetts (Mr. Markey) and I when the energy bill 
came up just 2 years ago. So many of my colleagues may be wondering why 
do we have to have this debate again. Well, a lot has changed in the 
intervening 2 years, changes that make this amendment even more 
important and even harder to oppose. What has changed?
  First, over the past 2 years our Nation's oil consumption has 
continued to rise, and we have become even more dependent on foreign 
oil. Guess what most of that oil is used for? Transportation. Not 
electricity generation, not home heating, not industrial production, 
but transportation.
  As the chart beside me shows, domestic production can provide the oil 
we require to meet almost all of our needs except transportation. And 
our demand for oil for transportation just gets larger and larger and 
larger. We have an insatiable appetite. But that does not have to be 
the case. Other sectors of our economy have become more oil efficient, 
but transportation has not.
  What else has changed over the last 2 years? We have finally learned 
that SUVs are not a boon to safety. In fact, Dr. Jeffrey Runge, the 
chief auto safety official for the Bush administration, has made 
pointing out the safety failings of SUVs something of a crusade.
  Not only do SUVs make driving unsafe for the people that may collide 
with them, SUVs are not especially safe for the people who drive them. 
SUVs are three times as likely as cars to roll over and cause death. So 
the argument that we cannot change SUVs because they advance the cause 
of safety is pure hogwash.
  The third change over the past 2 years is that we have learned beyond 
a shadow of a doubt that automakers are perfectly capable of building 
SUVs with greater mileage. In fact, every place but Washington, D.C. 
they brag about it, as they should. GM and Ford have both announced 
plans to bring out an SUV that gets 40 miles per gallon in the next 
model year, not years down, the next model year. What we are told is 
impossible on the House floor turns out to be perfectly possible on the 
auto assembly floor.
  In fact, it is possible and affordable to make even further 
improvements in SUV mileage with current available technology. This 
page of Automotive News, hardly a left-wing rag, spells out those 
technologies and their costs specifically.
  The other change that has occurred in the past 2 years is we have had 
time to absorb the findings of the National Academy of Sciences' study. 
My colleagues may remember that the academy released a major, long-
awaited study on fuel economy standards on the eve of the energy bill 
which was debated 2 years ago. That timing enabled all sorts of 
ridiculous claims to be made about what the study said because few had 
the opportunity to actually read it.
  Now we all know exactly what the experts have said. There is nothing 
in the academy study that suggests we cannot improve CAFE standards. 
That is why the auto companies tried so hard, and unsuccessfully, I 
might report, to challenge the study.
  Probably the most important point the academy had to make is on page 
70 of their report. The academy said, ``It is technically feasible and 
potentially economical to improve fuel economy without reducing vehicle 
weight or size and, therefore, without significantly affecting the 
safety of motor vehicle travel.'' I hope we will not be hearing any 
nonsense this year about CAFE standards threatening safety. Those 
arguments should be a dead letter.
  Now, let me dispense with two changes over the past 2 years that the 
opponents of this amendment may bring up. The first is that the 
administration recently announced an increase in CAFE standards. The 
administration should be congratulated for acknowledging the need to 
improve fuel economy. Give credit where credit is due, but the 1.5 mile 
per gallon increase over 3 years sought by the administration is 
minuscule, far less than what is needed and far less than what is 
possible.
  But frankly, the opponents of this amendment ought to be embarrassed 
to bring up the administration's proposal. After all, the last time 
around, the authors of H.R. 6 told us that any increase in CAFE greater 
than a half mile per gallon over a decade would spell disaster for the 
economy. Now they have changed their tune. In fact, the authors of H.R. 
6 will defend whatever the status quo is at any given moment because 
that is easier than debating what we could actually be doing to improve 
fuel economy.
  The second change my opponents may bring up is that this is not 
exactly the same amendment as 2 years ago. That is true. But the 
standard in this

[[Page H3193]]

amendment should not be any tougher to achieve. In fact, we have given 
the automakers more time to improve fuel economy than we did 2 years 
ago. Two years ago we proposed an average among all cars and light 
trucks of 27.5 miles per gallon by 2007.

                              {time}  1615

  This amendment translates roughly into 30 miles per gallon by 2010, 3 
additional years, and this amendment, like our last one, is flexible. 
We all want to give flexibility when possible.
  The acoumeters can decide whether they want to reach these levels by 
improving the mileage of cars or SUVs or both. It does not set a 
specific standard for SUVs.
  So, in short, there is more reason than ever to approve this 
amendment. Without this amendment the bill will do nothing, absolutely 
nothing, to improve energy efficiency in the sector of our economy that 
uses the most oil.
  How can we be silent on fuel efficiency if this bill is going to 
accomplish anything at all? Our amendment would save more oil than 
would be produced from drilling in ANWR even under the most optimistic 
scenarios, and those figures come from the nonpartisan Congressional 
Research Service. So it ought to be hard to argue against this 
amendment with a straight face.
  This amendment will not prevent anyone from buying an SUV. This 
amendment will not reduce safety. This amendment will not require 
acoumeters to produce any vehicle they have not already announced that 
they are building. This amendment will save consumers money and, boy, 
we all want to do that. This amendment will put the Nation on the road 
to true energy independence. This amendment deserves widespread 
support, and I urge its adoption.
  Mr. Chairman, I reserve the balance of my time.
  The CHAIRMAN pro tempore (Mr. Bonilla). The gentleman's time has 
expired.
  Mr. TAUZIN. Mr. Chairman, I yield myself 1 minute.
  What the gentleman from New York (Mr. Boehlert) failed to quote from 
the National Academy of Sciences' study is found in Finding 13 on Page 
ES-8: ``If an increase in fuel economy is effected by a system that 
encourages either downweighting or the production and sale of more 
small cars, some additional traffic fatalities would be expected.'' In 
fact, the study estimates that between 1,300 and 2,600 fewer deaths on 
the highway would have occurred had average weight and size of the 
light-duty motor vehicle fleet in that year, 1993, had we had that 
instead of the CAFE requirements.
  Let me make a quick case in this 1 minute. This amendment is worse 
than the one we had last year on the floor. This amendment is so severe 
that if you consider a 3- to 5-year cycle to get a new vehicle in 
production, the vehicles in 2010 would have to have a 30-mile per 
gallon, or a 36-mile per gallon. That is as much as a 50 percent 
increase in fuel efficiency. The only way to achieve that is lighter 
vehicles, less safe vehicles, more deaths on the highway.
  This amendment needs to get rejected.
  Mr. Chairman, I reserve the balance of my time.
  Mr. MARKEY. Mr. Chairman, I yield myself 1\1/2\ minutes.
  The United States has 3 percent of the oil reserves in the world. The 
Middle East has 75 percent. Technological genius is what we are all 
about. We see that in the Middle East right now. That is our strength.
  We doubled the fuel economy in our country from 13 to 26 miles per 
gallon back in the middle of 1980s. With it, we had a plummeting of oil 
imports. Since 1987 we have slipped backwards in technology, and there 
has been a dramatic rise in the import of imported oil, up to 65 
percent of our total oil. We can see the direct correlation between the 
power OPEC has over us and the increase in the number of SUVs and light 
trucks, with no controls, which are sold in our country.
  When we reach 70 percent and 75 percent dependence upon imported oil, 
Iran and Syria and other countries that have large oil reserves over 
there, including Saudi Arabia, looking at us 10 years from now, will 
wonder why on the floor of the Congress with 250,000 troops over in the 
Middle East securing the oil fields of Iraq, we did not also increase 
the fuel economy standards of the Hummer 1s that are roaming the 
streets of the United States consuming gasoline at a rate of 11 miles 
per gallon.
  It is one thing to have young men and women in these vehicles in the 
Middle East securing oil. It is another thing in our country not to 
have a plan to increase the fuel efficiency that reduces our oil 
consumption, to avoid the necessity of sending them back there again.
  Mr. Chairman, I reserve the balance of my time.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished 
gentleman from Michigan (Mr. Stupak).
  Mr. STUPAK. Mr. Chairman, I thank the gentleman for yielding me this 
time.
  I must disagree with the gentleman from New York. I was a police 
officer for 13 years during this time from 1975 to 1998, and if we look 
at this article from 1999, it says ``death by the gallon.'' From 1975 
to 1998, we had 46,000 more deaths on the highways because we were 
driving smaller cars and trying to obtain the CAFE standard, the fuel 
efficiency. So we bring smaller cars in, and it results in more deaths 
on the highway. And as the chairman quoted, the National Academy of 
Sciences found in 2001, in their report on CAFE, reducing the size and 
weight of vehicles affects vehicle safety, increases the likelihood of 
traffic fatalities on the highways.
  The better way to increase fuel economy throughout is the development 
and the advancement of technologies like are found in this bill in 
hybrid and fuel cells. The acoumeters are already moving these 
technologies into the marketplace. To go with the standard proposed by 
the proponents of this new CAFE standard of a 5 percent, we would have 
to get the 30 miles, which is not even in the marketplace right now.
  Reject this amendment.
  Mr. MARKEY. Mr. Chairman, I reserve the balance of my time.
  Mr. TAUZIN. Mr. Chairman, I yield 1 minute to the gentleman from 
Michigan (Mr. Rogers), a distinguished member of the Committee on 
Energy and Commerce.
  Mr. ROGERS of Michigan. Mr. Chairman, I thank the chairman for his 
work on this energy bill.
  To my good friends from New York, I do appreciate their efforts here, 
however misguided. This is like trying to treat obesity by mandating 
smaller pants sizes. This does not consider energy costs or slowing 
sales on behalf of car companies due to the recession. It does not 
consider higher production costs.
  And what it means is, they will take research and development money 
and take it away from research and development to reengineer these 
vehicles, which means lower weight. Lower weight means more fatalities.
  If the Members believe in hydrogen vehicles, if the Members believe 
in hybrid vehicles, if the Members believe in the future of automobiles 
being cleaner and having the weight and size for safety, this is not 
the bill. This amendment will take $73 billion away from auto 
manufacturers, from researching and developing hybrid and hydrogen 
technology and flush it down the tubes to reengineer for less weight 
and taking vehicles out of production.
  We all want to get to the same place. Let us stand up for the 
security of our jobs, the health of our Nation, and the safety of those 
who drive. Let us soundly reject this amendment.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished 
gentleman from Michigan (Mr. Kildee).
  Mr. KILDEE. Mr. Chairman, I rise today to oppose this unnecessary 
amendment, which will hurt our already struggling economy. It will 
jeopardize the jobs of workers in Flint, Bay City, Saginaw, and other 
communities in my home State of Michigan. It will undermine the efforts 
we, as a Nation, are making through the investment of billions of 
dollars in alternative fuels and advanced technology vehicles.
  The broad range of organizations opposing this amendment demonstrate 
its flaws. These include the AFL-CIO, United Auto Workers, National 
Association of Manufacturers, the National Farm Bureau, and the U.S. 
Chamber of Commerce. This is the wrong amendment at the wrong time. Our 
automobile industry and their dedicated

[[Page H3194]]

workers deserve our support, and we can give it to them by rejecting 
this amendment.
  Just recently the National Highway Traffic Administration did their 
job and increased CAFE standards. This amendment will lead to reduced 
passenger safety, the loss of jobs and economic damage.
  Mr. MARKEY. Mr. Chairman, I yield 1 minute to the gentleman from 
Massachusetts (Mr. Olver).
  (Mr. OLVER asked and was given permission to revise and extend his 
remarks.)
  Mr. OLVER. Mr. Chairman, we should raise CAFE standards because that 
would reduce this Nation's dependence on foreign oil and reduce 
America's contribution to global warming. Cars and light trucks consume 
40 percent of the oil we use and emit 20 percent of the carbon dioxide 
we produce. And CO2 is the major cause of global warming. It is 
embarrassing that we have not significantly raised CAFE standards in a 
decade, when the technology is so readily available.
  Overall fuel efficiency has declined as SUVs have grown to nearly 50 
percent of the market, and the situation is certain to get worse as 
supersized, unregulated SUVs penetrate the market. The amendment before 
us requires a 5 percent reduction in oil usage by cars and light trucks 
by 2010. It would save half a million barrels of oil every day and 
reduce carbon dioxide emissions by over 90 million tons every day.
  I urge a ``yes'' vote on the Boehlert-Markey amendment.
  I would like to thank the distinguished chair of the Science 
committee and the gentleman from Massachusetts for bringing this 
important amendment to the floor today.
  We should raise CAFE standards because that would reduce this 
nation's dependence on foreign oil and reduce America's contribution to 
global warming.
  Cars and light trucks consume 40 percent of the oil we use and emit 
20 percent of the carbon dioxide we produce. And CO2 is the 
major cause of global warming--the single most critical environmental 
issue facing us. The consensus among the world's leading scientists 
warn that over this century, CO2 levels will double. Seas 
levels are already rising, and glaciers are melting.
  It's embarrassing that we have not significantly raised CAFE 
standards in a decade, when the technology is so readily available. 
Overall fuel efficiency has declined, as SUVs have grown to nearly 50 
percent of the market. And the situation is certain to get worse, as 
supersized, unregulated SUVs--those over 8,500 pounds--penetrate the 
market.
  The amendment before us requires a 5 percent reduction in oil usage 
by cars and light trucks by 2010. It would save half a million barrels 
of oil every day and reduce carbon dioxide emissions by over 90 million 
tons every day.
  I personally hope that this debate today will encourage automakers to 
rapidly replace the outdated, low efficiency technology so embedded in 
the cars and trucks we drive. The National Academy of Sciences report 
issued in July of 2001 demonstrates that the technologies already exist 
to take us even further than this modest amendment would require.
  I urge a ``yes'' vote on the Boehlert-Markey amendment.
  Mr. TAUZIN. Mr. Chairman, I yield 1 minute to the distinguished 
gentleman from Wisconsin (Mr. Ryan).
  Mr. RYAN of Wisconsin. Mr. Chairman, I thank the chairman for 
yielding me this time.
  I want to introduce another point to this topic of debate, and that 
is, if we take a look at the fleet consistency of the different car 
manufacturers, the Big Three American auto manufacturers sell more SUVs 
and trucks than light cars, relative to the Japanese auto 
manufacturers, who sell more light, small cars relative to trucks and 
SUVs. What ends up happening is, this amendment will not serve to get 
more heavy trucks off the road. It will simply serve to shift market 
share from U.S. auto manufacturers to Japanese auto manufacturers, and 
the short time line will actually require the lines to go down.
  So the line that makes the Tahoes and Suburbans in Janesville, 
Wisconsin, which is on a 5-year schedule, will have to go down to 
accommodate these changes. Meanwhile, Japanese acoumeters, like the 
Sequoias, will fill in and take that market share.
  It will not take more cars off the road. It will change market share 
from U.S. auto manufacturers to Japanese auto manufacturers, and it 
will simply cost U.S. auto manufacturing jobs.
  Mr. MARKEY. Mr. Chairman, I yield 30 seconds to the gentlewoman from 
Illinois (Ms. Schakowsky).
  (Ms. SCHAKOWSKY asked and was given permission to revise and extend 
her remarks.)
  Ms. SCHAKOWSKY. Mr. Chairman, I rise today in strong support of the 
Boehlert-Markey amendment, which saves oil by increasing fuel economy 
standards for autos and light trucks. Increasing the standard will 
reduce the amount of oil the Nation must now import.
  Research tells us by simply increasing average fuel efficiencies on 
cars, SUVs, and light trucks from 24 to 39 miles per gallon over the 
next decade would save 51 billion barrels of oil, more than 15 times 
the likely yield from the Arctic.
  The technology is there. It is about time we utilize it. Our children 
are looking to us to leave them with a safe and healthy environment. I 
urge my colleagues to support the amendment.
  Mr. DINGELL. Mr. Chairman, I yield 1 minute to the distinguished 
gentleman from Pennsylvania (Mr. Doyle).
  Mr. DOYLE. Mr. Chairman, I would respectfully add my voice to those 
opposing this amendment. While I can agree that we all want to reduce 
our imports of foreign oil, I have not been convinced that raising CAFE 
standards would actually accomplish this.
  As I understand it, our import share of oil consumption was 35 
percent in 1974. Since then our new fuel car economy has roughly 
doubled, but our oil import share has risen, nonetheless, to about 50 
percent. For this reason, I am not convinced that the amendment, if 
adopted, would achieve what I believe is one of its primary goals.
  Additionally, at this time, our economy is struggling. Unemployment 
is rising, new job growth is stagnating, and there is increasing 
concern throughout my district and the country about the direction our 
economy is headed. Yet this amendment could have a devastating impact 
on the automobile industry which is critical to our economy.
  Even in my home State of Pennsylvania, which is not normally thought 
of as a State closely tied to the automotive industry, a total of 
220,800 jobs are dependent on the industry.

                  Conference Report (H. Rept. 108-71)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the concurrent 
     resolution (H. Con. Res. 95), establishing the congressional 
     budget for the United States Government for fiscal year 2004 
     and setting forth appropriate budgetary levels for fiscal 
     years 2003 and 2005 through 2013, having met, after full and 
     free conference, have agreed to recommend and do recommend to 
     their respective Houses as follows:
       That the House recede from its disagreement to the 
     amendment of the Senate and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the Senate 
     amendment, insert the following:

     SECTION 1. CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL 
                   YEAR 2004.

         (a) Declaration.--The Congress declares that the 
     concurrent resolution on the budget for fiscal year 2004 is 
     hereby established and that the appropriate budgetary levels 
     for fiscal years 2003 and 2005 through 2013 are hereby set 
     forth.
         (b) Table of Contents.--The table of contents for this 
     concurrent resolution is as follows:


[[Page H3195]]


Sec. 1. Concurrent resolution on the budget for fiscal year 2004.

                TITLE I--RECOMMENDED LEVELS AND AMOUNTS

Sec. 101. Recommended levels and amounts.
Sec. 102. Social security.
Sec. 103. Major functional categories.

                        TITLE II--RECONCILIATION

Sec. 201. Reconciliation for economic growth and tax simplification and 
              fairness.
Sec. 202. Limit on Senate consideration of reconciliation.

      TITLE III--SUBMISSIONS TO ELIMINATE WASTE, FRAUD, AND ABUSE

Sec. 301. Submissions of findings providing for the elimination of 
              waste, fraud, and abuse in mandatory programs.

           TITLE IV--RESERVE FUNDS AND CONTINGENCY PROCEDURE

 Subtitle A--Reserve Funds for Legislation Assumed in Budget Aggregates

Sec. 401. Reserve fund for medicare modernization and prescription 
              drugs.
Sec. 402. Reserve fund for medicaid reform.
Sec. 403. Reserve fund for State children's health insurance program.
Sec. 404. Reserve fund for project bioshield.
Sec. 405. Reserve fund for health insurance for the uninsured.
Sec. 406. Reserve fund for children with special needs.

                   Subtitle B--Contingency Procedure

Sec. 411. Contingency procedure for surface transportation.

           Subtitle C--Adjustments to Fiscal Year 2003 Levels

Sec. 421. Supplemental appropriations for fiscal year 2003.

                      TITLE V--BUDGET ENFORCEMENT

Sec. 501. Restrictions on advance appropriations.
Sec. 502. Emergency legislation.
Sec. 503. Extension of supermajority enforcement.
Sec. 504. Discretionary spending limits in the Senate.
Sec. 505. Pay-as-you-go point of order in the Senate.
Sec. 506. Compliance with section 13301 of the Budget Enforcement Act 
              of 1990.
Sec. 507. Application and effect of changes in allocations and 
              aggregates.
Sec. 508. Adjustments to reflect changes in concepts and definitions.

                     TITLE VI--SENSE OF THE SENATE

Sec. 601. Sense of the Senate on Federal employee pay.
Sec. 602. Sense of the Senate regarding Pell Grants.
Sec. 603. Sense of the Senate on emergency and disaster assistance for 
              livestock and agriculture producers.
Sec. 604. Social security restructuring.
Sec. 605. Sense of the Senate concerning State fiscal relief.
Sec. 606. Federal agency review commission.
Sec. 607. Sense of the Senate regarding highway spending.
Sec. 608. Sense of the Senate on reports on liabilities and future 
              costs.
Sec. 609. Sense of the Senate concerning an expansion in health care 
              coverage.
Sec. 610. Sense of the Senate concerning programs of the Corps of 
              Engineers.
Sec. 611. Sense of the Senate concerning Native American health.
Sec. 612. Sense of the Senate on providing tax and other incentives to 
              revitalize rural America.
Sec. 613. Sense of the Senate concerning children's graduate medical 
              education.
Sec. 614. Sense of the Senate on funding for criminal justice.
Sec. 615. Sense of the Senate concerning funding for drug treatment 
              programs.
Sec. 616. Sense of Senate concerning free trade agreement with the 
              United Kingdom.
                TITLE I--RECOMMENDED LEVELS AND AMOUNTS

     SEC. 101. RECOMMENDED LEVELS AND AMOUNTS.

       The following budgetary levels are appropriate for each of 
     fiscal years 2003 through 2013:
       (1) Federal revenues.--For purposes of the enforcement of 
     this resolution:
       (A) The recommended levels of Federal revenues are as 
     follows:
       Fiscal year 2003: $1,303,111,000,000.
       Fiscal year 2004: $1,325,452,000,000.
       Fiscal year 2005: $1,493,875,000,000.
       Fiscal year 2006: $1,657,511,000,000.
       Fiscal year 2007: $1,790,251,000,000.
       Fiscal year 2008: $1,901,844,000,000.
       Fiscal year 2009: $2,053,762,000,000.
       Fiscal year 2010: $2,167,937,000,000.
       Fiscal year 2011: $2,270,540,000,000.
       Fiscal year 2012: $2,409,572,000,000.
       Fiscal year 2013: $2,553,985,000,000.
       (B) The amounts by which the aggregate levels of Federal 
     revenues should be reduced are as follows:
       Fiscal year 2003: $56,723,000,000.
       Fiscal year 2004: $140,918,000,000.
       Fiscal year 2005: $123,151,000,000.
       Fiscal year 2006: $83,161,000,000.
       Fiscal year 2007: $62,915,000,000.
       Fiscal year 2008: $61,133,000,000.
       Fiscal year 2009: $24,568,000,000.
       Fiscal year 2010: $25,105,000,000.
       Fiscal year 2011: $156,956,000,000.
       Fiscal year 2012: $240,207,000,000.
       Fiscal year 2013: $250,225,000,000.
       (2) New budget authority.--For purposes of the enforcement 
     of this resolution, the appropriate levels of total new 
     budget authority are as follows:
       Fiscal year 2003: $1,862,613,000,000.
       Fiscal year 2004: $1,861,004,000,000.
       Fiscal year 2005: $1,990,236,000,000.
       Fiscal year 2006: $2,122,301,000,000.
       Fiscal year 2007: $2,232,829,000,000.
       Fiscal year 2008: $2,348,872,000,000.
       Fiscal year 2009: $2,454,439,000,000.
       Fiscal year 2010: $2,555,612,000,000.
       Fiscal year 2011: $2,669,462,000,000.
       Fiscal year 2012: $2,754,007,000,000.
       Fiscal year 2013: $2,875,121,000,000.
       (3) Budget outlays.--For purposes of the enforcement of 
     this resolution, the appropriate levels of total budget 
     outlays are as follows:
       Fiscal year 2003: $1,815,395,000,000.
       Fiscal year 2004: $1,883,834,000,000.
       Fiscal year 2005: $1,981,402,000,000.
       Fiscal year 2006: $2,089,299,000,000.
       Fiscal year 2007: $2,190,576,000,000.
       Fiscal year 2008: $2,307,259,000,000.
       Fiscal year 2009: $2,419,846,000,000.
       Fiscal year 2010: $2,527,898,000,000.
       Fiscal year 2011: $2,651,220,000,000.
       Fiscal year 2012: $2,723,935,000,000.
       Fiscal year 2013: $2,855,491,000,000.
       (4) Deficits (on-budget).--For purposes of the enforcement 
     of this resolution, the amounts of the deficits (on-budget) 
     are as follows:
       Fiscal year 2003: $512,284,000,000.
       Fiscal year 2004: $558,382,000,000.
       Fiscal year 2005: $487,527,000,000.
       Fiscal year 2006: $431,788,000,000.
       Fiscal year 2007: $400,325,000,000.
       Fiscal year 2008: $405,415,000,000.
       Fiscal year 2009: $366,084,000,000.
       Fiscal year 2010: $359,961,000,000.
       Fiscal year 2011: $380,680,000,000.
       Fiscal year 2012: $314,363,000,000.
       Fiscal year 2013: $301,506,000,000.
       (5) Debt subject to limit.--Pursuant to section 301(a)(5) 
     of the Congressional Budget Act of 1974, the appropriate 
     levels of the public debt are as follows:
       Fiscal year 2003: $6,747,000,000,000.
       Fiscal year 2004: $7,384,000,000,000.
       Fiscal year 2005: $7,978,000,000,000.
       Fiscal year 2006: $8,534,000,000,000.
       Fiscal year 2007: $9,064,000,000,000.
       Fiscal year 2008: $9,602,000,000,000.
       Fiscal year 2009: $10,102,000,000,000.
       Fiscal year 2010: $10,601,000,000,000.
       Fiscal year 2011: $11,125,000,000,000.
       Fiscal year 2012: $11,588,000,000,000.
       Fiscal year 2013: $12,040,000,000,000.
         (6) Debt held by the public.--The appropriate levels of 
     debt held by the public are as follows:
       Fiscal year 2003: $3,917,000,000,000.
       Fiscal year 2004: $4,299,000,000,000.
       Fiscal year 2005: $4,599,000,000,000.
       Fiscal year 2006: $4,829,000,000,000.
       Fiscal year 2007: $5,007,000,000,000.
       Fiscal year 2008: $5,169,000,000,000.
       Fiscal year 2009: $5,272,000,000,000.
       Fiscal year 2010: $5,349,000,000,000.
       Fiscal year 2011: $5,428,000,000,000.
       Fiscal year 2012: $5,424,000,000,000.
       Fiscal year 2013: $5,394,000,000,000.

     SEC. 102. SOCIAL SECURITY.

       (a) Social Security Revenues.--For purposes of Senate 
     enforcement under sections 302 and 311 of the Congressional 
     Budget Act of 1974, the amounts of revenues of the Federal 
     Old-Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund are as follows:
       Fiscal year 2003: $531,607,000,000.
       Fiscal year 2004: $557,821,000,000.
       Fiscal year 2005: $587,775,000,000.
       Fiscal year 2006: $619,062,000,000.
       Fiscal year 2007: $651,148,000,000.
       Fiscal year 2008: $684,429,000,000.
       Fiscal year 2009: $719,132,000,000.
       Fiscal year 2010: $755,754,000,000.
       Fiscal year 2011: $792,152,000,000.
       Fiscal year 2012: $829,568,000,000.
       Fiscal year 2013: $869,690,000,000.
       (b) Social Security Outlays.--For purposes of Senate 
     enforcement under sections 302 and 311 of the Congressional 
     Budget Act of 1974, the amounts of outlays of the Federal 
     Old-Age and Survivors Insurance Trust Fund and the Federal 
     Disability Insurance Trust Fund are as follows:
       Fiscal year 2003: $366,278,000,000.
       Fiscal year 2004: $380,389,000,000.
       Fiscal year 2005: $390,148,000,000.
       Fiscal year 2006: $402,413,000,000.
       Fiscal year 2007: $415,269,000,000.
       Fiscal year 2008: $429,061,000,000.
       Fiscal year 2009: $445,442,000,000.
       Fiscal year 2010: $463,613,000,000.
       Fiscal year 2011: $482,034,000,000.
       Fiscal year 2012: $504,888,000,000.
       Fiscal year 2013: $531,118,000,000.
       (c) Social Security Administrative Expenses.--In the 
     Senate, the amounts of new budget authority and budget 
     outlays of the Federal Old-Age and Survivors Insurance Trust 
     Fund and the Federal Disability Insurance Trust Fund for 
     administrative expenses are as follows:
       Fiscal year 2003:
       (A) New budget authority, $3,812,000,000.
       (B) Outlays, $3,838,000,000.
       Fiscal year 2004:
       (A) New budget authority, $4,257,000,000.
       (B) Outlays, $4,207,000,000.
       Fiscal year 2005:
       (A) New budget authority, $4,338,000,000.
       (B) Outlays, $4,301,000,000.
       Fiscal year 2006:
       (A) New budget authority, $4,424,000,000.
       (B) Outlays, $4,409,000,000.
       Fiscal year 2007:
       (A) New budget authority, $4,522,000,000.
       (B) Outlays, $4,505,000,000.
       Fiscal year 2008:
       (A) New budget authority, $4,638,000,000.
       (B) Outlays, $4,617,000,000.

[[Page H3196]]

       Fiscal year 2009:
       (A) New budget authority, $4,792,000,000.
       (B) Outlays, $4,766,000,000.
       Fiscal year 2010:
       (A) New budget authority, $4,954,000,000.
       (B) Outlays, $4,924,000,000.
       Fiscal year 2011:
       (A) New budget authority, $5,121,000,000.
       (B) Outlays, $5,091,000,000.
       Fiscal year 2012:
       (A) New budget authority, $5,292,000,000.
       (B) Outlays, $5,260,000,000.
       Fiscal year 2013:
       (A) New budget authority, $5,471,000,000.
       (B) Outlays, $5,439,000,000.

     SEC. 103. MAJOR FUNCTIONAL CATEGORIES.

         The Congress determines and declares that the appropriate 
     levels of new budget authority and outlays for fiscal years 
     2003 through 2013 for each major functional category are:
       (1) National Defense (050):
       Fiscal year 2003:
         (A) New budget authority, $392,494,000,000.
         (B) Outlays, $386,229,000,000.
       Fiscal year 2004:
         (A) New budget authority, $400,546,000,000.
         (B) Outlays, $400,916,000,000.
       Fiscal year 2005:
         (A) New budget authority, $420,071,000,000.
         (B) Outlays, $414,237,000,000.
       Fiscal year 2006:
         (A) New budget authority, $440,185,000,000.
         (B) Outlays, $426,011,000,000.
       Fiscal year 2007:
         (A) New budget authority, $460,435,000,000.
         (B) Outlays, $438,656,000,000.
       Fiscal year 2008:
         (A) New budget authority, $480,886,000,000.
         (B) Outlays, $462,861,000,000.
       Fiscal year 2009:
         (A) New budget authority, $491,951,000,000.
         (B) Outlays, $479,249,000,000.
       Fiscal year 2010:
         (A) New budget authority, $502,301,000,000.
         (B) Outlays, $493,195,000,000.
       Fiscal year 2011:
         (A) New budget authority, $511,859,000,000.
         (B) Outlays, $508,131,000,000.
       Fiscal year 2012:
         (A) New budget authority, $520,553,000,000.
         (B) Outlays, $510,509,000,000.
       Fiscal year 2013:
         (A) New budget authority, $529,428,000,000.
         (B) Outlays, $524,494,000,000.
       (2) International Affairs (150):
       Fiscal year 2003:
         (A) New budget authority, $22,506,000,000.
         (B) Outlays, $19,283,000,000.
       Fiscal year 2004:
         (A) New budget authority, $25,681,000,000.
         (B) Outlays, $24,207,000,000.
       Fiscal year 2005:
         (A) New budget authority, $29,734,000,000.
         (B) Outlays, $24,917,000,000.
       Fiscal year 2006:
         (A) New budget authority, $32,308,000,000.
         (B) Outlays, $26,539,000,000.
       Fiscal year 2007:
         (A) New budget authority, $33,603,000,000.
         (B) Outlays, $28,464,000,000.
       Fiscal year 2008:
         (A) New budget authority, $34,611,000,000.
         (B) Outlays, $29,604,000,000.
       Fiscal year 2009:
         (A) New budget authority, $35,413,000,000.
         (B) Outlays, $30,733,000,000.
       Fiscal year 2010:
       (A) New budget authority, $36,258,000,000.
       (B) Outlays, $31,689,000,000.
       Fiscal year 2011:
       (A) New budget authority, $37,136,000,000.
       (B) Outlays, $32,565,000,000.
       Fiscal year 2012:
       (A) New budget authority, $38,005,000,000.
       (B) Outlays, $33,408,000,000.
       Fiscal year 2013:
       (A) New budget authority, $38,885,000,000.
       (B) Outlays, $34,298,000,000.
       (3) General Science, Space, and Technology (250):
       Fiscal year 2003:
       (A) New budget authority, $23,153,000,000.
       (B) Outlays, $21,556,000,000.
       Fiscal year 2004:
       (A) New budget authority, $23,927,000,000.
       (B) Outlays, $22,799,000,000.
       Fiscal year 2005:
       (A) New budget authority, $24,433,000,000.
       (B) Outlays, $23,861,000,000.
       Fiscal year 2006:
       (A) New budget authority, $25,217,000,000.
       (B) Outlays, $24,485,000,000.
       Fiscal year 2007:
       (A) New budget authority, $26,055,000,000.
       (B) Outlays, $25,221,000,000.
       Fiscal year 2008:
       (A) New budget authority, $26,832,000,000.
       (B) Outlays, $25,948,000,000.
       Fiscal year 2009:
       (A) New budget authority, $27,462,000,000.
       (B) Outlays, $26,639,000,000.
       Fiscal year 2010:
       (A) New budget authority, $28,121,000,000.
       (B) Outlays, $27,296,000,000.
       Fiscal year 2011:
       (A) New budget authority, $28,805,000,000.
       (B) Outlays, $27,963,000,000.
       Fiscal year 2012:
       (A) New budget authority, $29,492,000,000.
       (B) Outlays, $28,639,000,000.
       Fiscal year 2013:
       (A) New budget authority, $30,185,000,000.
       (B) Outlays, $29,319,000,000.
       (4) Energy (270):
       Fiscal year 2003:
       (A) New budget authority, $2,074,000,000.
       (B) Outlays, $439,000,000.
       Fiscal year 2004:
       (A) New budget authority, $2,634,000,000.
       (B) Outlays, $873,000,000.
       Fiscal year 2005:
       (A) New budget authority, $2,797,000,000.
       (B) Outlays, $947,000,000.
       Fiscal year 2006:
       (A) New budget authority, $2,714,000,000.
       (B) Outlays, $1,272,000,000.
       Fiscal year 2007:
       (A) New budget authority, $2,540,000,000.
       (B) Outlays, $1,069,000,000.
       Fiscal year 2008:
       (A) New budget authority, $3,080,000,000.
       (B) Outlays, $1,419,000,000.
       Fiscal year 2009:
       (A) New budget authority, $3,090,000,000.
       (B) Outlays, $1,686,000,000.
       Fiscal year 2010:
       (A) New budget authority, $3,194,000,000.
       (B) Outlays, $1,794,000,000.
       Fiscal year 2011:
       (A) New budget authority, $3,296,000,000.
       (B) Outlays, $1,976,000,000.
       Fiscal year 2012:
       (A) New budget authority, $3,408,000,000.
       (B) Outlays, $2,357,000,000.
       Fiscal year 2013:
       (A) New budget authority, $3,520,000,000.
       (B) Outlays, $2,326,000,000.
       (5) Natural Resources and Environment (300):
       Fiscal year 2003:
       (A) New budget authority, $30,816,000,000.
       (B) Outlays, $28,940,000,000.
       Fiscal year 2004:
       (A) New budget authority, $31,623,000,000.
       (B) Outlays, $30,782,000,000.
       Fiscal year 2005:
       (A) New budget authority, $32,504,000,000.
       (B) Outlays, $31,654,000,000.
       Fiscal year 2006:
       (A) New budget authority, $32,962,000,000.
       (B) Outlays, $32,830,000,000.
       Fiscal year 2007:
       (A) New budget authority, $33,386,000,000.
       (B) Outlays, $33,127,000,000.
       Fiscal year 2008:
       (A) New budget authority, $34,064,000,000.
       (B) Outlays, $33,527,000,000.
       Fiscal year 2009:
       (A) New budget authority, $35,183,000,000.
       (B) Outlays, $34,544,000,000.
       Fiscal year 2010:
       (A) New budget authority, $36,021,000,000.
       (B) Outlays, $35,360,000,000.
       Fiscal year 2011:
       (A) New budget authority, $36,829,000,000.
       (B) Outlays, $36,163,000,000.
       Fiscal year 2012:
       (A) New budget authority, $37,529,000,000.
       (B) Outlays, $36,836,000,000.
       Fiscal year 2013:
       (A) New budget authority, $38,214,000,000.
       (B) Outlays, $37,600,000,000.
         (6) Agriculture (350):
       Fiscal year 2003:
       (A) New budget authority, $24,418,000,000.
       (B) Outlays, $23,365,000,000.
       Fiscal year 2004:
       (A) New budget authority, $24,583,000,000.
       (B) Outlays, $23,656,000,000.
       Fiscal year 2005:
       (A) New budget authority, $27,003,000,000.
       (B) Outlays, $25,763,000,000.
       Fiscal year 2006:
       (A) New budget authority, $26,828,000,000.
       (B) Outlays, $25,593,000,000.
       Fiscal year 2007:
       (A) New budget authority, $26,299,000,000.
       (B) Outlays, $25,107,000,000.
       Fiscal year 2008:
       (A) New budget authority, $25,507,000,000.
       (B) Outlays, $24,381,000,000.
       Fiscal year 2009:
       (A) New budget authority, $26,092,000,000.
       (B) Outlays, $25,128,000,000.
       Fiscal year 2010:
       (A) New budget authority, $25,545,000,000.
       (B) Outlays, $24,716,000,000.
       Fiscal year 2011:
       (A) New budget authority, $24,991,000,000.
       (B) Outlays, $24,180,000,000.
       Fiscal year 2012:
       (A) New budget authority, $24,573,000,000.
       (B) Outlays, $23,778,000,000.
       Fiscal year 2013:
       (A) New budget authority, $24,297,000,000.
       (B) Outlays, $23,498,000,000.
         (7) Commerce and Housing Credit (370):
       Fiscal year 2003:
       (A) New budget authority, $8,812,000,000.
       (B) Outlays, $5,881,000,000.
       Fiscal year 2004:
       (A) New budget authority, $7,516,000,000.
       (B) Outlays, $3,574,000,000.
       Fiscal year 2005:
       (A) New budget authority, $8,743,000,000.
       (B) Outlays, $4,050,000,000.
       Fiscal year 2006:
       (A) New budget authority, $8,280,000,000.
       (B) Outlays, $3,116,000,000.
       Fiscal year 2007:
       (A) New budget authority, $8,626,000,000.
       (B) Outlays, $2,651,000,000.
       Fiscal year 2008:
       (A) New budget authority, $8,743,000,000.
       (B) Outlays, $2,243,000,000.
       Fiscal year 2009:
       (A) New budget authority, $8,526,000,000.
       (B) Outlays, $2,019,000,000.
       Fiscal year 2010:
       (A) New budget authority, $8,407,000,000.
       (B) Outlays, $1,538,000,000.
       Fiscal year 2011:
       (A) New budget authority, $8,386,000,000.
       (B) Outlays, $934,000,000.
       Fiscal year 2012:
       (A) New budget authority, $8,489,000,000.
       (B) Outlays, $642,000,000.
       Fiscal year 2013:
       (A) New budget authority, $8,563,000,000.
       (B) Outlays, $756,000,000.
         (8) Transportation (400):
       Fiscal year 2003:
       (A) New budget authority, $64,091,000,000.
       (B) Outlays, $67,847,000,000.

[[Page H3197]]

       Fiscal year 2004:
       (A) New budget authority, $69,506,000,000.
       (B) Outlays, $69,869,000,000.
       Fiscal year 2005:
       (A) New budget authority, $70,489,000,000.
       (B) Outlays, $69,442,000,000.
       Fiscal year 2006:
       (A) New budget authority, $72,496,000,000.
       (B) Outlays, $70,191,000,000.
       Fiscal year 2007:
       (A) New budget authority, $75,278,000,000.
       (B) Outlays, $71,786,000,000.
       Fiscal year 2008:
       (A) New budget authority, $76,927,000,000.
       (B) Outlays, $73,659,000,000.
       Fiscal year 2009:
       (A) New budget authority, $78,878,000,000.
       (B) Outlays, $75,632,000,000.
       Fiscal year 2010:
       (A) New budget authority, $77,747,000,000.
       (B) Outlays, $77,233,000,000.
       Fiscal year 2011:
       (A) New budget authority, $78,624,000,000.
       (B) Outlays, $78,291,000,000.
       Fiscal year 2012:
       (A) New budget authority, $79,527,000,000.
       (B) Outlays, $79,317,000,000.
       Fiscal year 2013:
       (A) New budget authority, $80,466,000,000.
       (B) Outlays, $80,346,000,000.
         (9) Community and Regional Development (450):
       Fiscal year 2003:
       (A) New budget authority, $12,251,000,000.
       (B) Outlays, $15,994,000,000.
       Fiscal year 2004:
       (A) New budget authority, $14,063,000,000.
       (B) Outlays, $15,823,000,000.
       Fiscal year 2005:
       (A) New budget authority, $14,138,000,000.
       (B) Outlays, $15,872,000,000.
       Fiscal year 2006:
       (A) New budget authority, $14,321,000,000.
       (B) Outlays, $14,961,000,000.
       Fiscal year 2007:
       (A) New budget authority, $14,536,000,000.
       (B) Outlays, $14,664,000,000.
       Fiscal year 2008:
       (A) New budget authority, $14,745,000,000.
       (B) Outlays, $14,123,000,000.
       Fiscal year 2009:
       (A) New budget authority, $14,980,000,000.
       (B) Outlays, $14,298,000,000.
       Fiscal year 2010:
       (A) New budget authority, $15,233,000,000.
       (B) Outlays, $14,501,000,000.
       Fiscal year 2011:
       (A) New budget authority, $15,492,000,000.
       (B) Outlays, $14,750,000,000.
       Fiscal year 2012:
       (A) New budget authority, $15,755,000,000.
       (B) Outlays, $14,992,000,000.
       Fiscal year 2013:
       (A) New budget authority, $16,023,000,000.
       (B) Outlays, $15,259,000,000.
       (10) Education, Training, Employment, and Social Services 
     (500):
       Fiscal year 2003:
       (A) New budget authority, $82,699,000,000.
       (B) Outlays, $81,455,000,000.
       Fiscal year 2004:
       (A) New budget authority, $90,035,000,000.
       (B) Outlays, $84,205,000,000.
       Fiscal year 2005:
       (A) New budget authority, $91,442,000,000.
       (B) Outlays, $87,020,000,000.
       Fiscal year 2006:
       (A) New budget authority, $93,428,000,000.
       (B) Outlays, $90,541,000,000.
       Fiscal year 2007:
       (A) New budget authority, $95,569,000,000.
       (B) Outlays, $92,986,000,000.
       Fiscal year 2008:
       (A) New budget authority, $97,925,000,000.
       (B) Outlays, $95,118,000,000.
       Fiscal year 2009:
       (A) New budget authority, $99,813,000,000.
       (B) Outlays, $97,440,000,000.
       Fiscal year 2010:
       (A) New budget authority, $101,551,000,000.
       (B) Outlays, $99,289,000,000.
       Fiscal year 2011:
       (A) New budget authority, $103,529,000,000.
       (B) Outlays, $101,117,000,000.
       Fiscal year 2012:
       (A) New budget authority, $105,790,000,000.
       (B) Outlays, $102,985,000,000.
       Fiscal year 2013:
       (A) New budget authority, $107,265,000,000.
       (B) Outlays, $104,934,000,000.
       (11) Health (550):
       Fiscal year 2003:
       (A) New budget authority, $222,913,000,000.
       (B) Outlays, $217,881,000,000.
       Fiscal year 2004:
       (A) New budget authority, $240,554,000,000.
       (B) Outlays, $238,785,000,000.
       Fiscal year 2005:
       (A) New budget authority, $259,701,000,000.
       (B) Outlays, $259,403,000,000.
       Fiscal year 2006:
       (A) New budget authority, $279,236,000,000.
       (B) Outlays, $279,024,000,000.
       Fiscal year 2007:
       (A) New budget authority, $299,614,000,000.
       (B) Outlays, $298,681,000,000.
       Fiscal year 2008:
       (A) New budget authority, $322,061,000,000.
       (B) Outlays, $320,731,000,000.
       Fiscal year 2009:
       (A) New budget authority, $345,548,000,000.
       (B) Outlays, $344,059,000,000.
       Fiscal year 2010:
       (A) New budget authority, $370,626,000,000.
       (B) Outlays, $369,097,000,000.
       Fiscal year 2011:
       (A) New budget authority, $396,818,000,000.
       (B) Outlays, $395,280,000,000.
       Fiscal year 2012:
       (A) New budget authority, $415,790,000,000.
       (B) Outlays, $414,384,000,000.
       Fiscal year 2013:
       (A) New budget authority, $445,484,000,000.
       (B) Outlays, $444,082,000,000.
       (12) Medicare (570):
       Fiscal year 2003:
       (A) New budget authority, $248,586,000,000.
       (B) Outlays, $248,434,000,000.
       Fiscal year 2004:
       (A) New budget authority, $266,018,000,000.
       (B) Outlays, $266,283,000,000.
       Fiscal year 2005:
       (A) New budget authority, $282,682,000,000.
       (B) Outlays, $285,630,000,000.
       Fiscal year 2006:
       (A) New budget authority, $321,623,000,000.
       (B) Outlays, $318,384,000,000.
       Fiscal year 2007:
       (A) New budget authority, $343,717,000,000.
       (B) Outlays, $343,987,000,000.
       Fiscal year 2008:
       (A) New budget authority, $369,244,000,000.
       (B) Outlays, $369,119,000,000.
       Fiscal year 2009:
       (A) New budget authority, $395,368,000,000.
       (B) Outlays, $395,107,000,000.
       Fiscal year 2010:
       (A) New budget authority, $423,288,000,000.
       (B) Outlays, $423,546,000,000.
       Fiscal year 2011:
       (A) New budget authority, $453,285,000,000.
       (B) Outlays, $456,642,000,000.
       Fiscal year 2012:
       (A) New budget authority, $485,951,000,000.
       (B) Outlays, $482,125,000,000.
       Fiscal year 2013:
       (A) New budget authority, $526,553,000,000.
       (B) Outlays, $526,809,000,000.
       (13) Income Security (600):
       Fiscal year 2003:
       (A) New budget authority, $326,390,000,000.
       (B) Outlays, $334,177,000,000.
       Fiscal year 2004:
       (A) New budget authority, $319,518,000,000.
       (B) Outlays, $324,840,000,000.
       Fiscal year 2005:
       (A) New budget authority, $333,821,000,000.
       (B) Outlays, $337,123,000,000.
       Fiscal year 2006:
       (A) New budget authority, $341,816,000,000.
       (B) Outlays, $344,292,000,000.
       Fiscal year 2007:
       (A) New budget authority, $349,199,000,000.
       (B) Outlays, $350,945,000,000.
       Fiscal year 2008:
       (A) New budget authority, $361,697,000,000.
       (B) Outlays, $362,808,000,000.
       Fiscal year 2009:
       (A) New budget authority, $373,372,000,000.
       (B) Outlays, $374,083,000,000.
       Fiscal year 2010:
       (A) New budget authority, $384,844,000,000.
       (B) Outlays, $385,347,000,000.
       Fiscal year 2011:
       (A) New budget authority, $400,266,000,000.
       (B) Outlays, $400,688,000,000.
       Fiscal year 2012:
       (A) New budget authority, $403,738,000,000.
       (B) Outlays, $404,146,000,000.
       Fiscal year 2013:
       (A) New budget authority, $418,672,000,000.
       (B) Outlays, $419,245,000,000.
       (14) Social Security (650):
       Fiscal year 2003:
       (A) New budget authority, $13,255,000,000.
       (B) Outlays, $13,255,000,000.
       Fiscal year 2004:
       (A) New budget authority, $14,294,000,000.
       (B) Outlays, $14,293,000,000.
       Fiscal year 2005:
       (A) New budget authority, $15,471,000,000.
       (B) Outlays, $15,471,000,000.
       Fiscal year 2006:
       (A) New budget authority, $16,421,000,000.
       (B) Outlays, $16,421,000,000.
       Fiscal year 2007:
       (A) New budget authority, $17,919,000,000.
       (B) Outlays, $17,919,000,000.
       Fiscal year 2008:
       (A) New budget authority, $19,704,000,000.
       (B) Outlays, $19,704,000,000.
       Fiscal year 2009:
       (A) New budget authority, $21,810,000,000.
       (B) Outlays, $21,810,000,000.
       Fiscal year 2010:
       (A) New budget authority, $24,283,000,000.
       (B) Outlays, $24,283,000,000.
       Fiscal year 2011:
       (A) New budget authority, $28,170,000,000.
       (B) Outlays, $28,170,000,000.
       Fiscal year 2012:
       (A) New budget authority, $31,357,000,000.
       (B) Outlays, $31,357,000,000.
       Fiscal year 2013:
       (A) New budget authority, $34,347,000,000.
       (B) Outlays, $34,347,000,000.
       (15) Veterans Benefits and Services (700):
       Fiscal year 2003:
       (A) New budget authority, $57,597,000,000.
       (B) Outlays, $57,486,000,000.
       Fiscal year 2004:
       (A) New budget authority, $63,779,000,000.
       (B) Outlays, $63,209,000,000.
       Fiscal year 2005:
       (A) New budget authority, $67,135,000,000.
       (B) Outlays, $66,553,000,000.
       Fiscal year 2006:
       (A) New budget authority, $65,397,000,000.
       (B) Outlays, $64,995,000,000.
       Fiscal year 2007:
       (A) New budget authority, $63,874,000,000.
       (B) Outlays, $63,442,000,000.
       Fiscal year 2008:
       (A) New budget authority, $67,666,000,000.
       (B) Outlays, $67,398,000,000.
       Fiscal year 2009:
       (A) New budget authority, $69,279,000,000.
       (B) Outlays, $68,924,000,000.
       Fiscal year 2010:
       (A) New budget authority, $70,992,000,000.
       (B) Outlays, $70,588,000,000.
       Fiscal year 2011:
       (A) New budget authority, $75,669,000,000.
       (B) Outlays, $75,249,000,000.

[[Page H3198]]

       Fiscal year 2012:
       (A) New budget authority, $72,618,000,000.
       (B) Outlays, $72,097,000,000.
       Fiscal year 2013:
       (A) New budget authority, $77,455,000,000.
       (B) Outlays, $76,989,000,000.
       (16) Administration of Justice (750):
       Fiscal year 2003:
       (A) New budget authority, $38,543,000,000.
       (B) Outlays, $37,712,000,000.
       Fiscal year 2004:
       (A) New budget authority, $37,626,000,000.
       (B) Outlays, $40,788,000,000.
       Fiscal year 2005:
       (A) New budget authority, $37,946,000,000.
       (B) Outlays, $39,193,000,000.
       Fiscal year 2006:
       (A) New budget authority, $37,984,000,000.
       (B) Outlays, $38,329,000,000.
       Fiscal year 2007:
       (A) New budget authority, $38,461,000,000.
       (B) Outlays, $38,252,000,000.
       Fiscal year 2008:
       (A) New budget authority, $39,477,000,000.
       (B) Outlays, $39,128,000,000.
       Fiscal year 2009:
       (A) New budget authority, $40,497,000,000.
       (B) Outlays, $40,212,000,000.
       Fiscal year 2010:
       (A) New budget authority, $41,599,000,000.
       (B) Outlays, $41,299,000,000.
       Fiscal year 2011:
       (A) New budget authority, $42,889,000,000.
       (B) Outlays, $42,472,000,000.
       Fiscal year 2012:
       (A) New budget authority, $44,207,000,000.
       (B) Outlays, $43,760,000,000.
       Fiscal year 2013:
       (A) New budget authority, $45,576,000,000.
       (B) Outlays, $45,120,000,000.
       (17) General Government (800):
       Fiscal year 2003:
       (A) New budget authority, $18,185,000,000.
       (B) Outlays, $18,110,000,000.
       Fiscal year 2004:
       (A) New budget authority, $20,202,000,000.
       (B) Outlays, $20,066,000,000.
       Fiscal year 2005:
       (A) New budget authority, $20,635,000,000.
       (B) Outlays, $20,714,000,000.
       Fiscal year 2006:
       (A) New budget authority, $20,656,000,000.
       (B) Outlays, $20,485,000,000.
       Fiscal year 2007:
       (A) New budget authority, $21,126,000,000.
       (B) Outlays, $20,876,000,000.
       Fiscal year 2008:
       (A) New budget authority, $21,236,000,000.
       (B) Outlays, $21,013,000,000.
       Fiscal year 2009:
       (A) New budget authority, $21,946,000,000.
       (B) Outlays, $21,504,000,000.
       Fiscal year 2010:
       (A) New budget authority, $22,695,000,000.
       (B) Outlays, $22,212,000,000.
       Fiscal year 2011:
       (A) New budget authority, $23,458,000,000.
       (B) Outlays, $22,946,000,000.
       Fiscal year 2012:
       (A) New budget authority, $24,255,000,000.
       (B) Outlays, $23,880,000,000.
       Fiscal year 2013:
       (A) New budget authority, $25,076,000,000.
       (B) Outlays, $24,520,000,000.
       (18) Net Interest (900):
       Fiscal year 2003:
       (A) New budget authority, $240,176,000,000.
       (B) Outlays, $240,176,000,000.
       Fiscal year 2004:
       (A) New budget authority, $259,414,000,000.
       (B) Outlays, $259,414,000,000.
       Fiscal year 2005:
       (A) New budget authority, $310,630,000,000.
       (B) Outlays, $310,630,000,000.
       Fiscal year 2006:
       (A) New budget authority, $352,219,000,000.
       (B) Outlays, $352,219,000,000.
       Fiscal year 2007:
       (A) New budget authority, $380,574,000,000.
       (B) Outlays, $380,574,000,000.
       Fiscal year 2008:
       (A) New budget authority, $405,647,000,000.
       (B) Outlays, $405,647,000,000.
       Fiscal year 2009:
       (A) New budget authority, $429,542,000,000.
       (B) Outlays, $429,542,000,000.
       Fiscal year 2010:
       (A) New budget authority, $450,651,000,000.
       (B) Outlays, $450,651,000,000.
       Fiscal year 2011:
       (A) New budget authority, $473,381,000,000.
       (B) Outlays, $473,381,000,000.
       Fiscal year 2012:
       (A) New budget authority, $496,015,000,000.
       (B) Outlays, $496,015,000,000.
       Fiscal year 2013:
       (A) New budget authority, $514,513,000,000.
       (B) Outlays, $514,513,000,000.
       (19) Allowances (920):
       Fiscal year 2003:
       (A) New budget authority, $74,758,000,000.
       (B) Outlays, $38,279,000,000.
       Fiscal year 2004:
       (A) New budget authority, -$7,621,000,000.
       (B) Outlays, $22,346,000,000.
       Fiscal year 2005:
       (A) New budget authority, -$6,541,000,000.
       (B) Outlays, $1,520,000,000.
       Fiscal year 2006:
       (A) New budget authority, -$7,331,000,000.
       (B) Outlays, -$5,930,000,000.
       Fiscal year 2007:
       (A) New budget authority, -$8,947,000,000.
       (B) Outlays, -$8,796,000,000.
       Fiscal year 2008:
       (A) New budget authority, -$9,959,000,000.
       (B) Outlays, -$9,951,000,000.
       Fiscal year 2009:
       (A) New budget authority, -$11,526,000,000.
       (B) Outlays, -$9,978,000,000.
       Fiscal year 2010:
       (A) New budget authority, -$12,888,000,000.
       (B) Outlays, -$10,880,000,000.
       Fiscal year 2011:
       (A) New budget authority, -$16,414,000,000.
       (B) Outlays, -$12,671,000,000.
       Fiscal year 2012:
       (A) New budget authority, -$21,460,000,000.
       (B) Outlays, -$15,707,000,000.
       Fiscal year 2013:
       (A) New budget authority, -$25,618,000,000.
       (B) Outlays, -$19,181,000,000.
       (20) Undistributed Offsetting Receipts (950):
       Fiscal year 2003:
       (A) New budget authority, -$41,104,000,000.
       (B) Outlays, -$41,104,000,000.
       Fiscal year 2004:
       (A) New budget authority, -$42,894,000,000.
       (B) Outlays, -$42,894,000,000.
       Fiscal year 2005:
       (A) New budget authority, -$52,598,000,000.
       (B) Outlays, -$52,598,000,000.
       Fiscal year 2006:
       (A) New budget authority, -$54,459,000,000.
       (B) Outlays, -$54,459,000,000.
       Fiscal year 2007:
       (A) New budget authority, -$49,035,000,000.
       (B) Outlays, -$49,035,000,000.
       Fiscal year 2008:
       (A) New budget authority, -$51,221,000,000.
       (B) Outlays, -$51,221,000,000.
       Fiscal year 2009:
       (A) New budget authority, -$52,785,000,000.
       (B) Outlays, -$52,785,000,000.
       Fiscal year 2010:
       (A) New budget authority, -$54,856,000,000.
       (B) Outlays, -$54,856,000,000.
       Fiscal year 2011:
       (A) New budget authority, -$57,007,000,000.
       (B) Outlays, -$57,007,000,000.
       Fiscal year 2012:
       (A) New budget authority, -$61,585,000,000.
       (B) Outlays, -$61,585,000,000.
       Fiscal year 2013:
       (A) New budget authority, -$63,783,000,000.
       (B) Outlays, -$63,783,000,000.
                        TITLE II--RECONCILIATION

     SEC. 201. RECONCILIATION FOR ECONOMIC GROWTH AND TAX 
                   SIMPLIFICATION AND FAIRNESS.

       (a) In the House.--The House Committee on Ways and Means 
     shall report a reconciliation bill not later than May 8, 
     2003, that consists of changes in laws within its 
     jurisdiction sufficient to reduce revenues by not more than 
     $535,000,000,000 for the period of fiscal years 2003 through 
     2013 and increase the total level of outlays by not more than 
     $15,000,000,000 for the period of fiscal years 2003 through 
     2013.
       (b) In the Senate.--The Senate Committee on Finance shall 
     report a reconciliation bill not later than May 8, 2003, that 
     consists of changes in laws within its jurisdiction 
     sufficient to reduce revenues by not more than 
     $522,524,000,000 and increase the total level of outlays by 
     not more than $27,476,000,000 for the period of fiscal years 
     2003 through 2013.

     SEC. 202. LIMIT ON SENATE CONSIDERATION OF RECONCILIATION.

       (a) Point of Order.--It shall not be in order for the 
     Senate to consider a bill reported pursuant to section 201, 
     or an amendment thereto, which would cause the total revenue 
     reduction to exceed $322,524,000,000 or the total outlay 
     increase to exceed $27,476,000,000 for the period of fiscal 
     years 2003 through 2013, except for the purpose of inserting 
     the text of a Senate-passed measure and requesting a 
     conference with the House of Representatives.
       (b) Waiver.--This section may be waived or suspended in the 
     Senate only by the affirmative vote of three-fifths of the 
     Members, duly chosen and sworn.
       (c) Appeals.--An affirmative vote of three-fifths of the 
     Members of the Senate, duly chosen and sworn, shall be 
     required to sustain an appeal of the ruling of the Chair on 
     the point of order raised under this section.
      TITLE III--SUBMISSIONS TO ELIMINATE WASTE, FRAUD, AND ABUSE

     SEC. 301. SUBMISSIONS OF FINDINGS PROVIDING FOR THE 
                   ELIMINATION OF WASTE, FRAUD, AND ABUSE IN 
                   MANDATORY PROGRAMS.

       (a) Findings and Purpose.--The Congress finds that--
       (1) the Inspector General of the Department of Education 
     has found that nearly 23 percent of recipients whose loans 
     were discharged due to disability claims were gainfully 
     employed;
       (2) based on data provided by the Office of Management and 
     Budget, it is estimated that more than $8 billion in 
     erroneous earned income tax payments are made each year;
       (3) the Office of Management and Budget estimates that 
     erroneous payments for food stamps account for almost 9 
     percent of total benefits;
       (4) mismanagement of more than $3 billion in trust funds 
     controlled by the Bureau of Indian Affairs led the Congress 
     to take extraordinary measures to regain control of these 
     funds;
       (5) in its semiannual reports to Congress, the Inspector 
     General of the Office of Personnel Management has documented 
     numerous instances of the Government continuing to make 
     electronic payments for retirement benefits through the Civil 
     Service Retirement System after the death of the eligible 
     annuitants; and
       (6) numerous other examples of waste, fraud, and abuse are 
     reported regularly by government watchdog agencies.
       (b) Submissions Providing for the Elimination of Waste, 
     Fraud, and Abuse in Mandatory Programs.--Not later than 
     September 2, 2003, the House committees named in subsection 
     (c) and the Senate committees named in subsection (d) shall 
     submit findings that identify changes in law within their 
     jurisdictions that would achieve the specified level of 
     savings through the elimination of waste, fraud, and abuse. 
     After receiving those recommendations, the Committees on the 
     Budget may use them in the development of future concurrent 
     resolutions on the budget. For purposes of this subsection, 
     the specified level of savings for each

[[Page H3199]]

     committee shall be inserted in the Congressional Record by 
     the chairmen of the Committee on the Budget by May 16, 2003.
       (c) House Committees.--The following committees of the 
     House of Representatives shall submit findings to the House 
     Committee on the Budget pursuant to subsection (b): the 
     Committee on Agriculture, the Committee on Armed Services, 
     the Committee on Education and the Workforce, the Committee 
     on Energy and Commerce, the Committee on Financial Services, 
     the Committee on Government Reform, the Committee on House 
     Administration, the Committee on International Relations, the 
     Committee on the Judiciary, the Committee on Resources, the 
     Committee on Science, the Committee on Small Business, the 
     Committee on Transportation and Infrastructure, the Committee 
     on Veterans' Affairs, and the Committee on Ways and Means.
       (d) Senate Committees.--The following committees of the 
     Senate shall submit their findings to the Senate Committee on 
     the Budget pursuant to subsection (b): the Committee on 
     Agriculture, Nutrition, and Forestry, the Committee on Armed 
     Services, the Committee Banking, Housing, and Urban Affairs, 
     the Committee Commerce, Science, and Transportation, the 
     Committee on Energy and Natural Resources, the Committee on 
     Environment and Public Works, the Committee on Finance, the 
     Committee on Foreign Relations, the Committee on Governmental 
     Affairs, the Committee on Health, Education, Labor, and 
     Pensions, the Committee on the Judiciary, and the Committee 
     on Veterans' Affairs.
       (e) GAO Report.--By August 1, 2003, the Comptroller General 
     shall submit to the Committees on the Budget a comprehensive 
     report identifying instances in which the committees of 
     jurisdiction may make legislative changes to improve the 
     economy, efficiency, and effectiveness of programs within 
     their jurisdiction.
           TITLE IV--RESERVE FUNDS AND CONTINGENCY PROCEDURE
 Subtitle A--Reserve Funds for Legislation Assumed in Budget Aggregates

     SEC. 401. RESERVE FUND FOR MEDICARE MODERNIZATION AND 
                   PRESCRIPTION DRUGS.

       (a) In the House.--(1) In the House, if the Committee on 
     Ways and Means or the Committee on Energy and Commerce 
     reports a bill or joint resolution, or if an amendment 
     thereto is offered or a conference report thereon is 
     submitted, that provides a prescription drug benefit and 
     modernizes medicare, and provides adjustments to the medicare 
     program on a fee-for-service, capitated, or other basis, the 
     chairman of the Committee on the Budget may revise the 
     appropriate allocations described in paragraph (3) for such 
     committees and other appropriate levels in this resolution by 
     the amount provided by that measure for that purpose, but not 
     to exceed $7,000,000,000 in new budget authority and 
     $7,000,000,000 in outlays for fiscal year 2004 and 
     $400,000,000,000 in new budget authority and $400,000,000,000 
     in outlays for the period of fiscal years 2004 through 2013.
       (2) After the consideration of any measure for which an 
     adjustment is made pursuant to paragraph (1), the chairman of 
     the Committee on the Budget shall make any further 
     appropriate adjustments in allocations and budget aggregates.
       (3) In the House, there shall be a separate section 302(a) 
     allocation to the appropriate committees for medicare. For 
     purposes of enforcing such separate allocation under section 
     302(f) of the Congressional Budget Act of 1974, the ``first 
     fiscal year'' and the ``total of fiscal years'' shall be 
     deemed to refer to fiscal year 2004 and the total of fiscal 
     years 2004 through 2013 included in the joint explanatory 
     statement of managers accompanying this resolution, 
     respectively. Such separate allocation shall be the exclusive 
     allocation for medicare under section 302(a) of such Act.
       (b) In the Senate.--If the Committee on Finance of the 
     Senate reports a bill or joint resolution, or an amendment is 
     offered thereto or a conference report thereon is submitted, 
     that strengthens and enhances the Medicare Program under 
     title XVIII of the Social Security Act (42 U.S.C. 1395 et 
     seq.) and improves the access of beneficiaries under that 
     program to prescription drugs or promotes geographic equity 
     payments, the chairman of the Committee on the Budget, may 
     revise appropriate budgetary aggregates and committee 
     allocations of new budget authority and outlays provided by 
     that measure for that purpose, but not to exceed 
     $7,000,000,000 for fiscal year 2004 and $400,000,000,000 for 
     the period of fiscal years 2004 through 2013.

     SEC. 402. RESERVE FUND FOR MEDICAID REFORM.

       If the Committee on Energy and Commerce of the House or the 
     Committee on Finance of the Senate reports a bill or joint 
     resolution, or if an amendment thereto is offered or a 
     conference report thereon is submitted, that modernizes 
     medicaid, the appropriate chairman of the Committee on the 
     Budget may revise appropriate budgetary aggregates and 
     committee allocations of new budget authority and outlays 
     provided by that measure for that purpose, but not to exceed 
     $3,258,000,000 in new budget authority and outlays for fiscal 
     year 2004, $8,944,000,000 in new budget authority and outlays 
     for the period of fiscal years 2004 through 2008, and 
     $12,782,000,000 in budget authority and outlays for the 
     period of fiscal years 2004 through 2010, if the legislation 
     would not increase the deficit over the period of fiscal 
     years 2004 through 2013.

     SEC. 403. RESERVE FUND FOR STATE CHILDREN'S HEALTH INSURANCE 
                   PROGRAM.

       If the Committee on Energy and Commerce of the House or the 
     Committee on Finance of the Senate reports a bill or joint 
     resolution, or if an amendment thereto is offered or a 
     conference report thereon is submitted, that extends the 
     availability of fiscal year 1998 and 1999 expired State 
     Children's Health Insurance Program allotments and the 
     expiring fiscal year 2000 allotments, the appropriate 
     chairman of the Committee on the Budget may revise 
     appropriate budgetary aggregates and committee allocations of 
     new budget authority and outlays by the amount provided by 
     that measure for that purpose, but not to exceed 
     $1,260,000,000 in new budget authority and $85,000,000 in 
     outlays for fiscal year 2003, $1,330,000,000 in new budget 
     authority and $85,000,000 in outlays for fiscal year 2004, 
     $690,000,000 in new budget authority and $760,000,000 in 
     outlays for the period of fiscal years 2004 through 2008, and 
     $565,000,000 in new budget authority and $890,000,000 in 
     outlays for the period of fiscal years 2004 through 2013.

     SEC. 404. RESERVE FUND FOR PROJECT BIOSHIELD.

       (a) In the House.--In the House, if the appropriate 
     committee of jurisdiction reports a bill or joint resolution, 
     or if an amendment thereto is offered or a conference report 
     thereon is submitted, that establishes a program to 
     accelerate the research, development, and purchase of 
     biomedical threat countermeasures and--
       (1) such measure provides new budget authority to carry out 
     such program; or
       (2) such measure authorizes discretionary new budget 
     authority to carry out such program and the Committee on 
     Appropriations reports a bill or joint resolution that 
     provides new budget authority to carry out such program,

     the chairman of the Committee on the Budget may revise the 
     allocations for the committee providing such new budget 
     authority, and other appropriate levels in this resolution, 
     by the amount provided for that purpose, but, in the case of 
     a measure described in paragraph (1), not to exceed 
     $890,000,000 in new budget authority for fiscal year 2004 and 
     outlays flowing therefrom and $3,418,000,000 in new budget 
     authority for the period of fiscal years 2004 through 2008 
     and outlays flowing therefrom or, in the case of a measure 
     described in paragraph (2), not to exceed $890,000,000 in new 
     budget authority for fiscal year 2004 and outlays flowing 
     therefrom. Notwithstanding the preceding sentence, the total 
     such revision for fiscal year 2004 may not exceed 
     $890,000,000 in new budget authority and outlays flowing 
     therefrom.
       (b) In the Senate.--In the Senate, if the Committee on 
     Health, Education, Labor, and Pensions reports a bill or 
     joint resolution, or if an amendment thereto is offered or a 
     conference report thereon is submitted, that provides for the 
     Department of Homeland Security to procure countermeasures 
     necessary to protect the public health from current and 
     emerging threats of chemical, biological, radiological, or 
     nuclear agents for inclusion by the Secretary of Health and 
     Human Services in the Strategic National Stockpile, the 
     chairman of the Committee on the Budget may revise 
     appropriate budgetary aggregates and committee allocations of 
     new budget authority and outlays provided by that measure for 
     that purpose, but not to exceed $890,000,000 in new budget 
     authority and $575,000,000 in outlays for fiscal year 2004, 
     and $5,593,000,000 in new budget authority and $5,593,000,000 
     in outlays for the period of fiscal years 2004 through 2013.

     SEC. 405. RESERVE FUND FOR HEALTH INSURANCE FOR THE 
                   UNINSURED.

       If the committee of jurisdiction in the House or the 
     Committee on Finance of the Senate reports a bill or joint 
     resolution, or an amendment thereto is offered or a 
     conference report thereon is submitted, that provides health 
     insurance for the uninsured (including a measure providing 
     for tax deductions for the purchase of health insurance for, 
     among others, moderate income individuals not receiving 
     health insurance from their employers), the appropriate 
     chairman of the Committee on the Budget may revise 
     allocations of new budget authority and outlays, the revenue 
     aggregates, and other appropriate aggregates by the amount 
     provided by that measure for that purpose, but not to exceed 
     $28,457,000,000 for the period of fiscal years 2004 through 
     2008 and $49,965,000,000 for the period of fiscal years 2004 
     through 2013.

     SEC. 406. RESERVE FUND FOR CHILDREN WITH SPECIAL NEEDS.

       If the Committee on Energy and Commerce of the House or the 
     Committee on Finance of the Senate reports a bill or joint 
     resolution, or if an amendment thereto is offered or a 
     conference report thereon is submitted, that provides States 
     with the option to expand Medicaid coverage for children with 
     special needs, allowing families of disabled children to 
     purchase coverage under the Medicaid Program for such 
     children, the appropriate chairman of the Committee on the 
     Budget may revise committee allocations for that committee 
     and other appropriate budgetary aggregates and allocations of 
     new budget authority and outlays by the amount provided by 
     that measure for that purpose, but not to exceed $43,000,000 
     in new budget authority and $42,000,000 in outlays for fiscal 
     year 2004, $1,627,000,000 in new budget authority and 
     $1,566,000,000 in outlays for the period of fiscal years 2004 
     through 2008, and $7,462,000,000 in new budget authority and 
     $7,261,000,000 in outlays for the period of fiscal years 2004 
     through 2013.
                   Subtitle B--Contingency Procedure

     SEC. 411. CONTINGENCY PROCEDURE FOR SURFACE TRANSPORTATION.

       (a) In General.--If the Committee on Transportation and 
     Infrastructure of the House or the Committee on Environment 
     and Public Works, the Committee on Banking, Housing, and 
     Urban Affairs, or the Committee on Commerce, Science, and 
     Transportation of the Senate reports a bill or joint 
     resolution, or if an amendment thereto is offered or a 
     conference report thereon is submitted, that provides new 
     budget authority for the budget accounts or portions thereof 
     in the highway and transit categories as defined in sections 
     250(c)(4)(B) and (C) of the Balanced

[[Page H3200]]

     Budget and Emergency Deficit Control Act of 1985 in excess of 
     the following amounts:
       (1) for fiscal year 2004: $41,740,000,000,
       (2) for fiscal year 2005: $42,743,000,000,
       (3) for fiscal year 2006: $43,721,000,000,
       (4) for fiscal year 2007: $45,795,000,000,
       (5) for fiscal year 2008: $47,031,000,000, or
       (6) for fiscal year 2009: $47,818,000,000,

     the chairman of the appropriate Committee on the Budget may 
     adjust the appropriate budget aggregates and increase the 
     allocation of new budget authority to such committee for 
     fiscal year 2004 and for the period of fiscal years 2004 
     through 2008 to the extent such excess is offset by a 
     reduction in mandatory outlays from the Highway Trust Fund or 
     an increase in receipts appropriated to such fund for the 
     applicable fiscal year caused by such legislation or any 
     previously enacted legislation. In the Senate, any increase 
     in receipts must be reported from the Committee on Finance.
       (b) Adjustment for Outlays.--(1) For fiscal year 2004, in 
     the House and in the Senate, if a bill or joint resolution is 
     reported, or if an amendment thereto is offered or a 
     conference report thereon is submitted, that changes 
     obligation limitations such that the total limitations are in 
     excess of $39,684,000,000 for fiscal year 2004, for programs, 
     projects, and activities within the highway and transit 
     categories as defined in sections 250(c)(4)(B) and (C) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 and 
     if legislation has been enacted that satisfies the conditions 
     set forth in subsection (a) for such fiscal year, the 
     appropriate chairman of the Committee on the Budget may 
     increase the allocation of outlays and appropriate aggregates 
     for such fiscal year for the committee reporting such measure 
     by the amount of outlays that corresponds to such excess 
     obligation limitations, but not to exceed the amount of such 
     excess that was offset pursuant to subsection (a).
       (2) For fiscal year 2005, in the Senate, if a bill or joint 
     resolution is reported, or if an amendment thereto is offered 
     or a conference report thereon is submitted, that changes 
     obligation limitations such that the total limitations are in 
     excess of $40,788,000,000 for fiscal year 2005, for programs, 
     projects, and activities within the highway and transit 
     categories as defined in sections 250(c)(4)(B) and (C) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 and 
     if legislation has been enacted that satisfies the conditions 
     set forth in subsection (a) for such fiscal year, the 
     chairman of the Committee on the Budget may increase the 
     allocation of outlays and appropriate aggregates for such 
     fiscal year for the committee reporting such measure by the 
     amount of outlays that corresponds to such excess obligation 
     limitations, but not to exceed the amount of such excess that 
     was offset pursuant to subsection (a).
       (c) Statement of Intent.--It is the intent of Congress that 
     the increase in new budget authority and outlays above the 
     baseline assumed for highways and highway safety in section 
     103 of this resolution is derived from the resources 
     available to the Highway Trust Fund.
           Subtitle C--Adjustments to Fiscal Year 2003 Levels

     SEC. 421. SUPPLEMENTAL APPROPRIATIONS FOR FISCAL YEAR 2003.

       If legislation making supplemental appropriations for 
     fiscal year 2003 is enacted before May 1, 2003, the 
     appropriate chairman of the Committee on the Budget shall 
     make the appropriate adjustments in the appropriate 
     allocations and aggregates of new budget authority and 
     outlays to reflect the difference between such measure and 
     the corresponding levels assumed in this resolution.
                      TITLE V--BUDGET ENFORCEMENT

     SEC. 501. RESTRICTIONS ON ADVANCE APPROPRIATIONS.

       (a) In the House.--(1)(A) In the House, except as provided 
     in paragraph (2), an advance appropriation may not be 
     reported in a bill or joint resolution making a general 
     appropriation or continuing appropriation, and may not be in 
     order as an amendment thereto.
       (B) Managers on the part of the House may not agree to a 
     Senate amendment that would violate subparagraph (A) unless 
     specific authority to agree to the amendment first is given 
     by the House by a separate vote with respect thereto.
       (2) In the House, an advance appropriation may be provided 
     for fiscal year 2005 for programs, projects, activities or 
     accounts identified in the joint explanatory statement of 
     managers accompanying this resolution under the heading 
     ``Accounts Identified for Advance Appropriations, Part A'' in 
     an aggregate amount not to exceed $23,158,000,000 in new 
     budget authority, and an advance appropriation may be 
     provided for fiscal year 2006 for any program identified in 
     such statement under the heading ``Accounts Identified for 
     Advance Appropriations, Part B''.
       (3) In this subsection, the term ``advance appropriation'' 
     means any discretionary new budget authority in a bill or 
     joint resolution making general appropriations or continuing 
     appropriations for fiscal year 2004 that first becomes 
     available for any fiscal year after 2004.
       (b) In the Senate.--(1) Except as provided in paragraph 
     (2), it shall not be in order in the Senate to consider any 
     bill, joint resolution, motion, amendment, or conference 
     report that would provide an advance appropriation.
       (2) An advance appropriation may be provided for fiscal 
     years 2005 and 2006 for programs, projects, activities, or 
     accounts identified in the joint explanatory statement of 
     managers accompanying this resolution under the heading 
     ``Accounts Identified for Advance Appropriations'' in an 
     aggregate amount not to exceed $23,158,000,000 in new budget 
     authority in each year.
       (3)(A) In the Senate, paragraph (1) may be waived or 
     suspended only by an affirmative vote of three-fifths of the 
     Members, duly chosen and sworn. An affirmative vote of three-
     fifths of the Members of the Senate, duly chosen and sworn, 
     shall be required to sustain an appeal of the ruling of the 
     Chair on a point of order raised under paragraph (1).
       (B) A point of order under paragraph (1) may be raised by a 
     Senator as provided in section 313(e) of the Congressional 
     Budget Act of 1974.
       (C) If a point of order is sustained under paragraph (1) 
     against a conference report in the Senate, the report shall 
     be disposed of as provided in section 313(d) of the 
     Congressional Budget Act of 1974.
       (4) In this subsection, the term ``advance appropriation'' 
     means any discretionary new budget authority in a bill or 
     joint resolution making general appropriations or continuing 
     appropriations for fiscal year 2004 that first becomes 
     available for any fiscal year after 2004 or making general 
     appropriations or continuing appropriations for fiscal year 
     2005 that first becomes available for any fiscal year after 
     2005.

     SEC. 502. EMERGENCY LEGISLATION.

       (a) Purpose.--It is the purpose of this section, in the 
     absence of an extension of the discretionary spending limits 
     and PAYGO requirements under the Balanced Budget and 
     Emergency Deficit Control Act of 1985, to enable the Congress 
     to designate provisions of legislation as an emergency in 
     order to exempt such measures from enforcement of this 
     resolution with respect to the new budget authority, outlays, 
     and receipts resulting from such provisions.
       (b) In the House.--
       (1) Exemption of emergency provisions.--In the House, any 
     new budget authority, new entitlement authority, outlays, and 
     receipts resulting from any provision designated in that 
     provision as an emergency requirement, pursuant to this 
     section, in any bill, joint resolution, amendment, or 
     conference report shall not count for purposes of sections 
     302, 303, 311, and 401 of the Congressional Budget Act of 
     1974.
       (2) Designations.--
       (A) Guidance.--In the House, if a provision of legislation 
     is designated as an emergency requirement under this section, 
     the committee report and any statement of managers 
     accompanying that legislation shall include an explanation of 
     the manner in which the provision meets the criteria in 
     subparagraph (B). If such legislation is to be considered by 
     the House without being reported, then the committee shall 
     cause the explanation to be published in the Congressional 
     Record in advance of floor consideration.
       (B) Criteria.--
       (i) In general.--Any such provision is an emergency 
     requirement if the situation addressed by such provision is--

       (I) necessary, essential, or vital (not merely useful or 
     beneficial);

       (II) sudden, quickly coming into being, and not building up 
     over time;
       (III) an urgent, pressing, and compelling need requiring 
     immediate action;
       (IV) subject to clause (ii), unforeseen, unpredictable, and 
     unanticipated; and
       (V) not permanent, temporary in nature.
       (ii) Unforeseen.--An emergency that is part of an aggregate 
     level of anticipated emergencies, particularly when normally 
     estimated in advance, is not unforeseen.
       (c) In the Senate.--
       (1) Authority to designate.--In the Senate, with respect to 
     a provision of direct spending or receipts legislation or 
     appropriations for discretionary accounts that the President 
     designates as an emergency requirement and that the Congress 
     so designates in such measure, the amounts of new budget 
     authority, outlays, and receipts in all fiscal years 
     resulting from that provision shall be treated as an 
     emergency requirement for the purpose of this section.
       (2) Exemption of emergency provisions.--In the Senate, any 
     new budget authority, outlays, and receipts resulting from 
     any provision designated as an emergency requirement, 
     pursuant to this section, in any bill, joint resolution, 
     amendment, or conference report shall not count for purposes 
     of sections 302, 303, 311, and 401 of the Congressional 
     Budget Act of 1974 and sections 504 (relating to 
     discretionary spending limits in the Senate) and 505 
     (relating to the paygo requirement in the Senate) of this 
     resolution.
       (3) Designations.--
       (A) Guidance.--In the Senate, if a provision of legislation 
     is designated as an emergency requirement under this section, 
     the committee report and any statement of managers 
     accompanying that legislation shall include an explanation of 
     the manner in which the provision meets the criteria in 
     subparagraph (B).
       (B) Criteria.--
       (i) In general.--Any such provision is an emergency 
     requirement if the situation addressed by such provision is--
       (I) necessary, essential, or vital (not merely useful or 
     beneficial);
       (II) sudden, quickly coming into being, and not building up 
     over time;
       (III) an urgent, pressing, and compelling need requiring 
     immediate action;
       (IV) subject to clause (ii), unforeseen, unpredictable, and 
     unanticipated; and
       (V) not permanent, temporary in nature.
       (ii) Unforeseen.--An emergency that is part of an aggregate 
     level of anticipated emergencies, particularly when normally 
     estimated in advance, is not unforeseen.
       (4) Definitions.--In this subsection, the terms ``direct 
     spending'', ``receipts'', and ``appropriations for 
     discretionary accounts'' means any provision of a bill, joint 
     resolution, amendment, motion, or conference report that 
     affects direct spending, receipts, or appropriations as those 
     terms have been defined and interpreted for purposes of the 
     Balanced Budget and Emergency Deficit Control Act of 1985.
       (5) Point of order.--When the Senate is considering a bill, 
     resolution, amendment, motion,

[[Page H3201]]

     or conference report, if a point of order is made by a 
     Senator against an emergency designation in that measure, 
     that provision making such a designation shall be stricken 
     from the measure and may not be offered as an amendment from 
     the floor.
       (6) Waiver and appeal.--Paragraph (5) may be waived or 
     suspended in the Senate only by an affirmative vote of three-
     fifths of the Members, duly chosen and sworn. An affirmative 
     vote of three-fifths of the Members of the Senate, duly 
     chosen and sworn, shall be required to sustain an appeal of 
     the ruling of the Chair on a point of order raised under this 
     section.
       (7) Definition of an emergency designation.--For purposes 
     of paragraph (5), a provision shall be considered an 
     emergency designation if it designates any item as an 
     emergency requirement pursuant to this section.
       (8) Form of the point of order.--A point of order under 
     paragraph (5) may be raised by a Senator as provided in 
     section 313(e) of the Congressional Budget Act of 1974.
       (9) Conference reports.--If a point of order is sustained 
     under paragraph (5) against a conference report, the report 
     shall be disposed of as provided in section 313(d) of the 
     Congressional Budget Act of 1974.
       (10) Exception for defense spending.--Paragraph (5) shall 
     not apply against an emergency designation for a provision 
     making discretionary appropriations in the defense category.

     SEC. 503. EXTENSION OF SUPERMAJORITY ENFORCEMENT.

       (a) In General.--Notwithstanding any provision of the 
     Congressional Budget Act of 1974, subsections (c)(2) and 
     (d)(3) of section 904 of the Congressional Budget Act of 1974 
     shall remain in effect for purposes of Senate enforcement 
     through September 30, 2008.
       (b) Repeal.--Senate Resolution 304, agreed to October 16, 
     2002 (107th Congress), is repealed.

     SEC. 504. DISCRETIONARY SPENDING LIMITS IN THE SENATE.

       (a) Discretionary Spending Limits.--In the Senate and as 
     used in this section, the term ``discretionary spending 
     limit'' means--
       (1) for fiscal year 2003--
       (A) $839,118,000,000 in new budget authority and 
     $805,146,000,000 in outlays for the discretionary category;
       (B) for the highway category, $31,264,000,000 in outlays; 
     and
       (C) for the mass transit category, $1,436,000,000 in new 
     budget authority, and $6,551,000,000 in outlays;
       (2) for fiscal year 2004--
       (A) $782,999,000,000 in new budget authority and 
     $822,563,000,000 in outlays for the discretionary category;
       (B) for the highway category, $31,555,000,000 in outlays; 
     and
       (C) for the mass transit category, $1,461,000,000 in new 
     budget authority, and $6,634,000,000 in outlays; and
       (3) for fiscal year 2005--
       (A) $812,598,000,000 in new budget authority, and 
     $817,883,000,000 in outlays for the discretionary category;
       (B) for the highway category, $33,393,000,000 in outlays; 
     and
       (C) for the mass transit category $1,488,000,000 in new 
     budget authority, and $6,726,000,000 in outlays;
     as adjusted in conformance with subsection (c).
       (b) Discretionary Spending Point of Order in the Senate.--
       (1) In general.--Except as otherwise provided in this 
     subsection, it shall not be in order in the Senate to 
     consider any bill or resolution (or amendment, motion, or 
     conference report on that bill or resolution) that would 
     exceed any of the discretionary spending limits in this 
     section.
       (2) Waiver.--This subsection may be waived or suspended in 
     the Senate only by the affirmative vote of three-fifths of 
     the Members, duly chosen and sworn.
       (3) Appeals.--Appeals in the Senate from the decisions of 
     the Chair relating to any provision of this subsection shall 
     be limited to 1 hour, to be equally divided between, and 
     controlled by, the appellant and the manager of the bill or 
     joint resolution, as the case may be. An affirmative vote of 
     three-fifths of the Members of the Senate, duly chosen and 
     sworn, shall be required to sustain an appeal of the ruling 
     of the Chair on a point of order raised under this 
     subsection.
       (c) Adjustments.--
       (1) In general.--
       (A) Chairman.--After the reporting of a bill or joint 
     resolution, or the offering of an amendment thereto or the 
     submission of a conference report thereon, the chairman of 
     the Committee on the Budget may make the adjustments set 
     forth in subparagraph (B) for the amount of new budget 
     authority in that measure (if that measure meets the 
     requirements set forth in paragraph (2)) and the outlays 
     flowing from that budget authority.
       (B) Matters to be adjusted.--The adjustments referred to in 
     subparagraph (A) are to be made to--
       (i) the discretionary spending limits, if any, set forth in 
     the appropriate concurrent resolution on the budget;
       (ii) the allocations made pursuant to the appropriate 
     concurrent resolution on the budget pursuant to section 
     302(a) of the Congressional Budget Act of 1974; and
       (iii) the budgetary aggregates as set forth in the 
     appropriate concurrent resolution on the budget.
       (2) Amounts of adjustments.--The adjustment referred to in 
     paragraph (1) shall be--
       (A) an amount provided for transportation under section 
     411; and
       (B) an amount provided for the fiscal year 2003 
     supplemental appropriation pursuant to section 421.
       (3) Reporting revised suballocations.--Following any 
     adjustment made under paragraph (1), the Committee on 
     Appropriations of the Senate shall report appropriately 
     revised suballocations under section 302(b) to carry out this 
     subsection.

     SEC. 505. PAY-AS-YOU-GO POINT OF ORDER IN THE SENATE.

       (a) Point of Order.--
       (1) In general.--It shall not be in order in the Senate to 
     consider any direct spending or revenue legislation that 
     would increase the on-budget deficit or cause an on-budget 
     deficit for any one of the three applicable time periods as 
     measured in paragraphs (5) and (6).
       (2) Applicable time periods.--For purposes of this 
     subsection, the term ``applicable time period'' means any 1 
     of the 3 following periods:
       (A) The first year covered by the most recently adopted 
     concurrent resolution on the budget.
       (B) The period of the first 5 fiscal years covered by the 
     most recently adopted concurrent resolution on the budget.
       (C) The period of the 5 fiscal years following the first 5 
     fiscal years covered in the most recently adopted concurrent 
     resolution on the budget.
       (3) Direct-spending legislation.--For purposes of this 
     subsection and except as provided in paragraph (4), the term 
     ``direct-spending legislation'' means any bill, joint 
     resolution, amendment, motion, or conference report that 
     affects direct spending as that term is defined by, and 
     interpreted for purposes of, the Balanced Budget and 
     Emergency Deficit Control Act of 1985.
       (4) Exclusion.--For purposes of this subsection, the terms 
     ``direct-spending legislation'' and ``revenue legislation'' 
     do not include--
       (A) any concurrent resolution on the budget; or
       (B) any provision of legislation that affects the full 
     funding of, and continuation of, the deposit insurance 
     guarantee commitment in effect on the date of enactment of 
     the Budget Enforcement Act of 1990.
       (5) Baseline.--Estimates prepared pursuant to this section 
     shall--
       (A) use the baseline surplus or deficit used for the most 
     recently adopted concurrent resolution on the budget as 
     adjusted for any changes in revenues or direct spending 
     assumed by such resolution; and
       (B) be calculated under the requirements of subsections (b) 
     through (d) of section 257 of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 for fiscal years beyond 
     those covered by that concurrent resolution on the budget.
       (6) Prior surplus.--If direct spending or revenue 
     legislation increases the on-budget deficit or causes an on-
     budget deficit when taken individually, it must also increase 
     the on-budget deficit or cause an on-budget deficit when 
     taken together with all direct spending and revenue 
     legislation enacted since the beginning of the calendar year 
     not accounted for in the baseline under paragraph (5)(A), 
     except that direct spending or revenue effects resulting in 
     net deficit reduction enacted pursuant to reconciliation 
     instructions since the beginning of that same calendar year 
     shall not be available.
       (b) Waiver.--This section may be waived or suspended in the 
     Senate only by the affirmative vote of three-fifths of the 
     Members, duly chosen and sworn.
       (c) Appeals.--Appeals in the Senate from the decisions of 
     the Chair relating to any provision of this section shall be 
     limited to 1 hour, to be equally divided between, and 
     controlled by, the appellant and the manager of the bill or 
     joint resolution, as the case may be. An affirmative vote of 
     three-fifths of the Members of the Senate, duly chosen and 
     sworn, shall be required to sustain an appeal of the ruling 
     of the Chair on a point of order raised under this section.
       (d) Determination of Budget Levels.--For purposes of this 
     section, the levels of new budget authority, outlays, and 
     revenues for a fiscal year shall be determined on the basis 
     of estimates made by the Committee on the Budget of the 
     Senate.
       (e) Sunset.--This section shall expire on September 30, 
     2008.

     SEC. 506. COMPLIANCE WITH SECTION 13301 OF THE BUDGET 
                   ENFORCEMENT ACT OF 1990.

       (a) In General.--In the House, notwithstanding section 
     302(a)(1) of the Congressional Budget Act of 1974 and section 
     13301 of the Budget Enforcement Act of 1990, the joint 
     explanatory statement accompanying the conference report on 
     any concurrent resolution on the budget shall include in 
     its allocation under section 302(a) of the Congressional 
     Budget Act of 1974 to the Committee on Appropriations 
     amounts for the discretionary administrative expenses of 
     the Social Security Administration.
       (b) Special Rule.--In the House, except as provided by 
     section 401(a), for purposes of applying section 302(f) of 
     the Congressional Budget Act of 1974, estimates of the level 
     of total new budget authority and total outlays provided by a 
     measure shall include any discretionary amounts provided for 
     the Social Security Administration.

     SEC. 507. APPLICATION AND EFFECT OF CHANGES IN ALLOCATIONS 
                   AND AGGREGATES.

       (a) Application.--Any adjustments of allocations and 
     aggregates made pursuant to this resolution shall--
       (1) apply while that measure is under consideration;
       (2) take effect upon the enactment of that measure; and
       (3) be published in the Congressional Record as soon as 
     practicable.
       (b) Effect of Changed Allocations and Aggregates.--Revised 
     allocations and aggregates resulting from these adjustments 
     shall be considered for the purposes of the Congressional 
     Budget Act of 1974 as allocations and aggregates contained in 
     this resolution.
       (c) Budget Committee Determinations.--For purposes of this 
     resolution--

[[Page H3202]]

       (1) the levels of new budget authority, outlays, direct 
     spending, new entitlement authority, revenues, deficits, and 
     surpluses for a fiscal year or period of fiscal years shall 
     be determined on the basis of estimates made by the 
     appropriate Committee on the Budget; and
       (2) such chairman may make any other necessary adjustments 
     to such levels to carry out this resolution.
       (d) Enforcement in the House.--In the House, for the 
     purpose of enforcing this concurrent resolution, sections 
     302(f) and 311(a) of the Congressional Budget Act of 1974 
     shall apply to fiscal year 2004 and the total for fiscal year 
     2004 and the four ensuing fiscal years.

     SEC. 508. ADJUSTMENTS TO REFLECT CHANGES IN CONCEPTS AND 
                   DEFINITIONS.

       In the House or in the Senate, upon the enactment of a bill 
     or joint resolution providing for a change in concepts or 
     definitions, the appropriate chairman of the Committee on the 
     Budget shall make adjustments to the levels and allocations 
     in this resolution in accordance with section 251(b) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985 (as 
     in effect prior to September 30, 2002).
                     TITLE VI--SENSE OF THE SENATE

     SEC. 601. SENSE OF THE SENATE ON FEDERAL EMPLOYEE PAY.

       It is the sense of the Senate that rates of compensation 
     for civilian employees of the United States should be 
     adjusted at the same time, and in the same proportion, as are 
     rates of compensation for members of the uniformed services.

     SEC. 602. SENSE OF THE SENATE REGARDING PELL GRANTS.

       It is the sense of the Senate that the levels in this 
     resolution assume that within the discretionary allocation 
     provided to the Committee on Appropriations the maximum Pell 
     Grant award should be raised to the maximum extent 
     practicable.

     SEC. 603. SENSE OF THE SENATE ON EMERGENCY AND DISASTER 
                   ASSISTANCE FOR LIVESTOCK AND AGRICULTURE 
                   PRODUCERS.

       It is the sense of the Senate that the Senate develop a 
     long-term drought plan that effectively recognizes the 
     recurring nature of drought cycles and adequately supports 
     emergency and disaster assistance to livestock and 
     agricultural producers hurt by drought and that the Senate 
     establish an agricultural reserve to fund these activities.

     SEC. 604. SOCIAL SECURITY RESTRUCTURING.

       It is the sense of the Senate that--
       (1) the President, the Congress and the American people 
     (including seniors, workers, women, minorities, and disabled 
     persons) should work together at the earliest opportunity to 
     enact legislation to achieve a solvent and permanently 
     sustainable Social Security system; and
       (2) Social Security reform must--
       (A) protect current and near retirees from any changes to 
     Social Security benefits;
       (B) reduce the pressure on future taxpayers and on other 
     budgetary priorities;
       (C) provide benefit levels that adequately reflect 
     individual contributions to the Social Security System; and
       (D) preserve and strengthen the safety net for vulnerable 
     populations, including the disabled and survivors.

     SEC. 605. SENSE OF THE SENATE CONCERNING STATE FISCAL RELIEF.

       It is the Sense of the Senate that the functional totals in 
     this resolution assume that any legislation enacted to 
     provide economic growth for the United States should include 
     not less than $30,000,000,000 for State fiscal relief over 
     the next 18 months (of which at least half should be provided 
     through a temporary increase in the Federal medical 
     assistance percentage (FMAP)).

     SEC. 606. FEDERAL AGENCY REVIEW COMMISSION.

       It is the sense of the Senate that a commission should be 
     established to review Federal domestic agencies, and programs 
     within such agencies, with the express purpose of providing 
     Congress with recommendations, and legislation to implement 
     those recommendations, to realign or eliminate government 
     agencies and programs that are duplicative, wasteful, 
     inefficient, outdated, or irrelevant, or have failed to 
     accomplish their intended purpose.

     SEC. 607. SENSE OF THE SENATE REGARDING HIGHWAY SPENDING.

       (a) Findings.--The Senate makes the following findings:
       (1) Highway construction funding should increase over 
     current levels.
       (2) The Senate Budget Committee-passed budget resolution 
     increases highway funding above the President's request.
       (3) All vehicles, whether they are operated by gasoline, 
     gasohol, or electricity, do damage to our highways.
       (4) As set out in TEA-21, the direct relationship between 
     excise taxes and highway spending makes sense and should be 
     maintained.
       (5) Highways should be funded through user fees such as 
     excise taxes and not through the General Fund of the 
     Treasury.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that the Senate should only consider legislation that 
     increases highway spending if such legislation changes 
     highway user fees to pay for such increased spending.

     SEC. 608. SENSE OF THE SENATE ON REPORTS ON LIABILITIES AND 
                   FUTURE COSTS.

       It is the sense of the Senate that the Congressional Budget 
     Office shall consult with the Committee on the Budget of the 
     Senate in order to prepare a report containing--
       (1) an estimate of the unfunded liabilities of the Federal 
     Government;
       (2) an estimate of the contingent liabilities of Federal 
     programs; and
       (3) an accrual-based estimate of the current and future 
     costs of Federal programs.

     SEC. 609. SENSE OF THE SENATE CONCERNING AN EXPANSION IN 
                   HEALTH CARE COVERAGE.

       It is the sense of the Senate that the functional totals in 
     this resolution assume that--
       (1) expanded access to health care coverage throughout the 
     United States is a top priority for national policymaking; 
     and
       (2) to the extent that additional funds are made available, 
     a significant portion of such funds should be dedicated to 
     expanding access to health care coverage so that fewer 
     individuals are uninsured and fewer individuals are likely to 
     become uninsured.

     SEC. 610. SENSE OF THE SENATE CONCERNING PROGRAMS OF THE 
                   CORPS OF ENGINEERS.

       It is the sense of the Senate that the Corps of Engineers 
     requires additional funding to perform its vital functions 
     and the budgetary totals in this resolution assume that the 
     level of funding provided for programs of the Corps will not 
     be reduced below current baseline spending levels.

     SEC. 611. SENSE OF THE SENATE CONCERNING NATIVE AMERICAN 
                   HEALTH.

       It is the sense of the Senate that Congress has recognized 
     the importance of Native American health. In 1997, Congress 
     enacted a program to spend $30,000,000 a year on research and 
     treatment on diabetes in the Native American community. This 
     amount was increased to $100,000,000 a year in 2000 and 
     further increased to $150,000,000 a year in 2002. This is a 
     500 percent increase since 1997. This priority focuses on 
     prevention and treatment for a major disease in the Native 
     American community.

     SEC. 612. SENSE OF THE SENATE ON PROVIDING TAX AND OTHER 
                   INCENTIVES TO REVITALIZE RURAL AMERICA.

       It is the sense of the Senate that if tax relief measures 
     are enacted in accordance with the assumptions in the budget 
     resolution in this session of Congress, such legislation 
     should include incentives to help rural communities attract 
     individuals to live and work and start and grow a business in 
     those communities.

     SEC. 613. SENSE OF THE SENATE CONCERNING CHILDREN'S GRADUATE 
                   MEDICAL EDUCATION.

       It is the sense of the Senate that, for fiscal year 2004, 
     children's graduate medical education should be funded at 
     $305,000,000.

     SEC. 614. SENSE OF THE SENATE ON FUNDING FOR CRIMINAL 
                   JUSTICE.

       It is the sense of the Senate that the funding levels in 
     this resolution assume that the programs authorized under the 
     Crime Identification Technology Act of 1998 to improve the 
     justice system will be fully funded at the levels authorized 
     for each of the fiscal years 2004 through 2007.

     SEC. 615. SENSE OF THE SENATE CONCERNING FUNDING FOR DRUG 
                   TREATMENT PROGRAMS.

       It is the sense of the Senate that the functional totals in 
     this resolution assume that up to $20,000,000 from funds 
     designated, but not obligated, for travel and administrative 
     expenses, from drug interdiction activities should be used 
     for service-oriented targeted grants for the utilization of 
     substances that block the craving for heroin and that are 
     newly approved for such use by the Food and Drug 
     Administration.

     SEC. 616. SENSE OF SENATE CONCERNING FREE TRADE AGREEMENT 
                   WITH THE UNITED KINGDOM.

       It is the sense of the Senate that the President should 
     negotiate a free trade agreement with the United Kingdom.
       And the Senate agree to the same.

     Jim Nussle,
     Christopher Shays,
                                Managers on the Part of the House.

     Don Nickles,
     Pete V. Domenici,
     Chuck Grassley,
     Judd Gregg,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     conference on disagreeing votes of the two Houses on the 
     amendment of the Senate to the concurrent resolution (H. Con. 
     Res. 95), establishing the congressional budget for the 
     United States Government for fiscal year 2004 and setting 
     forth appropriate budgetary levels for fiscal years 2003 
     through 2005 through 2013, submit the following joint 
     statement to the House and the Senate in explanation of the 
     effect of the action agreed upon by the managers and 
     recommended in the accompanying conference report:
       The Senate amendment struck all out of the House bill after 
     the enacting clause and inserted a substitute text.
       The House recedes from its disagreement to the amendment of 
     the Senate with an amendment that is a substitute for the 
     House bill and the Senate amendment. The differences between 
     the House bill, the Senate amendment, and the substitute 
     agreed to in conference are noted below, except for clerical 
     corrections, conforming changes made necessary by agreements 
     reached by the conferees, and minor drafting and clarifying 
     changes.

                          DISPLAYS AND AMOUNTS

       The contents of concurrent budget resolutions are set forth 
     in section 301(a) of the Congressional Budget Act of 1974. 
     The years in this document are fiscal years unless otherwise 
     indicated.
     House Resolution
       The House budget resolution includes all of the items 
     required as part of a concurrent budget resolution under 
     section 301(a) of the

[[Page H3203]]

     Congressional Budget Act other than the spending and revenue 
     levels for Social Security (which is used to enforce a point 
     of order applicable only in the Senate).
     Senate Amendment
       The Senate amendment includes all of the items required 
     under section 301(a) of the Congressional Budget Act. As 
     permitted under section 301(b) of the Congressional Budget 
     Act, Section 101(6) of the Senate amendment includes advisory 
     levels on debt held by the public.
     Conference Agreement
       The Conference Agreement includes all of the items required 
     by section 301(a) of the Congressional Budget Act.

                     AGGREGATE AND FUNCTION LEVELS

       The following tables are included in this section:

     Conference Report on the Fiscal Year 2004 Budget Resolution: 
         Total Spending and Revenues
     Conference Report on the Fiscal Year 2004 Budget Resolution: 
         Discretionary Spending
     Conference Report on the Fiscal Year 2004 Budget Resolution: 
         Mandatory Spending
     House-Passed Fiscal Year 2004 Budget Resolution: Total 
         Spending and Revenues
     House-Passed Fiscal Year 2004 Budget Resolution: 
         Discretionary Spending
     House Passed Fiscal Year 2004 Budget Resolution: Mandatory 
         Spending
     Senate-Passed Fiscal Year 2004 Amendment: Aggregate and 
         Function Levels

                                                    CONFERENCE REPORT ON THE FISCAL YEAR 2004 BUDGET RESOLUTION: TOTAL SPENDING AND REVENUES
                                                                                      [Dollars in billions]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
           Fiscal Year               2003        2004        2005        2006        2007        2008        2009        2010        2011        2012        2013        2004-08       2004-13
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             SUMMARY
Total Spending:
  BA............................   2,231.122   2,247.860   2,387.012   2,529.740   2,652.819   2,782.789   2,905.038   3,024.490   3,156.932   3,264.724   3,412.316    12,600.220    28,363.720
  OT............................   2,181.910   2,268.230   2,375.351   2,493.643   2,607.179   2,737.405   2,866.279   2,992.306   3,133.830   3,229.310   3,386.854    12,481.808    28,090.387
On-Budget:
  BA............................   1,862.613   1,861.004   1,990.236   2,122.301   2,232.829   2,348.872   2,454.439   2,555.612   2,669.462   2,754.007   2,875.121    10,555.242    23,863.883
  OT............................   1,815.395   1,883.834   1,981.402   2,089.299   2,190.576   2,307.259   2,419.846   2,527.898   2,651.220   2,723.935   2,855.491    10,452.370    23,630.760
Off-Budget:
  BA............................     368.509     386.856     396.776     407.439     419.990     433.917     450.599     468.878     487.470     510.717     537.195     2,044.978     4,499.837
  OT............................     366.515     384.396     393.949     404.344     416.603     430.146     446.433     464.408     482.610     505.375     531.363     2,029.438     4,459.627
Revenues
  Total.........................   1,834.718   1,883.273   2,081.650   2,276.573   2,441.399   2,586.273   2,772.894   2,923.691   3,062.692   3,239.140   3,423.675    11,269.168    26,691.260
  On-budget.....................   1,303.111   1,325.452   1,493.875   1,657.511   1,790.251   1,901.844   2,053.762   2,167.937   2,270.540   2,409.572   2,553.985     8,168.933    19,624.729
  Off-budget....................     531.607     557.821     587.775     619.062     651.148     684.429     719.132     755.754     792.152     829.568     869.690     3,100.235     7,066.531
Surplus/Deficit (-):
  Total.........................    -347.192    -384.957    -293.701    -217.070    -165.780    -151.132     -93.385     -68.615     -71.138       9.830      36.821    -1,212.640    -1,399.127
  On-budget.....................    -512.284    -558.382    -487.527    -431.788    -400.325    -405.415    -366.084    -359.961    -380.680    -314.363    -301.506    -2,283.437    -4,006.031
  Off-budget....................     165.092     173.425     193.826     214.718     234.545     254.283     272.699     291.346     309.542     324.193     338.327     1,070.797     2,606.904
Debt Held by the Public (end of        3,917       4,299       4,599       4,829       5,007       5,169       5,272       5,349       5,428       5,424       5,394            na            na
 year)..........................
Debt Subject to Limit (end of          6,747       7,384       7,978       8,534       9,064       9,602      10,102      10,601      11,125      11,588      12,040            na            na
 year)..........................
 
                                                                                           BY FUNCTION
National Defense (050):
  BA............................     392.494     400.546     420.071     440.185     460.435     480.886     491.951     502.301     511.859     520.553     529.428     2,202.123     4,758.215
  OT............................     386.229     400.916     414.237     426.011     438.656     462.861     479.249     493.195     508.131     510.509     524.494     2,142.681     4,658.259
International Affairs (150):
  BA............................      22.506      25.681      29.734      32.308      33.603      34.611      35.413      36.258      37.136      38.005      38.885       155.937       341.634
  OT............................      19.283      24.207      24.917      26.539      28.464      29.604      30.733      31.689      32.565      33.408      34.298       133.731       296.424
General Science, Space, and Technology (250):
  BA............................      23.153      23.927      24.433      25.217      26.055      26.832      27.462      28.121      28.805      29.492      30.185       126.464       270.529
  OT............................      21.556      22.799      23.861      24.485      25.221      25.948      26.639      27.296      27.963      28.639      29.319       122.314       262.170
Energy (270):
  BA............................       2.074       2.634       2.797       2.714       2.540       3.080       3.090       3.194       3.296       3.408       3.520        13.765        30.273
  OT............................       0.439       0.873       0.947       1.272       1.069       1.419       1.686       1.794       1.976       2.357       2.326         5.580        15.719
Natural Resources and Environment (300):
  BA............................      30.816      31.623      32.504      32.962      33.386      34.064      35.183      36.021      36.829      37.529      38.214       164.539       348.315
  OT............................      28.940      30.782      31.654      32.830      33.127      33.527      34.544      35.360      36.163      36.836      37.600       161.920       342.423
Agriculture (350):
  BA............................      24.418      24.583      27.003      26.828      26.299      25.507      26.092      25.545      24.991      24.573      24.297       130.220       255.718
  OT............................      23.365      23.656      25.763      25.593      25.107      24.381      25.128      24.716      24.180      23.778      23.498       124.500       245.800
Commerce and Housing Credit (370):
  BA............................       5.212       7.316       8.243       5.802       5.455       5.211       4.751       4.278       3.871       3.716       3.369        32.027        52.012
  OT............................       2.281       3.374       3.550       0.638      -0.520      -1.289      -1.756      -2.591      -3.581      -4.131      -4.438         5.753       -10.744
On-budget:
  BA............................       8.812       7.516       8.743       8.280       8.626       8.743       8.526       8.407       8.386       8.489       8.563        41.908        84.279
  OT............................       5.881       3.574       4.050       3.116       2.651       2.243       2.019       1.538       0.934       0.642       0.756        15.634        21.523
Off-budget:
  BA............................      -3.600      -0.200      -0.500      -2.478      -3.171      -3.532      -3.775      -4.129      -4.515      -4.773      -5.194        -9.881       -32.267
  OT............................      -3.600      -0.200      -0.500      -2.478      -3.171      -3.532      -3.775      -4.129      -4.515      -4.773      -5.194        -9.881       -32.267
Transportation (400):
  BA............................      64.091      69.506      70.489      72.496      75.278      76.927      78.878      77.747      78.624      79.527      80.466       364.696       759.938
  OT............................      67.847      69.869      69.442      70.191      71.786      73.659      75.632      77.233      78.291      79.317      80.346       354.947       745.766
Community and Regional Development (450):
  BA............................      12.251      14.063      14.138      14.321      14.536      14.745      14.980      15.233      15.492      15.755      16.023        71.803       149.286
  OT............................      15.994      15.823      15.872      14.961      14.664      14.123      14.298      14.501      14.750      14.992      15.259        75.443       149.243
Education, Training, Employment and Social Services (500):
  BA............................      82.699      90.035      91.442      93.428      95.569      97.925      99.813     101.551     103.529     105.790     107.265       468.399       986.347
  OT............................      81.455      84.205      87.020      90.541      92.986      95.118      97.440      99.289     101.117     102.985     104.934       449.870       955.635
Health (550):
  BA............................     222.913     240.554     259.701     279.236     299.614     322.061     345.548     370.626     396.818     415.790     445.484     1,401.166     3,375.432
  OT............................     217.881     238.785     259.403     279.024     298.681     320.731     344.059     369.097     395.280     414.384     444.082     1,396.624     3,363.526
Medicare (570):
  BA............................     248.586     266.018     282.682     321.623     343.717     369.244     395.368     423.288     453.285     485.951     526.553     1,583.284     3,867.729
  OT............................     248.434     266.283     285.630     318.384     343.987     369.119     395.107     423.546     456.642     482.125     526.809     1,583.403     3,867.632
Income Security (600):
  BA............................     326.390     319.518     333.821     341.816     349.199     361.697     373.372     384.844     400.266     403.738     418.672     1,706.051     3,686.943
  OT............................     334.177     324.840     337.123     344.292     350.945     362.808     374.083     385.347     400.688     404.146     419.245     1,720.008     3,703.517
Social Security (650):
  BA............................     478.882     501.140     521.499     546.735     575.008     606.071     641.105     679.322     720.505     766.154     816.195     2,750.453     6,373.734
  OT............................     476.888     498.679     518.672     543.640     571.621     602.300     636.939     674.852     715.645     760.812     810.363     2,734.912     6,333.523
On-budget:
  BA............................      13.255      14.294      15.471      16.421      17.919      19.704      21.810      24.283      28.170      31.357      34.347        83.809       223.776
  OT............................      13.255      14.293      15.471      16.421      17.919      19.704      21.810      24.283      28.170      31.357      34.347        83.808       223.775
Off-budget:
  BA............................     465.627     486.846     506.028     530.314     557.089     586.367     619.295     655.039     692.335     734.797     781.848     2,666.644     6,149.958
  OT............................     463.633     484.386     503.201     527.219     553.702     582.596     615.129     650.569     687.475     729.455     776.016     2,651.104     6,109.748
Veterans Benefits and Services (700):
  BA............................      57.597      63.779      67.135      65.397      63.874      67.666      69.279      70.992      75.669      72.618      77.455       327.851       693.864
  OT............................      57.486      63.209      66.553      64.995      63.442      67.398      68.924      70.588      75.249      72.097      76.989       325.597       689.444
Administration of Justice (750):
  BA............................      38.543      37.626      37.946      37.984      38.461      39.477      40.497      41.599      42.889      44.207      45.576       191.494       406.262
  OT............................      37.712      40.788      39.193      38.329      38.252      39.128      40.212      41.299      42.472      43.760      45.120       195.690       408.553
General Government (800):
  BA............................      18.185      20.202      20.635      20.656      21.126      21.236      21.946      22.695      23.458      24.255      25.076       103.855       221.285
  OT............................      18.110      20.066      20.714      20.485      20.876      21.013      21.504      22.212      22.946      23.880      24.520       103.154       218.216
Net Interest (900):
  BA............................     156.067     169.656     212.681     243.313     258.818     269.793     278.541     283.448     288.931     293.336     292.764     1,154.261     2,591.281
  OT............................     156.067     169.656     212.681     243.313     258.818     269.793     278.541     283.448     288.931     293.336     292.764     1,154.261     2,591.281
On-budget:
  BA............................     240.176     259.414     310.630     352.219     380.574     405.647     429.542     450.651     473.381     496.015     514.513     1,708.484     4,072.586
  OT............................     240.176     259.414     310.630     352.219     380.574     405.647     429.542     450.651     473.381     496.015     514.513     1,708.484     4,072.586
Off-budget:
  BA............................     -84.109     -89.758     -97.949    -108.906    -121.756    -135.854    -151.001    -167.203    -184.450    -202.679    -221.749      -554.223    -1,481.305

[[Page H3204]]

 
  OT............................     -84.109     -89.758     -97.949    -108.906    -121.756    -135.854    -151.001    -167.203    -184.450    -202.679    -221.749      -554.223    -1,481.305
Allowances (920):
  BA............................      74.758      -7.621      -6.541      -7.331      -8.947      -9.959     -11.526     -12.888     -16.414     -21.460     -25.618       -40.399      -128.305
  OT............................      38.279      22.346       1.520      -5.930      -8.796      -9.951      -9.978     -10.880     -12.671     -15.707     -19.181        -0.811       -69.228
Undistributed Offsetting Receipts (950):
  BA............................     -50.513     -52.926     -63.401     -65.950     -61.207     -64.285     -66.705     -69.685     -72.907     -78.213     -81.493      -307.769      -676.772
  OT............................     -50.513     -52.926     -63.401     -65.950     -61.207     -64.285     -66.705     -69.685     -72.907     -78.213     -81.493      -307.769      -676.772
On-budget:
  BA............................     -41.104     -42.894     -52.598     -54.459     -49.035     -51.221     -52.785     -54.856     -57.007     -61.585     -63.783      -250.207      -540.223
  OT............................     -41.104     -42.894     -52.598     -54.459     -49.035     -51.221     -52.785     -54.856     -57.007     -61.585     -63.783      -250.207      -540.223
Off-budget:
  BA............................      -9.409     -10.032     -10.803     -11.491     -12.172     -13.064     -13.920     -14.829     -15.900     -16.628     -17.710       -57.562      -136.549
  OT............................      -9.409     -10.032     -10.803     -11.491     -12.172     -13.064     -13.920     -14.829     -15.900     -16.628     -17.710       -57.562      -136.549
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                                                       CONFERENCE REPORT ON THE FISCAL YEAR 2004 BUDGET RESOLUTION: DISCRETIONARY SPENDING
                                                                                      [Dollars in billions]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
           Fiscal Year               2003        2004        2005        2006        2007        2008        2009        2010        2011        2012        2013        2004-08       2004-13
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             SUMMARY
Total Spending:
  BA............................     840.554     784.460     814.086     842.470     872.461     903.983     924.775     944.195     962.135     978.491     995.126     4,217.460     9,022.182
  OT............................     842.961     860.752     858.003     870.434     892.160     926.475     955.305     980.114   1,004.818   1,016.239   1,038.931     4,407.824     9,403.231
Defense:
  BA............................     392.137     400.058     419.437     439.507     459.729     480.129     491.172     501.487     511.015     519.702     528.537     2,198.860     4,750.773
  OT............................     386.373     400.561     413.682     425.379     437.995     462.157     478.522     492.435     507.345     509.721     523.668     2,139.774     4,651.465
Nondefense:
  BA............................     448.417     384.402     394.649     402.963     412.732     423.854     433.603     442.708     451.120     458.789     466.589     2,018.600     4,271.409
  OT............................     456.588     460.191     444.321     445.055     454.165     464.318     476.783     487.679     497.473     506.518     515.263     2,268.050     4,751.766
 
                                                                                           BY FUNCTION
National Defense (050):
  BA............................     392.137     400.058     419.437     439.507     459.729     480.129     491.172     501.487     511.015     519.702     528.537     2,198.860     4,750.773
  OT............................     386.373     400.561     413.682     425.379     437.995     462.157     478.522     492.435     507.345     509.721     523.668     2,139.774     4,651.465
International Affairs (150):
  BA............................      25.407      28.651      30.034      31.579      32.854      33.845      34.630      35.459      36.322      37.176      38.037       156.963       338.587
  OT............................      26.000      26.775      27.522      29.195      31.084      32.119      33.225      34.179      35.072      35.935      36.778       146.695       321.884
General Science, Space, and Technology (250):
  BA............................      23.047      23.897      24.402      25.186      26.023      26.799      27.429      28.087      28.770      29.456      30.149       126.307       270.198
  OT............................      21.457      22.701      23.766      24.421      25.176      25.915      26.607      27.263      27.929      28.605      29.284       121.979       261.667
Energy (270):
  BA............................       3.237       3.672       3.975       3.914       3.902       4.858       4.975       5.096       5.227       5.357       5.489        20.321        46.465
  OT............................       3.151       3.577       3.869       3.971       3.901       4.647       4.911       5.031       5.157       5.286       5.415        19.965        45.765
Natural Resources and Environment (300):
  BA............................      29.238      29.327      29.802      30.097      30.583      31.319      31.998      32.705      33.448      34.196      34.970       151.128       318.445
  OT............................      27.857      29.014      29.554      29.983      30.464      30.965      31.542      32.199      32.899      33.595      34.342       149.980       314.557
Agriculture (350):
  BA............................       5.727       5.243       5.609       5.734       5.876       6.037       6.208       6.386       6.575       6.767       6.962        28.499        61.397
  OT............................       5.852       5.589       5.533       5.613       5.758       5.958       6.128       6.303       6.487       6.679       6.871        28.451        60.919
Commerce and Housing Credit (370):
  BA............................       0.150      -0.496      -0.269      -0.554       0.534       0.878       0.767       0.661       0.534       0.625       0.574         0.093         3.254
  OT............................       0.054       0.092      -0.393      -0.650       0.449       0.686       0.633       0.549       0.414       0.502       0.450         0.184         2.732
On-budget:
  BA............................       0.150      -0.496      -0.269      -0.554       0.534       0.878       0.767       0.661       0.534       0.625       0.574         0.093         3.254
  OT............................       0.054       0.092      -0.393      -0.650       0.449       0.686       0.633       0.549       0.414       0.502       0.450         0.184         2.732
Off-budget:
  BA............................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ............  ............
  OT............................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ............  ............
Transportation (400):
  BA............................      22.611      23.205      23.134      24.192      24.882      25.276      26.393      26.221      27.040      27.875      28.739       120.689       256.957
  OT............................      65.184      67.608      67.257      68.142      69.802      71.732      73.676      75.266      76.289      77.269      78.245       344.541       725.286
Community and Regional Development (450):
  BA............................      11.725      13.826      13.999      14.188      14.401      14.688      14.921      15.168      15.425      15.686      15.950        71.102       148.252
  OT............................      16.054      15.912      15.992      15.124      14.884      14.390      14.602      14.835      15.079      15.313      15.569        76.302       151.700
Education, Training, Employment and Social Services (500):
  BA............................      72.875      80.507      81.005      82.245      84.023      86.086      87.707      89.283      90.924      92.938      94.086       413.866       868.804
  OT............................      71.958      75.206      77.152      80.039      82.172      83.975      86.043      87.652      89.250      90.886      92.523       398.544       844.898
Health (550):
  BA............................      49.468      49.620      50.667      51.800      52.950      54.299      55.607      56.972      58.387      59.806      61.246       259.336       551.354
  OT............................      44.349      47.742      49.376      50.414      51.631      52.576      53.801      55.102      56.460      57.851      59.252       251.739       534.205
Medicare (570):
  BA............................       3.798       3.739       3.807       3.906       4.014       4.138       4.353       4.572       4.809       5.089       5.396        19.604        43.823
  OT............................       3.797       3.726       3.811       3.897       3.992       4.113       4.309       4.524       4.757       5.027       5.327        19.539        43.483
Income Security (600):
  BA............................      44.020      45.712      48.760      50.311      52.004      53.714      55.441      57.295      59.143      61.023      62.884       250.501       546.287
  OT............................      50.781      51.544      52.373      53.424      54.643      56.116      57.505      58.954      60.560      62.215      63.908       268.100       571.242
Social Security (650):
  BA............................       3.833       4.282       4.363       4.450       4.549       4.665       4.820       4.983       5.151       5.323       5.503        22.309        48.089
  OT............................       3.859       4.231       4.326       4.435       4.532       4.644       4.794       4.953       5.121       5.291       5.471        22.168        47.798
On-budget:
  BA............................       0.021       0.025       0.025       0.026       0.027       0.027       0.028       0.029       0.030       0.031       0.032         0.130         0.280
  OT............................       0.021       0.024       0.025       0.026       0.027       0.027       0.028       0.029       0.030       0.031       0.032         0.129         0.279
Off-budget:
  BA............................       3.812       4.257       4.338       4.424       4.522       4.638       4.792       4.954       5.121       5.292       5.471        22.179        47.809
  OT............................       3.838       4.207       4.301       4.409       4.505       4.617       4.766       4.924       5.091       5.260       5.439        22.039        47.519
Veterans Benefits and Services (700):
  BA............................      26.532      29.957      28.386      28.812      29.272      29.838      30.796      31.789      32.824      33.887      35.000       146.265       310.561
  OT............................      26.902      29.600      28.183      28.495      29.024      29.662      30.530      31.497      32.521      33.576      34.663       144.964       307.751
Administration of Justice (750):
  BA............................      36.289      33.529      35.762      36.664      37.621      38.694      39.771      40.931      42.288      43.674      45.117       182.270       394.051
  OT............................      35.484      37.495      36.611      36.824      37.483      38.455      39.596      40.741      41.977      43.331      44.764       186.868       397.277
General Government (800):
  BA............................      15.702      17.352      17.754      17.770      18.191      18.679      19.313      19.988      20.667      21.371      22.105        89.746       193.190
  OT............................      15.570      17.033      17.869      17.658      17.966      18.316      18.859      19.511      20.172      20.864      21.582        88.842       189.830
Allowances (920):
  BA............................      74.758      -7.621      -6.541      -7.331      -8.947      -9.959     -11.526     -12.888     -16.414     -21.460     -25.618       -40.399      -128.305
  OT............................      38.279      22.346       1.520      -5.930      -8.796      -9.951      -9.978     -10.880     -12.671     -15.707     -19.181        -0.811       -69.228
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                                                         CONFERENCE REPORT ON THE FISCAL YEAR 2004 BUDGET RESOLUTION: MANDATORY SPENDING
                                                                                      [Dollars in billions]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
           Fiscal Year               2003        2004        2005        2006        2007        2008        2009        2010        2011        2012        2013        2004-08       2004-13
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             SUMMARY
Total Spending:
  BA............................   1,390.568   1,463.400   1,572.926   1,687.270   1,780.358   1,878.806   1,980.263   2,080.295   2,194.797   2,286.233   2,417.190     8,382.760    19,341.538

[[Page H3205]]

 
  OT............................   1,338.949   1,407.478   1,517.348   1,623.209   1,715.019   1,810.930   1,910.974   2,012.192   2,129.012   2,213.071   2,347.923     8,073.984    18,687.156
On-budget:
  BA............................   1,025.871   1,080.801   1,180.488   1,284.255   1,364.890   1,449.527   1,534.456   1,616.371   1,712.448   1,780.808   1,885.466     6,359.961    14,889.510
  OT............................     976.272   1,027.289   1,127.700   1,223.274   1,302.921   1,385.401   1,469.307   1,552.708   1,651.493   1,712.956   1,821.999     6,066.585    14,275.048
Off-budget:
  BA............................     364.697     382.599     392.438     403.015     415.468     429.279     445.807     463.924     482.349     505.425     531.724     2,022.799     4,452.028
  OT............................     362.677     380.189     389.648     399.935     412.098     425.529     441.667     459.484     477.519     500.115     525.924     2,007.399     4,412.108
 
                                                                                           BY FUNCTION
National Defense (050):
  BA............................       0.357       0.488       0.634       0.678       0.706       0.757       0.779       0.814       0.844       0.851       0.891         3.263         7.442
  OT............................      -0.144       0.355       0.555       0.632       0.661       0.704       0.727       0.760       0.786       0.788       0.826         2.907         6.794
International Affairs (150):
  BA............................      -2.901      -2.970      -0.300       0.729       0.749       0.766       0.783       0.799       0.814       0.829       0.848        -1.026         3.047
  OT............................      -6.717      -2.568      -2.605      -2.656      -2.620      -2.515      -2.492      -2.490      -2.507      -2.527      -2.480       -12.964       -25.460
General Science, Space, and Technology (250):
  BA............................       0.106       0.030       0.031       0.031       0.032       0.033       0.033       0.034       0.035       0.036       0.036         0.157         0.331
  OT............................       0.099       0.098       0.095       0.064       0.045       0.033       0.032       0.033       0.034       0.034       0.035         0.335         0.503
Energy (270):
  BA............................      -1.163      -1.038      -1.178      -1.200      -1.362      -1.778      -1.885      -1.902      -1.931      -1.949      -1.969        -6.556       -16.192
  OT............................      -2.712      -2.704      -2.922      -2.699      -2.832      -3.228      -3.225      -3.237      -3.181      -2.929      -3.089       -14.385       -30.046
Natural Resources and Environment (300):
  BA............................       1.578       2.296       2.702       2.865       2.803       2.745       3.185       3.316       3.381       3.333       3.244        13.411        29.870
  OT............................       1.083       1.768       2.100       2.847       2.663       2.562       3.002       3.161       3.264       3.241       3.258        11.940        27.866
Agriculture (350):
  BA............................      18.691      19.340      21.394      21.094      20.423      19.470      19.884      19.159      18.416      17.806      17.335       101.721       194.321
  OT............................      17.513      18.067      20.230      19.980      19.349      18.423      19.000      18.413      17.693      17.099      16.627        96.049       184.881
Commerce and Housing Credit (370):
  BA............................       5.062       7.812       8.512       6.356       4.921       4.333       3.984       3.617       3.337       3.091       2.795        31.934        48.758
  OT............................       2.227       3.282       3.943       1.288      -0.969      -1.975      -2.389      -3.140      -3.995      -4.633      -4.888         5.569       -13.476
On-budget:
  BA............................       8.662       8.012       9.012       8.834       8.092       7.865       7.759       7.746       7.852       7.864       7.989        41.815        81.025
  OT............................       5.827       3.482       4.443       3.766       2.202       1.557       1.386       0.989       0.520       0.140       0.306        15.450        18.791
Off-budget:
  BA............................      -3.600      -0.200      -0.500      -2.478      -3.171      -3.532      -3.775      -4.129      -4.515      -4.773      -5.194        -9.881       -32.267
  OT............................      -3.600      -0.200      -0.500      -2.478      -3.171      -3.532      -3.775      -4.129      -4.515      -4.773      -5.194        -9.881       -32.267
Transportation (400):
  BA............................      41.480      46.301      47.355      48.304      50.396      51.651      52.485      51.526      51.584      51.652      51.727       244.007       502.981
  OT............................       2.663       2.261       2.185       2.049       1.984       1.927       1.956       1.967       2.002       2.048       2.101        10.406        20.480
Community and Regional Development (450)
  BA............................       0.526       0.237       0.139       0.133       0.135       0.057       0.059       0.065       0.067       0.069       0.073         0.701         1.034
  OT............................      -0.060      -0.089      -0.120      -0.163      -0.220      -0.267      -0.304      -0.334      -0.329      -0.321      -0.310        -0.859        -2.457
Education, Training, Employment and Social Services (500):
  BA............................       9.824       9.528      10.437      11.183      11.546      11.839      12.106      12.268      12.605      12.852      13.179        54.533       117.543
  OT............................       9.497       8.999       9.868      10.502      10.814      11.143      11.397      11.637      11.867      12.099      12.411        51.326       110.737
Health (550):
  BA............................     173.445     190.934     209.034     227.436     246.664     267.762     289.941     313.654     338.431     355.984     384.238     1,141.830     2,824.078
  OT............................     173.532     191.043     210.027     228.610     247.050     268.155     290.258     313.995     338.820     356.533     384.830     1,144.885     2,829.321
Medicare (570):
  BA............................     244.788     262.279     278.875     317.717     339.703     365.106     391.015     418.716     448.476     480.862     521.157     1,563.680     3,823.906
  OT............................     244.637     262.557     281.819     314.487     339.995     365.006     390.798     419.022     451.885     477.098     521.482     1,563.864     3,824.149
Income Security (600):
  BA............................     282.370     273.806     285.061     291.505     297.195     307.983     317.931     327.549     341.123     342.715     355.788     1,455.550     3,140.656
  OT............................     283.396     273.296     284.750     290.868     296.302     306.692     316.578     326.393     340.128     341.931     355.337     1,451.908     3,132.275
Social Security (650):
  BA............................     475.049     496.858     517.136     542.285     570.459     601.406     636.285     674.339     715.354     760.831     810.692     2,728.144     6,325.645
  OT............................     473.029     494.448     514.346     539.205     567.089     597.656     632.145     669.899     710.524     755.521     804.892     2,712.744     6,285.725
On-budget:
  BA............................      13.234      14.269      15.446      16.395      17.892      19.677      21.782      24.254      28.140      31.326      34.315        83.679       223.496
  OT............................      13.234      14.269      15.446      16.395      17.892      19.677      21.782      24.254      28.140      31.326      34.315        83.679       223.496
Off-budget:
  BA............................     461.815     482.589     501.690     525.890     552.567     581.729     614.503     650.085     687.214     729.505     776.377     2,644.465     6,102.149
  OT............................     459.795     480.179     498.900     522.810     549.197     577.979     610.363     645.645     682.384     724.195     770.577     2,629.065     6,062.229
Veterans Benefits and Services (700):
  BA............................      31.065      33.822      38.749      36.585      34.602      37.828      38.483      39.203      42.845      38.731      42.455       181.586       383.303
  OT............................      30.584      33.609      38.370      36.500      34.418      37.736      38.394      39.091      42.728      38.521      42.326       180.633       381.693
Administration of Justice (750):
  BA............................       2.254       4.097       2.184       1.320       0.840       0.783       0.726       0.668       0.601       0.533       0.459         9.224        12.211
  OT............................       2.228       3.293       2.582       1.505       0.769       0.673       0.616       0.558       0.495       0.429       0.356         8.822        11.276
General Government (800):
  BA............................       2.483       2.850       2.881       2.886       2.935       2.557       2.633       2.707       2.791       2.884       2.971        14.109        28.095
  OT............................       2.540       3.033       2.845       2.827       2.910       2.697       2.645       2.701       2.774       3.016       2.938        14.312        28.386
Net Interest (900):
  BA............................     156.067     169.656     212.681     243.313     258.818     269.793     278.541     283.448     288.931     293.336     292.764     1,154.261     2,591.281
  OT............................     156.067     169.656     212.681     243.313     258.818     269.793     278.541     283.448     288.931     293.336     292.764     1,154.261     2,591.281
On-budget:
  BA............................     240.176     259.414     310.630     352.219     380.574     405.647     429.542     450.651     473.381     496.015     514.513     1,708.484     4,072.586
  OT............................     240.176     259.414     310.630     352.219     380.574     405.647     429.542     450.651     473.381     496.015     514.513     1,708.484     4,072.586
Off-budget:
  BA............................     -84.109     -89.758     -97.949    -108.906    -121.756    -135.854    -151.001    -167.203    -184.450    -202.679    -221.749      -554.223    -1,481.305
  OT............................     -84.109     -89.758     -97.949    -108.906    -121.756    -135.854    -151.001    -167.203    -184.450    -202.679    -221.749      -554.223    -1,481.305
Allowances (920):
  BA............................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ............  ............
  OT............................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ............  ............
Undistributed Offsetting Receipts (950):
  BA............................     -50.513     -52.926     -63.401     -65.950     -61.207     -64.285     -66.705     -69.685     -72.907     -78.213     -81.493      -307.769      -676.772
  OT............................     -50.513     -52.926     -63.401     -65.950     -61.207     -64.285     -66.705     -69.685     -72.907     -78.213     -81.493      -307.769      -676.772
On-budget:
  BA............................     -41.104     -42.894     -52.598     -54.459     -49.035     -51.221     -52.785     -54.856     -57.007     -61.585     -63.783      -250.207      -540.223
  OT............................     -41.104     -42.894     -52.598     -54.459     -49.035     -51.221     -52.785     -54.856     -57.007     -61.585     -63.783      -250.207      -540.223
Off-budget:
  BA............................      -9.409     -10.032     -10.803     -11.491     -12.172     -13.064     -13.920     -14.829     -15.900     -16.628     -17.710       -57.562      -136.549
  OT............................      -9.409     -10.032     -10.803     -11.491     -12.172     -13.064     -13.920     -14.829     -15.900     -16.628     -17.710       -57.562      -136.549
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                                                          HOUSE-PASSED FISCAL YEAR 2004 BUDGET RESOLUTION: TOTAL SPENDING AND REVENUES
                                                                                      [Dollars in billions]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
           Fiscal Year               2003        2004        2005        2006        2007        2008        2009        2010        2011        2012        2013        2004-08       2004-13
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             SUMMARY
Total Spending:
  BA............................   2,158.555   2,225.395   2,349.552   2,483.786   2,597.355   2,716.161   2,834.044   2,950.169   3,084.734   3,215.178   3,369.698    12,372.249    27,826.072
  OT............................   2,143.410   2,232.365   2,337.286   2,450.075   2,555.757   2,674.646   2,797.065   2,916.177   3,057.083   3,172.626   3,335.342    12,250.129    27,528.422
On-Budget:
  BA............................   1,790.046   1,838.519   1,952.639   2,076.319   2,177.306   2,282.248   2,383.491   2,481.237   2,597.191   2,704.406   2,832.479    10,327.031    23,325.835
  OT............................   1,776.895   1,847.887   1,943.164   2,045.680   2,139.077   2,244.487   2,350.662   2,451.698   2,574.381   2,667.177   2,803.936    10,220.295    23,068.149
Off-Budget:
  BA............................     368.509     386.876     396.913     407.467     420.049     433.913     450.553     468.932     487.543     510.772     537.219     2,045.218     4,500.237
  OT............................     366.515     384.478     394.122     404.395     416.680     430.159     446.403     464.479     482.702     505.449     531.406     2,029.834     4,460.273

[[Page H3206]]

 
Revenues:
  Total.........................   1,855.336   1,908.024   2,107.162   2,281.891   2,444.370   2,587.249   2,736.597   2,886.701   3,028.028   3,194.074   3,372.405    11,328.696    26,546.501
  On-budget.....................   1,323.729   1,350.138   1,519.267   1,662.729   1,793.142   1,902.740   2,017.385   2,130.867   2,235.796   2,364.426   2,502.635     8,228.016    19,479.125
  Off-budget....................     531.607     557.886     587.895     619.162     651.228     684.509     719.212     755.834     792.232     829.648     869.770     3,100.680     7,067.376
Surplus/Deficit (-):
  Total.........................    -288.074    -324.341    -230.124    -168.184    -111.387     -87.397     -60.468     -29.476     -29.055      21.448      37.063      -921.433      -981.921
  On-budget.....................    -453.166    -497.749    -423.897    -382.951    -345.935    -341.747    -333.277    -320.831    -338.585    -302.751    -301.301    -1,992.279    -3,589.024
  Off-budget....................     165.092     173.408     193.773     214.767     234.548     254.350     272.809     291.355     309.530     324.199     338.364     1,070.846     2,607.103
Debt Held by the Public (end of        3,858       4,179       4,416       4,597       4,720       4,819       4,889       4,926       4,963       4,949       4,918            na            na
 year)..........................
Debt Subject to Limit (end of          6,687       7,264       7,794       8,302       8,777       9,251       9,719      10,179      10,660      11,112      11,564            na            na
 year)..........................
 
                                                                                           BY FUNCTION
National Defense (050):
  BA............................     392.494     400.546     420.071     440.185     460.435     480.886     494.067     507.840     522.103     536.531     551.323     2,202.123     4,813.987
  OT............................     386.229     400.916     414.237     426.011     438.656     462.861     480.650     497.348     516.338     523.884     543.541     2,142.681     4,704.442
International Affairs (150):
  BA............................      22.506      24.750      28.631      31.090      32.271      33.120      33.775      34.466      35.315      36.148      37.006       149.862       326.572
  OT............................      19.283      23.654      24.090      25.557      27.344      28.303      29.284      30.078      30.916      31.716      32.576       128.948       283.518
General Science, Space, and Technology (250):
  BA............................      23.153      22.771      23.591      24.344      25.153      25.899      26.504      27.140      27.800      28.464      29.134       121.758       260.800
  OT............................      21.556      22.348      23.082      23.690      24.425      25.127      25.799      26.435      27.079      27.735      28.393       118.672       254.113
Energy (270):
  BA............................       2.074       2.583       2.707       2.609       2.431       2.988       2.977       3.085       3.181       3.288       3.401        13.318        29.250
  OT............................       0.439       0.928       0.961       1.244       1.022       1.400       1.660       1.781       1.955       2.316       2.293         5.555        15.560
Natural Resources and Environment (300):
  BA............................      30.816      29.240      30.253      30.945      31.453      32.230      33.463      34.432      35.438      36.354      37.251       154.121       331.059
  OT............................      28.940      29.868      30.276      31.203      31.335      31.713      32.843      33.768      34.752      35.626      36.600       154.395       327.984
Agriculture (350):
  BA............................      24.418      24.192      26.481      26.197      25.567      24.607      24.998      24.293      23.781      23.390      23.155       127.044       246.661
  OT............................      23.365      23.363      25.205      25.000      24.430      23.543      24.091      23.526      23.030      22.654      22.413       121.541       237.255
Commerce and Housing Credit (370):
  BA............................       5.212       7.205       8.137       5.673       6.000       5.103       4.999       4.621       4.437       4.269       4.065        32.118        54.509
  OT............................       2.281       3.294       3.457       0.487      -0.068      -1.562      -1.793      -2.584      -3.374      -3.945      -4.138         5.608       -10.226
On-budget:
  BA............................       8.812       7.405       8.637       8.151       9.171       8.635       8.774       8.750       8.952       9.042       9.259        41.999        86.776
  OT............................       5.881       3.494       3.957       2.965       3.103       1.970       1.982       1.545       1.141       0.828       1.056        15.489        22.041
Off-budget:
  BA............................      -3.600      -0.200      -0.500      -2.478      -3.171      -3.532      -3.775      -4.129      -4.515      -4.773      -5.194        -9.881       -32.267
  OT............................      -3.600      -0.200      -0.500      -2.478      -3.171      -3.532      -3.775      -4.129      -4.515      -4.773      -5.194        -9.881       -32.267
Transportation (400):
  BA............................      64.091      65.430      65.806      66.718      67.726      68.692      69.881      71.084      72.789      74.498      76.283       334.372       698.907
  OT............................      67.847      69.225      66.917      66.538      67.264      68.297      69.552      70.915      72.410      74.004      75.640       338.241       700.762
Community and Regional Development (450):
  BA............................      12.251      14.137      14.356      14.647      14.968      15.351      15.702      16.076      16.468      16.858      17.256        73.459       155.819
  OT............................      15.994      15.923      15.991      15.119      14.918      14.500      14.803      15.146      15.524      15.892      16.288        76.451       154.104
Education, Training, Employment and Social Services (500):
  BA............................      86.169      84.748      84.381      86.670      88.650      90.811      92.393      93.935      95.832      97.635      99.536       435.260       914.591
  OT............................      81.340      85.706      83.598      84.639      86.417      88.355      90.486      92.170      93.936      95.713      97.602       428.715       898.622
Health (550):
  BA............................     221.878     235.103     248.663     265.462     284.237     303.780     324.153     345.696     370.681     395.391     423.754     1,337.245     3,196.920
  OT............................     218.021     235.479     248.358     264.949     283.363     302.637     322.870     344.412     369.399     394.133     422.447     1,334.786     3,188.047
Medicare (570):
  BA............................     248.586     266.538     282.932     322.237     344.656     370.545     396.931     424.989     452.618     489.873     528.586     1,586.908     3,879.905
  OT............................     248.434     266.865     285.912     319.017     344.943     370.436     396.685     425.263     455.994     486.064     528.861     1,587.173     3,880.040
Income Security (600):
  BA............................     326.588     315.485     325.921     331.772     336.386     344.748     352.988     360.370     374.372     377.623     391.496     1,654.312     3,511.161
  OT............................     334.373     321.120     329.359     334.216     338.308     345.993     353.901     361.147     375.115     378.358     392.351     1,668.996     3,529.868
Social Security (650):
  BA............................     478.882     501.089     521.493     546.791     575.122     606.191     641.237     679.459     720.651     766.311     816.362     2,750.686     6,374.706
  OT............................     476.888     498.690     518.702     543.719     571.753     602.437     637.087     675.006     715.810     760.988     810.549     2,735.301     6,334.741
On-budget:
  BA............................      13.255      14.223      15.330      16.451      17.975      19.827      21.982      24.357      28.235      31.450      34.481        83.806       224.311
  OT............................      13.255      14.222      15.330      16.451      17.975      19.827      21.982      24.357      28.235      31.450      34.481        83.805       224.310
Off-budget:
  BA............................     465.627     486.866     506.163     530.340     557.147     586.364     619.255     655.102     692.416     734.861     781.881     2,666.880     6,150.395
  OT............................     463.633     484.468     503.372     527.268     553.778     582.610     615.105     650.649     687.575     729.538     776.068     2,651.496     6,110.431
Veterans Benefits and Services (700):
  BA............................      57.597      61.567      65.847      64.000      62.348      65.696      66.939      68.222      72.714      69.867      74.518       319.458       671.718
  OT............................      57.486      61.119      65.632      63.830      62.074      65.557      66.695      67.938      72.418      69.477      74.198       318.212       668.938
Administration of Justice (750):
  BA............................      38.543      37.313      37.676      37.586      37.966      38.884      39.846      40.891      42.160      43.459      44.808       189.425       400.589
  OT............................      37.712      40.898      39.007      38.030      37.862      38.639      39.669      40.703      41.855      43.131      44.471       194.436       404.265
General Government (800):
  BA............................      18.178      19.779      20.038      19.672      19.976      19.789      20.208      20.620      21.342      22.090      22.881        99.254       206.395
  OT............................      18.103      19.597      20.226      19.731      19.737      19.584      19.800      20.175      20.874      21.751      22.374        98.875       203.849
Net Interest (900):
  BA............................     155.632     166.912     205.969     233.138     245.717     253.445     259.512     262.464     265.793     268.782     267.822     1,105.181     2,429.554
  OT............................     155.632     166.912     205.969     233.138     245.717     253.445     259.512     262.464     265.793     268.782     267.822     1,105.181     2,429.554
On-budget:
  BA............................     239.741     256.670     303.916     342.042     367.472     389.300     410.519     429.676     450.251     471.470     489.580     1,659.400     3,910.896
  OT............................     239.741     256.670     303.916     342.042     367.472     389.300     410.519     429.676     450.251     471.470     489.580     1,659.400     3,910.896
Off-budget:
  BA............................     -84.109     -89.758     -97.947    -108.904    -121.755    -135.855    -151.007    -167.212    -184.458    -202.688    -221.758      -554.219    -1,481.342
  OT............................     -84.109     -89.758     -97.947    -108.904    -121.755    -135.855    -151.007    -167.212    -184.458    -202.688    -221.758      -554.219    -1,481.342
Allowances (920):
  BA............................  ..........      -1.067  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........        -1.067        -1.067
  OT............................  ..........      -0.614      -0.292      -0.093      -0.036      -0.015  ..........  ..........  ..........  ..........  ..........        -1.050        -1.050
Undistributed Offsetting Receipts (950):
  BA............................     -50.513     -52.926     -63.401     -65.950     -63.707     -66.604     -66.529     -69.514     -72.741     -75.653     -78.939      -312.588      -675.964
  OT............................     -50.513     -52.926     -63.401     -65.950     -63.707     -66.604     -66.529     -69.514     -72.741     -75.653     -78.939      -312.588      -675.964
On-budget:
  BA............................     -41.104     -42.894     -52.598     -54.459     -51.535     -53.540     -52.609     -54.685     -56.841     -59.025     -61.229      -255.026      -539.415
  OT............................     -41.104     -42.894     -52.598     -54.459     -51.535     -53.540     -52.609     -54.685     -56.841     -59.025     -61.229      -255.026      -539.415
Off-budget:
  BA............................      -9.409     -10.032     -10.803     -11.491     -12.172     -13.064     -13.920     -14.829     -15.900     -16.628     -17.710       -57.562      -136.549
  OT............................      -9.409     -10.032     -10.803     -11.491     -12.172     -13.064     -13.920     -14.829     -15.900     -16.628     -17.710       -57.562      -136.549
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                                                             HOUSE-PASSED FISCAL YEAR 2004 BUDGET RESOLUTION: DISCRETIONARY SPENDING
                                                                                      [Dollars in billions]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
           Fiscal Year               2003        2004        2005        2006        2007        2008        2009        2010        2011        2012        2013        2004-08       2004-13
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             SUMMARY
Total Spending:
  BA............................     765.796     775.386     802.587     830.682     860.381     891.601     915.318     939.877     965.492     991.479   1,018.043     4,160.637     8,990.846
  OT............................     804.682     831.265     841.708     857.651     878.630     911.456     940.851     968.691     999.228   1,018.712   1,050.542     4,320.710     9,298.734
Defense
  BA............................     392.137     400.058     419.437     439.507     459.729     480.129     493.288     507.026     521.259     535.680     550.432     2,198.860     4,806.545
  OT............................     386.373     400.561     413.682     425.379     437.995     462.157     479.923     496.588     515.552     523.096     542.715     2,139.774     4,697.648

[[Page H3207]]

 
Nondefense
  BA............................     373.659     375.328     383.150     391.175     400.652     411.472     422.030     432.851     444.233     455.799     467.611     1,961.777     4,184.301
  OT............................     418.309     430.704     428.026     432.272     440.635     449.299     460.928     472.103     483.676     495.616     507.827     2,180.936     4,601.086
 
                                                                                           BY FUNCTION
National Defense (050):
  BA............................     392.137     400.058     419.437     439.507     459.729     480.129     493.288     507.026     521.259     535.680     550.432     2,198.860     4,806.545
  OT............................     386.373     400.561     413.682     425.379     437.995     462.157     479.923     496.588     515.552     523.096     542.715     2,139.774     4,697.648
International Affairs (150):
  BA............................      25.407      27.843      29.122      30.620      31.842      32.791      33.546      34.351      35.187      36.016      36.851       152.218       328.169
  OT............................      26.000      26.376      26.888      28.455      30.266      31.234      32.310      33.233      34.097      34.935      35.754       143.219       313.548
General Science, Space, and Technology (250):
  BA............................      23.047      22.741      23.561      24.314      25.122      25.867      26.472      27.108      27.767      28.430      29.100       121.605       260.482
  OT............................      21.457      22.251      22.989      23.627      24.381      25.095      25.768      26.404      27.047      27.703      28.360       118.343       253.625
Energy (270):
  BA............................       3.237       3.625       3.888       3.813       3.794       4.752       4.840       4.960       5.086       5.211       5.344        19.872        45.313
  OT............................       3.151       3.614       3.856       3.915       3.816       4.562       4.804       4.919       5.043       5.167       5.297        19.763        44.993
Natural Resources and Environment (300):
  BA............................      29.238      27.018      27.588      28.150      28.751      29.646      30.518      31.431      32.374      33.340      34.320       141.153       303.136
  OT............................      27.857      28.167      28.205      28.427      28.771      29.305      30.073      30.914      31.800      32.700      33.657       142.875       302.019
Agriculture (350):
  BA............................       5.727       5.109       5.467       5.569       5.691       5.838       6.005       6.177       6.354       6.538       6.728        27.674        59.476
  OT............................       5.852       5.537       5.334       5.462       5.599       5.783       5.943       6.116       6.287       6.471       6.658        27.715        59.190
Commerce and Housing Credit (370):
  BA............................       0.150      -0.503      -0.217      -0.489       0.595       0.916       1.225       1.280       1.369       1.439       1.521         0.302         7.136
  OT............................       0.054       0.147      -0.314      -0.564       0.523       0.730       1.042       1.150       1.234       1.333       1.387         0.522         6.668
On-budget:
  BA............................       0.150      -0.503      -0.217      -0.489       0.595       0.916       1.225       1.280       1.369       1.439       1.521         0.302         7.136
  OT............................       0.054       0.147      -0.314      -0.564       0.523       0.730       1.042       1.150       1.234       1.333       1.387         0.522         6.668
Off-budget:
  BA............................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ............  ............
  OT............................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ............  ............
Transportation (400):
  BA............................      22.611      22.225      22.140      22.544      23.010      23.554      24.279      25.042      25.828      26.635      27.468       113.473       242.725
  OT............................      65.184      66.995      64.772      64.536      65.335      66.443      67.687      69.059      70.519      72.070      73.653       328.081       681.069
Community and Regional Development (450):
  BA............................      11.725      13.909      14.227      14.527      14.849      15.313      15.668      16.043      16.434      16.824      17.218        72.825       155.012
  OT............................      16.054      16.016      16.116      15.289      15.145      14.775      15.116      15.491      15.866      16.227      16.614        77.341       156.655
Education, Training, Employment and Social Services (500):
  BA............................      72.875      75.390      74.170      75.775      77.459      79.444      80.873      82.381      83.947      85.515      87.091       382.238       802.045
  OT............................      71.958      74.172      73.051      74.414      75.943      77.662      79.647      81.218      82.757      84.313      85.892       375.242       789.069
Health (550):
  BA............................      49.468      48.063      49.093      50.183      51.285      52.591      53.850      55.162      56.522      57.887      59.271       251.215       533.907
  OT............................      44.349      47.097      48.243      49.086      50.216      51.105      52.282      53.540      54.849      56.186      57.537       245.747       520.141
Medicare (570):
  BA............................       3.798       3.619       3.687       3.785       3.888       4.009       4.221       4.433       4.662       4.936       5.234        18.988        42.474
  OT............................       3.797       3.668       3.723       3.795       3.883       4.000       4.192       4.401       4.629       4.891       5.184        19.069        42.366
Income Security (600):
  BA............................      44.020      44.436      45.235      46.150      46.305      46.540      47.533      48.538      49.589      50.639      51.691       228.666       476.656
  OT............................      50.781      50.570      48.947      49.387      49.075      48.944      49.724      50.427      51.286      52.128      52.985       246.923       503.473
Social Security (650):
  BA............................       3.833       4.160       4.226       4.310       4.407       4.519       4.671       4.829       4.991       5.158       5.333        21.622        46.604
  OT............................       3.859       4.171       4.225       4.318       4.408       4.515       4.661       4.816       4.980       5.145       5.320        21.637        46.559
On-budget:
  BA............................       0.021       0.024       0.024       0.025       0.026       0.026       0.027       0.028       0.029       0.030       0.031         0.125         0.270
  OT............................       0.021       0.023       0.024       0.025       0.026       0.026       0.027       0.028       0.029       0.030       0.031         0.124         0.269
Off-budget:
  BA............................       3.812       4.136       4.202       4.285       4.381       4.493       4.644       4.801       4.962       5.128       5.302        21.497        46.334
  OT............................       3.838       4.148       4.201       4.293       4.382       4.489       4.634       4.788       4.951       5.115       5.289        21.513        46.290
Veterans Benefits and Services (700):
  BA............................      26.532      28.162      27.729      28.153      28.610      29.174      30.128      31.102      32.116      33.159      34.234       141.828       302.567
  OT............................      26.902      27.922      27.886      28.066      28.515      29.124      29.969      30.924      31.931      32.968      34.036       141.513       301.341
Administration of Justice (750):
  BA............................      36.289      33.314      35.592      36.372      37.247      38.266      39.328      40.482      41.819      43.190      44.612       180.791       390.222
  OT............................      35.484      37.693      36.532      36.636      37.212      38.127      39.256      40.398      41.614      42.961      44.373       186.200       394.802
General Government (800):
  BA............................      15.702      17.284      17.642      17.399      17.797      18.252      18.873      19.532      20.188      20.882      21.595        88.374       189.444
  OT............................      15.570      16.922      17.865      17.516      17.583      17.910      18.454      19.093      19.737      20.418      21.120        87.796       186.618
Allowances (920):
  BA............................  ..........      -1.067  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........        -1.067        -1.067
  OT............................  ..........      -0.614      -0.292      -0.093      -0.036      -0.015  ..........  ..........  ..........  ..........  ..........        -1.050        -1.050
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                                                               HOUSE-PASSED FISCAL YEAR 2004 BUDGET RESOLUTION: MANDATORY SPENDING
                                                                                      [Dollars in billions]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
           Fiscal Year               2003        2004        2005        2006        2007        2008        2009        2010        2011        2012        2013        2004-08       2004-13
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             SUMMARY
Total Spending:
  BA............................   1,392.759   1,450.009   1,546.965   1,653.104   1,736.974   1,824.560   1,918.726   2,010.292   2,119.242   2,223.699   2,351.655     8,211.612    18,835.226
  OT............................   1,338.728   1,401.100   1,495.578   1,592.424   1,677.127   1,763.190   1,856.214   1,947.486   2,057.855   2,153.914   2,284.800     7,929.419    18,229.688
On-budget:
  BA............................   1,028.062   1,067.269   1,154.254   1,249.922   1,321.306   1,395.140   1,472.817   1,546.161   1,636.661   1,718.055   1,819.738     6,187.891    14,381.323
  OT............................     976.051   1,020.770   1,105.657   1,192.322   1,264.829   1,337.520   1,414.445   1,487.795   1,580.104   1,653.580   1,758.683     5,921.098    13,815.705
Off-budget:
  BA............................     364.697     382.740     392.711     403.182     415.668     429.420     445.909     464.131     482.581     505.644     531.917     2,023.721     4,453.903
  OT............................     362.677     380.330     389.921     400.102     412.298     425.670     441.769     459.691     477.751     500.334     526.117     2,008.321     4,413.983
 
                                                                                           BY FUNCTION
National Defense (050):
  BA............................       0.357       0.488       0.634       0.678       0.706       0.757       0.779       0.814       0.844       0.851       0.891         3.263         7.442
  OT............................      -0.144       0.355       0.555       0.632       0.661       0.704       0.727       0.760       0.786       0.788       0.826         2.907         6.794
International Affairs (150):
  BA............................      -2.901      -3.093      -0.491       0.470       0.429       0.329       0.229       0.115       0.128       0.132       0.155        -2.356        -1.597
  OT............................      -6.717      -2.722      -2.798      -2.898      -2.922      -2.931      -3.026      -3.155      -3.181      -3.219      -3.178       -14.271       -30.030
General Science, Space, and Technology (250):
  BA............................       0.106       0.030       0.030       0.030       0.031       0.032       0.032       0.032       0.033       0.034       0.034         0.153         0.318
  OT............................       0.099       0.097       0.093       0.063       0.044       0.032       0.031       0.031       0.032       0.032       0.033         0.329         0.488
Energy (270):
  BA............................      -1.163      -1.042      -1.181      -1.204      -1.363      -1.764      -1.863      -1.875      -1.905      -1.923      -1.943        -6.554       -16.063
  OT............................      -2.712      -2.686      -2.895      -2.671      -2.794      -3.162      -3.144      -3.138      -3.088      -2.851      -3.004       -14.208       -29.433
Natural Resources and Environment (300):
  BA............................       1.578       2.222       2.665       2.795       2.702       2.584       2.945       3.001       3.064       3.014       2.931        12.968        27.923
  OT............................       1.083       1.701       2.071       2.776       2.564       2.408       2.770       2.854       2.952       2.926       2.943        11.520        25.965
Agriculture (350):
  BA............................      18.691      19.083      21.014      20.628      19.876      18.769      18.993      18.116      17.427      16.852      16.427        99.370       187.185
  OT............................      17.513      17.826      19.871      19.538      18.831      17.760      18.148      17.410      16.743      16.183      15.755        93.826       178.065
Commerce and Housing Credit (370):
  BA............................       5.062       7.708       8.354       6.162       5.405       4.187       3.774       3.341       3.068       2.830       2.544        31.816        47.373

[[Page H3208]]

 
  OT............................       2.227       3.147       3.771       1.051      -0.591      -2.292      -2.835      -3.734      -4.608      -5.278      -5.525         5.086       -16.894
On-budget:
  BA............................       8.662       7.908       8.854       8.640       8.576       7.719       7.549       7.470       7.583       7.603       7.738        41.697        79.640
  OT............................       5.827       3.347       4.271       3.529       2.580       1.240       0.940       0.395      -0.093      -0.505      -0.331        14.967        15.373
Off-budget:
  BA............................      -3.600      -0.200      -0.500      -2.478      -3.171      -3.532      -3.775      -4.129      -4.515      -4.773      -5.194        -9.881       -32.267
  OT............................      -3.600      -0.200      -0.500      -2.478      -3.171      -3.532      -3.775      -4.129      -4.515      -4.773      -5.194        -9.881       -32.267
Transportation (400):
  BA............................      41.480      43.205      43.666      44.174      44.716      45.138      45.602      46.042      46.961      47.863      48.815       220.899       456.182
  OT............................       2.663       2.230       2.145       2.002       1.929       1.854       1.865       1.856       1.891       1.934       1.987        10.160        19.693
Community and Regional Development (450):
  BA............................       0.526       0.228       0.129       0.120       0.119       0.038       0.034       0.033       0.034       0.034       0.038         0.634         0.807
  OT............................      -0.060      -0.093      -0.125      -0.170      -0.227      -0.275      -0.313      -0.345      -0.342      -0.335      -0.326        -0.890        -2.551
Education, Training, Employment and Social Services (500):
  BA............................      13.294       9.358      10.211      10.895      11.191      11.367      11.520      11.554      11.885      12.120      12.445        53.022       112.546
  OT............................       9.382      11.534      10.547      10.225      10.474      10.693      10.839      10.952      11.179      11.400      11.710        53.473       109.553
Health (550):
  BA............................     172.410     187.040     199.570     215.279     232.952     251.189     270.303     290.534     314.159     337.504     364.483     1,086.030     2,663.013
  OT............................     173.672     188.382     200.115     215.863     233.147     251.532     270.588     290.872     314.550     337.947     364.910     1,089.039     2,667.906
Medicare (570):
  BA............................     244.788     262.919     279.245     318.452     340.768     366.536     392.710     420.556     447.956     484.937     523.352     1,567.920     3,837.431
  OT............................     244.637     263.197     282.189     315.222     341.060     366.436     392.493     420.862     451.365     481.173     523.677     1,568.104     3,837.674
Income Security (600):
  BA............................     282.568     271.049     280.686     285.622     290.081     298.208     305.455     311.832     324.783     326.984     339.805     1,425.646     3,034.505
  OT............................     283.592     270.550     280.412     284.829     289.233     297.049     304.177     310.720     323.829     326.230     339.366     1,422.073     3,026.395
Social Security (650):
  BA............................     475.049     496.929     517.267     542.481     570.715     601.672     636.566     674.630     715.660     761.153     811.029     2,729.064     6,328.102
  OT............................     473.029     494.519     514.477     539.401     567.345     597.922     632.426     670.190     710.830     755.843     805.229     2,713.664     6,288.182
On-budget:
  BA............................      13.234      14.199      15.306      16.426      17.949      19.801      21.955      24.329      28.206      31.420      34.450        83.681       224.041
  OT............................      13.234      14.199      15.306      16.426      17.949      19.801      21.955      24.329      28.206      31.420      34.450        83.681       224.041
Off-budget:
  BA............................     461.815     482.730     501.961     526.055     552.766     581.871     614.611     650.301     687.454     729.733     776.579     2,645.383     6,104.061
  OT............................     459.795     480.320     499.171     522.975     549.396     578.121     610.471     645.861     682.624     724.423     770.779     2,629.983     6,064.141
Veterans Benefits and Services (700):
  BA............................      31.065      33.405      38.118      35.847      33.738      36.522      36.811      37.120      40.598      36.708      40.284       177.630       369.151
  OT............................      30.584      33.197      37.746      35.764      33.559      36.433      36.726      37.014      40.487      36.509      40.162       176.699       367.597
Administration of Justice (750):
  BA............................       2.254       3.999       2.084       1.214       0.719       0.618       0.518       0.409       0.341       0.269       0.196         8.634        10.367
  OT............................       2.228       3.205       2.475       1.394       0.650       0.512       0.413       0.305       0.241       0.170       0.098         8.236         9.463
General Government (800):
  BA............................       2.476       2.495       2.396       2.273       2.179       1.537       1.335       1.088       1.154       1.208       1.286        10.880        16.951
  OT............................       2.533       2.675       2.361       2.215       2.154       1.674       1.346       1.082       1.137       1.333       1.254        11.079        17.231
Net Interest (900):
  BA............................     155.632     166.912     205.969     233.138     245.717     253.445     259.512     262.464     265.793     268.782     267.822     1,105.181     2,429.554
  OT............................     155.632     166.912     205.969     233.138     245.717     253.445     259.512     262.464     265.793     268.782     267.822     1,105.181     2,429.554
On-budget:
  BA............................     239.741     256.670     303.916     342.042     367.472     389.300     410.519     429.676     450.251     471.470     489.580     1,659.400     3,910.896
  OT............................     239.741     256.670     303.916     342.042     367.472     389.300     410.519     429.676     450.251     471.470     489.580     1,659.400     3,910.896
Off-budget:
  BA............................     -84.109     -89.758     -97.947    -108.904    -121.755    -135.855    -151.007    -167.212    -184.458    -202.688    -221.758      -554.219    -1,481.342
  OT............................     -84.109     -89.758     -97.947    -108.904    -121.755    -135.855    -151.007    -167.212    -184.458    -202.688    -221.758      -554.219    -1,481.342
Allowances (920):
  BA............................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ............  ............
  OT............................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ............  ............
Undistributed Offsetting Receipts (950):
  BA............................     -50.513     -52.926     -63.401     -65.950     -63.707     -66.604     -66.529     -69.514     -72.741     -75.653     -78.939      -312.588      -675.964
  OT............................     -50.513     -52.926     -63.401     -65.950     -63.707     -66.604     -66.529     -69.514     -72.741     -75.653     -78.939      -312.588      -675.964
On-budget:
  BA............................     -41.104     -42.894     -52.598     -54.459     -51.535     -53.540     -52.609     -54.685     -56.841     -59.025     -61.229      -255.026      -539.415
  OT............................     -41.104     -42.894     -52.598     -54.459     -51.535     -53.540     -52.609     -54.685     -56.841     -59.025     -61.229      -255.026      -539.415
Off-budget:
  BA............................      -9.409     -10.032     -10.803     -11.491     -12.172     -13.064     -13.920     -14.829     -15.900     -16.628     -17.710       -57.562      -136.549
  OT............................      -9.409     -10.032     -10.803     -11.491     -12.172     -13.064     -13.920     -14.829     -15.900     -16.628     -17.710       -57.562      -136.549
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                                                                            SENATE-PASSED FY 2004 BUDGET RESOLUTION AMENDMENT: AGGREGATE AND FUNCTION LEVELS
                                                                                                          [Dollars in billions]
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2002
                           Function                               Actual       2003        2004        2005        2006        2007        2008        2009        2010        2011        2012        2013       2004-08      2004-13
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
050--National Defense:
  BA..........................................................     362.106     395.494     400.658     420.402     440.769     461.400     482.340     489.209     495.079     502.947     510.984     519.393    2,205.569    4,723.181
  OT..........................................................     348.555     389.229     401.064     414.536     426.591     439.621     464.315     477.989     487.993     500.478     501.628     514.885    2,146.127    4,629.100
Discretionary:
  BA..........................................................     360.988     395.137     400.058     419.437     439.507     459.729     480.129     486.788     492.526     500.259     508.180     516.432    2,198.860    4,703.045
  OT..........................................................     348.511     389.373     400.561     413.682     425.379     437.995     462.157     475.620     485.494     497.848     498.887     511.989    2,139.774    4,609.612
Mandatory:
  BA..........................................................       1.118       0.357       0.600       0.965       1.262       1.671       2.211       2.421       2.553       2.688       2.804       2.961        6.709       20.136
  OT..........................................................       0.044      -0.144       0.503       0.854       1.212       1.626       2.158       2.369       2.499       2.630       2.741       2.896        6.353       19.488
150--International Affairs:
  BA..........................................................      25.144      22.506      25.681      29.734      32.308      33.603      34.611      35.413      36.258      37.136      38.005      38.885      155.937      341.634
  OT..........................................................      22.357      19.283      24.207      24.917      26.539      28.464      29.604      30.733      31.689      32.565      33.408      34.298      133.730      296.422
Discretionary:
  BA..........................................................      25.208      25.407      28.651      30.034      31.579      32.854      33.845      34.630      35.459      36.322      37.176      38.037      156.963      338.587
  OT..........................................................      26.229      26.000      26.775      27.522      29.195      31.084      32.119      33.225      34.179      35.072      35.935      36.778      146.694      321.882
Mandatory:
  BA..........................................................      -0.064      -2.901      -2.970      -0.300       0.729       0.749       0.766       0.783       0.799       0.814       0.829       0.848       -1.026        3.047
  OT..........................................................      -3.872      -6.717      -2.568      -2.605      -2.656      -2.620      -2.515      -2.492      -2.490      -2.507      -2.527      -2.480      -12.964      -25.460
250--General Science, Space and Technology:
  BA..........................................................      22.016      23.153      23.603      24.433      25.217      26.055      26.832      27.462      28.121      28.805      29.492      30.185      126.140      270.205
  OT..........................................................      20.772      21.556      22.728      23.715      24.420      25.202      25.942      26.639      27.296      27.963      28.639      29.319      122.007      261.863
Discretionary:
  BA..........................................................      21.922      23.047      23.573      24.402      25.186      26.023      26.799      27.429      28.087      28.770      29.456      30.149      125.983      269.874
  OT..........................................................      20.715      21.457      22.630      23.620      24.356      25.157      25.909      26.607      27.263      27.929      28.605      29.284      121.672      261.360
Mandatory:
  BA..........................................................       0.094       0.106       0.030       0.031       0.031       0.032       0.033       0.033       0.034       0.035       0.036       0.036        0.157        0.331
  OT..........................................................       0.057       0.099       0.098       0.095       0.064       0.045       0.033       0.032       0.033       0.034       0.034       0.035        0.335        0.503
270--Energy:
  BA..........................................................       0.400       2.074       2.634       2.797       2.714       2.540       3.080       3.090       3.194       3.296       3.408       3.520       13.765       30.273
  OT..........................................................       0.483       0.439       0.873       0.947       1.272       1.069       1.419       1.686       1.794       1.976       2.357       2.326        5.578       15.718
Discretionary:
  BA..........................................................       3.248       3.237       3.672       3.975       3.914       3.902       4.858       4.975       5.096       5.227       5.357       5.489       20.321       46.465
  OT..........................................................       2.974       3.151       3.577       3.869       3.971       3.901       4.647       4.911       5.031       5.157       5.286       5.415       19.963       45.764
Mandatory:
  BA..........................................................      -2.848      -1.163      -1.038      -1.178      -1.200      -1.362      -1.778      -1.885      -1.902      -1.931      -1.949      -1.969       -6.556      -16.192
  OT..........................................................      -2.491      -2.712      -2.704      -2.922      -2.699      -2.832      -3.228      -3.225      -3.237      -3.181      -2.929      -3.089      -14.385      -30.046
300--Natural Resources and Environment:
  BA..........................................................      30.636      30.816      35.253      32.639      33.261      33.576      34.245      35.370      36.198      36.958      37.592      38.316      168.974      353.408

[[Page H3209]]

 
  OT..........................................................      29.459      28.940      31.378      32.325      33.889      34.128      34.119      34.701      35.512      36.267      36.874      37.677      165.840      346.870
Discretionary:
  BA..........................................................      29.124      29.238      32.836      29.802      30.097      30.583      31.319      31.998      32.705      33.448      34.196      34.970      154.637      321.954
  OT..........................................................      28.949      27.857      29.489      30.090      30.936      31.392      31.431      31.542      32.199      32.899      33.595      34.342      153.339      317.915
Mandatory:
  BA..........................................................       1.512       1.578       2.417       2.837       3.164       2.993       2.926       3.372       3.493       3.510       3.396       3.346       14.337       31.454
  OT..........................................................       0.510       1.083       1.889       2.235       2.954       2.736       2.688       3.159       3.313       3.368       3.279       3.335       12.501       28.955
350--Agriculture:
  BA..........................................................      23.821      24.418      24.457      26.844      26.661      26.141      25.363      25.943      25.407      24.864      24.455      24.185      129.466      254.320
  OT..........................................................      22.188      23.365      23.530      25.604      25.426      24.949      24.237      24.979      24.578      24.053      23.660      23.386      123.746      244.402
Discretionary:
  BA..........................................................       5.688       5.727       5.243       5.609       5.734       5.876       6.037       6.208       6.386       6.575       6.767       6.962       28.499       61.397
  OT..........................................................       5.306       5.852       5.589       5.533       5.613       5.758       5.958       6.128       6.303       6.487       6.679       6.871       28.451       60.919
Mandatory:
  BA..........................................................      18.133      18.691      19.214      21.235      20.927      20.265      19.326      19.735      19.021      18.289      17.688      17.223      100.967      192.923
  OT..........................................................      16.882      17.513      17.941      20.071      19.813      19.191      18.279      18.851      18.275      17.566      16.981      16.515       95.295      183.483
370--Commerce and Housing Credit:
  BA..........................................................      11.262       5.212       7.228       8.155       5.714       5.367       5.123       4.663       4.190       3.783       3.628       3.281       31.587       51.132
  OT..........................................................      -0.385       2.281       3.286       3.462       0.550      -0.608      -1.377      -1.844      -2.679      -3.669      -4.219      -4.526        5.313      -11.624
Discretionary:
  BA..........................................................       0.693       0.150      -0.496      -0.269      -0.554       0.534       0.878       0.767       0.661       0.534       0.625       0.574        0.093        3.254
  OT..........................................................       1.230       0.054       0.092      -0.393      -0.650       0.449       0.686       0.633       0.549       0.414       0.502       0.450        0.184        2.732
Mandatory:
  BA..........................................................      10.569       5.062       7.724       8.424       6.268       4.833       4.245       3.896       3.529       3.249       3.003       2.707       31.494       47.878
  OT..........................................................      -1.615       2.227       3.194       3.855       1.200      -1.057      -2.063      -2.477      -3.228      -4.083      -4.721      -4.976        5.129      -14.356
370 on-budget:
  BA..........................................................       8.191       8.812       7.428       8.655       8.192       8.538       8.655       8.438       8.319       8.298       8.401       8.475       41.468       83.399
  OT..........................................................       0.266       5.881       3.486       3.962       3.028       2.563       2.155       1.931       1.450       0.846       0.554       0.668       15.194       20.643
Discretionary:
  BA..........................................................       0.693       0.150      -0.496      -0.269      -0.554       0.534       0.878       0.767       0.661       0.534       0.625       0.574        0.093        3.254
  OT..........................................................       1.230       0.054       0.092      -0.393      -0.650       0.449       0.686       0.633       0.549       0.414       0.502       0.450        0.184        2.732
Mandatory:
  BA..........................................................       7.498       8.662       7.924       8.924       8.746       8.004       7.777       7.671       7.658       7.764       7.776       7.901       41.375       80.145
  OT..........................................................      -0.964       5.827       3.394       4.355       3.678       2.114       1.469       1.298       0.901       0.432       0.052       0.218       15.010       17.911
400--Transportation:
  BA..........................................................      68.887      64.091      75.783      76.502      77.515      79.931      82.747      85.361      72.323      73.183      74.067      74.987      392.478      772.399
  OT..........................................................      61.862      67.847      71.555      71.581      73.035      74.938      77.285      79.865      79.035      75.687      74.864      75.124      368.394      752.969
Discretionary:
  BA..........................................................      23.820      22.611      25.715      25.040      24.857      25.840      26.936      28.756      26.221      27.040      27.875      28.739      128.388      267.019
  OT..........................................................      57.292      65.184      69.294      69.396      70.986      72.954      75.358      77.909      77.068      73.685      72.816      73.023      357.988      732.489
Mandatory:
  BA..........................................................      45.067      41.480      50.068      51.462      52.658      54.091      55.811      56.605      46.102      46.143      46.192      46.248      264.090      505.380
  OT..........................................................       4.570       2.663       2.261       2.185       2.049       1.984       1.927       1.956       1.967       2.002       2.048       2.101       10.406       20.480
450--Community and Regional Development:
  BA..........................................................      23.361      15.751      14.323      14.398      14.581      14.796      15.005      15.240      15.493      15.752      16.015      16.283       73.103      151.886
  OT..........................................................      12.991      17.569      16.716      16.696      15.553      15.096      14.383      14.558      14.761      15.010      15.252      15.519       78.444      153.543
Discretionary:
  BA..........................................................      23.051      15.225      13.826      13.999      14.188      14.401      14.688      14.921      15.168      15.425      15.686      15.950       71.102      148.252
  OT..........................................................      14.108      17.629      16.787      16.517      15.474      15.059      14.390      14.602      14.835      15.079      15.313      15.569       78.227      153.624
Mandatory:
  BA..........................................................       0.310       0.526       0.497       0.399       0.393       0.395       0.317       0.319       0.325       0.327       0.329       0.333        2.001        3.634
  OT..........................................................      -1.117      -0.060      -0.071       0.179       0.079       0.037      -0.007      -0.044      -0.074      -0.069      -0.061      -0.050        0.217       -0.081
500--Education, Training, Employment, and Social Services:
  BA..........................................................      79.861      82.974      97.610      91.777      92.818      95.959      99.315     102.203     104.059     106.160     108.544     110.143      477.479    1,008.588
  OT..........................................................      70.544      81.531      86.279      91.286      91.964      92.948      95.279      98.470     101.281     103.536     105.570     107.642      457.757      974.256
Discretionary:
  BA..........................................................      71.275      72.875      86.322      81.280      81.575      84.353      87.416      90.037      91.731      93.495      95.632      96.904      420.946      888.745
  OT..........................................................      62.751      71.958      75.843      81.012      81.317      82.028      84.040      87.013      89.584      91.609      93.411      95.171      404.241      861.029
Mandatory:
  BA..........................................................       8.586      10.099      11.288      10.497      11.243      11.606      11.899      12.166      12.328      12.665      12.912      13.239       56.533      119.843
  OT..........................................................       7.793       9.573      10.436      10.274      10.647      10.920      11.239      11.457      11.697      11.927      12.159      12.471       53.516      113.227
550--Health:
  BA..........................................................     205.120     222.913     248.464     264.948     284.216     304.438     326.942     350.373     375.419     401.552     415.777     445.554    1,429.008    3,417.683
  OT..........................................................     196.521     217.881     246.671     264.680     284.024     303.522     325.618     348.889     373.890     400.014     414.359     444.147    1,424.514    3,405.813
Discretionary:
  BA..........................................................      45.789      49.468      52.712      50.667      51.800      52.950      54.299      55.607      56.972      58.387      59.806      61.246      262.428      554.446
  OT..........................................................      39.426      44.349      50.799      49.394      50.423      51.637      52.576      53.801      55.102      56.460      57.851      59.252      254.828      537.294
Mandatory:
  BA..........................................................     159.331     173.445     195.752     214.281     232.416     251.488     272.643     294.766     318.447     343.165     355.971     384.308    1,166.580    2,863.237
  OT..........................................................     157.095     173.532     195.872     215.286     233.601     251.885     273.042     295.088     318.788     343.554     356.508     384.895    1,169.686    2,868.519
570--Medicare:
  BA..........................................................     231.399     248.586     265.178     282.869     322.045     344.178     369.577     395.685     422.684     453.721     488.367     526.981    1,583.847    3,871.285
  OT..........................................................     230.855     248.434     265.443     285.817     318.806     344.448     369.452     395.424     422.942     457.078     484.541     527.237    1,583.966    3,871.188
Discretionary:
  BA..........................................................       3.653       3.798       3.739       3.807       3.906       4.014       4.138       4.353       4.572       4.809       5.089       5.396       19.604       43.823
  OT..........................................................       3.156       3.797       3.726       3.811       3.897       3.992       4.113       4.309       4.524       4.757       5.027       5.327       19.539       43.483
Mandatory:
  BA..........................................................     227.746     244.788     261.439     279.062     318.139     340.164     365.439     391.332     418.112     448.912     483.278     521.585    1,564.243    3,827.462
  OT..........................................................     227.699     244.637     261.717     282.006     314.909     340.456     365.339     391.115     418.418     452.321     479.514     521.910    1,564.427    3,827.705
600--Income Security:
  BA..........................................................     309.367     326.390     319.513     333.810     341.805     349.191     362.006     373.681     385.152     400.573     404.045     418.978    1,706.325    3,688.754
  OT..........................................................     312.511     334.169     324.701     337.157     344.322     350.983     363.115     374.384     385.671     401.003     404.453     419.551    1,720.278    3,705.341
Discretionary:
  BA..........................................................      42.379      44.020      45.712      48.760      50.311      52.004      53.714      55.441      57.295      59.143      61.023      62.884      250.501      546.287
  OT..........................................................      48.081      50.781      51.544      52.373      53.424      54.643      56.116      57.505      58.954      60.560      62.215      63.908      268.100      571.243
Mandatory:
  BA..........................................................     266.988     282.370     273.801     285.050     291.494     297.187     308.292     318.240     327.857     341.430     343.022     356.094    1,455.824    3,142.467
  OT..........................................................     264.430     283.388     273.157     284.784     290.898     296.340     306.999     316.879     326.717     340.443     342.238     355.643    1,452.178    3,134.098
650--Social Security:
  BA..........................................................     462.363     478.882     501.140     521.499     546.735     575.008     606.071     641.105     679.322     720.505     766.154     816.195    2,750.453    6,373.734
  OT..........................................................     455.999     476.888     498.679     518.672     543.640     571.621     602.300     636.939     674.852     715.645     760.812     810.363    2,734.912    6,333.523
Discretionary:
  BA..........................................................       3.523       3.833       4.282       4.363       4.450       4.549       4.665       4.820       4.983       5.151       5.323       5.503       22.309       48.089
  OT..........................................................       3.925       3.859       4.231       4.326       4.435       4.532       4.644       4.794       4.953       5.121       5.291       5.471       22.168       47.798
Mandatory:
  BA..........................................................     458.840     475.049     496.858     517.136     542.285     570.459     601.406     636.285     674.339     715.354     760.831     810.692    2,728.144    6,325.645
  OT..........................................................     452.074     473.029     494.448     514.346     539.205     567.089     597.656     632.145     669.899     710.524     755.521     804.892    2,712.744    6,285.725
650 on-budget:
  BA..........................................................      13.997      13.255      14.294      15.471      16.421      17.919      19.704      21.810      24.283      28.170      31.357      34.347       83.809      223.776
  OT..........................................................      13.988      13.255      14.293      15.471      16.421      17.919      19.704      21.810      24.283      28.170      31.357      34.347       83.808      223.775
Discretionary:
  BA..........................................................       0.019       0.021       0.025       0.025       0.026       0.027       0.027       0.028       0.029       0.030       0.031       0.032        0.130        0.280
  OT..........................................................       0.019       0.021       0.024       0.025       0.026       0.027       0.027       0.028       0.029       0.030       0.031       0.032        0.129        0.279
Mandatory:
  BA..........................................................      13.978      13.234      14.269      15.446      16.395      17.892      19.677      21.782      24.254      28.140      31.326      34.315       83.679      223.496
  OT..........................................................      13.969      13.234      14.269      15.446      16.395      17.892      19.677      21.782      24.254      28.140      31.326      34.315       83.679      223.496
700--Veterans Benefits and Services:
  BA..........................................................      52.126      57.597      63.773      67.125      65.388      63.859      67.645      69.254      70.967      75.643      72.592      77.429      327.790      693.675
  OT..........................................................      50.983      57.486      63.200      66.530      64.970      63.416      67.374      68.899      70.563      75.223      72.071      76.963      325.490      689.209

[[Page H3210]]

 
Discretionary:
  BA..........................................................      24.074      26.532      29.957      28.386      28.812      29.272      29.838      30.796      31.789      32.824      33.887      35.000      146.265      310.561
  OT..........................................................      23.959      26.902      29.600      28.183      28.495      29.024      29.662      30.530      31.497      32.521      33.576      34.663      144.964      307.751
Mandatory:
  BA..........................................................      28.052      31.065      33.816      38.739      36.576      34.587      37.807      38.458      39.178      42.819      38.705      42.429      181.525      383.114
  OT..........................................................      27.024      30.584      33.600      38.347      36.475      34.392      37.712      38.369      39.066      42.702      38.495      42.300      180.526      381.458
750--Administration of Justice:
  BA..........................................................      36.171      38.543      37.757      38.077      37.965      38.442      39.458      40.478      41.580      42.870      44.188      45.557      191.699      406.372
  OT..........................................................      34.310      37.712      40.882      39.324      38.348      38.233      39.109      40.193      41.280      42.453      43.741      45.101      195.896      408.664
Discretionary:
  BA..........................................................      34.676      36.289      33.679      35.912      36.664      37.621      38.694      39.771      40.931      42.288      43.674      45.117      182.570      394.351
  OT..........................................................      33.153      35.484      37.608      36.761      36.862      37.483      38.455      39.596      40.741      41.977      43.331      44.764      187.169      397.578
Mandatory:
  BA..........................................................       1.495       2.254       4.078       2.165       1.301       0.821       0.764       0.707       0.649       0.582       0.514       0.440        9.129       12.021
  OT..........................................................       1.157       2.228       3.274       2.563       1.486       0.750       0.654       0.597       0.539       0.476       0.410       0.337        8.727       11.086
800--General Government:
  BA..........................................................      18.384      18.195      20.012      20.341      22.396      21.147      21.646      21.957      22.706      23.469      24.267      25.138      105.542      223.079
  OT..........................................................      17.380      18.120      19.876      20.420      22.225      20.897      21.423      21.515      22.223      22.957      23.892      24.582      104.841      220.010
Discretionary:
  BA..........................................................      15.602      15.702      17.102      17.364      17.760      18.181      18.669      19.303      19.977      20.656      21.360      22.094       89.076      192.466
  OT..........................................................      14.640      15.570      16.783      17.479      17.648      17.956      18.306      18.849      19.500      20.161      20.853      21.571       88.172      189.106
Mandatory:
  BA..........................................................       2.782       2.493       2.910       2.977       4.636       2.966       2.977       2.654       2.729       2.813       2.907       3.044       16.466       30.613
  OT..........................................................       2.740       2.550       3.093       2.941       4.577       2.941       3.117       2.666       2.723       2.796       3.039       3.011       16.669       30.904
900--Net Interest:
  BA..........................................................     170.955     155.592     166.095     203.823     230.541     243.499     252.354     259.782     263.974     267.195     267.392     261.100    1,096.312    2,415.755
  OT..........................................................     170.957     155.592     166.095     203.823     230.541     243.499     252.354     259.782     263.974     267.195     267.392     261.100    1,096.312    2,415.755
Discretionary:
  BA..........................................................       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000        0.000        0.000
  OT..........................................................       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000        0.000        0.000
Mandatory:
  BA..........................................................     170.955     155.592     166.095     203.823     230.541     243.499     252.354     259.782     263.974     267.195     267.392     261.100    1,096.312    2,415.755
  OT..........................................................     170.957     155.592     166.095     203.823     230.541     243.499     252.354     259.782     263.974     267.195     267.392     261.100    1,096.312    2,415.755
900 on-budget:
  BA..........................................................     247.775     239.682     255.775     301.673     339.281     364.919     387.674     410.022     430.164     450.345     468.452     480.870    1,649.322    3,889.175
  OT..........................................................     247.777     239.682     255.775     301.673     339.281     364.919     387.674     410.022     430.164     450.345     468.452     480.870    1,649.322    3,889.175
Discretionary:
  BA..........................................................       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000        0.000        0.000
  OT..........................................................       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000        0.000        0.000
Mandatory:
  BA..........................................................     247.775     239.682     255.775     301.673     339.281     364.919     387.674     410.022     430.164     450.345     468.452     480.870    1,649.322    3,889.175
  OT..........................................................     247.777     239.682     255.775     301.673     339.281     364.919     387.674     410.022     430.164     450.345     468.452     480.870    1,649.322    3,889.175
920--Allowances:
  BA..........................................................       0.000       0.115     -16.122      -5.943      -2.104      -1.467      -6.263     -19.939     -41.290     -19.883     -23.031     -27.371      -31.899     -163.413
  OT..........................................................       0.000       0.115      -8.342      -6.134      -5.959      -3.698      -7.163     -17.617     -38.356     -16.729     -19.546     -24.228      -31.297     -147.771
Discretionary:
  BA..........................................................       0.000       0.115     -15.202      -5.623      -1.784      -1.147      -5.943     -19.619     -40.970     -19.563     -22.711     -27.051      -29.699     -159.613
  OT..........................................................       0.000       0.115      -7.763      -5.685      -5.657      -3.381      -6.843     -17.297     -38.036     -16.409     -19.226     -23.908      -29.330     -144.204
Mandatory:
  BA..........................................................       0.000       0.000      -0.920      -0.320      -0.320      -0.320      -0.320      -0.320      -0.320      -0.320      -0.320      -0.320       -2.200       -3.800
  OT..........................................................       0.000       0.000      -0.579      -0.449      -0.302      -0.317      -0.320      -0.320      -0.320      -0.320      -0.320      -0.320       -1.967       -3.567
950--Undistributed Offsetting Receipts:
  BA..........................................................     -47.806     -50.513     -52.926     -63.411     -69.375     -61.259     -65.185     -66.882     -69.937     -73.259     -78.640     -82.068     -312.156     -682.942
  OT..........................................................     -47.392     -50.513     -52.926     -63.411     -69.375     -61.259     -65.185     -66.882     -69.937     -73.259     -78.640     -82.068     -312.156     -682.942
Discretionary:
  BA..........................................................       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000        0.000        0.000
  OT..........................................................       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000        0.000        0.000
Mandatory:
  BA..........................................................     -47.806     -50.513     -52.926     -63.411     -69.375     -61.259     -65.185     -66.882     -69.937     -73.259     -78.640     -82.068     -312.156     -682.942
  OT..........................................................     -47.392     -50.513     -52.926     -63.411     -69.375     -61.259     -65.185     -66.882     -69.937     -73.259     -78.640     -82.068     -312.156     -682.942
950 on-budget:
  BA..........................................................     -38.514     -41.104     -42.894     -52.608     -57.884     -49.087     -52.121     -52.962     -55.108     -57.359     -62.012     -64.358     -254.594     -546.393
  OT..........................................................     -38.514     -41.104     -42.894     -52.608     -57.884     -49.087     -52.121     -52.962     -55.108     -57.359     -62.012     -64.358     -254.594     -546.393
Discretionary:
  BA..........................................................       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000        0.000        0.000
  OT..........................................................       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000        0.000        0.000
Mandatory:
  BA..........................................................     -38.514     -41.104     -42.894     -52.608     -57.884     -49.087     -52.121     -52.962     -55.108     -57.359     -62.012     -64.358     -254.594     -546.393
  OT..........................................................     -38.514     -41.104     -42.894     -52.608     -57.884     -49.087     -52.121     -52.962     -55.108     -57.359     -62.012     -64.358     -254.594     -546.393
Total:
  BA..........................................................   2,085.573   2,162.789   2,260.114   2,390.819   2,531.170   2,656.404   2,782.913   2,889.448   2,970.900   3,125.270   3,227.301   3,366.670   12,621.420   28,201.009
  OT..........................................................   2,010.950   2,147.924   2,245.894   2,371.946   2,490.782   2,607.468   2,733.603   2,849.302   2,948.361   3,105.447   3,191.109   3,338.397   12,449.692   27,882.308
Discretionary:
  BA..........................................................     734.713     772.411     791.381     816.945     848.002     881.539     910.979     916.981     909.590     950.790     968.401     984.394    4,248.847    8,979.003
  OT..........................................................     734.405     809.372     837.164     857.489     876.104     901.663     933.724     950.277     949.739     991.328     999.948   1,019.939    4,406.144    9,317.374
Mandatory:
  BA..........................................................   1,350.860   1,390.378   1,468.733   1,573.874   1,683.168   1,774.865   1,871.933   1,972.467   2,061.310   2,174.480   2,258.900   2,382.276    8,372.573   19,222.006
  OT..........................................................   1,276.545   1,338.552   1,408.730   1,514.457   1,614.678   1,705.805   1,799.879   1,899.025   1,998.622   2,114.119   2,191.161   2,318.458    8,043.549   18,564.934
Total on-budget:
  BA..........................................................   1,720.248   1,794.261   1,873.180   1,993.944   2,123.565   2,236.078   2,348.462   2,438.088   2,501.009   2,636.500   2,714.965   2,827.496   10,575.229   23,693.287
  OT..........................................................   1,655.288   1,781.390   1,861.420   1,977.898   2,086.272   2,190.529   2,302.923   2,402.108   2,482.940   2,621.537   2,684.115   2,805.055   10,419.041   23,414.796
Discretionary:
  BA..........................................................     731.209     768.599     787.124     812.607     843.578     877.017     906.341     912.189     904.636     945.669     963.109     978.923    4,226.668    8,931.194
  OT..........................................................     730.499     805.534     832.957     853.188     871.695     897.158     929.107     945.511     944.815     986.237     994.688   1,014.500    4,384.105    9,269.855
Mandatory:
  BA..........................................................     989.039   1,025.662   1,086.056   1,181.337   1,279.987   1,359.061   1,442.120   1,525.899   1,596.373   1,690.831   1,751.856   1,848.573    6,348.561   14,762.093
  OT..........................................................     924.789     975.856   1,028.463   1,124.710   1,214.577   1,293.371   1,373.816   1,456.597   1,538.125   1,635.300   1,689.427   1,790.555    6,034.937   14,144.941
Revenues......................................................   1,853.173   1,865.468   1,958.615   2,153.829   2,321.376   2,479.341   2,619.660   2,762.435   2,897.122   3,102.068   3,292.730   3,497.075   11,532.821   27,084.251
Revenues on-budget............................................   1,337.852   1,333.861   1,400.789   1,566.044   1,702.314   1,828.213   1,935.251   2,043.323   2,141.398   2,309.946   2,463.192   2,627.425    8,432.611   20,017.895
Deficit/Surplus...............................................    -157.777    -282.456    -287.279    -218.117    -169.406    -128.127    -113.943     -86.867     -51.239      -3.379     101.621     158.678     -916.871     -798.057
  On-budget...................................................    -317.436    -447.529    -460.631    -411.854    -383.958    -362.316    -367.672    -358.785    -341.542    -311.591    -220.923    -177.630   -1,986.430   -3,396.901
  Off-budget..................................................     159.659     165.073     173.352     193.737     214.552     234.189     253.729     271.918     290.303     308.212     322.544     336.308    1,069.559    2,598.844
Notes and Miscellaneous Info:
Revenues:
  On-budget...................................................   1,337.852   1,333.861   1,400.789   1,566.044   1,702.314   1,828.213   1,935.251   2,043.323   2,141.398   2,309.946   2,463.192   2,627.425    8,432.611   20,017.895
  Off-budget..................................................     515.321     531.607     557.826     587.785     619.062     651.128     684.409     719.112     755.724     792.122     829.538     869.650    3,100.210    7,066.356
Outlays:
  On-budget:
    BA........................................................   1,720.248   1,794.261   1,873.180   1,993.944   2,123.565   2,236.078   2,348.462   2,438.088   2,501.009   2,636.500   2,714.965   2,827.496   10,575.229   23,693.287
    OT........................................................   1,655.288   1,781.390   1,861.420   1,977.898   2,086.272   2,190.529   2,302.923   2,402.108   2,482.940   2,621.537   2,684.115   2,805.055   10,419.041   23,414.796
  Off-budget:
    BA........................................................     365.325     368.528     386.934     396.875     407.605     420.326     434.451     451.360     469.891     488.770     512.336     539.174    2,046.191    4,507.722
    OT........................................................     355.662     366.534     384.474     394.048     404.510     416.939     430.680     447.194     465.421     483.910     506.994     533.342    2,030.651    4,467.512
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[[Page H3211]]

                         FUNCTIONS AND REVENUES

       Pursuant to section 301(a)(3) of the Budget Act, the budget 
     resolution must set appropriate levels for each major 
     functional category based on the 302(a) allocations and the 
     budgetary totals.
       The respective levels of the House resolution, the Senate 
     amendment, and the Conference Agreement for each major budget 
     function and revenue totals are discussed in the following 
     section. The Conference Agreement provides aggregate 
     discretionary spending in 2004 of $784.460 billion in budget 
     authority (BA) and $860.752 billion in outlays.
       These two aggregate numbers are allocated to the 
     Appropriations Committees to be suballocated to their 13 
     individual appropriation subcommittees.

                                Revenue

       The component of the budget resolution classified as 
     revenue reflects all of the Federal Government's various tax 
     receipts that are classified as ``on-budget.'' This includes 
     individual income taxes; corporate income taxes; excise 
     taxes, such as the gasoline tax; various other taxes, such as 
     estate and gift taxes; and social insurance taxes, except for 
     Social Security. Customs duties, tariffs, and other 
     miscellaneous receipts also are included in the revenue 
     function.
       Social insurance taxes collected for the Social Security 
     system--the Old Age and Survivors and Disability Insurance 
     [OASDI] payroll tax--are off budget. The remaining social 
     insurance taxes (the Hospital Insurance [HI] payroll tax 
     portion of Medicare, the Federal Unemployment Tax Act [FUTA] 
     payroll tax, railroad retirement, and other retirement 
     systems) are all on budget. Pursuant to the Congressional 
     Budget Act of 1974 and the Budget Enforcement Act of 1990,
       Social Security payroll taxes, which constitute slightly 
     more than a quarter of all Federal receipts, are not 
     reflected in the budget resolution.
     House Resolution
       The House resolution calls for on-budget revenue of $1.32 
     trillion in fiscal year 2003; $1.35 trillion in 2004; $8.23 
     trillion from 2004 through 2008; and $19.48 trillion from 
     2004 through 2013. When off-budget Social Security taxes are 
     added, total revenue is estimated to be $1.86 trillion in 
     fiscal year 2003, $1.91 trillion in 2004, $11.33 trillion 
     over the next 5 years, and $26.55 trillion over the next 10 
     years.
       The resolution directs the Committee on Ways and Means to 
     report legislation to the House floor by 11 April 2003, 
     making adjustments in current law to effect a reduction in 
     revenue of $35.4 billion in 2003; $112.8 billion in 2004; 
     $387.7 billion from 2004 through 2008; and $698.3 billion in 
     2003-2013. This ``reconciles'' an economic growth and job 
     creation plan similar to the President's under the expedited 
     reconciliation rules of the Budget Act. (Also reconciled to 
     the Ways and Means Committee is $27.5 billion in new 
     mandatory spending authority to cover the refundable 
     component of an accelerated increase in the child tax 
     credit.)
       The resolution also assumes the permanent extension of the 
     expiring tax cuts in the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 that otherwise will expire in 
     2010. This will reduce revenue over 11 years by $601.9 
     billion below the baseline. This adjustment is not 
     reconciled.
       Finally, the budget accommodates, but does not reconcile, 
     $49.9 billion in additional tax relief over the next 11 
     years. Policies would be determined by the Committee on Ways 
     and Means, but could include incentives for charitable 
     giving, affordable single-family housing, and energy 
     production, conservation, and reliability; simplifying the 
     tax laws; and other House policies. Tariff and other revenue 
     effects of various trade initiatives are also possible.
     Senate Amendment
       The Senate amendment assumes an overall reduction in 
     revenues of $802.2 billion over the 11-year period, 2003-13. 
     The Senate amendment instructs the Finance Committee to 
     report legislation by 8 April 2003 to reduce revenues by 
     $322.5 billion over 2003-2013 and to increase direct spending 
     related to tax policy changes by $27.5 billion over 2003-13 
     (reflected in Function 600). The Senate amendment assumes, 
     but does not reconcile, an additional $479.6 billion in tax 
     relief over 11 years with a related, but unreconciled, 
     increase in direct spending (related to tax policy changes) 
     of $22.3 billion over 11 years (reflected in Function 600).
       The Committee-reported resolution reconciled the Finance 
     Committee for a reduction in revenues and an increase in 
     outlays consistent with President Bush's jobs and growth tax 
     relief plan. The President's plan provides tax relief of $698 
     billion over the 2003-13 period. It includes three main 
     components: tax relief for working families (by speeding up 
     individual income tax marginal rate reductions already in 
     law, accelerating marriage penalty relief already in law, 
     increasing the child credit immediately to $1,000, and 
     increasing the alternative minimum tax exemption amount); 
     elimination of the double taxation of dividends; and a 
     permanent increase in small business expensing. Since the 
     child credit is partially refundable, the Committee-reported 
     resolution assumed outlay increases sufficient to accommodate 
     the President's growth plan--$27.5 billion in new spending 
     over the next 11 years.
       During consideration of the Committee-reported resolution, 
     the Senate adopted several amendments that had the combined 
     effect of reducing the revenue reconciliation instruction to 
     the Finance Committee to $322.5 billion over 11 years.
       The Committee-reported resolution assumed, but did not 
     reconcile, the permanent extension of the provisions of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 
     [EGTRRA], which are currently scheduled to expire after 
     2010. The 11-year tax relief assumption for the EGTRRA 
     extensions is $601.9 billion, with $592.6 billion of the 
     revenue loss (98 percent) occurring in years 2011-13. The 
     permanent extension of the EGTRRA provisions also results 
     in an increase in direct spending of $22.3 billion over 11 
     years. The Committee-reported resolution also assumed, but 
     did not reconcile, about $13 billion in tax relief over 11 
     years from several measures expected to be considered in 
     the upcoming year.
       During the Senate's consideration of the Committee-reported 
     resolution, the Senate adopted eight amendments affecting the 
     amount of tax relief assumed outside of reconciliation. The 
     Senate adopted one amendment providing for $45 billion in 
     additional tax relief consistent with making the repeal of 
     the estate tax permanent beginning in 2009. The Senate also 
     adopted seven amendments that reduced the level of tax relief 
     assumed outside of reconciliation by $181 billion. The 
     Committee-reported resolution assumed $614.7 billion of tax 
     relief outside of reconciliation; the Senate amendment 
     assumes $478.7 billion of tax relief outside of 
     reconciliation.
     Conference Agreement
       The Conference Agreement calls for a jobs and growth plan 
     with goals similar to the President's proposal: supporting 
     broad, sustained economic growth and job creation.
       With these goals, the Conference Agreement assumes $626 
     billion over the 2003-13 period for tax relief and associated 
     outlays for a jobs and growth plan. The Agreement directs the 
     Senate Finance Committee to report legislation by 8 May 2003 
     to reduce revenue by $522.524 billion over 2003-2013, and to 
     increase direct spending related to tax policy changes by 
     $27.476 billion over 2003-2013 (reflected in function 600). 
     The Agreement also directs the House Ways and Means Committee 
     to report legislation by 30 May 2003 to reduce revenue by 
     $535.0 billion over 2003-13, and to increase direct spending 
     related to tax policy changes by $15.0 billion over 2003-
     2013.
       The Conference Agreement assumes, but does not reconcile, 
     an additional $690.9 billion in tax relief over 11 years, and 
     associated increases in direct spending. The assumed 
     additional tax relief could accommodate the permanent 
     extension of the provisions of the Economic Growth and Tax 
     Relief Reconciliation Act of 2001 [EGTRRA], the tax 
     provisions of energy policy legislation, the revenue impacts 
     of trade legislation, and several miscellaneous tax 
     provisions proposed by the President or Congress.

                     National Defense: Function 050

     Function Summary
       The National Defense function includes funds to develop, 
     maintain, and equip the military forces of the United States. 
     More than 95 percent of the funding in this function goes to 
     Department of Defense [DOD] military activities. The function 
     also includes pay and benefits for military and civilian 
     personnel; research, development, testing, and evaluation; 
     procurement of weapon systems; military construction and 
     family housing; and operations and maintenance of the defense 
     establishment. The remaining funding in the function is for 
     atomic energy defense activities of the Department of Energy, 
     and other defense-related activities.
     House Resolution
       The House resolution calls for $400.6 billion in BA and 
     $400.9 billion in outlays in fiscal year 2004, an increase of 
     2.0 percent in BA compared with fiscal year 2003. The 
     function totals are $2,202.1 billion in BA and $2,142.7 
     billion in outlays over 5 years; and $4,814.0 billion in BA 
     and $4,704.4 billion in outlays over 10 years.
       The BA and outlay funding levels for National Defense will 
     support critical military and homeland security initiatives, 
     and are consistent with the President's recommendations. The 
     resolution assumes $70 million in additional mandatory BA to 
     permit proceeds from facilities that were acquired, 
     constructed, or improved with commissary surcharges or 
     nonappropriated funds, and that were closed under Base 
     Realignment and Closure authority, to be reapplied to 
     nonappropriated fund activities without an appropriation.
     Senate Amendment
       For discretionary programs, the Senate amendment assumes 
     the President's request for National Defense in 2004 
     totalling $400.1 billion in BA and $400.6 billion in outlays 
     for 2004. This is an increase of $7.9 billion in BA (2.0 
     percent) and $14.2 billion in outlays (3.7 percent) from the 
     2003 level.
       For 2003, the Committee-reported resolution assumed the 
     full-year appropriations already enacted. An amendment to the 
     resolution adopted by the Senate assumed an increase of $3.0 
     billion in BA and outlays in 2003 to provide pay and benefits 
     for active duty, National Guard and Reserve forces, and to 
     modernize National Guard and Reserve equipment and weapons.
       For defense activities in the Department of Defense only, 
     the Senate amendment assumes $380.8 billion in discretionary 
     BA in

[[Page H3212]]

     2004, an increase of $6.2 billion (1.6 percent) above the 
     2003 level of $374.6 billion.
       Within DOD, the Senate amendment assumes $231.9 billion in 
     discretionary BA for readiness accounts (military personnel 
     and operations and maintenance) in 2004. This represents an 
     increase of $2.4 billion in BA (1.0 percent) above the 2003 
     level of $229.5 billion. These appropriations would support 
     an active duty end strength of 1,388,100 and a Selected 
     Reserves strength of 863,000. It would also support pay 
     raises ranging from 2.0 percent to 6.3 percent, targeted by 
     rank and years of service.
       The Senate amendment also assumes $136.2 billion for 
     investment accounts (procurement and research, development, 
     testing, and evaluation) in 2004. This represents an increase 
     of $4.8 billion in BA (3.9 percent) above the 2003 
     appropriated level of $131.4 billion. Major purchases include 
     a Virginia Class submarine, 3 DDG-51 destroyers, 42 F/A-18E/F 
     fighter aircraft, and 22 F-22 fighter aircraft.
       For military construction and family housing, the Senate 
     amendment assumes $9.1 billion in discretionary budget 
     authority for 2004 representing a 13.8-percent decrease from 
     the 2003 level of $10.5 billion.
       During floor consideration, the Senate adopted an amendment 
     that would allow the Appropriations Committee to provide up 
     to $100 billion for the costs associated with disarming Iraq.
       For defense activities in the Department of Energy, the 
     Senate amendment assumes $16.9 billion in discretionary BA in 
     2004, representing an increase of $1.1 billion (6.9 percent) 
     above the 2003 enacted level of $15.8 billion.
       The Senate amendment assumes $8.8 billion in discretionary 
     BA for the National Nuclear Security Administration in 2004, 
     representing an increase of $796 million (10.0 percent) above 
     the 2003 enacted level of $8.0 billion.
       The Senate amendment assumes $7.7 billion in discretionary 
     BA for the Department of Energy's environmental and other 
     defense activities in 2004, representing an increase of $185 
     million (2.5 percent) above the 2003 enacted level of $7.6 
     billion.
       The Senate-reported resolution assumed no mandatory 
     increases or decreases in this function. Of note, the Senate-
     reported amendment assumed full funding for the so-called the 
     Purple Heart Plus program, which was included in last year's 
     Defense Authorization Act. The provision allows all disabled 
     military retirees whose disabilities are a direct result of 
     combat, and those most severely disabled (60 percent or 
     greater) military retirees whose disabilities are a direct 
     result of combat-related injury, to receive their full 
     military retirement pay as well as a special compensation 
     equal to the amount of veterans' disability compensation 
     without offset. The Senate amendment reflects an amendment to 
     the Committee- reported resolution adopted by the Senate to 
     cover the incremental mandatory cost of phased-in concurrent 
     receipt of retirement pay and disability for all veterans 
     with service-related disabilities rated at 60 percent or 
     higher ($182 million in BA and outlays in 2004, and $12.8 
     billion in BA and outlays over the 2004-13 period).
     Conference Agreement
       The Conference Agreement assumes enactment of the fiscal 
     year 2003 supplemental appropriations bill for addressing the 
     conflict in Iraq. The provision allows an adjustment for the 
     finally enacted level.
       The Agreement calls for function totals of $400.5 billion 
     in BA and $400.9 billion in outlays for fiscal year 2004; 
     $2,202.1 billion in BA and $2,142.7 billion in outlays over 5 
     years; and $4,758.2 billion in BA and $4,658.3 billion in 
     outlays over 10 years.
       The discretionary levels in this function are consistent 
     with the President's request. The levels will support 
     military forces capable of prevailing decisively in the near 
     term, and accommodate the military's longer-term 
     transformation goals.

                  International Affairs: Function 150

     Function Summary
       As part of the Global War on Terrorism, the Department of 
     State and international assistance programs play a vital role 
     in maintaining and expanding support of the international 
     coalition against terrorism. Funds distributed through the 
     International Affairs function provide for international 
     development and humanitarian assistance; international 
     security assistance; the conduct of foreign affairs; foreign 
     information and exchange activities; and international 
     financial programs. The major departments and agencies in 
     this function include the Department of State, the Department 
     of the Treasury, and the United States Agency for 
     International Development [USAID].
     House Resolution
       The budget resolution calls for $24.8 billion in BA and 
     $23.7 billion in outlays in fiscal year 2004, an increase of 
     9.8 percent in BA compared with fiscal year 2003. The 
     function totals are $149.9 billion in BA and $128.9 billion 
     in outlays over 5 years, and $326.6 billion in BA and $283.5 
     billion in outlays over 10 years.
       The House resolution calls for $2 billion as the first 
     installment toward the President's Emergency Plan for AIDS 
     Relief, a 5-year, $15-billion initiative to turn the tide in 
     the global effort to combat the HIV/AIDS pandemic. This 
     initiative--funded through USAID, the Department of Health 
     and Human Services, and the Centers for Disease Control--
     virtually triples U.S. funding to fight the international 
     AIDS pandemic. The resolution also recommends funds 
     sufficient for the President's proposal to create a new 
     Government corporation--the Millennium Challenge 
     Corporation--to administer a $1.3 billion fund designed to 
     promote just governance and sound free-market economic 
     policies in International Development Association-eligible 
     countries (with yearly per-capita incomes below $1,435).
     Senate Amendment
       For discretionary programs, the Senate amendment assumes 
     the President's request for 2004 totaling $28.7 billion in BA 
     and $26.8 billion in outlays. This represents an increase of 
     $3.2 billion in BA (12.8 percent) and $0.8 billion in outlays 
     (3.0 percent) from the 2003 level.
       The Senate amendment assumes $12.5 billion in discretionary 
     BA for International Development and Humanitarian Assistance, 
     an increase of $2.1 billion (20.1 percent) above the 2003 
     appropriated level of $10.4 billion. Within International 
     Development and Humanitarian Assistance, the Senate amendment 
     assumes a new development assistance organization, called the 
     Millennium Challenge Corporation, with an initial funding 
     level of $1.3 billion for 2004 and $14.3 billion over 2004-
     13. The Senate amendment also assumes a new Global AIDS 
     Initiative ($450 million in 2004 and $22.3 billion over 10 
     years), and a new fund for dealing with famine ($200 million 
     in 2004, and $2.2 billion over 10 years).
       The Senate amendment assumes $7.6 billion in discretionary 
     BA for International Security Assistance, an increase of $0.9 
     billion (13.2 percent) above the 2003 appropriated level of 
     $6.7 billion. Within International Security Assistance, the 
     Senate amendment assumes the creation of a new fund to deal 
     with Complex Foreign Crises, with initial funding of $100 
     million for 2004.
       The Senate amendment assumes $7.5 billion in discretionary 
     BA for the Conduct of Foreign Affairs, an increase of $636 
     million (9.2 percent) above the 2003 appropriated level of 
     $6.9 billion. The Senate amendment also assumes $983 million 
     in discretionary BA for Foreign Information and Exchange 
     Activities, an increase of $152 million (18.3 percent) above 
     the 2003 appropriated level of $831 million.
       The Senate amendment assumes no mandatory increases or 
     decreases in this function.
     Conference Agreement
       The Conference Agreement calls for $25.7 billion in BA and 
     $24.2 billion in outlays in fiscal year 2004; $155.9 billion 
     in BA and $133.7 billion in outlays over 5 years; and $341.6 
     billion in BA and $296.4 billion in outlays over 10 years. 
     The Conference Agreement fully accommodates the President's 
     request for this function. This includes funding for the 
     President's Millennium Challenge Corporation initiative and 
     the Global AIDS Initiative.

          General Science, Space, and Technology: Function 250

     Function Summary
       Function 250 consists of General Science, Space and 
     Technology programs. The largest component of this function--
     about two-thirds of total spending--is for the space flight, 
     research, and supporting activities of the National 
     Aeronautics and Space Administration [NASA]. The function 
     also reflects general science funding, including the budgets 
     for the National Science Foundation [NSF], and the 
     fundamental science programs of the Department of Energy 
     [DOE].
     House Resolution
       The House resolution calls for $22.8 billion in BA and 
     $22.3 billion in outlays in fiscal year 2004, a decrease of 
     1.6 percent in BA compared with fiscal year 2003. The 
     function totals are $121.8 billion in BA and $118.7 billion 
     in outlays over 5 years; and $260.8 billion in BA and $254.1 
     billion in outlays over 10 years.
     Senate Amendment
       For discretionary programs the Senate amendment assumes a 
     discretionary total of $23.6 billion in BA and $22.6 billion 
     in outlays for 2004. This represents an increase of $0.5 
     billion (2.3 percent) in BA and $1.2 billion (5.5 percent) in 
     outlays from the 2003 level. The Senate amendment includes 
     the following specific assumptions.
       For NASA, the Senate amendment assumes funding the 
     President's request of $14.5 billion for Function 250 
     activities (this excludes NASA aeronautics funding that falls 
     in Function 400). Included is $6.7 billion for Science, 
     Aeronautics, and Exploration and $7.8 billion for Space 
     Flight Capabilities. The President's request of $4.0 billion 
     (on a full-cost basis) is assumed for the Space Shuttle.
       The Senate amendment assumes funding the President's 
     request of $5.4 billion in discretionary funding for National 
     Science Foundation activities, a 3.2 percent increase over 
     the 2003 level.
       For Department of Energy science programs, the Senate 
     amendment assumes a $100 million increase over the 
     President's request, bringing total funding for DOE science 
     programs to $3.4 billion in 2004, a 4.6 percent increase over 
     the 2003 level.
       The Senate amendment includes $273 million for the 
     Department of Homeland Security in 2004. These funds support 
     the advance of homeland security through scientific research.
       The Senate amendment assumes no mandatory increases or 
     decreases in this function.

[[Page H3213]]

     Conference Agreement
       The Conference Agreement for Function 250 calls for $23.9 
     billion in BA and $22.8 billion in outlays in fiscal year 
     2004. The functional totals are $126.5 billion in BA and 
     $122.3 billion in outlays over 5 years, and $270.5 billion in 
     BA and $262.2 billion in outlays over 10 years. The Agreement 
     accommodates an increase of $324 million above the 
     administration's request for NSF research and related 
     activities. The Agreement also supports a $100 million 
     increase over the administration's request for DOE science 
     programs.

                          Energy: Function 270

     Function Summary
       The Energy function reflects civilian energy and 
     environmental activities and programs of the Federal 
     Government. Through this function, spending is provided for 
     energy supply programs, such as solar and renewable, fossil 
     and nuclear research at the Department of Energy [DOE]; rural 
     electricity and telecommunications loans, administered 
     through the Rural Utilities Service of the Department of 
     Agriculture; electric power generation and transmission 
     programs of the Power Marketing Administrations (the 
     Southeastern Power Administration, the Southwestern Power 
     Administration, the Western Area Power Administration, and 
     the Bonneville Power Administration); and power generation 
     and transmission programs of the Tennessee Valley Authority. 
     This function also provides funds for energy conservation 
     programs; emergency energy preparedness (mainly the Strategic 
     Petroleum Reserve); and energy information, policy, and 
     regulation programs, including spending by the Office of the 
     Secretary of Energy and the operations of the Federal Energy 
     Regulatory Commission, the Nuclear Regulatory Commission and 
     the U.S. Enrichment Corporation.
       Function 270 does not include DOE's national security 
     activities--the National Nuclear Security Administration--
     which are in Function 050 (Defense), or its basic research 
     and science activities, which are in Function 250 (General 
     Science, Space, and Technology).
     House Resolution
       The House resolution calls for $2.6 billion in BA and $0.9 
     billion in outlays in fiscal year 2004, an increase of 25 
     percent in BA compared with fiscal year 2003. The function 
     totals are $13.3 billion in BA and $5.6 billion in outlays 
     over 5 years, and $29.3 billion in BA and $15.6 billion in 
     outlays over 10 years.
       Pursuant to the Homeland Security Act of 2002, the 
     functions of the National Simulation and Analysis Center and 
     the energy security and assurance programs of the Department 
     of Energy are transferred to the new Department's Directorate 
     of Information Analysis and Infrastructure Protection.
       The resolution accommodates resources outside the 
     Department of Homeland Security necessary for certain aspects 
     of homeland security. A sum of $619 million is assumed in 
     fiscal year 2004 for the Nuclear Regulatory Commission to 
     continue to review and strengthen NRC's physical facilities 
     and information technology infrastructure to enhance nuclear 
     plant security. Of this amount, $572 million is provided by 
     fees and receipts.
     Senate Amendment
       The Senate amendment assumes spending in this function 
     would total $2.6 billion in BA and $0.9 billion in outlays 
     for 2004. This represents an increase of $0.6 billion in BA 
     (7 percent), and $0.4 billion in outlays from the 2003 level. 
     The Senate amendment includes the following specific 
     assumptions.
       For discretionary programs, the Senate amendment assumes a 
     total of $3.7 billion in BA and $3.6 billion in outlays for 
     2004. This represents an increase of $0.4 billion (13 
     percent) in BA above the 2003 level.
       The Senate amendment assumes $881 million for non-defense 
     environmental management activities. This is an increase of 
     $213 million, or 32 percent, above the 2003 enacted level. 
     (An additional $6.3 billion for environmental management 
     activities is included in Function 050.)
       The Senate amendment assumes $802 million for Energy Supply 
     activities. This is $106 million (15 percent) above the 2003 
     enacted level. This increase includes funding for the 
     President's Freedom Fuel Initiative, which would help reverse 
     America's growing dependence on foreign oil, by providing 
     funds for research for a commercially viable hydrogen-powered 
     fuel cell technology.
       The Senate amendment assumes no mandatory increases or 
     decreases in this function.
     Conference Agreement
       The Conference Agreement for Function 270 calls for $2.6 
     billion in BA and $0.9 billion in outlays in fiscal year 
     2004. The functional totals are $13.8 billion in BA and $5.6 
     billion in outlays over 5 years, and $30.3 billion in BA and 
     $15.7 billion in outlays over 10 years. The Conference 
     Agreement fully supports the President's budget request for 
     this function.

            Natural Resources and Environment: Function 300

     Function Summary
       Programs within Function 300 consist of water resources, 
     conservation, land management, pollution control and 
     abatement, and recreational resources. Major departments and 
     agencies in this function are the Department of Interior, 
     including the National Park Service [NPS], the Bureau of Land 
     Management [BLM], the Bureau of Reclamation, and the Fish and 
     Wildlife Service [FWS]; conservation-oriented and land 
     management agencies within the Department of Agriculture 
     [USDA] including the Forest Service; the National Oceanic and 
     Atmospheric Administration [NOAA] in the Department of 
     Commerce; the Army Corps of Engineers; and the Environmental 
     Protection Agency [EPA].
     House Resolution
       The House resolution calls for $29.2 billion in BA and 
     $29.9 billion in outlays in fiscal year 2004. The function 
     totals are $154.1 billion in BA and $154.4 billion in outlays 
     over 5 years, and $331.0 billion in BA and $327.9 billion in 
     outlays over 10 years.
       The resolution assumes legislation allowing the Bureau of 
     Land Management to use updated management plans to identify 
     publicly owned areas suitable for sale; the permanent 
     extension of the Recreation Fee Program, which allows parks, 
     refuges, forests, and other publicly-owned units to spend 
     fees within the units from which they are collected; 
     legislation to prevent the United Mine Workers of America 
     Combined Benefit Fund from financial crisis by transferring 
     to it any additional interest from the Abandoned Mine Land 
     Reclamation Fund; the Water Resources Development Act of 
     2002, which authorizes the Corps of Engineers to conduct 
     water resource studies and undertake specified projects and 
     programs for flood control, inland navigation, shoreline 
     protection, and environmental restoration; and the Central 
     Utah Project [CUP] Completion Act, which clarifies and 
     streamlines completion of project goals. The CUP provides 
     water for agricultural, industrial, and municipal uses.
     Senate Amendment
       The Senate amendment assumes spending in this function of 
     $35.3 billion in BA and $31.4 billion in outlays for 2004. 
     This represents an increase of $4.4 billion in BA (14 
     percent), and $2.4 billion in outlays from the 2003 level. 
     The Senate amendment includes the following specific 
     assumptions.
       For discretionary programs, the Senate amendment assumes a 
     total of $32.8 billion in BA and $29.5 billion in outlays for 
     2004. This represents an increase of $3.6 billion (12 
     percent) in BA above the 2003 level.
       The Senate amendment assumes $3.1 billion for the National 
     Fire Plan, which is $880 million above the President's 
     request. This reflects an amendment to the resolution adopted 
     by the Senate that added $500 million to the National Fire 
     Plan. The Senate believes it is critical to fund the National 
     Fire Plan at a realistic level that will allow the Forest 
     Service and Department of Interior to pay for wildfire 
     suppression, while maintaining its ongoing operations.
       The Senate amendment assumes $900 million for the Land and 
     Water Conservation Fund [LWCF], the same as the President's 
     budget.
       The Senate amendment assumes $11.3 billion for the 
     Environmental Protection Agency. This is $3 billion (36 
     percent) above the 2003 enacted level. The Senate did not 
     accept the President's cut to the State and Tribal Assistance 
     Grants, instead funding them at $6.8 billion, which is $3 
     billion more than the 2003 enacted level. (This increase to 
     the State and Tribal Assistance Grants is due to an amendment 
     adopted by the Senate, which added $3 billion in 2004 to the 
     Clean Water and Safe Drinking Water State Revolving Fund.) 
     Within the EPA, there is $1.4 billion for Superfund, which is 
     $125 million or 9.9 percent more than the 2003 enacted level. 
     The Senate amendment also includes $2.2 billion for 
     environmental programs and management. This is $122 million, 
     or 5.8 percent, more than the 2003 enacted level.
       The Senate amendment assumes $4.5 billion for the Corps of 
     Engineers, the same as the 2003 level, and $546 million more 
     than the President's request. It does not include the 
     President's proposal to fund operations and maintenance and 
     construction from the Inland Waterways Trust Fund or from the 
     Harbor Maintenance Trust Fund.
       The Senate amendment assumes the President's proposal to 
     make the Recreation Fee Demonstration Program permanent. This 
     program allows the Forest Service and Department of Interior 
     to collect entrance fees and use a portion of those fees 
     without further appropriation for maintenance and other 
     projects. Over 10 years, this program would have a net cost 
     of $803 million.
       The Senate amendment reflects the administration's proposal 
     for the Federal Land Transaction Facilitation Act. This 
     proposal would allow the Bureau of Land Management to use 
     updated management plans to identify property suitable for 
     disposal as well as allow a certain portion of receipts to be 
     used by the BLM for restoration projects. It would cap 
     receipt retention at $100 million per year. The proposal 
     costs $86 million over 10 years.
       The Senate amendment assumes $3.4 billion over 10 years for 
     the Conservation Security Program in the Department of 
     Agriculture.
     Conference Agreement
       The Conference Agreement calls for $31.6 billion in BA and 
     $30.8 billion in outlays in fiscal year 2004. The function 
     totals are $164.5 billion in BA and $161.9 billion in outlays 
     over 5 years, and $348.3 billion in BA and $342.4 billion in 
     outlays over 10 years.
       For discretionary programs, the Conference Agreement 
     provides for a total of $29.3 billion in BA and $29.0 billion 
     in outlays in fiscal year 2004.

[[Page H3214]]

       The Conference Agreement recognizes the importance of the 
     National Fire Plan and calls for $2.6 billion for the plan, 
     $380 million above the President's request. The Congress 
     believes it is critical to fund the National Fire Plan at a 
     level that will allow the Forest Service and the Department 
     of the Interior to pay for wildfire suppression, while 
     maintaining their normal operations. In particular, Congress 
     places a priority on wildfire suppression; rehabilitation and 
     restoration of areas burned during recent fire seasons; and 
     the reduction of hazardous fuels, which will help prevent 
     wildfires in the future.
       The Conference Agreement accommodates $8.3 billion for the 
     Environmental Protection Agency, $250 million greater than 
     the 2003 enacted level. The Congress restored funding for the 
     State and Tribal Assistance Grants to $3.8 billion, the same 
     as the 2003 enacted level. Within the EPA, there is $1.4 
     billion for Superfund, which is $125 million (9.9 percent) 
     more than the 2003 enacted level; and $2.2 billion for 
     environmental programs and management, which is $122 million 
     (5.8 percent) more than the 2003 enacted level.
       The Conference Agreement also accommodates the Senate's 
     $4.5 billion for the Corps of Engineers.
       For mandatory programs, the Agreement assumes the 
     President's proposal allowing the Forest Service and 
     Department of Interior to collect entrance fees and use a 
     portion of those fees for maintenance and other projects 
     without further appropriation. It also assumes an amendment 
     allowing the Bureau of Land Management [BLM] to use updated 
     management plans to identify property suitable for disposal, 
     as well as permit a certain portion of receipts to be used by 
     the BLM for restoration projects. The Agreement also assumes 
     $3.4 billion over 10 years for the Conservation Security 
     Program in the Department of Agriculture; legislation passed 
     in the House last year to authorize the Army Corps of 
     Engineers to conduct water resource studies and undertake 
     specific projects and programs for flood control, inland 
     navigation, shoreline protection, and environmental 
     restoration; and enactment of the Central Utah Project 
     Completion Act, which passed in the House last year.

                       Agriculture: Function 350

     Function Summary
       The Agriculture function includes funds for direct 
     assistance and loans to food and fiber producers, export 
     assistance, market information, inspection services, and 
     agricultural research. Farm policy is driven by the Farm 
     Security and Rural Investment Act of 2002, which provides 
     producers with continued planting flexibility while 
     protecting them against unique uncertainties such as poor 
     weather conditions and unfavorable market conditions.
     House Resolution
       The House resolution calls for $24.0 billion in BA and 
     $23.4 billion in outlays in fiscal year 2004. The function 
     totals are $125.1 billion in BA and $121.5 billion in outlays 
     over 5 years, and $240.8 billion in BA and $237.1 billion in 
     outlays over 10 years.
       Included in these funding levels is the continuation of the 
     2002 farm bill.
     Senate Amendment
       The Senate amendment assumes spending in this function 
     would total $24.5 billion in BA and $23.5 billion in outlays 
     for 2004. This represents an increase of $39 million in BA 
     over the 2003 level.
       For discretionary programs, the Senate amendment assumes a 
     total of $5.2 billion in BA and $5.6 billion in outlays for 
     2004. This represents a decrease of $0.5 billion or 8.5 
     percent in BA from the 2003 level.
       The Senate amendment assumes the President's request that 
     several mandatory agriculture programs will provide 
     discretionary savings of $321 million in 2004 and $1.1 
     billion over 10 years.
       The Senate amendment also assumes a decrease of $1.4 
     billion over 10 years in the mandatory programs administered 
     by the Department of Agriculture.
     Conference Agreement
       The conference agreement calls for $24.6 billion in BA and 
     $23.7 billion in outlays in fiscal year 2004. The function 
     totals are $130.2 billion in BA and $124.5 billion in outlays 
     over 5 years, and $255.7 billion in BA and $245.8 billion in 
     outlays over 10 years. Included in these funding levels is 
     the continuation of the 2002 Farm Bill. The Conference 
     Agreement fully supports the President's overall request for 
     this function.

               Commerce and Housing Credit: Function 370

     Function Summary
       Function 370 includes four components: mortgage credit 
     (usually negative BA because receipts tend to exceed the 
     losses from defaulted mortgages); the Postal Service (mostly 
     off budget); deposit insurance (negligible spending due to 
     deposit insurance premiums); and other advancement of 
     commerce (the majority of the discretionary and mandatory 
     spending in this function).
       The mortgage credit component of this function includes 
     housing assistance through the Federal Housing Administration 
     [FHA], the Government National Mortgage Association [Ginnie 
     Mae], and rural housing programs of the Department of 
     Agriculture. The function also includes net Postal Service 
     spending and spending for deposit insurance for banks, 
     thrifts, and credit unions. Finally, most, but not all, of 
     the Commerce Department is provided for in this function 
     including the International Trade Administration, Bureau of 
     Economic Analysis, Patent and Trademark Office, National 
     Institute of Standards and Technology, National 
     Telecommunications and Information Administration, and the 
     Bureau of the Census; as well as independent agencies such as 
     the Securities and Exchange Commission [SEC], the Commodity 
     Futures Trading Commission, the Federal Trade Commission, the 
     Federal Communications Commission [FCC], and the majority of 
     the Small Business Administration [SBA].
       More than two-thirds of the spending in Function 370 is out 
     of the FCC's Universal Service Fund. Spending from this fund 
     exactly offsets the receipts (classified as taxes on the 
     revenue side of the budget) that certain telecommunications 
     operators charge their customers to promote service to low- 
     income users and high-cost areas, as well as new services.
     House Resolution
       The House resolution calls for $7.4 billion in BA and $3.6 
     billion in outlays in fiscal year 2004, a decline of 16 
     percent in BA compared with fiscal year 2003. The function 
     totals are $42.0 billion in BA and $16.5 billion in outlays 
     over 5 years, and $86.8 billion in BA and $26.6 in outlays 
     over 10 years.
       For the Department of Homeland Security, $21 million is 
     provided for Departmentwide technology investments, as is $9 
     million for the Critical Infrastructure Assurance Office 
     under Information Analysis and Infrastructure Protection.
       The resolution assumes other funding for homeland security 
     purposes of the Commerce Department, including: $83.9 million 
     for the Bureau of Industry and Security to inhibit the global 
     spread of dual-use technologies that could be used in 
     biological, chemical, and nuclear weapons of mass destruction 
     (formerly the Bureau of Export Administration); $10.3 million 
     for the National Institute of Standards and Technology; and 
     $3.7 million for the International Trade Administration.
     Senate Amendment
       For discretionary programs, the Senate amendment assumes 
     discretionary spending in this function would total -$0.5 
     billion in BA and $0.1 billion in outlays for 2004. This 
     represents a decrease of $0.6 billion in BA, but an increase 
     of $38 million in outlays from the 2003 level. The Senate 
     amendment includes the following specific assumptions.
       The Senate amendment for 2004 reflects all the President's 
     requested increases over 2003 (shown as percentage increase) 
     for export control and enforcement (47 percent), the 
     activities of the Census Bureau (20 percent), economic and 
     statistical analysis (18-percent), and homeland security 
     investments in the Department of Commerce (43 percent). The 
     Senate amendment also assumes the President's request of $842 
     million (an 18-percent increase) for the Securities and 
     Exchange Commission to implement the corporate responsibility 
     activities under the Sarbanes-Oxley bill.
       The President's budget proposes to eliminate the Advanced 
     Technology Program, which would save $0.7 billion over the 
     next 10 years and is reflected in the Senate amendment. The 
     President's proposal to discontinue the Manufacturing 
     Extension Program, however, is not assumed by the Senate 
     amendment.
       For mandatory programs, the Senate amendment assumes the 
     President's proposal to merge the deposit insurance funds for 
     banks and thrifts--the Bank Insurance Fund and the Savings 
     Association Insurance Fund. According to CBO estimates, this 
     proposal would be nearly budget neutral over the next 10 
     years.
       The Senate amendment also assumes legislation (S. 380, as 
     cleared for the President on 8 April 2003) that would reduce 
     the Postal Service payment to the Civil Service Retirement 
     [CSRS] trust fund for 2003-05, but then would reinstate and 
     redirect the payment to an escrow fund until Congress can 
     enact subsequent law regarding how the Postal Service should 
     address its retiree health liabilities and other concerns. 
     This proposal would increase the unified deficit by $7.3 
     billion over the 2003-13 period. The budgetary effect on the 
     Postal Service is reflected in this function, and the effect 
     on the receipts of the CSRS fund are shown in Function 950 (a 
     small interest effect appears in Function 900).
     Conference Agreement
       The Conference Agreement calls for on-budget amounts as 
     follows: $7.5 billion in BA and $3.6 billion in outlays in 
     fiscal year 2004; $41.9 billion in BA and $15.6 billion in 
     outlays over 5 years; and $84.3 billion in BA and $21.5 
     billion in outlays over 10 years. For mandatory programs, the 
     agreement assumes a merger of the Bank Insurance Fund and the 
     Savings Association Insurance Fund; legislation to pay 
     interest on bank deposits with the Federal Reserve; and 
     regulatory relief for certain financial services companies. 
     For discretionary programs, the Agreement is consistent with 
     the Senate amendment.

                      Transportation: Function 400

     Function Summary
       This function funds all major Federal transportation modes 
     and programs including the Transportation Security 
     Administration; the Federal Highway Administration; the 
     Federal Transit Administration; the National Rail Passenger 
     Corporation [Amtrak]; highway, motor carrier and rail safety 
     programs; the Federal Aviation Administration; the 
     aeronautical activities of the National

[[Page H3215]]

     Aeronautics and Space Administration [NASA]; the Coast Guard; 
     the Maritime Administration; and other transportation support 
     activities.
     House Resolution
       The House resolution calls for $65.4 billion in BA and 
     $69.2 billion in outlays in fiscal year 2004, an increase of 
     2.1 percent in BA compared with fiscal year 2003. Function 
     totals are $334.2 billion in BA and $338.2 billion in outlays 
     over 5 years, and $698.9 billion in BA and $700.8 billion in 
     outlays over 10 years.
       The resolution assumes an increase in Federal-aid Highway 
     contract authority and obligation limitation from $32.1 
     billion in 2004 to $39.0 billion in 2013; a freeze of Transit 
     Category contract authority and obligation limitation at $5.7 
     billion; transfer of the receipts from the 2.5-cent gasohol 
     deficit reduction tax from the General Fund to the Highway 
     Trust Fund; and establishment of a contingency procedure to 
     increase spending above the level in the budget resolution on 
     highways, highway safety, and transit should additional 
     resources be made available to the Highway Trust Fund.
     Senate Amendment
       For Function 400, the Senate amendment includes $75.8 
     billion in BA and $71.6 billion in outlays for 2004. This 
     represents an increase of $11.7 billion in BA, or 18 percent.
       The Senate amendment includes major increases in the 
     Federal-aid Highways program, reflecting an amendment adopted 
     by the Senate that set contract authority at levels that 
     cannot be sustained with trust fund receipts under current 
     law. For 2004, the Senate amendment assumes an obligation 
     limitation of $35.6 billion, an 11-percent increase from the 
     Committee-reported resolution of $32.1 billion and contract 
     authority of $39.3 billion, a 29-percent increase from the 
     Committee-reported resolution of $30.5 billion.
       For 2004-09, the Senate amendment includes $233.3 billion 
     in obligation limitation, a 20-percent increase from the 
     Committee-reported resolution of $194.4 billion and the 
     amendment includes contract authority of $255.7 billion, a 
     24-percent increase in the Committee-reported resolution of 
     $206.5 billion.
       For Essential Air Service, the Senate amendment assumes 
     $103 million for 2004, which is $53 million above the 
     President's request.
       For Port Security, the Senate amendment included $850 
     million in 2004, and $850 million in 2005 due to an amendment 
     adopted on the floor.
       For the Coast Guard, the Senate amendment assumes the 
     President's request of $6.1 billion, the same as the 2003 
     enacted level. This request would recapitalize much of the 
     Coast Guard's budget which was diverted for more urgent 
     needs, following September 11, 2001.
       The Senate amendment assumes full funding for the 
     President's request for NASA programs within this function at 
     $993 million, a 20-percent increase from the enacted 2003 
     level.
       The Senate amendment includes $1.8 billion for Amtrak, a 
     100-percent increase over the committee-passed resolution of 
     $900 million due to an amendment adopted on the Senate floor 
     that added $912 million.
     Conference Agreement
       The Conference Agreement calls for $69.5 billion in BA and 
     $69.9 billion in outlays in fiscal year 2004; $364.7 billion 
     in BA and $354.9 billion in outlays over 5 years; and $759.9 
     billion in BA and $745.8 billion in outlays over 10 years.
       The Conference Agreement provides contract authority for 
     Federal-aid highways of $35.482 billion in 2004, and $231.078 
     billion for 2004-09, representing a compromise midway between 
     the House- and Senate-passed level.
       The Conference Agreement also provides transit budget 
     authority of $5.841 billion in 2004 and $49.1 billion for 
     2004-09, which is also a compromise midway between the House- 
     and Senate-passed.
       The Conference Agreement establishes a contingency 
     procedure to increase spending above the level in the budget 
     resolution on highways, highway safety, and transit should 
     new offsetting resources be made available to the Highway 
     Trust Fund. The conferees intend that the increase provided 
     for in this Conference Agreement above the baseline will be 
     constrained by the resources available to the Highway Trust 
     Fund.

            Community and Regional Development: Function 450

     Function Summary
       Function 450 includes programs that provide Federal funding 
     for economic and community development in both urban and 
     rural areas, including: Community Development Block Grants 
     [CDBGs]; the non-power activities of the Tennessee Valley 
     Authority; the non-roads activities of the Appalachian 
     Regional Commission; the Economic Development Administration 
     [EDA]; and partial funding for the Bureau of Indian Affairs 
     [BIA]. Funding for disaster relief and insurance--including 
     the Federal Emergency Management Agency [FEMA], now part of 
     the new Department of Homeland Security [DHS]--also appear 
     here.
     House Resolution
       The House resolution calls for $14.1 billion in BA and 
     $15.9 billion in outlays in fiscal year 2004, an increase of 
     15.4 percent in BA compared with fiscal year 2003. The 
     function totals are $73.5 billion in BA and $76.5 billion in 
     outlays over 5 years, and $155.8 billion in BA and $154.1 
     billion in outlays over 10 years.
       Resources allow for significant expansions of the First 
     Responder Grant Program, with $3.5 billion in funding for 
     grants for ``first responders'' such as local firefighters, 
     and search-and-rescue or police forces. This is a $1.7 
     billion increase over the 2003 enacted level.
     Senate Amendment
       The Senate amendment assumes funding for this function will 
     total $14.3 billion in BA and $16.7 billion in outlays. This 
     represents a decrease of 9 percent in BA, or $1.4 billion, 
     from 2003. The Senate amendment assumes funding of $151.9 
     billion in BA and $153.5 billion in outlays over 2004-13.
       For discretionary programs, the Senate amendment assumes 
     $13.8 billion in BA and $16.8 billion in outlays for 2004. 
     This represents a decrease of $1.4 billion in BA from the 
     2003 level. The Senate amendment includes the following 
     specific assumptions.
       As part of the newly formed Department of Homeland 
     Security, all the activities of what was once known as the 
     Federal Emergency Management Agency will be managed by the 
     Emergency Preparedness and Response Directorate within DHS. 
     For the Office of Domestic Preparedness, the Committee-
     reported resolution assumed the President's request for $3.5 
     billion in 2004 to ensure that first responders are properly 
     trained and equipped. Then the Senate adopted an amendment to 
     the resolution to add an additional $3.5 billion in 2003 for 
     first responders. The Senate amendment also assumes $3.2 
     billion for Disaster Relief activities. This level is 
     consistent with the average cost of (non-terrorist) disaster 
     events over the past 5 years. This includes $2.0 billion in 
     new money, as well as money left over from prior years. This 
     $2.0 billion in new money represents an increase of $1.2 
     billion over the 2003 level.
       The Senate amendment also incorporates the President's 
     proposal for a new $300 million pre-disaster mitigation 
     program. The Senate amendment also continues to support the 
     protection of the public against flood damage by supporting 
     the Flood Map Modernization Fund and including $200 million 
     to update the inaccurate maps.
       For Community Development Block Grants, the Senate 
     amendment matches the President's request by assuming $4.7 
     billion in 2004. This is $200 million below the enacted 2003 
     level. The President proposes to review this program and 
     develop proposals to better incorporate poorer communities 
     with poverty rates above the national average.
       For the Bureau of Indian Affairs, the Senate amendment 
     assumes $1.1 billion which is an increase of $21 million from 
     2003. The resolution also supports Indian school construction 
     and provides $346 million to improve academic performance at 
     BIA schools and to eliminate the school maintenance and 
     repair backlog.
       Among mandatory activities in this function, the Senate 
     amendment reflects an amendment adopted by the Senate adding 
     $260 million in BA in 2004 (and in each year thereafter 
     through 2013) for a new Homestead Venture Capital Fund.
     Conference Agreement
       The Conference Agreement calls for spending of $14.1 
     billion in BA and $15.8 billion in outlays in 2004, and $71.8 
     billion in BA and $75.4 billion in outlays over the period 
     2004-08. Over the period 2004-13, the agreement calls for 
     spending of $149.3 billion in BA and $149.2 billion in 
     outlays. The conference agreement accommodates the expansion 
     of grants for first responders, and other activities in the 
     new Department of Homeland Security.
       The conferees strongly support the continued funding of the 
     Round II Urban and Rural Empowerment Zone and Enterprise 
     Community [EZ/EC] initiatives at least at the level pledged 
     by the Round II designation of 1999. The conferees recognize 
     that the current EZ/EC initiative is yielding measurable 
     results; improving the economy and quality of life in 
     distressed areas; enabling self-sufficiency of disadvantaged 
     residents; and leveraging private and nonprofit resources. In 
     competing for the designations, these communities were 
     selected for their thoughtful use of Federal funds over a 
     full 10 year cycle, not on how quickly they could withdraw 
     funds from the Treasury. The Round II EZ/EC designees have 
     received only a small portion of the Federal grant funds they 
     were promised to implement their strategic plans for 
     revitalization. This Conference Agreement assumes the program 
     will receive sufficient resources to continue progress on 
     this important work.

   Education, Training, Employment, and Social Services: Function 500

     Function Summary
       Education spending consumes two-thirds of the Function 500 
     total, including elementary and secondary education services, 
     higher education aid, and research and general education 
     aids--the last category incorporating funding for arts, 
     humanities, museums, libraries, and public broadcasting. Job 
     training and other Labor Department activities are in this 
     function, as are social services--including the Social 
     Services Block Grant, vocational rehabilitation, and national 
     service.
     House Resolution
       The House resolution calls for $84.7 billion in BA and 
     $85.7 billion in outlays in fiscal year 2004. The function 
     totals are $435.2 billion in BA and $428.7 billion in outlays 
     over 5 years, and $914.5 billion in BA and 898.5 billion in 
     outlays over 10 years.

[[Page H3216]]

       The resolution levels support priority funding for a number 
     of discretionary spending programs. It assumes an increase of 
     $50 million, to $1.238 billion, for the Impact Aid program. 
     It accommodates an increase of at least $666 million, to 
     $12.35 billion, for Title I funding of low-income school 
     districts. The resolution also provides for at least $12.7 
     billion toward the Pell Grant program for low- income 
     undergraduate students, a $1.34-billion increase from 2003. 
     In the area of special education, the resolution assumes an 
     increase of at least $660 million for Individuals with 
     Disabilities Education Act [IDEA] Part B Grants to States.
       In mandatory spending, the resolution includes 
     reconciliation instructions to the Committee on Education and 
     the Workforce to create re-employment accounts as a temporary 
     new benefit. As recommended in the President's economic 
     growth proposal, $3.6 billion in mandatory BA is provided in 
     2003 for the establishment of these accounts.
     Senate Amendment
       For discretionary programs, the Senate amendment assumes 
     $86.3 billion in BA and $75.8 billion in outlays for 2004. 
     This represents an increase of $13.4 billion (18.5 percent) 
     in BA over the 2003 level. The Senate amendment includes the 
     following specific assumptions.
       For Title I Grants to Local Education Agencies, the 
     Committee-reported resolution assumed a $1 billion increase, 
     bringing funding to $12.7 billion for academic year 2004-05. 
     This represents an 8.6-percent increase over the previous 
     academic year. An amendment adopted by the Senate added an 
     additional $2 billion for No Child Left Behind programs. 
     Another amendment adopted by the Senate added $2 billion for 
     block grants to States for No Child Left Behind, special 
     education, and vocational education programs.
       For the Individuals with Disabilities Education Act [IDEA], 
     the Committee- reported resolution assumed a $1-billion 
     increase for Part B Grants to States, and a $205-million cap 
     adjustment in 2004. In addition to maintaining the previous 
     year's funding level, a $1-billion increase was assumed in 
     each year thereafter through 2009, bringing IDEA funding to 
     $6.2 billion above the baseline level in 2009. During its 
     consideration of the resolution, the Senate adopted an 
     amendment that increased IDEA levels by $970 million in 2004 
     and $2.3 billion in 2005.
       The Committee-reported resolution assumed holding Impact 
     Aid at the 2003 level. The Senate adopted an amendment to 
     increase Impact Aid by $112 million, bringing its funding 
     level to $1.3 billion in 2004.
       For Pell Grants, the Committee-reported resolution assumed 
     a $1.4 billion increase. The Senate adopted an amendment to 
     increase Pell funding by an additional $1.8 billion, which 
     would support a $4,500 maximum award. This brings total 
     funding for Pell Grants to $14.5 billion in 2004.
       The Senate amendment fully funds the President's request of 
     $6.8 billion for Head Start, which would remain in HHS.
       The Senate amendment reflects the President's proposals for 
     reauthorization of the Workforce Investment Act [WIA] as well 
     as an amendment adopted by the Senate to increase WIA funding 
     by $678 million, bringing total funding to $5.6 billion.
       The Senate amendment includes the administration's request 
     for the Labor Department's Office of Labor-Management 
     Standards, which reflects an additional $6 million to improve 
     the transparency of union finances. The Senate amendment also 
     reflects an additional $6-million increase to make whole the 
     chronic under-funding of the Office in prior years.
       The Senate amendment also assumes enactment of the CARE 
     Act, as reported by the Senate Finance Committee, and 
     therefore reflects an additional $275 million for the Social 
     Services Block Grant for 2003 and an additional $1.1 billion 
     for 2004.
       The Senate amendment assumes adoption of the President's 
     student loan forgiveness proposal at a cost of $45 million in 
     2004.
       Among mandatory programs in this function, the Senate 
     amendment reflects an amendment adopted by the Senate to 
     create a New Homestead Venture Capital Fund, costing $1.2 
     billion over 10 years.
     Conference Agreement
       The resolution calls for $90.0 billion in BA and $84.2 
     billion in outlays in fiscal year 2004. The function totals 
     are $468.4 billion in BA and $449.9 billion in outlays over 5 
     years, and $986.3 billion in BA and $955.6 billion in outlays 
     over 10 years.
       These levels accommodate a $3-billion increase from the 
     previous year for the Department of Education, which would 
     provide for a $1.3-billion increase for the Pell Grant 
     program; a $50-million increase for the Impact Aid Program; 
     and a $1-billion increase for Title I of the No Child Left 
     Behind Act. Cumulatively, the Conference Agreement 
     accommodates funding for No Child Left Behind programs of 
     $1.5 billion above the President's proposed level. For the 
     Part B Grants to States program of the Individuals with 
     Disabilities Education Act, a $2.2-billion increase is 
     provided for 2004, followed by an additional $2.5 billion 
     increase in 2005. This increase of $4.7 billion over 2 years 
     would raise the program's level of funding from $8.9 billion 
     to $13.6 billion.
       In mandatory spending, the resolution assumes the 
     President's proposal to increase from $5,000 to $17,500 the 
     maximum level of student loan forgiveness available to math, 
     science, and special education teachers serving in low-income 
     communities.

                          Health: Function 550

     Function Summary
       Medicaid represents about 71 percent of the spending in 
     this function. The function also includes the State 
     Children's Health Insurance Program [SCHIP]; health research 
     and training, including NIH and substance abuse prevention 
     and treatment; and consumer and occupational health and 
     safety, including the Occupational Safety and Health 
     Administration.
       The Department of Health and Human Services [HHS] plays a 
     lead role in addressing bioterrorism. Four key HHS components 
     participate in homeland bioterrorism security: the Centers 
     for Disease Control and Prevention [CDC], the Food and Drug 
     Administration [FDA], the Health Resources and Services 
     Administration [HRSA], and the National Institutes of Health 
     [NIH]. In fiscal year 2004, total spending for HHS's 
     bioterrorism efforts would be $3.6 billion.
     House Resolution
       The House resolution calls for $235.1 billion in BA and 
     $235.5 billion in outlays in fiscal year 2004, an increase of 
     5.9 percent in BA compared with fiscal year 2003. The 
     function totals are $1,337.2 billion in BA and $1,334.8 
     billion in outlays over 5 years, and $3,196.9 billion in BA 
     and $3,188.0 billion in outlays over 10 years.
       For the Department of Homeland Security [DHS], the 
     resolution reserves $5.6 billion over 10 years for BioShield, 
     a program to accelerate research, development, and purchase 
     of bioterrorism threat countermeasures. Also within Function 
     550, the resolution assumes $400 million to maintain and 
     strengthen the Strategic National Stockpile.
       The resolution provides for Medicaid reform to give States 
     greater flexibility and to provide health insurance coverage 
     for new populations. The budget establishes a reserve fund of 
     $3.25 billion in fiscal year 2004 and $8.9 billion over 5 
     years for Medicaid reform. The proposal is budget-neutral 
     over 10 years.
       Other Medicaid policies include assumptions that expiring 
     fiscal year 2000 State Children's Health Insurance Program 
     funds will be extended for 1 year, that Transitional Medicaid 
     Assistance and the QI-1 programs are extended for 5 years, 
     and that the Vaccines for Children program will be modified 
     to allow health departments to give vaccines.
       The resolution also assumes enactment of abstinence 
     education legislation and assumes States will have the option 
     to expand Medicaid coverage for children with special needs, 
     allowing families of disabled children the opportunity to 
     purchase coverage under the Medicaid program for such 
     children.
       The budget assumes that by fiscal year 2004, NIH funding 
     will have more than doubled over the 1998 level, to $27.9 
     billion.
     Senate Amendment
       For discretionary programs, the Senate amendment assumes 
     $52.7 billion in BA and $50.8 billion in outlays for 2004. 
     This represents an increase of $3.2 billion in BA over the 
     2003 level.
       The omnibus appropriations bill of 2003 completed the 
     planned 5-year doubling of the National Institutes of Health 
     [NIH] budget from $13.7 billion in 1998 to $27.1 billion in 
     2003. Nonetheless, the Senate amendment includes an 
     additional 10-percent increase for 2004, bringing total NIH 
     funding to $29.7 billion in BA in 2004.
       For mandatory programs, the Senate amendment includes 
     several reserve funds. The Senate amendment assumes a reserve 
     fund for the Finance Committee to reform Medicaid and the 
     State Children's Health Insurance Program by providing 
     flexibility to the States for innovation and expansion of 
     coverage. The fund is based on the administration's proposal 
     for a new Medicaid and SCHIP program option, under which 
     States may take their Medicaid and SCHIP funding in a single 
     Federal payment.
       The Senate amendment includes another reserve fund for the 
     Finance Committee to report legislation to extend the 
     availability of SCHIP funds that will expire and restore 
     availability of funds from 1998 and 1999 that have expired. 
     According to CBO estimates, approximately $1.26 billion in 
     SCHIP funds reverted to the Treasury on 1 October 2002, and 
     $1.35 billion will return to the Treasury at the end of 2003. 
     Beyond these amounts, the reserve fund would allow such 
     legislation to provide an additional $1.825 billion in BA and 
     $975 million in outlays over 10 years to the States to ease 
     some of the financial strain they face as well as to cover 
     more children under their SCHIP programs.
       The Senate amendment includes an $88 billion reserve fund 
     for the Finance Committee to report legislation that would 
     assist the 41 million uninsured Americans in gaining access 
     to quality, affordable health insurance.
       The Senate amendment includes a reserve fund for the HELP 
     Committee for the creation of Project Bioshield, a 
     comprehensive effort to develop effective countermeasures 
     against biological and other dangerous agents. Over the next 
     10 years, almost $6 billion will be available to purchase new 
     countermeasures for smallpox, anthrax, and botulism toxin as 
     well as to produce and purchase countermeasures for other 
     dangerous agents, such as Ebola and plague, once safe and 
     effective treatments are developed.
       The Senate amendment includes savings of $3.346 billion 
     over 10 years for medical liability reform.
     Conference Agreement
       The Conference Agreement calls for $240.6 billion in BA and 
     $238.8 billion in outlays in

[[Page H3217]]

     fiscal year 2004. The function totals are $1,401.2 billion in 
     BA and $1,396.6 billion in outlays over 5 years, and $3,375.4 
     billion in BA and $3,363.5 billion in outlays over 10 years.
       The Agreement reserves $5.6 billion in funding over 10 
     years to allow the Department of Homeland Security to 
     procure, for inclusion in the Strategic National Stockpile, 
     countermeasures necessary to protect the public health from 
     current and emerging threats of chemical, biological, 
     radiological or nuclear agents. For Medicaid reform, the 
     Agreement establishes a reserve fund of $3.3 billion in 
     fiscal year 2004, and $8.9 billion over 5 years. The fund is 
     budget neutral over 10 years. Other reserve funds in the 
     Agreement include $161 million in new BA in 2004 and $50 
     billion over 10 years to increase access to health insurance 
     for the uninsured; and $43 million in new BA in 2004 and $7.5 
     billion over 10 years for the Family Opportunity Act. Other 
     assumptions include a 1-year extension of certain State 
     Children's Health Insurance Program funds--specifically 
     fiscal year 1998 and 1999 funds that have expired, and fiscal 
     year 2000 funds that are expiring. In addition, the 
     Conference Agreement assumes that Transitional Medicaid 
     Assistance and the QI-1 programs are extended for 5 years. It 
     also assumes funding for abstinence education.
       The Agreement assumes savings of $3.7 billion over 10 years 
     resulting from the impact of medical liability reform on 
     Medicaid, FEHBP, and DOD. The figure reflects an updated cost 
     estimate from the Congressional Budget Office for the 108th 
     Congress.

                         Medicare: Function 570

     Function Summary
       This budget function reflects the Medicare Part A Hospital 
     Insurance [HI] Program, Part B Supplementary Medical 
     Insurance [SMI] Program, and premiums paid by qualified aged 
     and disabled beneficiaries. It also includes the 
     ``Medicare+Choice'' Program, which covers Part A and Part B 
     benefits and allows beneficiaries to choose certain private 
     health insurance plans. Medicare+Choice plans may include 
     health maintenance organizations, preferred provider 
     organizations, provider-sponsored organizations, and private 
     fee-for-service plans. In addition to covering all Medicare-
     covered services, such plans may add benefits or reduce cost-
     sharing required by the traditional Medicare program.
     House Resolution
       The House resolution calls for $266.5 billion in BA and 
     $266.9 billion in outlays in fiscal year 2004, an increase of 
     7.2 percent in BA compared with fiscal year 2003. The 
     function totals are $1.6 trillion in BA and $1.6 trillion in 
     outlays over 5 years and $3.9 trillion in BA and $3.9 
     trillion in outlays over 10 years. Over the 2004-13 period, 
     Medicare spending grows by 7.8 percent.
       The House budget resolution includes a reserve fund of $400 
     billion over 10 years for Medicare modernization and a 
     prescription drug benefit. The $400 billion amount is equal 
     to the amount the President proposed in his fiscal year 2004 
     budget. This amount is in addition to the $54 billion 
     increase in Medicare spending in the Fiscal Year 2003 Omnibus 
     Appropriations Bill.
     Senate Amendment
       The Senate amendment assumes the President's proposal to 
     provide additional Medicare funds to improve access to 
     prescription drugs for all beneficiaries and to strengthen 
     and modernize the program. This funding is included in a 
     reserve fund, which contains up to $400 billion for the 2004-
     13 period.
       The Senate amendment also assumes savings of $7.9 billion 
     dollars over 10 years in Medicare from the passage of medical 
     liability reform. The Congressional Budget Office has 
     determined that limits on medical malpractice litigation 
     would lower the cost of malpractice insurance for physicians, 
     hospitals, and other health care providers and organizations. 
     That reduction in insurance costs would, in turn, lead to 
     lower charges for health care services and procedures, and 
     ultimately, to a decrease in rates for health insurance 
     premiums.
     Conference Agreement
       The Conference Agreement calls for $266.0 billion in BA and 
     $266.3 billion in outlays in fiscal year 2004, $1,583.3 
     billion in BA and $1,583.4 billion in outlays over 5 years, 
     and $3,867.7 billion in BA and $3,867.6 billion in outlays 
     over 10 years.
       The Conference Agreement includes separate Medicare reserve 
     funds for the House and Senate, each of which provides $7 
     billion in fiscal year 2004 and $400 billion over 10 years. 
     The $400-billion level is equal to the amount the President 
     proposed in his fiscal year 2004 budget.
       The Conference Agreement also assumes savings of $11.2 
     billion over 10 years in Medicare from the passage of medical 
     liability reform legislation. This amount reflects the 
     updated cost estimate from the Congressional Budget Office 
     for the 108th Congress.

                     Income Security: Function 600

     Function Summary
       The Income Security function includes most of the Federal 
     Government's income support programs. These include: general 
     retirement and disability insurance (excluding Social 
     Security)--mainly through the Pension Benefit Guaranty 
     Corporation [PBGC]--and benefits to railroad retirees. Other 
     components are Federal employee retirement and disability 
     benefits (including military retirees); unemployment 
     compensation; low-income housing assistance, including 
     section 8 housing; food and nutrition assistance, including 
     food stamps and school lunch subsidies; and other income 
     security programs.
       This last category includes: Temporary Assistance to Needy 
     Families [TANF], the Government's principal welfare program; 
     Supplemental Security Income [SSI]; spending for the 
     refundable portion of the Earned Income Credit [EIC]; and the 
     Low Income Home Energy Assistance Program [LIHEAP]. Agencies 
     involved in these programs include the Departments of 
     Agriculture, Health and Human Services, Housing and Urban 
     Development, the Social Security Administration (for SSI), 
     and the Office of Personnel Management (for Federal 
     retirement benefits).
       Over the period 1998-03, BA in the function has had an 
     average annual increase of 6.4 percent.
     House Resolution
       The House resolution calls for $315.9 billion in BA and 
     $321.6 billion in outlays in fiscal year 2004. The function 
     totals are $1,658.0 billion in BA and $1,672.7 billion in 
     outlays over 5 years, and $3,524.3 in BA and $3,543.0 in 
     outlays over 10 years. The reauthorization of the contingency 
     fund in the TANF program causes a one-time spike in BA and 
     outlays during fiscal year 2003 relative to the remaining 
     period of the reauthorization.
       The resolution assumes that the TANF block grant, as well 
     as the related child care entitlement to States and other 
     elements of the 1996 welfare reform law will be reauthorized 
     during fiscal year 2003 as passed by the House on 13 February 
     2003 in the Personal Responsibility, Work, and Family 
     Promotion Act of 2003, which accommodates an additional $2.4 
     billion in mandatory spending above the baseline for these 
     programs over 5 years (2003-08). The resolution allows for an 
     additional $1 billion over 5 years above current law for the 
     mandatory child care entitlement to States.
       The resolution also accommodates the President's proposal 
     to offer States an optional block grant for foster care 
     payments. The resolution assumes $6.9 billion in 2004 for 
     Foster Care and Adoption Assistance, including the 
     Independent Living program, which provides assistance to 
     youths who are aging out of foster care.
       The resolution assumes a decline in Unemployment Insurance 
     benefit payments in fiscal year 2004, relative to 2003, 
     because extended Federal Unemployment Insurance benefits 
     enacted on 8 January 2003 will terminate on 31 May 2003, and 
     because economic assumptions assume a drop in the 
     unemployment rate in 2004.
       The resolution seeks to reduce erroneous overpayments in 
     SSI by accommodating $1.4 billion to conduct Continuing 
     Disability Reviews [CDRs] of SSI Disability recipients to 
     ensure that they are sufficiently disabled to remain eligible 
     for benefits.
       The resolution assumes the outlay portions of refundable 
     tax credits contained in the President's economic growth 
     package of tax incentives, together with the outlay effects 
     of making refundable tax credit policies of the 2001 tax cuts 
     permanent. Outlays are assumed for the Earned Income Tax 
     Credit and the Child Tax Credit under these provisions.
       The resolution also assumes enactment of legislation such 
     as H.R. 4069 (from the 107th Congress), providing for 
     enhancement of Social Security benefits for women.
     Senate Amendment
       For discretionary programs, the Senate amendment assumes 
     $45.7 billion in BA and $51.5 billion in outlays for 2004. 
     This represents an increase of $1.7 billion in BA and $763 
     million in outlays from the 2003 level. The Senate amendment 
     includes the following specific assumptions.
       The Senate amendment includes an additional $9 million for 
     the Employee Benefit Security Administration for pension 
     protection and employer education.
       The Senate amendment incorporates the administration's plan 
     to reform the Federal Employee Compensation Act. These 
     changes will save taxpayers approximately $80 million over 10 
     years.
       The Senate amendment incorporates a debt restructuring and 
     interest refinancing plan for the Black Lung Trust Fund.
       The Senate amendment includes the President's proposal for 
     food and nutrition funding totaling $41.7 billion for 2004. 
     The Senate amendment increases funding for the Women's Infant 
     and Children program by $73 million, or 1.6 percent more than 
     2003.
       The Senate amendment assumes reauthorization the Personal 
     Responsibility and Work Act and therefore assumes an increase 
     above the President's request for the Child Care Development 
     Block Grant. The Senate amendment assumes an increase for 
     2004 of $214 million over the 2003 level, a 10.2-percent 
     increase.
       The Senate amendment includes the President's proposal to 
     eliminate a discretionary limit on administrative 
     expenditures for the Pension Benefit Guarantee Corporation.
       Under the Senate amendment, sufficient budget authority is 
     provided to renew all utilized section 8 housing contracts as 
     contemplated in the 2003 Omnibus Appropriations Bill.
       Among mandatory programs in this function, the Senate 
     amendment assumes the President's request to reauthorize the 
     landmark 1996 welfare reform legislation, which replaced the 
     60 year-old Aid to Families with Dependent Children program 
     with the Temporary Assistance to Needy Families block

[[Page H3218]]

     grant. The Senate amendment also assumes the President's 
     priority to promote healthy marriages, fatherhood and family 
     formation. The Senate amendment is supportive of efforts to 
     capitalize and develop the role of sustainable social 
     services, such as Goodwill, which are critical to the success 
     of moving welfare recipients to work.
       The Senate amendment assumes an increase of $200 million 
     annually above the baseline in the Child Care Entitlement to 
     States.
       The Senate amendment also assumes aspects of the 
     President's proposal to enhance Child Support Enforcement 
     collections. Child Support Enforcement efforts will increase 
     collections and direct more of the support collected to 
     children and families.
       The Senate amendment assumes the President's Foster Care 
     and Adoption Assistance proposal, providing States with 
     increased flexibility to better design their child welfare 
     system that supports services to families in crisis and 
     children at risk.
     Conference Agreement
       The conference agreement calls for spending of $319.5 
     billion in BA and $324.8 billion in outlays in 2004, and 
     $1,706.1 billion in BA and $1,720.0 billion in outlays over 
     the period 2004-08. Over the period 2004-13, the agreement 
     calls for spending of $3,686.9 billion in BA and $3,703.5 
     billion in outlays.
       The conference agreement assumes reauthorization of TANF at 
     the level requested by the President, which is largely 
     consistent with H.R. 4 as passed by the House on 13 February, 
     2003. It also provides $2.0 billion above the baseline level 
     for the mandatory Child Care Entitlement to States, as 
     assumed in the Senate budget resolution. The Agreement 
     assumes funding for the incentive to States to reform child 
     welfare programs as proposed by the President. It also 
     assumes savings from pre-effectuation reviews of applications 
     for Supplemental Security Income benefits.

                     Social Security: Function 650

     Function Summary
       Function 650 consists of the Social Security Program, or 
     Old Age, Survivors, and Disability Insurance [OASDI]. Under 
     provisions of the Congressional Budget Act and the Budget 
     Enforcement Act, Social Security trust funds are ``off 
     budget.'' Nevertheless, a small portion of spending in 
     Function 650--specifically a portion of the budget for the 
     Office of the Inspector General of the Social Security 
     Administration [SSA], the quinquennial adjustment for World 
     War II veterans, and general fund transfers of taxes paid on 
     Social Security benefits--are on budget.
     House Resolution
       Total on-budget spending in the House resolution is $14.2 
     billion in BA and outlays.
     Senate Amendment
       The Senate amendment assumes the on-budget totals for 
     Social Security will be $14.3 billion in BA and outlays for 
     2004 and $223.8 billion in BA and outlays over 2004-13. The 
     Senate amendment assumes discretionary spending in this 
     function, for the administrative expenses of the Social 
     Security Administration, would total $4.3 billion in BA and 
     $4.2 billion in outlays for 2004. This represents an increase 
     of $0.4 billion, or 11.7 percent, in BA above the 2003 level. 
     The Senate amendment assumes no mandatory increases or 
     decreases in this function.
     Conference Agreement
       The Conference Agreement calls for on-budget amounts as 
     follows: $14.3 billion in BA and outlays in 2004; $83.8 
     billion in BA and outlays for 2004-08; and $223.8 billion in 
     BA and outlays over the 2004-13 period. The House accepts the 
     Senate's method of recording certain pension offsets.

              Veterans Benefits and Services: Function 700

     Function Summary
       The Veterans Benefits and Services function includes 
     funding for the Department of Veterans Affairs [VA], which 
     provides benefits to veterans who meet various eligibility 
     rules. Benefits range from income security for veterans, 
     principally disability compensation and pensions; veterans 
     education, training, and rehabilitation services; hospital 
     and medical care for veterans; and other veterans' benefits 
     and services, such as home loan guarantees. There are about 
     25 million veterans, but over the next 20 years this number 
     will decline by one-third, to about 17 million.
     House Resolution
       The House resolution calls for $61.6 billion in BA and 
     $61.1 billion in outlays in fiscal year 2004, an increase of 
     5.4 percent in BA compared with fiscal year 2003. The 
     function totals are $319.5 billion in BA and $318.2 billion 
     in outlays over 5 years; and $671.7 billion in BA and $668.9 
     billion in outlays over 10 years.
       The resolution supports a $1.3-billion increase in veterans 
     medical care. It assumes the expansions and revisions of 
     mandatory benefits proposed by the administration's fiscal 
     year 2004 budget, as well as: continuation of Dependency and 
     Indemnity Compensation for surviving spouses who remarry 
     after age 55; an increase in auto allowance from $9,000 to 
     $11,000 for severely disabled veterans; and accrued benefits 
     for veterans survivors.
     Senate Amendment
       The Senate amendment assumes levels for this function of 
     $63.8 billion in BA and $63.2 billion in outlays. This 
     represents an increase of 10.7 percent, or $6.2 billion, in 
     BA. The Senate amendment assumes funding of $693.7 billion in 
     BA and $689.2 billion in outlays over 2004-13.
       For discretionary spending, the Senate amendment assumes 
     $30.0 billion in BA and $29.6 billion in outlays for 2004. 
     This represents an increase of 12.9 percent, or $3.4 billion, 
     in BA over the 2003 level. The Senate amendment proposes to 
     refocus resources to benefit higher priority veterans.
       The Senate amendment proposes total net funding of $29.0 
     billion for the Department of Veterans Affairs [VA] medical 
     programs. This is an increase of 14.6 percent, or $3.7 
     billion, above the 2003 enacted level, and the largest 
     increase for medical care in the past 5 years. This increase 
     will help the VA in its mission to provide medical care to 
     its core constituency low-income and service-connected 
     disabled veterans.
       The Senate amendment assumes the enactment of legislation 
     to establish the President's proposed $250 enrollment fee for 
     priority level 7 and 8 veterans. Priority 7 and 8 veterans 
     have ailments that are not service connected and have a 
     higher income than other veterans using the VA hospitals. The 
     enrollment fee would generate offsetting receipts of $102 
     million in 2004 for the Medical Care Collections Fund [MCCF].
       The Senate amendment also assumes legislation will be 
     enacted to increase the insurance and prescription drug co-
     payments for Priority 7 and 8 veterans to $20 and $15, 
     respectively, as proposed by the President. In addition, the 
     Senate amendment reflects the President's proposal to 
     eliminate both the insurance and prescription drug co-payment 
     for priority level 2 through 5 veterans. These changes in the 
     prescription drug and insurance co-payments would yield 
     offsetting receipts of $224 million in 2004 into MCCF.
       For mandatory veterans programs, the Senate amendment 
     assumes the President's proposal to enact legislation to 
     restore the original interpretation of section 1110 of title 
     38 U.S. Code will be enacted. Section 1110 prohibits 
     compensation for alcohol or drug abuse that arises 
     secondarily from a service connected disability. In February 
     2001, the U.S. Court of Appeals decided that section 1110 did 
     not preclude compensation for alcohol or drug abuse arising 
     secondarily from a service connected disability. This 
     proposal would save $71 million over 10 years.
     Conference Agreement
       The Conference Agreement calls for $63.8 billion in BA and 
     $63.2 billion in outlays in fiscal year 2004. The function 
     totals are $327.9 billion in BA and $325.6 billion in outlays 
     over 5 years; and $693.9 billion in BA and $689.4 billion in 
     outlays over 10 years. The Agreement assumes no revisions in 
     mandatory programs.
       The Conference Agreement provides for discretionary BA of 
     $29.96 billion for fiscal year 2004, an increase of $3.4 
     billion, or 12.9 percent--nearly all of which is expected to 
     be for Department of Veterans Affairs [VA] medical programs. 
     An increase of this magnitude will help the VA in its mission 
     to provide medical care to its core constituency--low-income 
     and service-connected disabled veterans, as well as the cost 
     of medical care for combat veterans returning from Iraq in 
     accordance with Public Law 105-368.

                Administration of Justice: Function 750

     Function Summary
       Function 750 supports the majority of Federal justice and 
     law enforcement programs and activities. This includes 
     funding for the Department of Justice, much of the newly 
     formed Department of Homeland Security [DHS], as well as the 
     financial law enforcement activities of the Department of the 
     Treasury, Federal courts and prisons, and criminal justice 
     assistance to State and local governments.
     House Resolution
       The House resolution calls for $37.3 billion in BA and 
     $40.9 billion in outlays for this function for fiscal year 
     2004. The function totals over 10 years are $404.2 billion in 
     BA and outlays.
       The House resolution fully funds the Department of Homeland 
     Security [DHS] components reflected in this function, 
     including: securing the Nation's borders; enhancing Federal, 
     State, and local law enforcement efforts; stopping terrorist 
     financing; and bringing terrorist conspirators to justice.
       The resolution also provides for $18.7 billion in 
     discretionary funding for the Department of Justice, and thus 
     allows for the hiring of 2,170 new employees, including 1,911 
     new FBI personnel.
       Also in this function, the resolution assumes $9 million 
     for the mandatory costs associated with creating 62 new 
     Federal judgeships and extending five existing bankruptcy 
     judgeships.
     Senate Amendment
       The Senate amendment assumes funding for this function will 
     total $37.8 billion in BA and $40.9 billion in outlays. This 
     represents a decrease of 2.0 percent, or $0.8 billion, in BA 
     from 2003. The Senate amendment assumes funding of $406.4 
     billion in BA and $408.7 billion in outlays over 2004-13.
       For discretionary programs, the Senate amendment assumes 
     $33.7 billion in BA and $37.6 billion in outlays for 2004. 
     This represents a decrease of $2.6 billion in BA from the 
     2003 level. The Senate amendment includes the following 
     specific assumptions.
       For the Department of Homeland Security, the Senate 
     amendment assumes $5.6 billion in discretionary funds in 2004 
     for the Bureau of Customs and Border Protection, an increase 
     of $800 million (16.7 percent) more

[[Page H3219]]

     than in 2003. For the DHS Bureau of Immigration and Customs 
     Enforcement, the Senate amendment assumes $1.4 billion for 
     2004, an increase of $0.3 billion or 26 percent more than in 
     2003. The Senate also adopted an amendment to add $150 
     million in BA in 2004 and 2005 for additional port security 
     needs.
       For the Federal Bureau of Investigation [FBI], the Senate 
     amendment assumes a total of $4.1 billion, an increase of 
     $397 million (10.6 percent) from 2003. This increase would be 
     primarily used for intelligence analysts, surveillance 
     personnel, and field investigators, including cybercrime 
     investigators, as well as to support FBI-led interagency task 
     forces.
       The Senate amendment also assumes $500 million for the 
     Office of Domestic Preparedness to be used exclusively for 
     grants to local law enforcement agencies to combat terrorism.
       The Senate amendment assumes two mandatory proposals in the 
     President's budget concerning the extension of expiring 
     Customs user fees. If extended, the combined resulting 
     collections would be $1.3 billion in 2004 and $17.8 billion 
     through 2013.
     Conference Agreement
       The function totals for the Conference Agreement are $37.6 
     billion in BA and $40.8 billion in outlays for fiscal year 
     2004; $191.5 billion in BA and $195.7 billion in outlays over 
     5 years; and $406.3 billion in BA and $408.6 billion in 
     outlays over 10 years.
       The Agreement fully funds the President's request for the 
     Department of Justice and the programs and activities of the 
     Department of Homeland Security in Function 750. The 
     Agreement also assumes additional funding for Bankruptcy and 
     other Federal judges.

                    General Government: Function 800

     Function Summary
       The General Government function consists of the activities 
     of the Legislative Branch; the Executive Office of the 
     President; general tax collection and fiscal operations of 
     the Department of Treasury (including the Internal Revenue 
     Service [IRS]); the property and personnel costs of the 
     General Services Administration and the Office of Personnel 
     Management; general purpose fiscal assistance to States, 
     localities, the District of Columbia, and U.S. territories; 
     and other general government activities. The IRS accounts for 
     about half of the spending in this function.
     House Resolution
       The House resolution calls for $19.8 billion in BA and 
     $19.6 billion in outlays in fiscal year 2004, an increase of 
     8.8 percent in BA compared with fiscal year 2003. The 
     function totals are $99.3 billion in BA and $98.9 billion in 
     outlays over 5 years, and $206.4 billion in BA and $203.9 
     billion in outlays over 10 years.
       The House Passed resolution accommodates $500 million for 
     the newly created Election Assistance Commission. It also 
     assumes the President's mandatory spending proposal to pay 
     financial institutions for their services in lieu of 
     providing compensating balances; and continuation of fiscal 
     assistance provided to the Compact of Free Association 
     between the United States Government and the government of 
     the Federated States of Micronesia.
     Senate Amendment
       For discretionary programs, the Senate amendment assumes 
     $17.1 billion in BA and $16.8 billion in outlays for 2004. 
     This represents an increase of $1.4 billion in BA from the 
     2003 level. The Senate amendment includes the following 
     specific assumptions.
       The Senate amendment allocates $10.4 billion for the 
     Internal Revenue Service [IRS], an increase of $550 million 
     or almost 6 percent over 2003. Of that increase, 50 percent 
     is directed into Tax Law Enforcement [TLE], 23 percent toward 
     Processing Assistance and Management [PAM], and 19 percent 
     for reducing fraud in the Earned Income Tax Credit [EITC] 
     program.
       The Senate amendment allocates $223 million for Payments in 
     Lieu of Taxes [PILT] for 2004, $23 million more than the 
     President's request. Over the next decade, this translates 
     into an additional $300 million above the President's 
     request. These payments compensate municipal governments for 
     forgone revenues stemming from the presence of the Federal 
     Government.
       The Senate amendment increases Homeland Security funding 
     within Function 800 by $214 million in 2004. The additional 
     funds are dedicated to developing the site plan for the new 
     headquarters, converting wireless radio communication to 
     narrowband operations and bolstering security at Federal 
     buildings.
       For mandatory programs, the Senate amendment reflects the 
     President's proposal to open ANWR for oil and gas leasing 
     (the total Federal receipts portion appears in Function 950, 
     Offsetting Receipts). The State of Alaska would receive a 
     payment of one-half of the proceeds, or $1.7 billion in 2006, 
     which is reflected in Function 800.
       The Senate amendment assumes that President's $386 million 
     Financial Agent Services proposal is enacted. Currently, 
     financial institutions that operate major collection and 
     payment programs on behalf of the Federal Government are 
     reimbursed via compensating balances. The President's 
     proposal would instead replace the existing barter 
     arrangement with a more transparent fee-for-service 
     agreement.
       In its examination of selected Government programs, OMB 
     determined through the Performance Assessment Rating Tool 
     [PART] that IRS collection efforts do not efficiently utilize 
     its available resources. In response, the President proposes 
     legislation that would permit the IRS to enlist the help of 
     private collection agencies to obtain payment from delinquent 
     taxpayers. The Senate amendment includes $226 million in 
     mandatory funding in 2004 for this proposal.
     Conference Agreement
       The Conference Agreement for Function 800 calls for $20.2 
     billion in BA and $20.1 billion in outlays in fiscal year 
     2004. The functional totals are $103.9 billion in BA and 
     $103.2 billion in outlays over 5 years, and $221.3 billion in 
     BA and $218.2 billion in outlays over 10 years.
       The Conference Agreement reflects the Senate amendment on 
     funding for PILT.
       In fiscal year 2004, the Conference Agreement assumes the 
     President's $386 million Financial Agent Services proposal is 
     enacted. It also assumes that Compacts of Free Association 
     are ratified and therefore accommodates $19 million for this 
     purpose in 2004.

                       Net Interest: Function 900

     Function Summary
       Net interest is the interest paid for the Federal 
     Government's borrowing less the interest received by the 
     Federal Government from trust fund investments and loans to 
     the public. Function 900 is a mandatory payment, with no 
     discretionary components.
       On-budget BA and outlays for net interest has gone from 
     $287.8 billion in fiscal year 1998 to $239.7 billion in 
     fiscal year 2003, an overall decrease of 3.6 percent per 
     year.
     House Resolution
       For on-budget interest, the resolution calls for $256.7 
     billion in BA and outlays in fiscal year 2004, an increase of 
     7.2 percent compared with fiscal year 2003. The function 
     totals are $1,659.4 billion in BA and outlays over 5 years, 
     and $3,910.9 billion in BA and outlays over 10 years. For 
     off-budget interest, it calls for -$89.8 billion in BA and 
     outlays in fiscal year 2004, a decrease of 6.7 percent 
     compared with fiscal year 2003. The function totals are 
     -$554.2 billion in BA and outlays over 5 years, and -$1,481.3 
     billion in BA and outlays over 10 years.
       The resolution assumes a reduction in interest payments of 
     $0.3 billion in BA and outlays in fiscal year 2004 and $5.3 
     billion in BA and outlays over 10 years. This saving arises 
     from replacing Treasury's compensating balances by a 
     permanent indefinite appropriation (see Function 800) that 
     would result in lower borrowing by the Federal Government.
     Senate Amendment
       For 2004, the Senate amendment sets forth on-budget levels 
     of $255.8 billion in BA and outlays. Over the 2004-2013 
     period, it provides on-budget amounts of $3,889.2 billion in 
     BA and outlays.
       The Senate amendment assumes two additional policies that 
     affect net interest. The first is the President's proposal to 
     pay financial institutions for their services in lieu of 
     providing compensating balances (discussed in Function 800), 
     which results in lower borrowing by the Federal Government 
     and saves $5.3 billion in interest over 10 years. The second 
     is the Postal Service pension proposal (discussed in 
     Functions 370 and 950), which results in a reduction in 
     interest received by the Federal Government.
     Conference Agreement
       The Conference Agreement calls for on-budget amounts of 
     259.4 billion in BA and outlays in fiscal year 2004, and 
     $4,072.6 billion over the 2004-13 period.

                        Allowances: Function 920

     Function Summary
       The Allowances function is used for planning purposes to 
     reflect the aggregate budgetary effects of proposals or 
     assumptions that relate to programs in other budget 
     functions. Once such changes are enacted, the budgetary 
     effects are distributed to the appropriate budget functions.
       There is no spending history in Function 920 for the reason 
     mentioned above.
     House Resolution
       The House resolution calls for -$1.1 billion in BA and 
     -$0.6 billion in outlays in fiscal year 2004, all of it in 
     discretionary spending. The function totals are -$1.1 billion 
     in BA and outlays for both the 5-year and the 10-year 
     periods. There are offsets in Functions 500 and 700: $0.2 
     billion in BA and outlays in Function 500, for Impact Aid; 
     and -$1.1 billion in BA and outlays in Function 700 to match 
     the function total with the President's.
     Senate Amendment
       The Senate Amendment assumes levels for this function would 
     total -$16.1 billion in BA and -$8.3 billion in outlays for 
     2004. Initially, the Committee-reported resolution only 
     assumed discretionary effects in this function (totaling 
     -$3.9 billion in BA and -$3.6 billion in outlays for 2004). 
     These assumptions reflected removal of the effects of pay 
     annualization in the baseline (which would reduce 
     discretionary BA by about $2 billion annually); an alternate 
     growth scenario for the path of nondefense discretionary 
     spending after 2008 (the last year of the President's 2004 
     budget); and an unspecified offset for an increase in 
     veterans medical care.
       During consideration of the Committee-reported resolution, 
     the Senate adopted 10 amendments that provided unspecified 
     discretionary offsets in Function 920 for specific 
     assumptions affecting other portions of the

[[Page H3220]]

     budget, and one amendment for an unspecified mandatory offset 
     in Function 920 for spending increases in Functions 450 and 
     500.
     Conference Agreement
       The Agreement calls for -$7.6 billion in BA and $22.3 
     billion in outlays in fiscal year 2004.

            Undistributed Offsetting Receipts: Function 950

     Function Summary
       Offsetting Receipts recorded in this function are either 
     intragovernmental (a payment from one Federal agency to 
     another, such as agency payments to the retirement trust 
     funds) or proprietary (a payment from the public for some 
     kind of business transaction with the Government). The main 
     types of receipts recorded in this function are: the payments 
     Federal employers make to employee retirement trust funds; 
     payments made by companies for the right to explore and 
     produce oil and gas on the Outer Continental Shelf; and 
     payments by those who bid for the right to buy or use public 
     property or resources, such as the electromagnetic spectrum. 
     These receipts are treated as mandatory negative spending.
     House Resolution
       The House resolution calls for -$52.9 billion in BA and 
     outlays for this function in fiscal year 2004, reflecting a 
     -$2.4 billion, or -4.8 percent, increase in receipts (or 
     decrease in spending) compared to the fiscal year 2003 
     budget. This amount is the baseline for offsetting receipts 
     increased by the reduction ($2.7 billion) in the Postal 
     Service's contribution to the Civil Service Retirement 
     System. Over the 2004-08 period, BA and outlays are to 
     further decrease by $16.1 billion due to an average increase 
     for receipts of 5.7 percent per year. Over 10 years, receipts 
     are to total -$676.0 billion in BA and outlays.
       On-Budget Receipts. The resolution calls for -$42.9 billion 
     in BA and outlays in fiscal year 2004, a decrease of 4.4 
     percent in BA compared with fiscal year 2003. The function 
     totals are -$255.0 billion in BA and outlays over 5 years, 
     and -$539.4 billion in BA and outlays over 10 years. Over the 
     2004-08 period, on-budget BA and outlays further decrease an 
     average of 5.4 percent per year.
       Off-Budget Receipts. The resolution assumes -$10.0 billion 
     in BA and outlays in fiscal year 2004, a decrease of 6.6 
     percent in BA compared with fiscal year 2003. The off-budget 
     function totals -$57.6 billion in BA and outlays over 5 
     years, and -$136.5 billion in BA and outlays over 10 years. 
     Over the 2004-08 period, BA and outlays further decrease an 
     average of 6.8 percent per year. The off-budget receipts in 
     this function are agencies' payments to the Social Security 
     trust funds at baseline.
     Senate Amendment
       The Senate amendment assumes additional offsetting receipts 
     of $2.15 billion over the 2004-13 period, consistent with 
     opening up the 1002 area of the Arctic National Wildlife 
     Refuge for oil exploration and production in order to 
     decrease our dependence on foreign oil (the payment of a 
     share of these receipts to the State of Alaska is reflected 
     in Function 800). An amendment to the Committee-reported 
     resolution adopted by the Senate struck the reconciliation 
     instruction to the Senate Energy Committee to report 
     legislation producing that level of savings.
       The Senate amendment also assumes legislation (S. 380, as 
     cleared for the President on 8 April 2003) that would reduce 
     the Postal Service payment to the Civil Service Retirement 
     [CSRS] trust fund for 2003-05, but then would reinstate and 
     redirect the payment to an escrow fund until Congress can 
     enact subsequent law regarding how the Postal Service should 
     address its retiree health liabilities and other concerns. 
     This proposal would increase the unified deficit by $7.3 
     billion over the 2003-13 period. The budgetary effect on the 
     Postal Service is reflected in Function 370, and the effect 
     on the receipts of the CSRS fund are shown in this function 
     (a small interest effect appears in Function 900).
       The Senate amendment assumes the President's proposals to 
     extend the authority of the Federal Communications Commission 
     to auction spectrum (which would otherwise expire at the end 
     of 2007) and to impose an efficiency fee on users of spectrum 
     not acquired through Federal auction.
     Conference Agreement
       On-Budget Receipts. For these receipts, the Agreement 
     assumes -$42.9 billion in BA and outlays in fiscal year 2004; 
     -$250.2 billion over 5 years; and -$540.2 billion over 10 
     years.
       Off-Budget Receipts. The Agreement assumes -$10.0 billion 
     in BA and outlays in fiscal year 2004; -$57.6 billion over 5 
     years; and -$136.5 billion over 10 years.
       The Agreement assumes extended authority to auction the 
     electromagnetic spectrum. It makes no assumption concerning 
     the Arctic National Wildlife Refuge.

                      RECONCILIATION INSTRUCTIONS

       Under section 310(a) of the Congressional Budget Act, the 
     budget resolution may include directives to the committees of 
     jurisdiction to make revisions in law necessary to accomplish 
     a specified change in spending or revenues. If the resolution 
     includes directives to only one committee of the House or 
     Senate, then that committee is required to directly report to 
     its House legislative language of its design that would 
     implement the level of spending or revenue changes provided 
     for in the resolution. Any bill considered pursuant to a 
     reconciliation instruction is subject to special procedures 
     set forth in sections 310 and 313 of the Budget Act.
     House Resolution
       Section 201. Reconciliation
       Section 201 provides for two different reconciliation 
     bills. The first reconciliation bill is designed to stimulate 
     economic growth and to simplify and reform the tax system. It 
     has two separate directives: The Committee on Ways and Means 
     must reduce the total level of revenues by not more than 
     $35.4 billion for fiscal year 2003, $112.8 billion for fiscal 
     year 2004, $387.7 billion for the period of fiscal years 2004 
     through 2008, and $662.8 billion for the period of fiscal 
     years 2004 through 2013. It must also increase the level of 
     direct spending by $4.4 billion in outlays for fiscal year 
     2003, $1.1 billion in outlays for fiscal year 2004, $17.4 
     billion in outlays for the period of fiscal years 2004 
     through 2008, and $23.1 billion in outlays for the period of 
     fiscal years 2004 through 2013. It also requires the 
     Education and the Workforce to increase direct spending by 
     $3.6 billion for FY2003. These changes must be transmitted to 
     the Budget Committee by 11 April 2003.
       The House resolution also instructs 13 committees to reduce 
     spending on programs within their jurisdiction to the Budget 
     Committee by 18 July 2003. The intent of the instruction is 
     to reduce instances of waste fraud and abuse in these program 
     areas. The committees may choose their own methods of 
     complying with the directives. The committees are as follows: 
     Agriculture, Education and the Workforce, Energy and 
     Commerce, Financial Services, Government Reform, House 
     Administration, International Relations, the Judiciary, 
     Resources, Science, Transportation and Infrastructure, 
     Veterans Affairs, and the Ways and Means. Each committee is 
     required to reduce its spending by one percent.
     Senate Amendment
       Section 104. Reconciliation in the Senate
       The Senate amendment instructs the Finance Committee to 
     report legislation by 8 April 2003 to reduce revenues by 
     $322.5 billion over 2003-2013 and to increase direct spending 
     related to tax policy changes by $27.5 billion over 2003-2013 
     (reflected in function 600). The Committee-reported 
     resolution had reconciled the Finance Committee for a 
     reduction in revenues and an increase in outlays consistent 
     with President Bush's jobs and growth tax relief plan--$725.8 
     billion over the 2003-2013 period. During consideration of 
     the Committee-reported resolution, the Senate adopted several 
     amendments that reduced the revenue reconciliation 
     instruction to the Finance Committee.
     Conference Agreement
       Section 201. Reconciliation for Economic Growth and Tax 
           Simplification and Fairness
       Section 201(a) of the Conference Agreement includes a 
     reconciliation directive to the House Ways and Means 
     Committee to report legislation by 8 May 2003 to stimulate 
     economic growth and to simplify and reform the tax system. 
     The committee must reduce the total level of revenues by not 
     more than $535.0 billion for the period of fiscal years 2003 
     through 2013, and to increase direct spending related to tax 
     policy changes by $15.0 billion over 2003-2013.
       Section 201(b) of the Conference Agreement instructs the 
     Senate Finance Committee to report legislation by 8 May 2003 
     to reduce revenues by $522.524 billion over 2003-2013 and to 
     increase direct spending related to tax policy changes by 
     $27.476 billion over 2003-2013 (reflected in function 600).
       Section 202. Limit on Senate Consideration of 
           Reconciliation
       Section 202 of the Conference Agreement limits initial 
     Senate consideration of a reconciliation bill reported 
     pursuant to Section 201, or any amendment thereto, to no more 
     than $322.524 billion in revenue reductions and $27.476 
     billion in outlay increases for the period of fiscal years 
     2003 through 2013, enforced by a 60-vote point of order. The 
     limitation would not apply to a conference report on 
     legislation considered pursuant to this Title.

            SUBMISSIONS TO ELIMINATE WASTE, FRAUD, AND ABUSE

       Section 301. Submissions to eliminate waste, fraud, and 
           abuse
       Section 301 of the Conference Agreement requires 
     authorizing committees in the House and the Senate to submit 
     findings to the appropriate Budget Committee identifying 
     instances of waste fraud and abuse in programs within their 
     jurisdiction sufficient to reduce outlays by an amount to be 
     specified by the chairmen of the Budget Committees. Such a 
     specified amount must be inserted in the Congressional Record 
     by 19 May 2003. The findings of the authorizing committees 
     must be submitted to the Budget Committees by 2 September 
     2003. These findings will be used by the Budget Committees in 
     the development of future budget resolutions.
       In the House, the authorizing committees directed to report 
     these findings are: Agriculture, Armed Services, Education 
     and the Workforce, Energy and Commerce, Financial Services, 
     Government Reform, House Administration, International 
     Relations, Judiciary, Resources, Science, Small Business, 
     Transportation and Infrastructure, Veterans' Affairs, and 
     Ways and Means.
       In the Senate, the authorizing committees directed to 
     report these findings are: Agriculture, Nutrition and 
     Forestry; Armed

[[Page H3221]]

     Services; Banking, Housing, and Urban Affairs; Commerce, 
     Science, and Transportation; Energy and Natural Resources; 
     Environment and Public Works; Finance; Foreign Relations; 
     Governmental Affairs; Health, Education, Labor, and Pensions; 
     Judiciary; Small Business; Veterans' Affairs; and Indian 
     Affairs.
       Finally, the Comptroller-General of the General Accounting 
     Office is directed to submit to the Budget Committees a 
     report identifying instances in which the committees of 
     jurisdiction can make legislative changes to improve the 
     economy, efficiency, and effectiveness of Federal programs. 
     The report must be submitted by 2 September 2003.

         RESERVE FUNDS, CONTINGENCY PROCEDURES, AND ADJUSTMENTS

     House Resolution
       Section 301. Medicare modernization and prescription drugs
       Section 301 creates a reserve fund for legislation that 
     provides a prescription drug benefit and modernizes Medicare, 
     and provides adjustments to the Medicare program on a fee-
     for-service, capitated, or other basis. It creates a separate 
     allocation for Medicare and then permits the Chairman of the 
     House Budget Committee to make adjustments to that allocation 
     for such legislation. The committees with jurisdiction over 
     Medicare may report legislation for these purposes, though 
     the adjustment made must be no more than $7.5 billion in 
     fiscal year 2004 and $400 billion for fiscal years 2004 
     through 2013. Pursuant to section 321(d), legislation must be 
     within the allocations provided by the budget resolution in 
     the first year and five-year period. Because of the separate 
     Medicare allocation established in section 301(c), Medicare 
     legislation must be within its allocation in the first year 
     and the ten-year period. For legislation other than Medicare, 
     the applicable allocation is for the first and five-year 
     period.
       Section 302. Reserve fund for medicaid
       Section 302 creates a reserve fund that allows the Chairman 
     of the House Budget Committee to adjust the allocation of BA 
     and outlays to the Committee on Energy and Commerce for any 
     measure that combines funding for Medicaid and the State 
     Children's Health Insurance Program [SCHIP]. The purpose of 
     this reserve fund is to ensure, as a condition for setting 
     any increase in the allocation, the bill is deficit neutral 
     over ten years. The adjustments in the allocations may not 
     exceed $3.3 billion in new BA and outlays for fiscal year 
     2004; and $8.9 billion in new BA and outlays for the period 
     of fiscal years 2004 through 2008.
       Section 303. Reserve fund for Bioshield
       In section 303, the Chairman of the House Budget Committee 
     is permitted to adjust the allocation of BA and outlays to 
     the appropriate committees for a bill that establishes a 
     program to accelerate the research, development, and purchase 
     of biomedical threat countermeasures.
       The adjustment can accommodate either a discretionary or 
     mandatory program, depending on the structure of the program 
     in the authorizing legislation. If it is mandatory, the 
     adjustment may not exceed $890 million in new mandatory BA 
     for fiscal year 2004, and $3.4 billion in new mandatory BA 
     for fiscal years 2004 through 2008. If it is discretionary, 
     the adjustment would be made in the Appropriations 
     Committee's 302(a) allocation for fiscal year 2004 because 
     that allocation is made for only a single fiscal year. If the 
     program includes both mandatory and discretionary components 
     or if two bills are enacted, the maximum adjustment the 
     committee may make in fiscal year 2004 is $890 million in BA.
       Section 311: Contingency procedure for surface 
           transportation
       In section 311, the House resolution creates a contingency 
     procedure to permit the Transportation and Infrastructure 
     Committee to increase spending above the level in the budget 
     resolution on highways, highway safety, and transit in the 
     surface transportation reauthorization bill it will consider 
     later this year, should additional resources be made 
     available to the Highway Trust Fund. The offsets may take the 
     form of an increase in receipts to the Highway Trust Fund or 
     a reduction in mandatory outlays from the fund.
       Subsection (a) creates a reserve fund that allows the 
     Chairman of the House Budget Committee to adjust the 
     allocation of BA to the Committee on Transportation and 
     Infrastructure for any measure that reauthorizes surface 
     transportation programs and provides new BA for highway and 
     transit spending. The Budget Committee Chairman may make an 
     adjustment to its allocation if the Transportation Committee 
     reports a measure that exceeds the amounts specified in 
     section 311. The adjustment may only be made if it is offset 
     by changes in law, either included in same measure, or by 
     previously enacted legislation. The changes in law may effect 
     either direct spending or receipts must be appropriated to 
     the Highway Trust Fund. The adjustment may be made in the BA 
     allocation for fiscal year 2004 and the 5 year period, but 
     the additional resources must offset the additional BA and 
     corresponding outlays in each year.
       Subsection (b) creates a reserve fund that allows the 
     Chairman of the House Budget Committee to adjust the 
     allocation of outlays to the Committee on Appropriations for 
     any measure that sets total obligation limitations greater 
     than $38.5 billion for fiscal year 2004 for spending from the 
     Highway Trust Fund. In addition, the amount of the adjustment 
     must be offset by increases in resources dedicated to the 
     Highway Trust Fund in fiscal year 2004 as previously referred 
     to in subsection (a).
     Senate Amendment
       In general, a reserve fund permits the Chairman of the 
     Committee on the Budget to increase the section 302 
     allocation and other appropriate levels set out in this 
     resolution (including in some cases--see sections 211 and 
     212--the discretionary spending limits) once certain 
     conditions specified in the reserve fund have been met. The 
     authority to make these adjustments is solely within the 
     discretion of the Chairman and may be made when the specified 
     committee of jurisdiction reports a measure that satisfies 
     all the conditions set out in the reserve fund.
       Section 211: Adjustment for special education
       The Senate amendment contains a mechanism to make 
     additional resources available to the Committee on 
     Appropriations specifically for the Part B grant program 
     under the Individuals with Disabilities Education Act (IDEA). 
     The mechanism will make available an additional $205 million 
     for fiscal year 2004 and $209 million for fiscal year 2005 
     after enactment of a bill reported by the Committee on 
     Health, Education, Labor and Pensions reauthorizing IDEA and 
     only if the appropriators provide more than the base amounts 
     described in the reserve. Additionally, the amendment 
     requires the reauthorization bill to provide an allowance of 
     uniform discipline policies for all students; local fiscal 
     relief; and to minimize the over-identification of students 
     with disabilities.
       Section 212: Adjustment for highways and highway safety and 
           transit
       The Senate amendment provides a mechanism to make 
     additional resources available to the appropriate authorizing 
     committees and the Committee on Appropriations for highway 
     and transit programs once the reauthorization of the 
     Transportation Equity Act for the 21st Century (TEA-21) is 
     enacted, provided that the reauthorization includes new 
     governmental receipts for the highway trust fund--without 
     increasing the deficit. The amendment makes no assumption 
     with respect to the floor procedures required to bring 
     together the portions of this legislation that fall within 
     the jurisdiction of various committees of the Senate. 
     Therefore the amendment names all three authorizing 
     committees (the Committee on the Environment and Public 
     Works, the Committee on Banking, Housing and Urban Affairs 
     and the Committee on Commerce, Science and Transportation). 
     The amendment further assumes that the additional funding 
     facilitated by this section will be provided in the form of 
     new governmental receipts in a measure reported by the 
     Committee on Finance, net of the 25% income tax offset as is 
     customarily scored by the Joint Committee on Taxation.
       Section 213: Reserve fund for Medicare
       The Senate amendment provides up to $400 billion for the 
     period of fiscal years 2004 through 2013 for legislation that 
     improves the Medicare program and makes prescription drugs 
     more accessible for those covered by Medicare. During the 
     markup an amendment offered by Senator Feingold was agreed to 
     which provides that the legislation may also promote 
     geographic equity payments. The adjustment may be made only 
     if the Committee on Finance reports a bill that strengthens 
     and enhances the Medicare program as well as improves the 
     access of beneficiaries to prescription drugs or promotes 
     geographic equity.
       Section 214: Reserve fund for health insurance for the 
           uninsured
       The Senate amendment provides up to $88 billion for the 
     period of fiscal years 2004 through 2013 for legislation that 
     provides health insurance for the uninsured. The adjustment 
     may be made only if the Committee on Finance reports a bill 
     that provides health insurance for the uninsured--which may 
     include a measure providing for tax deductions for the 
     purchase of health insurance for, among others, moderate 
     income individuals not receiving health insurance from their 
     employers.
       Section 215: Reserve fund for children with special needs
       The Senate amendment creates a reserve for legislation that 
     provides states with the option to expand Medicaid coverage 
     for children with special needs. The adjustment may be made 
     only if the Committee on Finance reports a bill that does not 
     exceed $43 million in new budget authority and $42 million in 
     outlays for fiscal year 2004, and $7.462 billion in new 
     budget authority and $7.262 billion in outlays for the 
     period of fiscal years 2004 through 2013.
       Section 216: Reserve fund for Medicaid Reform
       The Senate amendment provides up to $12.782 billion through 
     2010 for legislation that reforms the Medicaid program. The 
     adjustment may be made only if the Committee on Finance 
     reports a bill that provides significant reform of the 
     Medicaid program. The adjustments may be made only if the 
     Finance Committee reports a bill that does not exceed $3.258 
     billion in new budget authority and outlays for 2004, $8.944 
     billion in new budget authority and outlays for the period of 
     fiscal years 2004 through 2008, $12.782 billion in new budget 
     authority and outlays for the period of fiscal years 2004 
     through 2010, and is deficit neutral for the period of fiscal 
     years 2004 through 2013.

[[Page H3222]]

       Section 217: Reserve fund for Project Bioshield
       The Senate amendment provides up to $5.593 billion over the 
     life of the resolution for legislation that facilitates 
     procurement for inclusion by the Secretary of Health and 
     Human Services in the Strategic National Stockpile of 
     countermeasures necessary to protect the public health from 
     current and emerging threats of chemical, biological, 
     radiological, or nuclear agents. The adjustments may be made 
     only if the Committee on Health Education, Labor and Pensions 
     reports a bill that provides no more than $890 million in new 
     budget authority (and $575 million in outlays) for fiscal 
     year 2004 and $5.593 billion in new budget authority and 
     outlays for the period of fiscal years 2004 through 2013.
       Section 218: Reserve fund for the state grant program and 
           ANWR receipts
       The Senate amendment provides up to $250 million per year 
     (beginning in fiscal year 2006) for legislation that provides 
     additional resources for the state grant program funded from 
     the Land and Water Conservation Fund. The adjustment is 
     conditioned upon two events: the enactment of legislation 
     that yields offsetting receipts (reflected in the resolution 
     as a reduction in outlays) from the opening of the Arctic 
     National Wildlife Refuge and subsequent reporting of a bill 
     from the Committee on Energy and Natural Resources that 
     dedicates a portion of these receipts to the Land and Water 
     Conservation Trust Fund for the grant program.
       Section 219: Reserve fund for State Children's Health 
           Insurance Program
       The Senate amendment provides up to $1.825 billion in new 
     budget authority for legislation that extends the 
     availability to states of expired State Children's Health 
     Insurance Program allotments (from 1998 and 1999) and 
     expiring 2000 allotments. The adjustments may be made only if 
     the Committee on Finance reports a bill that provides no more 
     than $1.26 billion in new budget authority (and $85 million 
     in outlays) for fiscal year 2003, $1.33 billion in new budget 
     authority (and $85 million in outlays) for fiscal year 2004, 
     $1.95 billion in new budget authority (and $845 million in 
     outlays) for the period of fiscal years 2003 through 2008, 
     and $1.825 billion in new budget authority (and $975 million 
     in outlays) for the period of fiscal years 2003 through 2013.
       Section 319: Reserve fund to strengthen Social Security
       Section 319 of the Senate amendment was adopted as part of 
     an amendment that reduced to $350 billion the reconciliation 
     instruction to the Committee on Finance. It purports to hold 
     in reserve $396 billion to extend the solvency of the Social 
     Security trust funds, but provides no policy directive for 
     how to accomplish this. On its face, it would permit the 
     Committee on Finance to spend $396 billion on any program so 
     long as it was part of legislation that for instance, reduced 
     benefits or increased the retirement age, and thus extended 
     solvency.
       Past practice has been to include the effect of the 
     policies described in a reserve fund in the functional levels 
     and aggregates of the budget resolution but to withhold the 
     funds from the committee's 302(a) allocation. The language of 
     section 319 does not conform to this model. Rather, it 
     entirely eliminates the $396 billion from the budget--or in 
     other words, reduces the deficit. If the authority in this 
     section were invoked it would result in a $396 billion 
     increase in the deficit. It is not clear, how a deficit 
     increase would contribute to the solvency of Social Security 
     trust funds.
       Section 329: Reserve fund for possible military action and 
           reconstruction in Iraq
       Section 329 of the Senate amendment was adopted as part of 
     an amendment that reduced the reconciliation instruction to 
     the Finance Committee by $100 billion and thus increased 
     taxes by $10 billion each year 2004 through 2013. It purports 
     to hold this $100 billion in reserve for the Committee on 
     Appropriations to pay for military action and reconstruction 
     in Iraq over the period of 2003 through 2013. Because this 
     reserve can only be triggered for an appropriations bill, it 
     would more appropriately be a cap adjustment instead of a 
     reserve fund.
       Past practice has been to include the effect of the 
     policies described in a reserve fund in the functional levels 
     and aggregates of the budget resolution but to withhold the 
     funds from the committee's 302(a) allocation. The language of 
     section 329 does not conform to this model. Rather it 
     entirely eliminates the $100 billion from the budget--or in 
     other words, it reduces the deficit by that amount over the 
     10-year period ending in 2013. If the authority in this 
     section were invoked, it would result in up to a $100 billion 
     increase in the deficit.
     Conference Agreement
       Section 401. Reserve Fund for Medicare
       Section 401 of the Conference Agreement permits the 
     appropriate Budget Committee Chairman to adjust committee 
     allocations and other appropriate budgetary aggregates and 
     allocations for reported legislation (and amendments thereto, 
     or any conference report thereon) for Medicare-related 
     legislation.
       Section 401(a) of the Conference Agreement establishes a 
     Medicare reserve fund for the House. The reserve fund permits 
     the Chairman of the Committee on the Budget to adjust the 
     levels in the budget resolution to accommodate certain 
     Medicare-related legislation. The Chairman may make an 
     adjustment to the separate Medicare allocation to the Ways 
     and Means Committee and the Energy and Commerce Committee for 
     legislation that provides a prescription drug benefit and 
     modernizes Medicare, and provides adjustments to the Medicare 
     program on a fee-for-service, capitated, or other basis. The 
     amount of the adjustment for this legislation may not exceed 
     $7.0 billion in budget authority and outlays for fiscal year 
     2004 and $400 billion in budget authority and outlays for 
     fiscal years 2004 through 2013. The adjustment is made to the 
     separate allocation for Medicare, regardless of the committee 
     that reports the measure.
       Section 401(b) of the Conference Agreement sets forth a 
     Medicare reserve fund for the Senate and also provides up to 
     $400 billion for the period of fiscal years 2004 through 2013 
     for legislation that improves the Medicare program and makes 
     prescription drugs more accessible for those covered by 
     Medicare. The legislation may also promote geographic equity 
     payments. The Chairman of the Committee on the Budget may 
     make an adjustment only if the Committee on Finance reports a 
     bill that strengthens and enhances the Medicare program as 
     well as improves the access of beneficiaries to prescription 
     drugs and does not exceed $7.0 billion in new budget 
     authority and outlays for fiscal year 2004 and $400 billion 
     fiscal years 2004-2013.
       The Senate conferees recognize the need to enhance both the 
     benefits and structure of the Medicare program in order to 
     provide a better system for seniors. In addition to providing 
     an integrated prescription drug benefit, the Conferees 
     support efforts to take advantage of competition in order to 
     enhance seniors' medical benefits which are currently lacking 
     in our present system. This could include access to 
     preventive care services, disease management and catastrophic 
     protection against high hospital costs.
       While considering benefit expansions, however, it is 
     critical to recognize the long-term unfunded promises in the 
     Medicare program. The President's budget submission includes 
     sobering information on the extent of Medicare's long- term 
     unfunded promises. According to the Medicare Trustees' most 
     recent report, the Hospital Insurance Trust Fund is expected 
     to be exhausted in 2026--four years earlier than estimated in 
     the 2002 report.
       Medicare actuaries project a 75-year unfunded promise to 
     the HI fund of $5 trillion. However, this only tells half the 
     story. It does not include the Part B program. Medicare 
     beneficiary premiums only cover 25 percent of these costs. 
     The remaining 75 percent of expenses are not covered by any 
     specific or dedicated financing source. The Senate conferees 
     believe it is artificial to separate Part A and B. Policy 
     makers must look at the total expenditures for Medicare. From 
     this perspective Medicare's unfunded promises are $13 
     trillion.
       Section 402. Reserve Fund for Medicaid Reform
       Section 402 of the Conference Agreement includes a reserve 
     fund to reform the Medicaid program. Both the House 
     resolution and the Senate amendment included reserve funds 
     this general purpose. The reserve fund, which applies in both 
     the House and the Senate, permits the appropriate Budget 
     Committee Chairman to adjust the appropriate committee 
     allocations of the Committee on Energy and Commerce in the 
     House, or the Committee on Finance in the Senate, and other 
     budgetary aggregates and allocations for reported legislation 
     (and amendments thereto, or any conference report thereon) 
     that modernizes Medicaid. The adjustments in the allocations 
     may not exceed $3.258 billion in new BA and outlays for 
     fiscal year 2004; and $8.944 billion in new BA and outlays 
     for fiscal years 2004 through 2008, and $12.782 billion for 
     fiscal years 2004 through 2010.
       Section 403. Reserve Fund for State Children's Health 
           Insurance Program
       Section 403 of the Conference Agreement retains the reserve 
     fund for the extension of the State Children's Health 
     Insurance Program [SCHIP] included in section 219 of the 
     Senate amendment. The reserve fund, which applies in both the 
     House and the Senate, permits the appropriate Budget 
     Committee Chairman to adjust the committee allocations for 
     the Committee on Ways and Means in the House, or the 
     Committee Finance in the Senate, and other appropriate 
     budgetary aggregates and allocations for reported legislation 
     (and amendments thereto, or any conference report thereon) 
     that extends the availability of expired and expiring 
     allotments of the State Children's Health Insurance Program 
     [SCHIP]. The adjustments in the allocations may not exceed 
     $1.260 billion in new BA and $85 million in outlays for 
     fiscal year 2003; $1.350 billion in new BA and $105 million 
     in outlays for fiscal year 2004; $1.355 billion in new BA and 
     $1.425 million in outlays for fiscal year 2004 through 2008; 
     and $1.355 billion in new BA and $1.680 million in outlays 
     for the period of fiscal years 2004 through 2013.
       Section 404. Reserve Fund for Bioshield
       Section 404 of the Conference Agreement establishes 
     separate procedures in the House and the Senate reserving 
     amounts for legislation providing countermeasures to 
     international terrorism.
       Section 404(a) of the Conference Agreement adopts the 
     reserve fund for bioshield included in section 303 the House 
     resolution. The reserve fund permits the House Budget

[[Page H3223]]

     Committee Chairman to adjust committee allocations and other 
     appropriate budgetary aggregates and allocations for a 
     reported measure (and amendments thereto, or any conference 
     report thereon) that establishes either a new mandatory or 
     discretionary program to accelerate the research, 
     development, and purchase of biomedical threat 
     countermeasures. If the program established is mandatory, the 
     adjustment may not exceed $890 million in new mandatory BA 
     for fiscal year 2004, and $3.418 billion in new BA and 
     outlays for fiscal years 2004 through 2008. If the program 
     authorized is discretionary, the adjustment may not exceed 
     $890 million in new mandatory BA for the measure 
     appropriating funds for the new program. If the program 
     includes both mandatory and discretionary components or if 
     two bills are enacted, the maximum adjustment the chairman 
     may make in fiscal year 2004 is $890 million in BA.
       Section 404(b) of the Conference Agreement adopts the 
     reserve fund for bioshield included in section 217 of the 
     Senate Amendment with minor modifications. The reserve fund 
     permits the appropriate Budget Committee Chairman to adjust 
     committee allocations and other appropriate budgetary 
     aggregates and allocations for reported legislation (and 
     amendments thereto, or any conference report thereon) that 
     establishes a new mandatory program to accelerate the 
     research, development, and purchase of biomedical threat 
     countermeasures. For the adjustment to take place, the 
     measure may provide no more than $890 million in new 
     mandatory BA and $575 million in outlays for fiscal year 
     2004, and $5.593 billion in new mandatory BA and outlays for 
     fiscal years 2004 through 2013.
       Section 405. Reserve Fund for Health Insurance for the 
           Uninsured
       Section 405 of the Conference Agreement retains the Senate 
     reserve fund for health insurance for the uninsured included 
     in section 214 of the Senate amendment. The reserve fund 
     permits the Chairmen of the respective Budget Committees to 
     adjust the allocation of BA and outlays to the appropriate 
     committee of jurisdiction in the House, or the Committee on 
     Finance in the Senate, for any measure that provides health 
     insurance for the uninsured (including a measure providing 
     for tax deductions for the purchase of health insurance for, 
     among others, moderate income individuals not receiving 
     health insurance for from their employers). The adjustments 
     in the allocations may not exceed $28.5 billion in new BA and 
     outlays for fiscal years 2004 through 2008, and $50 billion 
     in new BA and outlays for the period of fiscal years 2004 
     through 2013.
       Section 406. Reserve Fund for Children With Special Needs
       Section 406 of the Conference Agreement retains the reserve 
     fund for children with special needs included in section 215 
     of the Senate amendment and which was accommodated in the 
     allocations in the House resolution. The reserve fund, which 
     applies in both the House and the Senate, permits the 
     appropriate Budget Committee Chairman to adjust the committee 
     allocations for the Committee on Energy and Commere in the 
     House, or the Committee on Finance in the Senate, and other 
     appropriate budgetary aggregates and allocations for reported 
     legislation (and amendments thereto, or any conference report 
     thereon) that provides states with the option to expand 
     Medicaid coverage for children with special needs, allowing 
     families of disabled children to purchase coverage under the 
     Medicaid program for such children. The adjustments in the 
     allocations may not exceed $43 million in BA and $42 million 
     in outlays for fiscal year 2004, $1.627 billion in BA and 
     $1.566 billion in outlays for the period of fiscal years 2004 
     through 2008. and $7.462 billion in BA and $7.262 billion in 
     outlays for the period of fiscal years 2004 through 2013.
       Section 411. Contingency Procedure for Surface 
           Transportation
       Section 411 of the Conference agreement establishes a 
     separate contingency procedure for the Highway Trust Fund, 
     which will be reauthorized this session of Congress. The 
     contingency procedure, which applies in both the House and 
     the Senate, permits the appropriate Budget Committee Chairman 
     to accommodate legislation providing additional highway 
     spending to the extent it is offset by additional revenues or 
     a reduction in mandatory spending in the Highway Trust Fund. 
     The procedure permits the Budget Committee Chairmen to 
     increase the 302(a) allocation of the Committee on 
     Transportation and Infrastructure in the House, or the 
     Committee on Environment and Public Works, the Committee on 
     Banking, Housing, and Urban Affairs, or the Committee on 
     Commerce, Science, and Transportation in the Senate, for 
     legislation that provides in excess of the level assumed in 
     the budget resolution but only to the extent to which it has 
     been offset by new revenue or savings in mandatory outlays. 
     The offsets must be dedicated to the Highway Trust Fund and 
     can be made in the same measure or legislation enacted 
     earlier in the 108th Congress. In view of the fact that 
     outlays are determined by obligation limits, subsection (a) 
     also permits the chairman to make a corresponding change in 
     outlays for the committee setting the obligation limits. 
     Again, legislation must have first been enacted to offset the 
     increase in contract authority.
       Section 421. Supplemental Appropriations for Fiscal Year 
           2003
       If a measure making supplemental appropriations for fiscal 
     year 2003 is enacted before May 1, 2003, the Chairmen of the 
     Committees on the Budget are permitted to adjust the 
     appropriate allocations and aggregates of budget authority 
     and outlays in the budget resolution to reflect the 
     difference between that measure and the levels assumed in 
     that resolution. The Conference Agreement reflects the 
     President's requested level of $74.7 billion.

                           BUDGET ENFORCEMENT

       Under section 301 of the Budget Act, the budget resolution 
     may include special procedures to enforce the spending and 
     revenue levels contained in the resolution and the 
     allocations found in the accompanying joint statement of 
     managers.
     House Resolution
       Section 301(c). Medicare 302(a) Allocation
       Section 301(c) creates a Medicare allocation to the Ways 
     and Means Committee and Energy and Commerce Committee. 
     Legislation changing the Medicare program must be offset in 
     the first year and the 10-year period. This allocation may be 
     increased should a reserve fund for specific Medicare 
     modernization legislation be released. Such a measure must 
     provide less than $7.5 billion in the first year, and no more 
     than $400 billion over 10 years. If a measure receiving a 
     Medicare allocation adjustment also includes budget authority 
     not directly related to Medicare modernization, that non-
     Medicare spending will be compared to the committee of 
     jurisdiction's allocation.
       Section 321. Application and Effects of Changes In 
           Allocations and Aggregates
       This section sets forth the procedures for making 
     adjustments pursuant to the reserve funds included in this 
     resolution. Subsection (a)(1) and (2) provide that the 
     adjustments may only be made during the interval that the 
     legislation is under consideration and do not take effect 
     until the legislation is actually enacted. This is 
     approximately consistent with the procedures for making 
     adjustments for various initiatives under section 314 of the 
     Congressional Budget Act. Subsection (a)(3) provides that in 
     order to make the adjustments provided for in the reserve 
     funds, the chairman of the House Budget Committee is directed 
     to insert these adjustments in the Congressional Record.
       Subsection (b) clarifies that any adjustments made under 
     any of the reserve funds in the resolution have the same 
     effect as if they were part of the original levels set forth 
     in section 101. Therefore the adjusted levels are used to 
     enforce points of order against legislation inconsistent with 
     the allocations and aggregates included in the concurrent 
     resolution on the budget.
       Subsection (c) clarifies that the House Budget Committee 
     determines the levels and estimates used to enforce points of 
     order, as is the case for enforcing budget-related points of 
     order, and the determination is made pursuant to section 312 
     of the Budget Act. This section of the Budget Act provides 
     the chairman of the Budget Committee with the authority to 
     advise the chairman of the House on the appropriate levels 
     and estimates related to legislation being considered on the 
     floor.
       Subsection (d) provides for 5-year enforcement periods. 
     Though the authorizing committees receive a 10-year 
     allocation, under Section 321 (d) of the House resolution, 
     the Budget Committee will apply the various relevant 
     provisions of the Congressional Budget Act for only the first 
     and 5-year time period.
       Section 401. Restrictions on Advance Appropriations
       Section 401 imposes a limitation on advance appropriations 
     similar to a provision included in the last several budget 
     resolutions. It does two things: (1) It limits the total 
     amount of advance appropriations; and (2) It limits the 
     accounts for which advanced appropriations may be made. It 
     establishes this procedure with regard to any advance 
     appropriation for fiscal year 2004 and any year thereafter. 
     An exception is provided for those programs specified in the 
     Joint Statement of Managers, but the total advance 
     appropriation must be lower than a specified level. The 
     section defines an `advance appropriation' as any new 
     discretionary budget authority making general appropriations 
     or continuing appropriations for fiscal year 2004 that first 
     becomes available after 2004. This limitation is enforced by 
     a point of order that may be raised against any measure 
     including an advance appropriation not falling within the 
     exception. The result of the point of order would be to 
     remove the advance appropriation, but the measure would 
     continue to be considered.
       Section 402. Compliance With Section 13301 of the Budget 
           Enforcement Act of 1990
       Section 402 provides authority to include the 
     administrative expenses related to Social Security in the 
     allocation to the Appropriations Committee. This language is 
     necessary to ensure that the Appropriations Committee retains 
     control of administrative expenses through the Congressional 
     budget process. In the 106th Congress, the Joint Leadership 
     of the House and Senate Budget Committees decided to 
     discontinue including administrative expenses in the budget 
     resolution. This change was intended to make the budget 
     resolution consistent with CBO's baseline which does not 
     include administrative expenses for Social Security. At the 
     same time, the Budget Committees believe

[[Page H3224]]

     that these expenses should continue to be reflected in the 
     302(a) allocations to the Appropriations Committee. Absent a 
     waiver of section 302(a) of the Budget Act, the inclusion of 
     these expenses in the allocation is construed as violating 
     302(a) of the Budget Act which states that the allocations 
     must reflect the discretionary amounts in the budget 
     resolution (and arguably, section 13301 of the Budget 
     Enforcement Act, which states that Social Security benefits 
     and revenues are off-budget).
     Senate Amendment
       Section 201. Extension of supermajority enforcement
       The Senate amendment extends the 60-vote requirement for 5 
     years (until September 30, 2008), for waivers and appeals 
     with respect to those Budget Act points of order for which 
     this supermajority requirement expired on September 30, 2002 
     (and was temporarily extended through April 15, 2003 in S. 
     Res. 304, 107th Congress).
       Section 202. Discretionary spending limits in the Senate
       The Senate amendment sets out discretionary spending limits 
     for the Senate for the first two years covered by the budget 
     resolution (FY 2004 and 2005) with respect to both budget 
     authority and outlays. It also sets limits for FY 2003 
     because no FY 2003 budget resolution was ever adopted. Since 
     the advent of statutory discretionary spending limits in 
     1990, a majority of budget resolution conference reports have 
     included language dealing with ``congressional caps''.
       The Senate amendment provides that the following amounts 
     will be the discretionary spending limits:
       For fiscal year 2003: $770.860 billion in new budget 
     authority and $771.442 billion in outlays for the 
     discretionary category; $31.264 billion in outlays for the 
     highway category, and $1.436 billion in new budget authority 
     and $6.551 billion in outlays for the transit category, for a 
     total of $772.296 billion in new budget authority and 
     $809.257 billion in outlays.
       For fiscal year 2004: $788.459 billion in new budget 
     authority and $797.890 billion in outlays for the 
     discretionary category; $32.016 billion in outlays for the 
     highway category, and $2.209 billion in new budget authority 
     and $6.746 billion in outlays for the transit category, for a 
     total of $790.668 billion in new budget authority and 
     $836.652 billion in outlays.
       For fiscal year 2005: $813.597 billion in new budget 
     authority and $814.987 billion in outlays for the 
     discretionary category; $34.665 billion in outlays for the 
     highway category, and $2.544 billion in new budget authority 
     and $7.109 billion in outlays for the transit category, for a 
     total of $816.141 billion in new budget authority and 
     $856.761 billion in outlays.
       The Senate amendment also provides for a number of so-
     called cap adjustments. The cap adjustments permit the 
     Chairman of the Committee on the Budget to increase the 
     spending limit, the section 302(a) allocations to the 
     Committee on Appropriations, and any other appropriate levels 
     in the resolution if an appropriations bill provides 
     additional resources for the programs specified in the 
     adjustment. The Senate amendment provides that spending and 
     allocations may be adjusted for: (1) emergency spending, (2) 
     funding for Part B grants under the Individuals with 
     Disabilities Education Act (IDEA), and (3) highway and 
     transit programs.
       These discretionary spending limits are enforced by a 60-
     vote point of order on two fronts: (1) there will be a point 
     of order against the FY 2005 budget resolution if it exceeds 
     the limits set forth in this resolution (or against any 
     revision to the FY 2004 resolution that does so) and (2) 
     there will be a point of order against any appropriations 
     bill that causes the discretionary limits to be exceeded.
       Section 203. Restriction on advance appropriations in the 
           Senate
       The Senate amendment once again includes language limiting 
     the use of advance appropriations. This restriction was first 
     included in the FY 2001 budget resolution and was included 
     and revised in the FY 2002 resolution as well. The Senate 
     amendment continues to limit advance appropriations to an 
     annual limit of $23.158 billion with respect to both the FY 
     2004 and 2005 appropriations bills and to those programs, 
     which are listed in the statement of managers accompanying 
     the conference report on the budget resolution. The amendment 
     also continues the exception for advances with respect to the 
     Corporation for Public Broadcasting.
       The list of permissible advances is as follows:


             Accounts Identified for Advance Appropriations

     Interior
     Elk Hills
     Labor, HHS
     Employment and Training Administration
     Education for the Disadvantaged
     School Improvement
     Children and Family Services (Head Start)
     Special Education
     Vocational and Adult Education
     Treasury, Postal
     Payment to Postal Service
     Veterans', HUD
     Section 8 Renewals
       Section 204. Emergency legislation
       With respect to emergency spending, the Senate amendment 
     addresses two issues: the ability to designate spending as an 
     emergency and the restatement of the 60-vote point of order 
     in the Senate with respect to the use of that designation.
       The authority to designate spending as an ``emergency'' 
     existed as a part of the statutory discretionary spending 
     limits and the pay-as-you-go rules set out in sections 251 
     and 252 of the Balanced Budget and Emergency Deficit Control 
     Act of 1985. The purpose of the designation was to create a 
     ``safety valve'' for unexpected, emergency expenditures with 
     respect to the sequestration mechanism which served as the 
     underlying enforcement mechanism for the caps and PAYGO. With 
     the expiration of section 251 on September 30, 2002 and the 
     de facto expiration of section 252 by virtue of setting the 
     scorecard to zero for all fiscal years, the Senate amendment 
     reestablishes the authority of Congress to designate spending 
     and revenue changes as an emergency. In doing so, the 
     resolution specifies the criteria used in the definition of 
     an emergency and requires committee reports and statements of 
     managers to justify the use of emergency designations vis a 
     vis these criteria. The criteria are as follows:
       An expenditure may be designated an emergency if it is--
       (i) necessary, essential, or vital (not merely useful or 
     beneficial);
       (ii) sudden, quickly coming into being, and not building up 
     over time;
       (iii) an urgent, pressing, and compelling need requiring 
     immediate action;
       (iv) unforeseen (see below), unpredictable, and 
     unanticipated;
       Note: an emergency that is part of an aggregate level of 
     anticipated emergencies, particularly when normally estimated 
     in advance, is not unforeseen.
       If an item of discretionary spending is accompanied by an 
     emergency designation then the discretionary spending limit 
     and the allocation to the Committee on Appropriations will be 
     adjusted accordingly (as well as all other appropriate levels 
     in the resolution). If a revenue reduction or mandatory 
     spending increase is accompanied by an emergency designation, 
     then the committee allocation and the Senate's pay-go 
     scorecard will be adjusted accordingly (again, as well as all 
     other appropriate levels in the resolution).
       The Senate amendment also revises the Senate's emergency 
     designation point of order. This point of order was first 
     included in the FY 2000 budget resolution. This point of 
     order allows any member to question the use of an emergency 
     designation while the bill, amendment or conference report 
     containing the designation is before the Senate. Once the 
     point of order is made, it will require 60-votes to waive the 
     point of order and keep the designation. If the motion to 
     waive is not successful, the designation is removed from the 
     measure while the spending or revenue provision remains, 
     potentially making the measure subject to a Budget Act point 
     of order, which too would require 60-votes to overcome. The 
     removal of the designation is accomplished by the same method 
     as provided for in the Byrd Rule (section 313 of the 
     Congressional Budget Act).
       The language in the Senate amendment differs from past 
     resolutions only to the extent that the references to 
     sections 251 and 252 of the BBEDCA have been replaced with a 
     cross reference to subsection (a) of this section, which 
     provides the authority for the use of the designation. In 
     addition, spending for homeland security programs would be 
     exempt from the point of order as has been the case with 
     defense spending.
       Section 205. Pay-as-you-go point of order in the Senate
       The Senate amendment revises and extends the Senate's pay-
     as-you-go point of order. The original pay-as-you-go point of 
     order first appeared in the FY 1994 budget resolution. Its 
     most recent incarnation expired in its entirety on September 
     30, 2002. The point of order was revised and extended in S. 
     Res. 304 (107th Congress) through April 15, 2003. S. Res 304 
     included a new provision within the pay-as-you-go rule making 
     the rule applicable to mandatory spending in appropriation 
     bills in order to prevent the exploitation of the fact that 
     there were no limits on discretionary spending for FY 2003 
     due to the expiration of the discretionary spending limits 
     and the lack of a FY 2003 budget resolution.
       The pay-as-you-go point of order included in the Senate 
     amendment does not retain the expanded application to 
     appropriation bills set out in S. Res. 304. Rather it 
     resembles the previous versions of the rule with one specific 
     exception: it will not apply to any spending or revenue 
     changes that result from the implementation of the 
     reconciliation instruction set out in section 104 of the 
     Senate amendment (up to $350 billion). It will nonetheless 
     apply to all other mandatory spending and revenue changes 
     provided for in the Senate amendment.
       Section 221. Authority to make adjustments for changes in 
           concepts and definitions
       The Senate amendment provides that upon enactment of 
     legislation that changes the nature of funding of an existing 
     program from discretionary to mandatory (or vice versa), the 
     Chairman of the Committee on the Budget will immediately 
     adjust the levels in this resolution (including the 
     discretionary spending limits) to reflect such a change.

[[Page H3225]]

       Section 222. Application and effect of changes in 
           allocations and aggregates
       The Senate amendment contains language identical to section 
     221 of the FY 2002 budget resolution, which makes clear when 
     adjustments made under Title II of the budget resolution will 
     take effect.
       Section 223. Exercise of Rulemaking Powers
       The Senate amendment includes language identical to section 
     222 of the FY 2002 budget resolution which simply states 
     Congress' authority to legislate rule of procedure for either 
     chamber.
     Conference Agreement
       Section 501. Restrictions on advance appropriations
       Section 501 of the Conference Agreement retains the 
     language of both section 401 of the House resolution and 
     section 203 of the Senate amendment.
       Subsection (a) applies to the House; it limits which 
     programs may receive an advance appropriation and an overall 
     amount of advanced appropriations. Advance appropriations may 
     be provided for the accounts in the appropriation bills 
     listed below, provided that their sum does not exceed $23.158 
     billion in budget authority. Advance appropriations are 
     defined as any discretionary budget authority in a measure 
     for fiscal year 2004 which first becomes available in a year 
     after that fiscal year. This limitation is enforced by a 
     point of order that may be raised against any measure 
     including an advance appropriation not falling within the 
     exception. The result of the point of order would be to 
     remove the advance appropriation, but the measure would 
     continue to be considered.


            Accounts Identified For Advanced Appropriations

          Part A: Advanced Appropriations for Fiscal Year 2005

     Interior Appropriations
     Elk Hills (89 5428 02 271)
     Labor, Health and Human Services, Education Appropriations
     Employment and Training administration (16 0174 01 504)
     Education for the Disadvantaged (91 0900 01 501)
     School Improvement (91 1000 01 501)
     Children and Family Services [Head Start] (75 1536 01 506)
     Special Education (91 0300 01 501)
     Vocational and Adult Education (91 0400 01 501)
     Treasury, General Government Appropriations
     Payment to Postal Service (18 1001 01 372)
     Veterans, Housing and Urban Development Appropriations
     Section 8 Renewals (86 0319 01 604)

          Part B: Advanced Appropriations for Fiscal Year 2006

     Labor, Health and Human Services, Education Appropriations
     Corporation for Public Broadcasting (20 0151 01 503)

       Subsection (b) applies in the Senate and is virtually 
     identical to the language in section 203 of the Senate 
     amendment and sets an overall limit of $23.158 billion per 
     year. The Conference Agreement modifies the Senate language 
     only to the extent that the explicit exception for the 
     Corporation for Public Broadcasting is moved from the text of 
     the resolution to the list set out below. A conforming change 
     is made to the definition of an advance appropriation to make 
     clear that its inclusion on the list below, covers the 
     advance for both the 1st and 2nd years.
       The list of permissible advances is as follows:


             Accounts Identified for Advance Appropriations

     Interior
     Elk Hills (89 5428 02 271)
     Labor, HHS
     Corporation for Public Broadcasting (20 0151 01 503)
     Employment and Training Administration (16 0174 01 504)
     Education for the Disadvantaged (91 0900 01 501)
     School Improvement (91 1000 01 501)
     Children and Family Services (Head Start) (75 1536 01 506)
     Special Education (91 0300 01 501)
     Vocational and Adult Education (91 0400 01 501)
     Treasury, Postal
     Payment to Postal Service (18 1001 01 372)
     Veterans', HUD
     Section 8 Renewals (86 0319 01 604)
       Section 502. Emergency legislation
       Section 502 the House recedes to the Senate on its regimen 
     relating to the budgetary treatment of emergencies. With some 
     modifications, it extends to the House the authority of 
     Congress to designated spending-related legislation as an 
     emergency for purposes of budget enforcement, adopts criteria 
     for emergency spending, and requires committees to justify 
     emergency-designated provisions. The point of order in the 
     Senate amendment, however, continues to apply only to the 
     Senate.
       Section 502(a) of the Conference Agreement includes a 
     statement of intent that, in the absence of the extension of 
     the discretionary spending limits and PAYGO requirements 
     under the Balanced Budget and Emergency Deficit Control Act 
     of 1985, the section enables Congress to designate provisions 
     of legislation as emergencies. The House conferees note that 
     this regimen is similar to H.R. 853, which was reported by 
     the House Budget Committee in the 106th Congress.
       Subsections (b) sets forth the procedure in the House 
     governing emergencies designated spending (or receipts). It 
     extends the automatic exemption for emergency-designated 
     spending (and receipts) from the budget resolution, which was 
     in effect until the statutory discretionary spending 
     limits and PAYGO requirements expired last September. If 
     an urgent need arises after the budget resolution is 
     adopted, the committee of jurisdiction could designate the 
     emergency-related provisions as an emergency requirement 
     pursuant to this section.
       Instead of adjusting the allocations and budget aggregates 
     by the designated amount, subsection (b) provides that 
     spending (or receipts) resulting from such measure would not 
     be counted for purposes of determining whether the measure 
     complies with the budget resolution or related requirements 
     under the Budget Act of 1974. The conferees note that this is 
     consistent with congressional scoring conventions prior to 
     the Balanced Budget Act of 1997. Assuming the measure is 
     otherwise in compliance with the budget resolution, it would 
     not be subject to a point of order under sections 302(f), 
     303(a), 311(a) or 401 of the Congressional Budget Act of 
     1974. The same would be true with a violation of * * *
       In subsection (b)(2), committees reporting legislation that 
     includes an emergency designation are required to include in 
     the accompanying report, or the conference committee in the 
     joint statement of managers, a statement justifying the 
     emergency designation on the basis of the following criteria:
       Necessary, essential, or vital;
       Sudden, quickly coming into being and building up over 
     time;
       Urgent, pressing and completing need requiring immediate 
     action;
       Unforeseen unpredictable and anticipated; and
       Not permanent, temporary in nature.
       The conferees note that this definition was originally 
     developed by the previous Bush Administration as part of an 
     OMB Circular (A-11) on the preparation and submission of 
     budget estimates.
       Section 502(c) of the Conference Agreement retains the 
     language of section 204 of the Senate amendment (which 
     provides the authority to use an emergency designation and 
     creates a supermajority point of order to police the use of 
     the designation) with a number of modifications.
       The Conference Agreement strengthens the requirement that 
     committees in both Houses provide a justification for use of 
     the designation vis a vis the criteria listed in subsection 
     (b)(2) and (c)(3).
       The point of order with respect to the use of the 
     designation applies only in the Senate and contains some 
     technical changes with respect to the execution of the point 
     of order that were recommended by the Parliamentarian of the 
     Senate. It is the view of the Conferees that the exception 
     for ``homeland security'' spending could not be included at 
     this time due to the lack of consensus between the Congress 
     and the Executive branch as to exactly what programs, 
     projects or activities should qualify for the exception. It 
     may be possible to do so in the future.
       Section 503. Extension of supermajority enforcement
       Section 503 of the Conference Agreement retains the 
     language of section 201 of the Senate amendment extending 60-
     vote enforcement for five years.
       Section 504. Discretionary spending limits in the Senate
       Section 504 of the Conference Agreement retains the 
     language of section 202 of the Senate amendment which sets 
     forth discretionary spending limits in the Senate only for 
     fiscal years 2003, 2004 and 2005 with a number of 
     modifications. The limits BA for FY 2003 now include the 
     amounts included in the supplemental appropriations bill that 
     is being considered at the same time as the conference on the 
     budget resolution, with outlays reflected accordingly.
       The Conference Agreement provides that the following 
     amounts will be the discretionary spending limits in the 
     Senate:
       For fiscal year 2003: $839.118 billion in new budget 
     authority and $805.146 billion in outlays for the 
     discretionary category; $31.264 billion in outlays for the 
     highway category, and $1.436 billion in new budget authority 
     and $6.551 billion in outlays for the transit category, for a 
     total of $840.554 billion in new budget authority and 
     $842.961 billion in outlays.
       For fiscal year 2004: $782.999 billion in new budget 
     authority and $822.563 billion in outlays for the 
     discretionary category; $31.555 billion in outlays for the 
     highway category, and $1.461 billion in new budget authority 
     and $6.634 billion in outlays for the transit category, for a 
     total of $784.460 billion in new budget authority and 
     $860.752 billion in outlays.
       For fiscal year 2005: $812.598 billion in new budget 
     authority and $817.883 billion in outlays for the 
     discretionary category; $33.393 billion in outlays for the 
     highway category, and $1.488 billion in new budget authority 
     and $6.726 billion in outlays for the transit category, for a 
     total of $814.086 billion in new budget authority and 
     $858.002 billion in outlays.

[[Page H3226]]

       The Conference Agreement also provides that these limits 
     may be adjusted for emergency spending (pursuant to section 
     502) and for additional resources for transportation 
     (pursuant to section 411).
       Section 505. pay-as-you-go point of order in the Senate
       The Senate pay-as-you-go point of order included in the 
     Conference Agreement reflects the language in the Senate-
     reported resolution and will apply on a post-budget 
     resolution policy basis; that is, it will not apply to direct 
     spending or revenue changes assumed in this resolution. To 
     accomplish this, a scorecard will be maintained by the 
     Chairman of the Committee on the Budget that will set out the 
     total level of change to the deficit assumed by this budget 
     resolution Conference Agreement. Subsequent legislation will 
     be measured against these balances.
       The following table shows the total of revenue and direct 
     spending policy assumptions in the Conference Agreement on 
     the budget resolution:

                           PAY GO SCORE CARD

2003.............................................................64.789
2004............................................................155.946
2005............................................................149.364
2006............................................................133.611
2007............................................................119.017
2008............................................................121.625
2009.............................................................85.416
2010.............................................................87.650
2011............................................................218.726
2012............................................................302.840
2013............................................................316.973
2004-08.........................................................679.563
2004-13........................................................1691.168
       Section 506. Compliance with Section 13301 of the Budget 
           Enforcement Act of 1990
       Section 506 retains the language of section 402 of the 
     House resolution regarding the budgetary treatment in the 
     House of discretionary spending for the Social Security 
     Administration.
       Section 507. Application and Effect of Changes in 
           Allocations and Aggregates
       Section 507 of the Conference Agreement retains the 
     language of section 321 of the House resolution (which is 
     virtually identical to Section 204 of the Senate amendment) 
     clarifying the process for implementing any adjustment made 
     pursuant to the reserve funds and the status of these 
     adjusted levels. It further clarifies that the Budget 
     Committee determines scoring for purposes of points of order. 
     The section also makes clear that, for the purpose of 
     enforcing provisions of the Congressional Budget Act in the 
     House, legislation must be within a reporting committee's 
     allocation for fiscal year 2004 and the period of fiscal 
     years 2004 through 2008.
       Section 508. Adjustments to Reflect Changes in Concepts and 
           Definitions
       Section 508 of the Conference Agreement retains the 
     language of section 221 of the Senate amendment and applies 
     it to the House. It provides that upon enactment of 
     legislation that changes funding of an existing program from 
     discretionary to mandatory (or vice versa), the Chairman of 
     the Committee on the Budget will immediately adjust the 
     levels in this resolution (including the discretionary 
     spending limits) to reflect such a change.

                              ALLOCATIONS

       As required in section 302 of the Congressional Budget Act, 
     the joint statement of managers includes an allocation, based 
     on the Conference Agreement, of total budget authority and 
     total budget outlays among each of the appropriate 
     committees. The allocations are as follow:

   ALLOCATION OF SPENDING AUTHORITY TO HOUSE APPROPRIATIONS COMMITTEE
                        [In millions of dollars]
------------------------------------------------------------------------
                                                    2003         2004
------------------------------------------------------------------------
Discretionary Action:
    BA........................................      840,554      784,460
    OT........................................      842,961      860,752
Current Law Mandatory:
    BA........................................      391,344      426,127
    OT........................................      378,717      409,870
------------------------------------------------------------------------


                                                         ALLOCATIONS OF SPENDING AUTHORITY TO HOUSE COMMITTEES OTHER THAN APPROPRIATIONS
                                                                                      [Dollars in millions]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
            Fiscal year                 2003        2004        2005        2006        2007        2008        2009        2010        2011        2012        2013       2004-08     2004-13
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Agriculture Committee:
Current Law
  BA...............................      19,840      20,509      22,792      22,501      21,709      20,518       5,720       5,897       6,014       6,028       5,991     108,029      137,679
  OT...............................      15,480      16,561      19,201      19,449      18,467      17,078       2,734       3,151       3,429       3,754       3,712      90,756      107,536
Reauthorizations:
  BA...............................  ..........  ..........  ..........  ..........  ..........      26,803      43,206      43,226      43,260      43,405      43,736      26,803      243,636
  OT...............................  ..........  ..........  ..........  ..........  ..........      25,586      43,169      43,188      43,221      43,367      43,696      25,586      242,227
Total:
  BA...............................      19,840      20,509      22,792      22,501      21,709      47,321      48,926      49,123      49,274      49,433      49,727     134,832      381,315
  OT...............................      15,480      16,561      19,201      19,449      18,467      42,664      45,903      46,339      46,650      47,121      47,408     116,342      349,763
Armed Services Committee:
Current Law:
  BA...............................      74,000      77,493      80,663      83,445      86,350      89,324      92,292      95,417      98,608     101,899     105,348     417,275      910,839
  OT...............................      73,476      77,295      80,459      83,291      86,195      89,166      92,132      95,253      98,438     101,723     105,167     416,406      909,119
Discretionary Action:
  BA...............................  ..........          70  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........          70           70
  OT...............................  ..........          34          32           4  ..........  ..........  ..........  ..........  ..........  ..........  ..........          70           70
Total:
  BA...............................      74,000      77,563      80,663      83,445      86,350      89,324      92,292      95,417      98,608     101,899     105,348     417,345      910,909
  OT...............................      73,476      77,329      80,491      83,295      86,195      89,166      92,132      95,253      98,438     101,723     105,167     416,476      909,189
Committee on Education and the Workforce:
Current Law:
  BA...............................       5,069       4,809       5,666       6,357       6,656       6,887       7,091       7,273       7,452       7,630       7,885      30,375       67,706
  OT...............................       4,516       4,121       5,053       5,637       5,942       6,212       6,401       6,572       6,733       6,897       7,138      26,965       60,706
Discretionary Action:
  BA...............................         130          39          38          38          43          43          42          45          44          44          43         201          419
  OT...............................         115          47          47          47          52          52          52          57          57          57          57         245          525
Reauthorizations:
  BA...............................  ..........         393         404         415       3,503       3,583       3,667       3,664       3,843       3,933       4,027       8,298       27,432
  OT...............................  ..........         330         402         413       2,422       3,419       3,629       3,728       3,816       3,906       3,999       6,986       26,064
Total:
  BA...............................       5,199       5,241       6,108       6,810      10,202      10,513      10,800      10,982      11,339      11,607      11,955      38,874       95,557
  OT...............................       4,631       4,498       5,502       6,097       8,416       9,683      10,082      10,357      10,606      10,860      11,194      34,196       87,295
Energy and Commerce Committee:
Current Law:
  BA...............................      10,433      10,710      11,718      11,824      12,845       7,807       7,773       7,882       8,009       8,099       8,234      54,904       94,901
  OT...............................      11,987      12,071      11,900      12,003      12,455      10,289       8,154       7,719       7,615       7,732       7,849      58,718       97,787
Discretionary Action:
  BA...............................  ..........        -170        -480        -910       1,250         749      -1,996      -2,161      -2,296      -4,780      -4,904         439      -15,698
  OT...............................  ..........        -170        -480        -910       1,250         749      -1,996      -2,161      -2,296      -4,780      -4,904         439      -15,698
Reauthorizations:
  BA...............................  ..........  ..........  ..........  ..........  ..........       5,040       5,040       5,040       5,040       5,040       5,040       5,040       30,240
  OT...............................  ..........  ..........  ..........  ..........  ..........       2,345       4,470       5,130       5,446       5,465       5,443       2,345       28,299
Total:
  BA...............................      10,433      10,540      11,238      10,914      14,095      13,596      10,817      10,761      10,753       8,359       8,370      60,383      109,443
  OT...............................      11,987      11,901      11,420      11,093      13,705      13,383      10,628      10,688      10,765       8,417       8,388      61,502      110,388
Financial Services Committee:
Current Law:
  BA...............................       6,100       7,406       8,430       8,365       7,702       7,558       7,456       7,568       7,795       7,938       8,170      39,461       78,388
  OT...............................       1,951       2,139       2,740       1,921         894         650         435         170        -228        -622        -619       8,344        7,480
Discretionary Action:
  BA...............................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ...........
  OT...............................  ..........         375         525         575          50        -275        -275        -300        -300        -200  ..........       1,250          175
Total:
  BA...............................       6,100       7,406       8,430       8,365       7,702       7,558       7,456       7,568       7,795       7,938       8,170      39,461       78,388
  OT...............................       1,951       2,514       3,265       2,496         944         375         160        -130        -528        -822        -619       9,594        7,655
Government Reform Committee:
Current Law:
  BA...............................      66,645      68,243      71,550      74,376      77,325      80,696      84,320      88,242      92,163      95,997      99,999     372,190      832,911
  OT...............................      65,140      66,710      70,071      72,959      75,902      79,272      82,863      86,817      90,798      94,705      98,875     364,914      818,972
Discretionary Action:
  BA...............................  ..........          -1  ..........          -1  ..........          -1          -1          -1          -1          -1          -1          -3           -8
  OT...............................  ..........  ..........  ..........  ..........          -1  ..........          -1          -1          -1          -1          -1          -1           -6
Total:
  BA...............................      66,645      68,242      71,550      74,375      77,325      80,695      84,319      88,241      92,162      95,996      99,998     372,187      832,903

[[Page H3227]]

 
  OT...............................      65,140      66,710      70,071      72,959      75,901      79,272      82,862      86,816      90,797      94,704      98,874     364,913      818,966
Committee on House Administration:
Current Law:
  BA...............................          82          82          83          82          81          80          79          79          79          79          79         408          803
  OT...............................          85         246          38          23          54         213          79          61          55         208          48         574        1,025
International Relations Committee:
Current Law:
  BA...............................      13,633       9,825      11,398      12,424      12,665      12,912      13,162      13,417      13,679      13,911      14,147      59,224      127,540
  OT...............................      11,441      11,746      10,704      10,749      11,052      11,374      11,680      11,953      12,231      12,503      12,810      55,625      116,802
Resources Committee:
Current Law:
  BA...............................       3,832       3,840       3,676       3,740       3,739       3,050       2,981       3,039       3,112       3,196       3,272      18,045       33,645
  OT...............................       3,412       3,437       3,200       3,540       3,585       3,145       2,969       2,912       2,965       3,040       3,098      16,907       31,891
Discretionary Action:
  BA...............................           7          24         118         124         126         130         133         137         139         143         146         522        1,220
  OT...............................           7          24           9          76         109         124         127         129         132         134         139         342        1,003
Total:
  BA...............................       3,839       3,864       3,794       3,864       3,865       3,180       3,114       3,176       3,251       3,339       3,418      18,567       34,865
  OT...............................       3,419       3,461       3,209       3,616       3,694       3,269       3,096       3,041       3,097       3,174       3,237      17,249       32,894
Judiciary Committee:
Current Law:
  BA...............................       5,914       6,942       5,749       5,783       5,862       5,959       6,154       6,263       6,366       6,466       6,582      30,295       62,126
  OT...............................       5,870       6,082       6,101       5,985       5,838       5,888       6,065       6,137       6,218       6,306       6,418      29,894       61,038
Discretionary Action:
  BA...............................  ..........          19          19          19          19          19          19          19          19          19          19          95          190
  OT...............................  ..........          19          19          19          19          19          19          19          19          19          19          95          190
Total:
  BA...............................       5,914       6,961       5,768       5,802       5,881       5,978       6,173       6,282       6,385       6,485       6,601      30,390       62,316
  OT...............................       5,870       6,101       6,120       6,004       5,857       5,907       6,084       6,156       6,237       6,325       6,437      29,989       61,228
Transportation and Infrastructure Committee:
Current Law:
  BA...............................      69,531       8,038      14,449      13,581      13,345      13,583      13,804      14,129      14,407      14,798      15,284      62,996      135,418
  OT...............................      30,724      13,244      14,935      13,854      13,503      13,642      13,835      14,136      14,403      14,793      15,283      69,178      141,628
Discretionary Action:
  BA...............................  ..........       9,256       5,890       6,868       8,942      10,178      10,965       9,983      10,000      10,019      10,038      41,134       92,139
  OT...............................  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ..........  ...........
Reauthorizations:
  BA...............................  ..........      40,231      40,231      40,231      40,231      40,231      40,231      40,231      40,231      40,231      40,231     201,155      402,310
  OT...............................  ..........         173         441         550         588         613         626         639         639         639         639       2,365        5,547
Total:
  BA...............................      69,531      57,525      60,570      60,680      62,518      63,992      65,000      64,343      64,638      65,048      65,553     305,285      629,867
  OT...............................      30,724      13,417      15,376      14,404      14,091      14,255      14,461      14,775      15,042      15,432      15,922      71,543      147,175
Science Committee:
Current Law:
  BA...............................         130          55          56          57          59          60          61          63          65          67          68         287          611
  OT...............................         122         123         120          90          72          60          60          62          64          65          67         465          783
Small Business Committee:
Current Law:
  BA...............................         864           3           1           1           1  ..........  ..........  ..........  ..........  ..........  ..........           6            6
  OT...............................         792          -6  ..........  ..........  ..........          -1          -1          -1          -1          -1          -1          -7          -12
Veterans' Affairs Committee:
Current Law:
  BA...............................       1,171       1,311       1,297       1,310       1,319       1,324       1,310       1,291       1,254       1,207       1,158       6,561       12,781
  OT...............................       1,042       1,217       1,228       1,250       1,262       1,270       1,262       1,250       1,224       1,185       1,142       6,227       12,290
Reauthorizations:
  BA...............................  ..........         429       1,129       1,766       2,254       3,080       3,791       4,540       5,657       5,566       6,750       8,658       34,962
  OT...............................  ..........         419       1,129       1,746       2,231       3,072       3,773       4,481       5,636       5,505       6,688       8,597       34,680
Total:
  BA...............................       1,171       1,740       2,426       3,076       3,573       4,404       5,101       5,831       6,911       6,773       7,908      15,219       47,743
  OT...............................       1,042       1,636       2,357       2,996       3,493       4,342       5,035       5,731       6,860       6,690       7,830      14,824       46,970
Ways and Means Committee:
Current Law:
  BA...............................     728,516     728,732     792,780     855,434     906,045     955,712   1,009,838   1,064,521   1,123,340   1,164,783   1,214,151   4,238,703    9,815,336
  OT...............................     731,399     732,853     796,856     852,561     906,718     956,342   1,010,200   1,065,527   1,127,592   1,162,020   1,215,640   4,245,330    9,826,309
Discretionary Action:
  BA...............................       4,444       1,334       4,458       3,862       3,343       2,608       2,145         168      -2,219       9,076       8,323      15,605       33,098
  OT...............................       4,380         762       4,486       3,890       3,483       2,781       2,133         221      -2,205       9,087       8,327      15,402       32,965
Reauthorizations:
  BA...............................       3,417      16,889      16,889      16,889      16,889      17,788      17,808      17,829      17,851      17,873      17,897      85,344      174,602
  OT...............................       3,025      15,000      17,250      17,700      17,300      17,298      17,747      17,819      17,840      17,863      17,886      84,548      173,703
Total:
  BA...............................     736,377     746,955     814,127     876,185     926,277     976,108   1,029,791   1,082,518   1,138,972   1,191,732   1,240,371   4,339,652   10,023,036
  OT...............................     738,804     748,615     818,592     874,151     927,501     976,421   1,030,080   1,083,567   1,143,227   1,188,970   1,241,853   4,345,280   10,032,977
Medicare:
Discretionary Action (Reserve Fund):
  BA...............................  ..........       7,000          na          na          na          na          na          na          na          na          na          na      400,000
  OT...............................  ..........       7,000          na          na          na          na          na          na          na          na          na          na      400,000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                           ACT: BUDGET YEAR TOTAL 2003
                                              [Millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                  Direct spending        Entitlements funded in
                                                                   jurisdiction           annual appropriations
                                                           ----------------------------           acts
                         Committee                                                     -------------------------
                                                               Budget        Outlays       Budget
                                                              authority                  authority     Outlays
----------------------------------------------------------------------------------------------------------------
Appropriations:
General purpose discretionary.............................      839,118       805,146   ...........  ...........
    Memo:
        On-budget.........................................      835,306       801,308   ...........  ...........
        Off-budget........................................        3,812         3,838   ...........  ...........
    Highways..............................................  ............       31,264   ...........  ...........
    Mass transit..........................................        1,436         6,551   ...........  ...........
    Mandatory.............................................      391,344       378,717   ...........  ...........
                                                           -----------------------------------------------------
      Total...............................................    1,231,898     1,221,678   ...........  ...........
                                                           =====================================================
Agriculture, Nutrition, and Forestry......................       19,359        14,964        52,763       40,712
Armed Services............................................       73,996        73,473           275          233
Banking, Housing and Urban Affairs........................       12,558         1,599           118           16
Commerce, Science and Transportation......................       10,590         7,255           885          814
Energy and Natural Resources..............................        2,879         2,539            48           63

[[Page H3228]]

 
Environment and Public Works..............................       30,830         2,372   ...........  ...........
Finance...................................................      759,763       763,470       286,512      286,509
Foreign Relations.........................................       13,595        11,366           183          183
Government Affairs........................................       66,931        65,426        16,564       16,564
Judiciary.................................................        6,509         6,441           534          527
Health, Education, Labor and Pensions.....................        5,328         4,805         2,814        2,801
Rules and Administration..................................           82            85           104          103
Intelligence..............................................  ............  ............          223          223
Veterans' Affairs.........................................        1,171         1,109        30,321       29,969
Indian Affairs............................................          456           444   ...........  ...........
Small Business............................................          864           769   ...........  ...........
Unassigned to Committee...................................     (371,644)     (358,647)  ...........  ...........
                                                           -----------------------------------------------------
      Total...............................................    1,865,165     1,819,148       391,344      378,717
----------------------------------------------------------------------------------------------------------------


  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                           ACT: BUDGET YEAR TOTAL 2004
                                              [Millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                  Direct spending        Entitlements funded in
                                                                   jurisdiction           annual appropriations
                                                           ----------------------------           acts
                         Committee                                                     -------------------------
                                                               Budget        Outlays       Budget
                                                              authority                  authority     Outlays
----------------------------------------------------------------------------------------------------------------
Appropriations:
General purpose discretionary.............................      782,999       822,563   ...........  ...........
    Memo:
        On-budget.........................................      778,742       818,356   ...........  ...........
        Off-budget........................................        4,257         4,207   ...........  ...........
    Highways..............................................  ............       31,555   ...........  ...........
    Mass transit..........................................        1,461         6,634   ...........  ...........
    Mandatory.............................................      426,949       410,619   ...........  ...........
                                                           -----------------------------------------------------
      Total...............................................    1,211,409     1,271,371   ...........  ...........
                                                           =====================================================
Agriculture, Nutrition, and Forestry......................       20,801        16,826        55,536       39,472
Armed Services............................................       77,560        77,326           357          376
Banking, Housing and Urban Affairs........................       13,946         2,251           120           12
Commerce, Science and Transportation......................       10,908         6,518           827          843
Energy and Natural Resources..............................        2,669         2,390            64           70
Environment and Public Works..............................       35,654         2,312   ...........  ...........
Finance...................................................      757,606       760,928       315,856      315,780
Foreign Relations.........................................        9,787        11,689           179          179
Government Affairs........................................       68,533        67,000        17,362       17,362
Judiciary.................................................        7,883         7,230           511          523
Health, Education, Labor and Pensions.....................        5,232         4,439         2,888        2,872
Rules and Administration..................................           82           246           109          109
Intelligence..............................................  ............  ............          226          226
Veterans' Affairs.........................................        1,311         1,260        32,914       32,795
Indian Affairs............................................          475           472   ...........  ...........
Small Business............................................            3           (23)  ...........  ...........
Unassigned to Committee...................................     (371,280)     (355,315)  ...........  ...........
                                                           -----------------------------------------------------
      Total...............................................    1,852,579     1,876,920       426,949      410,619
----------------------------------------------------------------------------------------------------------------


  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                          ACT, 5-YEAR TOTAL: 2004-2008
                                              [Millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                 Direct spending         Entitlements funded in
                                                                   jurisdiction          annual appropriations
                                                           ---------------------------            acts
                         Committee                                                    --------------------------
                                                               Budget       Outlays       Budget
                                                             authority                  authority      Outlays
----------------------------------------------------------------------------------------------------------------
Agriculture...............................................      109,330       91,951       288,857      206,256
Armed Services............................................      417,330      416,461         2,992        3,047
Banking, Housing and Urban Affairs........................       71,267        7,231           626         (104)
Commerce, Science, and Transportation.....................       60,492       38,575         4,538        4,541
Energy and Natural Resources..............................       11,991       10,905           320          333
Environment and Public Works..............................      190,317       10,561   ...........  ............
Finance...................................................    4,501,491    4,510,575     1,824,189    1,823,275
Foreign Relations.........................................       59,034       55,412           876          876
Governmental Affairs......................................      372,971      365,695        93,701       93,701
Judiciary.................................................       25,585       25,756         2,629        2,640
Health, Education, Labor, and Pensions....................       32,738       29,056        15,226       15,126
Rules and Administration..................................          408          574           588          588
Intelligence..............................................  ...........  ............        1,230        1,230
Veterans' Affairs.........................................        6,561        6,382       176,815      176,196
Indian Affairs............................................        2,587        2,569   ...........  ............
Small Business............................................            6          (59)  ...........  ............
----------------------------------------------------------------------------------------------------------------


  SENATE COMMITTEE BUDGET AUTHORITY AND OUTLAY ALLOCATIONS PURSUANT TO SECTION 302 OF THE CONGRESSIONAL BUDGET
                                          ACT, 10-YEAR TOTAL: 2004-2013
                                              [Millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                 Direct spending         Entitlements funded in
                                                                   jurisdiction          annual appropriations
                                                           ---------------------------            acts
                         Committee                                                    --------------------------
                                                               Budget       Outlays       Budget
                                                             authority                  authority      Outlays
----------------------------------------------------------------------------------------------------------------
Agriculture...............................................      209,130      178,892       600,618      446,118
Armed Services............................................      910,879      909,159         7,129        7,273
Banking, Housing and Urban Affairs........................      141,433        1,859         1,318         (176)
Commerce, Science, and Transportation.....................      113,446       69,687        10,252       10,232
Energy and Natural Resources..............................       22,263       20,458           640          653
Environment and Public Works..............................      393,698       19,403   ...........  ............
Finance...................................................   10,593,061   10,608,189     4,487,111    4,485,223

[[Page H3229]]

 
Foreign Relations.........................................      127,160      116,399         1,733        1,733
Governmental Affairs......................................      833,756      819,817       206,453      206,453
Judiciary.................................................       42,068       41,692         5,459        5,455
Health, Education, Labor, and Pensions....................       71,126       64,104        32,601       32,468
Rules and Administration..................................          803        1,025         1,309        1,309
Intelligence..............................................  ...........  ............        2,648        2,648
Veterans' Affairs.........................................       12,781       12,501       373,770      372,651
Indian Affairs............................................        5,805        5,765   ...........  ............
Small Business............................................            6          (76)  ...........  ............
----------------------------------------------------------------------------------------------------------------

                          ECONOMIC ASSUMPTIONS

       Section 301(g)(2) of the Congressional Budget Act requires 
     that the joint explanatory statement accompanying a 
     conference report on a budget resolution set forth the common 
     economic assumptions upon which the joint statement and 
     conference report are based. The Conference Agreement is 
     built upon the economic forecasts developed by the 
     Congressional Budget Office [CBO] and presented in CBO's 
     ``The Budget and Economic Outlook: Fiscal Years 2004-2013'' 
     (January 2003).
       House Resolution.--CBO's economic assumptions were used.
       Senate Amendment.--CBO's economic assumptions were used.
       Conference Agreement.--CBO's economic assumptions were 
     used.

                                                        ECONOMIC ASSUMPTIONS OF BUDGET RESOLUTION
                                                               [Calendar years 2003-2013]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   2003    2004    2005    2006    2007    2008    2009    2010    2011    2012    2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
Real GDP (percentage change year over year):....................    2.5     3.6     3.4     3.3     3.2     3.1     3.0     2.9     2.6     2.5     2.7
GDP Price Index (percentage change year over year):.............    1.6     1.7     2.0     2.1     2.1     2.2     2.2     2.2     2.2     2.2     2.2
Consumer Price Index (percentage change year over year):........    2.3     2.2     2.4     2.5     2.5     2.5     2.5     2.5     2.5     2.5     2.5
Unemployment Rate (percent):....................................    5.9     5.7     5.4     5.3     5.2     5.2     5.2     5.2     5.2     5.2     5.2
3-month Treasury Bill Rate (percent):...........................    1.4     3.5     4.8     4.9     4.9     4.9     4.9     4.9     4.9     4.9     4.9
10-year Treasury Note Rate (percent):...........................    4.4     5.2     5.7     5.8     5.8     5.8     5.8     5.8     5.8     5.8     5.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: CBO.

                              PUBLIC DEBT

       The adoption of this Conference Agreement by the two Houses 
     would result in the engrossment of a House Joint Resolution 
     adjusting the level of the statutory limit on the public debt 
     pursuant to House Rule XXVII. In consonance with clause 3 of 
     that rule, the conferees contemplate a joint resolution of 
     the following form:
       ``Resolved, by the Senate and the House of Representatives 
     of the United States of America in Congress assembled, That 
     subsection (b) of section 3101 of title 31, United States 
     Code, is amended by striking out the dollar limitation 
     contained in such subsection and inserting in lieu thereof 
     $7,384,000,000,000.''
       If the joint resolution is enacted to raise the debt limit 
     to the level contemplated by this conference agreement, the 
     limit will be increased from $6.4 trillion to $7.384 
     trillion.
       Legislative jurisdiction over the public debt remains with 
     the Committee on Ways and Means. The debt rule does not 
     preclude that committee from originating public debt limit 
     bills whenever necessary.

                            OTHER PROVISIONS

       The Senate amendment included 4 separate sections dealing 
     with various reserve funds and or adjustments that have not 
     been included in this Conference Agreement. These provisions 
     are discussed below.
       The Agreement does not include any language with respect to 
     section 211 of the Senate amendment which provided an 
     adjustment for Part B grant program under the Individuals 
     with Disabilities Education Act. Additional funding for this 
     program is assumed within the functional levels and 
     discretionary spending limits set out in the Conference 
     Agreement.
       The Agreement also does not include any language with 
     respect to section 218 of the Senate amendment which provided 
     a reserve for the State grant program which is funded through 
     the Land and Water conservation fund. The section 218 
     language was proposed only in conjunction with a 
     reconciliation instruction to the Senate Committee on Energy 
     and Natural Resources designed to facilitate exploration of 
     the Arctic National Wildlife Refuge. This Conference 
     Agreement does not include any such instruction, thus the 
     reserve fund has become irrelevant.
       The Agreement does not include any language with respect to 
     section 319 of the Senate amendment which purported to 
     provide a reserve fund to strengthen Social Security. As 
     discussed above, the language was superfluous and thus was 
     not adopted by the conferees.
       The Agreement does not include any language with respect to 
     section 329 of the Senate amendment which purported to create 
     a $100 billion reserve for the war in Iraq and subsequent 
     reconstruction. Again the language was superfluous and has in 
     fact been superceded by the President's request and Congress' 
     action on a FY 2003 supplemental appropriations bill for just 
     this purpose.

                           SENSES OF CONGRESS

     House Resolution
       The House Resolution did not include any Senses of the 
     House or of Congress.
     Senate Amendment
       The Senate amendment contains twenty-seven ``Sense of the 
     Senate'' provisions that were adopted either during the 
     markup or during consideration on the Senate floor. Two other 
     provisions calling for reserve funds were also adopted and 
     included in Title III of the Senate amendment. They more 
     appropriately should have appeared in Title II with other 
     reserve funds and adjustments. These are non-binding 
     statements.
       Section 301. Sense of the Senate on Federal employee pay.
       Section 302. Sense of the Senate on Tribal colleges and 
     universities.
       Section 303. Sense of the Senate regarding the 504 small 
     business credit program.
       Section 304. Sense of the Senate regarding Pell Grants.
       Section 305. Sense of the Senate regarding the National 
     Guard.
       Section 306. Sense of the Senate regarding weapons of mass 
     destruction civil support teams.
       Section 307. Sense of the Senate on emergency and disaster 
     assistance for livestock and agriculture producers.
       Section 308. Social Security restructuring.
       Section 309. Sense of the Senate concerning State fiscal 
     relief.
       Section 310. Federal Agency Review Commission.
       Section 311. Sense of the Senate regarding highway 
     spending.
       Section 312. Sense of the Senate concerning an expansion in 
     health care coverage.
       Section 313. Sense of the Senate on the State Criminal 
     Alien Assistance Program.
       Section 314. Sense of the Senate concerning programs of the 
     Corps of Engineers.
       Section 315. Radio interoperability for first responders.
       Section 316. Sense of the Senate on corporate tax haven 
     loopholes.
       Section 317. Sense of the Senate on phased-in concurrent 
     receipt of retired pay and veterans' disability compensation 
     for veterans with service-connected disabilities rated at 60 
     percent or higher.
       Section 318. Sense of the Senate concerning Native American 
     Health.
       Section 319. Reserve fund to strengthen social security.
       Section 320. Sense of the Senate on providing tax and other 
     incentives to revitalize rural America.
       Section 321. Sense of the Senate concerning higher 
     education affordability.
       Section 322. Sense of the Senate concerning children's 
     graduate medical education.
       Section 323. Sense of the Senate on funding for criminal 
     justice.
       Section 324. Sense of the Senate concerning funding for 
     drug treatment programs.
       Section 325. Funding for after-school programs.
       Section 326. Sense of the Senate on the $1,000 child 
     credit.
       Section 327. Sense of the Senate concerning funding for 
     domestic nutrition assistance programs.
       Section 328. Sense of the Senate concerning free trade 
     agreement with the United Kingdom.
       Section 329. Reserve fund for possible military action and 
     reconstruction in Iraq.

[[Page H3230]]

     Conference Agreement
       The Conference Agreement contains the following Senses of 
     the Senate:
       Section 601. Sense of the Senate on Federal employee pay.
       Section 602. Sense of the Senate regarding Pell Grants.
       Section 603. Sense of the Senate on emergency and disaster 
     assistance for livestock and agriculture producers.
       Section 604. Social Security restructuring.
       Section 605. Sense of the Senate concerning State fiscal 
     relief.
       Section 606. Federal Agency Review Commission.
       Section 607. Sense of the Senate regarding highway 
     spending.
       Section 608. Sense of the Senate on Reports and Liabilities 
     and Future Costs.
       Section 609. Sense of the Senate concerning an expansion in 
     health care coverage.
       Section 610. Sense of the Senate concerning programs of the 
     Corps of Engineers.
       Section 611. Sense of the Senate concerning Native American 
     Health.
       Section 612. Sense of the Senate on providing tax and other 
     incentives to revitalize rural America.
       Section 613. Sense of the Senate concerning children's 
     graduate medical education.
       Section 614. Sense of the Senate on funding for criminal 
     justice.
       Section 615. Sense of the Senate concerning funding for 
     drug treatment programs.
       Section 616. Sense of the Senate concerning free trade 
     agreement with the United Kingdom.

     Jim Nussle,
     Christopher Shays,
                                Managers on the Part of the House.

     Don Nickles,
     Pete V. Dominici,
     Chuck Grassley,
     Judd Gregg,
                               Managers on the Part of the Senate.