[Congressional Record Volume 150, Number 82 (Tuesday, June 15, 2004)]
[House]
[Pages H3990-H4132]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ENERGY POLICY ACT OF 2004
Mr. HALL. Mr. Speaker, pursuant to House Resolution 671, I call up
the bill (H.R. 4503) 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 Clerk read the title of the bill.
The text of H.R. 4503 is as follows:
H.R. 4503
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Energy
Policy Act of 2004''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--ENERGY EFFICIENCY
Subtitle A--Federal Programs
Sec. 101. Energy and water saving measures in congressional buildings.
Sec. 102. Energy management requirements.
Sec. 103. Energy use measurement and accountability.
Sec. 104. Procurement of energy efficient products.
Sec. 105. Energy Savings Performance Contracts.
Sec. 106. Energy Savings Performance Contracts pilot program for
nonbuilding applications.
Sec. 107. Voluntary commitments to reduce industrial energy intensity.
Sec. 108. Advanced Building Efficiency Testbed.
Sec. 109. Federal building performance standards.
Sec. 110. Increased use of recovered mineral component in Federally
funded projects involving procurement of cement or
concrete.
Subtitle B--Energy Assistance and State Programs
Sec. 121. Low income home energy assistance program.
Sec. 122. Weatherization assistance.
Sec. 123. State energy programs.
Sec. 124. Energy efficient appliance rebate programs.
Sec. 125. Energy efficient public buildings.
Sec. 126. Low income community energy efficiency pilot program.
Subtitle C--Energy Efficient Products
Sec. 131. Energy Star Program.
Sec. 132. HVAC maintenance consumer education program.
Sec. 133. Energy conservation standards for additional products.
Sec. 134. Energy labeling.
Subtitle D--Public housing
Sec. 141. Capacity building for energy-efficient, affordable housing.
Sec. 142. Increase of cdbg public services cap for energy conservation
and efficiency activities.
Sec. 143. FHA mortgage insurance incentives for energy efficient
housing.
Sec. 144. Public housing capital fund.
Sec. 145. Grants for energy-conserving improvements for assisted
housing.
Sec. 146. North American Development Bank.
Sec. 147. Energy-efficient appliances.
Sec. 148. Energy efficiency standards.
Sec. 149. Energy strategy for HUD.
TITLE II--RENEWABLE ENERGY
Subtitle A--General Provisions
Sec. 201. Assessment of renewable energy resources.
Sec. 202. Renewable energy production incentive.
Sec. 203. Federal purchase requirement.
Sec. 204. Insular areas energy security.
Sec. 205. Use of photovoltaic energy in public buildings.
Sec. 206. Grants to improve the commercial value of forest biomass for
electric energy, useful heat, transportation fuels,
petroleum-based product substitutes, and other commercial
purposes.
Sec. 207. Biobased products.
Subtitle B--Geothermal Energy
Sec. 211. Short title.
Sec. 212. Competitive lease sale requirements.
Sec. 213. Direct use.
Sec. 214. Royalties and near-term production incentives.
Sec. 215. Geothermal leasing and permitting on Federal lands.
Sec. 216. Review and report to Congress.
Sec. 217. Reimbursement for costs of NEPA analyses, documentation, and
studies.
Sec. 218. Assessment of Geothermal energy potential.
Sec. 219. Cooperative or Unit plans.
Sec. 220. Royalty on byproducts.
Sec. 221. Repeal of authorities of Secretary to readjust terms,
conditions, rentals, and royalties.
Sec. 222. Crediting of rental toward royalty.
Sec. 223. Lease duration and work commitment requirements.
Sec. 224. Advanced royalties required for suspension of production.
Sec. 225. Annual rental.
Sec. 226. Leasing and permitting on Federal lands withdrawn for
military purposes.
Sec. 227. Technical amendments.
Subtitle C--Hydroelectric
Part I--Alternative conditions
Sec. 231. Alternative conditions and fishways.
Part II--Additional hydropower
Sec. 241. Hydroelectric production incentives.
Sec. 242. Hydroelectric efficiency improvement.
Sec. 243. Small hydroelectric power projects.
Sec. 244. Increased hydroelectric generation at existing Federal
facilities.
Sec. 245. Shift of project loads to off-peak periods.
Sec. 246. Corps of Engineers hydropower operation and maintenance
funding.
Sec. 247. Limitation on certain charges assessed to the flint creek
project, Montana.
Sec. 248. Reinstatement and transfer.
TITLE III--OIL AND GAS
Subtitle A--Petroleum Reserve and Home Heating Oil
Sec. 301. Permanent authority to operate the Strategic Petroleum
Reserve and other energy programs.
Sec. 302. National Oilheat Research Alliance.
Subtitle B--Production Incentives
Sec. 311. Definition of Secretary.
Sec. 312. Program on oil and gas royalties in-kind.
Sec. 313. Marginal property production incentives.
Sec. 314. Incentives for natural gas production from deep wells in the
shallow waters of the Gulf of Mexico.
Sec. 315. Royalty Relief for deep water production.
Sec. 316. Alaska offshore royalty suspension.
Sec. 317. Oil and gas leasing in the National Petroleum Reserve in
Alaska.
Sec. 318. Orphaned, abandoned, or idled wells on Federal land.
Sec. 319. Combined hydrocarbon leasing.
Sec. 320. Liquified natural gas.
Sec. 321. Alternate energy-related uses on the outer Continental Shelf.
Sec. 322. Preservation of geological and geophysical data.
Sec. 323. Oil and gas lease acreage limitations.
Sec. 324. Assessment of dependence of State of Hawaii on oil.
Sec. 325. Deadline for decision on appeals of consistency determination
under the Coastal Zone Management Act of 1972.
Sec. 326. Reimbursement for costs of NEPA analyses, documentation, and
studies.
Sec. 327. Hydraulic fracturing.
Sec. 328. Oil and gas exploration and production defined.
Sec. 329. Outer Continental Shelf provisions.
Sec. 330. Appeals relating to pipeline construction or offshore mineral
development projects.
Sec. 331. Bilateral international oil supply agreements.
Sec. 332. Natural gas market reform.
Sec. 333. Natural gas market transparency.
Subtitle C--Access to Federal Land
Sec. 341. Office of Federal Energy Project Coordination.
Sec. 342. Federal onshore oil and gas leasing and permitting practices.
Sec. 343. Management of Federal oil and gas leasing programs.
Sec. 344. Consultation regarding oil and gas leasing on public land.
Sec. 345. Estimates of oil and gas resources underlying onshore Federal
land.
Sec. 346. Compliance with executive order 13211; actions concerning
regulations that significantly affect energy supply,
distribution, or use.
Sec. 347. Pilot Project to improve Federal permit coordination.
Sec. 348. Deadline for consideration of applications for permits.
Sec. 349. Clarification of fair market rental value determinations for
public land and Forest Service rights-of-way.
Sec. 350. Energy facility rights-of-way and corridors on Federal land.
Sec. 351. Consultation regarding energy rights-of-way on public land.
Sec. 352. Renewable energy on Federal land.
Sec. 353. Electricity transmission line right-of-way, cleveland
national forest and adjacent public land, California.
Sec. 354. Sense of Congress regarding development of MINERALS under
Padre Island National Seashore.
Sec. 355. Encouraging prohibition of off-shore Drilling in the Great
Lakes.
Sec. 356. Finger Lakes National Forest withdrawal.
Sec. 357. Study on lease exchanges in the rocky mountain front.
Sec. 358. Federal coalbed methane regulation.
Sec. 359. Livingston parish mineral rights transfer.
Subtitle D--Alaska Natural Gas Pipeline
Sec. 371. Short title.
Sec. 372. Definitions.
Sec. 373. Issuance of certificate of public convenience and necessity.
Sec. 374. Environmental reviews.
Sec. 375. Pipeline expansion.
Sec. 376. Federal Coordinator.
Sec. 377. Judicial review.
Sec. 378. State jurisdiction over in-State delivery of natural gas.
Sec. 379. Study of alternative means of construction.
Sec. 380. Clarification of angta status and authorities.
Sec. 381. Sense of Congress concerning use of steel manufactured in
North America negotiation of a project labor Agreement.
Sec. 382. Sense of Congress and study concerning participation by small
business concerns.
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Sec. 383. Alaska pipeline construction training Program.
Sec. 384. Sense of Congress concerning natural gas demand.
Sec. 385. Sense of Congress concerning Alaskan ownership.
Sec. 386. Loan guarantees.
TITLE IV--COAL
Subtitle A--Clean Coal Power Initiative
Sec. 401. Authorization of appropriations.
Sec. 402. Project criteria.
Sec. 403. Report.
Sec. 404. Clean coal centers of excellence.
Subtitle B--Clean Power Projects
Sec. 411. Coal technology loan.
Sec. 412. Coal gasification.
Sec. 413. Integrated gasification combined cycle technology.
Sec. 414. Petroleum coke gasification.
Sec. 415. Integrated coal/renewable energy system.
Sec. 416. Electron scrubbing demonstration.
Subtitle C--Federal Coal Leases
Sec. 421. Repeal of the 160-acre limitation for coal leases.
Sec. 422. Mining plans.
Sec. 423. Payment of advance royalties under coal leases.
Sec. 424. Elimination of deadline for submission of coal lease
operation and reclamation plan.
Sec. 425. Amendment relating to financial assurances with respect to
bonus bids.
Sec. 426. Inventory requirement.
Sec. 427. Application of amendments.
Subtitle D--Coal and Related Programs
Sec. 441. Clean air coal program.
TITLE V--INDIAN ENERGY
Sec. 501. Short title.
Sec. 502. Office of Indian Energy Policy and Programs.
Sec. 503. Indian energy.
Sec. 504. Four corners transmission line project.
Sec. 505. Energy efficiency in federally assisted housing.
Sec. 506. Consultation with Indian tribes.
TITLE VI--NUCLEAR MATTERS
Subtitle A--Price-Anderson Act Amendments
Sec. 601. Short title.
Sec. 602. Extension of indemnification authority.
Sec. 603. Maximum assessment.
Sec. 604. Department of energy liability limit.
Sec. 605. Incidents outside the United States.
Sec. 606. Reports.
Sec. 607. Inflation adjustment.
Sec. 608. Treatment of modular reactors.
Sec. 609. Applicability.
Sec. 610. Prohibition on assumption by United States government of
liability for certain foreign incidents.
Sec. 611. Civil penalties.
Subtitle B--General Nuclear Matters
Sec. 621. Licenses.
Sec. 622. NRC training program.
Sec. 623. Cost recovery from government agencies.
Sec. 624. Elimination of pension offset.
Sec. 625. Antitrust review.
Sec. 626. Decommissioning.
Sec. 627. Limitation on legal fee reimbursement.
Sec. 628. Decommissioning pilot program.
Sec. 629. Report on feasibility of developing commercial nuclear energy
generation facilities at existing Department of Energy
sites.
Sec. 630. Uranium sales.
Sec. 631. Cooperative research and development and special
demonstration projects for the uranium mining industry.
Sec. 632. Whistleblower protection.
Sec. 633. Medical isotope production.
Sec. 634. Fernald byproduct material.
Sec. 635. Safe disposal of greater-than-class c radioactive waste.
Sec. 636. Prohibition on nuclear exports to countries that sponsor
terrorism.
Sec. 637. Uranium enrichment facilities.
Sec. 638. National uranium stockpile.
Subtitle C--Advanced Reactor Hydrogen Cogeneration Project
Sec. 651. Project establishment.
Sec. 652. Project definition.
Sec. 653. Project management.
Sec. 654. Project requirements.
Sec. 655. Authorization of appropriations.
Subtitle D--Nuclear Security
Sec. 661. Nuclear facility threats.
Sec. 662. Fingerprinting for criminal history record checks.
Sec. 663. Use of firearms by security personnel of licensees and
certificate holders of the commission.
Sec. 664. Unauthorized introduction of dangerous weapons.
Sec. 665. Sabotage of nuclear facilities or fuel.
Sec. 666. Secure transfer of nuclear materials.
Sec. 667. Department of homeland security consultation.
Sec. 668. Authorization of appropriations.
TITLE VII--VEHICLES AND FUELS
Subtitle A--Existing Programs
Sec. 701. Use of alternative fuels by dual-fueled vehicles.
Sec. 702. Neighborhood electric vehicles.
Sec. 703. Credits for medium and heavy duty dedicated vehicles.
Sec. 704. Incremental cost allocation.
Sec. 705. Alternative compliance and flexibility.
Sec. 706. Review of Energy Policy Act of 1992 programs.
Sec. 707. Report concerning compliance with alternative fueled vehicle
purchasing requirements.
Subtitle B--Hybrid Vehicles, Advanced Vehicles, and Fuel Cell Buses
Part I--Hybrid vehicles
Sec. 711. Hybrid vehicles.
Part II--Advanced vehicles
Sec. 721. Definitions.
Sec. 722. Pilot program.
Sec. 723. Reports to Congress.
Sec. 724. Authorization of appropriations.
Part III--Fuel cell buses
Sec. 731. Fuel cell transit bus demonstration.
Subtitle C--Clean School Buses
Sec. 741. Definitions.
Sec. 742. Program for replacement of certain school buses with clean
school buses.
Sec. 743. Diesel retrofit program.
Sec. 744. Fuel cell school buses.
Subtitle D--Miscellaneous
Sec. 751. Railroad efficiency.
Sec. 752. Mobile emission reductions trading and crediting.
Sec. 753. Aviation fuel conservation and emissions.
Sec. 754. Diesel fueled vehicles.
Sec. 755. Conserve by Bicycling Program.
Sec. 756. Reduction of engine idling of heavy-duty vehicles.
Sec. 757. Biodiesel engine testing program.
Sec. 758. High occupancy vehicle exception.
Subtitle E--Automobile Efficiency
Sec. 771. Authorization of appropriations for implementation and
enforcement of fuel economy standards.
Sec. 772. Revised considerations for decisions on maximum feasible
average fuel economy.
Sec. 773. Extension of maximum fuel economy increase for alternative
fueled vehicles.
Sec. 774. Study of feasibility and effects of reducing use of fuel for
automobiles.
TITLE VIII--HYDROGEN
Sec. 801. Definitions.
Sec. 802. Plan.
Sec. 803. Programs.
Sec. 804. Interagency task force.
Sec. 805. Advisory Committee.
Sec. 806. External review.
Sec. 807. Miscellaneous provisions.
Sec. 808. Savings clause.
Sec. 809. Authorization of appropriations.
TITLE IX--RESEARCH AND DEVELOPMENT
Sec. 901. Goals.
Sec. 902. Definitions.
Subtitle A--Energy Efficiency
Sec. 904. Energy efficiency.
Sec. 905. Next generation lighting initiative.
Sec. 906. National building performance initiative.
Sec. 907. Secondary electric vehicle battery use program.
Sec. 908. Energy efficiency science initiative.
Sec. 909. Electric motor control technology.
Sec. 910. Advanced energy technology transfer centers.
Subtitle B--Distributed Energy and Electric Energy Systems
Sec. 911. Distributed energy and electric energy systems.
Sec. 912. Hybrid distributed power systems.
Sec. 913. High power density industry program.
Sec. 914. Micro-cogeneration energy technology.
Sec. 915. Distributed energy technology demonstration program.
Sec. 916. Reciprocating power.
Subtitle C--Renewable Energy
Sec. 918. Renewable energy.
Sec. 919. Bioenergy programs.
Sec. 920. Concentrating solar power research and development Program.
Sec. 921. Miscellaneous projects.
Sec. 922. Renewable energy in public buildings.
Sec. 923. Study of marine renewable energy options.
Subtitle D--Nuclear Energy
Sec. 924. Nuclear energy.
Sec. 925. Nuclear energy research and development programs.
Sec. 926. Advanced fuel cycle Initiative.
Sec. 927. University nuclear science and engineering support.
Sec. 928. Security of reactor designs.
Sec. 929. Alternatives to industrial radioactive sources.
Sec. 930. Geological isolation of spent fuel.
Subtitle E--Fossil Energy
Part I--Research programs
Sec. 931. Fossil energy.
Sec. 932. Oil and gas research programs.
Sec. 933. Technology transfer.
Sec. 934. Research and development for coal mining technologies.
Sec. 935. Coal and related technologies Program.
Sec. 936. Complex Well Technology Testing Facility.
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Sec. 937. Fischer-Tropsch diesel fuel loan guarantee Program.
Part II--Ultra-deepwater and unconventional natural gas and other
petroleum resources
Sec. 941. Program authority.
Sec. 942. Ultra-deepwater Program.
Sec. 943. Unconventional natural gas and other petroleum resources
Program.
Sec. 944. Additional requirements for awards.
Sec. 945. Advisory committees.
Sec. 946. Limits on participation.
Sec. 947. Sunset.
Sec. 948. Definitions.
Sec. 949. Funding.
Subtitle F--Science
Sec. 951. Science.
Sec. 952. United States participation in ITER.
Sec. 953. Plan for Fusion Energy Sciences Program.
Sec. 954. Spallation Neutron Source.
Sec. 955. Support for science and energy facilities and infrastructure.
Sec. 956. Catalysis Research and development Program.
Sec. 957. Nanoscale Science and Engineering Research, development,
demonstration, and commercial application.
Sec. 958. Advanced scientific computing for energy missions.
Sec. 959. Genomes to Life Program.
Sec. 960. Fission and fusion energy materials research Program.
Sec. 961. Energy-Water Supply Program.
Sec. 962. Nitrogen fixation.
Subtitle G--Energy and Environment
Sec. 964. United States-Mexico energy Technology cooperation.
Sec. 965. Western Hemisphere energy cooperation.
Sec. 966. Waste reduction and use of alternatives.
Sec. 967. Report on fuel cell test Center.
Sec. 968. Arctic Engineering Research Center.
Sec. 969. Barrow Geophysical Research Facility.
Sec. 970. Western Michigan demonstration project.
Subtitle H--Management
Sec. 971. Availability of funds.
Sec. 972. Cost sharing.
Sec. 973. Merit review of proposals.
Sec. 974. External technical review of departmental programs.
Sec. 975. Improved coordination of Technology transfer activities.
Sec. 976. Federal laboratory educational partners.
Sec. 977. Interagency cooperation.
Sec. 978. Technology Infrastructure Program.
Sec. 979. Reprogramming.
Sec. 980. Construction with other laws.
Sec. 981. Report on research and development Program evaluation
methodologies.
Sec. 982. Department of Energy Science and Technology Scholarship
Program.
Sec. 983. Report on equal employment opportunity practices.
Sec. 984. Small business advocacy and assistance.
Sec. 985. Report on mobility of scientific and technical personnel.
Sec. 986. National Academy of Sciences report.
Sec. 987. Outreach.
Sec. 988. Competitive award of management contracts.
Sec. 989. Educational programs in science and mathematics.
TITLE X--DEPARTMENT OF ENERGY MANAGEMENT
Sec. 1001. Additional Assistant Secretary position.
Sec. 1002. Other transactions authority.
TITLE XI--PERSONNEL AND TRAINING
Sec. 1101. Training guidelines for electric energy industry personnel.
Sec. 1102. Improved access to energy-related scientific and technical
careers.
Sec. 1103. National Power Plant Operations Technology and Education
Center.
Sec. 1104. International energy training.
TITLE XII--ELECTRICITY
Sec. 1201. Short title.
Subtitle A--Reliability Standards
Sec. 1211. Electric reliability standards.
Subtitle B--Transmission Infrastructure Modernization
Sec. 1221. Siting of interstate electric transmission facilities.
Sec. 1222. Third-party finance.
Sec. 1223. Transmission system monitoring.
Sec. 1224. Advanced transmission technologies.
Sec. 1225. Electric transmission and distribution programs.
Sec. 1226. Advanced Power System Technology Incentive Program.
Sec. 1227. Office of Electric Transmission and Distribution.
Subtitle C--Transmission Operation Improvements
Sec. 1231. Open nondiscriminatory access.
Sec. 1232. Sense of Congress on Regional Transmission Organizations.
Sec. 1233. Regional Transmission Organization applications progress
report.
Sec. 1234. Federal utility participation in Regional Transmission
Organizations.
Sec. 1235. Standard market design.
Sec. 1236. Native load service obligation.
Sec. 1237. Study on the benefits of economic dispatch.
Subtitle D--Transmission Rate Reform
Sec. 1241. Transmission infrastructure investment.
Sec. 1242. Voluntary transmission pricing plans.
Subtitle E--Amendments to PURPA
Sec. 1251. Net metering and additional standards.
Sec. 1252. Smart metering.
Sec. 1253. Cogeneration and small power production purchase and sale
requirements.
Subtitle F--Repeal of PUHCA
Sec. 1261. Short title.
Sec. 1262. Definitions.
Sec. 1263. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 1264. Federal access to books and records.
Sec. 1265. State access to books and records.
Sec. 1266. Exemption authority.
Sec. 1267. Affiliate transactions.
Sec. 1268. Applicability.
Sec. 1269. Effect on other regulations.
Sec. 1270. Enforcement.
Sec. 1271. Savings provisions.
Sec. 1272. Implementation.
Sec. 1273. Transfer of resources.
Sec. 1274. Effective date.
Sec. 1275. Service allocation.
Sec. 1276. Authorization of appropriations.
Sec. 1277. Conforming amendments to the Federal Power Act.
Subtitle G--Market Transparency, Enforcement, and Consumer Protection
Sec. 1281. Market transparency rules.
Sec. 1282. Market manipulation.
Sec. 1283. Enforcement.
Sec. 1284. Refund effective date.
Sec. 1285. Refund authority.
Sec. 1286. Sanctity of contract.
Sec. 1287. Consumer privacy and unfair trade practices.
Subtitle H--Merger Reform
Sec. 1291. Merger review reform and accountability.
Sec. 1292. Electric utility mergers.
Subtitle I--Definitions
Sec. 1295. Definitions.
Subtitle J--Technical and Conforming Amendments
Sec. 1297. Conforming amendments.
TITLE XIII--ENERGY TAX INCENTIVES
Sec. 1300. Short title; amendment of 1986 Code.
Subtitle A--Conservation
Part I--Residential and business property
Sec. 1301. Credit for residential energy efficient property.
Sec. 1302. Extension and expansion of credit for electricity produced
from certain renewable resources.
Sec. 1303. Credit for business installation of qualified fuel cells.
Sec. 1304. Credit for energy efficiency improvements to existing homes.
Sec. 1305. Credit for construction of new energy efficient homes.
Sec. 1306. Energy credit for combined heat and power system property.
Sec. 1307. Credit for energy efficient appliances.
Sec. 1308. Energy efficient commercial buildings deduction.
Sec. 1309. Three-year applicable recovery period for depreciation of
qualified energy management devices.
Sec. 1310. Credit for production from advanced nuclear power
facilities.
Part II--Fuels and alternative motor vehicles
Sec. 1311. Repeal of 4.3-cent motor fuel excise taxes on railroads and
inland waterway transportation which remain in general
Fund.
Sec. 1312. Reduced motor fuel excise tax on certain mixtures of diesel
fuel.
Sec. 1313. Small ethanol producer credit.
Sec. 1314. Incentives for biodiesel.
Sec. 1315. Alcohol fuel and biodiesel mixtures excise tax credit.
Sec. 1316. Nonapplication of export exemption to delivery of fuel to
motor vehicles removed from United States.
Sec. 1317. Repeal of phaseouts for qualified electric vehicle credit
and deduction for clean fuel-vehicles.
Sec. 1318. Alternative motor vehicle credit.
Sec. 1319. Modifications of deduction for certain refueling property.
Subtitle B--Reliability
Sec. 1321. Natural gas gathering lines treated as 7-YEAR property.
Sec. 1322. Natural gas distribution lines treated as 15-year property.
Sec. 1323. Electric transmission property treated as 15-year property.
Sec. 1324. Expensing of capital costs incurred in complying with
Environmental Protection Agency sulfur regulations.
Sec. 1325. Credit for production of low sulfur diesel fuel.
Sec. 1326. Determination of small refiner exception to oil depletion
deduction.
Sec. 1327. Sales or dispositions to implement Federal Energy Regulatory
Commission or State electric restructuring policy.
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Sec. 1328. Modifications to special rules for nuclear decommissioning
costs.
Sec. 1329. Treatment of certain income of cooperatives.
Sec. 1330. Arbitrage rules not to apply to prepayments for natural gas.
Subtitle C--Production
Part I--Oil and gas provisions
Sec. 1341. Oil and gas from marginal wells.
Sec. 1342. 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. 1343. Amortization of delay rental payments.
Sec. 1344. Amortization of geological and geophysical expenditures.
Sec. 1345. Extension and modification of credit for producing fuel from
a nonconventional source.
Part II--Alternative minimum tax provisions
Sec. 1346. New nonrefundable personal credits allowed against regular
and minimum taxes.
Sec. 1347. Business related energy credits allowed against regular and
minimum tax.
Sec. 1348. Temporary repeal of alternative minimum tax preference for
intangible drilling costs.
Part III--Clean coal incentives
Sec. 1351. Credit for clean coal technology units.
Sec. 1352. Expansion of amortization for certain pollution control
facilities.
Sec. 1353. 5-year recovery period for eligible integrated gasification
combined cycle technology unit eligible for credit.
Part IV--High volume natural gas provisions
Sec. 1355. High volume natural gas pipe treated as 7-year property.
Sec. 1356. Extension of enhanced oil recovery credit to high volume
natural gas facilities.
Subtitle D--Additional Provisions
Sec. 1361. Extension of accelerated depreciation benefit for energy-
related businesses on indian reservations.
Sec. 1362. Payment of dividends on stock of cooperatives without
reducing patronage dividends.
Sec. 1363. Distributions from publicly traded partnerships treated as
qualifying income of regulated investment companies.
Sec. 1364. Ceiling fans.
Sec. 1365. Certain steam generators, and certain reactor vessel heads,
used in nuclear facilities.
Sec. 1366. Brownfields demonstration program for qualified green
building and sustainable design projects.
TITLE XIV--MISCELLANEOUS
Subtitle A--Rural and Remote Electricity Construction
Sec. 1401. Denali Commission programs.
Sec. 1402. Rural and remote community assistance.
Subtitle B--Coastal Programs
Sec. 1411. Royalty payments under leases under the Outer Continental
Shelf Lands Act.
Sec. 1412. Domestic offshore energy reinvestment.
Subtitle C--Reforms to the Board of Directors of the Tennessee Valley
Authority
Sec. 1431. Change in composition, operation, and duties of the Board of
Directors of the Tennessee Valley Authority.
Sec. 1432. Change in manner of appointment of staff.
Sec. 1433. Conforming amendments.
Sec. 1434. Appointments; effective date; transition.
Subtitle D--Other Provisions
Sec. 1441. Continuation of transmission security order.
Sec. 1442. Review of agency determinations.
Sec. 1443. Attainment dates for downwind ozone nonattainment areas.
Sec. 1444. Energy production incentives.
Sec. 1445. Use of granular mine tailings.
TITLE XV--ETHANOL AND MOTOR FUELS
Subtitle A--General Provisions
Sec. 1501. Renewable content of motor vehicle fuel.
Sec. 1502. Fuels safe harbor.
Sec. 1503. Findings and MTBE transition assistance.
Sec. 1504. Use of MTBE.
Sec. 1505. National Academy of Sciences review and presidential
determination.
Sec. 1506. Elimination of oxygen content requirement for reformulated
gasoline.
Sec. 1507. Analyses of motor vehicle fuel changes.
Sec. 1508. Data collection.
Sec. 1509. Reducing the proliferation of State fuel controls.
Sec. 1510. Fuel system requirements harmonization study.
Sec. 1511. Commercial byproducts from municipal solid waste and
cellulosic biomass loan guarantee program.
Sec. 1512. Resource Center.
Sec. 1513. Cellulosic biomass and waste-derived ethanol conversion
assistance.
Sec. 1514. Blending of compliant reformulated gasolines.
Subtitle B--Underground Storage Tank Compliance
Sec. 1521. Short title.
Sec. 1522. Leaking underground storage tanks.
Sec. 1523. Inspection of underground storage tanks.
Sec. 1524. Operator training.
Sec. 1525. Remediation from oxygenated fuel additives.
Sec. 1526. Release prevention, compliance, and enforcement.
Sec. 1527. Delivery prohibition.
Sec. 1528. Federal facilities.
Sec. 1529. Tanks on Tribal lands.
Sec. 1530. Future release containment technology.
Sec. 1531. Authorization of appropriations.
Sec. 1532. Conforming amendments.
Sec. 1533. Technical amendments.
TITLE XVI--STUDIES
Sec. 1601. Study on inventory of petroleum and natural gas storage.
Sec. 1602. Natural gas supply shortage report.
Sec. 1603. Split-estate Federal oil and gas leasing and development
practices.
Sec. 1604. Resolution of Federal resource development conflicts in the
Powder River Basin.
Sec. 1605. Study of energy efficiency standards.
Sec. 1606. Telecommuting study.
Sec. 1607. Liheap report.
Sec. 1608. Oil bypass filtration technology.
Sec. 1609. Total integrated thermal systems.
Sec. 1610. University collaboration.
Sec. 1611. Reliability and consumer protection assessment.
TITLE I--ENERGY EFFICIENCY
Subtitle A--Federal Programs
SEC. 101. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL
BUILDINGS.
(a) In General.--Part 3 of title V of the National Energy
Conservation Policy Act (42 U.S.C. 8251 et seq.) is amended
by adding at the end the following:
``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
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 of the Capitol 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 (2 U.S.C. 1815), 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 of Appropriations.--There are authorized
to be appropriated to
[[Page H3995]]
the Architect of the Capitol to carry out subsection (d),
$2,000,000 for each of fiscal years 2004 through 2008.
SEC. 102. 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 (42 U.S.C.
8253(a)(1)), as amended by 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'';
(2) by striking ``a finding of impracticability'' and
inserting ``the exclusion''; and
(3) by striking ``energy consumption requirements'' and
inserting ``requirements of subsections (a) and (b)(1)''.
(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 and Water 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 and Water Savings.--An agency may
retain any funds appropriated to that agency for energy
expenditures, water expenditures, or wastewater treatment
expenditures, at buildings subject to the requirements of
section 543(a) and (b), that are not made because of energy
savings or water savings. Except as otherwise provided by
law, such funds may be used only for energy efficiency, water
conservation, 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).''.
SEC. 103. 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, energy efficiency advocacy
organizations, 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 1 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.--Not 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. 104. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.
(a) Requirements.--Part 3 of title V of the National Energy
Conservation Policy Act (42 U.S.C. 8251 et seq.), as amended
by section 101, 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--
[[Page H3996]]
``(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) Specific Products.--(1) 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
not later than 120 days after the date of the enactment of
this section, after considering the recommendations of
associated electric motor manufacturers and energy efficiency
groups.
``(2) All Federal agencies are encouraged to take actions
to maximize the efficiency of air conditioning and
refrigeration equipment, including appropriate cleaning and
maintenance, including the use of any system treatment or
additive that will reduce the electricity consumed by air
conditioning and refrigeration equipment. Any such treatment
or additive must be--
``(A) determined by the Secretary to be effective in
increasing the efficiency of air conditioning and
refrigeration equipment without having an adverse impact on
air conditioning performance (including cooling capacity) or
equipment useful life;
``(B) determined by the Administrator of the Environmental
Protection Agency to be environmentally safe; and
``(C) shown to increase seasonal energy efficiency ratio
(SEER) or energy efficiency ratio (EER) when tested by the
National Institute of Standards and Technology according to
Department of Energy test procedures without causing any
adverse impact on the system, system components, the
refrigerant or lubricant, or other materials in the system.
Results of testing described in subparagraph (C) shall be
published in the Federal Register for public review and
comment. For purposes of this section, a hardware device or
primary refrigerant shall not be considered an additive.
``(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 of the
National Energy Conservation Policy Act is further amended by
inserting after the item relating to section 552 the
following new item:
``Sec. 553. Federal procurement of energy efficient products.''.
SEC. 105. ENERGY SAVINGS PERFORMANCE CONTRACTS.
(a) Permanent Extension.--Effective September 30, 2003,
section 801(c) of the National Energy Conservation Policy Act
(42 U.S.C. 8287(c)) is repealed.
(b) Payment of Costs.--Section 802 of the National Energy
Conservation Policy Act (42 U.S.C. 8287a) is amended by
inserting ``, water, or wastewater treatment'' after
``payment of energy''.
(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 reduction in the
cost of energy, water, or wastewater treatment, from a base
cost established through a methodology set forth in the
contract, used in an existing federally owned building or
buildings or other federally owned facilities as a result
of--
``(A) the lease or purchase of operating equipment,
improvements, altered operation and maintenance, or technical
services;
``(B) the increased efficient use of existing energy
sources by cogeneration or heat recovery, excluding any
cogeneration process for other than a federally owned
building or buildings or other federally owned facilities; or
``(C) the increased efficient use of existing water sources
in either interior or exterior applications.''.
(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 that provides
for the performance of services for the design, acquisition,
installation, testing, and, where appropriate, operation,
maintenance, and repair, of an identified energy or water
conservation measure or series of measures at 1 or more
locations. Such contracts shall, with respect to an agency
facility that is a public building (as such term is defined
in section 3301 of title 40, United States Code), be in
compliance with the prospectus requirements and procedures of
section 3307 of title 40, United States Code.''.
(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; or
``(B) a water conservation measure that improves the
efficiency of water use, 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.--Not later than 180 days after the date of the
enactment of this Act, the Secretary of Energy shall complete
a review of the Energy Savings Performance Contract program
to identify statutory, regulatory, and administrative
obstacles that prevent Federal agencies from fully utilizing
the program. In addition, this review shall identify all
areas for increasing program flexibility and effectiveness,
including audit and measurement verification requirements,
accounting for energy use in determining savings, contracting
requirements, including the identification of additional
qualified contractors, and energy efficiency services
covered. The Secretary shall report these findings to
Congress 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.
(g) Extension of Authority.--Any energy savings performance
contract entered into under section 801 of the National
Energy Conservation Policy Act (42 U.S.C. 8287) after October
1, 2003, and before the date of enactment of this Act, shall
be deemed to have been entered into pursuant to such section
801 as amended by subsection (a) of this section.
SEC. 106. ENERGY SAVINGS PERFORMANCE CONTRACTS PILOT PROGRAM
FOR NONBUILDING APPLICATIONS.
(a) In General.--The Secretary of Defense and the heads of
other interested Federal agencies are authorized to enter
into up to 10 energy savings performance contracts using
procedures, established under subsection (b), based on the
procedures under title VIII of the National Energy
Conservation Policy Act (42 U.S.C. 8287 et seq.), for the
purpose of achieving energy or water savings, secondary
savings, and benefits incidental to those purposes, in
nonbuilding applications. The payments to be made by the
Federal Government under such contracts shall not exceed a
total of $200,000,000 for all such contracts combined.
(b) Procedures.--The Secretary of Energy, in consultation
with the Administrator of General Services and the Secretary
of Defense, shall establish procedures based on the
procedures under title VIII of the National Energy
Conservation Policy Act (42 U.S.C. 8287 et seq.), for
implementing this section.
(c) Definitions.--In this section:
(1) Nonbuilding application.--The term ``nonbuilding
application'' means--
(A) any class of vehicles, devices, or equipment that are
transportable under their own power by land, sea, or air that
consume energy from any fuel source for the purpose of such
transportability, or to maintain a controlled environment
within such vehicle, device, or equipment; or
(B) any Federally owned equipment used to generate
electricity or transport water.
(2) Secondary savings.--The term ``secondary savings''
means additional energy or cost savings that are a direct
consequence of the energy or water savings that result from
the financing and implementation of the energy savings
performance contract, including, but not limited to, energy
or cost savings that result from a reduction in the need for
fuel delivery and logistical support, or the increased
efficiency in the production of electricity.
(d) Report.--Not later than 3 years after the date of
enactment of this section, the Secretary of Energy shall
report to Congress on the progress and results of the
projects funded pursuant to this section. Such report shall
include a description of projects undertaken; the energy,
water, and cost savings, secondary savings, and other
benefits that resulted from such projects; and
recommendations on whether the pilot program should be
extended, expanded, or authorized permanently as a part of
the program authorized under title VIII of the National
Energy Conservation Policy Act (42 U.S.C. 8287 et seq.).
SEC. 107. VOLUNTARY COMMITMENTS TO REDUCE INDUSTRIAL ENERGY
INTENSITY.
(a) Voluntary Agreements.--The Secretary of Energy is
authorized to enter into
[[Page H3997]]
voluntary agreements with 1 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 by a significant amount relative
to improvements in each sector in recent years.
(b) Recognition.--The Secretary of Energy, in cooperation
with the Administrator of the Environmental Protection Agency
and other appropriate Federal agencies, shall recognize and
publicize the achievements of participants in voluntary
agreements under this section.
(c) Definition.--In this section, the term ``energy
intensity'' means the primary energy consumed per unit of
physical output in an industrial process.
SEC. 108. ADVANCED BUILDING EFFICIENCY TESTBED.
(a) Establishment.--The Secretary of Energy, in
consultation with the Administrator of General Services,
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 (including by improving indoor air
quality) 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 \1/3\ of the total amount to the
lead university described in subsection (b), and provide the
remaining \2/3\ to the other participants referred to in
subsection (b) on an equal basis.
SEC. 109. 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 2003 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--
``(i) if life-cycle 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
version current as of the date of enactment of this paragraph
of the ASHRAE Standard or 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; and
``(ii) where water is used to achieve energy efficiency,
water conservation technologies shall be applied to the
extent they are life-cycle cost effective.
``(B) Additional revisions.--Not later than 1 year after
the date of approval of each subsequent revision of the
ASHRAE Standard or the International Energy Conservation
Code, as appropriate, 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. 110. 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.
``(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
greater 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
Congress 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, not later than 1 year after 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
[[Page H3998]]
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. 121. 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 ``and
$2,000,000,000 for each of fiscal years 2002 through 2004''
and inserting ``$2,000,000,000 for fiscal years 2002 and
2003, and $3,400,000,000 for each of fiscal years 2004
through 2006''.
SEC. 122. WEATHERIZATION ASSISTANCE.
Section 422 of the Energy Conservation and Production Act
(42 U.S.C. 6872) is amended by striking ``for fiscal years
1999 through 2003 such sums as may be necessary'' and
inserting ``$325,000,000 for fiscal year 2004, $400,000,000
for fiscal year 2005, and $500,000,000 for fiscal year
2006''.
SEC. 123. 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. 124. 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) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(5) State energy office.--The term ``State energy office''
means the State agency responsible for developing State
energy conservation plans under section 362 of the Energy
Policy and Conservation Act (42 U.S.C. 6322).
(6) 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 the Secretary to carry out this section
$50,000,000 for each of the fiscal years 2004 through 2008.
SEC. 125. 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 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 the most recent version of the
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 $30,000,000 for each of fiscal years 2004
through 2008. Not more than 10 percent of appropriated funds
shall be used for administration.
SEC. 126. 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.), that 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 each of fiscal years 2004
through 2006.
Subtitle C--Energy Efficient Products
SEC. 131. ENERGY STAR PROGRAM.
(a) Amendment.--The Energy Policy and Conservation Act (42
U.S.C. 6201 et seq.) 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 voluntary program to
identify and promote energy-efficient products and buildings
in order to reduce energy consumption, improve energy
security, and reduce pollution through voluntary labeling of
or other
[[Page H3999]]
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 2 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;
``(4) solicit comments from interested parties prior to
establishing or revising an Energy Star product category,
specification, or criterion (or effective dates for any of
the foregoing);
``(5) upon adoption of a new or revised product category,
specification, or criterion, provide reasonable notice to
interested parties of any changes (including effective dates)
in product categories, specifications, or criteria along with
an explanation of such changes and, where appropriate,
responses to comments submitted by interested parties; and
``(6) provide appropriate lead time (which shall be 9
months, unless the Agency or Department determines otherwise)
prior to the effective date for a new or a significant
revision to a product category, specification, or criterion,
taking into account the timing requirements of the
manufacturing, product marketing, and distribution process
for the specific product addressed.''.
(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. 132. HVAC MAINTENANCE CONSUMER EDUCATION PROGRAM.
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.--For the purpose of ensuring that
installed air conditioning and heating systems operate at
their maximum rated efficiency levels, the Secretary shall,
not later than 180 days after 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. The Secretary shall carry
out the program in a cost-shared manner 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 businesses 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 of the Small
Business Administration shall make the program information
available directly to small businesses and through other
Federal agencies, including the Federal Emergency Management
Program and the Department of Agriculture.''.
SEC. 133. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL
PRODUCTS.
(a) Definitions.--Section 321 of the Energy Policy and
Conservation Act (42 U.S.C. 6291) is amended--
(1) in paragraph (30)(S), by striking the period and adding
at the end the following: ``but does not include any lamp
specifically designed to be used for special purpose
applications and that is unlikely to be used in general
purpose applications such as those described in subparagraph
(D), and also does not include any lamp not described in
subparagraph (D) that is excluded by the Secretary, by rule,
because the lamp is designed for special applications and is
unlikely to be used in general purpose applications.''; and
(2) by adding at the end the following:
``(32) The term `battery charger' means a device that
charges batteries for consumer products and includes battery
chargers embedded in other consumer products.
``(33) The term `commercial refrigerators, freezers, and
refrigerator-freezers' means refrigerators, freezers, or
refrigerator-freezers that--
``(A) are not consumer products regulated under this Act;
and
``(B) incorporate 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 an electrically powered integral light
source that illuminates the legend `EXIT' and any directional
indicators and provides contrast between the legend, any
directional indicators, and the background.
``(36)(A) Except as provided in subparagraph (B), the term
`distribution transformer' means a transformer that--
``(i) has an input voltage of 34.5 kilovolts or less;
``(ii) has an output voltage of 600 volts or less; and
``(iii) is rated for operation at a frequency of 60 Hertz.
``(B) The term `distribution transformer' does not
include--
``(i) transformers with multiple voltage taps, with the
highest voltage tap equaling at least 20 percent more than
the lowest voltage tap;
``(ii) transformers, such as those commonly known as drive
transformers, rectifier transformers, auto-transformers,
Uninterruptible Power System transformers, impedance
transformers, harmonic transformers, regulating transformers,
sealed and nonventilating transformers, machine tool
transformers, welding transformers, grounding transformers,
or testing transformers, that are designed to be used in a
special purpose application and are unlikely to be used in
general purpose applications; or
``(iii) any transformer not listed in clause (ii) that is
excluded by the Secretary by rule because--
``(I) the transformer is designed for a special
application;
``(II) the transformer is unlikely to be used in general
purpose applications; and
``(III) the application of standards to the transformer
would not result in significant energy savings.
``(37) The term `low-voltage dry-type distribution
transformer' means a distribution transformer that--
``(A) has an input voltage of 600 volts or less;
``(B) is air-cooled; and
``(C) does not use oil as a coolant.
``(38) The term `standby mode' means the lowest power
consumption mode that--
``(A) cannot be switched off or influenced by the user; and
``(B) may persist for an indefinite time when an appliance
is connected to the main electricity supply and used in
accordance with the manufacturer's instructions,
as defined on an individual product basis by the Secretary.
``(39) The term `torchiere' means a portable electric lamp
with a reflector bowl that directs light upward so as to give
indirect illumination.
``(40) The term `traffic signal module' means a standard 8-
inch (200mm) or 12-inch (300mm) traffic signal indication,
consisting of a light source, a lens, and all other parts
necessary for operation, that communicates movement messages
to drivers through red, amber, and green colors.
``(41) The term `transformer' means a device consisting of
2 or more coils of insulated wire that transfers alternating
current by electromagnetic induction from 1 coil to another
to change the original voltage or current value.
``(42) The term `unit heater' means a self-contained fan-
type heater designed to be installed within the heated space,
except that such term does not include a warm air furnace.''.
(b) Test Procedures.--Section 323 of the Energy Policy and
Conservation Act (42 U.S.C. 6293) is amended--
(1) in subsection (b), by adding at the end the following:
``(9) Test procedures for illuminated exit signs shall be
based on the test method used under Version 2.0 of the Energy
Star program of the Environmental Protection Agency for
illuminated exit signs.
``(10) Test procedures for distribution transformers and
low voltage dry-type distribution transformers shall be based
on the `Standard Test Method for Measuring the Energy
Consumption of Distribution Transformers' prescribed by the
National Electrical Manufacturers Association (NEMA TP 2-
1998). The Secretary may review and revise this test
procedure. For purposes of section 346(a), this test
procedure shall be deemed to be testing requirements
prescribed by the Secretary under section 346(a)(1) for
distribution transformers for which the Secretary makes a
determination that energy conservation standards would be
technologically feasible and economically justified, and
would result in significant energy savings.
``(11) Test procedures for traffic signal modules shall be
based on the test method used under the Energy Star program
of the Environmental Protection Agency for traffic signal
modules, as in effect on the date of enactment of this
paragraph.
``(12) Test procedures for medium base compact fluorescent
lamps shall be based on the test methods used under the
August 9, 2001, version of the Energy Star program of the
Environmental Protection Agency and Department of Energy for
compact fluorescent lamps. Covered products shall meet all
test requirements for regulated parameters in section
325(bb). However, covered products may be marketed prior to
completion of lamp life and lumen maintenance at 40 percent
of rated life testing provided manufacturers document
engineering predictions and analysis that support expected
attainment of lumen maintenance at 40 percent rated life and
lamp life time.''; and
(2) by adding at the end the following:
``(f) Additional Consumer and Commercial Products.--The
Secretary shall, not
[[Page H4000]]
later than 24 months after the date of enactment of this
subsection, prescribe testing requirements for suspended
ceiling fans, refrigerated bottled or canned beverage vending
machines, 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.''.
(c) New Standards.--Section 325 of the Energy Policy and
Conservation Act (42 U.S.C. 6295) is amended by adding at the
end the following:
``(u) Battery Charger and External Power Supply 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 and test
procedures for the power use of battery chargers and external
power supplies. In establishing these test procedures, the
Secretary shall consider, among other factors, existing
definitions and test procedures used for measuring energy
consumption in standby mode and other modes and assess the
current and projected future market for battery chargers and
external power supplies. 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 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
issued 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 energy use that--
``(i) meets the criteria and procedures of subsections (o),
(p), (q), (r), (s), and (t); and
``(ii) will result in significant overall annual energy
savings, considering both standby mode and other operating
modes.
``(2) 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 that are major sources of standby mode energy
consumption, whether to incorporate standby mode into such
test procedures and energy conservation standards, taking
into account, among other relevant factors, standby mode
power consumption compared to overall product energy
consumption.
``(3) Rulemaking.--The Secretary shall not propose a
standard under this section unless the Secretary has issued
applicable test procedures for each product pursuant to
section 323.
``(4) Effective date.--Any standard issued under this
subsection shall be applicable to products manufactured or
imported 3 years after the date of issuance.
``(5) Voluntary programs.--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, that are designed to reduce standby mode
energy use.
``(v) Suspended Ceiling Fans, Vending Machines, and
Commercial Refrigerators, Freezers, and Refrigerator-
Freezers.--The Secretary shall not later than 36 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, and
commercial refrigerators, freezers, and refrigerator-
freezers. In establishing standards under this subsection,
the Secretary shall use the criteria and procedures contained
in subsections (o) and (p). 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 Distribution Transformers.--The
efficiency of low voltage dry-type distribution transformers
manufactured on or after January 1, 2005, shall be the Class
I Efficiency Levels for distribution transformers specified
in Table 4-2 of the `Guide for Determining Energy Efficiency
for Distribution Transformers' published by the National
Electrical Manufacturers Association (NEMA TP-1-2002).
``(z) Traffic Signal Modules.--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 subsection, and
shall be installed with compatible, electrically connected
signal control interface devices and conflict monitoring
systems.
``(aa) Unit Heaters.--Unit heaters manufactured on or after
the date that is 3 years after the date of enactment of this
subsection shall be equipped with an intermittent ignition
device and shall have either power venting or an automatic
flue damper.
``(bb) Medium Base Compact Fluorescent Lamps.--Bare lamp
and covered lamp (no reflector) medium base compact
fluorescent lamps manufactured on or after January 1, 2005,
shall meet the following requirements prescribed by the
August 9, 2001, version of the Energy Star Program
Requirements for Compact Fluorescent Lamps, Energy Star
Eligibility Criteria, Energy-Efficiency Specification issued
by the Environmental Protection Agency and Department of
Energy: minimum initial efficacy; lumen maintenance at 1000
hours; lumen maintenance at 40 percent of rated life; rapid
cycle stress test; and lamp life. The Secretary may, by rule,
establish requirements for color quality (CRI); power factor;
operating frequency; and maximum allowable start time based
on the requirements prescribed by the August 9, 2001, version
of the Energy Star Program Requirements for Compact
Fluorescent Lamps. The Secretary may, by rule, revise these
requirements or establish other requirements considering
energy savings, cost effectiveness, and consumer
satisfaction.
``(cc) Effective Date.--Section 327 shall apply--
``(1) to products for which standards are to be established
under subsections (u) and (v) on the date on which a final
rule is issued by the Department of Energy, except that any
State or local standards prescribed or enacted for any such
product prior to the date on which such final rule is issued
shall not be preempted until the standard established under
subsection (u) or (v) for that product takes effect; and
``(2) to products for which standards are established under
subsections (w) through (bb) on the date of enactment of
those subsections, except that any State or local standards
prescribed or enacted prior to the date of enactment of those
subsections shall not be preempted until the standards
established under subsections (w) through (bb) take
effect.''.
(d) Residential Furnace Fans.--Section 325(f)(3) of the
Energy Policy and Conservation Act (42 U.S.C. 6295(f)(3)) is
amended by adding the following new subparagraph at the end:
``(D) Notwithstanding any provision of this Act, the
Secretary may consider, and prescribe, if the requirements of
subsection (o) of this section are met, energy efficiency or
energy use standards for electricity used for purposes of
circulating air through duct work.''.
SEC. 134. ENERGY LABELING.
(a) Rulemaking on Effectiveness of Consumer Product
Labeling.--Section 324(a)(2) 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 not later than 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
(aa) 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. In the case
of products to which TP-1 standards under section 325(y)
apply, labeling requirements shall be based on the `Standard
for the Labeling of Distribution Transformer Efficiency'
prescribed by the National Electrical Manufacturers
Association (NEMA TP-3) as in effect upon the date of
enactment of this paragraph.''.
Subtitle D--Public Housing
SEC. 141. 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. 142. 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 semicolon at the end the
following: ``; and except that each
[[Page H4001]]
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. 143. 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 last 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--
(1) by striking ``with respect to rehabilitation projects
involving not more than five family units,''; and
(2) 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. 144. 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
generation, advanced energy savings technologies, including
renewable energy generation, and other such retrofits.''.
SEC. 145. 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. 146. 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. 147. 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 553 of the National Energy Conservation
Policy Act (as amended by this title), unless the purchase of
energy-efficient appliances is not cost-effective to the
agency.
SEC. 148. 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
``2003 International Energy Conservation Code'';
(2) in subsection (b)--
(A) by striking ``within 1 year after the date of the
enactment of the Energy Policy Act of 1992'' and inserting
``by September 30, 2004''; and
(B) by striking ``CABO'' and all that follows through
``1989'' and inserting ``the 2003 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 2003 International Energy
Conservation Code''.
SEC. 149. ENERGY STRATEGY FOR HUD.
The Secretary of Housing and Urban Development shall
develop and implement an integrated strategy to reduce
utility expenses through cost-effective energy conservation
and efficiency measures 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 1
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 2
years thereafter on progress in implementing the strategy.
TITLE II--RENEWABLE ENERGY
Subtitle A--General Provisions
SEC. 201. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.
(a) Resource Assessment.--Not later than 6 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 within the United States,
including solar, wind, biomass, ocean (tidal, wave, current,
and thermal), 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.
(c) Authorization of Appropriations.--For the purposes of
this section, there are authorized to be appropriated to the
Secretary of Energy $10,000,000 for each of fiscal years 2004
through 2008.
[[Page H4002]]
SEC. 202. 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 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 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 or
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. 203. FEDERAL PURCHASE REQUIREMENT.
(a) Requirement.--The President, acting through the
Secretary of Energy, shall seek to ensure that, to the extent
economically feasible and technically practicable, of the
total amount of electric energy the Federal Government
consumes during any fiscal year, the following amounts shall
be renewable energy:
(1) Not less than 3 percent in fiscal years 2005 through
2007.
(2) Not less than 5 percent in fiscal years 2008 through
2010.
(3) Not less than 7.5 percent in fiscal year 2011 and each
fiscal year thereafter.
(b) Definitions.--In this section:
(1) Biomass.--The term ``biomass'' means any solid,
nonhazardous, cellulosic material that is derived from--
(A) any of the following forest-related resources: mill
residues, precommercial thinnings, slash, and brush, or
nonmerchantable material;
(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;
(C) agriculture wastes, including orchard tree crops,
vineyard, grain, legumes, sugar, and other crop by-products
or residues, and livestock waste nutrients; or
(D) a plant that is grown exclusively as a fuel for the
production of electricity.
(2) Renewable energy.--The term ``renewable energy'' means
electric energy generated from solar, wind, biomass, landfill
gas, geothermal, municipal solid waste, or new hydroelectric
generation capacity achieved from increased efficiency or
additions of new capacity at an existing hydroelectric
project.
(c) Calculation.--For purposes of determining compliance
with the requirement of this section, the amount of renewable
energy shall be doubled if--
(1) the renewable energy is produced and used on-site at a
Federal facility;
(2) the renewable energy is produced on Federal lands and
used at a Federal facility; or
(3) the renewable energy is produced on Indian land as
defined in title XXVI of the Energy Policy Act of 1992 (25
U.S.C. 3501 et. seq.) and used at a Federal facility.
(d) Report.--Not later than April 15, 2005, and every 2
years thereafter, the Secretary of Energy shall provide a
report to Congress on the progress of the Federal Government
in meeting the goals established by this section.
SEC. 204. 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
(48 U.S.C. 1492), 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, opportunities
for energy conservation and increased energy efficiency, 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 head of government 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, increasing
energy conservation and energy efficiency, 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 December 31, 2005, the Secretary of
the Interior shall submit to Congress the updated plans for
each insular area required by this subsection.''; and
(4) by amending subsection (g)(4) to read as follows:
``(4) Power line grants for insular areas.--
``(A) In general.--The Secretary of the Interior is
authorized to make grants to governments of insular areas of
the United States to carry out eligible projects to protect
electric power transmission and distribution lines in such
insular areas from damage caused by hurricanes and typhoons.
``(B) Eligible projects.--The Secretary may award grants
under subparagraph (A) only to governments of insular areas
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 1 or more of
the insular areas 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 1 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 insular area
where the project is to be carried out for development or
hazard mitigation for that insular area.
``(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 are
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.''.
[[Page H4003]]
SEC. 205. USE OF PHOTOVOLTAIC ENERGY IN PUBLIC BUILDINGS.
(a) In General.--Subchapter VI of chapter 31 of title 40,
United States Code, is amended by adding at the end the
following:
``Sec. 3177. Use of photovoltaic energy in public buildings
``(a) Photovoltaic Energy Commercialization Program.--
``(1) In general.--The Administrator of General Services
may establish a photovoltaic energy commercialization program
for the procurement and installation of photovoltaic solar
electric systems for electric production in new and existing
public buildings.
``(2) Purposes.--The purposes of the program shall be to
accomplish the following:
``(A) To accelerate the growth of a commercially viable
photovoltaic industry to make this energy system available to
the general public as an option which can reduce the national
consumption of fossil fuel.
``(B) To reduce the fossil fuel consumption and costs of
the Federal Government.
``(C) To attain the goal of installing solar energy systems
in 20,000 Federal buildings by 2010, as contained in the
Federal Government's Million Solar Roof Initiative of 1997.
``(D) To stimulate the general use within the Federal
Government of life-cycle costing and innovative procurement
methods.
``(E) To develop program performance data to support policy
decisions on future incentive programs with respect to
energy.
``(3) Acquisition of photovoltaic solar electric systems.--
``(A) In general.--The program shall provide for the
acquisition of photovoltaic solar electric systems and
associated storage capability for use in public buildings.
``(B) Acquisition levels.--The acquisition of photovoltaic
electric systems shall be at a level substantial enough to
allow use of low-cost production techniques with at least 150
megawatts (peak) cumulative acquired during the 5 years of
the program.
``(4) Administration.--The Administrator shall administer
the program and shall--
``(A) issue such rules and regulations as may be
appropriate to monitor and assess the performance and
operation of photovoltaic solar electric systems installed
pursuant to this subsection;
``(B) develop innovative procurement strategies for the
acquisition of such systems; and
``(C) transmit to Congress an annual report on the results
of the program.
``(b) Photovoltaic Systems Evaluation Program.--
``(1) In general.--Not later than 60 days after the date of
enactment of this section, the Administrator, in consultation
with the Secretary of Energy, shall establish a photovoltaic
solar energy systems evaluation program to evaluate such
photovoltaic solar energy systems as are required in public
buildings.
``(2) Program requirement.--In evaluating photovoltaic
solar energy systems under the program, the Administrator
shall ensure that such systems reflect the most advanced
technology.
``(c) Authorization of Appropriations.--
``(1) Photovoltaic energy commercialization program.--There
are authorized to be appropriated to carry out subsection (a)
$50,000,000 for each of fiscal years 2004 through 2008. Such
sums shall remain available until expended.
``(2) Photovoltaic systems evaluation program.--There are
authorized to be appropriated to carry out subsection (b)
$10,000,000 for each of fiscal years 2004 through 2008. Such
sums shall remain available until expended.''.
(b) Conforming Amendment.--The section analysis for such
chapter is amended by inserting after the item relating to
section 3176 the following:
``3177. Use of photovoltaic energy in public buildings.''.
SEC. 206. 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 byproducts 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 byproducts 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 byproducts 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 byproducts 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 byproducts 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 $500,000.
(e) Authorization of Appropriations.--There are authorized
to be appropriated $50,000,000 for each of the fiscal years
2004 through 2014 to carry out this section.
[[Page H4004]]
(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, the
Committee on Energy and Commerce, 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.
SEC. 207. BIOBASED PRODUCTS.
Section 9002(c)(1) of the Farm Security and Rural
Investment Act of 2002 (7 U.S.C. 8102(c)(1)) is amended by
inserting ``or such items that comply with the regulations
issued under section 103 of Public Law 100-556 (42 U.S.C.
6914b-1)'' after ``practicable''.
Subtitle B--Geothermal Energy
SEC. 211. SHORT TITLE.
This subtitle may be cited as the ``John Rishel Geothermal
Steam Act Amendments of 2004''.
SEC. 212. COMPETITIVE LEASE SALE REQUIREMENTS.
Section 4 of the Geothermal Steam Act of 1970 (30 U.S.C.
1003) is amended to read as follows:
``SEC. 4. LEASING PROCEDURES.
``(a) Nominations.--The Secretary shall accept nominations
of lands to be leased at any time from qualified companies
and individuals under this Act.
``(b) Competitive Lease Sale Required.--The Secretary shall
hold a competitive lease sale at least once every 2 years for
lands in a State which has nominations pending under
subsection (a) if such lands are otherwise available for
leasing.
``(c) Noncompetitive Leasing.--The Secretary shall make
available for a period of 2 years for noncompetitive leasing
any tract for which a competitive lease sale is held, but for
which the Secretary does not receive any bids in a
competitive lease sale.
``(d) Leases Sold as a Block.--If information is available
to the Secretary indicating a geothermal resource that could
be produced as 1 unit can reasonably be expected to underlie
more than 1 parcel to be offered in a competitive lease sale,
the parcels for such a resource may be offered for bidding as
a block in the competitive lease sale.
``(e) Pending Lease Applications on April 1, 2003.--It
shall be a priority for the Secretary of the Interior, and
for the Secretary of Agriculture with respect to National
Forest Systems lands, to ensure timely completion of
administrative actions necessary to process applications for
geothermal leasing pending on April 1, 2003. Such an
application, and any lease issued pursuant to such an
application--
``(1) except as provided in paragraph (2), shall be subject
to this section as in effect on April 1, 2003; or
``(2) at the election of the applicant, shall be subject to
this section as in effect on the effective date of this
paragraph.''.
SEC. 213. DIRECT USE.
(a) Fees for Direct Use.--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) Direct Use.--Notwithstanding subsection (a)(1), with
respect to the direct use of geothermal resources for
purposes other than the commercial generation of electricity,
the Secretary of the Interior shall establish a schedule of
fees and collect fees pursuant to such a schedule in lieu of
royalties based upon the total amount of the geothermal
resources used. The schedule of fees shall ensure that there
is a fair return to the public for the use of a geothermal
resource based upon comparable fees charged for direct use of
geothermal resources by States or private persons. For direct
use by a State or local government for public purposes there
shall be no royalty and the fee charged shall be nominal.
Leases in existence on the date of enactment of the Energy
Policy Act of 2003 shall be modified in order to reflect the
provisions of this subsection.''.
(b) Leasing for Direct Use.--Section 4 of the Geothermal
Steam Act of 1970 (30 U.S.C. 1003) is further amended by
adding at the end the following:
``(f) Leasing for Direct Use of Geothermal Resources.--
Lands leased under this Act exclusively for direct use of
geothermal resources shall be leased to any qualified
applicant who first applies for such a lease under
regulations issued by the Secretary, if--
``(1) the Secretary publishes a notice of the lands
proposed for leasing 60 days before the date of the issuance
of the lease; and
``(2) the Secretary does not receive in the 60-day period
beginning on the date of such publication any nomination to
include the lands concerned in the next competitive lease
sale.
``(g) Area Subject to Lease for Direct Use.--A geothermal
lease for the direct use of geothermal resources shall
embrace not more than the amount of acreage determined by the
Secretary to be reasonably necessary for such proposed
utilization.''.
(c) Existing Leases With a Direct Use Facility.--
(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 direct utilization of 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.
(3) Application of new lease terms.--The amendment made by
subsection (a)(4) shall apply with respect to payments under
a lease converted under this subsection that are due and
owing to the United States on or after July 16, 2003.
SEC. 214. 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--
(1) in subsection (a) by striking paragraph (1) and
inserting the following:
``(1) a royalty on electricity produced using geothermal
steam and associated geothermal resources, other than direct
use of geothermal resources, that shall be--
``(A) not less than 1 percent and not more than 2.5 percent
of the gross proceeds from the sale of electricity produced
from such resources during the first 10 years of production
under the lease; and
``(B) not less than 2 and not more than 5 percent of the
gross proceeds from the sale of electricity produced from
such resources during each year after such 10-year period;'';
and
(2) by adding at the end the following:
``(c) Final Regulation Establishing Royalty Rates.--In
issuing any final regulation establishing royalty rates under
this section, the Secretary shall seek--
``(1) to provide lessees a simplified administrative
system;
``(2) to encourage new development; and
``(3) to achieve the same long-term level of royalty
revenues to States and counties as the regulation in effect
on the date of enactment of this subsection.
``(d) Credits for In-Kind Payments of Electricity.--The
Secretary may provide to a lessee a credit against royalties
owed under this Act, in an amount equal to the value of
electricity provided under contract to a State or county
government that is entitled to a portion of such royalties
under section 20 of this Act, 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), if--
``(1) the Secretary has approved in advance the contract
between the lessee and the State or county government for
such in-kind payments;
``(2) the contract establishes a specific methodology to
determine the value of such credits; and
``(3) the maximum credit will be equal to the royalty value
owed to the State or county that is a party to the contract
and the electricity received will serve as the royalty
payment from the Federal Government to that entity.''.
(b) Disposal of Moneys From Sales, Bonuses, Royalties, and
Rentals.--Section 20 of the Geothermal Steam Act of 1970 (30
U.S.C. 1019) is amended to read as follows:
``SEC. 20. DISPOSAL OF MONEYS FROM SALES, BONUSES, RENTALS,
AND ROYALTIES.
``(a) In General.--Except with respect to lands in the
State of Alaska, all monies received by the United States
from sales, bonuses, rentals, and royalties under this Act
shall be paid into the Treasury of the United States. Of
amounts deposited under this subsection, subject to the
provisions of section 35 of the Mineral Leasing Act (30
U.S.C. 191(b)) and section 5(a)(2) of this Act--
``(1) 50 percent shall be paid to the State within the
boundaries of which the leased lands or geothermal resources
are or were located; and
``(2) 25 percent shall be paid to the County within the
boundaries of which the leased lands or geothermal resources
are or were located.
``(b) Use of Payments.--Amounts paid to a State or county
under subsection (a) shall be used consistent with the terms
of section 35 of the Mineral Leasing Act (30 U.S.C. 191).''.
(c) Near-Term Production Incentive for Existing Leases.--
(1) In general.--Notwithstanding section 5(a) of the
Geothermal Steam Act of 1970, the royalty required to be paid
shall be 50 percent of the amount of the royalty otherwise
required, on any lease issued before the date of enactment of
this Act that does not convert to new royalty terms under
subsection (e)--
(A) with respect to commercial production of 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.
(2) 4-year application.--Paragraph (1) applies only to new
commercial production of
[[Page H4005]]
energy from a facility in the first 4 years of such
production.
(d) Definition of Qualified Expansion Geothermal Energy.--
In this section, the term ``qualified expansion geothermal
energy'' means geothermal energy produced from a generation
facility for which--
(1) 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
(2) 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.
(e) Royalty Under 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 any associated
geothermal resources to which the amendment applies that
occurs after the date of that application.
(3) Consultation.--The Secretary--
(A) shall consult with the State and local governments
affected by any proposed changes in lease royalty terms under
this subsection; and
(B) may establish a gross proceeds percentage within the
range specified in the amendment made by subsection (a)(1)
and with the concurrence of the lessee and the State.
SEC. 215. GEOTHERMAL LEASING AND PERMITTING ON FEDERAL LANDS.
(a) In General.--Not later than 180 days after the date of
the enactment of this section, the Secretary of the Interior
and the Secretary of Agriculture shall enter into and submit
to Congress a memorandum of understanding in accordance with
this section regarding leasing and permitting for geothermal
development of public lands and National Forest System lands
under their respective jurisdictions.
(b) Lease and Permit Applications.--The memorandum of
understanding shall--
(1) identify areas with geothermal potential on lands
included in the National Forest System and, when necessary,
require review of management plans to consider leasing under
the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) as
a land use; and
(2) establish an administrative procedure for processing
geothermal lease applications, including lines of authority,
steps in application processing, and time limits for
application procession.
(c) Data Retrieval System.--The memorandum of understanding
shall establish a joint data retrieval system that is capable
of tracking lease and permit applications and providing to
the applicant information as to their status within the
Departments of the Interior and Agriculture, including an
estimate of the time required for administrative action.
SEC. 216. REVIEW AND REPORT TO CONGRESS.
The Secretary of the Interior shall promptly review and
report to Congress not later than 3 years after the date of
the enactment of this Act regarding the status of all
withdrawals from leasing under the Geothermal Steam Act of
1970 (30 U.S.C. 1001 et seq.) of Federal lands, specifying
for each such area whether the basis for such withdrawal
still applies.
SEC. 217. 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:
``SEC. 30. REIMBURSEMENT FOR COSTS OF CERTAIN ANALYSES,
DOCUMENTATION, AND STUDIES.
``(a) In General.--The Secretary of the Interior may
reimburse a person that is a lessee, operator, operating
rights owner, or applicant for any lease under this Act for
reasonable amounts paid by the person for preparation for the
Secretary by a contractor or other person selected by the
Secretary of any project-level analysis, documentation, or
related study required pursuant to 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 costs voluntarily;
``(3) the person maintains records of its costs in
accordance with regulations issued by the Secretary;
``(4) the reimbursement is in the form of a reduction in
the Federal share of the royalty required to be paid for the
lease for which the analysis, documentation, or related study
is conducted, and is agreed to by the Secretary and the
person reimbursed prior to commencing the analysis,
documentation, or related study; and
``(5) the agreement required under paragraph (4) contains
provisions--
``(A) reducing royalties owed on lease production based on
market prices;
``(B) stipulating an automatic termination of the royalty
reduction upon recovery of documented costs; and
``(C) providing a process by which the lessee may seek
reimbursement for circumstances in which production from the
specified lease is not possible.''.
(b) Application.--The amendment made by this section shall
apply with respect to an analysis, documentation, or a
related study conducted on or after the date of enactment of
this Act for any lease entered into before, on, or after the
date of enactment of this Act.
(c) Deadline for Regulations.--The Secretary shall issue
regulations implementing the amendment made by this section
by not later than 1 year after the date of enactment of this
Act.
SEC. 218. ASSESSMENT OF GEOTHERMAL ENERGY POTENTIAL.
The Secretary of Interior, acting through the Director of
the United States Geological Survey and in cooperation with
the States, shall update the 1978 Assessment of Geothermal
Resources, and submit that updated assessment to Congress--
(1) not later than 3 years after the date of enactment of
this Act; and
(2) thereafter as the availability of data and developments
in technology warrant.
SEC. 219. COOPERATIVE OR UNIT PLANS.
Section 18 of the Geothermal Steam Act of 1970 (30 U.S.C.
1017) is amended to read as follows:
``SEC. 18. UNIT AND COMMUNITIZATION AGREEMENTS.
``(a) Adoption of Units by Lessees.--
``(1) In general.--For the purpose of more properly
conserving the natural resources of any geothermal reservoir,
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 Unit Agreement (cooperative 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 Unit Agreement
for such field, or like area, or any part thereof including
direct use resources, if determined and certified by the
Secretary to be necessary or advisable in the public
interest. A majority interest of owners of any single lease
shall have the authority to commit that lease to a Unit
Agreement. The Secretary of the Interior may also initiate
the formation of a Unit Agreement if 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 rates of operations (including
drilling, operations, production, and other requirements) of
such leases and make conditions with reference to such
leases, with the consent of the lessees, in connection with
the creation and operation of any such Unit Agreement as the
Secretary may deem necessary or proper to secure the proper
protection of the public interest. Leases with unlike lease
terms or royalty rates do not need to be modified to be in
the same unit.
``(b) Requirement of Plans Under New Leases.--The
Secretary--
``(1) may provide that geothermal leases issued under this
Act shall contain a provision requiring the lessee to operate
under such a reasonable Unit Agreement; and
``(2) may prescribe such an Agreement 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 Agreement
authorized by 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
Agreement to alter or modify from time to time the rate of
prospecting and development and the quantity and rate of
production under such an Agreement.
``(d) Exclusion From Determination of Holding or Control.--
Any lands that are subject to any Agreement 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 any section of this Act--
``(1) such lands, or a portion thereof, may be pooled with
other lands, whether or not owned by the United States, for
purposes of 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) Unit Agreement Review.--No more than 5 years after
approval of any cooperative or Unit Agreement and at least
every 5 years thereafter, the Secretary shall review each
such Agreement and, after notice and opportunity for comment,
eliminate from inclusion in such Agreement any lands that the
Secretary determines are not reasonably
[[Page H4006]]
necessary for Unit operations under the Agreement. 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 (g) of section 6 if it meets the
requirements for such an extension.
``(g) Drilling or Development Contracts.--The Secretary
may, on such conditions as the Secretary may prescribe,
approve drilling or development contracts made by 1 or more
lessees of geothermal leases, with 1 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 drilling or development
contracts, and interests thereunder, shall be excepted in
determining holdings or control under section 7.
``(h) Coordination With State Governments.--The Secretary
shall coordinate unitization and pooling activities with the
appropriate State agencies and shall ensure that State leases
included in any unitization or pooling arrangement are
treated equally with Federal leases.''.
SEC. 220. 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. 221. 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 subsection (b), and by
redesignating subsection (c) as subsection (b).
SEC. 222. 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:
``(e) 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. 223. LEASE DURATION AND WORK COMMITMENT REQUIREMENTS.
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);
(2) by redesignating subsections (c), (d), and (f) in order
as subsections (g), (h), and (i); and
(3) by inserting before subsection (g), as so redesignated,
the following:
``SEC. 6. LEASE TERM AND WORK COMMITMENT REQUIREMENTS.
``(a) In General.--
``(1) Primary term.--A geothermal lease shall be for a
primary term of 10 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 initial
extension under paragraph (2)) for an additional 5 years if,
for each year of the initial extension under paragraph (2),
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
equivalent dollar value 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 and factors, such as force majeure events,
that suspend or modify the work commitment obligation;
``(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;
``(E) establish transition rules for leases issued before
the date of the enactment of this subsection, including terms
under which a lease that is near the end of its term on the
date of enactment of this subsection may be extended for up
to 2 years--
``(i) to allow achievement of production under the lease;
or
``(ii) to allow the lease to be included in a producing
unit; and
``(F) establish an annual payment that, at the option of
the lessee, may be exercised in lieu of meeting any work
requirement for a limited number of years that the Secretary
determines will not impair achieving diligent development of
the geothermal resource.
``(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 90 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.''.
SEC. 224. 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:
``(f) Advanced Royalties Required for Suspension of
Production.--
``(1) Continuation of lease following cessation of
production.--If, at any time after commercial production
under a lease is achieved, production ceases for any cause
the lease shall remain in full force and effect--
``(A) during the 1-year period beginning on the date
production ceases; and
``(B) after such period if, and so long as, the lessee
commences and continues diligently and in good faith until
such production is resumed the steps, operations, or
procedures necessary to cause a resumption of such
production.
``(2) 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 subsection (a) and the terms
of paragraph (1) are not met, 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
[[Page H4007]]
paid each year in the 5-year-period preceding the date of
suspension.
``(3) Paragraph (2) shall not apply if the suspension is
required or otherwise caused by the Secretary, the Secretary
of a military department, a State or local government, or a
force majeure.''.
SEC. 225. 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 through the
tenth year 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, in the case of a lease awarded in a
competitive lease sale; and $5 per acre or fraction thereof
for each year after the 10th year thereof for all leases.''.
(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:
``(g) 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.''.
SEC. 226. LEASING AND PERMITTING ON FEDERAL LANDS WITHDRAWN
FOR MILITARY PURPOSES.
Not later than 2 years after the date of enactment of this
Act, the Secretary of the Interior and the Secretary of
Defense, in consultation with each military service and with
interested States, counties, representatives of the
geothermal industry, and other persons, shall submit to
Congress a joint report concerning leasing and permitting
activities for geothermal energy on Federal lands withdrawn
for military purposes. Such report shall include the
following:
(1) A description of the Military Geothermal Program,
including any differences between it and the non-Military
Geothermal Program, including required security procedures,
and operational considerations, and discussions as to the
differences, and why they are important. Further, the report
shall describe revenues or energy provided to the Department
of Defense and its facilities, royalty structures, where
applicable, and any revenue sharing with States and counties
or other benefits between--
(A) the implementation of the Geothermal Steam Act of 1970
(30 U.S.C 1001 et seq.) and other applicable Federal law by
the Secretary of the Interior; and
(B) the administration of geothermal leasing under section
2689 of title 10, United States Code, by the Secretary of
Defense.
(2) If appropriate, a description of the current methods
and procedures used to ensure interagency coordination, where
needed, in developing renewable energy sources on Federal
lands withdrawn for military purposes, and an identification
of any new procedures that might be required in the future
for the improvement of interagency coordination to ensure
efficient processing and administration of leases or
contracts for geothermal energy on Federal lands withdrawn
for military purposes, consistent with the defense purposes
of such withdrawals.
(3) Recommendations for any legislative or administrative
actions that might better achieve increased geothermal
production, including a common royalty structure, leasing
procedures, or other changes that increase production, offset
military operation costs, or enhance the Federal agencies'
ability to develop geothermal resources.
Except as provided in this section, nothing in this subtitle
shall affect the legal status of the Department of the
Interior and the Department of the Defense with respect to
each other regarding geothermal leasing and development until
such status is changed by law.
SEC. 227. TECHNICAL AMENDMENTS.
The Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.)
is further amended as follows:
(1) By striking ``geothermal steam and associated
geothermal resources'' each place it appears and inserting
``geothermal resources''.
(2) Section 2(e) (30 U.S.C. 1001(e)) is amended to read as
follows:
``(e) `direct use' means utilization of geothermal
resources for commercial, residential, agricultural, public
facilities, or other energy needs other than the commercial
production of electricity; and''.
(3) Section 21 (30 U.S.C. 1020) is amended by striking
``(a) Within one hundred'' and all that follows through ``(b)
Geothermal'' and inserting ``Geothermal''.
(4) The first section (30 U.S.C. 1001 note) is amended by
striking ``That this'' and inserting the following:
``SEC. 1. SHORT TITLE.
``This''.
(5) Section 2 (30 U.S.C. 1001) is amended by striking
``Sec. 2. As'' and inserting the following:
``SEC. 2. DEFINITIONS.
``As''.
(6) Section 3 (30 U.S.C. 1002) is amended by striking
``Sec. 3. Subject'' and inserting the following:
``SEC. 3 . LANDS SUBJECT TO GEOTHERMAL LEASING.
``Subject''.
(7) Section 5 (30 U.S.C. 1004) is further amended by
striking ``Sec. 5.'', and by inserting immediately before and
above subsection (a) the following:
``SEC. 5. RENTS AND ROYALTIES. ''.
(8) Section 7 (30 U.S.C. 1006) is amended by striking
``Sec. 7. A geothermal'' and inserting the following:
``SEC. 7. ACREAGE OF GEOTHERMAL LEASE.
``A geothermal''.
(9) Section 8 (30 U.S.C. 1007) is amended by striking
``Sec. 8. (a) The'' and inserting the following:
``SEC. 8. READJUSTMENT OF LEASE TERMS AND CONDITIONS.
``(a) The''.
(10) Section 9 (30 U.S.C. 1008) is amended by striking
``Sec. 9. If'' and inserting the following:
``SEC. 9. BYPRODUCTS.
``If''.
(11) Section 10 (30 U.S.C. 1009) is amended by striking
``Sec. 10. The'' and inserting the following:
``SEC. 10. RELINQUISHMENT OF GEOTHERMAL RIGHTS.
``The''.
(12) Section 11 (30 U.S.C. 1010) is amended by striking
``Sec. 11. The'' and inserting the following:
``SEC. 11. SUSPENSION OF OPERATIONS AND PRODUCTION.
``The''.
(13) Section 12 (30 U.S.C. 1011) is amended by striking
``Sec. 12. Leases'' and inserting the following:
``SEC. 12. TERMINATION OF LEASES.
``Leases''.
(14) Section 13 (30 U.S.C. 1012) is amended by striking
``Sec. 13. The'' and inserting the following:
``SEC. 13. WAIVER, SUSPENSION, OR REDUCTION OF RENTAL OR
ROYALTY.
``The''.
(15) Section 14 (30 U.S.C. 1013) is amended by striking
``Sec. 14. Subject'' and inserting the following:
``SEC. 14. SURFACE LAND USE.
``Subject''.
(16) Section 15 (30 U.S.C. 1014) is amended by striking
``Sec. 15. (a) Geothermal'' and inserting the following:
``SEC. 15. LANDS SUBJECT TO GEOTHERMAL LEASING.
``(a) Geothermal''.
(17) Section 16 (30 U.S.C. 1015) is amended by striking
``Sec. 16. Leases'' and inserting the following:
``SEC. 16. REQUIREMENT FOR LESSEES.
``Leases''.
(18) Section 17 (30 U.S.C. 1016) is amended by striking
``Sec. 17. Administration'' and inserting the following:
``SEC. 17. ADMINISTRATION.
``Administration''.
(19) Section 19 (30 U.S.C. 1018) is amended by striking
``Sec. 19. Upon'' and inserting the following:
``SEC. 19. DATA FROM FEDERAL AGENCIES.
``Upon''.
(20) Section 21 (30 U.S.C. 1020) is further amended by
striking ``Sec. 21.'', and by inserting immediately before
and above the remainder of that section the following:
``SEC. 21. PUBLICATION IN FEDERAL REGISTER; RESERVATION OF
MINERAL RIGHTS. ''.
(21) Section 22 (30 U.S.C. 1021) is amended by striking
``Sec. 22. Nothing'' and inserting the following:
``SEC. 22. FEDERAL EXEMPTION FROM STATE WATER LAWS.
``Nothing''.
(22) Section 23 (30 U.S.C. 1022) is amended by striking
``Sec. 23. (a) All'' and inserting the following:
``SEC. 23. PREVENTION OF WASTE; EXCLUSIVITY.
``(a) All''.
(23) Section 24 (30 U.S.C. 1023) is amended by striking
``Sec. 24. The'' and inserting the following:
``SEC. 24. RULES AND REGULATIONS.
``The''.
(24) Section 25 (30 U.S.C. 1024) is amended by striking
``Sec. 25. As'' and inserting the following:
``SEC. 25. INCLUSION OF GEOTHERMAL LEASING UNDER CERTAIN
OTHER LAWS.
``As''.
(25) Section 26 is amended by striking ``Sec. 26. The'' and
inserting the following:
``SEC. 26. AMENDMENT.
``The''.
(26) Section 27 (30 U.S.C. 1025) is amended by striking
``Sec. 27. The'' and inserting the following:
``SEC. 27. FEDERAL RESERVATION OF CERTAIN MINERAL RIGHTS.
``The''.
(27) Section 28 (30 U.S.C. 1026) is amended by striking
``Sec. 28. (a)(1) The'' and inserting the following:
[[Page H4008]]
``SEC. 28. SIGNIFICANT THERMAL FEATURES.
``(a)(1) The''.
(28) Section 29 (30 U.S.C. 1027) is amended by striking
``Sec. 29. The'' and inserting the following:
``SEC. 29. LAND SUBJECT TO PROHIBITION ON LEASING.
``The''.
Subtitle C--Hydroelectric
PART I--ALTERNATIVE CONDITIONS
SEC. 231. 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 expedited agency trial-type hearing
of any disputed issues of material fact, with respect to such
conditions. Such hearing may be conducted in accordance with
procedures established by agency regulation in consultation
with the Federal Energy Regulatory Commission.''.
(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
expedited agency trial-type hearing of any disputed issues
of material fact, with respect to such fishways. Such
hearing may be conducted in accordance with procedures
established by agency regulation in consultation with the
Federal Energy Regulatory Commission.''.
(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 provide for the
adequate protection and utilization of the reservation. The
Secretary shall submit the advisory and the Secretary's final
written determination into the record of the Commission's
proceeding.
``(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.
``(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 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 be less protective than the fishway initially prescribed
by the Secretary. The Secretary shall submit the advisory and
the Secretary's final written determination into the record
of the Commission's proceeding.''.
PART II--ADDITIONAL HYDROPOWER
SEC. 241. 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 (16
U.S.C. 823a(a)(2)).
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
[[Page H4009]]
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 1 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. 242. 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 1 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 of Appropriations.--There are 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. 243. SMALL HYDROELECTRIC POWER PROJECTS.
Section 408(a)(6) of the Public Utility Regulatory Policies
Act of 1978 (16 U.S.C. 2708(a)(6)) is amended by striking
``April 20, 1977'' and inserting ``March 4, 2003''.
SEC. 244. INCREASED HYDROELECTRIC GENERATION AT EXISTING
FEDERAL FACILITIES.
(a) In General.--The Secretary of the Interior and the
Secretary of Energy, in consultation with the Secretary of
the Army, shall jointly conduct a study of the potential for
increasing electric power production capability at federally
owned or operated water regulation, storage, and conveyance
facilities.
(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 Secretaries shall submit to the Committees
on Energy and Commerce, Resources, and Transportation and
Infrastructure of the House of Representatives and the
Committee on Energy and Natural Resources of the Senate 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. The report shall
include each of the following:
(1) The identifications, descriptions, and estimations
referred to in subsection (b).
(2) A description of activities currently conducted or
considered, or that could be considered, to produce
additional hydroelectric power from each identified facility.
(3) A summary of prior actions taken by the Secretaries 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 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, by performing
generator upgrades or rewinds, or construction of pumped
storage facilities.
(7) The impact of increased hydroelectric power production
on irrigation, fish, wildlife, Indian tribes, river health,
water quality, navigation, recreation, fishing, and flood
control.
(8) Any additional recommendations to increase
hydroelectric power production from, and reduce costs and
improve efficiency at, federally owned or operated water
regulation, storage, and conveyance facilities.
SEC. 245. 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, including recreational
releases.
SEC. 246. CORPS OF ENGINEERS HYDROPOWER OPERATION AND
MAINTENANCE FUNDING.
(a) In General.--Notwithstanding the last sentence of
section 5 of the Act of December 22, 1944 (commonly known as
the ``Flood Control Act of 1944'') (58 Stat. 890, chapter
665; 16 U.S.C. 825s), the 11th paragraph under the heading
``office of the secretary'' in title I of the Act of October
12, 1949 (63 Stat. 767, chapter 680; 16 U.S.C. 825s-1), the
matter under the heading ``continuing fund, southeastern
power administration'' in title I of the Act of August 31,
1951 (65 Stat. 249, chapter 375; 16 U.S.C. 825s-2), section
3302 of title 31, United States Code, or any other law, and
without further appropriation or fiscal year limitation, for
fiscal year 2004, the Administrator of the Southeastern Power
Administration, the Administrator of the Southwestern Power
Administration, and the Administrator of the Western Area
Power Administration may credit to the Secretary of the Army
(referred to in this section as the ``Secretary''), receipts,
in an amount determined under subsection (c), from the sale
of power and related services.
(b) Use of Funds.--
(1) In general.--The Secretary--
(A) shall, except as provided in paragraph (2), use the
amounts credited under subsection (a) to fund only the Corps
of Engineers annual operation and maintenance activities that
are allocated exclusively to the power function and assigned
to the respective power marketing administration and
respective project system as applicable for repayment; and
(B) shall not use the amounts for any costs allocated to
non-power functions of Corps of Engineer operations.
(2) Exception.--The Secretary may use amounts credited by
the Southwestern Power Administration under subsection (a)
for capital and nonrecurring costs.
(c) Amount.--The amount of the receipts credited under
subsection (a) shall be equal to such amount as--
(1) the Secretary of the Army requests; and
(2) the appropriate Administrator, in consultation with the
power customers of the Administrator's power marketing
administration, determines to be appropriate to apply to the
costs referred to in subsection (b).
(d) Applicable Law.--The amounts credited under subsection
(a) are exempt from sequestration under the Balanced Budget
and Emergency Deficit Control Act of 1985 (2 U.S.C. 901 et
seq.).
SEC. 247. LIMITATION ON CERTAIN CHARGES ASSESSED TO THE FLINT
CREEK PROJECT, MONTANA.
Notwithstanding section 10(e)(1) of the Federal Power Act
(16 U.S.C. 803(e)(1)) or any other provision of Federal law
providing for the payment to the United States of charges for
the use of Federal land for the purposes of operating and
maintaining a hydroelectric development licensed by the
Federal Energy Regulatory Commission (referred to in this
section as the ``Commission''), any political subdivision of
the State of Montana that holds a license for Commission
Project No. 1473 in Granite and Deer Lodge Counties, Montana,
shall be required to pay to the United States for the use of
that land for each year during which the political
subdivision continues to hold the license for the project,
the lesser of--
(1) $25,000; or
(2) such annual charge as the Commission or any other
department or agency of the Federal Government may assess.
SEC. 248. REINSTATEMENT AND TRANSFER.
(a) Reinstatement and Transfer of Federal License for
Project Numbered 2696.--Notwithstanding section 8 of the
Federal Power Act (16 U.S.C. 801) or any other provision of
such Act, the Federal Energy Regulatory Commission shall
reinstate the license for Project No. 2696 and transfer the
license, without delay or the institution of any proceedings,
to the Town of Stuyvesant, New York, holder of Federal Energy
Regulatory Commission Preliminary Permit No. 11787, within 30
days after the date of enactment of this Act.
(b) Hydroelectric Incentives.--Project No. 2696 shall be
entitled to the full benefit of any Federal legislation that
promotes hydroelectric development that is enacted within 2
years either before or after the date of enactment of this
Act.
(c) Project Development and Financing.--The Federal Energy
Regulatory Commission shall permit the Town of Stuyvesant
[[Page H4010]]
to add as a colicensee any private or public entity or
entities to the reinstated license at any time,
notwithstanding the issuance of a preliminary permit to the
Town of Stuyvesant and any consideration of municipal
preference. The town shall be entitled, to the extent that
funds are available or shall be made available, to receive
loans under sections 402 and 403 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2702 and 2703), or
similar programs, for the reimbursement of feasibility
studies or development costs, or both, incurred since January
1, 2001, through and including December 31, 2006. All power
produced by the project shall be deemed incremental
hydropower for purpose of qualifying for any energy credit or
similar benefits.
TITLE III--OIL AND GAS
Subtitle A--Petroleum Reserve and Home Heating Oil
SEC. 301. 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
the following:
``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. 6250(b)(1)) is amended by striking all after
``increases'' through to ``mid-October through March'' and
inserting ``by more than 60 percent over its 5-year rolling
average for the months of mid-October through March
(considered as a heating season average)''.
(e) Fill Strategic Petroleum Reserve to Capacity.--The
Secretary of Energy shall, as expeditiously as practicable,
acquire petroleum in amounts sufficient to fill the Strategic
Petroleum Reserve to the 1,000,000,000 barrel capacity
authorized under section 154(a) of the Energy Policy and
Conservation Act (42 U.S.C. 6234(a)), consistent with the
provisions of sections 159 and 160 of such Act (42 U.S.C.
6239, 6240).
SEC. 302. NATIONAL OILHEAT RESEARCH ALLIANCE.
Section 713 of the Energy Act of 2000 (42 U.S.C. 6201 note)
is amended by striking ``4'' and inserting ``9''.
Subtitle B--Production Incentives
SEC. 311. DEFINITION OF SECRETARY.
In this subtitle, the term ``Secretary'' means the
Secretary of the Interior.
SEC. 312. PROGRAM ON OIL AND GAS ROYALTIES IN-KIND.
(a) Applicability of Section.--Notwithstanding any other
provision of law, this section applies to all royalty in-kind
accepted by the Secretary on or after the date of 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 land for oil and gas development.
(b) Terms and Conditions.--All royalty accruing to the
United States shall, on the demand of the Secretary, be paid
in oil or gas. If the Secretary makes such a demand, the
following provisions apply to such payment:
(1) Satisfaction of royalty obligation.--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) Marketable condition.--
(A) In general.--Royalty production shall be placed in
marketable condition by the lessee at no cost to the United
States.
(B) Definition of marketable condition.--In this paragraph,
the term ``in marketable condition'' means sufficiently free
from impurities and otherwise in a condition that the royalty
production will be accepted by a purchaser under a sales
contract typical of the field or area in which the royalty
production was produced.
(3) Disposition by the secretary.--The Secretary 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) Retention by the secretary.--The Secretary 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 taken in-kind that otherwise would be deposited to
miscellaneous receipts, without regard to fiscal year
limitation, or may use oil or gas received as royalty taken
in-kind (in this paragraph referred to as ``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) Limitation.--
(A) In general.--Except as provided in subparagraph (B),
the Secretary may not use revenues from the sale of oil and
gas taken in-kind to pay for personnel, travel, or other
administrative costs of the Federal Government.
(B) Exception.--Notwithstanding subparagraph (A), the
Secretary may use a portion of the revenues from the sale of
oil 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 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) allow the lessee to deduct the transportation or
processing costs in reporting and paying royalties in-value
for other Federal oil and gas leases.
(d) Benefit to the United States Required.--The Secretary
may receive oil or gas royalties in-kind only if the
Secretary determines that receiving royalties in-kind
provides benefits to the United States that are greater than
or equal to the benefits that are likely to have been
received had royalties been taken in-value.
(e) Reports.--
(1) In general.--Not later than September 30, 2005, the
Secretary shall submit to Congress a report that addresses--
(A) actions taken to develop businesses processes and
automated systems to fully support the royalty-in-kind
capability to be used in tandem with the royalty-in-value
approach in managing Federal oil and gas revenue; and
(B) future royalty-in-kind businesses operation plans and
objectives.
(2) Reports on oil or gas royalties taken in-kind.--For
each of fiscal years 2004 through 2013 in which the United
States takes oil or gas royalties in-kind from production in
any State or from the outer Continental Shelf, excluding
royalties taken in-kind and sold to refineries under
subsection (h), the Secretary shall submit to Congress a
report that describes--
(A) the methodology or methodologies used by the Secretary
to determine compliance with subsection (d), including the
performance standard for comparing amounts received by the
United States derived from royalties in-kind to amounts
likely to have been received had royalties been taken in-
value;
(B) an explanation of the evaluation that led the Secretary
to take royalties in-kind from a lease or group of leases,
including the expected revenue effect of taking royalties in-
kind;
(C) actual amounts received by the United States derived
from taking royalties in-kind and costs and savings incurred
by the United States associated with taking royalties in-
kind, including, but not limited to, administrative savings
and any new or increased administrative costs; and
(D) an evaluation of other relevant public benefits or
detriments associated with taking royalties in-kind.
(f) Deduction of Expenses.--
(1) In general.--Before making payments under section 35 of
the Mineral Leasing Act (30 U.S.C. 191) or section 8(g) of
the Outer Continental Shelf Lands Act (43 U.S.C. 1337(g)) of
revenues derived from the sale of royalty production taken
in-kind from a lease, the Secretary shall deduct amounts paid
or deducted under subsections (b)(4) and (c) and deposit the
amount of the deductions in the miscellaneous receipts of the
United States Treasury.
[[Page H4011]]
(2) Accounting for deductions.--When the Secretary 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--
(1) shall consult with a State before conducting a royalty
in-kind program under this subtitle within the State, and may
delegate management of any portion of the Federal royalty in-
kind program to the 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) Small Refineries.--
(1) Preference.--If the Secretary finds that sufficient
supplies of crude oil are not available in the open market to
refineries that do not have 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
Energy may, at the discretion of the Secretary, prorate the
oil among refineries described in paragraph (1) in the area
in which the oil is produced.
(i) Disposition to Federal Agencies.--
(1) Onshore royalty.--Any royalty oil or gas taken by the
Secretary in-kind from onshore oil and gas leases may be sold
at not less than the market price to any Federal agency.
(2) Offshore royalty.--Any royalty oil or gas taken in-kind
from a Federal oil or gas lease 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) Federal Low-Income Energy Assistance Programs.--
(1) Preference.--In disposing of royalty oil or gas taken
in-kind under this section, the Secretary may grant a
preference to any person, including any Federal or State
agency, for the purpose of providing additional resources to
any Federal low-income energy assistance program.
(2) Report.--Not later than 3 years after the date of
enactment of this Act, the Secretary shall transmit a report
to Congress, assessing the effectiveness of granting
preferences specified in paragraph (1) and providing a
specific recommendation on the continuation of authority to
grant preferences.
SEC. 313. MARGINAL PROPERTY PRODUCTION INCENTIVES.
(a) Definition of Marginal Property.--Until such time as
the Secretary issues regulations under subsection (e) that
prescribe a different definition, in this section the term
``marginal property'' means an onshore unit, communitization
agreement, or lease not within a unit or communitization
agreement, that produces on average the combined equivalent
of less than 15 barrels of oil per well per day or 90 million
British thermal units of gas per well per day calculated
based on the average over the 3 most recent production
months, including only wells that produce on more than half
of the days during those 3 production months.
(b) Conditions for Reduction of Royalty Rate.--Until such
time as the Secretary issues regulations under subsection (e)
that prescribe different thresholds or standards, the
Secretary shall reduce the royalty rate on--
(1) oil production from marginal properties as prescribed
in subsection (c) when the spot price of West Texas
Intermediate crude oil at Cushing, Oklahoma, is, on average,
less than $15 per barrel for 90 consecutive trading days; and
(2) gas production from marginal properties as prescribed
in subsection (c) when the spot price of natural gas
delivered at Henry Hub, Louisiana, is, on average, less than
$2.00 per million British thermal units for 90 consecutive
trading days.
(c) Reduced Royalty Rate.--
(1) In general.--When a marginal property meets the
conditions specified in subsection (b), the royalty rate
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) Period of effectiveness.--The reduced royalty rate
under this subsection shall be effective beginning on the
first day of the production month following the date on which
the applicable condition specified in subsection (b) is met.
(d) Termination of Reduced Royalty Rate.--A royalty rate
prescribed in subsection (d)(1)(A) shall terminate--
(1) with respect to oil production from a marginal
property, on the first day of the production month following
the date on which--
(A) the spot price of West Texas Intermediate crude oil at
Cushing, Oklahoma, on average, exceeds $15 per barrel for 90
consecutive trading days; or
(B) the property no longer qualifies as a marginal
property; and
(2) with respect to gas production from a marginal
property, on the first day of the production month following
the date on which--
(A) the spot price of natural gas delivered at Henry Hub,
Louisiana, on average, exceeds $2.00 per million British
thermal units for 90 consecutive trading days; or
(B) the property no longer qualifies as a marginal
property.
(e) Regulations Prescribing Different Relief.--
(1) Discretionary regulations.--The Secretary may by
regulation prescribe different parameters, standards, and
requirements for, and a different degree or extent of,
royalty relief for marginal properties in lieu of those
prescribed in subsections (a) through (d).
(2) Mandatory regulations.--Not later than 18 months after
the date of enactment of this Act, the Secretary shall by
regulation--
(A) prescribe standards and requirements for, and the
extent of royalty relief for, marginal properties for oil and
gas leases on the outer Continental Shelf; and
(B) define what constitutes a marginal property on the
outer Continental Shelf for purposes of this section.
(3) Considerations.--In promulgating regulations under this
subsection, the Secretary may consider--
(A) oil and gas prices and market trends;
(B) production costs;
(C) abandonment costs;
(D) Federal and State tax provisions and the effects of
those provisions on production economics;
(E) other royalty relief programs;
(F) regional differences in average wellhead prices;
(G) national energy security issues; and
(H) other relevant matters.
(f) Savings Provision.--Nothing in this section prevents a
lessee from receiving royalty relief or a royalty reduction
pursuant to any other law (including a regulation) that
provides more relief than the amounts provided by this
section.
SEC. 314. INCENTIVES FOR NATURAL GAS PRODUCTION FROM DEEP
WELLS IN THE SHALLOW WATERS OF THE GULF OF
MEXICO.
(a) Royalty Incentive Regulations.--The Secretary shall
publish a final regulation to complete the rulemaking begun
by the Notice of Proposed Rulemaking entitled ``Relief or
Reduction in Royalty Rates--Deep Gas Provisions'', published
in the Federal Register on March 26, 2003 (Federal Register,
volume 68, number 58, 14868-14886).
(b) Royalty Incentive Regulations for Ultra Deep Gas
Wells.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, in addition to any other regulations
that may provide royalty incentives for natural gas produced
from deep wells on oil and gas leases issued pursuant to the
Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.),
the Secretary shall issue regulations, in accordance with the
regulations published pursuant to subsection (a), granting
royalty relief suspension volumes of not less than
35,000,000,000 cubic feet with respect to the production of
natural gas from ultra deep wells on leases issued before
January 1, 2001, in shallow waters less than 200 meters deep
located in the Gulf of Mexico wholly west of 87 degrees, 30
minutes West longitude. Regulations issued under this
subsection shall be retroactive to the date that the Notice
of Proposed Rulemaking is published in the Federal Register.
(2) Definition of ultra deep well.--In this subsection, 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.
SEC. 315. ROYALTY RELIEF FOR DEEP WATER PRODUCTION.
(a) In General.--For all tracts located in water depths of
greater than 400 meters in the Western and Central Planning
Area of the Gulf of Mexico, including the portion of the
Eastern Planning Area of the Gulf of Mexico encompassing
whole lease blocks lying west of 87 degrees, 30 minutes West
longitude, any oil or gas lease sale under the Outer
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.)
occurring within 5 years after the date of enactment of this
Act shall use the bidding system authorized in section
8(a)(1)(H) of the Outer Continental Shelf Lands Act (43
U.S.C. 1337(a)(1)(H)), except that the suspension of
royalties shall be set at a volume of not less than--
(1) 5,000,000 barrels of oil equivalent for each lease in
water depths of 400 to 800 meters;
(2) 9,000,000 barrels of oil equivalent for each lease in
water depths of 800 to 1,600 meters; and
(3) 12,000,000 barrels of oil equivalent for each lease in
water depths greater than 1,600 meters.
(b) Limitation.--The Secretary may place limitations on the
suspension of royalty relief granted based on market price.
SEC. 316. ALASKA OFFSHORE ROYALTY SUSPENSION.
Section 8(a)(3)(B) of the Outer Continental Shelf Lands Act
(43 U.S.C. 1337(a)(3)(B)) is amended by inserting ``and in
the Planning Areas offshore Alaska'' after ``West
longitude''.
SEC. 317. OIL AND GAS LEASING IN THE NATIONAL PETROLEUM
RESERVE IN ALASKA.
(a) Transfer of Authority.--
(1) Redesignation.--The Naval Petroleum Reserves Production
Act of 1976 (42 U.S.C.
[[Page H4012]]
6501 et seq.) is amended by redesignating section 107 (42
U.S.C. 6507) as section 108.
(2) Transfer.--The matter under the heading ``exploration
of national petroleum reserve in alaska'' under the heading
``ENERGY AND MINERALS'' of title I of Public Law 96-514 (42
U.S.C. 6508) is--
(A) transferred to the Naval Petroleum Reserves Production
Act of 1976 (42 U.S.C. 6501 et seq.);
(B) redesignated as section 107 of that Act; and
(C) moved so as to appear after section 106 of that Act (42
U.S.C. 6506).
(b) Competitive Leasing.--Section 107 of the Naval
Petroleum Reserves Production Act of 1976 (as amended by
subsection (a) of this section) is amended--
(1) by striking the heading and all that follows through
``Provided, That (1) activities'' and inserting the
following:
``SEC. 107. COMPETITIVE LEASING OF OIL AND GAS.
``(a) In General.--Notwithstanding any other provision of
law and pursuant to regulations issued by the Secretary, the
Secretary shall conduct an expeditious program of competitive
leasing of oil and gas in the National Petroleum Reserve in
Alaska (referred to in this section as the `Reserve').
``(b) Mitigation of Adverse Effects.--Activities'';
(2) by striking ``Alaska (the Reserve); (2) the'' and
inserting ``Alaska.
``(c) Land Use Planning; BLM Wilderness Study.--The'';
(3) by striking ``Reserve; (3) the'' and inserting
``Reserve.
``(d) First Lease Sale.--The'';
(4) by striking ``4332); (4) the'' and inserting ``4321 et
seq.).
``(e) Withdrawals.--The'';
(5) by striking ``herein; (5) bidding'' and inserting
``under this section.
``(f) Bidding Systems.--Bidding'';
(6) by striking ``629); (6) lease'' and inserting ``629).
``(g) Geological Structures.--Lease'';
(7) by striking ``structures; (7) the'' and inserting
``structures.
``(h) Size of Lease Tracts.--The'';
(8) by striking ``Secretary; (8)'' and all that follows
through ``Drilling, production,'' and inserting ``Secretary.
``(i) Terms.--
``(1) In general.--Each lease shall be--
``(A) issued for an initial period of not more than 10
years; and
``(B) renewed for successive 10-year terms if--
``(i) oil or gas is produced from the lease in paying
quantities;
``(ii) oil or gas is capable of being produced in paying
quantities; or
``(iii) drilling or reworking operations, as approved by
the Secretary, are conducted on the leased land.
``(2) Renewal of nonproducing leases.--The Secretary shall
renew for an additional 10-year term a lease that does not
meet the requirements of paragraph (1)(B) if the lessee
submits to the Secretary an application for renewal not later
than 60 days before the expiration of the primary lease and--
``(A) the lessee certifies, and the Secretary agrees, that
hydrocarbon resources were discovered on 1 or more wells
drilled on the leased land in such quantities that a prudent
operator would hold the lease for potential future
development;
``(B) the lessee--
``(i) pays the Secretary a renewal fee of $100 per acre of
leased land; and
``(ii) provides evidence, and the Secretary agrees that,
the lessee has diligently pursued exploration that warrants
continuation with the intent of continued exploration or
future development of the leased land; or
``(C) all or part of the lease--
``(i) is part of a unit agreement covering a lease
described in subparagraph (A) or (B); and
``(ii) has not been previously contracted out of the unit.
``(3) Applicability.--This subsection applies to a lease
that--
``(A) is entered into before, on, or after the date of
enactment of the Energy Policy Act of 2003; and
``(B) is effective on or after the date of enactment of
that Act.
``(j) Unit Agreements.--
``(1) In general.--For the purpose of conservation of the
natural resources of all or part of any oil or gas pool,
field, reservoir, or like area, lessees (including
representatives) of the pool, field, reservoir, or like area
may unite with each other, or jointly or separately with
others, in collectively adopting and operating under a unit
agreement for all or part of the pool, field, reservoir, or
like area (whether or not any other part of the oil or gas
pool, field, reservoir, or like area is already subject to
any cooperative or unit plan of development or operation), if
the Secretary determines the action to be necessary or
advisable in the public interest.
``(2) Participation by state of alaska.--The Secretary
shall ensure that the State of Alaska is provided the
opportunity for active participation concerning creation and
management of units formed or expanded under this subsection
that include acreage in which the State of Alaska has an
interest in the mineral estate.
``(3) Participation by regional corporations.--The
Secretary shall ensure that any Regional Corporation (as
defined in section 3 of the Alaska Native Claims Settlement
Act (43 U.S.C. 1602)) is provided the opportunity for active
participation concerning creation and management of units
that include acreage in which the Regional Corporation has an
interest in the mineral estate.
``(4) Production allocation methodology.--The Secretary may
use a production allocation methodology for each
participating area within a unit created for land in the
Reserve, State of Alaska land, or Regional Corporation land
shall, when appropriate, be based on the characteristics of
each specific oil or gas pool, field, reservoir, or like area
to take into account reservoir heterogeneity and a real
variation in reservoir producibility across diverse leasehold
interests.
``(5) Benefit of operations.--Drilling, production,'';
(9) by striking ``When separate'' and inserting the
following:
``(6) Pooling.--If separate'';
(10) by inserting ``(in consultation with the owners of the
other land)'' after ``determined by the Secretary of the
Interior'';
(11) by striking ``thereto; (10) to'' and all that follows
through ``the terms provided therein'' and inserting ``to the
agreement.
``(k) Exploration Incentives.--
``(1) In general.--
``(A) Waiver, suspension, or reduction.--To encourage the
greatest ultimate recovery of oil or gas or in the interest
of conservation, the Secretary may waive, suspend, or reduce
the rental fees or minimum royalty, or reduce the royalty on
an entire leasehold (including on any lease operated pursuant
to a unit agreement), if (after consultation with the State
of Alaska and the North Slope Borough of Alaska and the
concurrence of any Regional Corporation for leases that
include lands available for acquisition by the Regional
Corporation under the provisions of section 1431(o) of the
Alaska National Interest Lands Conservation Act (16 U.S.C.
3101 et seq.)) the Secretary determines that the waiver,
suspension, or reduction is in the public interest.
``(B) Applicability.--This paragraph applies to a lease
that--
``(i) is entered into before, on, or after the date of
enactment of the Energy Policy Act of 2003; and
``(ii) is effective on or after the date of enactment of
that Act.'';
(12) by striking ``The Secretary is authorized to'' and
inserting the following:
``(2) Suspension of operations and production.--The
Secretary may'';
(13) by striking ``In the event'' and inserting the
following:
``(3) Suspension of payments.--If'';
(14) by striking ``thereto; and (11) all'' and inserting
``to the lease.
``(l) Receipts.--All'';
(15) by redesignating clauses (A), (B), and (C) as clauses
(1), (2), and (3), respectively;
(16) by striking ``Any agency'' and inserting the
following:
``(m) Explorations.--Any agency'';
(17) by striking ``Any action'' and inserting the
following:
``(n) Environmental Impact Statements.--
``(1) Judicial review.--Any action'';
(18) by striking ``The detailed'' and inserting the
following:
``(2) Initial lease sales.--The detailed'';
(19) by striking ``of the Naval Petroleum Reserves
Production Act of 1976 (90 Stat. 304; 42 U.S.C. 6504)''; and
(20) by adding at the end the following:
``(o) Waiver of Administration for Conveyed Lands.--
Notwithstanding section 14(g) of the Alaska Native Claims
Settlement Act (43 U.S.C. 1613(g)) or any other provision of
law--
``(1) the Secretary of the Interior shall waive
administration of any oil and gas lease insofar as such lease
covers any land in the National Petroleum Reserve in Alaska
in which the subsurface estate is conveyed to the Arctic
Slope Regional Corporation; and
``(2) if any such conveyance of such subsurface estate does
not cover all the land embraced within any such oil and gas
lease--
``(A) the person who owns the subsurface estate in any
particular portion of the land covered by such lease shall be
entitled to all of the revenues reserved under such lease as
to such portion, including, without limitation, all the
royalty payable with respect to oil or gas produced from or
allocated to such particular portion of the land covered by
such lease; and
``(B) the Secretary of the Interior shall segregate such
lease into 2 leases, 1 of which shall cover only the
subsurface estate conveyed to the Arctic Slope Regional
Corporation, and operations, production, or other
circumstances (other than payment of rentals or royalties)
that satisfy obligations of the lessee under, or maintain,
either of the segregated leases shall likewise satisfy
obligations of the lessee under, or maintain, the other
segregated lease to the same extent as if such segregated
leases remained a part of the original unsegregated lease.''.
SEC. 318. ORPHANED, ABANDONED, OR IDLED WELLS ON FEDERAL
LAND.
(a) In General.--The Secretary, in cooperation with the
Secretary of Agriculture, shall establish a program not later
than 1 year after the date of enactment of this Act to
remediate, reclaim, and close orphaned, abandoned, or idled
oil and gas wells located on land administered by the land
management agencies within the Department of the Interior and
the Department of Agriculture.
(b) Activities.--The program under subsection (a) shall--
(1) include a means of ranking orphaned, abandoned, or
idled wells sites for priority in remediation, reclamation,
and closure, based
[[Page H4013]]
on public health and safety, potential environmental harm,
and other land use priorities;
(2) provide for identification and recovery of the costs of
remediation, reclamation, and closure from persons or other
entities currently providing a bond or other financial
assurance required under State or Federal law for an oil or
gas well that is orphaned, abandoned, or idled; and
(3) provide for recovery from the persons or entities
identified under paragraph (2), or their sureties or
guarantors, of the costs of remediation, reclamation, and
closure of such wells.
(c) Cooperation and Consultations.--In carrying out the
program under subsection (a), the Secretary shall--
(1) work cooperatively with the Secretary of Agriculture
and the States within which Federal land is located; and
(2) consult with the Secretary of Energy and the Interstate
Oil and Gas Compact Commission.
(d) Plan.--Not later than 1 year after the date of
enactment of this Act, the Secretary, in cooperation with the
Secretary of Agriculture, shall submit to Congress a plan for
carrying out the program under subsection (a).
(e) Idled Well.--For the purposes of this section, a well
is idled if--
(1) the well has been nonoperational for at least 7 years;
and
(2) there is no anticipated beneficial use for the well.
(f) Technical Assistance Program for Non-Federal Land.--
(1) In general.--The Secretary of Energy shall establish a
program to provide technical and financial assistance to oil
and gas producing States to facilitate State efforts over a
10-year period to ensure a practical and economical remedy
for environmental problems caused by orphaned or abandoned
oil and gas exploration or production well sites on State or
private land.
(2) Assistance.--The Secretary of Energy shall work with
the States, through the Interstate Oil and Gas Compact
Commission, to assist the States in quantifying and
mitigating environmental risks of onshore orphaned or
abandoned oil or gas wells on State and private land.
(3) Activities.--The program under paragraph (1) shall
include--
(A) mechanisms to facilitate identification, if feasible,
of the persons currently providing a bond or other form of
financial assurance required under State or Federal law for
an oil or gas well that is orphaned or abandoned;
(B) criteria for ranking orphaned or abandoned well sites
based on factors such as public health and safety, potential
environmental harm, and other land use priorities;
(C) information and training programs on best practices for
remediation of different types of sites; and
(D) funding of State mitigation efforts on a cost-shared
basis.
(g) Federal Reimbursement for Orphaned Well Reclamation
Pilot Program.--
(1) Reimbursement for remediating, reclaiming, and closing
wells on land subject to a new lease.--The Secretary shall
carry out a pilot program under which, in issuing a new oil
and gas lease on federally owned land on which 1 or more
orphaned wells are located, the Secretary--
(A) may require, but not as a condition of the lease, that
the lessee remediate, reclaim, and close in accordance with
standards established by the Secretary, all orphaned wells on
the land leased; and
(B) shall develop a program to reimburse a lessee, through
a royalty credit against the Federal share of royalties owed
or other means, for the reasonable actual costs of
remediating, reclaiming, and closing the orphaned well
pursuant to that requirement.
(2) Reimbursement for reclaiming orphaned wells on other
land.--In carrying out this subsection, the Secretary--
(A) may authorize any lessee under an oil and gas lease on
federally owned land to reclaim in accordance with the
Secretary's standards--
(i) an orphaned well on unleased federally owned land; or
(ii) an orphaned well located on an existing lease on
federally owned land for the reclamation of which the lessee
is not legally responsible; and
(B) shall develop a program to provide reimbursement of 115
percent of the reasonable actual costs of remediating,
reclaiming, and closing the orphaned well, through credits
against the Federal share of royalties or other means.
(3) Effect of remediation, reclamation, or closure of well
pursuant to an approved remediation plan.--
(A) Definition of remediating party.--In this paragraph the
term ``remediating party'' means a person who remediates,
reclaims, or closes an abandoned, orphaned, or idled well
pursuant to this subsection.
(B) General rule.--A remediating party who remediates,
reclaims, or closes an abandoned, orphaned, or idled well in
accordance with a detailed written remediation plan approved
by the Secretary under this subsection, shall be immune from
civil liability under Federal environmental laws, for--
(i) pre-existing environmental conditions at or associated
with the well, unless the remediating party owns or operates,
in the past owned or operated, or is related to a person that
owns or operates or in the past owned or operated, the well
or the land on which the well is located; or
(ii) any remaining releases of pollutants from the well
during or after completion of the remediation, reclamation,
or closure of the well, unless the remediating party causes
increased pollution as a result of activities that are not in
accordance with the approved remediation plan.
(C) Limitations.--Nothing in this section shall limit in
any way the liability of a remediating party for injury,
damage, or pollution resulting from the remediating party's
acts or omissions that are not in accordance with the
approved remediation plan, are reckless or willful,
constitute gross negligence or wanton misconduct, or are
unlawful.
(4) Regulations.--The Secretary may issue such regulations
as are appropriate to carry out this subsection.
(h) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
carry out this section $25,000,000 for each of fiscal years
2005 through 2009.
(2) Use.--Of the amounts authorized under paragraph (1),
$5,000,000 are authorized for each fiscal year for activities
under subsection (f).
SEC. 319. 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 ``Secretary''.
(c) Regulations.--Not later than 45 days after the date of
enactment of this Act, the Secretary shall issue final
regulations to implement this section.
SEC. 320. LIQUIFIED NATURAL GAS.
Section 3 of the Natural Gas Act (15 U.S.C. 717b) is
amended by adding at the end the following:
``(d) Limitation on Commission Authority.--If an applicant
under this section proposes to construct or expand a
liquified natural gas terminal either onshore or in State
waters for the purpose of importing liquified natural gas
into the United States, the Commission shall not deny or
condition the application solely on the basis that the
applicant proposes to utilize the terminal exclusively or
partially for gas that the applicant or any affiliate thereof
will supply thereto. In all other respects, subsection (a)
shall remain applicable to any such proposal.''.
SEC. 321. ALTERNATE ENERGY-RELATED USES ON THE OUTER
CONTINENTAL SHELF.
(a) 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:
``(p) Leases, Easements, or Rights-Of-Way for Energy and
Related Purposes.--
``(1) In general.--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 a lease, 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, if those 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, for energy-related or marine-related purposes,
facilities currently or previously used for activities
authorized under this Act.
``(2) Payments.--The Secretary shall establish reasonable
forms of 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 which the lease, easement, or
right-of-way is granted.
``(3) Consultation.--Before exercising authority 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.
``(4) Competitive or noncompetitive basis.--
``(A) In general.--The Secretary may issue a lease,
easement, or right-of-way for
[[Page H4014]]
energy and related purposes as described in paragraph (1) on
a competitive or noncompetitive basis.
``(B) Considerations.--In determining whether a lease,
easement, or right-of-way shall be granted competitively or
noncompetitively, the Secretary shall consider such factors
as--
``(i) prevention of waste and conservation of natural
resources;
``(ii) the economic viability of an energy project;
``(iii) protection of the environment;
``(iv) the national interest and national security;
``(v) human safety;
``(vi) protection of correlative rights; and
``(vii) potential return for the lease, easement, or right-
of-way.
``(5) Regulations.--Not later than 270 days after the date
of enactment of the Energy Policy Act of 2003, the Secretary,
in consultation with the Secretary of the Department in which
the Coast Guard is operating and other relevant agencies of
the Federal Government and affected States, shall issue any
necessary regulations to ensure 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 in the outer Continental Shelf.
``(6) Security.--The Secretary shall require the holder of
a lease, 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 considers necessary
to protect the interests of the United States.
``(7) Effect of subsection.--Nothing in this subsection
displaces, supersedes, limits, or modifies the jurisdiction,
responsibility, or authority of any Federal or State agency
under any other Federal law.
``(8) Applicability.--This subsection does not apply to any
area on the outer Continental Shelf designated as a National
Marine Sanctuary.''.
(b) Conforming Amendment.--Section 8 of the Outer
Continental Shelf Lands Act (43 U.S.C. 1337) is amended by
striking the section heading and inserting the following:
``Leases, Easements, and Rights-of-Way on the Outer
Continental Shelf.--''.
(c) Savings Provision.--Nothing in the amendment made by
subsection (a) requires, with respect to any project--
(1) for which offshore test facilities have been
constructed before the date of enactment of this Act; or
(2) for which a request for proposals has been issued by a
public authority,
any resubmittal of documents previously submitted or any
reauthorization of actions previously authorized.
SEC. 322. 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 2004''.
(b) Program.--The Secretary 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.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall submit to Congress
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 to 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 that elect to be part of the system 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 that agency is the agency that acts as the
geological survey in the State.
(4) Data from federal land.--The data archive system shall
provide for the archiving of relevant subsurface data and
samples obtained from Federal land--
(A) in the most appropriate repository designated under
paragraph (2), with preference being given to archiving data
in the State in which the data were 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
enactment of this Act, 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 the 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 Internet, 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. 31a et
seq.), the Advisory Committee shall perform the following
duties:
(A) Advise the Secretary on developing guidelines and
procedures for providing assistance for facilities under
subsection (g)(1).
(B) Review and critique the draft implementation plan
prepared by the Secretary under 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 and technical assistance activities 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 not more than 50 percent of the total cost of the
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) Maintenance of State Effort.--It is the intent of
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.
(j) Definitions.--In this section:
(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) Program.--The term ``Program'' means the National
Geological and Geophysical Data Preservation Program carried
out under this section.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Interior, acting through the Director of the United
States Geological Survey.
(4) Survey.--The term ``Survey'' means the United States
Geological Survey.
(k) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section $30,000,000 for
each of fiscal years 2004 through 2008.
SEC. 323. 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: ``, and 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. 324. ASSESSMENT OF DEPENDENCE OF STATE OF HAWAII ON OIL.
(a) Assessment.--The Secretary of Energy shall assess the
economic implication of the dependence of the State of Hawaii
on oil as the principal source of energy for the State,
including--
(1) the short- and long-term prospects for crude oil supply
disruption and price volatility and potential impacts on the
economy of Hawaii;
(2) the economic relationship between oil-fired generation
of electricity from residual
[[Page H4015]]
fuel and refined petroleum products consumed for ground,
marine, and air transportation;
(3) the technical and economic feasibility of increasing
the contribution of renewable energy resources for generation
of electricity, on an island-by-island basis, including--
(A) siting and facility configuration;
(B) environmental, operational, and safety considerations;
(C) the availability of technology;
(D) effects on the utility system including reliability;
(E) infrastructure and transport requirements;
(F) community support; and
(G) other factors affecting the economic impact of such an
increase and any effect on the economic relationship
described in paragraph (2);
(4) the technical and economic feasibility of using
liquified natural gas to displace residual fuel oil for
electric generation, including neighbor island opportunities,
and the effect of the displacement on the economic
relationship described in paragraph (2), including--
(A) the availability of supply;
(B) siting and facility configuration for onshore and
offshore liquified natural gas receiving terminals;
(C) the factors described in subparagraphs (B) through (F)
of paragraph (3); and
(D) other economic factors;
(5) the technical and economic feasibility of using
renewable energy sources (including hydrogen) for ground,
marine, and air transportation energy applications to
displace the use of refined petroleum products, on an island-
by-island basis, and the economic impact of the displacement
on the relationship described in (2); and
(6) an island-by-island approach to--
(A) the development of hydrogen from renewable resources;
and
(B) the application of hydrogen to the energy needs of
Hawaii
(b) Contracting Authority.--The Secretary of Energy may
carry out the assessment under subsection (a) directly or, in
whole or in part, through 1 or more contracts with qualified
public or private entities.
(c) Report.--Not later than 300 days after the date of
enactment of this Act, the Secretary of Energy shall prepare,
in consultation with agencies of the State of Hawaii and
other stakeholders, as appropriate, and submit to Congress, a
report detailing the findings, conclusions, and
recommendations resulting from the assessment.
(d) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this section.
SEC. 325. DEADLINE FOR DECISION ON APPEALS OF CONSISTENCY
DETERMINATION 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 not later than 30 days
after the date of the filing of any appeal to the Secretary
of a consistency determination under section 307.
``(b) Closure of Record.--
``(1) In general.--Not later than the end of the 120-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 administrative record
regarding the appeal shall be closed.
``(2) Notice.--Upon the closure of the administrative
record, the Secretary shall immediately publish a notice that
the administrative record has been closed.
``(c) Deadline for Decision.--The Secretary shall issue a
decision in any appeal filed under section 307 not later than
120 days after the closure of the administrative record.
``(d) Application.--This section applies to appeals
initiated by the Secretary and appeals filed by an
applicant.''.
(b) Application.--
(1) In general.--Except as provided in paragraph (2), the
amendment made by subsection (a) shall apply with respect to
any appeal initiated or filed before, on, or after the date
of enactment of this Act.
(2) Limitation.--Subsection (a) of section 319 of the
Coastal Zone Management Act of 1972 (as amended by subsection
(a)) shall not apply with respect to an appeal initiated or
filed before the date of enactment of this Act.
(c) Closure of Record for Appeal Filed Before Date of
Enactment.--Notwithstanding section 319(b)(1) of the Coastal
Zone Management Act of 1972 (as amended by this section), in
the case of an appeal of a consistency determination under
section 307 of that Act initiated or filed before the date of
enactment of this Act, the Secretary of Commerce shall
receive no more filings on the appeal and the administrative
record regarding the appeal shall be closed not later than
120 days after the date of enactment of this Act.
SEC. 326. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES,
DOCUMENTATION, AND STUDIES.
(a) In General.--The Mineral Leasing Act is amended by
inserting after section 37 (30 U.S.C. 193) the following:
``Reimbursement for costs of certain analyses, documentation, and
studies
``Sec. 38. (a) In General.--The Secretary of the Interior
may reimburse a person that is a lessee, operator, operating
rights owner, or applicant for any lease under this Act for
reasonable amounts paid by the person for preparation for the
Secretary by a contractor or other person selected by the
Secretary of any project-level analysis, documentation, or
related study required pursuant to 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 costs voluntarily;
``(3) the person maintains records of its costs in
accordance with regulations issued by the Secretary;
``(4) the reimbursement is in the form of a reduction in
the Federal share of the royalty required to be paid for the
lease for which the analysis, documentation, or related study
is conducted, and is agreed to by the Secretary and the
person reimbursed prior to commencing the analysis,
documentation, or related study; and
``(5) the agreement required under paragraph (4) contains
provisions--
``(A) reducing royalties owed on lease production based on
market prices;
``(B) stipulating an automatic termination of the royalty
reduction upon recovery of documented costs; and
``(C) providing a process by which the lessee may seek
reimbursement for circumstances in which production from the
specified lease is not possible.''.
(b) Application.--The amendment made by this section shall
apply with respect to an analysis, documentation, or a
related study conducted on or after the date of enactment of
this Act for any lease entered into before, on, or after the
date of enactment of this Act.
(c) Deadline for Regulations.--The Secretary shall issue
regulations implementing the amendment made by this section
by not later than 1 year after the date of enactment of this
Act.
SEC. 327. 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) Underground injection.--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.''.
SEC. 328. OIL AND GAS EXPLORATION AND PRODUCTION DEFINED.
Section 502 of the Federal Water Pollution Control Act (33
U.S.C. 1362) is amended by adding at the end the following:
``(24) Oil and gas exploration and production.--The term
`oil and gas exploration, production, processing, or
treatment operations or transmission facilities' means all
field activities or operations associated with exploration,
production, processing, or treatment operations, or
transmission facilities, including activities necessary to
prepare a site for drilling and for the movement and
placement of drilling equipment, whether or not such field
activities or operations may be considered to be construction
activities.''.
SEC. 329. OUTER CONTINENTAL SHELF PROVISIONS.
(a) Storage on the Outer Continental Shelf.--Section
5(a)(5) of the Outer Continental Shelf Lands Act (43 U.S.C.
1334(a)(5)) is amended by inserting ``from any source'' after
``oil and gas''.
(b) Deepwater Projects.--Section 6 of the Deepwater Port
Act of 1974 (33 U.S.C. 1505) is amended by adding at the end
the following:
``(d) Reliance on Activities of Other Agencies.--In
fulfilling the requirements of section 5(f)--
``(1) to the extent that other Federal agencies have
prepared environmental impact statements, are conducting
studies, or are monitoring the affected human, marine, or
coastal environment, the Secretary may use the information
derived from those activities in lieu of directly conducting
such activities; and
``(2) the Secretary may use information obtained from any
State or local government or from any person.''.
(c) Natural Gas Defined.--Section 3(13) of the Deepwater
Port Act of 1974 (33 U.S.C. 1502(13)) is amended to read as
follows:
``(13) natural gas means--
``(A) natural gas unmixed; or
``(B) any mixture of natural or artificial gas, including
compressed or liquefied natural gas, natural gas liquids,
liquefied petroleum gas, and condensate recovered from
natural gas;''.
SEC. 330. APPEALS RELATING TO PIPELINE CONSTRUCTION OR
OFFSHORE MINERAL DEVELOPMENT PROJECTS.
(a) Agency of Record, Pipeline Construction Projects.--Any
Federal administrative agency proceeding that is an appeal or
review under section 319 of the Coastal Zone Management Act
of 1972 (16 U.S.C. 1465), as amended by this Act, related to
Federal authority for an interstate natural gas pipeline
construction project, including construction
[[Page H4016]]
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 the Commission's proceeding under sections 3 and 7 of the
Natural Gas Act (15 U.S.C. 717b, 717f).
(b) Sense of Congress.--It is the sense of Congress that
all Federal and State agencies with jurisdiction over
interstate natural gas pipeline construction activities
should coordinate their proceedings within the timeframes
established by the Federal Energy Regulatory Commission when
the Commission is acting under sections 3 and 7 of the
Natural Gas Act (15 U.S.C. 717b, 717f) to determine whether a
certificate of public convenience and necessity should be
issued for a proposed interstate natural gas pipeline.
(c) Agency of Record, Offshore Mineral Development
Projects.--Any Federal administrative agency proceeding that
is an appeal or review under section 319 of the Coastal Zone
Management Act of 1972 (16 U.S.C. 1465), as amended by this
Act, related to Federal authority for the permitting,
approval, or other authorization of energy projects,
including projects to explore, develop, or produce mineral
resources in or underlying the outer Continental Shelf shall
use as its exclusive record for all purposes (except for the
filing of pleadings) the record compiled by the relevant
Federal permitting agency.
SEC. 331. BILATERAL INTERNATIONAL OIL SUPPLY AGREEMENTS.
(a) In General.--Notwithstanding any other provision of
law, the President may export oil to, or secure oil for, any
country pursuant to a bilateral international oil supply
agreement entered into by the United States with the country
before June 25, 1979, or to any country pursuant to the
International Emergency Oil Sharing Plan of the International
Energy Agency.
(b) Memorandum of Agreement.--The following agreements are
deemed to have entered into force by operation of law and are
deemed to have no termination date:
(1) The agreement entitled ``Agreement amending and
extending the memorandum of agreement of June 22, 1979'',
entered into force November 13, 1994 (TIAS 12580).
(2) The agreement entitled ``Agreement amending the
contingency implementing arrangements of October 17, 1980'',
entered into force June 27, 1995 (TIAS 12670).
SEC. 332. NATURAL GAS MARKET REFORM.
(a) Clarification of Existing CFTC Authority.--
(1) False reporting.--Section 9(a)(2) of the Commodity
Exchange Act (7 U.S.C. 13(a)(2)) is amended by striking
``false or misleading or knowingly inaccurate reports'' and
inserting ``knowingly false or knowingly misleading or
knowingly inaccurate reports''.
(2) Commission administrative and civil authority.--Section
9 of the Commodity Exchange Act (7 U.S.C. 13) is amended by
redesignating subsection (f) as subsection (e), and adding:
``(f) Commission Administrative and Civil Authority.--The
Commission may bring administrative or civil actions as
provided in this Act against any person for a violation of
any provision of this section including, but not limited to,
false reporting under subsection (a)(2).''.
(3) Effect of amendments.--The amendments made by
paragraphs (1) and (2) restate, without substantive change,
existing burden of proof provisions and existing Commission
civil enforcement authority, respectively. These clarifying
changes do not alter any existing burden of proof or grant
any new statutory authority. The provisions of this section,
as restated herein, continue to apply to any action pending
on or commenced after the date of enactment of this Act for
any act, omission, or violation occurring before, on, or
after, such date of enactment.
(b) Fraud Authority.--Section 4b of the Commodity Exchange
Act (7 U.S.C. 6b) is amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(2) by striking subsection (a) and inserting the following:
``(a) It shall be unlawful--
``(1) for any person, in or in connection with any order to
make, or the making of, any contract of sale of any commodity
for future delivery or in interstate commerce, that is made,
or to be made, on or subject to the rules of a designated
contract market, for or on behalf of any other person; or
``(2) for any person, in or in connection with any order to
make, or the making of, any contract of sale of any commodity
for future delivery, or other agreement, contract, or
transaction subject to section 5a(g) (1) and (2) of this Act,
that is made, or to be made, for or on behalf of, or with,
any other person, other than on or subject to the rules of a
designated contract market--
``(A) to cheat or defraud or attempt to cheat or defraud
such other person;
``(B) willfully to make or cause to be made to such other
person any false report or statement or willfully to enter or
cause to be entered for such other person any false record;
``(C) willfully to deceive or attempt to deceive such other
person by any means whatsoever in regard to any order or
contract or the disposition or execution of any order or
contract, or in regard to any act of agency performed, with
respect to any order or contract for or, in the case of
subsection (a)(2), with such other person; or
``(D)(i) to bucket an order if such order is either
represented by such person as an order to be executed, or
required to be executed, on or subject to the rules of a
designated contract market; or
``(ii) to fill an order by offset against the order or
orders of any other person, or willfully and knowingly and
without the prior consent of such other person to become the
buyer in respect to any selling order of such other person,
or become the seller in respect to any buying order of such
other person, if such order is either represented by such
person as an order to be executed, or required to be
executed, on or subject to the rules of a designated contract
market.
``(b) Subsection (a)(2) shall not obligate any person, in
connection with a transaction in a contract of sale of a
commodity for future delivery, or other agreement, contract
or transaction subject to section 5a(g) (1) and (2) of this
Act, with another person, to disclose to such other person
nonpublic information that may be material to the market
price of such commodity or transaction, except as necessary
to make any statement made to such other person in connection
with such transaction, not misleading in any material
respect.''.
(c) Jurisdiction of the CFTC.--The Natural Gas Act (15
U.S.C. 717 et seq.) is amended by adding at the end:
``SEC. 26. JURISDICTION.
``This Act shall not affect the exclusive jurisdiction of
the Commodity Futures Trading Commission with respect to
accounts, agreements, contracts, or transactions in
commodities under the Commodity Exchange Act (7 U.S.C. 1 et
seq.). Any request for information by the Commission to a
designated contract market, registered derivatives
transaction execution facility, board of trade, exchange, or
market involving accounts, agreements, contracts, or
transactions in commodities (including natural gas,
electricity, and other energy commodities) within the
exclusive jurisdiction of the Commodity Futures Trading
Commission shall be directed to the Commodity Futures Trading
Commission, which shall cooperate in responding to any
information request by the Commission.''.
(d) Increased Penalties.--Section 21 of the Natural Gas Act
(15 U.S.C. 717t) is amended--
(1) in subsection (a)--
(A) by striking ``$5,000'' and inserting ``$1,000,000'';
and
(B) by striking ``two years'' and inserting ``5 years'';
and
(2) in subsection (b), by striking ``$500'' and inserting
``$50,000''.
SEC. 333. NATURAL GAS MARKET TRANSPARENCY.
The Natural Gas Act (15 U.S.C 717 et seq.) is amended--
(1) by redesignating section 24 as section 25; and
(2) by inserting after section 23 the following:
``SEC. 24. NATURAL GAS MARKET TRANSPARENCY.
``(a) Authorization.--(1) Not later than 180 days after the
date of enactment of the Energy Policy Act of 2003, the
Federal Energy Regulatory Commission shall issue rules
directing all entities subject to the Commission's
jurisdiction as provided under this Act to timely report
information about the availability and prices of natural gas
sold at wholesale in interstate commerce to the Commission
and price publishers.
``(2) The Commission shall evaluate the data for adequate
price transparency and accuracy.
``(3) Rules issued under this subsection requiring the
reporting of information to the Commission that may become
publicly available shall be limited to aggregate data and
transaction-specific data that are otherwise required by the
Commission to be made public.
``(4) In exercising its authority under this section, the
Commission shall not--
``(A) compete with, or displace from the market place, any
price publisher; or
``(B) regulate price publishers or impose any requirements
on the publication of information.
``(b) Timely Enforcement.--No person shall be subject to
any penalty under this section with respect to a violation
occurring more than 3 years before the date on which the
Federal Energy Regulatory Commission seeks to assess a
penalty.
``(c) Limitation on Commission Authority.--(1) The
Commission shall not condition access to interstate pipeline
transportation upon the reporting requirements authorized
under this section.
``(2) Natural gas sales by a producer that are attributable
to volumes of natural gas produced by such producer shall not
be subject to the rules issued pursuant to this section.
``(3) The Commission shall not require natural gas
producers, processors, or users who have a de minimis market
presence to participate in the reporting requirements
provided in this section.''.
Subtitle C--Access to Federal Land
SEC. 341. OFFICE OF FEDERAL ENERGY PROJECT COORDINATION.
(a) Establishment.--The President shall establish the
Office of Federal Energy Project Coordination (referred to in
this section as the ``Office'') within the Executive Office
of the President in the same manner and with the same mission
as the White
[[Page H4017]]
House Energy Projects Task Force established by Executive
Order No. 13212 (42 U.S.C. 13201 note).
(b) Staffing.--The Office shall be staffed by functional
experts from relevant Federal agencies on a nonreimbursable
basis to carry out the mission of the Office.
(c) Report.--The Office shall transmit an annual report to
Congress that describes the activities put in place to
coordinate and expedite Federal decisions on energy projects.
The report shall list accomplishments in improving the
Federal decisionmaking process and shall include any
additional recommendations or systemic changes needed to
establish a more effective and efficient Federal permitting
process.
SEC. 342. FEDERAL ONSHORE OIL AND GAS LEASING AND PERMITTING
PRACTICES.
(a) Review of Onshore Oil and Gas Leasing Practices.--
(1) In general.--The Secretary of the Interior, in
consultation with the Secretary of Agriculture with respect
to National Forest System lands under the jurisdiction of the
Department of Agriculture, shall perform an internal review
of current Federal onshore oil and gas leasing and permitting
practices.
(2) Inclusions.--The review shall include the process for--
(A) accepting or rejecting offers to lease;
(B) administrative appeals of decisions or orders of
officers or employees of the Bureau of Land Management with
respect to a Federal oil or gas lease;
(C) considering surface use plans of operation, including
the timeframes in which the plans are considered, and any
recommendations for improving and expediting the process; and
(D) identifying stipulations to address site-specific
concerns and conditions, including those stipulations
relating to the environment and resource use conflicts.
(b) Report.--Not later than 180 days after the date of
enactment of this Act, the Secretary of the Interior and the
Secretary of Agriculture shall transmit a report to Congress
that describes--
(1) actions taken under section 3 of Executive Order No.
13212 (42 U.S.C. 13201 note); and
(2) actions taken or any plans to improve the Federal
onshore oil and gas leasing program.
SEC. 343. 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 land otherwise available for leasing, the Secretary
of the Interior (in this section referred to as the
``Secretary'') shall--
(1) ensure expeditious compliance with section 102(2)(C) of
the National Environmental Policy Act of 1969 (42 U.S.C.
4332(2)(C));
(2) improve consultation and coordination with the States
and the public; and
(3) improve the collection, storage, and retrieval of
information relating to the leasing activities.
(b) Best Management Practices.--
(1) In general.--Not later than 18 months after the date of
enactment of this Act, the Secretary shall develop and
implement best management practices to--
(A) improve the administration of the onshore oil and gas
leasing program under the Mineral Leasing Act (30 U.S.C. 181
et seq.); and
(B) ensure timely action on oil and gas leases and
applications for permits to drill on lands otherwise
available for leasing.
(2) Considerations.--In developing the best management
practices under paragraph (1), the Secretary shall consider
any recommendations from the review under section 342.
(3) Regulations.--Not later than 180 days after the
development of best management practices under paragraph (1),
the Secretary shall publish, for public comment, proposed
regulations that set forth specific timeframes for processing
leases and applications in accordance with the practices,
including deadlines for--
(A) approving or disapproving resource management plans and
related documents, lease applications, and surface use plans;
and
(B) related administrative appeals.
(c) Improved Enforcement.--The Secretary shall improve
inspection and enforcement of oil and gas activities,
including enforcement of terms and conditions in permits to
drill.
(d) Authorization of Appropriations.--In addition to
amounts authorized to be appropriated to carry out section 17
of the Mineral Leasing Act (30 U.S.C. 226), there are
authorized to be appropriated to the Secretary for each of
fiscal years 2004 through 2007--
(1) $40,000,000 to carry out subsections (a) and (b); and
(2) $20,000,000 to carry out subsection (c).
SEC. 344. CONSULTATION REGARDING OIL AND GAS LEASING ON
PUBLIC LAND.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Secretary of the Interior and the
Secretary of Agriculture shall enter into a memorandum of
understanding regarding oil and gas leasing on--
(1) public lands under the jurisdiction of the Secretary of
the Interior; and
(2) National Forest System lands under the jurisdiction of
the Secretary of Agriculture.
(b) Contents.--The memorandum of understanding shall
include provisions that--
(1) establish administrative procedures and lines of
authority that ensure timely processing of oil and gas lease
applications, surface use plans of operation, and
applications for permits to drill, including steps for
processing surface use plans and applications for permits to
drill consistent with the timelines established by the
amendment made by section 348;
(2) eliminate duplication of effort by providing for
coordination of planning and environmental compliance
efforts; and
(3) ensure that lease stipulations are--
(A) applied consistently;
(B) coordinated between agencies; and
(C) only as restrictive as necessary to protect the
resource for which the stipulations are applied.
(c) Data Retrieval System.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary of the Interior and the
Secretary of Agriculture shall establish a joint data
retrieval system that is capable of--
(A) tracking applications and formal requests made in
accordance with procedures of the Federal onshore oil and gas
leasing program; and
(B) providing information regarding the status of the
applications and requests within the Department of the
Interior and the Department of Agriculture.
(2) Resource mapping.--Not later than 2 years after the
date of enactment of this Act, the Secretary of the Interior
and the Secretary of Agriculture shall establish a joint
Geographic Information System mapping system for use in--
(A) tracking surface resource values to aid in resource
management; and
(B) processing surface use plans of operation and
applications for permits to drill.
SEC. 345. ESTIMATES OF OIL AND GAS RESOURCES UNDERLYING
ONSHORE FEDERAL LAND.
(a) Assessment.--Section 604 of the Energy Act of 2000 (42
U.S.C. 6217) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by striking ``reserve''; and
(ii) by striking ``and'' after the semicolon; and
(B) by striking paragraph (2) and inserting the following:
``(2) the extent and nature of any restrictions or
impediments to the development of the resources, including--
``(A) impediments to the timely granting of leases;
``(B) post-lease restrictions, impediments, or delays on
development for 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 quantity of resources not produced or introduced
into commerce because of the restrictions.'';
(2) in subsection (b)--
(A) by striking ``reserve'' and inserting ``resource''; and
(B) by striking ``publically'' and inserting ``publicly'';
and
(3) by striking subsection (d) and inserting the following:
``(d) Assessments.--Using the inventory, the Secretary of
Energy shall make periodic assessments of economically
recoverable resources accounting for a range of parameters
such as current costs, commodity prices, technology, and
regulations.''.
(b) Methodology.--The Secretary of the Interior shall use
the same assessment methodology across all geological
provinces, areas, and regions in preparing and issuing
national geological assessments to ensure accurate
comparisons of geological resources.
SEC. 346. COMPLIANCE WITH EXECUTIVE ORDER 13211; ACTIONS
CONCERNING REGULATIONS THAT SIGNIFICANTLY
AFFECT ENERGY SUPPLY, DISTRIBUTION, OR USE.
(a) Requirement.--The head of each Federal agency shall
require that before the Federal agency takes any action that
could have a significant adverse effect on the supply of
domestic energy resources from Federal public land, the
Federal agency taking the action shall comply with Executive
Order No. 13211 (42 U.S.C. 13201 note).
(b) Guidance.--Not later than 180 days after the date of
enactment of this Act, the Secretary of Energy shall publish
guidance for purposes of this section describing what
constitutes a significant adverse effect on the supply of
domestic energy resources under Executive Order No. 13211 (42
U.S.C. 13201 note).
(c) Memorandum of Understanding.--The Secretary of the
Interior and the Secretary of Agriculture shall include in
the memorandum of understanding under section 344 provisions
for implementing subsection (a) of this section.
SEC. 347. PILOT PROJECT TO IMPROVE FEDERAL PERMIT
COORDINATION.
(a) Establishment.--The Secretary of the Interior (in this
section referred to as the ``Secretary'') shall establish a
Federal Permit Streamlining Pilot Project (in this section
referred to as the ``Pilot Project'').
(b) Memorandum of Understanding.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall enter into a
memorandum of understanding with the Secretary of
Agriculture, the Administrator of the Environmental
Protection Agency, and the Chief of Engineers of the Army
Corps of Engineers for purposes of this section.
(2) State participation.--The Secretary may request that
the Governors of Wyoming, Montana, Colorado, Utah, and New
Mexico be signatories to the memorandum of understanding.
[[Page H4018]]
(c) Designation of Qualified Staff.--
(1) In general.--Not later than 30 days after the date of
the signing of the memorandum of understanding under
subsection (b), all Federal signatory parties shall assign to
each of the field offices identified in subsection (d), on a
nonreimbursable basis, an employee who has expertise in the
regulatory issues relating to the office in which the
employee is employed, including, as applicable, particular
expertise in--
(A) the consultations and the preparation of biological
opinions under section 7 of the Endangered Species Act of
1973 (16 U.S.C. 1536);
(B) permits under section 404 of Federal Water Pollution
Control Act (33 U.S.C. 1344);
(C) regulatory matters under the Clean Air Act (42 U.S.C.
7401 et seq.);
(D) planning under the National Forest Management Act of
1976 (16 U.S.C. 472a et seq.); and
(E) the preparation of analyses under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
(2) Duties.--Each employee assigned under paragraph (1)
shall--
(A) not later than 90 days after the date of assignment,
report to the Bureau of Land Management Field Managers in the
office to which the employee is assigned;
(B) be responsible for all issues relating to the
jurisdiction of the home office or agency of the employee;
and
(C) participate as part of the team of personnel working on
proposed energy projects, planning, and environmental
analyses.
(d) Field Offices.--The following Bureau of Land Management
Field Offices shall serve as the Pilot Project offices:
(1) Rawlins, Wyoming.
(2) Buffalo, Wyoming.
(3) Miles City, Montana
(4) Farmington, New Mexico.
(5) Carlsbad, New Mexico.
(6) Glenwood Springs, Colorado.
(7) Vernal, Utah.
(e) Reports.--Not later than 3 years after the date of
enactment of this Act, the Secretary shall transmit to
Congress a report that--
(1) outlines the results of the Pilot Project to date; and
(2) makes a recommendation to the President regarding
whether the Pilot Project should be implemented throughout
the United States.
(f) Additional Personnel.--The Secretary shall assign to
each field office identified in subsection (d) any additional
personnel that are necessary to ensure the effective
implementation of--
(1) the Pilot Project; and
(2) other programs administered by the field offices,
including inspection and enforcement relating to energy
development on Federal land, in accordance with the multiple
use mandate of the Federal Land Policy and Management Act of
1976 (43 U.S.C. 1701 et seq).
(g) Savings Provision.--Nothing in this section affects--
(1) the operation of any Federal or State law; or
(2) any delegation of authority made by the head of a
Federal agency whose employees are participating in the Pilot
Project.
SEC. 348. DEADLINE FOR CONSIDERATION OF APPLICATIONS FOR
PERMITS.
Section 17 of the Mineral Leasing Act (30 U.S.C. 226) is
amended by adding at the end the following:
``(p) Deadlines for Consideration of Applications for
Permits.--
``(1) In general.--Not later than 10 days after the date on
which the Secretary receives an application for any permit to
drill, the Secretary shall--
``(A) notify the applicant that the application is
complete; or
``(B) notify the applicant that information is missing and
specify any information that is required to be submitted for
the application to be complete.
``(2) Issuance or deferral.--Not later than 30 days after
the applicant for a permit has submitted a complete
application, the Secretary shall--
``(A) issue the permit; or
``(B)(i) defer decision on the permit; and
``(ii) provide to the applicant a notice that specifies any
steps that the applicant could take for the permit to be
issued.
``(3) Requirements for deferred applications.--
``(A) In general.--If the Secretary provides notice under
paragraph (2)(B)(ii), the applicant shall have a period of 2
years from the date of receipt of the notice in which to
complete all requirements specified by the Secretary,
including providing information needed for compliance with
the National Environmental Policy Act of 1969 (42 U.S.C. 4321
et seq.).
``(B) Issuance of decision on permit.--If the applicant
completes the requirements within the period specified in
subparagraph (A), the Secretary shall issue a decision on the
permit not later than 10 days after the date of completion of
the requirements described in subparagraph (A).
``(C) Denial of permit.--If the applicant does not complete
the requirements within the period specified in subparagraph
(A), the Secretary shall deny the permit.
``(q) Report.--On a quarterly basis, each field office of
the Bureau of Land Management and the Forest Service shall
transmit to the Secretary of the Interior or the Secretary of
Agriculture, respectively, a report that--
``(1) specifies the number of applications for permits to
drill received by the field office in the period covered by
the report; and
``(2) describes how each of the applications was disposed
of by the field office.''.
SEC. 349. CLARIFICATION OF FAIR MARKET RENTAL VALUE
DETERMINATIONS FOR PUBLIC LAND AND FOREST
SERVICE RIGHTS-OF-WAY.
(a) Linear Rights-Of-Way Under Federal Land Policy and
Management Act of 1976.--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) In general.--Effective beginning on the date of the
issuance of the rules required by paragraph (2), for purposes
of subsection (g), the Secretary concerned shall determine
the fair market value 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) Revisions.--Not later than 1 year after the date of
enactment of this subsection--
``(A) 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 value schedule by State, county,
and type of linear right-of-way use to reflect current values
of land in each zone; and
``(B) the Secretary of Agriculture shall make the same
revision for linear rights-of-way granted, issued, or renewed
under this title on National Forest System land.
``(3) Updates.--The Secretary concerned shall annually
update the schedule revised under paragraph (2) by
multiplying the current year's rental per acre by the annual
change, second quarter to 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) Review.--If 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. Any revision of base zones and
rental per acre figure shall only affect lease rental rates
at inception or renewal.''.
(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 in accordance
with section 504(k) of the Federal Land Policy and Management
Act of 1976 (43 U.S.C. 1764(k))''.
SEC. 350. ENERGY FACILITY RIGHTS-OF-WAY AND CORRIDORS ON
FEDERAL LAND.
(a) Report to Congress.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary of Agriculture and the
Secretary of the Interior, in consultation with the Secretary
of Commerce, the Secretary of Defense, the Secretary of
Energy, and the Federal Energy Regulatory Commission, shall
submit to Congress a joint report--
(A) that addresses--
(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 land; and
(ii) opportunities for additional oil and gas pipeline and
electric transmission capacity within those rights-of-way and
corridors; and
(B) that includes a plan for making available, on 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 the existing rights-of-way and corridors and any
planned rights-of-way and corridors.
(2) Consultations and considerations.--In preparing 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 the information may be withheld from public
disclosure under a national security or other exception under
section 552(b) of title 5, United States Code.
(b) Corridor Designations.--
[[Page H4019]]
(1) 11 contiguous western states.--Not later than 2 years
after the date of enactment of this Act, the Secretary of
Agriculture, the Secretary of Commerce, the Secretary of
Defense, the Secretary of Energy, and the Secretary of the
Interior, in consultation with the Federal Energy Regulatory
Commission and the affected utility industries, shall
jointly--
(A) designate, under title V of the Federal Land Policy and
Management Act of 1976 (43 U.S.C. 1761 et seq.) and other
applicable Federal laws, corridors for oil and gas pipelines
and electricity transmission and facilities on Federal land
in the eleven contiguous Western States (as defined in
section 103 of the Federal Land Policy and Management Act of
1976 (43 U.S.C. 1702));
(B) perform any environmental reviews that may be required
to complete the designations of corridors for the facilities
on Federal land in the eleven contiguous Western States; and
(C) incorporate the designated corridors into--
(i) the relevant departmental and agency land use and
resource management plans; or
(ii) equivalent plans.
(2) Other states.--Not later than 4 years after the date of
enactment of this Act, the Secretary of Agriculture, the
Secretary of Commerce, the Secretary of Defense, the
Secretary of Energy, and the Secretary of the Interior, in
consultation with the Federal Energy Regulatory Commission
and the affected utility industries, shall jointly--
(A) identify corridors for oil and gas pipelines and
electricity transmission and distribution facilities on
Federal land in the States other than those described in
paragraph (1); and
(B) schedule prompt action to identify, designate, and
incorporate the corridors into the land use plan.
(3) Ongoing responsibilities.--After completing the
requirements under paragraphs (1) and (2), the Secretary of
Agriculture, the Secretary of Commerce, the Secretary of
Defense, the Secretary of Energy, and the Secretary of the
Interior, with respect to lands under their respective
jurisdictions, in consultation with the Federal Energy
Regulatory Commission and the affected utility industries,
shall establish procedures that--
(A) ensure that additional corridors for oil and gas
pipelines and electricity transmission and distribution
facilities on Federal land are promptly identified and
designated; and
(B) expedite applications to construct or modify oil and
gas pipelines and electricity transmission and distribution
facilities within the corridors, taking into account prior
analyses and environmental reviews undertaken during the
designation of corridors.
(c) Considerations.--In carrying out this section, the
Secretaries shall take into account the need for upgraded and
new electricity transmission and distribution facilities to--
(1) improve reliability;
(2) relieve congestion; and
(3) enhance the capability of the national grid to deliver
electricity.
(d) Definition of Corridor.--
(1) In general.--In this section and title V of the Federal
Land Policy and Management Act of 1976 (43 U.S.C. 1761 et
seq.), the term ``corridor'' means--
(A) a linear strip of land--
(i) with a width determined with consideration given to
technological, environmental, and topographical factors; and
(ii) that contains, or may in the future contain, 1 or more
utility, communication, or transportation facilities;
(B) a land use designation that is established--
(i) by law;
(ii) by Secretarial Order;
(iii) through the land use planning process; or
(iv) by other management decision; and
(C) a designation made for the purpose of establishing the
preferred location of compatible linear facilities and land
uses.
(2) Specifications of corridor.--On designation of a
corridor under this section, the centerline, width, and
compatible uses of a corridor shall be specified.
SEC. 351. CONSULTATION REGARDING ENERGY RIGHTS-OF-WAY ON
PUBLIC LAND.
(a) Memorandum of Understanding.--
(1) In general.--Not later than 6 months after the date of
enactment of this Act, the Secretary of Energy, in
consultation with the Secretary of the Interior, the
Secretary of Agriculture, and the Secretary of Defense with
respect to lands under their respective jurisdictions, shall
enter into a memorandum of understanding to coordinate all
applicable Federal authorizations and environmental reviews
relating to a proposed or existing utility facility. To the
maximum extent practicable under applicable law, the
Secretary of Energy shall, to ensure timely review and permit
decisions, coordinate such authorizations and reviews with
any Indian tribes, multi-State entities, and State agencies
that are responsible for conducting any separate permitting
and environmental reviews of the affected utility facility.
(2) Contents.--The memorandum of understanding shall
include provisions that--
(A) establish--
(i) a unified right-of-way application form; and
(ii) an administrative procedure for processing right-of-
way applications, including lines of authority, steps in
application processing, and timeframes for application
processing;
(B) provide for coordination of planning relating to the
granting of the rights-of-way;
(C) provide for an agreement among the affected Federal
agencies to prepare a single environmental review document to
be used as the basis for all Federal authorization decisions;
and
(D) provide for coordination of use of right-of-way
stipulations to achieve consistency.
(b) Natural Gas Pipelines.--
(1) In general.--With respect to permitting activities for
interstate natural gas pipelines, the May 2002 document
entitled ``Interagency Agreement On Early Coordination Of
Required Environmental And Historic Preservation Reviews
Conducted In Conjunction With The Issuance Of Authorizations
To Construct And Operate Interstate Natural Gas Pipelines
Certificated By The Federal Energy Regulatory Commission''
shall constitute compliance with subsection (a).
(2) Report.--
(A) In general.--Not later than 1 year after the date of
enactment of this Act, and every 2 years thereafter, agencies
that are signatories to the document referred to in paragraph
(1) shall transmit to Congress a report on how the agencies
under the jurisdiction of the Secretaries are incorporating
and implementing the provisions of the document referred to
in paragraph (1).
(B) Contents.--The report shall address--
(i) efforts to implement the provisions of the document
referred to in paragraph (1);
(ii) whether the efforts have had a streamlining effect;
(iii) further improvements to the permitting process of the
agency; and
(iv) recommendations for inclusion of State and tribal
governments in a coordinated permitting process.
(c) Definition of Utility Facility.--In this section, the
term ``utility facility'' means any privately, publicly, or
cooperatively owned line, facility, or system--
(1) for the transportation of--
(A) oil, natural gas, synthetic liquid fuel, or gaseous
fuel;
(B) any refined product produced from oil, natural gas,
synthetic liquid fuel, or gaseous fuel; or
(C) products in support of the production of material
referred to in subparagraph (A) or (B);
(2) for storage and terminal facilities in connection with
the production of material referred to in paragraph (1); or
(3) for the generation, transmission, and distribution of
electric energy.
SEC. 352. RENEWABLE ENERGY ON FEDERAL LAND.
(a) Report.--
(1) In general.--Not later than 24 months after the date of
enactment of this Act, the Secretary of the Interior, in
cooperation with the Secretary of Agriculture, shall develop
and transmit to Congress a report that includes
recommendations on opportunities to develop renewable energy
on--
(A) public lands under the jurisdiction of the Secretary of
the Interior; and
(B) National Forest System lands under the jurisdiction of
the Secretary of Agriculture.
(2) Contents.--The report shall include--
(A) 5-year plans developed by the Secretary of the Interior
and the Secretary of Agriculture, respectively, for
encouraging the development of renewable energy consistent
with applicable law and management plans;
(B) an analysis of--
(i) the use of rights-of-way, leases, or other methods to
develop renewable energy on such lands;
(ii) the anticipated benefits of grants, loans, tax
credits, or other provisions to promote renewable energy
development on such lands; and
(iii) any issues that the Secretary of the Interior or the
Secretary of Agriculture have encountered in managing
renewable energy projects on such lands, believe are likely
to arise in relation to the development of renewable energy
on such lands;
(C) 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 the Department of
Defense that would be suitable for development for renewable
energy, and any recommended statutory and regulatory
mechanisms for such development; and
(D) any recommendations relating to the issues addressed in
the report.
(b) National Academy of Sciences Study.--
(1) In general.--Not later than 90 days after the date of
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 (including tidal, wave, and thermal 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.--The results of the study shall be
transmitted to Congress not later than 2 years after the date
of enactment of this Act.
(c) Generation Capacity of Electricity From Renewable
Energy Resources on Public Land.--The Secretary of the
Interior shall, not later than 10 years after the date of
enactment of this Act, seek to approve renewable energy
projects located (or to be located) on public lands with a
generation capacity of at least 10,000 megawatts of
electricity.
[[Page H4020]]
SEC. 353. ELECTRICITY TRANSMISSION LINE RIGHT-OF-WAY,
CLEVELAND NATIONAL FOREST AND ADJACENT PUBLIC
LAND, CALIFORNIA.
(a) Issuance.--
(1) In general.--Not later than 60 days after the
completion of the environmental reviews under 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.
(2) Inclusions.--The right-of-way approvals under paragraph
(1) 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-kilovolt 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 enactment of
this Act.
(c) Environmental and Administrative Reviews.--
(1) Department of interior or local agency.--The Secretary
of the Interior, acting through the Director of 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) 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, based on the environmental
reviews under subsection (c), to protect the value of
historic, cultural, and natural resources under the
jurisdiction of the Secretary of the Interior or the
Secretary of Agriculture.
(e) 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 referred to in subsection
(a) that was submitted before December 31, 2002, over all
other applications and proposals for the same or a similar
right-of-way submitted on or after that date.
SEC. 354. SENSE OF CONGRESS REGARDING DEVELOPMENT OF MINERALS
UNDER PADRE ISLAND NATIONAL SEASHORE.
(a) Findings.--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 under that Act, the United States is the
owner of only the surface estate 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 is held by the State of
Texas and private parties.
(3) Public Law 87-712 (16 U.S.C. 459d et seq.)--
(A) 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
(B) 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 Congress.--It is the sense of Congress that
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 the lands had on
September 27, 1962.
SEC. 355. ENCOURAGING PROHIBITION OF OFF-SHORE DRILLING IN
THE GREAT LAKES.
Congress encourages--
(1) the States of Illinois, Michigan, New York,
Pennsylvania, and Wisconsin to continue to prohibit offshore
drilling in the Great Lakes for oil and gas; and
(2) the States of Indiana, Minnesota, and Ohio to enact a
prohibition of such drilling.
SEC. 356. FINGER LAKES NATIONAL FOREST WITHDRAWAL.
All Federal land within the boundary of Finger Lakes
National Forest in the State of New York is withdrawn from--
(1) all forms of entry, appropriation, or disposal under
the public land laws; and
(2) disposition under all laws relating to oil and gas
leasing.
SEC. 357. STUDY ON LEASE EXCHANGES IN THE ROCKY MOUNTAIN
FRONT.
(a) Definitions.--For the purposes of this section:
(1) Badger-two medicine area.--The term ``Badger-Two
Medicine Area'' means the Forest Service land located in--
(A) T. 31 N., R. 12-13 W.;
(B) T. 30 N., R. 11-13 W.;
(C) T. 29 N., R. 10-16 W.; and
(D) T. 28 N., R. 10-14 W.
(2) Blackleaf area.--The term ``Blackleaf Area'' means the
Federal land owned by the Forest Service and Bureau of Land
Management that is located in--
(A) T. 27 N., R. 9 W.;
(B) T. 26 N., R. 9-10 W.;
(C) T. 25 N., R. 8-10 W.; and
(D) T. 24 N., R. 8-9 W.
(3) Eligible lessee.--The term ``eligible lessee'' means a
lessee under a nonproducing lease.
(4) Nonproducing lease.--The term ``nonproducing lease''
means a Federal oil or gas lease--
(A) that is in existence and in good standing on the date
of enactment of this Act; and
(B) that is located in the Badger-Two Medicine Area or the
Blackleaf Area.
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(6) State.--The term ``State'' means the State of Montana.
(b) Evaluation.--
(1) In general.--The Secretary, in consultation with the
Governor of the State, and the eligible lessees, shall
evaluate opportunities for domestic oil and gas production
through the exchange of the nonproducing leases.
(2) Requirements.--In carrying out the evaluation under
subsection (a), the Secretary shall--
(A) consider opportunities for domestic production of oil
and gas through--
(i) the exchange of the nonproducing leases for oil and gas
lease tracts of comparable value in the State; and
(ii) the issuance of bidding, royalty, or rental credits
for Federal oil and gas leases in the State in exchange for
the cancellation of the nonproducing leases;
(B) consider any other appropriate means to exchange, or
provide compensation for the cancellation of, nonproducing
leases, subject to the consent of the eligible lessees;
(C) consider the views of any interested persons, including
the State;
(D) determine the level of interest of the eligible lessees
in exchanging the nonproducing leases;
(E) assess the economic impact on the lessees and the State
of lease exchange, lease cancellation, and final judicial or
administrative decisions related to the nonproducing leases;
and
(F) provide recommendations on--
(i) whether to pursue an exchange of the nonproducing
leases;
(ii) any changes in laws (including regulations) that are
necessary for the Secretary to carry out the exchange; and
(iii) any other appropriate means to exchange or provide
compensation for the cancellation of a nonproducing lease,
subject to the consent of the eligible lessee.
(c) Valuation of Nonproducing Leases.--For the purpose of
the evaluation under subsection (a), the value of a
nonproducing lease shall be an amount equal to the difference
between--
(1) the sum of--
(A) the amount paid by the eligible lessee for the
nonproducing lease;
(B) any direct expenditures made by the eligible lessee
before the transmittal of the report in subsection (c)
associated with the exploration and development of the
nonproducing lease; and
(C) interest on any amounts under subparagraphs (A) and (B)
during the period beginning on the date on which the amount
was paid and ending on the date on which credits are issued
under subsection (b)(2)(A)(ii); and
(2) the sum of the revenues from the nonproducing lease.
(d) Report to Congress.--Not later than 2 years after the
date of the enactment of this Act, the Secretary shall
initiate the evaluation in subsection (b) and transmit to
Congress a report on the evaluation.
SEC. 358. FEDERAL COALBED METHANE REGULATION.
Any State currently on the list of Affected States
established under section 1339(b) of the Energy Policy Act of
1992 (42 U.S.C. 13368(b)) shall be removed from the list if,
not later than 3 years after the date of enactment of this
Act, the State takes, or prior to the date of enactment has
taken, any of the actions required for removal from the list
under such section 1339(b).
[[Page H4021]]
SEC. 359. LIVINGSTON PARISH MINERAL RIGHTS TRANSFER.
(a) Amendments.--Section 102 of Public Law 102-562 (106
Stat. 4234) is amended--
(1) by striking ``(a) In General.--'';
(2) by striking ``and subject to the reservation in
subsection (b),''; and
(3) by striking subsection (b).
(b) Implementation of Amendment.--The Secretary of the
Interior shall execute the legal instruments necessary to
effectuate the amendment made by subsection (a)(3).
Subtitle D--Alaska Natural Gas Pipeline
SEC. 371. SHORT TITLE.
This subtitle may be cited as the ``Alaska Natural Gas
Pipeline Act''.
SEC. 372. DEFINITIONS.
In this subtitle:
(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--
(A) the Alaska Natural Gas Transportation Act of 1976 (15
U.S.C. 719 et seq.); or
(B) section 373.
(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 (15 U.S.C. 719
et seq.) and designated and described in section 2 of the
President's decision.
(4) Commission.--The term ``Commission'' means the Federal
Energy Regulatory Commission.
(5) Federal coordinator.--The term ``Federal Coordinator''
means the head of the Office of the Federal Coordinator for
Alaska Natural Gas Transportation Projects established by
section 376(a).
(6) President's decision.--The term ``President's
decision'' means the decision and report to Congress on the
Alaska natural gas transportation system--
(A) issued by the President on September 22, 1977, in
accordance with section 7 of the Alaska Natural Gas
Transportation Act of 1976 (15 U.S.C. 719e); and
(B) approved by Public Law 95-158 (15 U.S.C. 719f note; 91
Stat. 1268).
(7) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(8) State.--The term ``State'' means the State of Alaska.
SEC. 373. ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE AND
NECESSITY.
(a) Authority of the Commission.--Notwithstanding the
Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719
et seq.), the Commission may, in accordance with 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 the project to markets
in the contiguous United States.
(c) Expedited Approval Process.--Not later than 60 days
after the date of issuance of the final environmental impact
statement under section 374 for an Alaska natural gas
transportation project, the Commission shall issue a final
order granting or denying any application for a certificate
of public convenience and necessity for the project under
section 7(c) of the Natural Gas Act (15 U.S.C. 717f(c)) and
this section.
(d) Prohibition of 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 land within the
Prudhoe Bay oil and gas lease area may be granted for any
pipeline that follows a route that--
(1) traverses land beneath navigable waters (as defined in
section 2 of the Submerged Lands Act (43 U.S.C. 1301))
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.--
(1) In general.--Not later than 120 days after the date of
enactment of this Act, the Commission shall issue regulations
governing the conduct of open seasons for Alaska natural gas
transportation projects (including procedures for the
allocation of capacity).
(2) Regulations.--The regulations referred to in paragraph
(1) shall--
(A) include the criteria for and timing of any open
seasons;
(B) promote competition in the exploration, development,
and production of Alaska natural gas; and
(C) for any open season for capacity exceeding the initial
capacity, provide the opportunity for the transportation of
natural gas other than from the Prudhoe Bay and Point Thomson
units.
(3) Applicability.--Except in a case in which an expansion
is ordered in accordance with section 375, 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 issued under
paragraph (1).
(f) Projects in the Contiguous United States.--
(1) In general.--An application 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 in accordance with the Natural Gas Act (15
U.S.C. 717a et seq.).
(2) Expansion.--To the extent that a pipeline facility
described in paragraph (1) includes the expansion of any
facility constructed in accordance with the Alaska Natural
Gas Transportation Act of 1976 (15 U.S.C. 719 et seq.), 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 the holder 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.--
(1) In general.--Except as provided in paragraph (2), the
Commission, on a request by the State and after a hearing,
may provide for reasonable access to the Alaska natural gas
transportation project by the State (or State designee) for
the transportation of royalty gas of the State for the
purpose of meeting local consumption needs within the State.
(2) Exception.--The rates of shippers of subscribed
capacity on an Alaska natural gas transportation project
described in paragraph (1), as in effect as of the date on
which access under that paragraph is granted, shall not be
increased as a result of such access.
(i) Regulations.--The Commission may issue such regulations
as are necessary to carry out this section.
SEC. 374. 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 373 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.--
(1) In general.--The Commission--
(A) shall be the lead agency for purposes of complying with
the National Environmental Policy Act of 1969 (42 U.S.C. 4321
et seq.); and
(B) shall be responsible for preparing the environmental
impact 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 373.
(2) Consolidation of statements.--In carrying out paragraph
(1), the Commission shall prepare a single environmental
impact statement, which shall consolidate the environmental
reviews of all Federal agencies considering any aspect of the
Alaska natural gas transportation project covered by the
environmental impact statement.
(c) Other Agencies.--
(1) In general.--Each Federal agency considering an aspect
of the construction and operation of an Alaska natural gas
transportation project under section 373 shall--
(A) cooperate with the Commission; and
(B) comply with deadlines established by the Commission in
the preparation of the environmental impact statement under
this section.
(2) Satisfaction of nepa requirements.--The environmental
impact statement prepared under this section shall be adopted
by each Federal agency described in paragraph (1) in
satisfaction of the responsibilities of the Federal agency
under section 102(2)(C) of the National Environmental Policy
Act of 1969 (42 U.S.C. 4332(2)(C)) with respect to the Alaska
natural gas transportation project covered by the
environmental impact statement.
(d) Expedited Process.--The Commission shall--
(1) not later than 1 year after the Commission determines
that the application under section 373 with respect to an
Alaska natural gas transportation project is complete, issue
a draft environmental impact statement under this section;
and
(2) not later than 180 days after the date of issuance of
the draft environmental impact statement, issue a final
environmental impact statement, unless the Commission for
good cause determines that additional time is needed.
SEC. 375. PIPELINE EXPANSION.
(a) Authority.--With respect to any Alaska natural gas
transportation project, on a request by 1 or more persons and
after giving notice and an opportunity for a hearing, the
[[Page H4022]]
Commission may order the expansion of the Alaska natural gas
project if the Commission determines that such an expansion
is required by the present and future public convenience and
necessity.
(b) Responsibilities of Commission.--Before ordering an
expansion under subsection (a), 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 do not require existing shippers
on the Alaska natural gas transportation project to subsidize
expansion shippers;
(3) find that a proposed shipper will comply with, and the
proposed expansion and the expansion of service will be
undertaken and implemented based on, terms and conditions
consistent with the tariff of the Alaska natural gas
transportation project in effect as of the date of the
expansion;
(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 in accordance with this
section shall be void unless the person requesting the order
executes a firm transportation agreement with the Alaska
natural gas transportation project within such reasonable
period of time as the order may specify.
(d) Limitation.--Nothing in this section expands or
otherwise affects any authority of the Commission with
respect to any natural gas pipeline located outside the
State.
(e) Regulations.--The Commission may issue such regulations
as are necessary to carry out this section.
SEC. 376. 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.--
(1) Appointment.--The Office shall be headed by a Federal
Coordinator for Alaska Natural Gas Transportation Projects,
who shall be appointed by the President, by and with the
advice and consent of the Senate, to serve a term to last
until 1 year following the completion of the project referred
to in section 373.
(2) Compensation.--The Federal Coordinator shall 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 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 under this subtitle.
(2) Prohibition of certain terms and conditions.--No
Federal agency may include in any certificate, right-of-way,
permit, lease, or other authorization issued to an Alaska
natural gas transportation project any term or condition that
may be permitted, but is not required, by any applicable law
if the Federal Coordinator determines that the term or
condition would prevent or impair in any significant respect
the expeditious construction and operation, or an expansion,
of the Alaska natural gas transportation project.
(3) Prohibition of certain actions.--Unless required by
law, no Federal 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 the action
would prevent or impair in any significant respect the
expeditious construction and operation, or an expansion, of
the Alaska natural gas transportation project.
(4) Limitation.--The Federal Coordinator shall not have
authority to--
(A) override--
(i) the implementation or enforcement of regulations issued
by the Commission under section 373; or
(ii) an order by the Commission to expand the project under
section 375; or
(B) impose any terms, conditions, or requirements in
addition to those imposed by the Commission or any agency
with respect to construction and operation, or an expansion
of, the project.
(e) State Coordination.--
(1) In general.--The Federal Coordinator and the State
shall enter into a joint surveillance and monitoring
agreement similar to the agreement in effect during
construction of the Trans-Alaska Pipeline, to be approved by
the President and the Governor of the State, for the purpose
of monitoring the construction of the Alaska natural gas
transportation project.
(2) Primary responsibility.--With respect to an Alaska
natural gas transportation project--
(A) the Federal Government shall have primary surveillance
and monitoring responsibility in areas where the Alaska
natural gas transportation project crosses Federal land or
private land; and
(B) the State government shall have primary surveillance
and monitoring responsibility in areas where the Alaska
natural gas transportation project crosses State land.
(f) Transfer of Federal Inspector Functions and
Authority.--On 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 under
section 3012(b) of the Energy Policy Act of 1992 (15 U.S.C.
719e note; Public Law 102-486), including all functions and
authority described and enumerated in the Reorganization Plan
No. 1 of 1979 (44 Fed. Reg. 33663), Executive Order No. 12142
of June 21, 1979 (44 Fed. Reg. 36927), and section 5 of the
President's decision, shall be transferred to the Federal
Coordinator.
(g) Temporary Authority.--The functions, authorities,
duties, and responsibilities of the Federal Coordinator shall
be vested in the Secretary until the later of the appointment
of the Federal Coordinator by the President, or 18 months
after the date of enactment of this Act.
SEC. 377. JUDICIAL REVIEW.
(a) Exclusive Jurisdiction.--Except for review by the
Supreme Court 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
(42 U.S.C. 4321 et seq.) with respect to any action under
this subtitle.
(b) Deadline for Filing Claim.--A claim 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 of
enhancing national energy security by providing access to the
significant gas reserves in Alaska needed to meet the
anticipated demand for natural gas.
(d) Amendment of the Alaska Natural Gas Transportation Act
of 1976.--Section 10(c) of the Alaska Natural Gas
Transportation Act of 1976 (15 U.S.C. 719h) is amended--
(1) by striking ``(c)(1) A claim'' and inserting the
following:
``(c) Jurisdiction.--
``(1) Special courts.--
``(A) In general.--A claim'';
(2) by striking ``Such court shall have'' and inserting the
following:
``(B) Exclusive jurisdiction.--The Special Court shall
have'';
(3) by inserting after paragraph (1) the following:
``(2) Expedited consideration.--The Special Court shall set
any action brought under this section for expedited
consideration, taking into account the national interest
described in section 2.''; and
(4) in paragraph (3), by striking ``(3) The enactment'' and
inserting the following:
``(3) Environmental impact statements.--The enactment''.
SEC. 378. STATE JURISDICTION OVER IN-STATE DELIVERY OF
NATURAL GAS.
(a) Local Distribution.--Any facility receiving natural gas
from an Alaska natural gas transportation project for
delivery to consumers within the State--
(1) 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
(2) shall not be subject to the jurisdiction of the
Commission.
(b) Additional Pipelines.--Except as provided in section
373(d), nothing in this subtitle shall preclude or otherwise
affect a future natural 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 for consumption within or distribution
outside the State.
(c) Rate Coordination.--
(1) In general.--In accordance with the Natural Gas Act (15
U.S.C. 717a et seq.), the Commission shall establish rates
for the transportation of natural gas on any Alaska natural
gas transportation project.
(2) Consultation.--In carrying out paragraph (1), the
Commission, in accordance with section 17(b) of the Natural
Gas Act (15 U.S.C. 717p(b)), shall consult with the State
regarding rates (including rate settlements)
[[Page H4023]]
applicable to natural gas transported on and delivered from
the Alaska natural gas transportation project for use within
the State.
SEC. 379. 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 by the date that is 18 months
after the date of enactment of this Act, the Secretary shall
conduct a study of alternative approaches to the construction
and operation of such an Alaska natural gas transportation
project.
(b) Scope of Study.--The study under subsection (a) shall
take into consideration the feasibility of--
(1) establishing a Federal Government corporation to
construct an Alaska natural gas transportation project; and
(2) securing alternative means of providing Federal
financing and ownership (including alternative combinations
of Government and private corporate ownership) of the Alaska
natural gas transportation project.
(c) Consultation.--In conducting the study under subsection
(a), the Secretary shall consult with the Secretary of the
Treasury and the Secretary of the Army (acting through the
Chief of Engineers).
(d) Report.--On completion of any study under subsection
(a), the Secretary shall submit to Congress a report that
describes--
(1) the results of the study; and
(2) any recommendations of the Secretary (including
proposals for legislation to implement the recommendations).
SEC. 380. CLARIFICATION OF ANGTA STATUS AND AUTHORITIES.
(a) Savings Clause.--Nothing in this subtitle affects--
(1) 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
(2) any Presidential finding or waiver issued in accordance
with that Act.
(b) Clarification of Authority to Amend Terms and
Conditions to Meet Current Project Requirements.--Any Federal
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 rescind any term
or condition included in the certificate, permit, right-of-
way, lease, or other authorization to meet current project
requirements (including the physical design, facilities, and
tariff specifications), if the addition, amendment, or
rescission--
(1) would not compel any 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
(2) would not otherwise prevent or impair in any
significant respect the expeditious construction and initial
operation of the Alaska natural gas transportation system.
(c) Updated Environmental Reviews.--The Secretary 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. 381. SENSE OF CONGRESS CONCERNING USE OF STEEL
MANUFACTURED IN NORTH AMERICA NEGOTIATION OF A
PROJECT LABOR AGREEMENT.
It is the sense of Congress that--
(1) an Alaska natural gas transportation project would
provide significant economic benefits to the United States
and Canada; and
(2) to maximize those benefits, the sponsors of the Alaska
natural gas transportation project should make every effort
to--
(A) use steel that is manufactured in North America; and
(B) negotiate a project labor agreement to expedite
construction of the pipeline.
SEC. 382. SENSE OF CONGRESS AND STUDY CONCERNING
PARTICIPATION BY SMALL BUSINESS CONCERNS.
(a) Definition of Small Business Concern.--In this section,
the term ``small business concern'' has the meaning given the
term in section 3(a) of the Small Business Act (15 U.S.C.
632(a)).
(b) Sense of Congress.--It is the sense of Congress that--
(1) an Alaska natural gas transportation project would
provide significant economic benefits to the United States
and Canada; and
(2) to maximize those benefits, the sponsors of the Alaska
natural gas transportation project should maximize the
participation of small business concerns in contracts and
subcontracts awarded in carrying out the project.
(c) Study.--
(1) In general.--The Comptroller General of the United
States shall conduct a study to determine 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 submit
to Congress a report that describes results of the study
under paragraph (1).
(3) Updates.--The Comptroller General shall--
(A) update the study at least once every 5 years until
construction of an Alaska natural gas transportation project
is completed; and
(B) on completion of each update, submit to Congress a
report containing the results of the update.
SEC. 383. ALASKA PIPELINE CONSTRUCTION TRAINING PROGRAM.
(a) Program.--
(1) Establishment.--The Secretary of Labor (in this section
referred to as the ``Secretary'') shall make grants to the
Alaska Workforce Investment Board--
(A) to recruit and train adult and dislocated workers in
Alaska, including Alaska Natives, in the skills required to
construct and operate an Alaska gas pipeline system; and
(B) for the design and construction of a training facility
to be located in Fairbanks, Alaska, to support an Alaska gas
pipeline training program.
(2) Coordination with existing programs.--The training
program established with the grants authorized under
paragraph (1) shall be consistent with the vision and goals
set forth in the State of Alaska Unified Plan, as developed
pursuant to the Workforce Investment Act of 1998 (29 U.S.C.
2801 et seq.).
(b) Requirements for Grants.--The Secretary shall make a
grant under subsection (a) only if--
(1) the Governor of the State of Alaska requests the grant
funds and certifies in writing to the Secretary that there is
a reasonable expectation that the construction of the Alaska
natural gas pipeline system will commence by the date that is
2 years after the date of the certification; and
(2) the Secretary of Energy concurs in writing to the
Secretary with the certification made under paragraph (1)
after considering--
(A) the status of necessary Federal and State permits;
(B) the availability of financing for the Alaska natural
gas pipeline project; and
(C) other relevant factors.
(c) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary to carry out this section
$20,000,000. Not more than 15 percent of the funds may be
used for the facility described in subsection (a)(1)(B).
SEC. 384. SENSE OF CONGRESS CONCERNING NATURAL GAS DEMAND.
It is the sense of Congress that--
(1) North American demand for natural gas will increase
dramatically over the course of the next several decades;
(2) both the Alaska Natural Gas Pipeline and the Mackenzie
Delta Natural Gas project in Canada will be necessary to help
meet the increased demand for natural gas in North America;
(3) Federal and State officials should work together with
officials in Canada to ensure both projects can move forward
in a mutually beneficial fashion;
(4) Federal and State officials should acknowledge that the
smaller scope, fewer permitting requirements, and lower cost
of the Mackenzie Delta project means it will most likely be
completed before the Alaska Natural Gas Pipeline;
(5) natural gas production in the 48 contiguous States and
Canada will not be able to meet all domestic demand in the
coming decades; and
(6) as a result, natural gas delivered from Alaskan North
Slope will not displace or reduce the commercial viability of
Canadian natural gas produced from the Mackenzie Delta or
production from the 48 contiguous States.
SEC. 385. SENSE OF CONGRESS CONCERNING ALASKAN OWNERSHIP.
It is the sense of Congress that--
(1) Alaska Native Regional Corporations, companies owned
and operated by Alaskans, and individual Alaskans should have
the opportunity to own shares of the Alaska natural gas
pipeline in a way that promotes economic development for the
State; and
(2) to facilitate economic development in the State, all
project sponsors should negotiate in good faith with any
willing Alaskan person that desires to be involved in the
project.
SEC. 386. LOAN GUARANTEES.
(a) Authority.--(1) The Secretary may enter into agreements
with 1 or more holders of a certificate of public convenience
and necessity issued under section 373(b) of this Act or
section 9 of the Alaska Natural Gas Transportation Act of
1976 (15 U.S.C. 719g) to issue Federal guarantee instruments
with respect to loans and other debt obligations for a
qualified infrastructure project.
(2) Subject to the requirements of this section, the
Secretary may also enter into agreements with 1 or more
owners of the Canadian portion of a qualified infrastructure
project to issue Federal guarantee instruments with respect
to loans and other debt obligations for a qualified
infrastructure project as though such owner were a holder
described in paragraph (1).
(3) The authority of the Secretary to issue Federal
guarantee instruments under this section for a qualified
infrastructure project shall expire on the date that is 2
years after the date on which the final certificate of public
convenience and necessity (including any Canadian
certificates of public convenience and necessity) is issued
for the project. A final certificate shall be considered to
have been issued when all certificates of public convenience
and necessity have been
[[Page H4024]]
issued that are required for the initial transportation of
commercially economic quantities of natural gas from Alaska
to the continental United States.
(b) Conditions.--(1) The Secretary may issue a Federal
guarantee instrument for a qualified infrastructure project
only after a certificate of public convenience and necessity
under section 373(b) of this Act or an amended certificate
under section 9 of the Alaska Natural Gas Transportation Act
of 1976 (15 U.S.C. 719g) has been issued for the project.
(2) The Secretary may issue a Federal guarantee instrument
under this section for a qualified infrastructure project
only if the loan or other debt obligation guaranteed by the
instrument has been issued by an eligible lender.
(3) The Secretary shall not require as a condition of
issuing a Federal guarantee instrument under this section any
contractual commitment or other form of credit support of the
sponsors (other than equity contribution commitments and
completion guarantees), or any throughput or other guarantee
from prospective shippers greater than such guarantees as
shall be required by the project owners.
(c) Limitations on Amounts.--(1) The amount of loans and
other debt obligations guaranteed under this section for a
qualified infrastructure project shall not exceed 80 percent
of the total capital costs of the project, including interest
during construction.
(2) The principal amount of loans and other debt
obligations guaranteed under this section shall not exceed,
in the aggregate, $18,000,000,000, which amount shall be
indexed for United States dollar inflation from the date of
enactment of this Act, as measured by the Consumer Price
Index.
(d) Loan Terms and Fees.--(1) The Secretary may issue
Federal guarantee instruments under this section that take
into account repayment profiles and grace periods justified
by project cash flows and project-specific considerations.
The term of any loan guaranteed under this section shall not
exceed 30 years.
(2) An eligible lender may assess and collect from the
borrower such other fees and costs associated with the
application and origination of the loan or other debt
obligation as are reasonable and customary for a project
finance transaction in the oil and gas sector.
(e) Regulations.--The Secretary may issue regulations to
carry out this section.
(f) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to cover the
cost of loan guarantees under this section, as defined by
section 502(5) of the Federal Credit Reform Act of 1990 (2
U.S.C. 661a(5)). Such sums shall remain available until
expended.
(g) Definitions.--In this section, the following
definitions apply:
(1) The term ``Consumer Price Index'' means the Consumer
Price Index for all-urban consumers, United States city
average, as published by the Bureau of Labor Statistics, or
if such index shall cease to be published, any successor
index or reasonable substitute thereof.
(2) The term ``eligible lender'' means any non-Federal
qualified institutional buyer (as defined by section
230.144A(a) of title 17, Code of Federal Regulations (or any
successor regulation), known as Rule 144A(a) of the
Securities and Exchange Commission and issued under the
Securities Act of 1933), including--
(A) a qualified retirement plan (as defined in section
4974(c) of the Internal Revenue Code of 1986 (26 U.S.C.
4974(c)) that is a qualified institutional buyer; and
(B) a governmental plan (as defined in section 414(d) of
the Internal Revenue Code of 1986 (26 U.S.C. 414(d)) that is
a qualified institutional buyer.
(3) The term ``Federal guarantee instrument'' means any
guarantee or other pledge by the Secretary to pledge the full
faith and credit of the United States to pay all of the
principal and interest on any loan or other debt obligation
entered into by a holder of a certificate of public
convenience and necessity.
(4) The term ``qualified infrastructure project'' means an
Alaskan natural gas transportation project consisting of the
design, engineering, finance, construction, and completion of
pipelines and related transportation and production systems
(including gas treatment plants), and appurtenances thereto,
that are used to transport natural gas from the Alaska North
Slope to the continental United States.
TITLE IV--COAL
Subtitle A--Clean Coal Power Initiative
SEC. 401. AUTHORIZATION OF APPROPRIATIONS.
(a) Clean Coal Power Initiative.--There are authorized to
be appropriated to the Secretary of Energy (referred to in
this title as the ``Secretary'') to carry out the activities
authorized by this subtitle $200,000,000 for each of fiscal
years 2004 through 2012, to remain available until expended.
(b) Report.--The Secretary shall submit to Congress the
report required by this subsection not later than March 31,
2005. 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.
SEC. 402. PROJECT CRITERIA.
(a) In General.--The Secretary shall not provide funding
under this subtitle 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 enactment of this Act.
(b) Technical Criteria for Clean Coal Power Initiative.--
(1) Gasification projects.--
(A) In general.--In allocating the funds made available
under section 401(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) Technical milestones.--The Secretary shall periodically
set technical milestones specifying the emission and thermal
efficiency levels that coal gasification projects under this
subtitle shall be designed, and reasonably expected, to
achieve. The technical milestones shall become 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 not 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 and ensure that up to 40 percent of the
funds appropriated pursuant to section 401(a) are used for
projects not described in paragraph (1). The milestones shall
specify the emission and thermal efficiency levels that
projects funded under this paragraph shall be designed to and
reasonably expected to achieve. The technical milestones
shall become 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 units in
existence on the date of enactment of this Act, 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 carrying out this subtitle, 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 subtitle unless the recipient
documents 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 to enable the Secretary to ensure that the
award funds are spent efficiently and effectively; and
(3) a market exists for the technology being demonstrated
or applied, as evidenced by statements of interest in writing
from potential purchasers of the technology.
(d) Financial Assistance.--The Secretary shall provide
financial assistance to projects that meet the requirements
of subsections (a), (b), and (c) and are likely to--
(1) achieve overall cost reductions in the utilization of
coal to generate useful forms of energy;
(2) improve the competitiveness of coal among various forms
of energy in order to
[[Page H4025]]
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
various types of coal, that use coal as the primary feedstock
as of the date of 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 subtitle 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 (42 U.S.C.
7411), achievable for purposes of section 169 of that Act (42
U.S.C. 7479), or achievable in practice for purposes of
section 171 of that Act (42 U.S.C. 7501) solely by reason of
the use of such technology, or the achievement of such
emission reduction, by 1 or more facilities receiving
assistance under this subtitle.
SEC. 403. REPORT.
Not later than 1 year after the date of enactment of this
Act, and once every 2 years thereafter through 2012, the
Secretary, in consultation with other appropriate Federal
agencies, shall submit to Congress a report describing--
(1) the technical milestones set forth in section 402 and
how those milestones ensure progress toward meeting the
requirements of subsections (b)(1)(B) and (b)(2) of section
402; and
(2) the status of projects funded under this subtitle.
SEC. 404. CLEAN COAL CENTERS OF EXCELLENCE.
As part of the program authorized in section 401, 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 show the greatest potential for
advancing new clean coal technologies.
Subtitle B--Clean Power Projects
SEC. 411. 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-FC-22-91PC90544 on
such terms and conditions as the Secretary determines,
including interest rates and upfront payments.
SEC. 412. 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. 413. INTEGRATED GASIFICATION COMBINED CYCLE TECHNOLOGY.
The Secretary is authorized to provide loan guarantees for
a project to produce energy from a plant using integrated
gasification combined cycle technology located in a taconite-
producing region of the United States that is entitled under
the law of the State in which the plant is located to enter
into a long-term contract approved by a State Public Utility
Commission to sell at least 450 megawatts of output to a
utility.
SEC. 414. PETROLEUM COKE GASIFICATION.
The Secretary is authorized to provide loan guarantees for
at least 1 petroleum coke gasification polygeneration
project.
SEC. 415. INTEGRATED COAL/RENEWABLE ENERGY SYSTEM.
The Secretary is authorized, subject to the availability of
appropriations, to provide loan guarantees for a project to
produce energy from coal of less than 7000 btu/lb using
appropriate advanced integrated gasification combined cycle
technology, including repowering of existing facilities, that
is combined with wind and other renewable sources, minimizes
and offers the potential to sequester carbon dioxide
emissions, and provides a ready source of hydrogen for near-
site fuel cell demonstrations. The facility may be built in
stages, combined output shall be at least 200 megawatts at
successively more competitive rates, and the facility shall
be located in the Upper Great Plains. Section 402(b)
technical criteria apply, and the Federal cost share shall
not exceed 50 percent. The loan guarantees provided under
this section do not preclude the facility from receiving an
allocation for investment tax credits under section 48A of
the Internal Revenue Code of 1986. Utilizing this investment
tax credit does not prohibit the use of other Clean Coal
Program funding.
SEC. 416. ELECTRON SCRUBBING DEMONSTRATION.
The Secretary shall use $5,000,000 from amounts
appropriated to initiate, through the Chicago Operations
Office, a project to demonstrate the viability of high-energy
electron scrubbing technology on commercial-scale electrical
generation using high-sulfur coal.
Subtitle C--Federal Coal Leases
SEC. 421. REPEAL OF THE 160-ACRE LIMITATION FOR COAL LEASES.
Section 3 of the Mineral Leasing Act (30 U.S.C. 203) is
amended--
(1) in the first sentence--
(A) by striking ``Any person'' and inserting ``(a) Any
person'';
(B) by inserting a comma after ``may''; and
(C) by striking ``upon'' and all that follows through the
period and inserting the following: ``upon a finding by the
Secretary that the lease--
``(1) would be in the interest of the United States;
``(2) would not displace a competitive interest in the
land; and
``(3) would not include land or deposits that can be
developed as part of another potential or existing operation;
secure modifications of the original coal lease by including
additional coal land or coal deposits contiguous or cornering
to those embraced in the lease, but in no event shall the
total area added by any modifications to an existing coal
lease exceed 1280 acres, or add acreage larger than the
acreage in the original lease.'';
(2) in the second sentence, by striking ``The Secretary''
and inserting the following:
``(b) The Secretary''; and
(3) in the third sentence, by striking ``The minimum'' and
inserting the following:
``(c) The minimum''.
SEC. 422. 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. 423. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.
Section 7(b) of the Mineral Leasing Act (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 in a case in which operations under the lease
are interrupted by strikes, the elements, or casualties not
attributable to the lessee.
``(2)(A) The Secretary of the Interior may suspend the
condition of continued operation upon the payment of advance
royalties, if the Secretary determines that the public
interest will be served by the suspension.
``(B) Advance royalties required under subparagraph (A)
shall be computed based on--
``(i) the average price for coal sold in the spot market
from the same region during the last month of each applicable
continued operation year; or
``(ii) by using other methods established by the Secretary
of the Interior to capture the commercial value of coal,
and based on commercial quantities, as defined by regulation
by the Secretary of the Interior.
``(C) The aggregate number of years during the initial and
any extended term of any lease for which advance royalties
may be accepted in lieu of the condition of continued
operation shall not exceed 20.
``(3) The amount of any production royalty paid for any
year shall be reduced (but not below 0) by the amount of any
advance royalties paid under the lease, to the extent that
the advance royalties have not been used to reduce production
royalties for a prior year.
``(4) The Secretary may, upon 6 months' notice to a lessee,
cease to accept advance royalties in lieu of the requirement
of continued operation.
``(5) Nothing in this subsection affects the requirement
contained in the second sentence of subsection (a) relating
to commencement of production at the end of 10 years.''.
SEC. 424. 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 in the first sentence by striking ``and not later
than three years after a lease is issued,''.
SEC. 425. AMENDMENT RELATING TO FINANCIAL ASSURANCES WITH
RESPECT TO BONUS BIDS.
Section 2(a) of the Mineral Leasing Act (30 U.S.C. 201(a))
is amended by adding at the end the following:
``(4)(A) 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 on a cash bonus bid to a lessee or successor in
interest having a history of a timely payment of noncontested
coal royalties and advanced coal royalties in lieu of
production (where applicable) and bonus bid installment
payments.
``(B) The Secretary may waive any requirement that a lessee
provide a surety bond or other financial assurance for a coal
lease issued before the date of the enactment of the Energy
Policy Act of 2003 only if the Secretary determines that the
lessee has a history of making timely payments referred to in
subparagraph (A).
``(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 the installment is
past due--
``(A) the lease shall automatically terminate; and
``(B) any bonus payments already made to the United States
with respect to the lease shall not be returned to the lessee
or credited in any future lease sale.''.
SEC. 426. INVENTORY REQUIREMENT.
(a) Review of Assessments.--
[[Page H4026]]
(1) In general.--The Secretary of the Interior, in
consultation with the Secretary of Agriculture and the
Secretary, shall review coal assessments and other available
data to identify--
(A) public lands, other than National Park 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 subparagraph (A); and
(C) with respect to areas of such lands for which
sufficient data exists, resources of compliant coal and
supercompliant coal.
(2) Definitions.--In this subsection:
(A) Compliant coal.--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.
(B) Supercompliant coal.--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 of the Interior--
(1) shall complete the inventory under subsection (a)(1) 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 of the Interior shall submit to
Congress, 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 that inventory.
SEC. 427. APPLICATION OF AMENDMENTS.
The amendments made by this subtitle apply--
(1) with respect to any coal lease issued on or after the
date of enactment of this Act; and
(2) with respect to any coal lease issued before the date
of enactment of this Act, upon the earlier of--
(A) the date of readjustment of the lease as provided for
by section 7(a) of the Mineral Leasing Act (30 U.S.C.
207(a)); or
(B) the date the lessee requests such application.
Subtitle D--Coal and Related Programs
SEC. 441. CLEAN AIR COAL PROGRAM.
(a) Amendment.--The Energy Policy Act of 1992 is amended by
adding the following new title at the end thereof:
``TITLE XXXI--CLEAN AIR COAL PROGRAM
``SEC. 3101. FINDINGS; PURPOSES; DEFINITIONS.
``(a) Findings.--The Congress finds that--
``(1) new environmental regulations present additional
challenges for coal-fired electrical generation in the
private marketplace; and
``(2) the Department of Energy, in cooperation with
industry, has already fully developed and commercialized
several new clean-coal technologies that will allow the clean
use of coal.
``(b) Purposes.--The purposes of this title are to--
``(1) promote national energy policy and energy security,
diversity, and economic competitiveness benefits that result
from the increased use of coal;
``(2) mitigate financial risks, reduce the cost, and
increase the marketplace acceptance of the new clean coal
technologies; and
``(3) advance the deployment of pollution control equipment
to meet the current and future obligations of coal-fired
generation units regulated under the Clean Air Act (42 U.S.C.
7402 and following).
``SEC. 3102. AUTHORIZATION OF PROGRAM.
``The Secretary shall carry out a program to facilitate
production and generation of coal-based power and the
installation of pollution control equipment.
``SEC. 3103. AUTHORIZATION OF APPROPRIATIONS.
``(a) Pollution Control Projects.--There are authorized to
be appropriated to the Secretary $300,000,000 for fiscal year
2005, $100,000,000 for fiscal year 2006, $40,000,000 for
fiscal year 2007, $30,000,000 for fiscal year 2008, and
$30,000,000 for fiscal year 2009, to remain available until
expended, for carrying out the program for pollution control
projects, which may include--
``(1) pollution control equipment and processes for the
control of mercury air emissions;
``(2) pollution control equipment and processes for the
control of nitrogen dioxide air emissions or sulfur dioxide
emissions;
``(3) pollution control equipment and processes for the
mitigation or collection of more than one pollutant;
``(4) advanced combustion technology for the control of at
least two pollutants, including mercury, particulate matter,
nitrogen oxides, and sulfur dioxide, which may also be
designed to improve the energy efficiency of the unit; and
``(5) advanced pollution control equipment and processes
designed to allow use of the waste byproducts or other
byproducts of the equipment or an electrical generation unit
designed to allow the use of byproducts.
Funds appropriated under this subsection which are not
awarded before fiscal year 2011 may be applied to projects
under subsection (b), in addition to amounts authorized under
subsection (b).
``(b) Generation Projects.--There are authorized to be
appropriated to the Secretary $150,000,000 for fiscal year
2006, $250,000,000 for each of the fiscal years 2007 through
2011, and $100,000,000 for fiscal year 2012, to remain
available until expended, for generation projects and air
pollution control projects. Such projects may include--
``(1) coal-based electrical generation equipment and
processes, including gasification combined cycle or other
coal-based generation equipment and processes;
``(2) associated environmental control equipment, that will
be cost-effective and that is designed to meet anticipated
regulatory requirements;
``(3) coal-based electrical generation equipment and
processes, including gasification fuel cells, gasification
coproduction, and hybrid gasification/combustion projects;
and
``(4) advanced coal-based electrical generation equipment
and processes, including oxidation combustion techniques,
ultra-supercritical boilers, and chemical looping, which the
Secretary determines will be cost-effective and could
substantially contribute to meeting anticipated environmental
or energy needs.
``(c) Limitation.--Funds placed at risk during any fiscal
year for Federal loans or loan guarantees pursuant to this
title may not exceed 30 percent of the total funds obligated
under this title.
``SEC. 3104. AIR POLLUTION CONTROL PROJECT CRITERIA.
``The Secretary shall pursuant to authorizations contained
in section 3103 provide funding for air pollution control
projects designed to facilitate compliance with Federal and
State environmental regulations, including any regulation
that may be established with respect to mercury.
``SEC. 3105. CRITERIA FOR GENERATION PROJECTS.
``(a) Criteria.--The Secretary shall establish criteria on
which selection of individual projects described in section
3103(b) should be based. The Secretary may modify the
criteria as appropriate to reflect improvements in equipment,
except that the criteria shall not be modified to be less
stringent. These selection criteria shall include--
``(1) prioritization of projects whose installation is
likely to result in significant air quality improvements in
nonattainment air quality areas;
``(2) prioritization of projects that result in the
repowering or replacement of older, less efficient units;
``(3) documented broad interest in the procurement of the
equipment and utilization of the processes used in the
projects by electrical generator owners or operators;
``(4) equipment and processes beginning in 2005 through
2010 that are projected to achieve an thermal efficiency of--
``(A) 40 percent for coal of more than 9,000 Btu per pound
based on higher heating values;
``(B) 38 percent for coal of 7,000 to 9,000 Btu per pound
based on higher heating values; and
``(C) 36 percent for coal of less than 7,000 Btu per pound
based on higher heating values,
except that energy used for coproduction or cogeneration
shall not be counted in calculating the thermal efficiency
under this paragraph; and
``(5) equipment and processes beginning in 2011 and 2012
that are projected to achieve an thermal efficiency of--
``(A) 45 percent for coal of more than 9,000 Btu per pound
based on higher heating values;
``(B) 44 percent for coal of 7,000 to 9,000 Btu per pound
based on higher heating values; and
``(C) 40 percent for coal of less than 7,000 Btu per pound
based on higher heating values,
except that energy used for coproduction or cogeneration
shall not be counted in calculating the thermal efficiency
under this paragraph.
``(b) Selection.--(1) In selecting the projects, up to 25
percent of the projects selected may be either coproduction
or cogeneration or other gasification projects, but at least
25 percent of the projects shall be for the sole purpose of
electrical generation, and priority should be given to
equipment and projects less than 600 MW to foster and promote
standard designs.
``(2) The Secretary shall give priority to projects that
have been developed and demonstrated that are not yet cost
competitive, and for coal energy generation projects that
advance efficiency, environmental performance, or cost
competitiveness significantly beyond the level of pollution
control equipment that is in operation on a full scale.
``SEC. 3106. FINANCIAL CRITERIA.
``(a) In General.--The Secretary shall only provide
financial assistance to projects that meet the requirements
of sections 3103 and 3104 and are likely to--
``(1) achieve overall cost reductions in the utilization of
coal to generate useful forms of energy; and
``(2) improve the competitiveness of coal in order to
maintain a diversity of domestic fuel choices in the United
States to meet electricity generation requirements.
``(b) Conditions.--The Secretary shall not provide a
funding award under this title unless--
``(1) the award recipient is financially viable without the
receipt of additional Federal funding; and
``(2) the recipient provides sufficient information to the
Secretary for the Secretary to ensure that the award funds
are spent efficiently and effectively.
``(c) Equal Access.--The Secretary shall, to the extent
practical, utilize cooperative
[[Page H4027]]
agreement, loan guarantee, and direct Federal loan mechanisms
designed to ensure that all electrical generation owners have
equal access to these technology deployment incentives. The
Secretary shall develop and direct a competitive solicitation
process for the selection of technologies and projects under
this title.
``SEC. 3107. FEDERAL SHARE.
``The Federal share of the cost of a coal or related
technology project funded by the Secretary under this title
shall not exceed 50 percent. For purposes of this title,
Federal funding includes only appropriated funds.
``SEC. 3108. APPLICABILITY.
``No technology, or level of emission reduction, shall be
treated as adequately demonstrated for purposes of section
111 of the Clean Air Act (42 U.S.C. 7411), achievable for
purposes of section 169 of the Clean Air Act (42 U.S.C.
7479), or achievable in practice for purposes of section 171
of the Clean Air Act (42 U.S.C. 7501) 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 title.''.
(b) Table of Contents Amendment.--The table of contents of
the Energy Policy Act of 1992 is amended by adding at the end
the following:
``TITLE XXXI CLEAN AIR COAL PROGRAM
``Sec. 3101. Findings; purposes; definitions.
``Sec. 3102. Authorization of program.
``Sec. 3103. Authorization of appropriations.
``Sec. 3104. Air pollution control project criteria.
``Sec. 3105. Criteria for generation projects.
``Sec. 3106. Financial criteria.
``Sec. 3107. Federal share.
``Sec. 3108. Applicability.''.
TITLE V--INDIAN ENERGY
SEC. 501. SHORT TITLE.
This title may be cited as the ``Indian Tribal Energy
Development and Self-Determination Act of 2004''.
SEC. 502. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS.
(a) In General.--Title II of the Department of Energy
Organization Act (42 U.S.C. 7131 et seq.) is amended by
adding at the end the following:
``Office of Indian Energy Policy and Programs
``Sec. 217. (a) Establishment.--There is established within
the Department an Office of Indian Energy Policy and Programs
(referred to in this section as the `Office'). The Office
shall be headed by a Director, who shall be appointed by the
Secretary and compensated at a rate equal to that of level IV
of the Executive Schedule under section 5315 of title 5,
United States Code.
``(b) Duties of Director.--The Director, in accordance with
Federal policies promoting Indian self-determination and the
purposes of this Act, shall provide, direct, foster,
coordinate, and implement energy planning, education,
management, conservation, and delivery programs of the
Department that--
``(1) promote Indian tribal energy development, efficiency,
and use;
``(2) reduce or stabilize energy costs;
``(3) enhance and strengthen Indian tribal energy and
economic infrastructure relating to natural resource
development and electrification; and
``(4) bring electrical power and service to Indian land and
the homes of tribal members located on Indian lands or
acquired, constructed, or improved (in whole or in part) with
Federal funds.''.
(b) Conforming Amendments.--
(1) The table of contents of the Department of Energy
Organization Act (42 U.S.C. prec. 7101) is amended--
(A) in the item relating to section 209, by striking
``Section'' and inserting ``Sec.''; and
(B) by striking the items relating to sections 213 through
216 and inserting the following:
``Sec. 213. Establishment of policy for National Nuclear Security
Administration.
``Sec. 214. Establishment of security, counterintelligence, and
intelligence policies.
``Sec. 215. Office of Counterintelligence.
``Sec. 216. Office of Intelligence.
``Sec. 217. Office of Indian Energy Policy and Programs.''.
(2) Section 5315 of title 5, United States Code, is amended
by inserting ``Director, Office of Indian Energy Policy and
Programs, Department of Energy.'' after ``Inspector General,
Department of Energy.''.
SEC. 503. INDIAN ENERGY.
(a) In General.--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.
``For purposes of this title:
``(1) The term `Director' means the Director of the Office
of Indian Energy Policy and Programs, Department of Energy.
``(2) The term `Indian land' means--
``(A) any land located within the boundaries of an Indian
reservation, pueblo, or rancheria;
``(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 or an individual Indian;
``(ii) by an Indian tribe or an individual Indian, subject
to restriction against alienation under laws of the United
States; or
``(iii) by a dependent Indian community; and
``(C) land that is owned by an Indian tribe and was
conveyed by the United States to a Native Corporation
pursuant to the Alaska Native Claims Settlement Act (43
U.S.C. 1601 et seq.), or that was conveyed by the United
States to a Native Corporation in exchange for such land.
``(3) The term `Indian reservation' includes--
``(A) an Indian reservation in existence in any State or
States as of the date of enactment of this paragraph;
``(B) a public domain Indian allotment; and
``(C) 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) The term `Indian tribe' has the meaning given the
term in section 4 of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450b), except that the
term `Indian tribe', for the purpose of paragraph (11) and
sections 2603(b)(3) and 2604, shall not include any Native
Corporation.
``(5) The term `integration of energy resources' means any
project or activity that promotes the location and operation
of a facility (including any pipeline, gathering system,
transportation system or facility, or electric transmission
or distribution facility) on or near Indian land to process,
refine, generate electricity from, or otherwise develop
energy resources on, Indian land.
``(6) 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).
``(7) The term `organization' means a partnership, joint
venture, limited liability company, or other unincorporated
association or entity that is established to develop Indian
energy resources.
``(8) The term `Program' means the Indian energy resource
development program established under section 2602(a).
``(9) The term `Secretary' means the Secretary of the
Interior.
``(10) The term `tribal energy resource development
organization' means an organization of 2 or more entities, at
least 1 of which is an Indian tribe, that has the written
consent of the governing bodies of all Indian tribes
participating in the organization to apply for a grant, loan,
or other assistance authorized by section 2602.
``(11) The term `tribal land' means any land or interests
in land owned by any Indian tribe, title to which is held in
trust by the United States or which is subject to a
restriction against alienation under laws of the United
States.
``SEC. 2602. INDIAN TRIBAL ENERGY RESOURCE DEVELOPMENT.
``(a) Department of the Interior Program.--
``(1) To assist Indian tribes in the development of energy
resources and further the goal of Indian self-determination,
the Secretary shall establish and implement an Indian energy
resource development program to assist consenting Indian
tribes and tribal energy resource development organizations
in achieving the purposes of this title.
``(2) In carrying out the Program, the Secretary shall--
``(A) provide development grants to Indian tribes and
tribal energy resource development organizations for use in
developing or obtaining the managerial and technical capacity
needed to develop energy resources on Indian land, and to
properly account for resulting energy production and
revenues;
``(B) provide grants to Indian tribes and tribal energy
resource development organizations for use in carrying out
projects to promote the integration of energy resources, and
to process, use, or develop those energy resources, on Indian
land; and
``(C) provide low-interest loans to Indian tribes and
tribal energy resource development organizations for use in
the promotion of energy resource development on Indian land
and integration of energy resources.
``(3) There are authorized to be appropriated to carry out
this subsection such sums as are necessary for each of fiscal
years 2004 through 2014.
``(b) Department of Energy Indian Energy Education Planning
and Management Assistance Program.--
``(1) The Director shall establish programs to assist
consenting Indian tribes in meeting energy education,
research and development, planning, and management needs.
``(2) In carrying out this subsection, the Director may
provide grants, on a competitive basis, to an Indian tribe or
tribal energy resource development organization for use in
carrying out--
``(A) energy, energy efficiency, and energy conservation
programs;
``(B) studies and other activities supporting tribal
acquisitions of energy supplies, services, and facilities;
``(C) planning, construction, development, operation,
maintenance, and improvement of tribal electrical generation,
transmission, and distribution facilities located on Indian
land; and
``(D) development, construction, and interconnection of
electric power transmission facilities located on Indian land
with other electric transmission facilities.
``(3)(A) The Director may develop, in consultation with
Indian tribes, a formula for providing grants under this
subsection.
[[Page H4028]]
``(B) In providing a grant under this subsection, the
Director shall give priority to an application received from
an Indian tribe with inadequate electric service (as
determined by the Director).
``(4) The Secretary of Energy may issue such regulations as
necessary to carry out this subsection.
``(5) There are authorized to be appropriated to carry out
this subsection $20,000,000 for each of fiscal years 2004
through 2014.
``(c) Department of Energy Loan Guarantee Program.--
``(1) Subject to paragraph (3), the Secretary of Energy may
provide loan guarantees (as defined in section 502 of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) for not
more than 90 percent of the unpaid principal and interest due
on any loan made to any Indian tribe for energy development.
``(2) A loan guarantee under this subsection shall be made
by--
``(A) a financial institution subject to examination by the
Secretary of Energy; or
``(B) an Indian tribe, from funds of the Indian tribe.
``(3) The aggregate outstanding amount guaranteed by the
Secretary of Energy at any time under this subsection shall
not exceed $2,000,000,000.
``(4) The Secretary of Energy may issue such regulations as
the Secretary of Energy determines are necessary to carry out
this subsection.
``(5) There are authorized to be appropriated such sums as
are necessary to carry out this subsection, to remain
available until expended.
``(6) Not later than 1 year from the date of enactment of
this section, the Secretary of Energy shall report to
Congress on the financing requirements of Indian tribes for
energy development on Indian land.
``(d) Federal Agencies-Indian Energy Preference.--
``(1) In purchasing electricity or any other energy product
or byproduct, a Federal agency or department may give
preference to an energy and resource production enterprise,
partnership, consortium, corporation, or other type of
business organization the majority of the interest in which
is owned and controlled by 1 or more Indian tribes.
``(2) In carrying out this subsection, a Federal agency or
department shall not--
``(A) pay more than the prevailing market price for an
energy product or byproduct; or
``(B) obtain less than prevailing market terms and
conditions.
``SEC. 2603. INDIAN TRIBAL ENERGY RESOURCE REGULATION.
``(a) Grants.--The Secretary may provide to Indian tribes,
on an annual basis, grants for use in accordance with
subsection (b).
``(b) Use of Funds.--Funds from a grant provided under this
section may be used--
``(1) by an Indian tribe for the development of a tribal
energy resource inventory or tribal energy resource on Indian
land;
``(2) by an Indian tribe for the development of a
feasibility study or other report necessary to the
development of energy resources on Indian land;
``(3) by an Indian tribe (other than an Indian Tribe in
Alaska except the Metlakatla Indian Community) for the
development and enforcement of tribal laws (including
regulations) relating to tribal energy resource development
and the development of technical infrastructure to protect
the environment under applicable law; or
``(4) by a Native Corporation for the development and
implementation of corporate policies and the development of
technical infrastructure to protect the environment under
applicable law; and
``(5) by an Indian tribe for the training of employees
that--
``(A) are engaged in the development of energy resources on
Indian land; or
``(B) are responsible for protecting the environment.
``(c) Other Assistance.--In carrying out the obligations of
the United States under this title, the Secretary shall
ensure, to the maximum extent practicable and to the extent
of available resources, that upon the request of an Indian
tribe, the Indian tribe shall have available scientific and
technical information and expertise, for use in the Indian
tribe's regulation, development, and management of energy
resources on Indian land. The Secretary may fulfill this
responsibility either directly, through the use of Federal
officials, or indirectly, by providing financial assistance
to the Indian tribe to secure independent assistance.
``SEC. 2604. LEASES, BUSINESS AGREEMENTS, AND RIGHTS-OF-WAY
INVOLVING ENERGY DEVELOPMENT OR TRANSMISSION.
``(a) Leases and Business Agreements.--Subject to the
provisions of this section--
``(1) an Indian tribe may, at its discretion, enter into a
lease or business agreement for the purpose of energy
resource development on tribal land, including a lease or
business agreement for--
``(A) exploration for, extraction of, processing of, or
other development of the Indian tribe's energy mineral
resources located on tribal land; and
``(B) construction or operation of an electric generation,
transmission, or distribution facility located on tribal land
or a facility to process or refine energy resources developed
on tribal land; and
``(2) such lease or business agreement described in
paragraph (1) shall not require the approval of the Secretary
under section 2103 of the Revised Statutes (25 U.S.C. 81) or
any other provision of law, if--
``(A) the lease or business agreement is executed pursuant
to a tribal energy resource agreement approved by the
Secretary under subsection (e);
``(B) the term of the lease or business agreement does not
exceed--
``(i) 30 years; or
``(ii) in the case of a lease for the production of oil
resources, gas resources, or both, 10 years and as long
thereafter as oil or gas is produced in paying quantities;
and
``(C) the Indian tribe has entered into a tribal energy
resource agreement with the Secretary, as described in
subsection (e), relating to the development of energy
resources on tribal land (including the periodic review and
evaluation of the activities of the Indian tribe under the
agreement, to be conducted pursuant to the provisions
required by subsection (e)(2)(D)(i)).
``(b) Rights-Of-Way for Pipelines or Electric Transmission
or Distribution Lines.--An Indian tribe may grant a right-of-
way over tribal land for a pipeline or an electric
transmission or distribution line without approval by the
Secretary if--
``(1) the right-of-way is executed in accordance with a
tribal energy resource agreement approved by the Secretary
under subsection (e);
``(2) the term of the right-of-way does not exceed 30
years;
``(3) the pipeline or electric transmission or distribution
line serves--
``(A) an electric generation, transmission, or distribution
facility located on tribal land; or
``(B) a facility located on tribal land that processes or
refines energy resources developed on tribal land; and
``(4) the Indian tribe has entered into a tribal energy
resource agreement with the Secretary, as described in
subsection (e), relating to the development of energy
resources on tribal land (including the periodic review and
evaluation of the Indian tribe's activities under such
agreement described in subparagraphs (D) and (E) of
subsection (e)(2)).
``(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 relating to the development of tribal energy resources
pursuant to the provisions of this section shall be valid
unless the lease, business agreement, or right-of-way is
authorized by the provisions of a tribal energy resource
agreement approved by the Secretary under subsection (e)(2).
``(e) Tribal Energy Resource Agreements.--
``(1) On issuance of regulations under paragraph (8), an
Indian tribe may submit to the Secretary for approval a
tribal energy resource agreement governing leases, business
agreements, and rights-of-way under this section.
``(2)(A) Not later than 180 days after the date on which
the Secretary receives a tribal energy resource agreement
submitted by an Indian tribe under paragraph (1), or not
later than 60 days after the Secretary receives a revised
tribal energy resource agreement submitted by an Indian tribe
under paragraph (4)(C), (or such later date as may be agreed
to by the Secretary and the Indian tribe), the Secretary
shall approve or disapprove the tribal energy resource
agreement.
``(B) The Secretary shall approve a tribal energy resource
agreement submitted under paragraph (1) if--
``(i) the Secretary determines that the Indian tribe has
demonstrated that the Indian tribe has sufficient capacity to
regulate the development of energy resources of the Indian
tribe;
``(ii) the tribal energy resource agreement includes
provisions required under subparagraph (D); and
``(iii) the tribal energy resource agreement includes
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 the economic return to the Indian tribe
under leases, business agreements, and rights-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;
``(X) establish a process for consultation with any
affected States concerning off-reservation impacts, if any,
identified pursuant to the provisions required under
subparagraph (C)(i);
``(XI) describe the remedies for breach of the lease,
business agreement, or right-of-way;
[[Page H4029]]
``(XII) require each lease, business agreement, and right-
of-way to include a statement that, in the event that any of
its provisions violates an express term or requirement set
forth in the tribal energy resource agreement pursuant to
which it was executed--
``(aa) such provision shall be null and void; and
``(bb) if the Secretary determines such provision to be
material, the Secretary shall have the authority to suspend
or rescind the lease, business agreement, or right-of-way or
take other appropriate action that the Secretary determines
to be in the best interest of the Indian tribe;
``(XIII) require each lease, business agreement, and right-
of-way to provide that it will become effective on the date
on which a copy of the executed lease, business agreement, or
right-of-way is delivered to the Secretary in accordance with
regulations adopted pursuant to this subsection; and
``(XIV) include citations to tribal laws, regulations, or
procedures, if any, that set out tribal remedies that must be
exhausted before a petition may be submitted to the Secretary
pursuant to paragraph (7)(B).
``(C) Tribal energy resource agreements 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), including effects on cultural resources;
``(ii) the identification of proposed mitigation;
``(iii) a process for ensuring that the public is informed
of and has an opportunity to comment on the environmental
impacts of the proposed action before tribal approval of the
lease, business agreement, or right-of-way; and
``(iv) sufficient administrative support and technical
capability to carry out the environmental review process.
``(D) A tribal energy resource agreement negotiated between
the Secretary and an Indian tribe in accordance with this
subsection shall include--
``(i) provisions requiring the Secretary to conduct a
periodic review and evaluation to monitor the performance of
the Indian tribe's activities associated with the development
of energy resources under the tribal energy resource
agreement; and
``(ii) when such review and evaluation result in a finding
by the Secretary of imminent jeopardy to a physical trust
asset arising from a violation of the tribal energy resource
agreement or applicable Federal laws, provisions authorizing
the Secretary to take appropriate actions determined by the
Secretary to be necessary to protect such asset, which
actions may include reassumption of responsibility for
activities associated with the development of energy
resources on tribal land until the violation and conditions
that gave rise to such jeopardy have been corrected.
``(E) The periodic review and evaluation described in
subparagraph (D) shall be conducted on an annual basis,
except that, after the third such annual review and
evaluation, the Secretary and the Indian tribe may mutually
agree to amend the tribal energy resource agreement to
authorize the review and evaluation required by subparagraph
(D) to be conducted once every 2 years.
``(3) The Secretary shall provide notice and opportunity
for public comment on tribal energy resource agreements
submitted for approval under paragraph (1). The Secretary's
review of a tribal energy resource agreement under the
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.) shall be limited to the direct effects of that
approval.
``(4) If the Secretary disapproves a tribal energy resource
agreement submitted by an Indian tribe under paragraph (1),
the Secretary shall, not later than 10 days after the date of
disapproval--
``(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 tribal energy resource agreement.
``(5) If an Indian tribe executes a lease or business
agreement or grants a right-of-way in accordance with a
tribal energy resource agreement approved under this
subsection, the Indian tribe shall, in accordance with the
process and requirements set forth in the Secretary's
regulations adopted pursuant to paragraph (8), 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 a tribal energy resource agreement or
a lease, business agreement, or right-of-way that permits
payments to be made directly to the Indian tribe, information
and documentation of those payments sufficient to enable the
Secretary to discharge the trust responsibility of the United
States to enforce the terms of, and protect the Indian
tribe's rights under, the lease, business agreement, or
right-of-way.
``(6)(A) For purposes of the activities to be undertaken by
the Secretary pursuant to this section, the Secretary shall--
``(i) carry out such activities in a manner consistent with
the trust responsibility of the United States relating to
mineral and other trust resources; and
``(ii) act in good faith and in the best interests of the
Indian tribes.
``(B) Subject to the provisions of subsections (a)(2), (b),
and (c) waiving the requirement of Secretarial approval of
leases, business agreements, and rights-of-way executed
pursuant to tribal energy resource agreements approved under
this section, and the provisions of subparagraph (D), nothing
in this section shall absolve the United States from any
responsibility to Indians or Indian tribes, including, but
not limited to, those which derive from the trust
relationship or from any treaties, statutes, and other laws
of the United States, Executive Orders, or agreements between
the United States and any Indian tribe.
``(C) The Secretary shall continue to have a trust
obligation to ensure that the rights and interests of an
Indian tribe are protected in the event that--
``(i) any other party to any such lease, business
agreement, or right-of-way violates any applicable provision
of Federal law or the terms of any lease, business agreement,
or right-of-way under this section; or
``(ii) any provision in such lease, business agreement, or
right-of-way violates any express provision or requirement
set forth in the tribal energy resource agreement pursuant to
which the lease, business agreement, or right-of-way was
executed.
``(D) Notwithstanding subparagraph (B), the United States
shall not be liable to any party (including any Indian tribe)
for any of the negotiated terms of, or any losses resulting
from the negotiated terms of, a lease, business agreement, or
right-of-way executed pursuant to and in accordance with a
tribal energy resource agreement approved by the Secretary
under paragraph (2). For the purpose of this subparagraph,
the term `negotiated terms' means any terms or provisions
that are negotiated by an Indian tribe and any other party or
parties to a lease, business agreement, or right-of-way
entered into pursuant to an approved tribal energy resource
agreement.
``(7)(A) In this paragraph, the term `interested party'
means any person or entity the interests of which have
sustained or will sustain a significant adverse environmental
impact as a result of the failure of an Indian tribe to
comply with a tribal energy resource agreement of the Indian
tribe approved by the Secretary under paragraph (2).
``(B) After exhaustion of tribal remedies, and in
accordance with the process and requirements set forth in
regulations adopted by the Secretary pursuant to paragraph
(8), an interested party may submit to the Secretary a
petition to review compliance of an Indian tribe with a
tribal energy resource agreement of the Indian tribe approved
by the Secretary under paragraph (2).
``(C)(i) Not later than 120 days after the date on which
the Secretary receives a petition under subparagraph (B), the
Secretary shall determine whether the Indian tribe is not in
compliance with the tribal energy resource agreement, as
alleged in the petition.
``(ii) The Secretary may adopt procedures under paragraph
(8) authorizing an extension of time, not to exceed 120 days,
for making the determination under clause (i) in any case in
which the Secretary determines that additional time is
necessary to evaluate the allegations of the petition.
``(iii) Subject to subparagraph (D), if the Secretary
determines that the Indian tribe is not in compliance with
the tribal energy resource agreement as alleged in the
petition, the Secretary shall take such action as is
necessary to ensure compliance with the provisions of the
tribal energy resource agreement, which action may include--
``(I) temporarily suspending some or all activities under a
lease, business agreement, or right-of-way under this section
until the Indian tribe or such activities are in compliance
with the provisions of the approved tribal energy resource
agreement; or
``(II) rescinding approval of all or part of the tribal
energy resource agreement, and if all of such agreement is
rescinded, reassuming the responsibility for approval of any
future leases, business agreements, or rights-of-way
described in subsections (a) and (b).
``(D) Prior to seeking to ensure compliance with the
provisions of the tribal energy resource agreement of an
Indian tribe under subparagraph (C)(iii), the Secretary
shall--
``(i) make a written determination that describes the
manner in which the tribal energy resource agreement has been
violated;
``(ii) provide the Indian tribe with a written notice of
the violations together with the written determination; and
``(iii) before taking any action described in subparagraph
(C)(iii) or seeking any other remedy, provide the Indian
tribe with a hearing and a reasonable opportunity to attain
compliance with the tribal energy resource agreement.
``(E) An Indian tribe described in subparagraph (D) shall
retain all rights to appeal as provided in regulations issued
by the Secretary.
``(8) Not later than 1 year after the date of enactment of
the Indian Tribal Energy Development and Self-Determination
Act of 2004, the Secretary shall issue regulations that
implement the provisions of this subsection, including--
``(A) criteria to be used in determining the capacity of an
Indian tribe described in paragraph (2)(B)(i), including the
experience of the Indian tribe in managing natural resources
and financial and administrative resources available for use
by the Indian tribe
[[Page H4030]]
in implementing the approved tribal energy resource agreement
of the Indian tribe;
``(B) a process and requirements in accordance with which
an Indian tribe may--
``(i) voluntarily rescind a tribal energy resource
agreement approved by the Secretary under this subsection;
and
``(ii) return to the Secretary the responsibility to
approve any future leases, business agreements, and rights-
of-way described in this subsection;
``(C) provisions setting forth the scope of, and procedures
for, the periodic review and evaluation described in
subparagraphs (D) and (E) of paragraph (2), including
provisions for review of transactions, reports, site
inspections, and any other review activities the Secretary
determines to be appropriate; and
``(D) provisions defining final agency actions after
exhaustion of administrative appeals from determinations of
the Secretary under paragraph (7).
``(f) No Effect on Other Law.--Nothing in this section
affects the application of--
``(1) any Federal environment law;
``(2) the Surface Mining Control and Reclamation Act of
1977 (30 U.S.C. 1201 et seq.); or
``(3) except as otherwise provided in this title, the
Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et
seq.) and the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.).
``(g) Authorization of Appropriations.--There are
authorized to be appropriated to the Secretary such sums as
are necessary for each of fiscal years 2004 through 2014 to
implement the provisions of this section and to make grants
or provide other appropriate assistance to Indian tribes to
assist the Indian tribes in developing and implementing
tribal energy resource agreements in accordance with the
provisions of this section.
``SEC. 2605. INDIAN MINERAL DEVELOPMENT REVIEW.
``(a) In General.--The Secretary shall conduct a review of
all activities being conducted under the Indian Mineral
Development Act of 1982 (25 U.S.C. 2101 et seq.) as of that
date.
``(b) Report.--Not later than 1 year after the date of
enactment of the Indian Tribal Energy Development and Self-
Determination Act of 2004, the Secretary shall submit to
Congress a report that includes--
``(1) the results of the review;
``(2) recommendations to ensure that Indian tribes have the
opportunity to develop Indian energy resources; and
``(3) an analysis of the barriers to the development of
energy resources on Indian land (including legal, fiscal,
market, and other barriers), along with recommendations for
the removal of those barriers.
``SEC. 2606. FEDERAL POWER MARKETING ADMINISTRATIONS.
``(a) Definitions.--In this section:
``(1) The term `Administrator' means the Administrator of
the Bonneville Power Administration and the Administrator of
the Western Area Power Administration.
``(2) The term `power marketing administration' means--
``(A) the Bonneville Power Administration;
``(B) the Western Area Power Administration; and
``(C) any other power administration the power allocation
of which is used by or for the benefit of an Indian tribe
located in the service area of the administration.
``(b) Encouragement of Indian Tribal Energy Development.--
Each Administrator shall encourage Indian tribal energy
development by taking such actions as are appropriate,
including administration of programs of the Bonneville Power
Administration and the Western Area Power Administration, in
accordance with this section.
``(c) Action by the Administrator.--In carrying out this
section, and in accordance with existing law--
``(1) each Administrator shall consider the unique
relationship that exists between the United States and Indian
tribes;
``(2) power allocations from the Western Area Power
Administration to Indian tribes may be used to meet firming
and reserve needs of Indian-owned energy projects on Indian
land;
``(3) the Administrator of the Western Area Power
Administration may purchase non-federally generated power
from Indian tribes to meet the firming and reserve
requirements of the Western Area Power Administration; and
``(4) each Administrator shall not pay more than the
prevailing market price for an energy product nor obtain less
than prevailing market terms and conditions.
``(d) Assistance for Transmission System Use.--(1) An
Administrator may provide technical assistance to Indian
tribes seeking to use the high-voltage transmission system
for delivery of electric power.
``(2) The costs of technical assistance provided under
paragraph (1) shall be funded by the Secretary of Energy
using nonreimbursable funds appropriated for that purpose, or
by the applicable Indian tribes.
``(e) Power Allocation Study.--Not later than 2 years after
the date of enactment of the Indian Tribal Energy Development
and Self-Determination Act of 2004, the Secretary of Energy
shall submit to Congress a report that--
``(1) describes the use by Indian tribes of Federal power
allocations of the Western Area Power Administration (or
power sold by the Southwestern Power Administration) and the
Bonneville Power Administration to or for the benefit of
Indian tribes in service areas of those administrations; and
``(2) identifies--
``(A) the quantity of power allocated to, or used for the
benefit of, Indian tribes by the Western Area Power
Administration;
``(B) the quantity of power sold to Indian tribes by other
power marketing administrations; and
``(C) barriers that impede tribal access to and use of
Federal power, including an assessment of opportunities to
remove those barriers and improve the ability of power
marketing administrations to deliver Federal power.
``(f) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this section
$750,000, which shall remain available until expended and
shall not be reimbursable.
``SEC. 2607. WIND AND HYDROPOWER FEASIBILITY STUDY.
``(a) Study.--The Secretary of Energy, in coordination with
the Secretary of the Army and the Secretary, shall conduct a
study of the cost and feasibility of developing a
demonstration project that would use wind energy generated by
Indian tribes and hydropower generated by the Army Corps of
Engineers on the Missouri River to supply firming power to
the Western Area Power Administration.
``(b) Scope of Study.--The study shall--
``(1) determine the feasibility of the blending of wind
energy and hydropower generated from the Missouri River dams
operated by the Army Corps of Engineers;
``(2) review historical and projected requirements for
firming power and the patterns of availability and use of
firming power;
``(3) assess the wind energy resource potential on tribal
land and projected cost savings through a blend of wind and
hydropower over a 30-year period;
``(4) determine seasonal capacity needs and associated
transmission upgrades for integration of tribal wind
generation; and
``(5) include an independent tribal engineer as a study
team member.
``(c) Report.--Not later than 1 year after the date of
enactment of the Energy Policy Act of 2003, the Secretary and
Secretary of the Army shall submit to Congress a report that
describes the results of the study, including--
``(1) an analysis of the potential energy cost or benefits
to the customers of the Western Area Power Administration
through the use of combined wind and hydropower;
``(2) an evaluation of whether a combined wind and
hydropower system can reduce reservoir fluctuation, enhance
efficient and reliable energy production, and provide
Missouri River management flexibility;
``(3) recommendations for a demonstration project that
could be carried out by the Western Area Power Administration
in partnership with an Indian tribal government or tribal
energy resource development organization to demonstrate the
feasibility and potential of using wind energy produced on
Indian land to supply firming energy to the Western Area
Power Administration or any other Federal power marketing
agency; and
``(4) an identification of--
``(A) the economic and environmental costs or benefits to
be realized through such a Federal-tribal partnership; and
``(B) the manner in which such a partnership could
contribute to the energy security of the United States.
``(d) Funding.--
``(1) Authorization of appropriations.--There are
authorized to be appropriated to carry out this section
$500,000, to remain available until expended.
``(2) Nonreimbursability.--Costs incurred by the Secretary
in carrying out this section shall be nonreimbursable.''.
(b) Conforming Amendments.--The table of contents for the
Energy Policy Act of 1992 is amended by striking the items
relating to title XXVI and inserting the following:
``Sec. 2601. Definitions.
``Sec. 2602. Indian tribal energy resource development.
``Sec. 2603. Indian tribal energy resource regulation.
``Sec. 2604. Leases, business agreements, and rights-of-way involving
energy development or transmission.
``Sec. 2605. Indian mineral development review.
``Sec. 2606. Federal Power Marketing Administrations.
``Sec. 2607. Wind and hydropower feasibility study.''.
SEC. 504. FOUR CORNERS TRANSMISSION LINE PROJECT.
The Dine Power Authority, an enterprise of the Navajo
Nation, shall be eligible to receive grants and other
assistance as authorized by section 217 of the Department of
Energy Organization Act, as added by section 502 of this
title, and section 2602 of the Energy Policy Act of 1992, as
amended by this title, for activities associated with the
development of a transmission line from the Four Corners Area
to southern Nevada, including related power generation
opportunities.
SEC. 505. ENERGY EFFICIENCY IN FEDERALLY ASSISTED HOUSING.
(a) In General.--The Secretary of Housing and Urban
Development shall promote energy conservation in housing that
is located on Indian land and assisted with Federal resources
through--
(1) the use of energy-efficient technologies and
innovations (including the procurement of energy-efficient
refrigerators and other appliances);
[[Page H4031]]
(2) the promotion of shared savings contracts; and
(3) the use and implementation of such other similar
technologies and innovations as the Secretary of Housing and
Urban Development considers to be appropriate.
(b) Amendment.--Section 202(2) of the Native American
Housing and Self-Determination Act of 1996 (25 U.S.C.
4132(2)) is amended by inserting ``improvement to achieve
greater energy efficiency,'' after ``planning,''.
SEC. 506. CONSULTATION WITH INDIAN TRIBES.
In carrying out this title and the amendments made by this
title, the Secretary of Energy and the Secretary shall, as
appropriate and to the maximum extent practicable, involve
and consult with Indian tribes in a manner that is consistent
with the Federal trust and the government-to-government
relationships between Indian tribes and the United States.
TITLE VI--NUCLEAR MATTERS
Subtitle A--Price-Anderson Act Amendments
SEC. 601. SHORT TITLE.
This subtitle may be cited as the ``Price-Anderson
Amendments Act of 2003''.
SEC. 602. 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 ``December 31, 2023''.
(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 ``December 31, 2023''.
(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 ``December 31,
2023''.
SEC. 603. MAXIMUM ASSESSMENT.
Section 170 of the Atomic Energy Act of 1954 (42 U.S.C.
2210) is amended--
(1) in the second proviso of the third sentence of
subsection b.(1)--
(A) by striking ``$63,000,000'' and inserting
``$95,800,000''; 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.(1)--
(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 ``August 20,
2003''; and
(C) in subparagraph (A), by striking ``such date of
enactment'' and inserting ``August 20, 2003''.
SEC. 604. 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
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 further amended by
striking paragraph (3) and inserting the following--
``(3) All agreements of indemnification under which the
Department of Energy (or its predecessor agencies) may be
required to indemnify any person under this section shall be
deemed to be amended, on the date of 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. 605. 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. 606. 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 ``December 31, 2019''.
SEC. 607. 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 inserting 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, 2003, 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. 608. 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:
``(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. 609. APPLICABILITY.
The amendments made by sections 603, 604, and 605 do not
apply to a nuclear incident that occurs before the date of
the enactment of this Act.
SEC. 610. PROHIBITION ON ASSUMPTION BY UNITED STATES
GOVERNMENT OF LIABILITY FOR CERTAIN FOREIGN
INCIDENTS.
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 Incidents.--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 incidents 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 (22 U.S.C. 2371(a)), section 6(j)(1)
of the Export Administration Act of 1979 (50 U.S.C. App.
2405(j)(1)), or section 40(d) of the Arms Export Control Act
(22 U.S.C. 2780(d)) to have repeatedly provided support for
acts of international terrorism). This subsection shall not
apply to nuclear incidents occurring as a result of missions,
carried out under the direction of the Secretary of Energy,
the Secretary of Defense, or the Secretary of State, that are
necessary to safely secure, store, transport, or remove
nuclear materials for nuclear safety or nonproliferation
purposes.''.
SEC. 611. 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 Not-For-Profit Institutions.--Subsection
d. of section 234A of the Atomic Energy Act of 1954 (42
U.S.C. 2282a(d)) is amended to read as follows:
``d.(1) Notwithstanding subsection a., in the case of any
not-for-profit contractor, subcontractor, or supplier, the
total amount of civil penalties paid under subsection a. may
not exceed the total amount of fees paid within any 1-year
period (as determined by the Secretary) under the contract
under which the violation occurs.
``(2) For purposes of this section, the term `not-for-
profit' means that no part of the net earnings of the
contractor, subcontractor, or supplier inures to the benefit
of any natural person or for-profit artificial person.''.
(c) Effective Date.--The amendments made by this section
shall not apply to any violation of the Atomic Energy Act of
1954 (42 U.S.C. 2011 et seq.) occurring under a contract
entered into before the date of enactment of this section.
Subtitle B--General Nuclear Matters
SEC. 621. 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. 622. 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 Nuclear
Regulatory Commission relating to the civilian nuclear energy
[[Page H4032]]
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
the Nuclear Regulatory Commission to carry out this section
$1,000,000 for each of fiscal years 2004 through 2008.
(2) Availability.--Funds made available under paragraph (1)
shall remain available until expended.
SEC. 623. COST RECOVERY FROM GOVERNMENT AGENCIES.
Section 161 w. of the Atomic Energy Act of 1954 (42 U.S.C.
2201(w)) is amended--
(1) by striking ``for or is issued'' and all that follows
through ``1702'' and inserting ``to the Commission for, or is
issued by the Commission, a license or certificate'';
(2) by striking ``483a'' and inserting ``9701''; and
(3) by striking ``, of applicants for, or holders of, such
licenses or certificates''.
SEC. 624. 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. 625. ANTITRUST REVIEW.
Section 105 c. of the Atomic Energy Act of 1954 (42 U.S.C.
2135(c)) is amended by adding at the end the following:
``(9) Applicability.--This subsection does not apply to an
application for a license to construct or operate a
utilization facility or production facility under section 103
or 104 b. that is filed on or after the date of enactment of
this paragraph.''.
SEC. 626. DECOMMISSIONING.
Section 161 i. of the Atomic Energy Act of 1954 (42 U.S.C.
2201(i)) is amended--
(1) by striking ``and (3)'' and inserting ``(3)''; and
(2) by inserting before the semicolon at the end the
following: ``, and (4) to ensure that sufficient funds will
be available for the decommissioning of any production or
utilization facility licensed under section 103 or 104 b.,
including standards and restrictions governing the control,
maintenance, use, and disbursement by any former licensee
under this Act that has control over any fund for the
decommissioning of the facility''.
SEC. 627. 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 part 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,
unless the adverse determination or final judgment is
reversed upon further administrative or judicial review.
SEC. 628. DECOMMISSIONING PILOT PROGRAM.
(a) Pilot Program.--The Secretary of Energy shall establish
a decommissioning pilot program to decommission and
decontaminate the sodium-cooled fast breeder experimental
test-site reactor located in northwest Arkansas in accordance
with the decommissioning activities contained in the August
31, 1998, Department of Energy report on the reactor.
(b) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of Energy to carry out
this section $16,000,000.
SEC. 629. REPORT ON FEASIBILITY OF DEVELOPING COMMERCIAL
NUCLEAR ENERGY GENERATION FACILITIES AT
EXISTING DEPARTMENT OF ENERGY SITES.
Not later than 1 year after the date of the enactment of
this Act, the Secretary of Energy shall submit to Congress a
report on the feasibility of developing commercial nuclear
energy generation facilities at Department of Energy sites in
existence on the date of enactment of this Act.
SEC. 630. URANIUM SALES.
(a) Sales, Transfers, and Services.--Section 3112 of the
USEC Privatization Act (42 U.S.C. 2297h-10) is amended by
striking subsections (d), (e), and (f) and inserting the
following:
``(3) The Secretary may transfer to the Corporation,
notwithstanding subsections (b)(2) and (d), natural uranium
in amounts sufficient to fulfill the Department of Energy's
commitments under Article 4(B) of the Agreement between the
Department and the Corporation dated June 17, 2002.
``(d) Inventory Sales.--(1) In addition to the transfers
and sales authorized under subsections (b) and (c) and under
paragraph (5) of this subsection, the United States
Government may transfer or sell uranium in any form subject
to paragraphs (2), (3), and (4).
``(2) Except as provided in subsections (b) and (c) and
paragraph (5) of this subsection, no sale or transfer of
uranium shall be made under this subsection by the United
States Government unless--
``(A) the President determines that the material is not
necessary for national security needs and the sale or
transfer has no adverse impact on implementation of existing
government-to-government agreements;
``(B) the price paid to the appropriate Federal agency, if
the transaction is a sale, will not be less than the fair
market value of the material; and
``(C) the sale or transfer to commercial nuclear power end
users is made pursuant to a contract of at least 3 years'
duration.
``(3) Except as provided in paragraph (5), the United
States Government shall not make any transfer or sale of
uranium in any form under this subsection that would cause
the total amount of uranium transferred or sold pursuant to
this subsection that is delivered for consumption by
commercial nuclear power end users to exceed--
``(A) 3,000,000 pounds of U3 O8
equivalent in fiscal year 2004, 2005, 2006, 2007, 2008, or
2009;
``(B) 5,000,000 pounds of U3O8
equivalent in fiscal year 2010 or 2011;
``(C) 7,000,000 pounds of U3O8
equivalent in fiscal year 2012; and
``(D) 10,000,000 pounds of U3O8
equivalent in fiscal year 2013 or any fiscal year thereafter.
``(4) Except for sales or transfers under paragraph (5),
for the purposes of this subsection, the recovery of uranium
from uranium bearing materials transferred or sold by the
United States Government 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 forth in this section, when such
uranium is sold to end users.
``(5) The United States Government may make the following
sales and transfers:
``(A) Sales or transfers to a Federal agency if the
material is transferred for the use of the receiving agency
without any resale or transfer to another entity and the
material does not meet commercial specifications.
``(B) Sales or transfers to any person for national
security purposes, as determined by the Secretary.
``(C) Sales or transfers to any State or local agency or
nonprofit, charitable, or educational institution for use
other than the generation of electricity for commercial use.
``(D) Sales or transfers to the Department of Energy
research reactor sales program.
``(E) Sales or transfers, at fair market value, for
emergency purposes in the event of a disruption in supply to
commercial nuclear power end users in the United States.
``(F) Sales or transfers, at fair market value, for use in
a commercial reactor in the United States with nonstandard
fuel requirements.
``(G) Sales or transfers provided for under law for use by
the Tennessee Valley Authority in relation to the Department
of Energy's highly enriched uranium or tritium programs.
``(6) For purposes of this subsection, the term `United
States Government' does not include the Tennessee Valley
Authority.
``(e) Savings Provision.--Nothing in this subchapter
modifies the terms of the Russian HEU Agreement.
``(f) Services.--Notwithstanding any other provision of
this section, if the Secretary determines that 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 Congress, in
such a manner that affords Congress 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.''.
(b) Report.--Not later than 3 years after the date of
enactment of this Act, the Secretary of Energy shall report
to 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 United States
Government; 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. 631. 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
[[Page H4033]]
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.
(c) Limitation.--No activities funded under this section
may be carried out in the State of New Mexico.
SEC. 632. 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) in subparagraph (C), by striking ``and'' at the end;
(2) in subparagraph (D), by striking the period at the end
and inserting ``; and'' and
(3) by adding at the end the following:
``(E) a contractor or subcontractor of 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 540 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 person seeking relief under this
paragraph, such person 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. 633. MEDICAL ISOTOPE PRODUCTION.
Section 134 of the Atomic Energy Act of 1954 (42 U.S.C.
2160d) is amended--
(1) in subsection a., by striking ``a. The Commission'' and
inserting ``a. In General.--Except as provided in subsection
b., the Commission'';
(2) by redesignating subsection b. as subsection c.; and
(3) by inserting after subsection a. the following:
``b. Medical Isotope Production.--
``(1) Definitions.--In this subsection:
``(A) Highly enriched uranium.--The term `highly enriched
uranium' means uranium enriched to include concentration of
U-235 above 20 percent.
``(B) Medical isotope.--The term `medical isotope' includes
Molybdenum 99, Iodine 131, Xenon 133, and other radioactive
materials used to produce a radiopharmaceutical for
diagnostic, therapeutic procedures or for research and
development.
``(C) Radiopharmaceutical.--The term `radiopharmaceutical'
means a radioactive isotope that--
``(i) contains byproduct material combined with chemical or
biological material; and
``(ii) is designed to accumulate temporarily in a part of
the body for therapeutic purposes or for enabling the
production of a useful image for use in a diagnosis of a
medical condition.
``(D) Recipient country.--The term `recipient country'
means Canada, Belgium, France, Germany, and the Netherlands.
``(2) Licenses.--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 (except subsection a.), the
Commission determines that--
``(A) a recipient country that supplies an assurance letter
to the United States Government in connection with the
consideration by the Commission 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 the highly
enriched uranium solely to produce medical isotopes; and
``(B) the highly enriched uranium for medical isotope
production will be irradiated only in a reactor in a
recipient country that--
``(i) uses an alternative nuclear reactor fuel; or
``(ii) is the subject of an agreement with the United
States Government to convert to an alternative nuclear
reactor fuel when alternative nuclear reactor fuel can be
used in the reactor.
``(3) Review of physical protection requirements.--
``(A) In general.--The Commission shall review the adequacy
of physical protection requirements that, as of the date of
an application under paragraph (2), are applicable to the
transportation and storage of highly enriched uranium for
medical isotope production or control of residual material
after irradiation and extraction of medical isotopes.
``(B) Imposition of additional requirements.--If the
Commission determines that additional physical protection
requirements are necessary (including a limit on the quantity
of highly enriched uranium that may be contained in a single
shipment), the Commission shall impose such requirements as
license conditions or through other appropriate means.
``(4) First report to congress.--
``(A) NAS study.--The Secretary shall enter into an
arrangement with the National Academy of Sciences to conduct
a study to determine--
``(i) the feasibility of procuring supplies of medical
isotopes from commercial sources that do not use highly
enriched uranium;
``(ii) the current and projected demand and availability of
medical isotopes in regular current domestic use;
``(iii) the progress that is being made by the Department
of Energy and others to eliminate all use of highly enriched
uranium in reactor fuel, reactor targets, and medical isotope
production facilities; and
``(iv) the potential cost differential in medical isotope
production in the reactors and target processing facilities
if the products were derived from production systems that do
not involve fuels and targets with highly enriched uranium.
``(B) Feasibility.--For the purpose of this subsection, the
use of low enriched uranium to produce medical isotopes shall
be determined to be feasible if--
``(i) low enriched uranium targets have been developed and
demonstrated for use in the reactors and target processing
facilities that produce significant quantities of medical
isotopes to serve United States needs for such isotopes;
``(ii) sufficient quantities of medical isotopes are
available from low enriched uranium targets and fuel to meet
United States domestic needs; and
``(iii) the average anticipated total cost increase from
production of medical isotopes in such facilities without use
of highly enriched uranium is less than 10 percent.
``(C) Report by the secretary.--Not later than 5 years
after the date of enactment of the Energy Policy Act of 2003,
the Secretary shall submit to Congress a report that--
``(i) contains the findings of the National Academy of
Sciences made in the study under subparagraph (A); and
``(ii) discloses the existence of any commitments from
commercial producers to provide domestic requirements for
medical isotopes without use of highly enriched uranium
consistent with the feasibility criteria described in
subparagraph (B) not later than the date that is 4 years
after the date of submission of the report.
``(5) Second report to congress.--If the study of the
National Academy of Sciences determines under paragraph
(4)(A)(i) that the procurement of supplies of medical
isotopes from commercial sources that do not use highly
enriched uranium is feasible, but the Secretary is unable to
report the existence of commitments under paragraph
(4)(C)(ii), not later than the date that is 6 years after the
date of enactment of the Energy Policy Act of 2003, the
Secretary shall submit to Congress a report that describes
options for developing domestic supplies of medical isotopes
in quantities that are adequate to meet domestic demand
without the use of highly enriched uranium consistent with
the cost increase described in paragraph (4)(B)(iii).
``(6) Certification.--At such time as commercial facilities
that do not use highly enriched uranium are capable of
meeting domestic requirements for medical isotopes, within
the cost increase described in paragraph (4)(B)(iii) and
without impairing the reliable supply of medical isotopes for
domestic utilization, the Secretary shall submit to Congress
a certification to that effect.
``(7) Sunset provision.--After the Secretary submits a
certification under paragraph (6), the Commission shall, by
rule, terminate its review of export license applications
under this subsection.''.
SEC. 634. FERNALD BYPRODUCT MATERIAL.
Notwithstanding any other law, the material in the
concrete silos at the Fernald uranium processing facility
managed on the date of enactment of this Act by the
Department of Energy shall be considered byproduct material
(as defined by section 11 e.(2) of the Atomic Energy Act of
1954 (42 U.S.C. 2014(e)(2))). The Department of Energy may
dispose of the material in a facility regulated by the
Nuclear Regulatory Commission or by an Agreement State. If
the Department of Energy disposes of the material in such a
facility, the Nuclear Regulatory Commission or the Agreement
State shall regulate the material as byproduct material under
that Act. This material shall remain subject to the
jurisdiction of the Department of Energy until it is received
at a commercial, Nuclear Regulatory Commission-licensed, or
Agreement State-licensed facility, at which time the material
shall be subject to the health and safety requirements of the
Nuclear Regulatory Commission or the Agreement State with
jurisdiction over the disposal site.
SEC. 635. SAFE DISPOSAL OF GREATER-THAN-CLASS C RADIOACTIVE
WASTE.
(a) Designation of Responsibility.--The Secretary of Energy
shall designate an Office within the Department of Energy to
have the responsibility for activities needed to develop a
new, or use an existing, facility for safely disposing of all
low-level radioactive waste with concentrations of
radionuclides that exceed the limits established by the
Nuclear Regulatory Commission for Class C radioactive waste
(referred to in this section as ``GTCC waste'').
(b) Comprehensive Plan.--The Secretary of Energy shall
develop a comprehensive plan for permanent disposal of GTCC
waste which includes plans for a disposal facility. This plan
shall be transmitted to Congress in a series of reports,
including the following:
[[Page H4034]]
(1) Report on short-term plan.--Not later than 180 days
after the date of enactment of this Act, the Secretary of
Energy shall submit to Congress a plan describing the
Secretary's operational strategy for continued recovery and
storage of GTCC waste until a permanent disposal facility is
available.
(2) Update of 1987 report.--
(A) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary of Energy shall submit
to Congress an update of the Secretary's February 1987 report
submitted to Congress that made comprehensive recommendations
for the disposal of GTCC waste.
(B) Contents.--The update under this paragraph shall
contain--
(i) a detailed description and identification of the GTCC
waste that is to be disposed;
(ii) a description of current domestic and international
programs, both Federal and commercial, for management and
disposition of GTCC waste;
(iii) an identification of the Federal and private options
and costs for the safe disposal of GTCC waste;
(iv) an identification of the options for ensuring that,
wherever possible, generators and users of GTCC waste bear
all reasonable costs of waste disposal;
(v) an identification of any new statutory authority
required for disposal of GTCC waste; and
(vi) in coordination with the Environmental Protection
Agency and the Nuclear Regulatory Commission, an
identification of any new regulatory guidance needed for the
disposal of GTCC waste.
(3) Report on cost and schedule for completion of
environmental impact statement and record of decision.--Not
later than 180 days after the date of submission of the
update required under paragraph (2), the Secretary of Energy
shall submit to Congress a report containing an estimate of
the cost and schedule to complete a draft and final
environmental impact statement and to issue a record of
decision for a permanent disposal facility, utilizing either
a new or existing facility, for GTCC waste.
SEC. 636. PROHIBITION ON NUCLEAR EXPORTS TO COUNTRIES THAT
SPONSOR TERRORISM.
(a) In General.--Section 129 of the Atomic Energy Act of
1954 (42 U.S.C. 2158) is amended--
(1) by inserting ``a.'' before ``No nuclear materials and
equipment''; and
(2) by adding at the end the following new subsection:
``b.(1) Notwithstanding any other provision of law,
including specifically section 121 of this Act, and except as
provided in paragraphs (2) and (3), no nuclear materials and
equipment or sensitive nuclear technology, including items
and assistance authorized by section 57 b. of this Act and
regulated under part 810 of title 10, Code of Federal
Regulations, and nuclear-related items on the Commerce
Control List maintained under part 774 of title 15 of the
Code of Federal Regulations, shall be exported or reexported,
or transferred or retransferred whether directly or
indirectly, and no Federal agency shall issue any license,
approval, or authorization for the export or reexport, or
transfer, or retransfer, whether directly or indirectly, of
these items or assistance (as defined in this paragraph) 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 has been determined by the Secretary of
State under section 620A(a) of the Foreign Assistance Act of
1961 (22 U.S.C. 2371(a)), section 6(j)(1) of the Export
Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)), or
section 40(d) of the Arms Export Control Act (22 U.S.C.
2780(d)) to have repeatedly provided support for acts of
international terrorism).
``(2) This subsection shall not apply to exports,
reexports, transfers, or retransfers of radiation monitoring
technologies, surveillance equipment, seals, cameras, tamper-
indication devices, nuclear detectors, monitoring systems, or
equipment necessary to safely store, transport, or remove
hazardous materials, whether such items, services, or
information are regulated by the Department of Energy, the
Department of Commerce, or the Nuclear Regulatory Commission,
except to the extent that such technologies, equipment,
seals, cameras, devices, detectors, or systems are available
for use in the design or construction of nuclear reactors or
nuclear weapons.
``(3) The President may waive the application of paragraph
(1) to a country if the President determines and certifies to
Congress that the waiver will not result in any increased
risk that the country receiving the waiver will acquire
nuclear weapons, nuclear reactors, or any materials or
components of nuclear weapons and--
``(A) the government of such country has not within the
preceding 12-month period willfully aided or abetted the
international proliferation of nuclear explosive devices to
individuals or groups or willfully aided and abetted an
individual or groups in acquiring unsafeguarded nuclear
materials;
``(B) in the judgment of the President, the government of
such country has provided adequate, verifiable assurances
that it will cease its support for acts of international
terrorism;
``(C) the waiver of that paragraph is in the vital national
security interest of the United States; or
``(D) such a waiver is essential to prevent or respond to a
serious radiological hazard in the country receiving the
waiver that may or does threaten public health and safety.''.
(b) Applicability to Exports Approved for Transfer but not
Transferred.--Subsection b. of section 129 of Atomic Energy
Act of 1954, as added by subsection (a) of this section,
shall apply with respect to exports that have been approved
for transfer as of the date of the enactment of this Act but
have not yet been transferred as of that date.
SEC. 637. URANIUM ENRICHMENT FACILITIES.
(a) Nuclear Regulatory Commission Review of Applications.--
(1) In general.--In order to facilitate a timely review and
approval of an application in a proceeding for a license for
the construction and operation of a uranium enrichment
facility under sections 53 and 63 of the Atomic Energy Act of
1954 (42 U.S.C. 2073, 2093) (referred to in this subsection
as a ``covered proceeding''), the Nuclear Regulatory
Commission shall, not later than 30 days after the receipt of
the application, establish, by order, the schedule for the
conduct of any hearing that may be requested by any person
whose interest may be affected by the covered proceeding.
(2) Final agency decision.--The schedule shall provide that
a final decision by the Commission on the application shall
be made not later than the date that is 2 years after the
date of submission of the application by the applicant.
(3) Compliance with schedule.--
(A) In general.--The Commission shall establish a process
to assess compliance with the schedule established under
paragraph (1) on an ongoing basis during the course of the
review of the application, including ensuring compliance with
schedules and milestones that are established for the conduct
of any covered proceeding by the Atomic Safety and Licensing
Board.
(B) Report.--The Commission shall submit to Congress on a
bimonthly basis a report describing the status of compliance
with the schedule established under paragraph (1), including
a description of the status of actions required to be
completed pursuant to the schedule by officers and employees
of--
(i) the Commission in undertaking the safety and
environmental review of applications; and
(ii) the Atomic Safety and Licensing Board in the conduct
of any covered proceeding.
(4) Environmental review.--
(A) In general.--In evaluating an application under the
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.) for licensing of a facility in a covered proceeding,
the Commission shall limit the consideration of need to
whether the licensing of the facility would advance the
national interest of encouraging in the United States--
(i) additional secure, reliable uranium enrichment
capacity;
(ii) diverse supplies and suppliers of uranium enrichment
capacity; and
(iii) the deployment of advanced centrifuge enrichment
technology.
(B) Comment.--In carrying out subparagraph (A), the
Commission shall consider and solicit the views of other
affected Federal agencies.
(C) Atomic safety and licensing board.--
(i) In general.--Except as provided in clause (ii), in any
covered proceeding, the Commission shall allow the litigation
and resolution by the Atomic Safety and Licensing Board of
issues arising under the National Environmental Policy Act of
1969 (42 U.S.C. 4321 et seq.), on the basis of information
submitted by the applicant in its environmental report, prior
to publication of any required environmental impact
statement.
(ii) Exceptions.--On the publication of any required
environmental impact statement, issues may be proffered for
resolution by the Atomic Safety and Licensing Board only if
information or conclusions in the environmental impact
statement differ significantly from the information or
conclusions in the environmental report submitted by the
applicant.
(D) Environmental justice.--In a covered proceeding, the
Commission shall apply the criteria in Appendix C of the
final report entitled ``Environmental Review Guidance for
Licensing Actions Associated with NMSS Programs'' (NUREG-
1748), published in August 2003, in any required review of
environmental justice.
(5) Low-level waste.--In any covered proceeding, the
Commission shall--
(A) deem the obligation of the Secretary of Energy pursuant
to section 3113 of the USEC Privitization Act (42 U.S.C. 2297
h-11) to constitute a plausible strategy with regard to the
disposition of depleted uranium generated by such facility;
and
(B) treat any residual material that remains following the
extraction of any usable resource value from depleted uranium
as low-level radioactive waste under part 61 of title 10,
Code of Federal Regulations.
(6) Adjudicatory hearing on licensing of uranium enrichment
facilities.--Section 193(b) of the Atomic Energy Act of 1954
(42 U.S.C. 2243(b)) is amended by striking paragraph (2) and
inserting the following:
``(2) Timing.--On the issuance of a final decision on the
application by the Atomic Safety and Licensing Board, the
Commission shall issue and make immediately effective any
license for the construction and operation of a uranium
enrichment facility under sections 53 and 63, on a
determination by the Commission that the issuance of the
license would not cause irreparable injury to the public
health and safety or the common defense and security,
notwithstanding the
[[Page H4035]]
pendency before the Commission of any appeal or petition for
review of any decision of the Atomic Safety and Licensing
Board.''.
(b) Department of Energy Responsibilities.--
(1) In general.--Not later than 180 days after a request is
made to the Secretary of Energy by an applicant for or
recipient of a license for a uranium enrichment facility
under section 53, 63, or 193 of the Atomic Energy Act of 1954
((42 U.S.C. 2073, 2093, 2243), the Secretary shall enter into
a memorandum of agreement with the applicant or licensee that
provides a schedule for the transfer to the Secretary, not
later than 5 years after the generation of any depleted
uranium hexafluoride, of title and possession of the depleted
uranium hexafluoride to be generated by the applicant or
licensee.
(2) Cost.--
(A) In general.--Subject to subparagraphs (B) and (C), the
memorandum of agreement shall specify the cost to be assessed
by the Secretary for the transfer to the Secretary of the
depleted uranium hexafluoride.
(B) Nondiscriminatory basis.--The cost shall be determined
by the Secretary on a nondiscriminatory basis.
(C) Cost.--Taking into account the physical and chemical
characteristics of such depleted uranium hexafluoride, the
cost shall not exceed the cost assessed by the Secretary for
the acceptance of depleted uranium hexafluoride under--
(i) the memorandum of agreement between the United States
Department of Energy and the United States Enrichment
Corporation Relating to Depleted Uranium, dated June 30,
1998; and
(ii) the Agreement Between the U.S. Department of Energy
and USEC Inc., dated June 17, 2002.
SEC. 638. NATIONAL URANIUM STOCKPILE.
(a) Stockpile Creation.--The Secretary of Energy may create
a national low-enriched uranium stockpile with the goals to--
(1) enhance national energy security; and
(2) reduce global proliferation threats.
(b) Source of Material.--The Secretary shall obtain
material for the stockpile from--
(1) material derived from blend-down of Russian highly
enriched uranium derived from weapons materials; and
(2) domestically mined and enriched uranium.
(c) Limitation on Sales or Transfers.--Sales or transfer of
materials in the stockpile shall occur pursuant to section
3112 of the USEC Privitization Act (42 U.S.C. 2297h-10), as
amended by section 630 of this Act.
Subtitle C--Advanced Reactor Hydrogen Cogeneration Project
SEC. 651. PROJECT ESTABLISHMENT.
The Secretary of Energy (in this subtitle referred to as
the ``Secretary'') is directed to establish an Advanced
Reactor Hydrogen Cogeneration Project.
SEC. 652. PROJECT DEFINITION.
The project shall consist of the research, development,
design, construction, and operation of a hydrogen production
cogeneration research facility that, relative to the current
commercial reactors, enhances safety features, reduces waste
production, enhances thermal efficiencies, increases
proliferation resistance, and has the potential for improved
economics and physical security in reactor siting. This
facility shall be constructed so as to enable research and
development on advanced reactors of the type selected and on
alternative approaches for reactor-based production of
hydrogen.
SEC. 653. PROJECT MANAGEMENT.
(a) Management.--The project shall be managed within the
Department by the Office of Nuclear Energy, Science, and
Technology.
(b) Lead Laboratory.--The lead laboratory for the project,
providing the site for the reactor construction, shall be the
Idaho National Engineering and Environmental Laboratory (in
this subtitle referred to as ``INEEL'').
(c) Steering Committee.--The Secretary shall establish a
national steering committee with membership from the national
laboratories, universities, and industry to provide advice to
the Secretary and the Director of the Office of Nuclear
Energy, Science, and Technology on technical and program
management aspects of the project.
(d) Collaboration.--Project activities shall be conducted
at INEEL, other national laboratories, universities, domestic
industry, and international partners.
SEC. 654. PROJECT REQUIREMENTS.
(a) Research and Development.--
(1) In general.--The project shall include planning,
research and development, design, and construction of an
advanced, next-generation, nuclear energy system suitable for
enabling further research and development on advanced reactor
technologies and alternative approaches for reactor-based
generation of hydrogen.
(2) Reactor test capabilities at ineel.--The project shall
utilize, where appropriate, extensive reactor test
capabilities resident at INEEL.
(3) Alternatives.--The project shall be designed to explore
technical, environmental, and economic feasibility of
alternative approaches for reactor-based hydrogen production.
(4) Industrial lead.--The industrial lead for the project
shall be a company incorporated in the United States.
(b) International Collaboration.--
(1) In general.--The Secretary shall seek international
cooperation, participation, and financial contribution in
this project.
(2) Assistance from international partners.--The Secretary
may contract for assistance from specialists or facilities
from member countries of the Generation IV International
Forum, the Russian Federation, or other international
partners where such specialists or facilities provide access
to cost-effective and relevant skills or test capabilities.
(3) Generation iv international forum.--International
activities shall be coordinated with the Generation IV
International Forum.
(4) Generation iv nuclear energy systems program.--The
Secretary may combine this project with the Generation IV
Nuclear Energy Systems Program.
(c) Demonstration.--The overall project, which may involve
demonstration of selected project objectives in a partner
nation, must demonstrate both electricity and hydrogen
production and may provide flexibility, where technically and
economically feasible in the design and construction, to
enable tests of alternative reactor core and cooling
configurations.
(d) Partnerships.--The Secretary shall establish cost-
shared partnerships with domestic industry or international
participants for the research, development, design,
construction, and operation of the research facility, and
preference in determining the final project structure shall
be given to an overall project which retains United States
leadership while maximizing cost sharing opportunities and
minimizing Federal funding responsibilities.
(e) Target Date.--The Secretary shall select technologies
and develop the project to provide initial testing of either
hydrogen production or electricity generation by 2010, or
provide a report to Congress explaining why this date is not
feasible.
(f) Waiver of Construction Timelines.--The Secretary is
authorized to conduct the Advanced Reactor Hydrogen
Cogeneration Project without the constraints of DOE Order
413.3, relating to program and project management for the
acquisition of capital assets, as necessary to meet the
specified operational date.
(g) Competition.--The Secretary may fund up to 2 teams for
up to 1 year to develop detailed proposals for competitive
evaluation and selection of a single proposal and concept for
further progress. The Secretary shall define the format of
the competitive evaluation of proposals.
(h) Use of Facilities.--Research facilities in industry,
national laboratories, or universities either within the
United States or with cooperating international partners may
be used to develop the enabling technologies for the research
facility. Utilization of domestic university-based facilities
shall be encouraged to provide educational opportunities for
student development.
(i) Role of Nuclear Regulatory Commission.--
(1) In general.--The Nuclear Regulatory Commission shall
have licensing and regulatory authority for any reactor
authorized under this subtitle, pursuant to section 202 of
the Energy Reorganization Act of 1974 (42 U.S.C. 5842).
(2) Risk-based criteria.--The Secretary shall seek active
participation of the Nuclear Regulatory Commission throughout
the project to develop risk-based criteria for any future
commercial development of a similar reactor architecture.
(j) Report.--The Secretary shall develop and transmit to
Congress a comprehensive project plan not later than April
30, 2004. The project plan shall be updated annually with
each annual budget submission.
SEC. 655. AUTHORIZATION OF APPROPRIATIONS.
(a) Research, Development, and Design Programs.--The
following sums are authorized to be appropriated to the
Secretary for all activities under this subtitle except for
construction activities described in subsection (b):
(1) For fiscal year 2004, $35,000,000.
(2) For each of fiscal years 2005 through 2008,
$150,000,000.
(3) For fiscal years beyond 2008, such sums as are
necessary.
(b) Construction.--There are authorized to be appropriated
to the Secretary for all project-related construction
activities, to be available until expended, $500,000,000.
Subtitle D--Nuclear Security
SEC. 661. NUCLEAR FACILITY THREATS.
(a) Study.--The President, in consultation with the Nuclear
Regulatory Commission (referred to in this subtitle as the
``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 Commission under the Atomic Energy Act of 1954 (42
U.S.C. 2011 et seq.). 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;
[[Page H4036]]
(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;
(10) the potential for attacks on spent fuel shipments by
multiple coordinated teams of a large number of individuals;
(11) the adequacy of planning to protect the public health
and safety at and around nuclear facilities, as appropriate,
in the event of a terrorist attack against a nuclear
facility; and
(12) the potential for theft and diversion of nuclear
materials from such facilities.
(b) Summary and Classification Report.--Not later than 180
days after the date of the enactment of this Act, the
President shall transmit to Congress and the 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 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 Congress a report on
actions taken, or to be taken, to address the types of
threats identified under subsection (b)(2)(A), including
identification of the Federal, State, and local agencies
responsible for carrying out the obligations and authorities
of the United States. Such report may include a classified
annex, as appropriate.
(d) Regulations.--Not later than 180 days after the date on
which a report is transmitted under subsection (b), the
Commission may revise, by rule, the design basis threats
issued before the date of enactment of this section as the
Commission considers appropriate based on the summary and
classification report.
(e) Physical Security Program.--The 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 and
category I fuel cycle facilities.
(f) Control of Information.--Notwithstanding any other
provision of law, the Commission may undertake any rulemaking
under this subtitle in a manner that will fully protect
safeguards and classified national security information.
(g) Federal Security Coordinators.--
(1) Regional offices.--Not later than 18 months after the
date of enactment of this Act, the Commission shall assign a
Federal security coordinator, under the employment of the
Commission, to each region of the Commission.
(2) Responsibilities.--The Federal security coordinator
shall be responsible for--
(A) communicating with the Commission and other Federal,
State, and local authorities concerning threats, including
threats against such classes of facilities as the Commission
determines to be appropriate;
(B) ensuring that such classes of facilities as the
Commission determines to be appropriate maintain security
consistent with the security plan in accordance with the
appropriate threat level; and
(C) assisting in the coordination of security measures
among the private security forces at such classes of
facilities as the Commission determines to be appropriate and
Federal, State, and local authorities, as appropriate.
(h) Training Program.--The President shall establish a
program to provide technical assistance and training to
Federal agencies, the National Guard, and State and local law
enforcement and emergency response agencies in responding to
threats against a designated nuclear facility.
SEC. 662. FINGERPRINTING FOR CRIMINAL HISTORY RECORD CHECKS.
(a) In General.--Subsection a. of section 149 of the Atomic
Energy Act of 1954 (42 U.S.C. 2169(a)) is amended--
(1) by striking ``a. The Nuclear'' and all that follows
through ``section 147.'' and inserting the following:
``a. In General.--
``(1) Requirements.--
``(A) In general.--The Commission shall require each
individual or entity--
``(i) that is licensed or certified to engage in an
activity subject to regulation by the Commission;
``(ii) that has filed an application for a license or
certificate to engage in an activity subject to regulation by
the Commission; or
``(iii) that has notified the Commission, in writing, of an
intent to file an application for licensing, certification,
permitting, or approval of a product or activity subject to
regulation by the Commission,
to fingerprint each individual described in subparagraph (B)
before the individual is permitted unescorted access or
access, whichever is applicable, as described in subparagraph
(B).
``(B) Individuals required to be fingerprinted.--The
Commission shall require to be fingerprinted each individual
who--
``(i) is permitted unescorted access to--
``(I) a utilization facility; or
``(II) radioactive material or other property subject to
regulation by the Commission that the Commission determines
to be of such significance to the public health and safety or
the common defense and security as to warrant fingerprinting
and background checks; or
``(ii) is permitted access to safeguards information under
section 147.'';
(2) by striking ``All fingerprints obtained by a licensee
or applicant as required in the preceding sentence'' and
inserting the following:
``(2) Submission to the attorney general.--All fingerprints
obtained by an individual or entity as required in paragraph
(1)'';
(3) by striking ``The costs of any identification and
records check conducted pursuant to the preceding sentence
shall be paid by the licensee or applicant.'' and inserting
the following:
``(3) Costs.--The costs of any identification and records
check conducted pursuant to paragraph (1) shall be paid by
the individual or entity required to conduct the
fingerprinting under paragraph (1)(A).''; and
(4) by striking ``Notwithstanding any other provision of
law, the Attorney General may provide all the results of the
search to the Commission, and, in accordance with regulations
prescribed under this section, the Commission may provide
such results to licensee or applicant submitting such
fingerprints.'' and inserting the following:
``(4) Provision to individual or entity required to conduct
fingerprinting.--Notwithstanding any other provision of law,
the Attorney General may provide all the results of the
search to the Commission, and, in accordance with regulations
prescribed under this section, the Commission may provide
such results to the individual or entity required to conduct
the fingerprinting under paragraph (1)(A).''.
(b) Administration.--Subsection c. of section 149 of the
Atomic Energy Act of 1954 (42 U.S.C. 2169(c)) is amended--
(1) by striking ``, subject to public notice and comment,
regulations--'' and inserting ``requirements--''; and
(2) by striking, in paragraph (2)(B), ``unescorted access
to the facility of a licensee or applicant'' and inserting
``unescorted access to a utilization facility, radioactive
material, or other property described in subsection
a.(1)(B)''.
(c) Biometric Methods.--Subsection d. of section 149 of the
Atomic Energy Act of 1954 (42 U.S.C. 2169(d)) is redesignated
as subsection e., and the following is inserted after
subsection c.:
``d. Use of Other Biometric Methods.--The Commission may
satisfy any requirement for a person to conduct
fingerprinting under this section using any other biometric
method for identification approved for use by the Attorney
General, after the Commission has approved the alternative
method by rule.''.
SEC. 663. USE OF FIREARMS BY SECURITY PERSONNEL OF LICENSEES
AND CERTIFICATE HOLDERS OF THE COMMISSION.
Section 161 of the Atomic Energy Act of 1954 (42 U.S.C.
2201) is amended by adding at the end the following
subsection:
``(z)(1) notwithstanding section 922(o), (v), and (w) of
title 18, United States Code, or any similar provision of any
State law or any similar rule or regulation of a State or any
political subdivision of a State prohibiting the transfer or
possession of a handgun, a rifle or shotgun, a short-barreled
shotgun, a short-barreled rifle, a machinegun, a
semiautomatic assault weapon, ammunition for the foregoing,
or a large capacity ammunition feeding device, authorize
security personnel of licensees and certificate holders of
the Commission (including employees of contractors of
licensees and certificate holders) to receive, possess,
transport, import, and use 1 or more of those weapons,
ammunition, or devices, if the Commission determines that--
``(A) such authorization is necessary to the discharge of
the security personnel's official duties; and
``(B) the security personnel--
``(i) are not otherwise prohibited from possessing or
receiving a firearm under Federal or State laws pertaining to
possession of firearms by certain categories of persons;
``(ii) have successfully completed requirements established
through guidelines implementing this subsection for training
in use of firearms and tactical maneuvers;
``(iii) are engaged in the protection of--
``(I) facilities owned or operated by a Commission licensee
or certificate holder that are designated by the Commission;
or
``(II) radioactive material or other property owned or
possessed by a person that is a licensee or certificate
holder of the Commission, or that is being transported to or
from a facility owned or operated by such a licensee or
certificate holder, and that has
[[Page H4037]]
been determined by the Commission to be of significance to
the common defense and security or public health and safety;
and
``(iv) are discharging their official duties.
``(2) Such receipt, possession, transportation,
importation, or use shall be subject to--
``(A) chapter 44 of title 18, United States Code, except
for section 922(a)(4), (o), (v), and (w);
``(B) chapter 53 of title 26, United States Code, except
for section 5844; and
``(C) a background check by the Attorney General, based on
fingerprints and including a check of the system established
under section 103(b) of the Brady Handgun Violence Prevention
Act (18 U.S.C. 922 note) to determine whether the person
applying for the authority is prohibited from possessing or
receiving a firearm under Federal or State law.
``(3) This subsection shall become effective upon the
issuance of guidelines by the Commission, with the approval
of the Attorney General, to govern the implementation of this
subsection.
``(4) In this subsection, the terms `handgun', `rifle',
`shotgun', `firearm', `ammunition', `machinegun',
`semiautomatic assault weapon', `large capacity ammunition
feeding device', `short-barreled shotgun', and `short-
barreled rifle' shall have the meanings given those terms in
section 921(a) of title 18, United States Code.''.
SEC. 664. UNAUTHORIZED INTRODUCTION OF DANGEROUS WEAPONS.
Section 229 a. of the Atomic Energy Act of 1954 (42 U.S.C.
2278a(a)) is amended in the first sentence by inserting ``or
subject to the licensing authority of the Commission or to
certification by the Commission under this Act or any other
Act'' before the period at the end.
SEC. 665. SABOTAGE OF NUCLEAR FACILITIES OR FUEL.
(a) In General.--Section 236 a. of the Atomic Energy Act of
1954 (42 U.S.C. 2284(a)) is amended--
(1) in paragraph (2), by striking ``storage facility'' and
inserting ``storage, treatment, or disposal facility'';
(2) in paragraph (3)--
(A) by striking ``such a utilization facility'' and
inserting ``a utilization facility licensed under this Act'';
and
(B) by striking ``or'' at the end;
(3) in paragraph (4)--
(A) by striking ``facility licensed'' and inserting ``,
uranium conversion, or nuclear fuel fabrication facility
licensed or certified''; and
(B) by striking the comma at the end and inserting a
semicolon; and
(4) by inserting after paragraph (4) the following:
``(5) any production, utilization, waste storage, waste
treatment, waste disposal, uranium enrichment, uranium
conversion, or nuclear fuel fabrication facility subject to
licensing or certification under this Act during construction
of the facility, if the destruction or damage caused or
attempted to be caused could adversely affect public health
and safety during the operation of the facility;
``(6) any primary facility or backup facility from which a
radiological emergency preparedness alert and warning system
is activated; or
``(7) any radioactive material or other property subject to
regulation by the Nuclear Regulatory Commission that, before
the date of the offense, the Nuclear Regulatory Commission
determines, by order or regulation published in the Federal
Register, is of significance to the public health and safety
or to common defense and security,''.
(b) Penalties.--Section 236 of the Atomic Energy Act of
1954 (42 U.S.C. 2284) is amended by striking ``$10,000 or
imprisoned for not more than 20 years, or both, and, if death
results to any person, shall be imprisoned for any term of
years or for life'' both places it appears and inserting
``$1,000,000 or imprisoned for up to life without parole''.
SEC. 666. 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 materials described in subsection b.,
when transferred or received in the United States by any
party pursuant to an import or export license issued pursuant
to this Act, are accompanied by a manifest describing the
type and amount of materials being transferred or received.
Each individual receiving or accompanying the transfer of
such materials shall be subject to a security background
check conducted by appropriate Federal entities.
``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 or
classes of individuals 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), except that the background check requirement
shall become effective on a date established by the
Commission.
(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 Energy Act of 1954 is amended by
adding at the end the following new item:
``Sec. 170C. Secure transfer of nuclear materials.''.
SEC. 667. DEPARTMENT OF HOMELAND SECURITY CONSULTATION.
Before issuing a license for a utilization facility, the
Nuclear Regulatory Commission shall consult with the
Department of Homeland Security concerning the potential
vulnerabilities of the location of the proposed facility to
terrorist attack.
SEC. 668. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There are authorized to be appropriated
such sums as are necessary to carry out this subtitle and the
amendments made by this subtitle.
(b) Aggregate Amount of Charges.--Section 6101(c)(2)(A) of
the Omnibus Budget Reconciliation Act of 1990 (42 U.S.C.
2214(c)(2)(A)) is amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii), by striking the period at the end and
inserting ``; and'' and
(3) by adding at the end the following:
``(iii) amounts appropriated to the Commission for homeland
security activities of the Commission for the fiscal year,
except for the costs of fingerprinting and background checks
required by section 149 of the Atomic Energy Act of 1954 (42
U.S.C. 2169) and the costs of conducting security
inspections.''.
TITLE VII--VEHICLES AND FUELS
Subtitle A--Existing Programs
SEC. 701. USE OF ALTERNATIVE FUELS BY DUAL-FUELED VEHICLES.
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 qualifies for a waiver of
such requirement for vehicles operated by the agency in a
particular geographic area in which--
``(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 to the Secretary by the
head of the agency.
``(ii) The Secretary shall monitor compliance with this
subparagraph by all such fleets and shall report annually to
Congress on the extent to which the requirements of this
subparagraph are being achieved. The report shall include
information on annual reductions achieved from the use of
petroleum-based fuels and the problems, if any, encountered
in acquiring alternative fuels.''.
SEC. 702. NEIGHBORHOOD ELECTRIC VEHICLES.
(a) Amendments.--Section 301 of the Energy Policy Act of
1992 (42 U.S.C. 13211) is amended--
(1) in paragraph (3), by striking ``or a dual fueled
vehicle'' and inserting ``, a dual fueled vehicle, or a
neighborhood electric vehicle'';
(2) in paragraph (13), by striking ``and'' at the end;
(3) in paragraph (14), by striking the period at the end
and inserting ``; and''; and
(4) by adding at the end the following:
``(15) the term `neighborhood electric vehicle' means a
motor vehicle that--
``(A) meets the definition of a low-speed vehicle (as
defined in part 571 of title 49, Code of Federal
Regulations);
``(B) meets the definition of a zero-emission vehicle (as
defined in section 86.1702-99 of title 40, Code of Federal
Regulations);
``(C) meets the requirements of Federal Motor Vehicle
Safety Standard No. 500; and
``(D) has a maximum speed of not greater than 25 miles per
hour.''.
(b) Credits.--Notwithstanding section 508 of the Energy
Policy Act of 1992 (42 U.S.C. 13258) or any other provision
of law, a neighborhood electric vehicle shall not be
allocated credit as more than 1 vehicle for purposes of
determining compliance with any requirement under title III
or title V of such Act.
SEC. 703. CREDITS FOR MEDIUM AND HEAVY DUTY DEDICATED
VEHICLES.
Section 508 of the Energy Policy Act of 1992 (42 U.S.C.
13258) is amended by adding at the end the following:
``(e) Credit for Purchase of Medium and Heavy Duty
Dedicated Vehicles.--
``(1) Definitions.--In this subsection:
``(A) Heavy duty dedicated vehicle.--The term `heavy duty
dedicated vehicle' means a dedicated vehicle that has a gross
vehicle weight rating of more than 14,000 pounds.
``(B) Medium duty dedicated vehicle.--The term `medium duty
dedicated vehicle'
[[Page H4038]]
means a dedicated vehicle that has a gross vehicle weight
rating of more than 8,500 pounds but not more than 14,000
pounds.
``(2) Credits for medium duty vehicles.--The Secretary
shall issue 2 full credits to a fleet or covered person under
this title, if the fleet or covered person acquires a medium
duty dedicated vehicle.
``(3) Credits for heavy duty vehicles.--The Secretary shall
issue 3 full credits to a fleet or covered person under this
title, if the fleet or covered person acquires a heavy duty
dedicated vehicle.
``(4) Use of credits.--At the request of a fleet or covered
person allocated a credit under this subsection, the
Secretary shall, for the year in which the acquisition of the
dedicated vehicle is made, treat that credit as the
acquisition of 1 alternative fueled vehicle that the fleet or
covered person is required to acquire under this title.''.
SEC. 704. INCREMENTAL COST ALLOCATION.
Section 303(c) of the Energy Policy Act of 1992 (42 U.S.C.
13212(c)) is amended by striking ``may'' and inserting
``shall''.
SEC. 705. ALTERNATIVE COMPLIANCE AND FLEXIBILITY.
(a) Alternative Compliance.--
(1) In general.--Title V of the Energy Policy Act of 1992
(42 U.S.C. 13251 et seq.) is amended--
(A) by redesignating section 514 as section 515; and
(B) by inserting after section 513 the following:
``SEC. 514. ALTERNATIVE COMPLIANCE.
``(a) Application for Waiver.--Any covered person subject
to section 501 and any State subject to section 507(o) may
petition the Secretary for a waiver of the applicable
requirements of section 501 or 507(o).
``(b) Grant of Waiver.--The Secretary may grant a waiver of
the requirements of section 501 or 507(o) upon a showing that
the fleet owned, operated, leased, or otherwise controlled by
the State or covered person--
``(1) will achieve a reduction in its annual consumption of
petroleum fuels equal to the reduction in consumption of
petroleum that would result from 100 percent compliance with
fuel use requirements in section 501, or, for entities
covered under section 507(o), a reduction equal to the
covered State entity's consumption of alternative fuels if
all its alternative fuel vehicles given credit under section
508 were to use alternative fuel 100 percent of the time; and
``(2) is in compliance with all applicable vehicle emission
standards established by the Administrator under the Clean
Air Act (42 U.S.C. 7401 et seq.).
``(c) Revocation of Waiver.--The Secretary shall revoke any
waiver granted under this section if the State or covered
person fails to comply with subsection (b).''.
(2) Table of contents amendment.--The table of contents of
the Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is
amended by striking the item relating to section 514 and
inserting the following:
``Sec. 514. Alternative compliance.
``Sec. 515. Authorization of appropriations.''.
(b) Credits.--Section 508 of the Energy Policy Act of 1992
(42 U.S.C. 13258) (as amended by section 703) is amended--
(1) by redesignating subsections (b) through (e) as
subsections (c) through (f), respectively;
(2) by striking subsection (a) and inserting the following:
``(a) In General.--The Secretary shall allocate a credit to
a fleet or covered person that is required to acquire an
alternative fueled vehicle under this title, if that fleet or
person acquires an alternative fueled vehicle--
``(1) in excess of the number that fleet or person is
required to acquire under this title;
``(2) before the date on which that fleet or person is
required to acquire an alternative fueled vehicle under this
title; or
``(3) that is eligible to receive credit under subsection
(b).
``(b) Maximum Available Power.--The Secretary shall
allocate credit to a fleet under subsection (a)(3) for the
acquisition by the fleet of a hybrid vehicle as follows:
``(1) For a hybrid vehicle with at least 4 percent but less
than 10 percent maximum available power, the Secretary shall
allocate 25 percent of 1 credit.
``(2) For a hybrid vehicle with at least 10 percent but
less than 20 percent maximum available power, the Secretary
shall allocate 50 percent of 1 credit.
``(3) For a hybrid vehicle with at least 20 percent but
less than 30 percent maximum available power, the Secretary
shall allocate 75 percent of 1 credit.
``(4) For a hybrid vehicle with 30 percent or more maximum
available power, the Secretary shall allocate 1 credit.'';
and
(3) by adding at the end the following:
``(g) Credit for Investment in Alternative Fuel
Infrastructure.--
``(1) Definition of qualifying infrastructure.--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; and
``(C) such other activities as the Secretary considers to
constitute an appropriate expenditure in support of the
operation, maintenance, or further widespread adoption of or
utilization of alternative fueled vehicles.
``(2) Issuance of credits.--The Secretary shall issue a
credit to a fleet or covered person under this title for
investment in qualifying infrastructure if the qualifying
infrastructure is open to the general public during regular
business hours.
``(3) Amount.--For the purpose of credits under this
subsection--
``(A) 1 credit shall be equal to a minimum investment of
$25,000 in cash or equivalent expenditure, 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.
``(h) Definition of Maximum Available Power.--In this
section, the term `maximum available power' means the
quotient obtained by dividing--
``(1) the maximum power available from the energy storage
device of a hybrid vehicle, during a standard 10-second pulse
power or equivalent test; by
``(2) the sum of--
``(A) the maximum power described in subparagraph (A); and
``(B) the net power of the internal combustion or heat
engine, as determined in accordance with standards
established by the Society of Automobile Engineers.''.
(c) Lease Condensate Fuels.--Section 301 of the Energy
Policy Act of 1992 (42 U.S.C. 13211) (as amended by section
702) is amended--
(1) in paragraph (2), by inserting ``mixtures containing 50
percent or more by volume of lease condensate or fuels
extracted from lease condensate;'' after ``liquefied
petroleum gas;'';
(2) in paragraph (14)--
(A) by inserting ``mixtures containing 50 percent or more
by volume of lease condensate or fuels extracted from lease
condensate,'' after ``liquefied petroleum gas,''; and
(B) by striking ``and'' at the end;
(3) in paragraph (15), by striking the period at the end
and inserting ``; and''; and
(4) by adding at the end the following:
``(16) the term `lease condensate' means a mixture,
primarily of pentanes and heavier hydrocarbons, that is
recovered as a liquid from natural gas in lease separation
facilities.''.
(d) Lease Condensate Use Credits.--
(1) In general.--Title III of the Energy Policy Act of 1992
(42 U.S.C. 13211 et seq.) is amended by adding at the end the
following:
``SEC. 313. LEASE CONDENSATE USE CREDITS.
``(a) In General.--Subject to subsection (d), the Secretary
shall allocate 1 credit under this section to a fleet or
covered person for each qualifying volume of the lease
condensate component of fuel containing at least 50 percent
lease condensate, or fuels extracted from lease condensate,
after the date of enactment of this section for use by the
fleet or covered person in vehicles owned or operated by the
fleet or covered person that weigh more than 8,500 pounds
gross vehicle weight rating.
``(b) Requirements.--A credit allocated under this
section--
``(1) shall be subject to the same exceptions, authority,
documentation, and use of credits that are specified for
qualifying volumes of biodiesel in section 312; and
``(2) shall not be considered a credit under section 508.
``(c) Regulation.--
``(1) In general.--Subject to subsection (d), not later
than January 1, 2004, after the collection of appropriate
information and data that consider usage options, uses in
other industries, products, or processes, potential volume
capacities, costs, air emissions, and fuel efficiencies, the
Secretary shall issue a regulation establishing requirements
and procedures for the implementation of this section.
``(2) Qualifying volume.--The regulation shall include a
determination of an appropriate qualifying volume for lease
condensate, except that in no case shall the Secretary
determine that the qualifying volume for lease condensate is
less than 1,125 gallons.
``(d) Applicability.--This section applies unless the
Secretary finds that the use of lease condensate as an
alternative fuel would adversely affect public health or
safety or ambient air quality or the environment.''.
(2) Table of contents amendment.--The table of contents of
the Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is
amended by adding at the end of the items relating to title
III the following:
``Sec. 313. Lease condensate use credits.''.
(e) Emergency Exemption.--Section 301 of the Energy Policy
Act of 1992 (42 U.S.C. 13211) (as amended by section 702 and
this section) is amended in paragraph (9)(E) by inserting
before the semicolon at the end ``, including vehicles
directly used in the emergency repair of transmission lines
and in the restoration of electricity service following power
outages, as determined by the Secretary''.
SEC. 706. REVIEW OF ENERGY POLICY ACT OF 1992 PROGRAMS.
(a) In General.--Not later than 180 days after the date of
enactment of this section, the Secretary of Energy shall
complete a study to determine the effect that titles III, IV,
and V of the Energy Policy Act of 1992 (42 U.S.C. 13211 et
seq.) have had on--
(1) the development of alternative fueled vehicle
technology;
[[Page H4039]]
(2) the availability of that technology in the market; and
(3) the cost of alternative fueled vehicles.
(b) Topics.--As part of the study under subsection (a), the
Secretary shall specifically identify--
(1) the number of alternative fueled vehicles acquired by
fleets or covered persons required to acquire alternative
fueled vehicles;
(2) the quantity, by type, of alternative fuel actually
used in alternative fueled vehicles acquired by fleets or
covered persons;
(3) the quantity of petroleum displaced by the use of
alternative fuels in alternative fueled vehicles acquired by
fleets or covered persons;
(4) the direct and indirect costs of compliance with
requirements under titles III, IV, and V of the Energy Policy
Act of 1992 (42 U.S.C. 13211 et seq.), including--
(A) vehicle acquisition requirements imposed on fleets or
covered persons;
(B) administrative and recordkeeping expenses;
(C) fuel and fuel infrastructure costs;
(D) associated training and employee expenses; and
(E) any other factors or expenses the Secretary determines
to be necessary to compile reliable estimates of the overall
costs and benefits of complying with programs under those
titles for fleets, covered persons, and the national economy;
(5) the existence of obstacles preventing compliance with
vehicle acquisition requirements and increased use of
alternative fuel in alternative fueled vehicles acquired by
fleets or covered persons; and
(6) the projected impact of amendments to the Energy Policy
Act of 1992 made by this title.
(c) Report.--Upon completion of the study under this
section, the Secretary shall submit to Congress a report that
describes the results of the study and includes any
recommendations of the Secretary for legislative or
administrative changes concerning the alternative fueled
vehicle requirements under titles III, IV and V of the Energy
Policy Act of 1992 (42 U.S.C. 13211 et seq.).
SEC. 707. REPORT CONCERNING COMPLIANCE WITH ALTERNATIVE
FUELED VEHICLE PURCHASING REQUIREMENTS.
Section 310(b)(1) of the Energy Policy Act of 1992 (42
U.S.C. 13218(b)(1)) is amended by striking ``1 year after the
date of enactment of this subsection'' and inserting
``February 15, 2004''.
Subtitle B--Hybrid Vehicles, Advanced Vehicles, and Fuel Cell Buses
PART I--HYBRID VEHICLES
SEC. 711. HYBRID VEHICLES.
The Secretary of Energy shall accelerate efforts directed
toward the improvement of batteries and other rechargeable
energy storage systems, power electronics, hybrid systems
integration, and other technologies for use in hybrid
vehicles.
PART II--ADVANCED VEHICLES
SEC. 721. DEFINITIONS.
In this part:
(1) Alternative fueled vehicle.--
(A) In general.--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)).
(B) Exclusion.--The term ``alternative fueled vehicle''
does not include a vehicle that the Secretary determines, by
regulation, 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 that--
(A) meets the definition of a low-speed vehicle (as defined
in part 571 of title 49, Code of Federal Regulations);
(B) meets the definition of a zero-emission vehicle (as
defined in section 86.1702-99 of title 40, Code of Federal
Regulations);
(C) meets the requirements of Federal Motor Vehicle Safety
Standard No. 500; and
(D) has a maximum speed of not greater than 25 miles per
hour.
(5) Pilot program.--The term ``pilot program'' means the
competitive grant program established under section 722.
(6) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(7) Ultra-low sulfur diesel vehicle.--The term ``ultra-low
sulfur diesel vehicle'' means a vehicle manufactured in any
of model years 2003 through 2006 powered by a heavy-duty
diesel engine that--
(A) is fueled by diesel fuel that 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 year 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 quantity of 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. 722. PILOT PROGRAM.
(a) Establishment.--The Secretary, in consultation with the
Secretary of Transportation, 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 15 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).
(b) Grant Purposes.--A grant 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 2-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 or pull airplanes toward or
away from terminal gates).
(3) The acquisition of ultra-low sulfur diesel vehicles.
(4) Installation or acquisition of 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.--
(A) In general.--The Secretary shall issue requirements for
applying for grants under the pilot program.
(B) Minimum requirements.--At a minimum, the Secretary
shall require that an application for a grant--
(i) 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
(ii) include--
(I) a description of the project proposed in the
application, including how the project meets the requirements
of this part;
(II) an estimate of the ridership or degree of use of the
project;
(III) an estimate of the air pollution emissions reduced
and fossil fuel displaced as a result of the project, and a
plan to collect and disseminate environmental data, related
to the project to be funded under the grant, over the life of
the project;
(IV) a description of how the project will be sustainable
without Federal assistance after the completion of the term
of the grant;
(V) a complete description of the costs of the project,
including acquisition, construction, operation, and
maintenance costs over the expected life of the project;
(VI) a description of which costs of the project will be
supported by Federal assistance under this part; and
(VII) 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 project, and a
commitment by the applicant to use such fuel in carrying out
the project.
(2) Partners.--An applicant under paragraph (1) may carry
out a project under the pilot program in partnership with
public and private entities.
(d) Selection Criteria.--In evaluating applications under
the pilot program, the Secretary shall--
(1) consider each applicant's previous experience with
similar projects; and
(2) give priority consideration to applications that--
(A) are most likely to maximize protection of the
environment;
(B) demonstrate the greatest commitment on the part of the
applicant to ensure funding for the proposed project and the
greatest likelihood that the project will be maintained or
expanded after Federal assistance under this part is
completed; and
(C) exceed the minimum requirements of subsection
(c)(1)(B)(ii).
(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.
[[Page H4040]]
(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 90 days after the date of
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 not later
than 180 days after the date of publication of the notice.
(2) Selection.--Not later than 180 days after the date by
which applications for grants are due, the Secretary shall
select by competitive, peer reviewed proposal, 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 nor more than 25 percent of the grant funding made
available under this section for the acquisition of ultra-low
sulfur diesel vehicles.
SEC. 723. REPORTS TO CONGRESS.
(a) Initial Report.--Not later than 60 days after the date
on which grants are awarded under this part, the Secretary
shall submit to 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
enactment of this Act, and annually thereafter until the
pilot program ends, the Secretary shall submit to Congress a
report containing an evaluation of the effectiveness of the
pilot program, including--
(1) an assessment of the benefits to the environment
derived from the projects included in the pilot program; and
(2) 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. 724. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Secretary to
carry out this part $200,000,000, to remain available until
expended.
PART III--FUEL CELL BUSES
SEC. 731. FUEL CELL TRANSIT BUS DEMONSTRATION.
(a) In General.--The Secretary of Energy, in consultation
with the Secretary of Transportation, shall establish a
transit bus demonstration program to make competitive, merit-
based awards for 5-year projects to demonstrate not more than
25 fuel cell transit buses (and necessary infrastructure) in
5 geographically dispersed localities.
(b) Preference.--In selecting projects under this section,
the Secretary of Energy shall give preference to projects
that are most likely to mitigate congestion and improve air
quality.
(c) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of Energy to carry out
this section $10,000,000 for each of fiscal years 2004
through 2008.
Subtitle C--Clean School Buses
SEC. 741. DEFINITIONS.
In this subtitle:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Alternative fuel.--The term ``alternative fuel'' means
liquefied natural gas, compressed natural gas, liquefied
petroleum gas, hydrogen, propane, or methanol or ethanol at
no less than 85 percent by volume.
(3) Alternative fuel school bus.--The term ``alternative
fuel school bus'' means a school bus that meets all of the
requirements of this subtitle and is operated solely on an
alternative fuel.
(4) Emissions control retrofit technology.--The term
``emissions control retrofit technology'' means a particulate
filter or other emissions control equipment that is verified
or certified by the Administrator or the California Air
Resources Board as an effective emission reduction technology
when installed on an existing school bus.
(5) Idling.--The term ``idling'' means operating an engine
while remaining stationary for more than approximately 15
minutes, except that the term does not apply to routine
stoppages associated with traffic movement or congestion.
(6) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(7) Ultra-low sulfur diesel fuel.--The term ``ultra-low
sulfur diesel fuel'' means diesel fuel that contains sulfur
at not more than 15 parts per million.
(8) Ultra-low sulfur diesel fuel school bus.--The term
``ultra-low sulfur diesel fuel school bus'' means a school
bus that meets all of the requirements of this subtitle and
is operated solely on ultra-low sulfur diesel fuel.
SEC. 742. PROGRAM FOR REPLACEMENT OF CERTAIN SCHOOL BUSES
WITH CLEAN SCHOOL BUSES.
(a) Establishment.--The Administrator, in consultation with
the Secretary and other appropriate Federal departments and
agencies, shall establish a program for awarding grants on a
competitive basis to eligible entities for the replacement of
existing school buses manufactured before model year 1991
with alternative fuel school buses and ultra-low sulfur
diesel fuel school buses.
(b) Requirements.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Administrator shall establish and
publish in the Federal Register grant requirements on
eligibility for assistance, and on implementation of the
program established under subsection (a), including
instructions for the submission of grant applications and
certification requirements to ensure compliance with this
subtitle.
(2) Application deadlines.--The requirements established
under paragraph (1) shall require submission of grant
applications not later than--
(A) in the case of the first year of program
implementation, the date that is 180 days after the
publication of the requirements in the Federal Register; and
(B) in the case of each subsequent year, June 1 of the
year.
(c) Eligible Recipients.--A grant shall be awarded under
this section only--
(1) to 1 or more local or State governmental entities
responsible for providing school bus service to 1 or more
public school systems or responsible for the purchase of
school buses;
(2) to 1 or more contracting entities that provide school
bus service to 1 or more public school systems, if the grant
application is submitted jointly with the 1 or more school
systems to be served by the buses, except that the
application may provide that buses purchased using funds
awarded shall be owned, operated, and maintained exclusively
by the 1 or more contracting entities; or
(3) to a nonprofit school transportation association
representing private contracting entities, if the association
has notified and received approval from the 1 or more school
systems to be served by the buses.
(d) Award Deadlines.--
(1) In general.--Subject to paragraph (2), the
Administrator shall award a grant made to a qualified
applicant for a fiscal year--
(A) in the case of the first fiscal year of program
implementation, not later than the date that is 90 days after
the application deadline established under subsection (b)(2);
and
(B) in the case of each subsequent fiscal year, not later
than August 1 of the fiscal year.
(2) Insufficient number of qualified grant applications.--
If the Administrator does not receive a sufficient number of
qualified grant applications to meet the requirements of
subsection (i)(1) for a fiscal year, the Administrator shall
award a grant made to a qualified applicant under subsection
(i)(2) not later than September 30 of the fiscal year.
(e) Types of Grants.--
(1) In general.--A grant under this section shall be used
for the replacement of school buses manufactured before model
year 1991 with alternative fuel school buses and ultra-low
sulfur diesel fuel school buses.
(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 Administrator
shall give priority to applicants that propose to replace
school buses manufactured before model year 1977.
(f) Conditions of Grant.--A grant provided under this
section shall include the following conditions:
(1) School bus fleet.--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) Use of funds.--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 fuel school buses, including State taxes and contract
fees associated with the acquisition of such buses; and
(B) to provide--
(i) up to 20 percent of the price of the alternative fuel
school buses acquired, for necessary alternative fuel
infrastructure if the infrastructure will only be available
to the grant recipient; and
(ii) up to 25 percent of the price of the alternative fuel
school buses acquired, for necessary alternative fuel
infrastructure if the infrastructure will be available to the
grant recipient and to other bus fleets.
(3) Grant recipient funds.--The grant recipient shall be
required to provide at least--
(A) in the case of a grant recipient described in paragraph
(1) or (3) of subsection (c), the lesser of--
[[Page H4041]]
(i) an amount equal to 15 percent of the total cost of each
bus received; or
(ii) $15,000 per bus; and
(B) in the case of a grant recipient described in
subsection (c)(2), the lesser of--
(i) an amount equal to 20 percent of the total cost of each
bus received; or
(ii) $20,000 per bus.
(4) Ultra-low sulfur diesel fuel.--In the case of a grant
recipient receiving a grant for ultra-low sulfur diesel fuel
school buses, the grant recipient shall be required to
provide documentation to the satisfaction of the
Administrator 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.
(5) Timing.--All alternative fuel school buses, ultra-low
sulfur diesel fuel school buses, or alternative fuel
infrastructure acquired under a grant awarded under this
section shall be purchased and placed in service as soon as
practicable.
(g) Buses.--
(1) In general.--Except as provided in paragraph (2),
funding under a grant made under this section for the
acquisition of new alternative fuel school buses or ultra-low
sulfur diesel fuel school buses shall only be used to acquire
school buses--
(A) with a gross vehicle weight of greater than 14,000
pounds;
(B) that are powered by a heavy duty engine;
(C) in the case of alternative fuel school buses
manufactured in model years 2004 through 2006, that 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
(D) in the case of ultra-low sulfur diesel fuel school
buses manufactured in model years 2004 through 2006, that
emit not more than 2.5 grams per brake horsepower-hour of
nonmethane hydrocarbons and oxides of nitrogen and .01 grams
per brake horsepower-hour of particulate matter.
(2) Limitations.--A bus shall not be acquired under this
section that emits 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 fuel school buses commercially available at the
time the grant is made.
(h) Deployment and Distribution.--The Administrator shall--
(1) seek, to the maximum extent practicable, to achieve
nationwide deployment of alternative fuel school buses and
ultra-low sulfur diesel fuel school buses through the program
under this section; and
(2) 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) Allocation of Funds.--
(1) In general.--Subject to paragraph (2), of the amount of
grant funding made available to carry out this section for
any fiscal year, the Administrator shall use--
(A) 70 percent for the acquisition of alternative fuel
school buses or supporting infrastructure; and
(B) 30 percent for the acquisition of ultra-low sulfur
diesel fuel school buses.
(2) Insufficient number of qualified grant applications.--
After the first fiscal year in which this program is in
effect, if the Administrator does not receive a sufficient
number of qualified grant applications to meet the
requirements of subparagraph (A) or (B) of paragraph (1) for
a fiscal year, effective beginning on August 1 of the fiscal
year, the Administrator shall make the remaining funds
available to other qualified grant applicants under this
section.
(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.--
(1) In general.--Not later than January 31 of each year,
the Administrator shall transmit to Congress a report
evaluating implementation of the programs under this section
and section 743.
(2) Components.--The reports shall include a description
of--
(A) the total number of grant applications received;
(B) the number and types of alternative fuel school buses,
ultra-low sulfur diesel fuel school buses, and retrofitted
buses requested in grant applications;
(C) grants awarded and the criteria used to select the
grant recipients;
(D) certified engine emission levels of all buses purchased
or retrofitted under the programs under this section and
section 743;
(E) an evaluation of the in-use emission level of buses
purchased or retrofitted under the programs under this
section and section 743; and
(F) any other information the Administrator considers
appropriate.
(l) Authorization of Appropriations.--There are authorized
to be appropriated to the Administrator to carry out this
section, to remain available until expended--
(1) $45,000,000 for fiscal year 2005;
(2) $65,000,000 for fiscal year 2006;
(3) $90,000,000 for fiscal year 2007; and
(4) such sums as are necessary for each of fiscal years
2008 and 2009.
SEC. 743. DIESEL RETROFIT PROGRAM.
(a) Establishment.--The Administrator, in consultation with
the Secretary, shall establish a program for awarding grants
on a competitive basis to entities for the installation 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 1 or more public school
systems;
(2) to 1 or more contracting entities that provide school
bus service to 1 or more public school systems, if the grant
application is submitted jointly with the 1 or more school
systems that the buses will serve, except that the
application may provide that buses purchased using funds
awarded shall be owned, operated, and maintained exclusively
by the 1 or more contracting entities; or
(3) to a nonprofit school transportation association
representing private contracting entities, if the association
has notified and received approval from the 1 or more school
systems to be served by the buses.
(c) Awards.--
(1) In general.--The Administrator shall seek, to the
maximum extent practicable, to ensure a broad geographic
distribution of grants under this section.
(2) Preferences.--In making awards of grants under this
section, the Administrator shall give preference to proposals
that--
(A) will achieve the greatest reductions in emissions of
nonmethane hydrocarbons, oxides of nitrogen, or particulate
matter per proposal or per bus; or
(B) involve the use of emissions control retrofit
technology on diesel school buses that operate solely on
ultra-low sulfur diesel fuel.
(d) Conditions of Grant.--A grant shall be provided under
this section on the conditions that--
(1) buses on which retrofit emissions-control technology
are to be demonstrated--
(A) will operate on ultra-low sulfur diesel fuel where such
fuel is reasonably available or required for sale by State or
local law or regulation;
(B) were manufactured in model year 1991 or later; and
(C) will be used for the transportation of school children
to and from school for a minimum of 5 years;
(2) grant funds will be used for the purchase of emission
control retrofit technology, including State taxes and
contract fees; and
(3) grant recipients will provide at least 15 percent of
the total cost of the retrofit, including the purchase of
emission control retrofit technology and all necessary labor
for installation of the retrofit.
(e) Verification.--Not later than 90 days 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;
(2) that buses powered by ultra-low sulfur diesel fuel 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; and
(3) that grants are administered in accordance with this
section.
(f) Authorization of Appropriations.--There are authorized
to be appropriated to the Administrator to carry out this
section, to remain available until expended--
(1) $20,000,000 for fiscal year 2005;
(2) $35,000,000 for fiscal year 2006;
(3) $45,000,000 for fiscal year 2007; and
(4) such sums as are necessary for each of fiscal years
2008 and 2009.
SEC. 744. FUEL CELL SCHOOL BUSES.
(a) Establishment.--The Secretary shall establish a program
for entering into cooperative agreements--
(1) with private sector fuel cell bus developers for the
development of fuel cell-powered school buses; and
(2) 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) Reports to Congress.--Not later than 3 years after the
date of enactment of this Act, the Secretary shall transmit
to 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.
(d) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary to carry out this section
$25,000,000 for the period of fiscal years 2004 through 2006.
Subtitle D--Miscellaneous
SEC. 751. RAILROAD EFFICIENCY.
(a) Establishment.--The Secretary of Energy shall, in
cooperation with the Secretary
[[Page H4042]]
of Transportation and the Administrator of the Environmental
Protection Agency, establish a cost-shared, public-private
research partnership involving the Federal Government,
railroad carriers, locomotive manufacturers and equipment
suppliers, and the Association of American Railroads, to
develop and demonstrate railroad locomotive technologies that
increase fuel economy, reduce emissions, and lower costs of
operation.
(b) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of Energy to carry out
this section--
(1) $25,000,000 for fiscal year 2005;
(2) $35,000,000 for fiscal year 2006; and
(3) $50,000,000 for fiscal year 2007.
SEC. 752. MOBILE EMISSION REDUCTIONS TRADING AND CREDITING.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Administrator of the Environmental
Protection Agency shall submit to Congress a report on the
experience of the Administrator with the trading of mobile
source emission reduction credits for use by owners and
operators of stationary source emission sources to meet
emission offset requirements within a nonattainment area.
(b) Contents.--The report shall describe--
(1) projects approved by the Administrator that include the
trading of mobile source emission reduction credits for use
by stationary sources in complying with offset requirements,
including a description of--
(A) project and stationary sources location;
(B) volumes of emissions offset and traded;
(C) the sources of mobile emission reduction credits; and
(D) if available, the cost of the credits;
(2) the significant issues identified by the Administrator
in consideration and approval of trading in the projects;
(3) the requirements for monitoring and assessing the air
quality benefits of any approved project;
(4) the statutory authority on which the Administrator has
based approval of the projects;
(5) an evaluation of how the resolution of issues in
approved projects could be used in other projects; and
(6) any other issues that the Administrator considers
relevant to the trading and generation of mobile source
emission reduction credits for use by stationary sources or
for other purposes.
SEC. 753. AVIATION FUEL CONSERVATION AND EMISSIONS.
(a) In General.--Not later than 60 days after the date of
enactment of this Act, the Administrator of the Federal
Aviation Administration and the Administrator of the
Environmental Protection Agency shall jointly initiate a
study to identify--
(1) the impact of aircraft emissions on air quality in
nonattainment areas; and
(2) ways to promote fuel conservation measures for aviation
to--
(A) enhance fuel efficiency; and
(B) reduce emissions.
(b) Focus.--The study under subsection (a) shall focus on
how air traffic management inefficiencies, such as aircraft
idling at airports, result in unnecessary fuel burn and air
emissions.
(c) Report.--Not later than 1 year after the date of the
initiation of the study under subsection (a), the
Administrator of the Federal Aviation Administration and the
Administrator of the Environmental Protection Agency shall
jointly submit to the Committee on Energy and Commerce and
the Committee on Transportation and Infrastructure of the
House of Representatives and the Committee on Environment and
Public Works and the Committee on Commerce, Science, and
Transportation of the Senate a report that--
(1) describes the results of the study; and
(2) includes any recommendations on ways in which
unnecessary fuel use and emissions affecting air quality may
be reduced--
(A) without adversely affecting safety and security and
increasing individual aircraft noise; and
(B) while taking into account all aircraft emissions and
the impact of the emissions on human health.
SEC. 754. DIESEL FUELED VEHICLES.
(a) Definition of Tier 2 Emission Standards.--In this
section, the term ``tier 2 emission standards'' means the
motor vehicle emission standards that apply to passenger
cars, light trucks, and larger passenger vehicles
manufactured after the 2003 model year, as issued on February
10, 2000, by the Administrator of the Environmental
Protection Agency under sections 202 and 211 of the Clean Air
Act (42 U.S.C. 7521, 7545).
(b) 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.
(c) Goals.--The Secretary shall carry out subsection (b)
with a view toward achieving the following goals:
(1) Developing and demonstrating diesel technologies that,
not later than 2010, meet the following standards:
(A) Tier 2 emission standards.
(B) The heavy-duty emissions standards of 2007 that are
applicable to heavy-duty vehicles under regulations issued by
the Administrator of the Environmental Protection Agency as
of the date of enactment of this Act.
(2) Developing the next generation of low-emission, high
efficiency diesel engine technologies, including homogeneous
charge compression ignition technology.
SEC. 755. CONSERVE BY BICYCLING PROGRAM.
(a) Definitions.--In this section:
(1) Program.--The term ``program'' means the Conserve by
Bicycling Program established by subsection (b).
(2) Secretary.--The term ``Secretary'' means the Secretary
of Transportation.
(b) Establishment.--There is established within the
Department of Transportation a program to be known as the
``Conserve by Bicycling Program''.
(c) Projects.--
(1) In general.--In carrying out the program, the Secretary
shall establish not more than 10 pilot projects that are--
(A) dispersed geographically throughout the United States;
and
(B) designed to conserve energy resources by encouraging
the use of bicycles in place of motor vehicles.
(2) Requirements.--A pilot project described in paragraph
(1) shall--
(A) use education and marketing to convert motor vehicle
trips to bicycle trips;
(B) document project results and energy savings (in
estimated units of energy conserved);
(C) facilitate partnerships among interested parties in at
least 2 of the fields of--
(i) transportation;
(ii) law enforcement;
(iii) education;
(iv) public health;
(v) environment; and
(vi) energy;
(D) maximize bicycle facility investments;
(E) demonstrate methods that may be used in other regions
of the United States; and
(F) facilitate the continuation of ongoing programs that
are sustained by local resources.
(3) Cost sharing.--At least 20 percent of the cost of each
pilot project described in paragraph (1) shall be provided
from State or local sources.
(d) Energy and Bicycling Research Study.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, the Secretary shall enter into a
contract with the National Academy of Sciences for, and the
National Academy of Sciences shall conduct and submit to
Congress a report on, a study on the feasibility of
converting motor vehicle trips to bicycle trips.
(2) Components.--The study shall--
(A) document the results or progress of the pilot projects
under subsection (c);
(B) determine the type and duration of motor vehicle trips
that people in the United States may feasibly make by
bicycle, taking into consideration factors such as--
(i) weather;
(ii) land use and traffic patterns;
(iii) the carrying capacity of bicycles; and
(iv) bicycle infrastructure;
(C) determine any energy savings that would result from the
conversion of motor vehicle trips to bicycle trips;
(D) include a cost-benefit analysis of bicycle
infrastructure investments; and
(E) include a description of any factors that would
encourage more motor vehicle trips to be replaced with
bicycle trips.
(e) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary to carry out this section
$6,200,000, to remain available until expended, of which--
(1) $5,150,000 shall be used to carry out pilot projects
described in subsection (c);
(2) $300,000 shall be used by the Secretary to coordinate,
publicize, and disseminate the results of the program; and
(3) $750,000 shall be used to carry out subsection (d).
SEC. 756. REDUCTION OF ENGINE IDLING OF HEAVY-DUTY VEHICLES.
(a) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Advanced truck stop electrification system.--The term
``advanced truck stop electrification system'' means a
stationary system that delivers heat, air conditioning,
electricity, and communications, and is capable of providing
verifiable and auditable evidence of use of those services,
to a heavy-duty vehicle and any occupants of the heavy-duty
vehicle without relying on components mounted onboard the
heavy-duty vehicle for delivery of those services.
(3) Auxiliary power unit.--The term ``auxiliary power
unit'' means an integrated system that--
(A) provides heat, air conditioning, engine warming, and
electricity to the factory-installed components on a heavy-
duty vehicle as if the main drive engine of the heavy-duty
vehicle were running; and
(B) is certified by the Administrator under part 89 of
title 40, Code of Federal Regulations (or any successor
regulation), as meeting applicable emission standards.
(4) Heavy-duty vehicle.--The term ``heavy-duty vehicle''
means a vehicle that--
(A) has a gross vehicle weight rating greater than 12,500
pounds; and
(B) is powered by a diesel engine.
(5) Idle reduction technology.--The term ``idle reduction
technology'' means an advanced truck stop electrification
system, auxiliary power unit, or other device or system of
devices that--
(A) is used to reduce long-duration idling of a heavy-duty
vehicle; and
[[Page H4043]]
(B) allows for the main drive engine or auxiliary
refrigeration engine of a heavy-duty vehicle to be shut down.
(6) Long-duration idling.--
(A) In general.--The term ``long-duration idling'' means
the operation of a main drive engine or auxiliary
refrigeration engine of a heavy-duty vehicle, for a period
greater than 15 consecutive minutes, at a time at which the
main drive engine is not engaged in gear.
(B) Exclusions.--The term ``long-duration idling'' does not
include the operation of a main drive engine or auxiliary
refrigeration engine of a heavy-duty vehicle during a routine
stoppage associated with traffic movement or congestion.
(b) Idle Reduction Technology Benefits, Programs, and
Studies.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Administrator shall--
(A)(i) commence a review of the mobile source air emission
models of the Environmental Protection Agency used under the
Clean Air Act (42 U.S.C. 7401 et seq.) to determine whether
the models accurately reflect the emissions resulting from
long-duration idling of heavy-duty vehicles and other
vehicles and engines; and
(ii) update those models as the Administrator determines to
be appropriate; and
(B)(i) commence a review of the emission reductions
achieved by the use of idle reduction technology; and
(ii) complete such revisions of the regulations and
guidance of the Environmental Protection Agency as the
Administrator determines to be appropriate.
(2) Deadline for completion.--Not later than 180 days after
the date of enactment of this Act, the Administrator shall--
(A) complete the reviews under subparagraphs (A)(i) and
(B)(i) of paragraph (1); and
(B) prepare and make publicly available 1 or more reports
on the results of the reviews.
(3) Discretionary inclusions.--The reviews under
subparagraphs (A)(i) and (B)(i) of paragraph (1) and the
reports under paragraph (2)(B) may address the potential fuel
savings resulting from use of idle reduction technology.
(4) Idle reduction deployment program.--
(A) Establishment.--
(i) In general.--Not later than 90 days after the date of
enactment of this Act, the Administrator, in consultation
with the Secretary of Transportation, shall establish a
program to support deployment of idle reduction technology.
(ii) Priority.--The Administrator shall give priority to
the deployment of idle reduction technology based on
beneficial effects on air quality and ability to lessen the
emission of criteria air pollutants.
(B) Funding.--
(i) Authorization of appropriations.--There are authorized
to be appropriated to the Administrator to carry out
subparagraph (A) $19,500,000 for fiscal year 2004,
$30,000,000 for fiscal year 2005, and $45,000,000 for fiscal
year 2006.
(ii) Cost sharing.--Subject to clause (iii), the
Administrator shall require at least 50 percent of the costs
directly and specifically related to any project under this
section to be provided from non-Federal sources.
(iii) Necessary and appropriate reductions.--The
Administrator may reduce the non-Federal requirement under
clause (ii) if the Administrator determines that the
reduction is necessary and appropriate to meet the objectives
of this section.
(5) Idling location study.--
(A) In general.--Not later than 90 days after the date of
enactment of this Act, the Administrator, in consultation
with the Secretary of Transportation, shall commence a study
to analyze all locations at which heavy-duty vehicles stop
for long-duration idling, including--
(i) truck stops;
(ii) rest areas;
(iii) border crossings;
(iv) ports;
(v) transfer facilities; and
(vi) private terminals.
(B) Deadline for completion.--Not later than 180 days after
the date of enactment of this Act, the Administrator shall--
(i) complete the study under subparagraph (A); and
(ii) prepare and make publicly available 1 or more reports
of the results of the study.
(c) Vehicle Weight Exemption.--Section 127(a) of title 23,
United States Code, is amended--
(1) by designating the first through eleventh sentences as
paragraphs (1) through (11), respectively; and
(2) by adding at the end the following:
``(12) Heavy duty vehicles.--
``(A) In general.--Subject to subparagraphs (B) and (C), in
order to promote reduction of fuel use and emissions because
of engine idling, the maximum gross vehicle weight limit and
the axle weight limit for any heavy-duty vehicle equipped
with an idle reduction technology shall be increased by a
quantity necessary to compensate for the additional weight of
the idle reduction system.
``(B) Maximum weight increase.--The weight increase under
subparagraph (A) shall be not greater than 250 pounds.
``(C) Proof.--On request by a regulatory agency or law
enforcement agency, the vehicle operator shall provide proof
(through demonstration or certification) that--
``(i) the idle reduction technology is fully functional at
all times; and
``(ii) the 250-pound gross weight increase is not used for
any purpose other than the use of idle reduction technology
described in subparagraph (A).''.
SEC. 757. BIODIESEL ENGINE TESTING PROGRAM.
(a) In General.--Not later that 180 days after the date of
enactment of this Act, the Secretary shall initiate a
partnership with diesel engine, diesel fuel injection system,
and diesel vehicle manufacturers and diesel and biodiesel
fuel providers, to include biodiesel testing in advanced
diesel engine and fuel system technology.
(b) Scope.--The program shall provide for testing to
determine the impact of biodiesel from different sources on
current and future emission control technologies, with
emphasis on--
(1) the impact of biodiesel on emissions warranty, in-use
liability, and antitampering provisions;
(2) the impact of long-term use of biodiesel on engine
operations;
(3) the options for optimizing these technologies for both
emissions and performance when switching between biodiesel
and diesel fuel; and
(4) the impact of using biodiesel in these fueling systems
and engines when used as a blend with 2006 Environmental
Protection Agency-mandated diesel fuel containing a maximum
of 15-parts-per-million sulfur content.
(c) Report.--Not later than 2 years after the date of
enactment of this Act, the Secretary shall provide an interim
report to Congress on the findings of the program, including
a comprehensive analysis of impacts from biodiesel on engine
operation for both existing and expected future diesel
technologies, and recommendations for ensuring optimal
emissions reductions and engine performance with biodiesel.
(d) Authorization of Appropriations.--There are authorized
to be appropriated $5,000,000 for each of fiscal years 2004
through 2008 to carry out this section.
(e) Definition.--For purposes of this section, the term
``biodiesel'' means a diesel fuel substitute produced from
nonpetroleum renewable resources that meets the registration
requirements for fuels and fuel additives established by the
Environmental Protection Agency under section 211 of the
Clean Air Act (42 U.S.C. 7545) and that meets the American
Society for Testing and Materials D6751-02a Standard
Specification for Biodiesel Fuel (B100) Blend Stock for
Distillate Fuels.
SEC. 758. HIGH OCCUPANCY VEHICLE EXCEPTION.
Notwithstanding section 102(a) of title 23, United States
Code, a State may permit a vehicle with fewer than 2
occupants to operate in high occupancy vehicle lanes if the
vehicle--
(1) is a dedicated vehicle (as defined in section 301 of
the Energy Policy Act of 1992 (42 U.S. 13211)); or
(2) is a hybrid vehicle (as defined by the State for the
purpose of this section).
Subtitle E--Automobile Efficiency
SEC. 771. 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 carry out its obligations with
respect to average fuel economy standards $2,000,000 for each
of fiscal years 2004 through 2008.
SEC. 772. REVISED CONSIDERATIONS FOR DECISIONS ON MAXIMUM
FEASIBLE AVERAGE FUEL ECONOMY.
Section 32902(f) of title 49, United States Code, is
amended to read as follows:
``(f) Considerations for Decisions on Maximum Feasible
Average Fuel Economy.--When deciding maximum feasible average
fuel economy under this section, the Secretary of
Transportation shall consider the following matters:
``(1) Technological feasibility.
``(2) Economic practicability.
``(3) The effect of other motor vehicle standards of the
Government on fuel economy.
``(4) The need of the United States to conserve energy.
``(5) The effects of fuel economy standards on passenger
automobiles, nonpassenger automobiles, and occupant safety.
``(6) The effects of compliance with average fuel economy
standards on levels of automobile industry employment in the
United States.''.
SEC. 773. EXTENSION OF MAXIMUM FUEL ECONOMY INCREASE FOR
ALTERNATIVE FUELED VEHICLES.
(a) Manufacturing Incentives.--Section 32905 of title 49,
United States Code, is amended--
(1) in each of subsections (b) and (d), by striking ``1993-
2004'' and inserting ``1993-2008'';
(2) in subsection (f), by striking ``2001'' and inserting
``2005''; and
(3) in subsection (f)(1), by striking ``2004'' and
inserting ``2008''.
(b) Maximum Fuel Economy Increase.--Subsection (a)(1) of
section 32906 of title 49, United States Code, is amended--
(1) in subparagraph (A), by striking ``the model years
1993-2004'' and inserting ``model years 1993-2008''; and
(2) in subparagraph (B), by striking ``the model years
2005-2008'' and inserting ``model years 2009-2012''.
[[Page H4044]]
SEC. 774. 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 initiate a study
of the feasibility and effects of reducing by model year
2012, by a significant percentage, the amount of fuel
consumed by 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 Congress a
report on the findings, conclusion, and recommendations of
the study under this section by not later than 1 year after
the date of the enactment of this Act.
TITLE VIII--HYDROGEN
SEC. 801. DEFINITIONS.
In this title:
(1) Advisory committee.--The term ``Advisory Committee''
means the Hydrogen Technical and Fuel Cell Advisory Committee
established under section 805.
(2) Department.--The term ``Department'' means the
Department of Energy.
(3) Fuel cell.--The term ``fuel cell'' means a device that
directly converts the chemical energy of a fuel and an
oxidant into electricity by an electrochemical process taking
place at separate electrodes in the device.
(4) Infrastructure.--The term ``infrastructure'' means the
equipment, systems, or facilities used to produce,
distribute, deliver, or store hydrogen.
(5) Light duty vehicle.--The term ``light duty vehicle''
means a car or truck classified by the Department of
Transportation as a Class I or IIA vehicle.
(6) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
SEC. 802. PLAN.
Not later than 6 months after the date of enactment of this
Act, the Secretary shall transmit to Congress a coordinated
plan for the programs described in this title 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 5 years for the programs
authorized under this title, including the agenda for each
activity enumerated in section 803(a);
(2) the types of entities that will carry out the
activities under this title and what role each entity is
expected to play;
(3) the milestones that will be used to evaluate the
programs for the next 5 years;
(4) the most significant technical and nontechnical hurdles
that stand in the way of achieving the goals described in
section 803(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. 803. PROGRAMS.
(a) Activities.--The Secretary, in partnership with the
private sector, shall conduct programs 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, including biomass; and
(D) nuclear energy;
(2) use of hydrogen for commercial, industrial, and
residential electric power generation;
(3) 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;
(4) advanced vehicle technologies, including--
(A) engine and emission control systems;
(B) energy storage, electric propulsion, and hybrid
systems;
(C) automotive materials; and
(D) other advanced vehicle technologies;
(5) 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;
(6) development of safe, durable, affordable, and efficient
fuel cells, including 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;
(7) development, after consultation with the private
sector, of necessary codes and standards (including
international codes and standards and voluntary consensus
standards adopted in accordance with OMB Circular A-119) and
safety practices for the production, distribution, storage,
and use of hydrogen, hydrogen-carrier fuels, and related
products; and
(8) a public education program to develop improved
knowledge and acceptability of hydrogen-based systems.
(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
hydrogen-powered vehicles that will have--
(i) a range of at least 300 miles;
(ii) improved performance and ease of driving;
(iii) safety and performance comparable to vehicle
technologies in the market; and
(iv) when compared to light duty vehicles in model year
2003--
(I) fuel economy that is substantially higher;
(II) substantially lower emissions of air pollutants; and
(III) equivalent or improved 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 programs under this
section, the Secretary shall fund a limited number of
demonstration projects, consistent with a determination of
the maturity, cost-effectiveness, and environmental impacts
of technologies supporting each project. 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 existing
facilities or installations, such as existing office
buildings, military bases, vehicle fleet centers, transit bus
authorities, or units of the National Park System;
(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) include vehicle, portable, and stationary
demonstrations of fuel cell and hydrogen-based energy
technologies;
(5) address the interdependency of demand for hydrogen fuel
cell applications and hydrogen fuel infrastructure;
(6) raise awareness of hydrogen technology among the
public;
(7) facilitate identification of an optimum technology
among competing alternatives;
(8) address distributed generation using renewable sources;
and
(9) address applications specific to rural or remote
locations, including isolated villages and islands, the
National Park System, and tribal entities.
The Secretary shall give preference to projects which address
multiple elements contained in paragraphs (1) through (9).
(d) Deployment.--In carrying out the programs under this
section, the Secretary shall, in partnership with the private
sector, conduct activities to facilitate the deployment of
hydrogen energy and energy infrastructure, fuel cells, and
advanced vehicle technologies.
(e) Funding.--
(1) In general.--The Secretary shall carry out the programs
under this section using a competitive, merit-based review
process and consistent with the generally applicable Federal
laws and regulations governing awards of financial
assistance, contracts, or other agreements.
[[Page H4045]]
(2) Research centers.--Activities under this section may be
carried out by funding nationally recognized university-based
or Federal laboratory research centers.
(f) Cost Sharing.--
(1) 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 paragraph if the Secretary
determines that the research and development is of a basic or
fundamental nature or involves technical analyses or
educational activities.
(2) 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 paragraph 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.
(3) Calculation of amount.--In calculating the amount of
the non-Federal commitment under paragraph (1) or (2), the
Secretary may include personnel, services, equipment, and
other resources.
(4) Size of non-federal share.--The Secretary may consider
the size of the non-Federal share in selecting projects.
(g) Disclosure.--Section 623 of the Energy Policy Act of
1992 (42 U.S.C. 13293) relating to the protection of
information shall apply to projects carried out through
grants, cooperative agreements, or contracts under this
title.
SEC. 804. 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 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 Department of State.
(6) The Environmental Protection Agency.
(7) The National Aeronautics and Space Administration.
(8) 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 title;
(D) promote the marketplace introduction of infrastructure
for hydrogen 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. 805. 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 title.
(b) Membership.--
(1) Members.--The Advisory Committee shall be comprised of
not fewer than 12 nor more than 25 members. The members shall
be appointed by the Secretary to represent domestic industry,
academia, professional societies, government agencies,
Federal laboratories, previous advisory panels, 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 title;
(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 802.
(d) Response.--
(1) Consideration of recommendations.--The Secretary shall
consider, but need not adopt, any recommendations of the
Advisory Committee under subsection (c).
(2) Biennial report.--The Secretary shall transmit a
biennial report to 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 title.
SEC. 806. EXTERNAL REVIEW.
(a) Plan.--The Secretary shall enter into an arrangement
with the National Academy of Sciences to review the plan
prepared under section 802, which shall be completed not
later than 6 months after the Academy receives the plan. Not
later than 45 days after receiving the review, the Secretary
shall transmit the review to 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 the National Academy of Sciences under which
the Academy will review the programs under section 803 during
the fourth year following the date of enactment of this Act.
The Academy's review shall include the research priorities
and technical milestones, and evaluate the progress toward
achieving them. The review shall be completed not later than
5 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 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. 807. MISCELLANEOUS PROVISIONS.
(a) Representation.--The Secretary may represent the United
States interests with respect to activities and programs
under this title, 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 title shall be
construed to alter the regulatory authority of the
Department.
SEC. 808. SAVINGS CLAUSE.
Nothing in this title shall be construed to affect the
authority of the Secretary of Transportation that may exist
prior to the date of enactment of this Act with respect to--
(1) research into, and regulation of, hydrogen-powered
vehicles fuel systems integrity, standards, and safety under
subtitle VI of title 49, United States Code;
(2) regulation of hazardous materials transportation under
chapter 51 of title 49, United States Code;
(3) regulation of pipeline safety under chapter 601 of
title 49, United States Code;
(4) encouragement and promotion of research, development,
and deployment activities relating to advanced vehicle
technologies under section 5506 of title 49, United States
Code;
(5) regulation of motor vehicle safety under chapter 301 of
title 49, United States Code;
(6) automobile fuel economy under chapter 329 of title 49,
United States Code; or
(7) representation of the interests of the United States
with respect to the activities and programs under the
authority of title 49, United States Code.
SEC. 809. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Secretary to
carry out this title, in addition to any amounts made
available for these purposes under other Acts--
(1) $273,500,000 for fiscal year 2004;
[[Page H4046]]
(2) $375,000,000 for fiscal year 2005;
(3) $450,000,000 for fiscal year 2006;
(4) $500,000,000 for fiscal year 2007; and
(5) $550,000,000 for fiscal year 2008.
TITLE IX--RESEARCH AND DEVELOPMENT
SEC. 901. GOALS.
(a) In General.--The Secretary shall conduct a balanced set
of programs of energy research, development, demonstration,
and commercial application to support Federal energy policy
and programs by the Department. Such programs shall be
focused on--
(1) increasing the efficiency of all energy intensive
sectors through conservation and improved technologies;
(2) promoting diversity of energy supply;
(3) decreasing the Nation's dependence on foreign energy
supplies;
(4) improving United States energy security; and
(5) decreasing the environmental impact of energy-related
activities.
(b) Goals.--The Secretary shall publish measurable 5-year
cost and performance-based goals with each annual budget
submission in at least the following areas:
(1) Energy efficiency for buildings, energy-consuming
industries, and vehicles.
(2) Electric energy generation (including distributed
generation), transmission, and storage.
(3) Renewable energy technologies including wind power,
photovoltaics, solar thermal systems, geothermal energy,
hydrogen-fueled systems, biomass-based systems, biofuels, and
hydropower.
(4) Fossil energy including power generation, onshore and
offshore oil and gas resource recovery, and transportation.
(5) Nuclear energy including programs for existing and
advanced reactors and education of future specialists.
(c) Public Comment.--The Secretary shall provide mechanisms
for input on the annually published goals from industry,
university, and other public sources.
(d) Effect of Goals.--
(1) No new authority or requirement.--Nothing in subsection
(a) or the annually published goals 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) No limitation.--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. 902. DEFINITIONS.
For purposes of this title:
(1) Department.--The term ``Department'' means the
Department of Energy.
(2) Departmental mission.--The term ``departmental
mission'' means any of the functions vested in the Secretary
of Energy by the Department of Energy Organization Act (42
U.S.C. 7101 et seq.) or other law.
(3) Institution of higher education.--The term
``institution of higher education'' has the meaning given
that term in section 101(a) of the Higher Education Act of
1965 (20 U.S.C. 1001(a)).
(4) National laboratory.--The term ``National Laboratory''
means any of the following laboratories owned by the
Department:
(A) Ames Laboratory.
(B) Argonne National Laboratory.
(C) Brookhaven National Laboratory.
(D) Fermi National Accelerator 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) Stanford Linear Accelerator Center.
(P) Thomas Jefferson National Accelerator Facility.
(5) Nonmilitary energy laboratory.--The term ``nonmilitary
energy laboratory'' means the laboratories listed in
paragraph (4), except for those listed in subparagraphs (G),
(H), and (N).
(6) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(7) Single-purpose research facility.--The term ``single-
purpose research facility'' means any of the primarily
single-purpose entities owned by the Department or any other
organization of the Department designated by the Secretary.
Subtitle A--Energy Efficiency
SEC. 904. 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.
(5) For fiscal year 2008, $920,000,000.
(b) Allocations.--From amounts authorized under subsection
(a), the following sums are authorized:
(1) For activities under section 905--
(A) for fiscal year 2004, $20,000,000;
(B) for fiscal year 2005, $30,000,000;
(C) for fiscal year 2006, $50,000,000;
(D) for fiscal year 2007, $50,000,000; and
(E) for fiscal year 2008, $50,000,000.
(2) For activities under section 907--
(A) for fiscal year 2004, $4,000,000; and
(B) for each of fiscal years 2005 through 2008, $7,000,000.
(3) For activities under section 908--
(A) for fiscal year 2004, $20,000,000;
(B) for fiscal year 2005, $25,000,000;
(C) for fiscal year 2006, $30,000,000;
(D) for fiscal year 2007, $35,000,000; and
(E) for fiscal year 2008, $40,000,000.
(4) For activities under section 909, $2,000,000 for each
of fiscal years 2005 through 2008.
(c) Extended Authorization.--There are authorized to be
appropriated to the Secretary for activities under section
905, $50,000,000 for each of fiscal years 2009 through 2013.
(d) Limitation on Use of Funds.--None of the funds
authorized to be appropriated under this section may be used
for--
(1) the issuance and implementation of energy efficiency
regulations;
(2) the Weatherization Assistance Program under part A of
title IV of the Energy Conservation and Production Act (42
U.S.C. 6861 et seq.);
(3) the State Energy Program under part D of title III of
the Energy Policy and Conservation Act (42 U.S.C. 6321 et
seq.); or
(4) the Federal Energy Management Program under part 3 of
title V of the National Energy Conservation Policy Act (42
U.S.C. 8251 et seq.).
SEC. 905. 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.
(b) Objectives.--The objectives of the initiative shall be
to develop advanced solid-state organic and inorganic
lighting technologies based on white light emitting diodes
that, compared to incandescent and fluorescent lighting
technologies, are longer lasting; more energy-efficient; and
cost-competitive, and have less environmental impact.
(c) Industry Alliance.--The Secretary shall, not later than
3 months after the date of enactment of this section,
competitively select an Industry Alliance to represent
participants that are private, for-profit firms which, as a
group, are broadly representative of United States solid
state lighting research, development, infrastructure, and
manufacturing expertise as a whole.
(d) Research.--
(1) In general.--The Secretary shall carry out the research
activities of the Next Generation Lighting Initiative through
competitively awarded grants to researchers, including
Industry Alliance participants, National Laboratories, and
institutions of higher education.
(2) Assistance from the industry alliance.--The Secretary
shall annually solicit from the Industry Alliance--
(A) comments to identify solid-state lighting technology
needs;
(B) assessment of the progress of the Initiative's research
activities; and
(C) assistance in annually updating solid-state lighting
technology roadmaps.
(3) Availability of information and roadmaps.--The
information and roadmaps under paragraph (2) shall be
available to the public and public response shall be
solicited by the Secretary.
(e) Development, Demonstration, and Commercial
Application.--The Secretary shall carry out a development,
demonstration, and commercial application program for the
Next Generation Lighting Initiative through competitively
selected awards. The Secretary may give preference to
participants of the Industry Alliance selected pursuant to
subsection (c).
(f) Intellectual Property.--The Secretary may require, in
accordance with the authorities provided in section
202(a)(ii) of title 35, United States Code, section 152 of
the Atomic Energy Act of 1954 (42 U.S.C. 2182), and section 9
of the Federal Nonnuclear Energy Research and Development Act
of 1974 (42 U.S.C. 5908), that--
(1) for any new invention resulting from activities under
subsection (d)--
(A) the Industry Alliance members that are active
participants in research, development, and demonstration
activities related to the advanced solid-state lighting
technologies that are the subject of this section shall be
granted first option to negotiate with the invention owner
nonexclusive licenses and royalties for uses of the invention
related to solid-state lighting on terms that are reasonable
under the circumstances; and
(B)(i) for 1 year after a United States patent is issued
for the invention, the patent holder shall not negotiate any
license or royalty with any entity that is not a participant
in the Industry Alliance described in subparagraph (A); and
(ii) during the year described in clause (i), the invention
owner shall negotiate nonexclusive licenses and royalties in
good faith with any interested participant in the Industry
Alliance described in subparagraph (A); and
[[Page H4047]]
(2) such other terms as the Secretary determines are
required to promote accelerated commercialization of
inventions made under the Initiative.
(g) National Academy Review.--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 and
progress towards achieving them. The Secretary shall consider
the results of such reviews in evaluating the information
obtained under subsection (d)(2).
(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) Research.--The term ``research'' includes research on
the technologies, materials, and manufacturing processes
required for white light emitting diodes.
(3) Industry alliance.--The term ``Industry Alliance''
means an entity selected by the Secretary under subsection
(c).
(4) White light emitting diode.--The term ``white light
emitting diode'' means a semiconducting package, utilizing
either organic or inorganic materials, that produces white
light using externally applied voltage.
SEC. 906. NATIONAL BUILDING PERFORMANCE INITIATIVE.
(a) Interagency Group.--Not later than 90 days 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 co-chaired 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 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 Secretary, in consultation with the
Secretary of Commerce and 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. 907. SECONDARY ELECTRIC VEHICLE BATTERY USE PROGRAM.
(a) Definitions.--For purposes of this section:
(1) Associated equipment.--The term ``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.
(2) Battery.--The term ``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.
(b) Program.--The Secretary shall establish and conduct a
research, development, demonstration, and commercial
application program for the secondary use of batteries if the
Secretary finds that there are sufficient numbers of such
batteries to support the program. The program shall be--
(1) designed to demonstrate the use of batteries in
secondary applications, 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 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.
(c) Solicitation.--Not later than 180 days after the date
of enactment of this Act, if the Secretary finds under
subsection (b) that there are sufficient numbers of batteries
to support the program, 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.
(d) Selection of Proposals.--
(1) In general.--The Secretary shall, not later than 90
days after the closing date established by the Secretary for
receipt of proposals under subsection (c), select up to 5
proposals which may receive financial assistance under this
section, subject to the availability of appropriations.
(2) Diversity; environmental effect.--In selecting
proposals, the Secretary shall consider diversity of battery
type, geographic and climatic diversity, and life-cycle
environmental effects of the approaches.
(3) Limitation.--No 1 project selected under this section
shall receive more than 25 percent of the funds authorized
for the program under this section.
(4) Optimization of federal resources.--The Secretary shall
consider the extent of involvement of State or local
government and other persons in each demonstration project to
optimize use of Federal resources.
(5) Other criteria.--The Secretary may consider such other
criteria as the Secretary considers appropriate.
(e) Conditions.--The Secretary shall require that--
(1) relevant information be provided to the Department, the
users of the batteries, the proposers, and the battery
manufacturers;
(2) the proposer provide at least 50 percent of the costs
associated with the proposal; and
(3) 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.
SEC. 908. 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 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.
SEC. 909. 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.
SEC. 910. ADVANCED ENERGY TECHNOLOGY TRANSFER CENTERS.
(a) Grants.--Not later than 18 months after the date of
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) In general.--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) Advisory panel.--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
[[Page H4048]]
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) Advanced energy methods and technologies.--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) Center.--The term ``Center'' means an Advanced Energy
Technology Transfer Center established pursuant to this
section.
(3) Distributed generation.--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
SEC. 911. 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.
(5) For fiscal year 2008, $260,000,000.
(b) Micro-Cogeneration Energy Technology.--From amounts
authorized under subsection (a), $20,000,000 for each of
fiscal years 2004 and 2005 is authorized for activities under
section 914.
SEC. 912. HYBRID DISTRIBUTED POWER SYSTEMS.
(a) Requirement.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall develop and
transmit to Congress a strategy for a comprehensive research,
development, demonstration, and commercial application
program to develop hybrid distributed power systems that
combine--
(1) 1 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 related to electric power technologies.
SEC. 913. 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.
SEC. 914. 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--
(1) the use of small-scale combined heat and power in
residential heating appliances; and
(2) the use of excess power to operate other appliances
within the residence and supply excess generated power to the
power grid.
SEC. 915. DISTRIBUTED ENERGY TECHNOLOGY DEMONSTRATION
PROGRAM.
The Secretary, within the sums authorized under section
911(a), may provide financial assistance to coordinating
consortia of interdisciplinary participants for
demonstrations designed to accelerate the utilization of
distributed energy technologies, such as fuel cells,
microturbines, reciprocating engines, thermally activated
technologies, and combined heat and power systems, in highly
energy intensive commercial applications.
SEC. 916. RECIPROCATING POWER.
The Secretary shall conduct a research, development, and
demonstration program regarding fuel system optimization and
emissions reduction after-treatment technologies for
industrial reciprocating engines. Such after-treatment
technologies shall use processes that reduce emissions by
recirculating exhaust gases and shall be designed to be
retrofitted to any new or existing diesel or natural gas
engine used for power generation, peaking power generation,
combined heat and power, or compression.
Subtitle C--Renewable Energy
SEC. 918. 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, $480,000,000.
(2) For fiscal year 2005, $550,000,000.
(3) For fiscal year 2006, $610,000,000.
(4) For fiscal year 2007, $659,000,000.
(5) For fiscal year 2008, $710,000,000.
(b) Bioenergy.--From the amounts authorized under
subsection (a), the following sums are authorized to be
appropriated to carry out section 919:
(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.
(5) For fiscal year 2008, $192,000,000.
(c) Concentrating Solar Power.--From amounts authorized
under subsection (a), the following sums are authorized to be
appropriated to carry out section 920:
(1) For fiscal year 2004, $20,000,000.
(2) For fiscal year 2005, $40,000,000.
(3) For each of fiscal years 2006, 2007 and 2008,
$50,000,000.
(d) Public Buildings.--From the amounts authorized under
subsection (a), $30,000,000 for each of the fiscal years 2004
through 2008 are authorized to be appropriated to carry out
section 922.
(e) Limits on Use of Funds.--
(1) No funds for renewable support and implementation.--
None of the funds authorized to be appropriated under this
section may be used for Renewable Support and Implementation.
(2) Grants.--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) Regional field verification program.--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.
(4) Off-stream pumped storage hydropower.--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.
(f) Consultation.--In carrying out this subtitle, the
Secretary, in consultation with the Secretary of Agriculture,
shall demonstrate the use of advanced wind power technology,
including combined use with coal gasification; biomass;
geothermal energy systems; and other renewable energy
technologies to assist in delivering electricity to rural and
remote locations.
SEC. 919. BIOENERGY PROGRAMS.
(a) Definitions.--For the purposes of this section:
(1) The term ``agricultural byproducts'' includes waste
products, including poultry fat and poultry waste.
(2) The term ``cellulosic biomass'' means any portion of a
crop containing lignocellulose or hemicellulose, including
barley grain, grapeseed, forest thinnings, rice bran, rice
hulls, rice straw, soybean matter, and sugarcane bagasse, or
any crop grown specifically for the purpose of producing
cellulosic feedstocks.
(b) Program.--The Secretary shall conduct a program of
research, development, demonstration, and commercial
application for bioenergy, including--
(1) biopower energy systems;
(2) biofuels;
(3) bio-based products;
(4) integrated biorefineries that may produce biopower,
biofuels, and bio-based products;
(5) cross-cutting research and development in feedstocks
and enzymes; and
(6) economic analysis.
(c) Biofuels and Bio-Based Products.--The goals of the
biofuels and bio-based products programs shall be to develop,
in partnership with industry--
(1) advanced biochemical and thermochemical conversion
technologies capable of making biofuels that are price-
competitive with gasoline or diesel in either internal
combustion engines or fuel cell-powered vehicles, and bio-
based products from a variety of feedstocks, including
grains, cellulosic biomass, and other agricultural
byproducts; and
(2) advanced biotechnology processes capable of making
biofuels and bio-based products with emphasis on development
of biorefinery technologies using enzyme-based processing
systems.
[[Page H4049]]
SEC. 920. CONCENTRATING SOLAR POWER RESEARCH AND DEVELOPMENT
PROGRAM.
(a) In General.--The Secretary shall conduct a program of
research and development to evaluate the potential of
concentrating solar power for hydrogen production, including
cogeneration approaches for both hydrogen and electricity.
Such program shall take advantage of existing facilities to
the extent possible and shall include--
(1) development of optimized technologies that are common
to both electricity and hydrogen production;
(2) evaluation of thermochemical cycles for hydrogen
production at the temperatures attainable with concentrating
solar power;
(3) evaluation of materials issues for the thermochemical
cycles described in paragraph (2);
(4) system architectures and economics studies; and
(5) coordination with activities in the Advanced Reactor
Hydrogen Cogeneration Project on high temperature materials,
thermochemical cycles, and economic issues.
(b) Assessment.--In carrying out the program under this
section, the Secretary shall--
(1) assess conflicting guidance on the economic potential
of concentrating solar power for electricity production
received from the National Research Council report entitled
``Renewable Power Pathways: A Review of the U.S. Department
of Energy's Renewable Energy Programs'' in 2000 and
subsequent Department-funded reviews of that report; and
(2) provide an assessment of the potential impact of the
technology before, or concurrent with, submission of the
fiscal year 2006 budget.
(c) Report.--Not later than 5 years after the date of
enactment of this Act, the Secretary shall provide a report
to Congress on the economic and technical potential for
electricity or hydrogen production, with or without
cogeneration, with concentrating solar power, including the
economic and technical feasibility of potential construction
of a pilot demonstration facility suitable for commercial
production of electricity or hydrogen from concentrating
solar power.
SEC. 921. MISCELLANEOUS PROJECTS.
The Secretary may conduct research, development,
demonstration, and commercial application programs for--
(1) ocean energy, including wave energy; and
(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.
SEC. 922. 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.
SEC. 923. STUDY OF MARINE RENEWABLE ENERGY OPTIONS.
(a) In General.--The Secretary shall enter into an
arrangement with the National Academy of Sciences to conduct
a study on--
(1) the feasibility of various methods of renewable
generation of energy from the ocean, including energy from
waves, tides, currents, and thermal gradients; and
(2) the research, development, demonstration, and
commercial application activities required to make marine
renewable energy generation competitive with other forms of
electricity generation.
(b) Transmittal.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall transmit the study
to Congress along with the Secretary's recommendations for
implementing the results of the study.
Subtitle D--Nuclear Energy
SEC. 924. NUCLEAR ENERGY.
(a) Core Programs.--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, other than those described in subsection (b):
(1) For fiscal year 2004, $273,000,000.
(2) For fiscal year 2005, $355,000,000.
(3) For fiscal year 2006, $430,000,000.
(4) For fiscal year 2007, $455,000,000.
(5) For fiscal year 2008, $545,000,000.
(b) Nuclear Infrastructure Support.--The following sums are
authorized to be appropriated to the Secretary for activities
under section 925(e):
(1) For fiscal year 2004, $125,000,000.
(2) For fiscal year 2005, $130,000,000.
(3) For fiscal year 2006, $135,000,000.
(4) For fiscal year 2007, $140,000,000.
(5) For fiscal year 2008, $145,000,000.
(c) Allocations.--From amounts authorized under subsection
(a), the following sums are authorized:
(1) For activities under section 926--
(A) for fiscal year 2004, $140,000,000;
(B) for fiscal year 2005, $145,000,000;
(C) for fiscal year 2006, $150,000,000;
(D) for fiscal year 2007, $155,000,000; and
(E) for fiscal year 2008, $275,000,000.
(2) For activities under section 927--
(A) for fiscal year 2004, $35,200,000;
(B) for fiscal year 2005, $44,350,000;
(C) for fiscal year 2006, $49,200,000;
(D) for fiscal year 2007, $54,950,000; and
(E) for fiscal year 2008, $60,000,000.
(3) For activities under section 929, for each of fiscal
years 2004 through 2008, $6,000,000.
(d) Limitation on Use of Funds.--None of the funds
authorized under this section may be used for decommissioning
the Fast Flux Test Facility.
SEC. 925. NUCLEAR ENERGY RESEARCH AND DEVELOPMENT 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, component
aging, safety, and security of 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. Whatever type of
reactor is chosen for the hydrogen cogeneration project under
subtitle C of title VI, that type shall not be addressed in
the Program under this section. The Program shall include--
(1) support for first-of-a-kind engineering design and
certification expenses of advanced nuclear power plant
designs, which offer improved safety and economics over
current conventional plants and the promise of near-term to
medium-term commercial deployment;
(2) action by the Secretary to encourage domestic power
companies to install new nuclear plant capacity as soon as
possible;
(3) utilization of the expertise and capabilities of
industry, universities, and National Laboratories in
evaluation of advanced nuclear fuel cycles and fuels testing;
(4) consideration of proliferation-resistant passively-
safe, small reactors suitable for long-term electricity
production without refueling and suitable for use in remote
installations;
(5) participation of international collaborators in
research, development, design, and deployment efforts as
appropriate and consistent with United States interests in
nonproliferation of nuclear weapons;
(6) encouragement for university and industry
participation; and
(7) selection of projects such as to strengthen the
competitive position of the domestic nuclear power industrial
infrastructure.
(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) use 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 Congress for fiscal year 2006.
SEC. 926. ADVANCED FUEL CYCLE INITIATIVE.
(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 that 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 the 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
[[Page H4050]]
program as part of the Department's annual budget submission.
SEC. 927. 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 establish fellowship and faculty
assistance programs, as well as provide support for
fundamental research and encourage collaborative research
among industry, National Laboratories, and universities
through the Nuclear Energy Research Initiative. The Secretary
is encouraged to support activities addressing the entire
fuel cycle through involvement of both the Office of Nuclear
Energy, Science, and Technology and the Office of Civilian
Radioactive Waste Management. The Secretary shall support
communication and outreach related to nuclear science,
engineering, and nuclear waste management, consistent with
interests of the United States in nonproliferation of nuclear
weapons capabilities.
(c) Strengthening University Research and Training Reactors
and Associated Infrastructure.--Activities under this section
may include--
(1) converting research and training 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 research and 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 sabbatical fellowship and visiting
scientist programs to encourage sharing of personnel between
National Laboratories and universities.
(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 and training reactor at an institution of higher
education used in the research project.
SEC. 928. SECURITY OF REACTOR DESIGNS.
The Secretary, through the Director of the Office of
Nuclear Energy, Science, and Technology, shall conduct a
research and development program on cost-effective
technologies for increasing the safety of reactor designs
from natural phenomena and the security of reactor designs
from deliberate attacks.
SEC. 929. ALTERNATIVES TO INDUSTRIAL RADIOACTIVE SOURCES.
(a) Study.--The Secretary shall conduct a study and provide
a report to Congress not later than August 1, 2004. The study
shall--
(1) survey industrial applications of large radioactive
sources, including well-logging sources;
(2) review current domestic and international Department,
Department of Defense, Department of State, and commercial
programs to manage and dispose of radioactive sources;
(3) discuss disposal options and practices for currently
deployed or future sources and, if deficiencies are noted in
existing disposal options or practices for either deployed or
future sources, recommend options to remedy deficiencies; and
(4) develop a program plan for research and development to
develop alternatives to large industrial sources that reduce
safety, environmental, or proliferation risks to either
workers using the sources or the public.
(b) Program.--The Secretary shall establish a research and
development program to implement the program plan developed
under subsection (a)(4). The program shall include
miniaturized particle accelerators for well-logging or other
industrial applications and portable accelerators for
production of short-lived radioactive materials at an
industrial site.
SEC. 930. 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 Congress.
Subtitle E--Fossil Energy
PART I--RESEARCH PROGRAMS
SEC. 931. 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, including activities authorized under this part:
(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.
(5) For fiscal year 2008, $626,000,000.
(b) Allocations.--From amounts authorized under subsection
(a), the following sums are authorized:
(1) For activities under section 932(b)(2), $28,000,000 for
each of the fiscal years 2004 through 2008.
(2) For activities under section 934--
(A) for fiscal year 2004, $12,000,000;
(B) for fiscal year 2005, $15,000,000; and
(C) for each of fiscal years 2006 through 2008,
$20,000,000.
(3) For activities under section 935--
(A) for fiscal year 2004, $259,000,000;
(B) for fiscal year 2005, $272,000,000;
(C) for fiscal year 2006, $285,000,000;
(D) for fiscal year 2007, $298,000,000; and
(E) for fiscal year 2008, $308,000,000.
(4) For the Office of Arctic Energy under section 3197 of
the Floyd D. Spence National Defense Authorization Act for
Fiscal Year 2001 (42 U.S.C. 7144d), $25,000,000 for each of
fiscal years 2004 through 2008.
(5) For activities under section 933, $4,000,000 for fiscal
year 2004 and $2,000,000 for each of fiscal years 2005
through 2008.
(c) 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 (42 U.S.C. 7144d),
$25,000,000 for each of fiscal years 2009 through 2012.
(d) Limits on Use of Funds.--
(1) No funds for certain programs.--None of the funds
authorized under this section may be used for Fossil Energy
Environmental Restoration or Import/Export Authorization.
(2) Institutions of higher education.--Of the funds
authorized under subsection (b)(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.
SEC. 932. OIL AND GAS RESEARCH PROGRAMS.
(a) 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;
(7) related environmental research; and
(8) compressed natural gas marine transport.
(b) Fuel Cells.--
(1) In general.--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) Improved manufacturing production and processes.--The
demonstrations under paragraph (1) shall include fuel cell
technology for commercial, residential, and transportation
applications, and distributed generation systems, utilizing
improved manufacturing production and processes.
(c) Natural Gas and Oil Deposits Report.--Not later than 2
years after the date of enactment of this Act, and every 2
years thereafter, the Secretary of the Interior, in
consultation with other appropriate Federal agencies, shall
transmit a report to Congress of the latest estimates of
natural gas and oil reserves, reserves growth, and
undiscovered resources in Federal and State waters off the
coast of Louisiana and Texas.
(d) Integrated Clean Power and Energy Research.--
(1) National center or consortium of excellence.--The
Secretary shall establish a national center or consortium of
excellence in clean energy and power generation, utilizing
the resources of the existing Clean Power and Energy Research
Consortium, to address the Nation's critical dependence on
energy and the need to reduce emissions.
(2) Program.--The center or consortium shall conduct a
program of research, development, demonstration, and
commercial application on integrating the following focus
areas:
(A) Efficiency and reliability of gas turbines for power
generation.
(B) Reduction in emissions from power generation.
(C) Promotion of energy conservation issues.
(D) Effectively utilizing alternative fuels and renewable
energy.
(E) Development of advanced materials technology for oil
and gas exploration and utilization in harsh environments.
(F) Education on energy and power generation issues.
SEC. 933. TECHNOLOGY TRANSFER.
The Secretary shall establish a competitive program to
award a contract to a nonprofit entity for the purpose of
transferring technologies developed with public funds. The
entity selected under this section shall have experience in
offshore oil and gas technology research management, in the
transfer of technologies developed with public funds to the
offshore and maritime industry, and in management of an
offshore and maritime industry consortium. The program
consortium selected under section 942 shall not be eligible
for selection under this section. When appropriate, the
Secretary shall consider utilizing the entity selected under
this section when implementing the activities authorized by
section 975.
[[Page H4051]]
SEC. 934. 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 guided by 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;
(2) include activities exploring minimization of
contaminants in mined coal that contribute to environmental
concerns including development and demonstration of
electromagnetic wave imaging ahead of mining operations;
(3) develop and demonstrate electromagnetic wave imaging
and radar techniques for horizontal drilling in coal beds in
order to increase methane recovery efficiency, prevent
spoilage of domestic coal reserves, and minimize water
disposal associated with methane extraction; and
(4) expand mining research capabilities at institutions of
higher education.
SEC. 935. COAL AND RELATED TECHNOLOGIES PROGRAM.
(a) In General.--In addition to the programs authorized
under title IV, the Secretary shall conduct a program of
technology research, development, demonstration, and
commercial application for coal and power systems, including
programs to facilitate production and generation of coal-
based power through--
(1) innovations for existing plants;
(2) integrated gasification combined cycle;
(3) advanced combustion systems;
(4) turbines for synthesis gas derived from coal;
(5) carbon capture and sequestration research and
development;
(6) coal-derived transportation fuels and chemicals;
(7) solid fuels and feedstocks;
(8) advanced coal-related research;
(9) advanced separation technologies; and
(10) a joint project for permeability enhancement in coals
for natural gas production and carbon dioxide sequestration.
(b) Cost and Performance Goals.--In carrying out programs
authorized by this section, the Secretary shall identify cost
and performance goals for coal-based technologies that would
permit the continued cost-competitive use of coal for
electricity generation, as chemical feedstocks, and as
transportation fuel in 2007, 2015, and the years after 2020.
In establishing such cost and performance goals, the
Secretary shall--
(1) consider activities and studies undertaken to date by
industry in cooperation with the Department in support of
such assessment;
(2) consult with interested entities, including coal
producers, industries using coal, organizations to promote
coal and advanced coal technologies, environmental
organizations, and organizations representing workers;
(3) not later than 120 days after the date of enactment of
this Act, publish in the Federal Register proposed draft cost
and performance goals for public comments; and
(4) not later than 180 days after the date of enactment of
this Act and every 4 years thereafter, submit to Congress a
report describing final cost and performance goals for such
technologies that includes a list of technical milestones as
well as an explanation of how programs authorized in this
section will not duplicate the activities authorized under
the Clean Coal Power Initiative authorized under subtitle A
of title IV.
SEC. 936. COMPLEX WELL TECHNOLOGY TESTING FACILITY.
The Secretary, in coordination with industry leaders in
extended research drilling technology, shall establish a
Complex Well Technology Testing Facility at the Rocky
Mountain Oilfield Testing Center to increase the range of
extended drilling technologies.
SEC. 937. FISCHER-TROPSCH DIESEL FUEL LOAN GUARANTEE PROGRAM.
(a) Definition of Fischer-Tropsch Diesel Fuel.--In this
section, the term ``Fischer-Tropsch diesel fuel'' means
diesel fuel that--
(1) contains less than 10 parts per million sulfur; and
(2) is produced through the Fischer-Tropsch liquification
process from coal or waste from coal that was mined in the
United States.
(b) Loan Guarantees.--
(1) Establishment of program.--The Secretary of Energy
shall establish a program to provide guarantees of loans by
private lending institutions for the construction of
facilities for the production of Fischer-Tropsch diesel fuel
and commercial byproducts of that production.
(2) Requirements.--The Secretary may provide a loan
guarantee under paragraph (1) if--
(A) 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
paragraph (1);
(B) 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
(C) 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.
(3) Criteria.--In selecting recipients of loan guarantees
from among applicants, the Secretary shall give preference to
proposals that--
(A) meet all Federal and State permitting requirements;
(B) are most likely to be successful; and
(C) are located in local markets that have the greatest
need for the facility because of--
(i) the availability of domestic coal or coal waste for
conversion; or
(ii) a projected high level of demand for Fischer-Tropsch
diesel fuel or other commercial byproducts of the facility.
(4) Maturity.--A loan guaranteed under paragraph (1) shall
have a maturity of not more than 25 years.
(5) Terms and conditions.--The loan agreement for a loan
guaranteed under paragraph (1) shall provide that no
provision of the loan may be amended or waived without the
consent of the Secretary.
(6) Guarantee fee.--A recipient of a loan guarantee under
paragraph (1) shall pay the Secretary an amount to be
determined by the Secretary to be sufficient to cover the
administrative costs of the Secretary relating to the loan
guarantee.
(7) Full faith and credit.--
(A) In general.--The full faith and credit of the United
States is pledged to payment of loan guarantees made under
this section.
(B) Conclusive evidence.--Any loan guarantee made by the
Secretary under this section shall be conclusive evidence of
the eligibility of the loan for the guarantee with respect to
principal and interest.
(C) Validity.--The validity of a loan guarantee shall be
incontestable in the hands of a holder of the guaranteed
loan.
(8) Reports.--Until each guaranteed loan under this section
is repaid in full, the Secretary shall annually submit to
Congress a report on the activities of the Secretary under
this section.
(9) Authorization of appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this section.
(10) Termination of authority.--The authority of the
Secretary to issue a new loan guarantee under paragraph (1)
terminates on the date that is 5 years after the date of
enactment of this Act.
PART II--ULTRA-DEEPWATER AND UNCONVENTIONAL NATURAL GAS AND OTHER
PETROLEUM RESOURCES
SEC. 941. 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 addressing the
technology challenges for small producers, 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, including drilling to
formations in the Outer Continental Shelf to depths greater
than 15,000 feet.
(2) Ultra-deepwater architecture.
(3) Unconventional natural gas and other petroleum resource
exploration and production technology, including the
technology challenges of small producers.
(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. 942. ULTRA-DEEPWATER PROGRAM.
(a) In General.--The Secretary shall carry out the
activities under section 941(a), to maximize the use of the
ultra-deepwater natural gas and other petroleum resources of
the United States by increasing the supply of such resources,
through reducing the cost and increasing the efficiency of
exploration for and production of such resources, while
improving safety and minimizing environmental impacts.
[[Page H4052]]
(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 may 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) Procedures.--The Secretary shall establish procedures--
(i) to ensure that each board member, officer, or employee
of the program consortium who is in a decision-making
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 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) Failure to comply.--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, trade associations, 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 180 days after the date of
enactment of this Act, the Secretary shall solicit proposals
from eligible consortia to perform the duties in subsection
(c)(1), which shall be submitted not later than 360 days
after the date of enactment of this Act. The Secretary shall
select the program consortium not later than 18 months 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 shall 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) Solicitation of recommendations.--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) Submission of recommendations; other comment.--The
Secretary shall submit the recommendations of the program
consortium under subparagraph (A) to the Ultra-Deepwater
Advisory Committee established under section 945(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) Consultation.--The Secretary shall consult regularly
with the program consortium throughout the preparation of the
annual plan.
(3) Publication.--The Secretary shall transmit to Congress
and publish in the Federal Register the annual plan, along
with any written comments received under paragraph (2)(A) and
(B).
(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).
(5) Estimates of increased royalty receipts.--The
Secretary, in consultation with the Secretary of the
Interior, shall provide an annual report to Congress with the
President's budget on the estimated cumulative increase in
Federal royalty receipts (if any) resulting from the
implementation of this part. The initial report under this
paragraph shall be submitted in the first President's budget
following the completion of the first annual plan required
under this subsection.
(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) In general.--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) Effect.--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) Provision of information.--The Secretary shall provide
to the program consortium the information necessary for the
program consortium to carry out its responsibilities under
this paragraph.
(g) Administrative Costs.--
(1) In general.--To compensate the program consortium for
carrying out its activities under this section, the Secretary
shall provide to the program consortium funds sufficient to
administer the program. This compensation may include a
management fee consistent with Department of Energy
contracting practices and procedures.
(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. 943. UNCONVENTIONAL NATURAL GAS AND OTHER PETROLEUM
RESOURCES PROGRAM.
(a) In General.--The Secretary shall carry out activities
under subsection 941(b)(3), to maximize the use of the
onshore unconventional natural gas and other petroleum
resources of the United States, by increasing the supply of
such resources, through 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 to research consortia made through an open,
competitive process. As a condition of award of funds,
qualified research consortia shall--
(A) demonstrate capability and experience in unconventional
onshore natural gas or other petroleum research and
development;
(B) provide a research plan that demonstrates how
additional natural gas or oil production will be achieved;
and
(C) at the request of the Secretary, provide technical
advice to the Secretary for the purposes of developing the
annual plan required under subsection (e).
(2) Production potential.--The Secretary shall seek to
ensure that the number and types of awards made under this
subsection have reasonable potential to lead to additional
oil and natural gas production on Federal lands.
(3) Schedule.--To carry out this subsection, not later than
180 days after the date of enactment of this Act, the
Secretary
[[Page H4053]]
shall solicit proposals from research consortia, which shall
be submitted not later than 360 days after the date of
enactment of this Act. The Secretary shall select the first
group of research consortia to receive awards under this
subsection not later than 18 months after such date of
enactment.
(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 for Awards.--
(1) Unconventional resources.--Awards from allocations
under section 949(d)(2) shall focus on areas including
advanced coalbed methane, deep drilling, natural gas
production from tight sands, natural gas production from gas
shales, stranded gas, innovative exploration and production
techniques, enhanced recovery techniques, and environmental
mitigation of unconventional natural gas and other petroleum
resources exploration and production.
(2) Small producers.--Awards from allocations under section
949(d)(3) shall be made to consortia consisting of small
producers or organized primarily for the benefit of small
producers, and shall focus on areas including complex geology
involving rapid changes in the type and quality of the oil
and gas reservoirs across the reservoir; low reservoir
pressure; unconventional natural gas reservoirs in coalbeds,
deep reservoirs, tight sands, or shales; and unconventional
oil reservoirs in tar sands and oil shales.
(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) Written recommendations.--Before drafting an annual
plan under this subsection, the Secretary shall solicit
specific written recommendations from the research consortia
receiving awards under subsection (b) and the Unconventional
Resources Technology Advisory Committee for each element to
be addressed in the plan, including those described in
subparagraph (D).
(B) Consultation.--The Secretary shall consult regularly
with the research consortia throughout the preparation of the
annual plan.
(C) Publication.--The Secretary shall transmit to Congress
and publish in the Federal Register the annual plan, along
with any written comments received under subparagraph (A).
(D) Contents.--The annual plan shall describe the ongoing
and prospective activities under this section and shall
include 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.
(3) Estimates of increased royalty receipts.--The
Secretary, in consultation with the Secretary of the
Interior, shall provide an annual report to Congress with the
President's budget on the estimated cumulative increase in
Federal royalty receipts (if any) resulting from the
implementation of this part. The initial report under this
paragraph shall be submitted in the first President's budget
following the completion of the first annual plan required
under this subsection.
(f) 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. 944. 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 941(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.--2.5 percent of the amount of each
award made under this part shall be designated for technology
transfer and outreach activities under this title.
(e) Cost Sharing Reduction for Independent Producers.--In
applying the cost sharing requirements under section 972 to
an award under this part the Secretary may reduce or
eliminate the non-Federal requirement if the Secretary
determines that the reduction is necessary and appropriate
considering the technological risks involved in the project.
SEC. 945. ADVISORY COMMITTEES.
(a) Ultra-Deepwater Advisory Committee.--
(1) Establishment.--Not later than 270 days after the date
of enactment of this Act, the Secretary shall establish an
advisory committee to be known as the Ultra-Deepwater
Advisory Committee.
(2) Membership.--The advisory committee under this
subsection shall be composed of members appointed by the
Secretary 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 942(e)(2)(B).
(4) Compensation.--A member of the advisory committee under
this subsection shall serve without compensation but shall
receive travel expenses 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 Act, 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 including--
(A) a majority of members who are employees or
representatives of independent producers of natural gas and
other petroleum, including small producers;
(B) individuals with extensive research experience or
operational knowledge of unconventional natural gas and other
petroleum resource exploration and production;
(C) 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
(D) 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 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
particular consortia or other entities, or for specific
projects.
SEC. 946. LIMITS ON PARTICIPATION.
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 that 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.
SEC. 947. SUNSET.
The authority provided by this part shall terminate on
September 30, 2011.
SEC. 948. 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) Independent producer of oil or gas.--
(A) In general.--The term ``independent producer of oil or
gas'' means any person that 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.
[[Page H4054]]
(3) Program consortium.--The term ``program consortium''
means the consortium selected under section 942(d).
(4) 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.
(5) Small producer.--The term ``small producer'' means an
entity organized under the laws of the United States with
production levels of less than 1,000 barrels per day of oil
equivalent.
(6) Ultra-deepwater.--The term ``ultra-deepwater'' means a
water depth that is equal to or greater than 1,500 meters.
(7) 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.
(8) Ultra-deepwater technology.--The term ``ultra-deepwater
technology'' means a discrete technology that is specially
suited to address 1 or more challenges associated with the
exploration for, or production of, natural gas or other
petroleum resources located at ultra-deepwater depths.
(9) 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, including resources of small producers.
SEC. 949. FUNDING.
(a) In General.--
(1) Oil and gas lease income.--For each of fiscal years
2004 through 2013, from any Federal royalties, rents, and
bonuses derived from Federal onshore and offshore oil and gas
leases 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
subsection (c), $150,000,000 shall be deposited into the
Ultra-Deepwater and Unconventional Natural Gas and Other
Petroleum Research Fund (in this section referred to as the
Fund). For purposes of this section, 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)).
(2) Authorization of appropriations.--In addition to
amounts described in paragraph (1), there are authorized to
be appropriated to the Secretary, to be deposited in the
Fund, $50,000,000 for each of the fiscal years 2004 through
2013, to remain available until expended.
(b) Obligational Authority.--Monies in the Fund shall be
available to the Secretary for obligation under this part
without fiscal year limitation, to remain available until
expended.
(c) Prior Distributions.--The distributions described in
subsection (a) are those required by law--
(1) to States and to the Reclamation Fund under the Mineral
Leasing Act (30 U.S.C. 191(a)); and
(2) to other funds receiving monies from Federal oil and
gas leasing programs, including--
(A) any recipients pursuant to section 8(g) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1337(g));
(B) 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));
(C) the Historic Preservation Fund, pursuant to section 108
of the National Historic Preservation Act (16 U.S.C. 470h);
and
(D) the Secure Energy Reinvestment Fund.
(d) Allocation.--Amounts obligated from the Fund under this
section in each fiscal year shall be allocated as follows:
(1) 50 percent shall be for activities under section 942.
(2) 35 percent shall be for activities under section
943(d)(1).
(3) 10 percent shall be for activities under section
943(d)(2).
(4) 5 percent shall be for research under section 941(d).
(e) 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''.
Subtitle F--Science
SEC. 951. 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 958(c)(2)(C), and including basic
energy sciences, advanced scientific 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.
(5) For fiscal year 2008, $5,800,000,000.
(b) Allocations.--From amounts authorized under subsection
(a), the following sums are authorized:
(1) For activities of the Fusion Energy Sciences Program,
including activities under sections 952 and 953--
(A) for fiscal year 2004, $335,000,000;
(B) for fiscal year 2005, $349,000,000;
(C) for fiscal year 2006, $362,000,000;
(D) for fiscal year 2007, $377,000,000; and
(E) for fiscal year 2008, $393,000,000.
(2) For the Spallation Neutron Source--
(A) for construction in fiscal year 2004, $124,600,000;
(B) for construction in fiscal year 2005, $79,800,000;
(C) for completion of construction in fiscal year 2006,
$41,100,000; and
(D) for other project costs (including research and
development necessary to complete the project, preoperations
costs, and capital equipment related to construction),
$103,279,000 for the period encompassing fiscal years 2003
through 2006, to remain available until expended through
September 30, 2006.
(3) For Catalysis Research activities under section 956--
(A) for fiscal year 2004, $33,000,000;
(B) for fiscal year 2005, $35,000,000;
(C) for fiscal year 2006, $36,500,000;
(D) for fiscal year 2007, $38,200,000; and
(E) for fiscal year 2008, $40,100,000.
(4) For Nanoscale Science and Engineering Research
activities under section 957--
(A) for fiscal year 2004, $270,000,000;
(B) for fiscal year 2005, $292,000,000;
(C) for fiscal year 2006, $322,000,000;
(D) for fiscal year 2007, $355,000,000; and
(E) for fiscal year 2008, $390,000,000.
(5) For activities under section 957(c), from the amounts
authorized under paragraph (4) of this subsection--
(A) for fiscal year 2004, $135,000,000;
(B) for fiscal year 2005, $150,000,000;
(C) for fiscal year 2006, $120,000,000;
(D) for fiscal year 2007, $100,000,000; and
(E) for fiscal year 2008, $125,000,000.
(6) For activities in the Genomes to Life Program under
section 959--
(A) for fiscal year 2004, $100,000,000; and
(B) for fiscal years 2005 through 2008, such sums as may be
necessary.
(7) For activities in the Energy-Water Supply Program under
section 961, $30,000,000 for each of fiscal years 2004
through 2008.
(c) ITER Construction.--In addition to the funds authorized
under subsection (b)(1), such sums as may be necessary for
costs associated with ITER construction, consistent with
limitations under section 952.
SEC. 952. UNITED STATES PARTICIPATION IN ITER.
(a) In General.--The United States may participate in ITER
in accordance with the provisions of this section.
(b) Agreement.--
(1) In general.--The Secretary is authorized to negotiate
an agreement for United States participation in ITER.
(2) Contents.--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
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) Alternative to ITER.--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
[[Page H4055]]
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.
(f) Definitions.--In this section and sections 951(b)(1)
and (c):
(1) Construction.--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.
(2) FIRE.--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.
(3) ITER.--The term ``ITER'' means the international
burning plasma fusion research project in which the President
announced United States participation on January 30, 2003.
SEC. 953. 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) Planning.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall present to
Congress a plan, with proposed cost estimates, budgets, and
potential international partners, for the implementation of
the policy described in subsection (a). The plan shall 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, and
those that are selected are funded at a cost-effective rate;
(D) communication of scientific results and methods between
the fusion energy science community and the broader
scientific and technology communities is improved;
(E) inertial confinement fusion facilities are utilized to
the extent practicable for the purpose of inertial fusion
energy research and development; and
(F) attractive alternative inertial and magnetic fusion
energy approaches are more fully explored.
(2) Costs and schedules.--Such plan shall also address the
status of and, to the degree possible, costs and schedules
for--
(A) in coordination with the program under section 960, 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.
SEC. 954. SPALLATION NEUTRON SOURCE.
(a) Definition.--For the purposes of this section, the term
``Spallation Neutron Source'' means Department Project 99-E-
334, Oak Ridge National Laboratory, Oak Ridge, Tennessee.
(b) 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.
(c) Limitations.--The total amount obligated by the
Department, including prior year appropriations, for the
Spallation Neutron Source shall 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.
SEC. 955. SUPPORT FOR SCIENCE AND ENERGY FACILITIES AND
INFRASTRUCTURE.
(a) Facility and Infrastructure Policy.--The Secretary
shall develop and implement a strategy for facilities and
infrastructure supported primarily from the Office of
Science, the Office of Energy Efficiency and Renewable
Energy, the Office of Fossil Energy, or the Office of Nuclear
Energy, Science, and Technology Programs at all National
Laboratories and single-purpose research facilities. Such
strategy shall provide 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) In general.--The Secretary shall prepare and transmit,
along with the President's budget request to Congress for
fiscal year 2006, a report containing the strategy developed
under subsection (a).
(2) Contents.--For each National Laboratory and single-
purpose research facility, for the facilities primarily used
for science and energy research, such report shall contain--
(A) the current priority list of proposed facilities and
infrastructure projects, including cost and schedule
requirements;
(B) a current 10-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 facility and infrastructure
project compared to the original baseline cost, schedule, and
scope.
SEC. 956. CATALYSIS RESEARCH AND DEVELOPMENT PROGRAM.
(a) Establishment.--The Secretary, through the Office of
Science, shall support a program of research and development
in catalysis science consistent with the Department's
statutory authorities related to research and development.
The program shall include efforts to--
(1) enable catalyst design using combinations of
experimental and mechanistic methodologies coupled with
computational modeling of catalytic reactions at the
molecular level;
(2) develop techniques for high throughput synthesis,
assay, and characterization at nanometer and subnanometer
scales in situ under actual operating conditions;
(3) synthesize catalysts with specific site architectures;
(4) conduct research on the use of precious metals for
catalysis; and
(5) translate molecular understanding to the design of
catalytic compounds.
(b) Duties of the Office of Science.--In carrying out the
program under this section, the Director of the Office of
Science shall--
(1) support both individual investigators and
multidisciplinary teams of investigators to pioneer new
approaches in catalytic design;
(2) develop, plan, construct, acquire, share, or operate
special equipment or facilities for the use of investigators
in collaboration with national user facilities such as
nanoscience and engineering centers;
(3) support technology transfer activities to benefit
industry and other users of catalysis science and
engineering; and
(4) coordinate research and development activities with
industry and other Federal agencies.
(c) Triennial Assessment.--The National Academy of Sciences
shall review the catalysis program every 3 years to report on
gains made in the fundamental science of catalysis and its
progress towards developing new fuels for energy production
and material fabrication processes.
SEC. 957. NANOSCALE SCIENCE AND ENGINEERING RESEARCH,
DEVELOPMENT, DEMONSTRATION, AND COMMERCIAL
APPLICATION.
(a) Establishment.--The Secretary, acting through the
Office of Science, shall support a program of research,
development, demonstration, and commercial application in
nanoscience and nanoengineering. The program shall include
efforts to further the understanding of the chemistry,
physics, materials science, and engineering of phenomena on
the scale of nanometers and to apply that knowledge to the
Department's mission areas.
(b) Duties of the Office of Science.--In carrying out the
program under this section, the Office of Science shall--
(1) support both individual investigators and teams of
investigators, including multidisciplinary teams;
(2) carry out activities under subsection (c);
(3) support technology transfer activities to benefit
industry and other users of nanoscience and nanoengineering;
(4) coordinate research and development activities with
other Department programs, industry, and other Federal
agencies;
(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) Nanoscience and Nanoengineering Research Centers and
Major Instrumentation.--
(1) In general.--The Secretary shall carry out projects to
develop, plan, construct, acquire, operate, or support
special equipment, instrumentation, or facilities for
investigators conducting research and development in
nanoscience and nanoengineering.
(2) Activities.--Projects under paragraph (1) may include
the measurement of properties at the scale of nanometers,
manipulation at such scales, and the integration of
technologies based on nanoscience or nanoengineering into
bulk materials or other technologies.
(3) Facilities.--Facilities under paragraph (1) may include
electron microcharacterization facilities, microlithography
facilities, scanning probe facilities, and related
instrumentation.
[[Page H4056]]
(4) Collaborations.--The Secretary shall encourage
collaborations among Department programs, institutions of
higher education, laboratories, and industry at facilities
under this subsection.
SEC. 958. 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 in collaboration with
other Department program offices;
(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, including
developments in quantum 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) by striking ``means'' and inserting
``and networking and information technology mean'', and 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 supporting
fundamental research in the physical sciences and
engineering, and energy applications; providing supercomputer
access and advanced communication capabilities and facilities
to scientific researchers; and 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 2008.''.
(d) Coordination.--The Secretary shall ensure that the
program under this section is integrated and consistent
with--
(1) the Advanced Simulation and Computing Program, formerly
known as 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) In general.--Before undertaking any new initiative to
develop any new advanced architecture for high-speed
computing, the Secretary, through the Director of the Office
of Science, shall transmit a report to 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) Limitation.--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 Congress.
SEC. 959. GENOMES TO LIFE PROGRAM.
(a) Program.--
(1) Establishment.--The Secretary shall establish a
research, development, and demonstration program in genetics,
protein science, and computational biology to support the
energy, national security, 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
genomes, microbes, and plants that--
(1) can facilitate the production of fuels, including
hydrogen;
(2) convert carbon dioxide to organic carbon;
(3) improve national security and combat terrorism;
(4) detoxify soils and water at Department facilities
contaminated with heavy metals and radiological materials;
and
(5) address other Department missions as identified by the
Secretary.
(c) Plan.--
(1) Development of plan.--Not later than 1 year after the
date of enactment of this Act, the Secretary shall prepare
and transmit to 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 Congress not later than 18 months after
transmittal of the research plan under paragraph (1), along
with the Secretary's response to the recommendations
contained in the review.
(d) Genomes to Life User Facilities and Ancillary
Equipment.--
(1) In general.--Within the funds authorized to be
appropriated pursuant to this Act, the amounts specified
under section 951(b)(6) shall, subject to appropriations, be
available for projects to develop, plan, construct, acquire,
or operate special equipment, instrumentation, or facilities
for investigators conducting research, development,
demonstration, and commercial application in systems biology
and proteomics and associated biological disciplines.
(2) Facilities.--Facilities under paragraph (1) may include
facilities, equipment, or instrumentation for--
(A) the production and characterization of proteins;
(B) whole proteome analysis;
(C) characterization and imaging of molecular machines; and
(D) analysis and modeling of cellular systems.
(3) Collaborations.--The Secretary shall encourage
collaborations among universities, laboratories, and industry
at facilities under this subsection. All facilities under
this subsection shall have a specific mission of technology
transfer to other institutions.
(e) Prohibition on Biomedical and Human Cell and Human
Subject Research.--
(1) No biomedical research.--In carrying out the program
under this section, the Secretary shall not conduct
biomedical research.
(2) Limitations.--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 direct application with respect to
human cells or human subjects.
SEC. 960. FISSION AND FUSION ENERGY MATERIALS RESEARCH
PROGRAM.
In the President's fiscal year 2006 budget request, the
Secretary shall establish a research and development program
on material science issues presented by advanced fission
reactors and the Department's fusion energy program. The
program shall develop a catalog of material properties
required for these applications, develop theoretical models
for materials possessing the required properties, benchmark
models against existing data, and develop a roadmap to guide
further research and development in this area.
SEC. 961. ENERGY-WATER SUPPLY PROGRAM.
(a) Establishment.--There is established within the
Department the Energy-Water Supply Program, to study energy-
related and certain other issues associated with the supply
of drinking water and operation of community water systems
and to study water supply issues related to energy.
(b) Definitions.--For the purposes of this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Agency.--The term ``Agency'' means the Environmental
Protection Agency.
(3) Foundation.--The term ``Foundation'' means the American
Water Works Association Research Foundation.
(4) Indian tribe.--The term ``Indian tribe'' has the
meaning given the term in section 4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b).
(5) Program.--The term ``Program'' means the Energy-Water
Supply Program established by this section.
(c) Program Areas.--The Program shall develop methods,
means, procedures, equipment, and improved technologies
relating to--
(1) the arsenic removal program under subsection (d);
(2) the desalination program under subsection (e); and
(3) the water and energy sustainability program under
subsection (f).
(d) Arsenic Removal Program.--
(1) In general.--As soon as practicable after the date of
enactment of this Act, the Secretary, in coordination with
the Administrator and in partnership with the Foundation,
shall utilize the facilities, institutions, and relationships
established in the Consolidated Appropriations Resolution,
2003 as described in Senate Report 107-220 to carry out
[[Page H4057]]
a research program to provide innovative methods and means
for removal of arsenic.
(2) Required evaluations.--The program shall, to the
maximum extent practicable, evaluate the means of--
(A) reducing energy costs incurred in using arsenic removal
technologies;
(B) minimizing materials, operating, and maintenance costs;
and
(C) minimizing any quantities of waste (especially
hazardous waste) that result from use of arsenic removal
technologies.
(3) Peer review.--Where applicable and reasonably
available, projects undertaken under this subsection shall be
peer-reviewed.
(4) Community water systems.--In carrying out the program
under this subsection, the Secretary, in coordination with
the Administrator, shall--
(A) select projects involving a geographically and
hydrologically diverse group of community water systems (as
defined in section 1003 of the Public Health Service Act (42
U.S.C. 300)) and water chemistries, that have experienced
technical or economic difficulties in providing drinking
water with levels of arsenic at 10 parts-per-billion or
lower, which projects shall be designed to develop innovative
methods and means to deliver drinking water that contains
less than 10 parts per billion of arsenic; and
(B) provide not less than 40 percent of all funds spent
pursuant to this subsection to address the needs of, and in
collaboration with, rural communities or Indian tribes.
(5) Cost effectiveness.--The Foundation shall create
methods for determining cost effectiveness of arsenic removal
technologies used in the program.
(6) Education, training, and technology.--The Foundation
shall include education, training, and technology transfer as
part of the program.
(7) Coordination.--The Secretary shall consult with the
Administrator to ensure that all activities conducted under
the program are coordinated with the Agency and do not
duplicate other programs in the Agency and other Federal
agencies, State programs, and academia.
(8) Reports.--Not later than 1 year after the date of
commencement of the program under this subsection, and once
every year thereafter, the Secretary shall submit to the
Committee on Energy and Commerce of the House of
Representatives and the Committee on Environment and Public
Works and the Committee on Energy and Natural Resources of
the Senate a report on the results of the program under this
subsection.
(e) Desalination Program.--
(1) In general.--The Secretary, in cooperation with the
Commissioner of Reclamation of the Department of the
Interior, shall carry out a program to conduct research and
develop methods and means for desalination in accordance with
the desalination technology progress plan developed under
title II of the Energy and Water Development Appropriations
Act, 2002 (115 Stat. 498), and described in Senate Report
107-39 under the heading ``water and related resources'' in
the ``Bureau of Reclamation'' section.
(2) Requirements.--The desalination program shall--
(A) use the resources of the Department and the Department
of the Interior that were involved in the development of the
2003 National Desalination and Water Purification Technology
Roadmap for next-generation desalination technology;
(B) focus on technologies that are appropriate for use in
desalinating brackish groundwater, drinking water, wastewater
and other saline water supplies, or disposal of residual
brine or salt; and
(C) consider the use of renewable energy sources.
(3) Construction projects.--Funds made available to carry
out this subsection may be used for construction projects,
including completion of the National Desalination Research
Center for brackish groundwater and ongoing operational costs
of this facility.
(4) Steering committee.--The Secretary and the Commissioner
of Reclamation of the Department of the Interior shall
jointly establish a steering committee for activities
conducted under this subsection. The steering committee shall
be jointly chaired by 1 representative from the program and 1
representative from the Bureau of Reclamation.
(f) Water and Energy Sustainability Program.--
(1) In general.--The Secretary shall develop a program to
identify methods, means, procedures, equipment, and improved
technologies necessary to ensure that sufficient quantities
of water are available to meet energy needs and sufficient
energy is available to meet water needs.
(2) Assessments.--In order to acquire information and avoid
duplication, the Secretary shall work in collaboration with
the Secretary of the Interior, the Army Corps of Engineers,
the Administrator, the Secretary of Commerce, the Secretary
of Defense, relevant State agencies, nongovernmental
organizations, and academia, to assess--
(A) future water resources needed to support energy
development and production within the United States including
water used for hydropower, and production of, or electricity
generation by, hydrogen, biomass, fossil fuels, and nuclear
fuel;
(B) future energy resources needed to support water
purification and wastewater treatment, including desalination
and water conveyance;
(C) use of impaired and nontraditional water supplies for
energy production other than oil and gas extraction;
(D) technology and programs for improving water use
efficiency; and
(E) technologies to reduce water use in energy development
and production.
(3) Roadmap; tools.--The Secretary shall--
(A) develop a program plan and technology development
roadmap for the Water and Energy Sustainability Program to
identify scientific and technical requirements and activities
that are required to support planning for energy
sustainability under current and potential future conditions
of water availability, use of impaired water for energy
production and other uses, and reduction of water use in
energy development and production;
(B) develop tools for national and local energy and water
sustainability planning, including numerical models, decision
analysis tools, economic analysis tools, databases, and
planning methodologies and strategies;
(C) implement at least 3 planning projects involving energy
development or production that use the tools described in
subparagraph (B) and assess the viability of those tools at
the scale of river basins with at least 1 demonstration
involving an international border; and
(D) transfer those tools to other Federal agencies, State
agencies, nonprofit organizations, industry, and academia.
(4) Report.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall submit to Congress
a report on the Water and Energy Sustainability Program
that--
(A) includes the results of the assessment under paragraph
(2) and the program plan and technology development roadmap;
and
(B) identifies policy, legal, and institutional issues
related to water and energy sustainability.
SEC. 962. 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.
Subtitle G--Energy and Environment
SEC. 964. 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 that minimizes public health risks from
industrial activities in the border region.
(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.
(e) Authorization of Appropriations.--The following sums
are authorized to be appropriated to the Secretary to carry
out activities under this section:
(1) For each of fiscal years 2004 and 2005, $5,000,000.
(2) For each of fiscal years 2006, 2007, and 2008,
$6,000,000.
SEC. 965. WESTERN HEMISPHERE ENERGY COOPERATION.
(a) Program.--The Secretary shall carry out a program to
promote cooperation on energy issues with Western Hemisphere
countries.
(b) Activities.--Under the program, the Secretary shall
fund activities to work with Western Hemisphere countries
to--
(1) assist the countries in formulating and adopting
changes in economic policies and other policies to--
(A) increase the production of energy supplies; and
(B) improve energy efficiency; and
(2) assist in the development and transfer of energy supply
and efficiency technologies that would have a beneficial
impact on world energy markets.
(c) University Participation.--To the extent practicable,
the Secretary shall carry out the program under this section
with the participation of universities so as to take
advantage of the acceptance of universities by Western
Hemisphere countries as sources of unbiased technical and
policy expertise when assisting the Secretary in--
(1) evaluating new technologies;
(2) resolving technical issues;
(3) working with those countries in the development of new
policies; and
(4) training policymakers, particularly in the case of
universities that involve the participation of minority
students, such as Hispanic-serving institutions and
Historically Black Colleges and Universities.
(d) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section--
(1) $8,000,000 for fiscal year 2004;
(2) $10,000,000 for fiscal year 2005;
[[Page H4058]]
(3) $13,000,000 for fiscal year 2006;
(4) $16,000,000 for fiscal year 2007; and
(5) $19,000,000 for fiscal year 2008.
SEC. 966. WASTE REDUCTION AND USE OF ALTERNATIVES.
(a) Grant Authority.--The Secretary may 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.
(c) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary for carrying out this
section $500,000.
SEC. 967. REPORT ON FUEL CELL TEST CENTER.
(a) Report.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall transmit to
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.
SEC. 968. ARCTIC ENGINEERING RESEARCH CENTER.
(a) In General.--The Secretary of Energy (referred to in
this section as the ``Secretary'') in consultation with the
Secretary of Transportation and the United States Arctic
Research Commission shall provide annual grants to a
university located adjacent to the Arctic Energy Office of
the Department of Energy, to establish and operate a
university research center to be headquartered in Fairbanks
and to be known as the ``Arctic Engineering Research Center''
(referred to in this section as the ``Center'').
(b) Purpose.--The purpose of the Center shall be to conduct
research on, and develop improved methods of, construction
and use of materials to improve the overall performance of
roads, bridges, residential, commercial, and industrial
structures, and other infrastructure in the Arctic region,
with an emphasis on developing--
(1) new construction techniques for roads, bridges, rail,
and related transportation infrastructure and residential,
commercial, and industrial infrastructure that are capable of
withstanding the Arctic environment and using limited energy
resources as efficiently as possible;
(2) technologies and procedures for increasing road,
bridge, rail, and related transportation infrastructure and
residential, commercial, and industrial infrastructure
safety, reliability, and integrity in the Arctic region;
(3) new materials and improving the performance and energy
efficiency of existing materials for the construction of
roads, bridges, rail, and related transportation
infrastructure and residential, commercial, and industrial
infrastructure in the Arctic region; and
(4) recommendations for new local, regional, and State
permitting and building codes to ensure transportation and
building safety and efficient energy use when constructing,
using, and occupying such infrastructure in the Arctic
region.
(c) Objectives.--The Center shall carry out--
(1) basic and applied research in the subjects described in
subsection (b), the products of which shall be judged by
peers or other experts in the field to advance the body of
knowledge in road, bridge, rail, and infrastructure
engineering in the Arctic region; and
(2) an ongoing program of technology transfer that makes
research results available to potential users in a form that
can be implemented.
(d) Amount of Grant.--For each of fiscal years 2004 through
2009, the Secretary shall provide a grant in the amount of
$3,000,000 to the institution specified in subsection (a) to
carry out this section.
(e) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section $3,000,000 for
each of fiscal years 2004 through 2009.
SEC. 969. BARROW GEOPHYSICAL RESEARCH FACILITY.
(a) Establishment.--The Secretary of Commerce, in
consultation with the Secretaries of Energy and the Interior,
the Director of the National Science Foundation, and the
Administrator of the Environmental Protection Agency, shall
establish a joint research facility in Barrow, Alaska, to be
known as the ``Barrow Geophysical Research Facility'', to
support scientific research activities in the Arctic.
(b) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretaries of Commerce, Energy,
and the Interior, the Director of the National Science
Foundation, and the Administrator of the Environmental
Protection Agency for the planning, design, construction, and
support of the Barrow Geophysical Research Facility
$61,000,000.
SEC. 970. WESTERN MICHIGAN DEMONSTRATION PROJECT.
The Administrator of the Environmental Protection Agency,
in consultation with the State of Michigan and affected local
officials, shall conduct a demonstration project to address
the effect of transported ozone and ozone precursors in
Southwestern Michigan. The demonstration program shall
address projected nonattainment areas in Southwestern
Michigan that include counties with design values for ozone
of less than .095 based on years 2000 to 2002 or the most
current 3-year period of air quality data. The Administrator
shall assess any difficulties such areas may experience in
meeting the 8 hour national ambient air quality standard for
ozone due to the effect of transported ozone or ozone
precursors into the areas. The Administrator shall work with
State and local officials to determine the extent of ozone
and ozone precursor transport, to assess alternatives to
achieve compliance with the 8 hour standard apart from local
controls, and to determine the timeframe in which such
compliance could take place. The Administrator shall complete
this demonstration project no later than 2 years after the
date of enactment of this section and shall not impose any
requirement or sanction that might otherwise apply during the
pendency of the demonstration project.
Subtitle H--Management
SEC. 971. AVAILABILITY OF FUNDS.
Funds authorized to be appropriated to the Department under
this title shall remain available until expended.
SEC. 972. 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 or involves technical analyses
or educational activities.
(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.
(d) Size of Non-Federal Share.--The Secretary may consider
the size of the non-Federal share in selecting projects.
SEC. 973. 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. 974. EXTERNAL TECHNICAL REVIEW OF DEPARTMENTAL PROGRAMS.
(a) National Energy Research and Development Advisory
Boards.--
(1) In general.--The Secretary shall establish 1 or more
advisory boards to review Department research, development,
demonstration, and commercial application programs in energy
efficiency, renewable energy, nuclear energy, and fossil
energy.
(2) Existing advisory boards.--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
(5 U.S.C. App.) 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 Director of the
Office of Science;
(ii) advise the Director with respect to the well-being and
management of the National Laboratories and single-purpose
research facilities;
(iii) advise the Director 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
[[Page H4059]]
(iv) advise the Director 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 semiannually 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 901(b), 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 901(b), 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 Congress
reports containing the results of all such reviews and
assessments.
SEC. 975. 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--
(1) coordinate the activities of the Technology Transfer
Working Group;
(2) oversee the expenditure of funds allocated to the
Technology Transfer Working Group; and
(3) 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 (15 U.S.C. 3701 et seq.).
SEC. 976. 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 agency 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 agency and the laboratory.''.
SEC. 977. 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.
SEC. 978. TECHNOLOGY INFRASTRUCTURE PROGRAM.
(a) Establishment.--The Secretary shall establish a
Technology Infrastructure Program in accordance with this
section.
(b) Purpose.--The purpose of the Technology Infrastructure
Program shall be to improve the ability of National
Laboratories and single-purpose research facilities to
support departmental missions by--
(1) stimulating the development of technology clusters that
can support departmental missions at the National
Laboratories or single-purpose research facilities;
(2) improving the ability of National Laboratories and
single-purpose research facilities to leverage and benefit
from commercial research, technology, products, processes,
and services; and
(3) encouraging the exchange of scientific and
technological expertise between National Laboratories or
single-purpose research facilities and entities that can
support departmental missions at the National Laboratories or
single-purpose research facilities, such as institutions of
higher education; technology-related business concerns;
nonprofit institutions; and agencies of State, tribal, or
local governments.
(c) Projects.--The Secretary shall authorize the Director
of each National Laboratory or single-purpose research
facility to implement the Technology Infrastructure Program
at such National Laboratory or facility through projects that
meet the requirements of subsections (d) and (e).
(d) Program Requirements.--Each project funded under this
section shall meet the following requirements:
(1) Each project shall include at least 1 of each of the
following entities: a business; an institution of higher
education; a nonprofit institution; and an agency of a State,
local, or tribal government.
(2) Not less than 50 percent of the costs of each project
funded under this section shall be provided from non-Federal
sources. The calculation of costs paid by the non-Federal
sources to a project shall include cash, personnel, services,
equipment, and other resources expended on the project after
start of the project. Independent research and development
expenses of Government contractors that qualify for
reimbursement under section 31.205-18(e) of the Federal
Acquisition Regulation issued pursuant to section 25(c)(1) of
the Office of Federal Procurement Policy Act (41 U.S.C.
421(c)(1)) may be credited toward costs paid by non-Federal
sources to a project, if the expenses meet the other
requirements of this section.
(3) All projects under this section shall be competitively
selected using procedures determined by the Secretary.
(4) Any participant that receives funds under this section
may use generally accepted accounting principles for
maintaining accounts, books, and records relating to the
project.
(5) No Federal funds shall be made available under this
section for construction or any project for more than 5
years.
(e) Selection Criteria.--
(1) In general.--The Secretary shall allocate funds under
this section only if the Director of the National Laboratory
or single-purpose research facility managing the project
determines that the project is likely to improve the ability
of the National Laboratory or single-purpose research
facility to achieve technical success in meeting departmental
missions.
(2) Criteria.--The Secretary shall consider the following
criteria in selecting a project to receive Federal funds:
(A) The potential of the project to promote the development
of a commercially sustainable technology cluster following
the period of Department investment, which will derive most
of the demand for its products or services from the private
sector, and which will support departmental missions at the
participating National Laboratory or single-purpose research
facility.
(B) The potential of the project to promote the use of
commercial research, technology, products, processes, and
services by the participating National Laboratory or single-
purpose research facility to achieve its mission or the
commercial development of technological innovations made at
the participating National Laboratory or single-purpose
research facility.
(C) The extent to which the project involves a wide variety
and number of institutions of higher education, nonprofit
institutions, and technology-related business concerns that
can support the missions of the participating National
Laboratory or single-purpose research facility and that will
make substantive contributions to achieving the goals of the
project.
(D) The extent to which the project focuses on promoting
the development of technology-related business concerns that
are small businesses or involves such small businesses
substantively in the project.
(E) Such other criteria as the Secretary determines to be
appropriate.
(f) Allocation.--In allocating funds for projects approved
under this section, the Secretary shall provide--
(1) the Federal share of the project costs; and
(2) additional funds to the National Laboratory or single-
purpose research facility managing the project to permit the
National Laboratory or single-purpose research facility to
carry out activities relating to the project, and to
coordinate such activities with the project.
(g) Report to Congress.--Not later than July 1, 2006, the
Secretary shall report to Congress on whether the Technology
Infrastructure Program should be continued and, if so, how
the program should be managed.
(h) Definitions.--In this section:
(1) Technology cluster.--The term ``technology cluster''
means a concentration of technology-related business
concerns, institutions of higher education, or nonprofit
institutions that reinforce each other's performance in the
areas of technology development through formal or informal
relationships.
[[Page H4060]]
(2) Technology-related business concern.--The term
``technology-related business concern'' means a for-profit
corporation, company, association, firm, partnership, or
small business concern that conducts scientific or
engineering research; develops new technologies; manufactures
products based on new technologies; or performs technological
services.
(i) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary for activities under this
section $10,000,000 for each of fiscal years 2004, 2005, and
2006.
SEC. 979. 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 Congress a report
explaining how such amounts will be distributed among the
authorizations contained in this title.
(b) Prohibition.--
(1) In general.--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 Congress a report
described in subsection (c) and a period of 30 days has
elapsed after such committees receive the report.
(2) Computation.--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. 980. 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. 2011
et seq.), the Federal Nonnuclear Research and Development Act
of 1974 (42 U.S.C. 5901 et seq.), the Energy Policy Act of
1992 (42 U.S.C. 13201 et seq.), 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. 981. REPORT ON RESEARCH AND DEVELOPMENT PROGRAM
EVALUATION METHODOLOGIES.
Not later than 180 days after the date of enactment of this
Act, the Secretary shall enter into appropriate arrangements
with the National Academy of Sciences to investigate and
report on the scientific and technical merits of any
evaluation methodology currently in use or proposed for use
in relation to the scientific and technical programs of the
Department by the Secretary or other Federal official. Not
later than 6 months after receiving the report of the
National Academy, the Secretary shall submit such report to
Congress, along with any other views or plans of the
Secretary with respect to the future use of such evaluation
methodology.
SEC. 982. DEPARTMENT OF ENERGY SCIENCE AND TECHNOLOGY
SCHOLARSHIP PROGRAM.
(a) Establishment of Program.--
(1) In general.--The Secretary is authorized to 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) In general.--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) Deferral.--The Secretary may defer the obligation of an
individual to provide a period of service 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 not later than 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.--A scholarship
recipient who, for any reason, fails to begin or complete a
service obligation under this section after completion of
academic training, or fails to comply with the terms and
conditions of deferment established by the Secretary pursuant
to subsection (f)(2)(B), shall be in breach of the
contractual agreement. When a recipient breaches an agreement
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:
[[Page H4061]]
(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) Program.--The term ``Program'' means the Department of
Energy Science and Technology Scholarship Program established
under this section.
(j) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary for activities under this
section--
(1) for fiscal year 2004, $800,000;
(2) for fiscal year 2005, $1,600,000;
(3) for fiscal year 2006, $2,000,000;
(4) for fiscal year 2007, $2,000,000; and
(5) for fiscal year 2008, $2,000,000.
SEC. 983. REPORT ON EQUAL EMPLOYMENT OPPORTUNITY PRACTICES.
Not later than 12 months after the date of enactment of
this Act, and biennially thereafter, the Secretary shall
transmit to Congress a report on the equal employment
opportunity practices at National Laboratories. Such report
shall include--
(1) a thorough review of each laboratory contractor's equal
employment opportunity policies, including promotion to
management and professional positions and pay raises;
(2) a statistical report on complaints and their
disposition in the laboratories;
(3) a description of how equal employment opportunity
practices at the laboratories are treated in the contract and
in calculating award fees for each contractor;
(4) a summary of disciplinary actions and their disposition
by either the Department or the relevant contractors for each
laboratory;
(5) a summary of outreach efforts to attract women and
minorities to the laboratories;
(6) a summary of efforts to retain women and minorities in
the laboratories; and
(7) a summary of collaboration efforts with the Office of
Federal Contract Compliance Programs to improve equal
employment opportunity practices at the laboratories.
SEC. 984. 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, including socially and
economically disadvantaged small business concerns, in
procurement, collaborative research, technology licensing,
and technology transfer activities along with
recommendations, if appropriate, on how to improve
participation;
(3) make available to small businesses training, mentoring,
and information on how to participate in procurement and
collaborative research activities;
(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 concerns' 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)).
(e) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary for activities under this
section $5,000,000 for each of fiscal years 2004 through
2008.
SEC. 985. REPORT ON MOBILITY OF SCIENTIFIC AND TECHNICAL
PERSONNEL.
Not later than 2 years after the date of enactment of this
Act, the Secretary shall transmit a report to 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 and technical personnel among the contractor-
operated National Laboratories or contractor-operated single-
purpose research facilities and provide suggestions for
improving interlaboratory exchange of scientific and
technical personnel.
SEC. 986. NATIONAL ACADEMY OF SCIENCES REPORT.
Not later than 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 a study 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) transmit a report to Congress on recommendations
developed as a result of the study.
SEC. 987. 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, small businesses, facility
planners and managers, State and local governments, and other
entities.
SEC. 988. COMPETITIVE AWARD OF MANAGEMENT CONTRACTS.
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 and shall submit to
Congress a report notifying Congress of the waiver and
setting forth the reasons for the waiver at least 60 days
prior to the date of the award of such a contract.
SEC. 989. EDUCATIONAL PROGRAMS IN SCIENCE AND MATHEMATICS.
(a) Activities.--Section 3165(a) of the Department of
Energy Science Education Enhancement Act (42 U.S.C. 7381b(a))
is amended by adding at the end the following:
``(14) Support competitive events for students, under
supervision of teachers, designed to encourage student
interest and knowledge in science and mathematics.''.
(b) Authorization of Appropriations.--Section 3169 of the
Department of Energy Science Education Enhancement Act (42
U.S.C. 7381e), as so redesignated by section 1102(b), is
amended by inserting before the period ``; and $40,000,000
for each of fiscal years 2004 through 2008''.
TITLE X--DEPARTMENT OF ENERGY MANAGEMENT
SEC. 1001. ADDITIONAL ASSISTANT SECRETARY POSITION.
(a) Additional Assistant Secretary Position to Enable
Improved Management of Nuclear Energy Issues.--
(1) In general.--Section 203(a) of the Department of Energy
Organization Act (42 U.S.C. 7133(a)) is amended by striking
``six Assistant Secretaries'' and inserting ``7 Assistant
Secretaries''.
(2) Sense of congress.--It is the sense of Congress that
the leadership for departmental missions in nuclear energy
should be at the Assistant Secretary level.
(b) Technical and Conforming Amendments.--
(1) Title 5.--Section 5315 of title 5, United States Code,
is amended by striking ``Assistant Secretaries of Energy
(6)'' and inserting ``Assistant Secretaries of Energy (7)''.
(2) Department of energy organization act.--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.''.
SEC. 1002. OTHER TRANSACTIONS AUTHORITY.
Section 646 of the Department of Energy Organization Act
(42 U.S.C. 7256) is amended by adding at the end the
following:
``(g)(1) In addition to other authorities granted to the
Secretary under law, the Secretary may enter into other
transactions on such terms as the Secretary may deem
appropriate in furtherance of research, development, or
demonstration functions vested in the Secretary. Such other
transactions shall not be subject to the provisions of
section 9 of the Federal Nonnuclear Energy Research and
Development Act of 1974 (42 U.S.C. 5908) or section 152 of
the Atomic Energy Act of 1954 (42 U.S.C. 2182).
``(2)(A) The Secretary shall ensure that--
``(i) to the maximum extent the Secretary determines
practicable, no transaction entered into under paragraph (1)
provides for research, development, or demonstration that
duplicates research, development, or demonstration being
conducted under existing projects carried out by the
Department;
``(ii) to the extent the Secretary determines practicable,
the funds provided by the Government under a transaction
authorized by paragraph (1) do not exceed the total
[[Page H4062]]
amount provided by other parties to the transaction; and
``(iii) to the extent the Secretary determines practicable,
competitive, merit-based selection procedures shall be used
when entering into transactions under paragraph (1).
``(B) A transaction authorized by paragraph (1) may be used
for a research, development, or demonstration project only if
the Secretary makes a written determination that the use of a
standard contract, grant, or cooperative agreement for the
project is not feasible or appropriate.
``(3)(A) The Secretary shall protect from disclosure,
including disclosure under section 552 of title 5, United
States Code, for up to 5 years after the date the information
is received by the Secretary--
``(i) a proposal, proposal abstract, and supporting
documents submitted to the Department in a competitive or
noncompetitive process having the potential for resulting in
an award under paragraph (1) to the party submitting the
information; and
``(ii) a business plan and technical information relating
to a transaction authorized by paragraph (1) submitted to the
Department as confidential business information.
``(B) The Secretary may protect from disclosure, for up to
5 years after the information was developed, any information
developed pursuant to a transaction under paragraph (1) which
developed information is of a character that it would be
protected from disclosure under section 552(b)(4) of title 5,
United States Code, if obtained from a person other than a
Federal agency.
``(4) Not later than 90 days after the date of enactment of
this subsection, the Secretary shall prescribe guidelines for
using other transactions authorized by paragraph (1). Such
guidelines shall be published in the Federal Register for
public comment under rulemaking procedures of the Department.
``(5) The authority of the Secretary under this subsection
may be delegated only to an officer of the Department who is
appointed by the President by and with the advice and consent
of the Senate and may not be delegated to any other person.
``(6)(A) Not later than September 31, 2005, the Comptroller
General of the United States shall report to Congress on the
Department's use of the authorities granted under this
section, including the ability to attract nontraditional
government contractors and whether additional safeguards are
needed with respect to the use of such authorities.
``(B) In this section, the term `nontraditional Government
contractor' has the same meaning as the term `nontraditional
defense contractor' as defined in section 845(e) of the
National Defense Authorization Act for Fiscal Year 1994
(Public Law 103-160; 10 U.S.C. 2371 note).''.
TITLE XI--PERSONNEL AND TRAINING
SEC. 1101. TRAINING GUIDELINES FOR ELECTRIC ENERGY INDUSTRY
PERSONNEL.
The Secretary of Energy, in consultation with the Secretary
of Labor and jointly with the electric industry and
recognized employee representatives, shall develop model
personnel training guidelines to support electric system
reliability and safety. The training guidelines shall, at a
minimum--
(1) include training requirements for workers engaged in
the construction, operation, inspection, and maintenance of
electric generation, transmission, and distribution,
including competency and certification requirements, and
assessment requirements that include initial and ongoing
evaluation of workers, recertification assessment procedures,
and methods for examining or testing the qualification of
individuals performing covered tasks; and
(2) consolidate existing training guidelines on the
construction, operation, maintenance, and inspection of
electric generation, transmission, and distribution
facilities, such as those established by the National
Electric Safety Code and other industry consensus standards.
SEC. 1102. IMPROVED ACCESS TO ENERGY-RELATED SCIENTIFIC AND
TECHNICAL CAREERS.
(a) Department of Energy Science Education Programs.--
Section 3164 of the Department of Energy Science Education
Enhancement Act (42 U.S.C. 7381a) is amended by adding at the
end the following:
``(c) Programs for Students From Underrepresented Groups.--
In carrying out a program under subsection (a), the Secretary
shall give priority to activities that are designed to
encourage students from underrepresented groups to pursue
scientific and technical careers.''.
(b) Partnerships With Historically Black Colleges and
Universities, Hispanic-Servicing Institutions, and Tribal
Colleges.--The Department of Energy Science Education
Enhancement Act (42 U.S.C. 7381 et seq.) is amended--
(1) by redesignating sections 3167 and 3168 as sections
3168 and 3169, respectively; and
(2) by inserting after section 3166 the following:
``SEC. 3167. PARTNERSHIPS WITH HISTORICALLY BLACK COLLEGES
AND UNIVERSITIES, HISPANIC-SERVING
INSTITUTIONS, AND TRIBAL COLLEGES.
``(a) Definitions.--In this section:
``(1) Hispanic-serving institution.--The term `Hispanic-
serving institution' has the meaning given that term in
section 502(a) of the Higher Education Act of 1965 (20 U.S.C.
1101a(a)).
``(2) Historically black college or university.--The term
`historically Black college or university' has the meaning
given the term `part B institution' in section 322 of the
Higher Education Act of 1965 (20 U.S.C. 1061).
``(3) National laboratory.--The term `National Laboratory'
has the meaning given that term in section 902 of the Energy
Policy Act of 2003.
``(4) Science facility.--The term `science facility' has
the meaning given the term `single-purpose research facility'
in section 902 of the Energy Policy Act of 2003.
``(5) Tribal college.--The term `tribal college' has the
meaning given the term `Tribal College or University' in
section 316(b)(3) of the Higher Education Act of 1965 (20
U.S.C. 1059c(b)(3)).
``(b) Education Partnership.--The Secretary shall direct
the Director of each National Laboratory and, to the extent
practicable, the head of any science facility to increase the
participation of historically Black colleges or universities,
Hispanic-serving institutions, or tribal colleges in
activities that increase the capacity of the historically
Black colleges or universities, Hispanic-serving
institutions, or tribal colleges to train personnel in
science or engineering.
``(c) Activities.--An activity under subsection (b) may
include--
``(1) collaborative research;
``(2) equipment transfer;
``(3) training activities conducted at a National
Laboratory or science facility; and
``(4) mentoring activities conducted at a National
Laboratory or science facility.
``(d) Report.--Not later than 2 years after the date of
enactment of the Energy Policy Act of 2003, the Secretary
shall submit to Congress a report on the activities carried
out under this section.''.
SEC. 1103. NATIONAL POWER PLANT OPERATIONS TECHNOLOGY AND
EDUCATION CENTER.
(a) Establishment.--The Secretary shall support the
establishment of a National Power Plant Operations Technology
and Education Center (in this section referred to as the
``Center''), to address the need for training and educating
certified operators for nonnuclear electric power generation
plants.
(b) Role.--The Center shall provide both training and
continuing education relating to nonnuclear electric power
generation plant technologies and operations. The Center
shall conduct training and education activities on site and
through Internet-based information technologies that allow
for learning at remote sites.
(c) Criteria for Competitive Selection.--The Secretary
shall support the establishment of the Center at an
institution of higher education with expertise in power plant
technology and operation and with the ability to provide
onsite as well as Internet-based training.
SEC. 1104. INTERNATIONAL ENERGY TRAINING.
(a) In General.--The Secretary of Energy, in consultation
with the Secretaries of Commerce, Interior, and State and the
Federal Energy Regulatory Commission, shall coordinate
training and outreach efforts for international commercial
energy markets in countries with developing and restructuring
economies.
(b) Components.--The efforts may address--
(1) production-related fiscal regimes;
(2) grid and network issues;
(3) energy user and demand side response;
(4) international trade of energy; and
(5) international transportation of energy.
(c) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section $1,500,000 for
each of fiscal years 2004 through 2007.
TITLE XII--ELECTRICITY
SEC. 1201. SHORT TITLE.
This title may be cited as the ``Electric Reliability Act
of 2004''.
Subtitle A--Reliability Standards
SEC. 1211. ELECTRIC RELIABILITY STANDARDS.
(a) In General.--Part II of the Federal Power Act (16 U.S.C
824 et seq.) is amended by adding at the end the following:
``SEC. 215. 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.
``(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
[[Page H4063]]
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 1 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. The Commission may
certify 1 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; and
``(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 ERO 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 ERO 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 ERO 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 issue 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 Electric 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 ERO. A proposed rule
or proposed rule change shall take effect upon a finding by
the Commission, after notice and opportunity for comment,
that the change is just, reasonable, not unduly
discriminatory or preferential, is in the public interest,
and satisfies the requirements of subsection (c).
[[Page H4064]]
``(g) Reliability Reports.--The ERO 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 ERO in the United States and Canada or Mexico.
``(i) Savings Provisions.--(1) The ERO shall have authority
to develop and enforce compliance with reliability standards
for only the bulk-power system.
``(2) This section does not authorize the ERO 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.
``(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 ERO.
``(5) The Commission, after consultation with the ERO 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 \2/3\ of the States within a region that have more than
\1/2\ of their electric load served within the region. A
regional advisory body shall be composed of 1 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) Alaska and Hawaii.--The provisions of this section do
not apply to Alaska or Hawaii.''.
(b) Status of ERO.--The Electric Reliability Organization
certified by the Federal Energy Regulatory Commission under
section 215(c) of the Federal Power Act and any regional
entity delegated enforcement authority pursuant to section
215(e)(4) of that Act are not departments, agencies, or
instrumentalities of the United States Government.
Subtitle B--Transmission Infrastructure Modernization
SEC. 1221. SITING OF INTERSTATE ELECTRIC 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 ELECTRIC TRANSMISSION
FACILITIES.
``(a) Designation of National Interest Electric
Transmission Corridors.--
``(1) Transmission congestion study.--Within 1 year after
the enactment of this section, and every 3 years thereafter,
the Secretary of Energy, in consultation with affected
States, shall conduct a study of electric transmission
congestion. After considering alternatives and
recommendations from interested parties, including an
opportunity for comment from affected States, the Secretary
shall issue a report, based on such study, which may
designate any geographic area experiencing electric energy
transmission capacity constraints or congestion that
adversely affects consumers as a national interest electric
transmission corridor. The Secretary shall conduct the study
and issue the report in consultation with any appropriate
regional entity referenced in section 215 of this Act.
``(2) Considerations.--In determining whether to designate
a national interest electric transmission corridor referred
to in paragraph (1) under this section, the Secretary may
consider whether--
``(A) the economic vitality and development of the
corridor, or the end markets served by the corridor, may be
constrained by lack of adequate or reasonably priced
electricity;
``(B)(i) economic growth in the corridor, or the end
markets served by the corridor, may be jeopardized by
reliance on limited sources of energy; and
``(ii) a diversification of supply is warranted;
``(C) the energy independence of the United States would be
served by the designation;
``(D) the designation would be in the interest of national
energy policy; and
``(E) the designation would enhance national defense and
homeland security.
``(b) Construction Permit.--Except as provided in
subsection (i), the Commission is authorized, after notice
and an opportunity for hearing, to issue a permit or permits
for the construction or modification of electric transmission
facilities in a national interest electric transmission
corridor designated by the Secretary under subsection (a) if
the Commission finds that--
``(1)(A) a State in which the transmission facilities are
to be constructed or modified is without authority to--
``(i) approve the siting of the facilities; or
``(ii) consider the interstate benefits expected to be
achieved by the proposed construction or modification of
transmission facilities in the State;
``(B) the applicant for a permit is a transmitting utility
under this Act but does not qualify to apply for a permit or
siting approval for the proposed project in a State because
the applicant does not serve end-use customers in the State;
or
``(C) a State commission or other entity that has authority
to approve the siting of the facilities has--
``(i) withheld approval for more than 1 year after the
filing of an application pursuant to applicable law seeking
approval or 1 year after the designation of the relevant
national interest electric transmission corridor, whichever
is later; or
``(ii) conditioned its approval in such a manner that the
proposed construction or modification will not significantly
reduce transmission congestion in interstate commerce or is
not economically feasible;
``(2) the facilities to be authorized by the permit will be
used for the transmission of electric energy in interstate
commerce;
``(3) the proposed construction or modification is
consistent with the public interest;
``(4) the proposed construction or modification will
significantly reduce transmission congestion in interstate
commerce and protects or benefits consumers; and
``(5) the proposed construction or modification is
consistent with sound national energy policy and will enhance
energy independence.
``(c) Permit Applications.--Permit applications under
subsection (b) shall be made in writing to the Commission.
The Commission shall issue rules setting forth the form of
the application, the information to be contained in the
application, 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 or modifying any transmission
facility pursuant to State law.
``(g) 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 the construction or modification of electric transmission
facilities within a reasonable period of time after the
acquisition. Other than construction, modification,
operation, or maintenance of electric transmission facilities
and related facilities, property acquired under subsection
(e) may not be used for any purpose (including use for any
heritage area, recreational trail, or park) without the
consent of the owner of the parcel from whom the property was
acquired (or the owner's heirs or assigns).
``(h) Coordination of Federal Authorizations for
Transmission and Distribution Facilities.--
``(1) Lead agency.--If an applicant, or prospective
applicant, for a Federal authorization related to an electric
transmission or distribution facility so requests, the
Department of Energy (DOE) shall act as the lead
[[Page H4065]]
agency for purposes of coordinating all applicable Federal
authorizations and related environmental reviews of the
facility. For purposes of this subsection, the term `Federal
authorization' means 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 agencies
responsible for Federal authorizations 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 considers 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.--As lead agency head, 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. The Secretary of Energy
and the heads of 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 relating to
the corridors. Such document shall include consideration by
the relevant agencies of any applicable criteria or other
matters as required under applicable laws.
``(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, 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 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 of 1969, and the Federal
Land Policy and Management Act.
``(5) Conforming regulations and memoranda of
understanding.--Not later than 18 months after the date of
enactment of this section, the Secretary of Energy shall
issue any regulations necessary to implement this subsection.
Not later than 1 year after the date of enactment of this
section, the Secretary and the heads of all Federal agencies
with authority to issue Federal authorizations shall enter
into Memoranda of Understanding to ensure the timely and
coordinated review and permitting of electricity transmission
and distribution facilities. The head of each Federal agency
with authority to issue a Federal authorization shall
designate a senior official responsible for, and dedicate
sufficient other staff and resources to ensure, full
implementation of the DOE regulations and any Memoranda.
Interested Indian tribes, multi-State entities, and State
agencies may enter such Memoranda of Understanding.
``(6) Duration and renewal.--Each Federal land use
authorization for an electricity transmission or distribution
facility shall be issued--
``(A) for a duration, as determined by the Secretary of
Energy, commensurate with the anticipated use of the
facility, and
``(B) with appropriate authority to manage the right-of-way
for reliability and environmental protection.
Upon the expiration of any such authorization (including an
authorization issued prior to enactment of this section), the
authorization 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), FERC-
approved electric reliability organizations (including
related regional entities), and FERC-approved Regional
Transmission Organizations and Independent System Operators.
``(i) Interstate Compacts.--The consent of Congress is
hereby given for 3 or more contiguous States to enter into an
interstate compact, subject to approval by Congress,
establishing regional transmission siting agencies to
facilitate siting of future electric energy transmission
facilities within such States and to carry out the electric
energy transmission siting responsibilities of such States.
The Secretary of Energy may provide technical assistance to
regional transmission siting agencies established under this
subsection. Such regional transmission siting agencies shall
have the authority to review, certify, and permit siting of
transmission facilities, including facilities in national
interest electric transmission corridors (other than
facilities on property owned by the United States). The
Commission shall have no authority to issue a permit for the
construction or modification of electric transmission
facilities within a State that is a party to a compact,
unless the members of a compact are in disagreement and the
Secretary makes, after notice and an opportunity for a
hearing, the finding described in section (b)(1)(C).
``(j) 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. Subsection (h)(4)
of this section shall not apply to any Congressionally-
designated components of the National Wilderness Preservation
System, the National Wild and Scenic Rivers System, or the
National Park system (including National Monuments therein).
``(k) ERCOT.--This section shall not apply within the area
referred to in section 212(k)(2)(A).''.
(b) Reports to Congress on Corridors and Rights of Way on
Federal Lands.--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 each of 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
under Title V of the Federal Land Policy and Management Act
(43 U.S.C. 1761 et. Seq.), 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.
(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. 1222. THIRD-PARTY FINANCE.
(a) Existing Facilities.--The Secretary of Energy
(hereinafter in this section referred to as the
``Secretary''), acting through the Administrator of the
Western Area Power Administration (hereinafter in this
section referred to as ``WAPA''), or through the
Administrator of the Southwestern Power Administration
(hereinafter in this section referred to as ``SWPA''), or
both, may design, develop, construct, operate, maintain, or
own, or participate with other entities in designing,
developing, constructing, operating, maintaining, or owning,
an electric power transmission facility and related
facilities (``Project'') needed to upgrade existing
transmission facilities owned by SWPA or WAPA if the
Secretary of Energy, in consultation with the applicable
Administrator, determines that the proposed Project--
(1)(A) is located in a national interest electric
transmission corridor designated under section 216(a) of the
Federal Power Act and will reduce congestion of electric
transmission in interstate commerce; or
(B) is necessary to accommodate an actual or projected
increase in demand for electric transmission capacity;
(2) is consistent with--
(A) transmission needs identified, in a transmission
expansion plan or otherwise, by
[[Page H4066]]
the appropriate Regional Transmission Organization or
Independent System Operator (as defined in the Federal Power
Act), if any, or approved regional reliability organization;
and
(B) efficient and reliable operation of the transmission
grid; and
(3) would be operated in conformance with prudent utility
practice.
(b) New Facilities.--The Secretary, acting through WAPA or
SWPA, or both, may design, develop, construct, operate,
maintain, or own, or participate with other entities in
designing, developing, constructing, operating, maintaining,
or owning, a new electric power transmission facility and
related facilities (``Project'') located within any State in
which WAPA or SWPA operates if the Secretary, in consultation
with the applicable Administrator, determines that the
proposed Project--
(1)(A) is located in an area designated under section
216(a) of the Federal Power Act and will reduce congestion of
electric transmission in interstate commerce; or
(B) is necessary to accommodate an actual or projected
increase in demand for electric transmission capacity;
(2) is consistent with--
(A) transmission needs identified, in a transmission
expansion plan or otherwise, by the appropriate Regional
Transmission Organization or Independent System Operator, if
any, or approved regional reliability organization; and
(B) efficient and reliable operation of the transmission
grid;
(3) will be operated in conformance with prudent utility
practice;
(4) will be operated by, or in conformance with the rules
of, the appropriate (A) Regional Transmission Organization or
Independent System Operator, if any, or (B) if such an
organization does not exist, regional reliability
organization; and
(5) will not duplicate the functions of existing
transmission facilities or proposed facilities which are the
subject of ongoing or approved siting and related permitting
proceedings.
(c) Other Funds.--
(1) In general.--In carrying out a Project under subsection
(a) or (b), the Secretary may accept and use funds
contributed by another entity for the purpose of carrying out
the Project.
(2) Availability.--The contributed funds shall be available
for expenditure for the purpose of carrying out the Project--
(A) without fiscal year limitation; and
(B) as if the funds had been appropriated specifically for
that Project.
(3) Allocation of costs.--In carrying out a Project under
subsection (a) or (b), any costs of the Project not paid for
by contributions from another entity shall be collected
through rates charged to customers using the new transmission
capability provided by the Project and allocated equitably
among these project beneficiaries using the new transmission
capability.
(d) Relationship to Other Laws.--Nothing in this section
affects any requirement of--
(1) any Federal environmental law, including the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.);
(2) any Federal or State law relating to the siting of
energy facilities; or
(3) any existing authorizing statutes.
(e) Savings Clause.--Nothing in this section shall
constrain or restrict an Administrator in the utilization of
other authority delegated to the Administrator of WAPA or
SWPA.
(f) Secretarial Determinations.--Any determination made
pursuant to subsections (a) or (b) shall be based on findings
by the Secretary using the best available data.
(g) Maximum Funding Amount.--The Secretary shall not accept
and use more than $100,000,000 under subsection (c)(1) for
the period encompassing fiscal years 2004 through 2013.
SEC. 1223. TRANSMISSION SYSTEM MONITORING.
Within 6 months after the date of enactment of this Act,
the Secretary of Energy and the Federal Energy Regulatory
Commission shall study and report to Congress on the steps
which must be taken to establish a system to make available
to all transmission system owners and Regional Transmission
Organizations (as defined in the Federal Power Act) within
the Eastern and Western Interconnections real-time
information on the functional status of all transmission
lines within such Interconnections. In such study, the
Commission shall assess technical means for implementing such
transmission information system and identify the steps the
Commission or Congress must take to require the
implementation of such system.
SEC. 1224. ADVANCED TRANSMISSION TECHNOLOGIES.
(a) Authority.--The Federal Energy Regulatory Commission,
in the exercise of its authorities under the Federal Power
Act and the Public Utility Regulatory Policies Act of 1978,
shall encourage the deployment of advanced transmission
technologies.
(b) Definition.--For the purposes of this section, the term
``advanced transmission technologies'' means technologies
that increase the capacity, efficiency, or reliability of
existing or new transmission facilities, including, but not
limited to--
(1) high-temperature lines (including superconducting
cables);
(2) underground cables;
(3) advanced conductor technology (including advanced
composite conductors, high-temperature low-sag conductors,
and fiber optic temperature sensing conductors);
(4) high-capacity ceramic electric wire, connectors, and
insulators;
(5) optimized transmission line configurations (including
multiple phased transmission lines);
(6) modular equipment;
(7) wireless power transmission;
(8) ultra-high voltage lines;
(9) high-voltage DC technology;
(10) flexible AC transmission systems;
(11) energy storage devices (including pumped hydro,
compressed air, superconducting magnetic energy storage,
flywheels, and batteries);
(12) controllable load;
(13) distributed generation (including PV, fuel cells,
microturbines);
(14) enhanced power device monitoring;
(15) direct system state sensors;
(16) fiber optic technologies;
(17) power electronics and related software (including real
time monitoring and analytical software); and
(18) any other technologies the Commission considers
appropriate.
(c) Obsolete or Impracticable Technologies.--The Commission
is authorized to cease encouraging the deployment of any
technology described in this section on a finding that such
technology has been rendered obsolete or otherwise
impracticable to deploy.
SEC. 1225. ELECTRIC TRANSMISSION AND DISTRIBUTION PROGRAMS.
(a) Electric Transmission and Distribution Program.--The
Secretary of Energy (hereinafter in this section referred to
as the ``Secretary'') acting through the Director of the
Office of Electric Transmission and Distribution shall
establish a comprehensive research, development,
demonstration and commercial application program to promote
improved reliability and efficiency of electrical
transmission and distribution systems. This program shall
include--
(1) advanced energy delivery and storage technologies,
materials, and systems, including new transmission
technologies, such as flexible alternating current
transmission systems, composite conductor materials and other
technologies that enhance reliability, operational
flexibility, or power-carrying capability;
(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) supply of electricity to the power grid by small scale,
distributed and residential-based power generators;
(9) the development and use of advanced grid design,
operation and planning tools;
(10) any other infrastructure technologies, as appropriate;
and
(11) technology transfer and education.
(b) Program Plan.--Not later than 1 year after the date of
the enactment of this legislation, 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 may 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) Implementation.--The Secretary shall consider
implementing this program using a consortium of industry,
university and national laboratory participants.
(d) 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 and distribution infrastructure technologies.
(e) Power Delivery Research Initiative.--
(1) In general.--The Secretary shall establish a research,
development, demonstration, and commercial application
initiative specifically focused on power delivery utilizing
components incorporating high temperature superconductivity.
(2) Goals.--The goals of this initiative shall be to--
(A) establish facilities to develop high temperature
superconductivity power applications in partnership with
manufacturers and utilities;
(B) provide technical leadership for establishing
reliability for high temperature superconductivity power
applications including suitable modeling and analysis;
(C) facilitate commercial transition toward direct current
power transmission, storage, and use for high power systems
utilizing high temperature superconductivity; and
[[Page H4067]]
(D) facilitate the integration of very low impedance high
temperature superconducting wires and cables in existing
electric networks to improve system performance, power flow
control and reliability.
(3) Requirements.--The initiative shall include--
(A) feasibility analysis, planning, research, and design to
construct demonstrations of superconducting links in high
power, direct current and controllable alternating current
transmission systems;
(B) public-private partnerships to demonstrate deployment
of high temperature superconducting cable into testbeds
simulating a realistic transmission grid and under varying
transmission conditions, including actual grid insertions;
and
(C) testbeds developed in cooperation with national
laboratories, industries, and universities to demonstrate
these technologies, prepare the technologies for commercial
introduction, and address cost or performance roadblocks to
successful commercial use.
(4) Authorization of appropriations.--For purposes of
carrying out this subsection, there are authorized to be
appropriated--
(A) for fiscal year 2004, $15,000,000;
(B) for fiscal year 2005, $20,000,000;
(C) for fiscal year 2006, $30,000,000;
(D) for fiscal year 2007, $35,000,000; and
(E) for fiscal year 2008, $40,000,000.
SEC. 1226. 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--
(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) Qualifying advanced power system technology facility.--
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.
(2) Qualifying security and assured power facility.--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.
SEC. 1227. OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION.
(a) Creation of an Office of Electric Transmission and
Distribution.--Title II of the Department of Energy
Organization Act (42 U.S.C. 7131 et seq.) (as amended by
section 502(a) of this Act) is amended by inserting the
following after section 217, as added by title V of this Act:
``SEC. 218. OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION.
``(a) Establishment.--There is established within the
Department an Office of Electric Transmission and
Distribution. This Office shall be headed by a Director,
subject to the authority of the Secretary. The Director shall
be appointed by the Secretary. The Director shall be
compensated at the annual rate prescribed for level IV of the
Executive Schedule under section 5315 of title 5, United
States Code.
``(b) Director.--The Director shall--
``(1) coordinate and develop a comprehensive, multi-year
strategy to improve the Nation's electricity transmission and
distribution;
``(2) implement or, where appropriate, coordinate the
implementation of, the recommendations made in the
Secretary's May 2002 National Transmission Grid Study;
``(3) oversee research, development, and demonstration to
support Federal energy policy related to electricity
transmission and distribution;
``(4) grant authorizations for electricity import and
export pursuant to section 202(c), (d), (e), and (f) of the
Federal Power Act (16 U.S.C. 824a);
``(5) perform other functions, assigned by the Secretary,
related to electricity transmission and distribution; and
``(6) develop programs for workforce training in power and
transmission engineering.''.
(b) Conforming Amendments.--(1) The table of contents of
the Department of Energy Organization Act (42 U.S.C. 7101
note) is amended by inserting after the item relating to
section 217 the following new item:
``Sec. 218. Office of Electric Transmission and Distribution.''.
(2) Section 5315 of title 5, United States Code, is amended
by inserting after the item relating to ``Inspector General,
Department of Energy.'' the following:
``Director, Office of Electric Transmission and
Distribution, Department of Energy.''.
Subtitle C--Transmission Operation Improvements
SEC. 1231. OPEN NONDISCRIMINATORY ACCESS.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is
amended by inserting after section 211 the following new
section:
``SEC. 211A. OPEN ACCESS BY UNREGULATED TRANSMITTING
UTILITIES.
``(a) Transmission Services.--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) Exemption.--The Commission shall exempt from any rule
or order under this section any unregulated transmitting
utility that--
``(1) sells no more than 4,000,000 megawatt hours of
electricity per year; or
``(2) does not own or operate any transmission facilities
that are necessary for operating an interconnected
transmission system (or any portion thereof); or
``(3) meets other criteria the Commission determines to be
in the public interest.
``(c) Local Distribution Facilities.--The requirements of
subsection (a) shall not apply to facilities used in local
distribution.
``(d) Exemption Termination.--Whenever the Commission,
after an evidentiary hearing held upon a complaint and after
giving consideration to reliability standards established
under section 215, finds on the basis of a preponderance of
the evidence that any exemption granted pursuant to
subsection (b) unreasonably impairs the continued reliability
of an interconnected transmission system, it shall revoke the
exemption granted to that transmitting utility.
``(e) Application to Unregulated Transmitting Utilities.--
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.
``(f) Remand.--In exercising its authority under paragraph
(1) of subsection (a), the Commission may remand transmission
rates to an unregulated transmitting utility for review and
revision where necessary to meet the requirements of
subsection (a).
``(g) Other Requests.--The provision of transmission
services under subsection (a) does not preclude a request for
transmission services under section 211.
``(h) Limitation.--The Commission may not require a State
or municipality to take action under this section that would
violate a private activity bond rule for purposes of section
141 of the Internal Revenue Code of 1986 (26 U.S.C. 141).
``(i) Transfer of Control of Transmitting Facilities.--
Nothing in this section authorizes the Commission to require
an unregulated transmitting utility to transfer control or
operational control of its transmitting facilities to an RTO
or any other Commission-approved independent transmission
organization designated to provide nondiscriminatory
transmission access.
``(j) Definition.--For purposes of this section, the term
`unregulated transmitting utility' means an entity that--
``(1) owns or operates facilities used for the transmission
of electric energy in interstate commerce; and
``(2) is an entity described in section 201(f).''.
SEC. 1232. SENSE OF CONGRESS ON REGIONAL TRANSMISSION
ORGANIZATIONS.
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 Regional Transmission
Organizations as defined in section 3 of the Federal Power
Act.
SEC. 1233. REGIONAL TRANSMISSION ORGANIZATION APPLICATIONS
PROGRESS REPORT.
Not later than 120 days after the date of enactment of this
section, the Federal Energy Regulatory Commission shall
submit to Congress a report containing each of the following:
[[Page H4068]]
(1) A list of all regional transmission organization
applications filed at the Commission pursuant to subpart F of
part 35 of title 18, Code of Federal Regulations (in this
section referred to as ``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 brief description of the status of each pending
regional transmission organization application, including a
precise explanation of how each fails to comply with the
minimal requirements of Order No. 2000 and what steps need to
be taken to bring each application into such compliance.
(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;
(B) a discussion of the impact of such seams on consumers
and wholesale competition; and
(C) a discussion of minimizing cost-shifting on consumers.
SEC. 1234. FEDERAL UTILITY PARTICIPATION IN REGIONAL
TRANSMISSION ORGANIZATIONS.
(a) Definitions.--For purposes of this section--
(1) Appropriate federal regulatory authority.--The term
``appropriate Federal regulatory authority'' means--
(A) with respect to a Federal power marketing agency (as
defined in the Federal Power Act), 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
(B) with respect to the Tennessee Valley Authority, the
Board of Directors of the Tennessee Valley Authority.
(2) Federal utility.--The term ``Federal utility'' means a
Federal power marketing agency or the Tennessee Valley
Authority.
(3) Transmission system.--The term ``transmission system''
means electric transmission facilities owned, leased, or
contracted for by the United States and operated by a Federal
utility.
(b) 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 an RTO or ISO
(as defined in the Federal Power Act), approved by the
Federal Energy Regulatory Commission. Such contract,
agreement or arrangement shall include--
(1) 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;
(2) provisions for monitoring and oversight by the Federal
utility of the RTO's or ISO's fulfillment of the terms and
conditions of the contract, agreement or other arrangement,
including a provision 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
(3) a provision that allows the Federal utility to withdraw
from the RTO or ISO 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 an RTO or ISO
shall 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.
(c) Existing Statutory and Other Obligations.--
(1) System operation requirements.--No statutory provision
requiring or authorizing a Federal utility to transmit
electric power or to construct, operate or maintain its
transmission system shall be construed to prohibit a transfer
of control and use of its transmission system pursuant to,
and subject to all requirements of subsection (b).
(2) Other obligations.--This subsection shall not be
construed to--
(A) 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
(B) authorize abrogation of any contract or treaty
obligation.
(3) Repeal.--Section 311 of title III of Appendix B of the
Act of October 27, 2000 (P.L. 106-377, section 1(a)(2); 114
Stat. 1441, 1441A-80; 16 U.S.C. 824n) is repealed.
SEC. 1235. STANDARD MARKET DESIGN.
(a) Remand.--The Commission's proposed rulemaking entitled
``Remedying Undue Discrimination through Open Access
Transmission Service and Standard Electricity Market Design''
(Docket No. RM01-12-000) (``SMD NOPR'') is remanded to the
Commission for reconsideration. No final rule mandating a
standard electricity market design pursuant to the proposed
rulemaking, including any rule or order of general
applicability within the scope of the proposed rulemaking,
may be issued before October 31, 2006, or take effect before
December 31, 2006. Any final rule issued by the Commission
pursuant to the proposed rulemaking shall be preceded by a
second notice of proposed rulemaking issued after the date of
enactment of this Act and an opportunity for public comment.
(b) Savings Clause.--This section shall not be construed to
modify or diminish any authority or obligation the Commission
has under this Act, the Federal Power Act, or other
applicable law, including, but not limited to, any authority
to--
(1) issue any rule or order (of general or particular
applicability) pursuant to any such authority or obligation;
or
(2) act on a filing or filings by 1 or more transmitting
utilities for the voluntary formation of a Regional
Transmission Organization or Independent System Operator (as
defined in the Federal Power Act) (and related market
structures or rules) or voluntary modification of an existing
Regional Transmission Organization or Independent System
Operator (and related market structures or rules).
SEC. 1236. NATIVE LOAD SERVICE OBLIGATION.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is
amended by adding at the end the following:
``SEC. 217. NATIVE LOAD SERVICE OBLIGATION.
``(a) Meeting Service Obligations.--(1) Any load-serving
entity that, as of the date of enactment of this section--
``(A) owns generation facilities, markets the output of
Federal generation facilities, or holds rights under 1 or
more wholesale contracts to purchase electric energy, for the
purpose of meeting a service obligation, and
``(B) by reason of ownership of transmission facilities, or
1 or more contracts or service agreements for firm
transmission service, holds firm transmission rights for
delivery of the output of such generation facilities or such
purchased energy to meet such service obligation,
is entitled to use such firm transmission rights, or,
equivalent tradable or financial transmission rights, in
order to deliver such output or purchased energy, or the
output of other generating facilities or purchased energy to
the extent deliverable using such rights, to the extent
required to meet its service obligation.
``(2) To the extent that all or a portion of the service
obligation covered by such firm transmission rights or
equivalent tradable or financial transmission rights is
transferred to another load-serving entity, the successor
load-serving entity shall be entitled to use the firm
transmission rights or equivalent tradable or financial
transmission rights associated with the transferred service
obligation. Subsequent transfers to another load-serving
entity, or back to the original load-serving entity, shall be
entitled to the same rights.
``(3) The Commission shall exercise its authority under
this Act in a manner that facilitates the planning and
expansion of transmission facilities to meet the reasonable
needs of load-serving entities to satisfy their service
obligations.
``(b) Allocation of Transmission Rights.--Nothing in this
section shall affect any methodology approved by the
Commission prior to September 15, 2003, for the allocation of
transmission rights by an RTO or ISO that has been authorized
by the Commission to allocate transmission rights.
``(c) Certain Transmission Rights.--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 just, reasonable, and not unduly
discriminatory or preferential.
``(d) Obligation to Build.--Nothing in this Act shall
relieve a load-serving entity from any obligation under State
or local law to build transmission or distribution facilities
adequate to meet its service obligations.
``(e) Contracts.--Nothing in this section shall provide a
basis for abrogating any contract or service agreement for
firm transmission service or rights in effect as of the date
of the enactment of this subsection.
``(f) Water Pumping Facilities.--The Commission shall
ensure that any entity described in section 201(f) that owns
transmission facilities used predominately to support its own
water pumping facilities shall
[[Page H4069]]
have, with respect to such facilities, protections for
transmission service comparable to those provided to load-
serving entities pursuant to this section.
``(g) ERCOT.--This section shall not apply within the area
referred to in section 212(k)(2)(A).
``(h) Jurisdiction.--This section does not authorize the
Commission to take any action not otherwise within its
jurisdiction.
``(i) Effect of Exercising Rights.--An entity that lawfully
exercises rights granted under subsection (a) shall not be
considered by such action as engaging in undue discrimination
or preference under this Act.
``(j) TVA Area.--For purposes of subsection (a)(1)(B), a
load-serving entity that is located within the service area
of the Tennessee Valley Authority and that has a firm
wholesale power supply contract with the Tennessee Valley
Authority shall be deemed to hold firm transmission rights
for the transmission of such power.
``(k) Definitions.--For purposes of this section:
``(1) The term `distribution utility' means an electric
utility that has a service obligation to end-users or to a
State utility or electric cooperative that, directly or
indirectly, through 1 or more additional State utilities or
electric cooperatives, provides electric service to end-
users.
``(2) The term `load-serving entity' means a distribution
utility or an electric utility that has a service obligation.
``(3) The term `service obligation' means a requirement
applicable to, or the exercise of authority granted to, an
electric utility under Federal, State or local law or under
long-term contracts to provide electric service to end-users
or to a distribution utility.
``(4) The term `State utility' means a State or any
political subdivision of a State, or any agency, authority,
or instrumentality of any 1 or more of the foregoing, or a
corporation which is wholly owned, directly or indirectly, by
any 1 or more of the foregoing, competent to carry on the
business of developing, transmitting, utilizing or
distributing power.''.
SEC. 1237. 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 Congress and the States on the results of the study
conducted under subsection (a), including recommendations to
Congress and the States for any suggested legislative or
regulatory changes.
Subtitle D--Transmission Rate Reform
SEC. 1241. TRANSMISSION INFRASTRUCTURE INVESTMENT.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is
amended by adding at the end the following:
``SEC. 218. TRANSMISSION INFRASTRUCTURE INVESTMENT.
``(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) rate treatments for the transmission of
electric energy in interstate commerce by public utilities
for the purpose of benefiting consumers by ensuring
reliability and reducing the cost of delivered power by
reducing transmission congestion. Such rule shall--
``(1) promote reliable and economically efficient
transmission and generation of electricity by promoting
capital investment in the enlargement, improvement,
maintenance and operation of facilities for the transmission
of electric energy in interstate commerce;
``(2) provide a return on equity that attracts new
investment in transmission facilities (including related
transmission technologies);
``(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; and
``(4) allow recovery of all prudently incurred costs
necessary to comply with mandatory reliability standards
issued pursuant to section 215 of this Act.
The Commission may, from time to time, revise such rule.
``(b) Additional Incentives for RTO Participation.--In the
rule issued under this section, the Commission shall, to the
extent within its jurisdiction, provide for incentives to
each transmitting utility or electric utility that joins a
Regional Transmission Organization or Independent System
Operator. Incentives provided by the Commission pursuant to
such rule shall include--
``(1) recovery of all prudently incurred costs to develop
and participate in any proposed or approved RTO, ISO, or
independent transmission company;
``(2) recovery of all costs previously approved by a State
commission which exercised jurisdiction over the transmission
facilities prior to the utility's participation in the RTO or
ISO, including costs necessary to honor preexisting
transmission service contracts, in a manner which does not
reduce the revenues the utility receives for transmission
services for a reasonable transition period after the utility
joins the RTO or ISO;
``(3) recovery as an expense in rates of the costs
prudently incurred to conduct transmission planning and
reliability activities, including the costs of participating
in RTO, ISO and other regional planning activities and
design, study and other precertification costs involved in
seeking permits and approvals for proposed transmission
facilities;
``(4) a current return in rates for construction work in
progress for transmission facilities and full recovery of
prudently incurred costs for constructing transmission
facilities;
``(5) formula transmission rates; and
``(6) a maximum 15 year accelerated depreciation on new
transmission facilities for rate treatment purposes.
The Commission shall ensure that any costs recoverable
pursuant to this subsection may be recovered by such utility
through the transmission rates charged by such utility or
through the transmission rates charged by the RTO or ISO that
provides transmission service to such utility.
``(c) Just and Reasonable Rates.--All rates approved under
the rules adopted pursuant to this section, including any
revisions to such rules, are subject to 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. 1242. VOLUNTARY TRANSMISSION PRICING PLANS.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is
amended by adding at the end the following:
``SEC. 219. VOLUNTARY TRANSMISSION PRICING PLANS.
``(a) In General.--Any transmission provider, including an
RTO or ISO, may submit to the Commission a plan or plans
under section 205 containing the criteria for determining the
person or persons that will be required to pay for any
construction of new transmission facilities or expansion,
modification or upgrade of transmission facilities (in this
section referred to as `transmission service related
expansion') or new generator interconnection.
``(b) Voluntary Transmission Pricing Plans.--(1) Any plan
or plans submitted under subsection (a) shall specify the
method or methods by which costs may be allocated or
assigned. Such methods may include, but are not limited to:
``(A) directly assigned;
``(B) participant funded; or
``(C) rolled into regional or sub-regional rates.
``(2) FERC shall approve a plan or plans submitted under
subparagraph (B) of paragraph (1) if such plan or plans--
``(A) result in rates that are just and reasonable and not
unduly discriminatory or preferential consistent with section
205; and
``(B) ensure that the costs of any transmission service
related expansion or new generator interconnection not
required to meet applicable reliability standards established
under section 215 are assigned in a fair manner, meaning that
those who benefit from the transmission service related
expansion or new generator interconnection pay an appropriate
share of the associated costs, provided that--
``(i) costs may not be assigned or allocated to an electric
utility if the native load customers of that utility would
not have required such transmission service related expansion
or new generator interconnection absent the request for
transmission service related expansion or new generator
interconnection that necessitated the investment;
``(ii) the party requesting such transmission service
related expansion or new generator interconnection shall not
be required to pay for both--
``(I) the assigned cost of the upgrade; and
``(II) the difference between--
``(aa) the embedded cost paid for transmission services
(including the cost of the requested upgrade); and
``(bb) the embedded cost that would have been paid absent
the upgrade; and
``(iii) the party or parties who pay for facilities
necessary for the transmission service related expansion or
new generator interconnection receives full compensation for
its costs for the participant funded facilities in the form
of--
``(I) monetary credit equal to the cost of the participant
funded facilities (accounting for the time value of money at
the Gross Domestic Product deflator), which credit shall be
pro-rated in equal installments over a period of not more
than 30 years and shall not exceed in total the amount of the
initial investment, against the transmission charges that the
funding entity or its assignee is otherwise assessed by the
transmission provider;
[[Page H4070]]
``(II) appropriate financial or physical rights; or
``(III) any other method of cost recovery or compensation
approved by the Commission.
``(3) A plan submitted under this section shall apply only
to--
``(A) a contract or interconnection agreement executed or
filed with the Commission after the date of enactment of this
section; or
``(B) an interconnection agreement pending rehearing as of
November 1, 2003.
``(4) Nothing in this section diminishes or alters the
rights of individual members of an RTO or ISO under this Act.
``(5) Nothing in this section shall affect the allocation
of costs or the cost methodology employed by an RTO or ISO
authorized by the Commission to allocate costs (including
costs for transmission service related expansion or new
generator interconnection) prior to the date of enactment of
this section.
``(6) This section shall not apply within the area referred
to in section 212(k)(2)(A).
``(7) The term `transmission provider' means a public
utility that owns or operates facilities that provide
interconnection or transmission service in interstate
commerce.''.
Subtitle E--Amendments to PURPA
SEC. 1251. NET METERING AND ADDITIONAL STANDARDS.
(a) Adoption of Standards.--Section 111(d) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d))
is amended by adding at the end the following:
``(11) Net metering.--Each electric utility shall make
available upon request net metering service to any electric
consumer that the electric utility serves. For purposes of
this paragraph, the term `net metering service' means service
to an electric consumer under which electric energy generated
by that electric consumer from an eligible on-site generating
facility and delivered to the local distribution facilities
may be used to offset electric energy provided by the
electric utility to the electric consumer during the
applicable billing period.
``(12) Fuel sources.--Each electric utility shall develop a
plan to minimize dependence on 1 fuel source and to ensure
that the electric energy it sells to consumers is generated
using a diverse range of fuels and technologies, including
renewable technologies.
``(13) Fossil fuel generation efficiency.--Each electric
utility shall develop and implement a 10-year plan to
increase the efficiency of its fossil fuel generation.''.
(b) Compliance.--
(1) Time limitations.--Section 112(b) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is
amended by adding at the end the following:
``(3)(A) Not later than 2 years after the enactment of this
paragraph, each State regulatory authority (with respect to
each electric utility for which it has ratemaking authority)
and each nonregulated electric utility shall commence the
consideration referred to in section 111, or set a hearing
date for such consideration, with respect to each standard
established by paragraphs (11) through (13) of section
111(d).
``(B) Not later than 3 years after the date of the
enactment of this paragraph, each State regulatory authority
(with respect to each electric utility for which it has
ratemaking authority), and each nonregulated electric
utility, shall complete the consideration, and shall make the
determination, referred to in section 111 with respect to
each standard established by paragraphs (11) through (13) of
section 111(d).''.
(2) Failure to comply.--Section 112(c) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c))
is amended by adding at the end the following:
``In the case of each standard established by paragraphs (11)
through (13) of section 111(d), the reference contained in
this subsection to the date of enactment of this Act shall be
deemed to be a reference to the date of enactment of such
paragraphs (11) through (13).''.
(3) Prior state actions.--
(A) In general.--Section 112 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622) is amended
by adding at the end the following:
``(d) Prior State Actions.--Subsections (b) and (c) of this
section shall not apply to the standards established by
paragraphs (11) through (13) of section 111(d) in the case of
any electric utility in a State if, before the enactment of
this subsection--
``(1) the State has implemented for such utility the
standard concerned (or a comparable standard);
``(2) the State regulatory authority for such State or
relevant nonregulated electric utility has conducted a
proceeding to consider implementation of the standard
concerned (or a comparable standard) for such utility; or
``(3) the State legislature has voted on the implementation
of such standard (or a comparable standard) for such
utility.''.
(B) Cross reference.--Section 124 of such Act (16 U.S.C.
2634) is amended by adding the following at the end thereof:
``In the case of each standard established by paragraphs (11)
through (13) of section 111(d), the reference contained in
this subsection to the date of enactment of this Act shall be
deemed to be a reference to the date of enactment of such
paragraphs (11) through (13).''.
SEC. 1252. SMART METERING.
(a) In General.--Section 111(d) of the Public Utilities
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is
amended by adding at the end the following:
``(14) Time-based metering and communications.--
``(A) Not later than 18 months after the date of enactment
of this paragraph, each electric utility shall offer each 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, if any, in the
utility's 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--
``(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,
based on the utility's cost of generating and/or purchasing
such electricity at the wholesale level for the benefit of
the consumer. 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/or purchasing electricity
at the wholesale level and when consumers may receive
additional discounts for reducing peak period energy
consumption; and
``(iii) real-time pricing whereby electricity prices are
set for a specific time period on an advanced or forward
basis, reflecting the utility's cost of generating and/or
purchasing electricity at the wholesale level, 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 the same time-based metering and
communications device and service as a retail electric
consumer of the electric utility.
``(F) Notwithstanding subsections (b) and (c) of section
112, each State regulatory authority shall, not later than 18
months after the date of 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 as follows:
(1) By inserting in subsection (b) after the phrase ``the
standard for time-of-day rates established by section
111(d)(3)'' the following: ``and the standard for time-based
metering and communications established by section
111(d)(14)''.
(2) By inserting in subsection (b) after the phrase ``are
likely to exceed the metering'' the following: ``and
communications''.
(3) By adding the at the end the following:
``(i) Time-Based Metering and Communications.--In making a
determination with respect to the standard established by
section 111(d)(14), the investigation requirement of section
111(d)(14)(F) shall be as follows: Each State regulatory
authority shall conduct an investigation and issue a decision
whether or not it is appropriate for electric utilities to
provide and install time-based meters and communications
devices for each of their customers 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 Policies 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. 2642) is amended
by adding the following at the end thereof:
``(d) Demand Response.--The Secretary shall be responsible
for--
``(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
[[Page H4071]]
``(3) not later than 180 days after the date of enactment
of the Energy Policy Act of 2003, providing Congress with a
report that identifies and quantifies the national benefits
of demand response and makes a recommendation on achieving
specific levels of such benefits by January 1, 2005.''.
(e) Demand Response and Regional Coordination.--
(1) In general.--It is the policy of the United States to
encourage States to coordinate, on a regional basis, State
energy policies to provide reliable and affordable demand
response services to the public.
(2) Technical assistance.--The Secretary of Energy shall
provide technical assistance to States and regional
organizations formed by 2 or more States to assist 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;
(C) developing plans and programs to use demand response to
respond to peak demand or emergency needs; and
(D) identifying specific measures consumers can take to
participate in these demand response programs.
(3) Report.--Not later than 1 year after the date of
enactment of the Energy Policy Act of 2003, the 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--
(A) saturation and penetration rate of advanced meters and
communications technologies, devices and systems;
(B) existing demand response programs and time-based rate
programs;
(C) the annual resource contribution of demand resources;
(D) the potential for demand response as a quantifiable,
reliable resource for regional planning purposes; and
(E) steps taken to ensure that, in regional transmission
planning and operations, demand resources are provided
equitable treatment as a quantifiable, reliable resource
relative to the resource obligations of any load-serving
entity, transmission provider, or transmitting party.
(f) Federal Encouragement of Demand Response Devices.--It
is the policy of the United States that 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.
(g) Time Limitations.--Section 112(b) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is
amended by adding at the end the following:
``(4)(A) Not later than 1 year after the enactment of this
paragraph, each State regulatory authority (with respect to
each electric utility for which it has ratemaking authority)
and each nonregulated electric utility shall commence the
consideration referred to in section 111, or set a hearing
date for such consideration, with respect to the standard
established by paragraph (14) of section 111(d).
``(B) Not later than 2 years after the date of the
enactment of this paragraph, each State regulatory authority
(with respect to each electric utility for which it has
ratemaking authority), and each nonregulated electric
utility, shall complete the consideration, and shall make the
determination, referred to in section 111 with respect to the
standard established by paragraph (14) of section 111(d).''.
(h) Failure to Comply.--Section 112(c) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c))
is amended by adding at the end the following:
``In the case of the standard established by paragraph (14)
of section 111(d), the reference contained in this subsection
to the date of enactment of this Act shall be deemed to be a
reference to the date of enactment of such paragraph (14).''.
(i) Prior State Actions Regarding Smart Metering
Standards.--
(1) In general.--Section 112 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622) is amended
by adding at the end the following:
``(e) Prior State Actions.--Subsections (b) and (c) of this
section shall not apply to the standard established by
paragraph (14) of section 111(d) in the case of any electric
utility in a State if, before the enactment of this
subsection--
``(1) the State has implemented for such utility the
standard concerned (or a comparable standard);
``(2) the State regulatory authority for such State or
relevant nonregulated electric utility has conducted a
proceeding to consider implementation of the standard
concerned (or a comparable standard) for such utility within
the previous 3 years; or
``(3) the State legislature has voted on the implementation
of such standard (or a comparable standard) for such utility
within the previous 3 years.''.
(2) Cross reference.--Section 124 of such Act (16 U.S.C.
2634) is amended by adding the following at the end thereof:
``In the case of the standard established by paragraph (14)
of section 111(d), the reference contained in this subsection
to the date of enactment of this Act shall be deemed to be a
reference to the date of enactment of such paragraph (14).''.
SEC. 1253. COGENERATION AND SMALL POWER PRODUCTION PURCHASE
AND SALE REQUIREMENTS.
(a) Termination of Mandatory Purchase and Sale
Requirements.--Section 210 of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 824a-3) is amended by adding
at the end the following:
``(m) Termination of Mandatory Purchase and Sale
Requirements.--
``(1) Obligation to purchase.--After the date of enactment
of this subsection, no electric utility shall be required to
enter into a new contract or obligation to purchase electric
energy from a qualifying cogeneration facility or a
qualifying small power production facility under this section
if the Commission finds that the qualifying cogeneration
facility or qualifying small power production facility has
nondiscriminatory access to--
``(A)(i) independently administered, auction-based day
ahead and real time wholesale markets for the sale of
electric energy; and (ii) wholesale markets for long-term
sales of capacity and electric energy; or
``(B)(i) transmission and interconnection services that are
provided by a Commission-approved regional transmission
entity and administered pursuant to an open access
transmission tariff that affords nondiscriminatory treatment
to all customers; and (ii) competitive wholesale markets that
provide a meaningful opportunity to sell capacity, including
long-term and short-term sales, and electric energy,
including long-term, short-term and real-time sales, to
buyers other than the utility to which the qualifying
facility is interconnected. In determining whether a
meaningful opportunity to sell exists, the Commission shall
consider, among other factors, evidence of transactions
within the relevant market; or
``(C) wholesale markets for the sale of capacity and
electric energy that are, at a minimum, of comparable
competitive quality as markets described in subparagraphs (A)
and (B).
``(2) Revised purchase and sale obligation for new
facilities.--(A) After the date of enactment of this
subsection, no electric utility shall be required pursuant to
this section to enter into a new contract or obligation to
purchase from or sell electric energy to a facility that is
not an existing qualifying cogeneration facility unless the
facility meets the criteria for qualifying cogeneration
facilities established by the Commission pursuant to the
rulemaking required by subsection (n).
``(B) For the purposes of this paragraph, the term
`existing qualifying cogeneration facility' means a facility
that--
``(i) was a qualifying cogeneration facility on the date of
enactment of subsection (m); or
``(ii) had filed with the Commission a notice of self-
certification, self recertification or an application for
Commission certification under 18 C.F.R. 292.207 prior to the
date on which the Commission issues the final rule required
by subsection (n).
``(3) Commission review.--Any electric utility may file an
application with the Commission for relief from the mandatory
purchase obligation pursuant to this subsection on a service
territory-wide basis. Such application shall set forth the
factual basis upon which relief is requested and describe why
the conditions set forth in subparagraphs (A), (B) or (C) of
paragraph (1) of this subsection have been met. After notice,
including sufficient notice to potentially affected
qualifying cogeneration facilities and qualifying small power
production facilities, and an opportunity for comment, the
Commission shall make a final determination within 90 days of
such application regarding whether the conditions set forth
in subparagraphs (A), (B) or (C) of paragraph (1) have been
met.
``(4) Reinstatement of obligation to purchase.--At any time
after the Commission makes a finding under paragraph (3)
relieving an electric utility of its obligation to purchase
electric energy, a qualifying cogeneration facility, a
qualifying small power production facility, a State agency,
or any other affected person may apply to the Commission for
an order reinstating the electric utility's obligation to
purchase electric energy under this section. Such application
shall set forth the factual basis upon which the application
is based and describe why the conditions set forth in
subparagraphs (A), (B) or (C) of paragraph (1) of this
subsection are no longer met. After notice, including
sufficient notice to potentially affected utilities, and
opportunity for comment, the Commission shall issue an order
within 90 days of such application reinstating the electric
utility's obligation to purchase electric energy under this
section if the Commission finds that the conditions set forth
in subparagraphs (A), (B) or (C) of paragraph (1) which
relieved the obligation to purchase, are no longer met.
``(5) Obligation to sell.--After the date of enactment of
this subsection, no electric utility shall be required to
enter into a new contract or obligation to sell electric
energy to a qualifying cogeneration facility or a qualifying
small power production facility under this section if the
Commission finds that--
[[Page H4072]]
``(A) competing retail electric suppliers are willing and
able to sell and deliver electric energy to the qualifying
cogeneration facility or qualifying small power production
facility; and
``(B) the electric utility is not required by State law to
sell electric energy in its service territory.
``(6) 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
non-regulated electric utility on the date of enactment of
this subsection, to purchase electric energy or capacity from
or to sell electric energy or capacity to a qualifying
cogeneration facility or qualifying small power production
facility under this Act (including the right to recover costs
of purchasing electric energy or capacity).
``(7) Recovery of costs.--(A) The Commission shall issue
and enforce such regulations as are necessary to ensure that
an electric utility that purchases electric energy or
capacity from a qualifying cogeneration facility or
qualifying small power production facility in accordance with
any legally enforceable obligation entered into or imposed
under this section recovers all prudently incurred costs
associated with the purchase.
``(B) A regulation under subparagraph (A) shall be
enforceable in accordance with the provisions of law
applicable to enforcement of regulations under the Federal
Power Act (16 U.S.C. 791a et seq.).
``(n) Rulemaking for New Qualifying Facilities.--(1)(A) Not
later than 180 days after the date of enactment of this
section, the Commission shall issue a rule revising the
criteria in 18 C.F.R. 292.205 for new qualifying cogeneration
facilities seeking to sell electric energy pursuant to
section 210 of this Act to ensure--
``(i) that the thermal energy output of a new qualifying
cogeneration facility is used in a productive and beneficial
manner;
``(ii) the electrical, thermal, and chemical output of the
cogeneration facility is used fundamentally for industrial,
commercial, or institutional purposes and is not intended
fundamentally for sale to an electric utility, taking into
account technological, efficiency, economic, and variable
thermal energy requirements, as well as State laws applicable
to sales of electric energy from a qualifying facility to its
host facility; and
``(iii) continuing progress in the development of efficient
electric energy generating technology.
``(B) The rule issued pursuant to section (n)(1)(A) shall
be applicable only to facilities that seek to sell electric
energy pursuant to section 210 of this Act. For all other
purposes, except as specifically provided in section
(m)(2)(A), qualifying facility status shall be determined in
accordance with the rules and regulations of this Act.
``(2) Notwithstanding rule revisions under paragraph (1),
the Commission's criteria for qualifying cogeneration
facilities in effect prior to the date on which the
Commission issues the final rule required by paragraph (1)
shall continue to apply to any cogeneration facility that--
``(A) was a qualifying cogeneration facility on the date of
enactment of subsection (m), or
``(B) had filed with the Commission a notice of self-
certification, self-recertification or an application for
Commission certification under 18 C.F.R. 292.207 prior to the
date on which the Commission issues the final rule required
by paragraph (1).''.
(b) Elimination of Ownership Limitations.--
(1) Qualifying small power production facility.--Section
3(17)(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 fuel use, fuel efficiency, and
reliability) as the Commission may, by rule, prescribe;''.
(2) Qualifying cogeneration facility.--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;''.
Subtitle F--Repeal of PUHCA
SEC. 1261. SHORT TITLE.
This subtitle may be cited as the ``Public Utility Holding
Company Act of 2004''.
SEC. 1262. DEFINITIONS.
For purposes of this subtitle:
(1) Affiliate.--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) Associate company.--The term ``associate company'' of a
company means any company in the same holding company system
with such company.
(3) Commission.--The term ``Commission'' means the Federal
Energy Regulatory Commission.
(4) Company.--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) Electric utility company.--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) Exempt wholesale generator and foreign utility
company.--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) Gas utility company.--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) Holding company.--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 1 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) Holding company system.--The term ``holding company
system'' means a holding company, together with its
subsidiary companies.
(10) Jurisdictional rates.--The term ``jurisdictional
rates'' means rates accepted or 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) Natural gas company.--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) Person.--The term ``person'' means an individual or
company.
(13) Public utility.--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) Public-utility company.--The term ``public-utility
company'' means an electric utility company or a gas utility
company.
(15) State commission.--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) Subsidiary company.--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 1 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) Voting security.--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. 1263. 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. 1264. 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 determines are 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,
[[Page H4073]]
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
determines are 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 determines are 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. 1265. STATE ACCESS TO BOOKS AND RECORDS.
(a) In General.--Upon the written request of a State
commission having jurisdiction to regulate a public-utility
company in a holding company system, the holding company or
any associate company or affiliate thereof, other than such
public-utility company, wherever located, shall produce for
inspection books, accounts, memoranda, and other records
that--
(1) have been identified in reasonable detail in a
proceeding before the State commission;
(2) the State commission determines 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 1 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. 1266. EXEMPTION AUTHORITY.
(a) Rulemaking.--Not later than 90 days after the effective
date of this subtitle, the Commission shall issue a final
rule to exempt from the requirements of section 1264
(relating to Federal access to books and records) any person
that is a holding company, solely with respect to 1 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 1264
(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. 1267. 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 issuance 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. 1268. 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), (3), or (4) acting as such in the
course of his or her official duty.
SEC. 1269. 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. 1270. 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. 1271. SAVINGS PROVISIONS.
(a) In General.--Nothing in this subtitle, or otherwise in
the Public Utility Holding Company Act of 1935, or rules,
regulations, or orders thereunder, 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, if that person
continues to comply with the terms (other than an expiration
date or termination date) 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.) or the Natural Gas
Act (15 U.S.C. 717 et seq.).
SEC. 1272. IMPLEMENTATION.
Not later than 12 months after the date of enactment of
this subtitle, the Commission shall--
(1) issue such regulations as may be necessary or
appropriate to implement this subtitle (other than section
1265, relating to State access to books and records); and
(2) submit to 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. 1273. 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. 1274. EFFECTIVE DATE.
(a) In General.--Except for section 1272 (relating to
implementation), this subtitle shall take effect 12 months
after the date of enactment of this subtitle.
(b) Compliance With Certain Rules.--If the Commission
approves and makes effective any final rulemaking modifying
the standards of conduct governing entities that own,
operate, or control facilities for transmission of
electricity in interstate commerce or transportation of
natural gas in interstate commerce prior to the effective
date of this subtitle, any action taken by a public-utility
company or utility holding company to comply with the
requirements of such rulemaking shall not subject such
public-utility company or utility holding company to any
regulatory requirement applicable to a holding company under
the Public Utility Holding Company Act of 1935 (15 U.S.C. 79
et seq.).
SEC. 1275. SERVICE ALLOCATION.
(a) FERC Review.--In the case of non-power goods or
administrative or management services provided by an
associate company organized specifically for the purpose of
providing such goods or services to any public utility in the
same holding company system, at the election of the system or
a State commission having jurisdiction over the public
utility, the Commission, after the effective date of this
subtitle, shall review and authorize the allocation of the
costs for such goods or services to the extent relevant to
that associate company in order to assure that each
allocation is appropriate for the protection of investors and
consumers of such public utility.
(b) Cost Allocation.--Nothing in this section shall
preclude the Commission or a State commission from exercising
its jurisdiction under other applicable law with respect to
the review or authorization of any costs allocated to a
public utility in a holding company system located in the
affected State as a result of the acquisition of non-power
goods or administrative and management services by such
public utility from an associate company organized
specifically for that purpose.
(c) Rules.--Not later than 6 months after the date of
enactment of this Act, the Commission shall issue rules
(which rules shall be effective no earlier than the effective
date of this subtitle) to exempt from the requirements of
this section any company in a holding company system whose
public utility operations are confined substantially to a
single State and any other class of transactions that the
Commission finds is not relevant to the jurisdictional rates
of a public utility.
(d) Public Utility.--As used in this section, the term
``public utility'' has the meaning given that term in section
201(e) of the Federal Power Act.
SEC. 1276. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such funds as may
be necessary to carry out this subtitle.
[[Page H4074]]
SEC. 1277. 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 G--Market Transparency, Enforcement, and Consumer Protection
SEC. 1281. MARKET TRANSPARENCY RULES.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is
amended by adding at the end the following:
``SEC. 220. MARKET TRANSPARENCY RULES.
``(a) In General.--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 under this Act. Such systems
shall provide information about the availability and market
price of wholesale electric energy and transmission services
to the Commission, State commissions, buyers and sellers of
wholesale electric energy, users of transmission services,
and the public on a timely basis. The Commission shall have
authority to obtain such information from any electric
utility or transmitting utility, including any entity
described in section 201(f).
``(b) Exemptions.--The Commission shall exempt from
disclosure information it determines would, if disclosed, be
detrimental to the operation of an effective market or
jeopardize system security. This section shall not apply to
transactions for the purchase or sale of wholesale electric
energy or transmission services within the area described in
section 212(k)(2)(A). In determining the information to be
made available under this section and time to make such
information available, the Commission shall seek to ensure
that consumers and competitive markets are protected from the
adverse effects of potential collusion or other anti-
competitive behaviors that can be facilitated by untimely
public disclosure of transaction-specific information.
``(c) Commodity Futures Trading Commission.--This section
shall not affect the exclusive jurisdiction of the Commodity
Futures Trading Commission with respect to accounts,
agreements, contracts, or transactions in commodities under
the Commodity Exchange Act (7 U.S.C. 1 et seq.). Any request
for information to a designated contract market, registered
derivatives transaction execution facility, board of trade,
exchange, or market involving accounts, agreements,
contracts, or transactions in commodities (including natural
gas, electricity and other energy commodities) within the
exclusive jurisdiction of the Commodity Futures Trading
Commission shall be directed to the Commodity Futures Trading
Commission.
``(d) Savings Provision.--In exercising its authority under
this section, the Commission shall not--
``(1) compete with, or displace from the market place, any
price publisher; or
``(2) regulate price publishers or impose any requirements
on the publication of information.''.
SEC. 1282. MARKET MANIPULATION.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is
amended by adding at the end the following:
``SEC. 221. PROHIBITION ON FILING FALSE INFORMATION.
``No person or other entity (including an entity described
in section 201(f)) shall willfully and knowingly report any
information relating to the price of electricity sold at
wholesale or availability of transmission capacity, which
information the person or any other entity knew to be false
at the time of the reporting, to a Federal agency with intent
to fraudulently affect the data being compiled by such
Federal agency.
``SEC. 222. PROHIBITION ON ROUND TRIP TRADING.
``(a) Prohibition.--No person or other entity (including an
entity described in section 201(f)) shall willfully and
knowingly 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.--For the purposes of this section, the
term `round trip trade' means a transaction, or combination
of transactions, in which a person or any 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 or
arrangement described in paragraph (1), arranges a
financially offsetting trade with such other person or entity
for the same such electric energy, at the same location,
price, quantity and terms so that, collectively, the purchase
and sale transactions in themselves result in no financial
gain or loss; and
``(3) enters into the contract or arrangement with a
specific intent to fraudulently affect reported revenues,
trading volumes, or prices.''.
SEC. 1283. ENFORCEMENT.
(a) Complaints.--Section 306 of the Federal Power Act (16
U.S.C. 825e) is amended as follows:
(1) By inserting ``electric utility,'' after ``Any
person,''.
(2) By 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 2 places
it appears and by striking ``any person unless such person''
and inserting ``any entity unless such entity''.
(c) Investigations.--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) 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
``5 years'';
(2) in subsection (b), by striking ``$500'' and inserting
``$25,000''; and
(3) by striking subsection (c).
(e) Civil Penalties.--Section 316A of the Federal Power Act
(16 U.S.C. 825o-1) is amended as follows:
(1) In subsections (a) and (b), by striking ``section 211,
212, 213, or 214'' each place it appears and inserting ``Part
II''.
(2) In subsection (b), by striking ``$10,000'' and
inserting ``$1,000,000''.
SEC. 1284. REFUND EFFECTIVE DATE.
Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b))
is amended as follows:
(1) By 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) By striking ``60 days after'' in the third sentence and
inserting ``of''.
(3) By striking ``expiration of such 60-day period'' in the
third sentence and inserting ``publication date''.
(4) By striking the fifth sentence and inserting the
following: ``If no final decision is rendered by the
conclusion of the 180-day period commencing upon initiation
of a proceeding pursuant to this section, the Commission
shall state the reasons why it has failed to do so and shall
state its best estimate as to when it reasonably expects to
make such decision.''.
SEC. 1285. REFUND 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) Except as provided in paragraph (2), if an entity
described in section 201(f) voluntarily makes a short-term
sale of electric energy and the sale violates Commission
rules in effect at the time of the 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--
``(A) any entity that sells less than 8,000,000 megawatt
hours of electricity per year; or
``(B) any electric cooperative.
``(3) For purposes of this subsection, the term `short-term
sale' means an agreement for the sale of electric energy at
wholesale in interstate commerce that is for a period of 31
days or less (excluding monthly contracts subject to
automatic renewal).
``(4) The Commission shall have refund authority under
subsection (e)(1) with respect to a voluntary short-term sale
of electric energy by the Bonneville Power Administration (in
this section `Bonneville') only if the sale is at an unjust
and unreasonable rate and, in that event, may order a refund
only for short-term sales made by Bonneville at rates that
are higher than the highest just and reasonable rate charged
by any other entity for a short-term sale of electric energy
in the same geographic market for the same, or most nearly
comparable, period as the sale by Bonneville.
``(5) With respect to any Federal power marketing agency or
the Tennessee Valley Authority, the Commission shall not
assert or exercise any regulatory authority or powers under
subsection (e)(1) other than the ordering of refunds to
achieve a just and reasonable rate.''.
SEC. 1286. SANCTITY OF CONTRACT.
(a) In General.--The Federal Energy Regulatory Commission
(in this section, ``the Commission'') shall have no authority
to abrogate or modify any provision of an executed contract
or executed contract amendment described in subsection (b)
that has been entered into or taken effect, except upon a
finding that failure to take such action would be contrary to
the public interest.
(b) Limitation.--Except as provided in subsection (c), this
section shall apply only to a contract or contract
amendment--
(1) executed on or after the date of enactment of this Act;
and
(2) entered into--
(A) for the purchase or sale of electric energy under
section 205 of the Federal Power Act (16 U.S.C. 824d) where
the seller has been authorized by the Commission to charge
market-based rates; or
[[Page H4075]]
(B) under section 4 of the Natural Gas Act (15 U.S.C. 717c)
where the natural gas company has been authorized by the
Commission to charge market-based rates for the service
described in the contract.
(c) Exclusion.--This section shall not apply to an executed
contract or executed contract amendment that expressly
provides for a standard of review other than the public
interest standard.
(d) Savings Provision.--With respect to contracts to which
this section does not apply, nothing in this section alters
existing law regarding the applicable standard of review for
a contract subject to the jurisdiction of the Commission.
SEC. 1287. CONSUMER PRIVACY AND UNFAIR TRADE PRACTICES.
(a) Privacy.--The Federal Trade Commission may 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.
(b) Slamming.--The Federal Trade Commission may 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.
(c) Cramming.--The Federal Trade Commission may issue rules
prohibiting the sale of goods and services to an electric
consumer unless expressly authorized by law or the electric
consumer.
(d) 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.
(e) 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.
(f) Definitions.--For purposes of this section:
(1) State regulatory authority.--The term ``State
regulatory authority'' has the meaning given that term in
section 3(21) of the Federal Power Act (16 U.S.C. 796(21)).
(2) Electric consumer and electric utility.--The terms
``electric consumer'' and ``electric utility'' have the
meanings given those terms in section 3 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2602).
Subtitle H--Merger Reform
SEC. 1291. 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 Attorney General of the United States, shall prepare,
and transmit to Congress 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 Congress
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.
SEC. 1292. ELECTRIC UTILITY MERGERS.
(a) Amendment.--Section 203(a) of the Federal Power Act (16
U.S.C. 824b(a)) is amended to read as follows:
``(a)(1) No public utility shall, without first having
secured an order of the Commission authorizing it to do so--
``(A) sell, lease, or otherwise dispose of the whole of its
facilities subject to the jurisdiction of the Commission, or
any part thereof of a value in excess of $10,000,000;
``(B) merge or consolidate, directly or indirectly, such
facilities or any part thereof with those of any other
person, by any means whatsoever; or
``(C) purchase, acquire, or take any security with a value
in excess of $10,000,000 of any other public utility.
``(2) No holding company in a holding company system that
includes a public utility shall purchase, acquire, or take
any security with a value in excess of $10,000,000 of, or, by
any means whatsoever, directly or indirectly, merge or
consolidate with, a public utility or a holding company in a
holding company system that includes a public utility with a
value in excess of $10,000,000 without first having secured
an order of the Commission authorizing it to do so.
``(3) Upon receipt of an application for such approval the
Commission shall give reasonable notice in writing to the
Governor and State commission of each of the States in which
the physical property affected, or any part thereof, is
situated, and to such other persons as it may deem advisable.
``(4) After notice and opportunity for hearing, the
Commission shall approve the proposed disposition,
consolidation, acquisition, or change in control, if it finds
that the proposed transaction will be consistent with the
public interest. In evaluating whether a transaction will be
consistent with the public interest, the Commission shall
consider whether the proposed transaction--
``(A) will adequately protect consumer interests;
``(B) will be consistent with competitive wholesale
markets;
``(C) will impair the financial integrity of any public
utility that is a party to the transaction or an associate
company of any party to the transaction; and
``(D) satisfies such other criteria as the Commission
considers consistent with the public interest.
``(5) The Commission shall, by rule, adopt procedures for
the expeditious consideration of applications for the
approval of dispositions, consolidations, or acquisitions
under this section. Such rules shall identify classes of
transactions, or specify criteria for transactions, that
normally meet the standards established in paragraph (4). The
Commission shall provide expedited review for such
transactions. The Commission shall grant or deny any other
application for approval of a transaction not later than 180
days after the application is filed. If the Commission does
not act within 180 days, such application shall be deemed
granted unless the Commission finds, based on good cause,
that further consideration is required to determine whether
the proposed transaction meets the standards of paragraph (4)
and issues an order tolling the time for acting on the
application for not more than 180 days, at the end of which
additional period the Commission shall grant or deny the
application.
``(6) For purposes of this subsection, the terms `associate
company', `holding company', and `holding company system'
have the meaning given those terms in the Public Utility
Holding Company Act of 2004.''.
(b) Effective Date.--The amendments made by this section
shall take effect 12 months after the date of enactment of
this section.
Subtitle I--Definitions
SEC. 1295. DEFINITIONS.
(a) Electric Utility.--Section 3(22) of the Federal Power
Act (16 U.S.C. 796(22)) is amended to read as follows:
``(22) Electric utility.--The term `electric utility' means
any person or Federal or State agency (including any entity
described in section 201(f)) that sells electric energy; such
term includes the Tennessee Valley Authority and each Federal
power marketing administration.''.
(b) Transmitting Utility.--Section 3(23) of the Federal
Power Act (16 U.S.C. 796(23)) is amended to read as follows:
``(23) Transmitting utility.--The term `transmitting
utility' means an entity, including any entity described in
section 201(f), that owns, operates, or controls facilities
used for the transmission of electric energy--
``(A) in interstate commerce; or
``(B) for the sale of electric energy at wholesale.''.
(c) Additional Definitions.--Section 3 of the Federal Power
Act (16 U.S.C. 796) is amended by adding at the end the
following:
``(26) Electric cooperative.--The term `electric
cooperative' means a cooperatively owned electric utility.
``(27) RTO.--The term `Regional Transmission Organization'
or `RTO' means an entity of sufficient regional scope
approved by the Commission to exercise operational or
functional control of facilities used for the transmission of
electric energy in interstate commerce and to ensure
nondiscriminatory access to such facilities.
``(28) ISO.--The term `Independent System Operator' or
`ISO' means an entity approved by the Commission to exercise
operational or functional control of facilities used for the
transmission of electric energy in interstate commerce and to
ensure nondiscriminatory access to such facilities.''.
(d) Commission.--For the purposes of this title, the term
``Commission'' means the Federal Energy Regulatory
Commission.
(e) Applicability.--Section 201(f) of the Federal Power Act
(16 U.S.C. 824(f)) is amended by adding after ``political
subdivision of a state,'' the following: ``an electric
cooperative that has financing under the Rural
Electrification Act of 1936 (7 U.S.C. 901 et seq.) or that
sells less than 4,000,000 megawatt hours of electricity per
year,''.
Subtitle J--Technical and Conforming Amendments
SEC. 1297. CONFORMING AMENDMENTS.
The Federal Power Act is amended as follows:
(1) 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 ``210, 211, and 212''
and inserting ``203(a)(2), 206(e), 210, 211, 211A, 212, 215,
216, 217, 218, 219, 220, 221, and 222''.
[[Page H4076]]
(B) In the second sentence by striking ``210 or 211'' and
inserting ``203(a)(2), 206(e), 210, 211, 211A, 212, 215, 216,
217, 218, 219, 220, 221, and 222''.
(C) Section 201(b)(2) of such Act is amended by striking
``The'' in the first place it appears and inserting
``Notwithstanding section 201(f), the'' and in the second
sentence after ``any order'' by inserting ``or rule''.
(2) Section 201(e) of such Act is amended by striking
``210, 211, or 212'' and inserting ``206(e), 206(f), 210,
211, 211A, 212, 215, 216, 217, 218, 219, 220, 221, and 222''.
(3) Section 206 of such 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''.
(4) Section 211(c) of such Act (16 U.S.C. 824j(c)) is
amended by--
(A) striking ``(2)'';
(B) striking ``(A)'' and inserting ``(1)''
(C) striking ``(B)'' and inserting ``(2)''; and
(D) striking ``termination of modification'' and inserting
``termination or modification''.
(5) Section 211(d)(1) of such Act (16 U.S.C. 824j(d)(1)) is
amended by striking ``electric utility'' the second time it
appears and inserting ``transmitting utility''.
(6) Section 315 (c) of such Act (16 U.S.C. 825n(c)) is
amended by striking ``subsection'' and inserting ``section''.
TITLE XIII--ENERGY TAX INCENTIVES
SEC. 1300. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This title may be cited as the ``Energy
Tax Policy Act of 2004''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this title 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.
Subtitle A--Conservation
PART I--RESIDENTIAL AND BUSINESS PROPERTY
SEC. 1301. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.
(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 (relating to nonrefundable personal credits) is
amended by inserting after section 25B the following new
section:
``SEC. 25C. RESIDENTIAL ENERGY EFFICIENT PROPERTY.
``(a) Allowance of Credit.--In the case of an individual,
there shall be allowed as a credit against the tax imposed by
this chapter for the taxable year an amount equal to the sum
of--
``(1) 15 percent of the qualified solar water heating
property expenditures made by the taxpayer during such year,
``(2) 15 percent of the qualified photovoltaic property
expenditures made by the taxpayer during such year,
``(3) 15 percent of the qualified wind energy property
expenditures made by the taxpayer during such year, and
``(4) 20 percent of the qualified fuel cell property
expenditures made by the taxpayer during such year.
``(b) Limitations.--
``(1) Maximum credit.--
``(A) In general.--The credit allowed under subsection (a)
shall not exceed--
``(i) $2,000 for property described in paragraph (1), (2),
or (3) of subsection (c), and
``(ii) $500 for each 0.5 kilowatt of capacity of property
described in subsection (c)(4).
``(B) Prior expenditures by taxpayer on same residence
taken into account.--In determining the amount of the credit
allowed to a taxpayer with respect to any dwelling unit under
this section, the dollar amount under subparagraph (A)(i)
with respect to each type of property described in such
subparagraph shall be reduced by the credit allowed to the
taxpayer under this section with respect to such property for
all preceding taxable years with respect to such dwelling
unit.
``(2) Property standards.--No credit shall be allowed under
this section for an item of property unless--
``(A) the original use of such property commences with the
taxpayer,
``(B) such property reasonably can be expected to remain in
use for at least 5 years,
``(C) such property is installed on or in connection with a
dwelling unit located in the United States and used as a
residence by the taxpayer,
``(D) in the case of solar water heating property, such
property is certified for performance by the non-profit Solar
Rating and Certification Corporation or a comparable entity
endorsed by the government of the State in which such
property is installed,
``(E) in the case of fuel cell property, such property
meets the performance and quality standards (if any) which
have been prescribed by the Secretary by regulations (after
consultation with the Secretary of Energy), and
``(F) in the case of any photovoltaic property, fuel cell
property, or wind energy property, such property 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 which uses solar energy to
heat water for use in a dwelling unit.
``(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 and which is not
described in paragraph (1).
``(3) Qualified wind energy property expenditure.--The term
`qualified wind energy property expenditure' means an
expenditure for property which uses wind energy to generate
electricity for use in a dwelling unit.
``(4) Qualified fuel cell property expenditure.--The term
`qualified fuel cell property expenditure' means an
expenditure for any qualified fuel cell property (as defined
in section 48(c)(1)).
``(d) Special Rules.--For purposes of this section--
``(1) 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) of subsection (c) solely because it
constitutes a structural component of the structure on which
it is installed.
``(2) 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.
``(3) 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 rules 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 expenditures described in paragraphs (1),
(2), (3), and (4) of subsection (c).
``(4) 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 the individual's
tenant-stockholder's proportionate share (as defined in
section 216(b)(3)) of any expenditures of such corporation.
``(5) Condominiums.--
``(A) In general.--In the case of an individual who is a
member of a condominium management association with respect
to a condominium which the individual owns, such individual
shall be treated as having made the individual's
proportionate share of any expenditures of such association.
``(B) Condominium management association.--For purposes of
this paragraph, the term `condominium management association'
means an organization which meets the requirements of
paragraph (1) of section 528(c) (other than subparagraph (E)
thereof) with respect to a condominium project substantially
all of the units of which are used as residences.
``(6) Allocation in certain cases.--Except in the case of
qualified wind energy property expenditures, if less than 80
percent of the use of an item is for nonbusiness purposes,
only that portion of the expenditures for such item which is
properly allocable to use for nonbusiness purposes shall be
taken into account.
``(7) 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.
``(8) 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)(C)).
``(9) Denial of depreciation on wind energy property for
which credit allowed.--No deduction shall be allowed under
section 167 for property which uses wind energy to generate
electricity if the taxpayer is allowed a credit under this
section with respect to such property.
``(e) Basis Adjustments.--For purposes of this subtitle, if
a credit is allowed under this section for any expenditure
with respect to
[[Page H4077]]
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) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (27), by striking the period at the end of
paragraph (28) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(29) to the extent provided in section 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 energy efficient property.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after December 31, 2003.
SEC. 1302. EXTENSION AND EXPANSION OF CREDIT FOR ELECTRICITY
PRODUCED FROM CERTAIN RENEWABLE RESOURCES.
(a) Expansion of Qualified Energy Resources.--Subsection
(c) of section 45 (relating to electricity produced from
certain renewable resources) is amended to read as follows:
``(c) Qualified Energy Resources.--For purposes of this
section--
``(1) In general.--The term `qualified energy resources'
means--
``(A) wind,
``(B) closed-loop biomass,
``(C) open-loop biomass,
``(D) geothermal energy,
``(E) solar energy,
``(F) small irrigation power, and
``(G) municipal solid waste.
``(2) Closed-loop biomass.--The term `closed-loop biomass'
means any organic material from a plant which is planted
exclusively for purposes of being used at a qualified
facility to produce electricity.
``(3) Open-loop biomass.--
``(A) In general.--The term `open-loop biomass' means--
``(i) any agricultural livestock waste nutrients, or
``(ii) any solid, nonhazardous, cellulosic waste material
which is segregated from other waste materials and which is
derived from--
``(I) any of the following forest-related resources: mill
and harvesting residues, precommercial thinnings, slash, and
brush,
``(II) 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, gas derived from the
biodegradation of solid waste, or paper which is commonly
recycled, or
``(III) 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.
``(B) Agricultural livestock waste nutrients.--
``(i) In general.--The term `agricultural livestock waste
nutrients' means agricultural livestock manure and litter,
including wood shavings, straw, rice hulls, and other bedding
material for the disposition of manure.
``(ii) Agricultural livestock.--The term `agricultural
livestock' includes bovine, swine, poultry, and sheep.
``(4) Geothermal energy.--The term `geothermal energy'
means energy derived from a geothermal deposit (within the
meaning of section 613(e)(2)).
``(5) Small irrigation power.--The term `small irrigation
power' means power--
``(A) generated without any dam or impoundment of water
through an irrigation system canal or ditch, and
``(B) the nameplate capacity rating of which is not less
than 150 kilowatts but is less than 5 megawatts.
``(6) Municipal solid waste.--The term `municipal solid
waste' has the meaning given the term `solid waste' under
section 2(27) of the Solid Waste Disposal Act (42 U.S.C.
6903).''.
(b) Extension and Expansion of Qualified Facilities.--
(1) In general.--Section 45 is amended by redesignating
subsection (d) as subsection (e) and by inserting after
subsection (c) the following new subsection:
``(d) Qualified Facilities.--For purposes of this section--
``(1) Wind facility.--In the case of a facility using wind
to produce electricity, the term `qualified facility' means
any facility owned by the taxpayer which is originally placed
in service after December 31, 1993, and before January 1,
2007.
``(2) Closed-loop biomass facility.--
``(A) In general.--In the case of a facility using closed-
loop biomass to produce electricity, the term `qualified
facility' means any facility--
``(i) owned by the taxpayer which is originally placed in
service after December 31, 1992, and before January 1, 2007,
or
``(ii) owned by the taxpayer which before January 1, 2007,
is originally placed in service and modified to use closed-
loop biomass to co-fire with coal, with other biomass, or
with both, but only if the modification is approved under the
Biomass Power for Rural Development Programs or is part of a
pilot project of the Commodity Credit Corporation as
described in 65 Fed. Reg. 63052.
``(B) Special rules.--In the case of a qualified facility
described in subparagraph (A)(ii)--
``(i) the 10-year period referred to in subsection (a)
shall be treated as beginning no earlier than the date of the
enactment of the Energy Tax Policy Act of 2004,
``(ii) the amount of the credit determined under subsection
(a) with respect to the facility shall be an amount equal to
the amount determined without regard to this clause
multiplied by the ratio of the thermal content of the closed-
loop biomass used in such facility to the thermal content of
all fuels used in such facility, and
``(iii) if the owner of such facility is not the producer
of the electricity, the person eligible for the credit
allowable under subsection (a) shall be the lessee or the
operator of such facility.
``(3) Open-loop biomass facilities.--
``(A) In general.--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--
``(i) in the case of a facility using agricultural
livestock waste nutrients--
``(I) is originally placed in service after the date of the
enactment of the Energy Tax Policy Act of 2004 and before
January 1, 2007, and
``(II) the nameplate capacity rating of which is not less
than 150 kilowatts, and
``(ii) in the case of any other facility, is originally
placed in service before January 1, 2007.
``(B) Credit eligibility.--In the case of any facility
described in subparagraph (A), if the owner of such facility
is not the producer of the electricity, the person eligible
for the credit allowable under subsection (a) shall be the
lessee or the operator of such facility.
``(4) Geothermal or solar energy facility.--In the case of
a facility using geothermal or solar energy to produce
electricity, the term `qualified facility' means any facility
owned by the taxpayer which is originally placed in service
after the date of the enactment of the Energy Tax Policy Act
of 2004 and before January 1, 2007. Such term shall not
include any property described in section 48(a)(3) the basis
of which is taken into account by the taxpayer for purposes
of determining the energy credit under section 48.
``(5) Small irrigation power facility.--In the case of a
facility using small irrigation power to produce electricity,
the term `qualified facility' means any facility owned by the
taxpayer which is originally placed in service after the date
of the enactment of the Energy Tax Policy Act of 2004 and
before January 1, 2007.
``(6) 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 after the date of the enactment
of the Energy Tax Policy Act of 2004 and before January 1,
2007.
``(7) 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 the Energy Tax Policy Act
of 2004 and before January 1, 2007.''.
(2) Conforming amendment.--Section 45(e), as so
redesignated, is amended by striking ``subsection (c)(3)(A)''
in paragraph (7)(A)(i) and inserting ``subsection (d)(1)''.
(c) Special Credit Rate and Period for Electricity Produced
and Sold After Enactment Date.--Section 45(b) is amended by
adding at the end the following new paragraph:
``(4) Credit rate and period for electricity produced and
sold from certain facilities.--
``(A) Credit rate.--In the case of electricity produced and
sold in any calendar year after 2003 at any qualified
facility described in paragraph (3), (5), (6), or (7) of
subsection (d), the amount in effect under subsection (a)(1)
for such calendar year (determined before the application of
the last sentence of paragraph (2) of this subsection) shall
be reduced by one-third.
``(B) Credit period.--
``(i) In general.--Except as provided in clause (ii), in
the case of any facility described in paragraph (3), (4),
(5), (6), or (7) of subsection (d), the 5-year period
beginning on the date the facility was originally placed in
service shall be substituted for the 10-year period in
subsection (a)(2)(A)(ii).
``(ii) Certain open-loop biomass facilities.--In the case
of any facility described in subsection (d)(3)(A)(ii) placed
in service before the date of the enactment of this
paragraph, the 5-year period beginning on January 1, 2004,
shall be substituted for the 10-year period in subsection
(a)(2)(A)(ii).''.
(d) Coordination With Other Credits.--Section 45(e), as so
redesignated, is amended by adding at the end the following
new paragraph:
[[Page H4078]]
``(8) Coordination with other credits.--The term `qualified
facility' shall not include--
``(A) any property with respect to which a credit is
allowed under section 25C, and
``(B) any facility the production from which is allowed as
a credit under section 45K,
for the taxable year or any prior taxable year.''.
(e) Coordination With Section 48.--Section 48(a)(3)
(defining energy property) is amended by adding at the end
the following new sentence: ``Such term shall not include any
property which is part of a facility the production from
which is allowed as a credit under section 45 for the taxable
year or any prior taxable year.''.
(f) Elimination of Certain Credit Reductions.--Section
45(b)(3) (relating to credit reduced for grants, tax-exempt
bonds, subsidized energy financing, and other credits) is
amended--
(1) by inserting ``the lesser of \1/2\ or'' before ``a
fraction'' in the matter preceding subparagraph (A), and
(2) by adding at the end the following new sentence: ``This
paragraph shall not apply with respect to any facility
described in subsection (d)(2)(A)(ii).''.
(g) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to electricity produced and sold after the date of the
enactment of this Act, in taxable years ending after such
date.
(2) Certain biomass facilities.--With respect to any
facility described in section 45(d)(3)(A)(ii) of the Internal
Revenue Code of 1986, as added by subsection (b)(1), which is
placed in service before the date of the enactment of this
Act, the amendments made by this section shall apply to
electricity produced and sold after December 31, 2003, in
taxable years ending after such date.
(3) Credit rate and period for new facilities.--The
amendments made by subsection (c) shall apply to electricity
produced and sold after December 31, 2003, in taxable years
ending after such date.
(4) Nonapplication of amendments to preeffective date
poultry waste facilities.--The amendments made by this
section shall not apply with respect to any poultry waste
facility (within the meaning of section 45(c)(3)(C), as in
effect on the day before the date of the enactment of this
Act) placed in service before January 1, 2004.
(h) GAO Study.--The Comptroller General of the United
States shall conduct a study on the market viability of
producing electricity from resources with respect to which
credit is allowed under section 45 of the Internal Revenue
Code of 1986 but without such credit. In the case of open-
loop biomass and municipal solid waste resources, the study
should take into account savings associated with not having
to dispose of such resources. In conducting such study, the
Comptroller shall estimate the dollar value of the
environmental impact of producing electricity from such
resources relative to producing electricity from fossil fuels
using the latest generation of technology. Not later than
June 30, 2006, the Comptroller shall report on such study to
the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate.
SEC. 1303. CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL
CELLS.
(a) In General.--Section 48(a)(3)(A) (defining energy
property) is amended by striking ``or'' at the end of clause
(i), by adding ``or'' at the end of clause (ii), and by
inserting after clause (ii) the following new clause:
``(iii) qualified fuel cell property,''.
(b) Qualified Fuel Cell Property.--Section 48 (relating to
energy credit; reforestation credit) is amended by adding at
the end the following new subsection:
``(c) Qualified Fuel Cell Property.--For purposes of
subsection (a)(3)(A)(iii)--
``(1) In general.--The term `qualified fuel cell property'
means a fuel cell power plant which generates at least 0.5
kilowatt of electricity using an electrochemical process.
``(2) Limitation.--The energy credit with respect to any
qualified fuel cell property shall not exceed an amount equal
to $500 for each 0.5 kilowatt of capacity of such property.
``(3) 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,
which converts a fuel into electricity using electrochemical
means.
``(4) Termination.--The term `qualified fuel cell property'
shall not include any property placed in service after
December 31, 2006.''.
(c) Energy Percentage.--Subparagraph (A) of section
48(a)(2) (relating to energy percentage) is amended to read
as follows:
``(A) In general.--The energy percentage is--
``(i) in the case of qualified fuel cell property, 20
percent, and
``(ii) in the case of any other energy property, 10
percent.''.
(d) Conforming Amendment.--Section 48(a)(1) is amended by
inserting ``except as provided in subsection (c)(2),'' before
``the energy''.
(e) Effective Date.--The amendments made by this section
shall apply to periods 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).
SEC. 1304. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS TO
EXISTING HOMES.
(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 (relating to nonrefundable personal credits), as
amended by this Act, is amended by inserting after section
25C the following new section:
``SEC. 25D. ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.
``(a) Allowance of Credit.--In the case of an individual,
there shall be allowed as a credit against the tax imposed by
this chapter for the taxable year an amount equal to 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 unit 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 unit in 1 or
more prior taxable years, the amount of the credit otherwise
allowable for the taxable year with respect to that dwelling
unit shall be reduced by the sum of the credits allowed under
subsection (a) to the taxpayer with respect to the dwelling
unit for all prior taxable years.
``(c) 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, as such Code (including supplements) is in
effect on the date of the enactment of this section (or, in
the case of a metal roof with appropriate pigmented coatings
which meet the Energy Star program requirements), if--
``(1) such component is installed in or on a dwelling
unit--
``(A) located in the United States,
``(B) owned and used by the taxpayer as the taxpayer's
principal residence (within the meaning of section 121), and
``(C) which has not been treated as a qualified new energy
efficient home for purposes of any credit allowed under
section 45G,
``(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 unit exceeds $1,000, such components shall be
treated as qualified energy efficiency improvements only if
such components are also certified in accordance with
subsection (d) as meeting such prescriptive criteria.
``(d) Certification.--The certification described in
subsection (c) 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 which specifies in
readily verifiable fashion the energy efficient building
envelope components installed and their respective energy
efficiency levels.
``(e) Definitions and Special Rules.--For purposes of this
section--
``(1) Building envelope component.--The term `building
envelope component' means--
``(A) any insulation material or system which is
specifically and primarily designed to reduce the heat loss
or gain of a dwelling unit when installed in or on such
dwelling unit,
``(B) exterior windows (including skylights),
``(C) exterior doors, and
``(D) any metal roof installed on a dwelling unit, but only
if such roof has appropriate pigmented coatings which are
specifically and primarily designed to reduce the heat gain
of such dwelling unit.
``(2) Manufactured homes included.--The term `dwelling
unit' includes a manufactured home which conforms to Federal
Manufactured Home Construction and Safety Standards (section
3280 of title 24, Code of Federal Regulations).
``(3) Application of rules.--Rules similar to the rules
under paragraphs (3), (4), and (5) of section 25C(d) shall
apply.
``(f) 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.
``(g) 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 (a) of section 1016, as amended by this Act,
is amended by striking ``and'' at the end of paragraph (28),
by striking the
[[Page H4079]]
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(f), in the
case of amounts with respect to which a credit has been
allowed under section 25D.''.
(2) The table of sections for subpart A of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by inserting after the item relating to section 25C the
following new item:
``Sec. 25D. Energy efficiency improvements to existing homes.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after December 31, 2003.
SEC. 1305. CREDIT FOR CONSTRUCTION OF NEW ENERGY EFFICIENT
HOMES.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business related credits) is amended
by adding at the end the following new section:
``SEC. 45G. NEW ENERGY EFFICIENT HOME CREDIT.
``(a) In General.--For purposes of section 38, in the case
of an eligible contractor with respect to a qualified new
energy efficient home, the credit determined under this
section for the taxable year with respect to such home is an
amount equal to the aggregate adjusted bases of all energy
efficient property installed in such 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 unit shall not exceed--
``(i) in the case of a dwelling unit described in clause
(i) or (iii) of subsection (c)(3)(D), $1,000, and
``(ii) in the case of a dwelling unit described in
subsection (c)(3)(D)(ii), $2,000.
``(B) Prior credit amounts on same dwelling unit taken into
account.--If a credit was allowed under subsection (a) with
respect to a dwelling unit in 1 or more prior taxable years,
the amount of the credit otherwise allowable for the taxable
year with respect to such dwelling unit shall be reduced by
the sum of the credits allowed under subsection (a) with
respect to the dwelling unit for all prior taxable years.
``(2) Coordination with certain credits.--For purposes of
this section--
``(A) the basis of any property referred to in subsection
(a) shall be reduced by that portion of the basis of any
property which is attributable to 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 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--
``(A) the person who constructed the qualified new energy
efficient home, or
``(B) in the case of a qualified new energy efficient home
which is a manufactured home, the manufactured home producer
of such home.
If more than 1 person is described in subparagraph (A) or (B)
with respect to any qualified new energy efficient home, such
term means the person designated as such by the owner of such
home.
``(2) Energy efficient property.--The term `energy
efficient property' means any energy efficient building
envelope component, and any energy efficient heating or
cooling equipment or system, which can, individually or in
combination with other components, result in a dwelling unit
meeting the requirements of this section.
``(3) Qualified new energy efficient home.--The term
`qualified new energy efficient home' means a dwelling unit--
``(A) located in the United States,
``(B) the construction of which is substantially completed
after December 31, 2003,
``(C) the original use of which, after such construction,
is reasonably expected to be as a residence by the person who
acquires such dwelling unit from the eligible contractor,
``(D) which is--
``(i) certified to have a level of annual heating and
cooling energy consumption which is at least 30 percent below
the annual level of heating and cooling energy consumption of
a comparable dwelling unit constructed in accordance with the
standards of chapter 4 of the 2000 International Energy
Conservation Code, as such Code (including supplements) is in
effect on the date of the enactment of this section, and to
have building envelope component improvements account for at
least \1/3\ of such 30 percent,
``(ii) certified to have a level of annual heating and
cooling energy consumption which is at least 50 percent below
such annual level and to have building envelope component
improvements account for at least \1/5\ of such 50 percent,
or
``(iii) a manufactured home which--
``(I) conforms to Federal Manufactured Home Construction
and Safety Standards (section 3280 of title 24, Code of
Federal Regulations), and
``(II) meets the applicable standards required by the
Administrator of the Environmental Protection Agency under
the Energy Star Labeled Homes program.
``(4) Construction.--The term `construction' includes
substantial 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--
``(A) any insulation material or system which is
specifically and primarily designed to reduce the heat loss
or gain of a dwelling unit when installed in or on such
dwelling unit,
``(B) exterior windows (including skylights),
``(C) exterior doors, and
``(D) any metal roof installed on a dwelling unit, but only
if such roof has appropriate pigmented coatings which--
``(i) are specifically and primarily designed to reduce the
heat gain of such dwelling unit, and
``(ii) meet the Energy Star program requirements.
``(d) Certification.--
``(1) Method of certification.--A certification described
in subsection (c)(3)(D) shall be determined in accordance
with guidance prescribed by the Secretary. Such guidance
shall specify procedures and methods for calculating energy
and cost savings.
``(2) Form.--A certification described in subsection
(c)(3)(D) shall be made in writing--
``(A) in a manner which specifies in readily verifiable
fashion the energy efficient building envelope components and
energy efficient heating or cooling equipment installed and
their respective rated energy efficiency performance, and
``(B) in the case of a qualified new energy efficient home
which is a manufactured home, accompanied by such
documentation as required by the Administrator of the
Environmental Protection Agency under the Energy Star Labeled
Homes program.
``(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 qualified new energy efficient homes acquired during the
period beginning on January 1, 2004, and ending on December
31, 2006.''.
(b) Credit Made Part of General Business Credit.--Section
38(b) (relating to current year business credit) is amended
by striking ``plus'' at the end of paragraph (14), by
striking the period at the end of paragraph (15) and
inserting ``, plus'', and by adding at the end the following
new paragraph:
``(16) the new energy efficient home credit determined
under section 45G(a).''.
(c) Basis Adjustment.--Subsection (a) of section 1016, as
amended by this Act, is amended by striking ``and'' at the
end of paragraph (29), by striking the period at the end of
paragraph (30) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(31) to the extent provided in section 45G(e), in the
case of amounts with respect to which a credit has been
allowed under section 45G.''.
(d) Limitation on Carryback.--
(1) In general.--Subsection (d) of section 39 is amended to
read as follows:
``(d) Transitional Rule.--No portion of the unused business
credit for any taxable year which is attributable to a credit
specified in section 38(b) or any portion thereof may be
carried back to any taxable year before the first taxable
year for which such specified credit or such portion is
allowable (without regard to subsection (a)).''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply with respect to taxable years ending after
December 31, 2002.
(e) Deduction for Certain Unused Business Credits.--Section
196(c) (defining qualified business credits) is amended by
striking ``and'' at the end of paragraph (10), by striking
the period at the end of paragraph (11) and inserting ``,
and'', and by adding after paragraph (11) the following new
paragraph:
``(12) the new energy efficient home credit determined
under section 45G(a).''.
(f) 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. 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. 1306. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM
PROPERTY.
(a) In General.--Section 48(a)(3)(A) (defining energy
property), as amended by this Act, is amended by striking
``or'' at the end of clause (ii), by adding ``or'' at the end
of clause (iii), and by inserting after clause (iii) the
following new clause:
``(iv) combined heat and power system property,''.
(b) Combined Heat and Power System Property.--Section 48
(relating to energy credit; reforestation credit), as amended
by this Act, is amended by adding at the end the following
new subsection:
``(d) Combined Heat and Power System Property.--For
purposes of subsection (a)(3)(A)(iv)--
``(1) Combined heat and power system property.--The term
`combined heat and
[[Page H4080]]
power system property' means property comprising a system--
``(A) 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),
``(B) which has an electrical capacity of not more than 15
megawatts or a mechanical energy capacity of not more than
2,000 horsepower or an equivalent combination of electrical
and mechanical energy capacities,
``(C) which produces--
``(i) at least 20 percent of its total useful energy in the
form of thermal energy which is not used to produce
electrical or mechanical power (or combination thereof), and
``(ii) at least 20 percent of its total useful energy in
the form of electrical or mechanical power (or combination
thereof),
``(D) the energy efficiency percentage of which exceeds 60
percent, and
``(E) which is placed in service before January 1, 2007.
``(2) Special rules.--
``(A) Energy efficiency percentage.--For purposes of this
subsection, the energy efficiency percentage of a system is
the fraction--
``(i) the numerator of which is the total useful
electrical, thermal, and mechanical power produced by the
system at normal operating rates, and expected to be consumed
in its normal application, and
``(ii) the denominator of which is the lower heating value
of the fuel sources for the system.
``(B) Determinations made on btu basis.--The energy
efficiency percentage and the percentages under paragraph
(1)(C) shall be determined on a Btu basis.
``(C) 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.
``(D) Public utility property.--
``(i) Accounting rule for public utility property.--If the
combined heat and power system property is public utility
property (as defined in section 168(i)(10)), the taxpayer may
only claim the credit under subsection (a) if, with respect
to such property, the taxpayer uses a normalization method of
accounting.
``(ii) Certain exception not to apply.--The matter in
subsection (a)(3) which follows subparagraph (D) thereof
shall not apply to combined heat and power system property.
``(3) Systems using bagasse.--If a system is designed to
use bagasse for at least 90 percent of the energy source--
``(A) paragraph (1)(D) shall not apply, but
``(B) the amount of credit determined under subsection (a)
with respect to such system shall not exceed the amount which
bears the same ratio to such amount of credit (determined
without regard to this paragraph) as the energy efficiency
percentage of such system bears to 60 percent.''.
(c) Effective Date.--The amendments made by this subsection
shall apply to periods after December 31, 2003, in taxable
years ending after such date, under rules similar to the
rules of section 48(m) of the Internal Revenue Code of
1986 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).
SEC. 1307. CREDIT FOR ENERGY EFFICIENT APPLIANCES.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business-related credits), as amended
by this Act, is amended by adding at the end the following
new section:
``SEC. 45H. ENERGY EFFICIENT APPLIANCE CREDIT.
``(a) Allowance of Credit.--For purposes of section 38, the
energy efficient appliance credit determined under this
section for the taxable year is an amount equal to the sum
of--
``(1) the tier I appliance amount, and
``(2) the tier II appliance amount,
with respect to qualified energy efficient appliances
produced by the taxpayer during the calendar year ending with
or within the taxable year.
``(b) Appliance Amounts.--For purposes of subsection (a)--
``(1) Tier i appliance amount.--The tier I appliance amount
is equal to--
``(A) $100, multiplied by
``(B) an amount (rounded to the nearest whole number) equal
to the applicable percentage of the eligible production.
``(2) Tier ii appliance amount.--The tier II appliance
amount is equal to $150, multiplied by an amount equal to the
eligible production reduced by the amount determined under
paragraph (1)(B).
``(3) Applicable percentage.--The applicable percentage is
the percentage determined by dividing the tier I appliances
produced by the taxpayer during the calendar year by the sum
of the tier I and tier II appliances so produced.
``(4) Eligible production.--The eligible production of
qualified energy efficient appliances by the taxpayer for any
calendar year is the excess of--
``(A) the number of such appliances which are produced by
the taxpayer during such calendar year, over
``(B) 110 percent of the average annual number of such
appliances which were produced by the taxpayer (or any
predecessor) during the preceding 3-calendar year period.
``(c) Qualified Energy Efficient Appliance.--For purposes
of this section--
``(1) In general.--The term `qualified energy efficient
appliance' means any tier I appliance or tier II appliance
which is produced in the United States.
``(2) Tier i appliance.--The term `tier I appliance'
means--
``(A) a clothes washer which is produced with at least a
1.50 MEF, and
``(B) a refrigerator which consumes at least 15 percent (20
percent in the case of a refrigerator produced after 2006)
less kilowatt hours per year than the energy conservation
standards for refrigerators promulgated by the Department of
Energy and effective on July 1, 2001.
``(3) Tier ii appliance.--The term `tier II appliance'
means a refrigerator produced before 2007 which consumes at
least 20 percent less kilowatt hours per year than the energy
conservation standards described in paragraph (2)(B).
``(4) Clothes washer.--The term `clothes washer' means a
residential clothes washer, including a residential style
coin operated washer.
``(5) Refrigerator.--The term `refrigerator' means an
automatic defrost refrigerator-freezer which has an internal
volume of at least 16.5 cubic feet.
``(6) MEF.--The term `MEF' means Modified Energy Factor (as
determined by the Secretary of Energy).
``(7) Produced.--The term `produced' includes manufactured.
``(d) Limitation on Maximum Credit.--
``(1) In general.--The amount of credit allowed under
subsection (a) with respect to a taxpayer for any taxable
year shall not exceed $60,000,000, reduced by the amount of
the credit allowed under subsection (a) to the taxpayer (or
any predecessor) for any prior taxable year.
``(2) Limitation based on gross receipts.--The credit
allowed under subsection (a) with respect to a taxpayer for
the taxable year shall not exceed an amount equal to 2
percent of the average annual gross receipts of the taxpayer
for the 3 taxable years preceding the taxable year for which
the credit is determined.
``(3) Gross receipts.--For purposes of this subsection, the
rules of paragraphs (2) and (3) of section 448(c) shall
apply.
``(e) Special Rules.--For purposes of this section--
``(1) In general.--Rules similar to the rules of
subsections (c), (d), and (e) of section 52 shall apply.
``(2) Controlled groups.--
``(A) In general.--All persons treated as a single employer
under subsection (a) or (b) of section 52 or subsection (m)
or (o) of section 414 shall be treated as a single
manufacturer.
``(B) Inclusion of foreign corporations.--For purposes of
subparagraph (A), in applying subsections (a) and (b) of
section 52 to this section, section 1563 shall be applied
without regard to subsection (b)(2)(C) thereof.
``(f) Verification.--The taxpayer shall submit such
information or certification as the Secretary, after
consultation with the Secretary of Energy, determines
necessary to claim the credit amount under subsection (a).
``(g) Termination.--This section shall not apply with
respect to appliances produced after December 31, 2007.''.
(b) Credit Made Part of General Business Credit.--Section
38(b) (relating to current year business credit), as amended
by this Act, is amended by striking ``plus'' at the end of
paragraph (15), by striking the period at the end of
paragraph (16) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(17) the energy efficient appliance credit determined
under section 45H(a).''.
(c) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1, as amended by this
Act, is amended by adding at the end the following new item:
``Sec. 45H. Energy efficient appliance credit.''.
(d) Effective Date.--The amendments made by this section
shall apply to appliances produced after December 31, 2003,
in taxable years ending after such date.
SEC. 1308. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.
(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. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.
``(a) In General.--There shall be allowed as a deduction an
amount equal to the cost of energy efficient commercial
building property placed in service during the taxable year.
``(b) Maximum Amount of Deduction.--The deduction under
subsection (a) with respect to any building for the taxable
year and all prior taxable years shall not exceed an amount
equal to the product of--
``(1) $1.50, and
``(2) the square footage of the building.
``(c) Definitions.--For purposes of this section--
``(1) Energy efficient commercial building property.--The
term `energy efficient commercial building property' means
property--
``(A) which is installed on or in a building--
``(i) which is located in the United States, and
[[Page H4081]]
``(ii) which is the type of structure to which the Standard
90.1-2001 is applicable,
``(B) which is installed as part of--
``(i) the lighting systems,
``(ii) the heating, cooling, ventilation, and hot water
systems, or
``(iii) the building envelope, and
``(C) which is certified in accordance with subsection
(d)(4) as being installed as part of a plan designed to
reduce the total annual energy and power costs with respect
to the lighting systems, heating, cooling, ventilation, and
hot water systems of the building by 50 percent or more in
comparison to a reference building which meets the minimum
requirements of Standard 90.1-2001 using methods of
calculation under subsection (d)(2).
``(2) Standard 90.1-2001.--The term `Standard 90.1-2001'
means Standard 90.1-2001 of the American Society of Heating,
Refrigerating, and Air Conditioning Engineers and the
Illuminating Engineering Society of North America (as in
effect on April 2, 2003).
``(d) Special Rules.--
``(1) Partial allowance.--
``(A) In general.--Except as provided in subsection (f), in
the case of a building placed in service on or before the
date of the enactment of this section, if--
``(i) the requirement of subsection (c)(1)(C) is not met,
but
``(ii) there is a certification in accordance with
subsection (d)(4) that any system referred to in subsection
(c)(1)(B) satisfies the energy-savings targets established by
the Secretary under subparagraph (B) with respect to such
system,
then the requirement of subsection (c)(1)(C) shall be treated
as met with respect to such system, and the deduction under
subsection (a) shall be allowed with respect to energy
efficient commercial building property installed as part of
such system and as part of a plan to meet such targets,
except that subsection (b) shall be applied to such property
by substituting `$.50' for `$1.50'.
``(B) Regulations.--The Secretary, after consultation with
the Secretary of Energy, shall establish a target for each
system described in subsection (c)(1)(B) which, if such
targets were met for all such systems, the building would
meet the requirements of subsection (c)(1)(C).
``(2) Methods of calculation.--The Secretary, after
consultation with the Secretary of Energy, shall promulgate
regulations which describe in detail methods for calculating
and verifying energy and power cost for purposes of this
section.
``(3) Notice to owner.--Each certification required under
this section shall include an explanation to the building
owner regarding the energy efficiency features of the
building and its projected annual energy costs.
``(4) Certification.--
``(A) In general.--The Secretary shall prescribe the manner
and method for the making of certifications under this
section.
``(B) Procedures.--The Secretary shall include as part of
the certification process procedures for inspection and
testing by qualified individuals described in subparagraph
(C) to ensure compliance of buildings with energy-savings
plans and targets. Such procedures shall be--
``(i) comparable, given the difference between commercial
and residential buildings, to the requirements in the
Mortgage Industry National Accreditation Procedures for Home
Energy Rating Systems, and
``(ii) fuel neutral such that the same energy efficiency
measures allow a building to be eligible for the deduction
under this section regardless of whether such building uses a
gas or oil furnace or boiler, an electric heat pump, or other
fuel source.
``(C) Qualified individuals.--Individuals qualified to
determine compliance shall be only those individuals who are
recognized by an organization certified by the Secretary for
such purposes.
``(e) Basis Reduction.--For purposes of this subtitle, if a
deduction is allowed under this section with respect to any
energy efficient commercial building property, the basis of
such property shall be reduced by the amount of the deduction
so allowed.
``(f) Interim Rules for Lighting Systems.--Until such time
as the Secretary issues final regulations under subsection
(d)(1)(B) with respect to property which is part of a
lighting system--
``(1) In general.--The lighting system target under
subsection (d)(1)(A)(ii) shall be a reduction in lighting
power density of 25 percent (50 percent in the case of a
warehouse) of the minimum requirements in Table 9.3.1.1 or
Table 9.3.1.2 (not including additional interior lighting
power allowances) of Standard 90.1-2001.
``(2) Reduction in deduction if reduction less than 40
percent.--
``(A) In general.--If, with respect to the lighting system
of any building other than a warehouse, the reduction in
lighting power density of the lighting system is not at least
40 percent, only the applicable percentage of the amount of
deduction otherwise allowable under this section with respect
to such property shall be allowed.
``(B) Applicable percentage.--For purposes of subparagraph
(A), the applicable percentage is the number of percentage
points (not greater than 100) equal to the sum of--
``(i) 50, and
``(ii) the amount which bears the same ratio to 50 as the
excess of the reduction of lighting power density of the
lighting system over 25 percentage points bears to 15.
``(C) Exceptions.--This subsection shall not apply to any
system--
``(i) the controls and circuiting of which do not comply
fully with the mandatory and prescriptive requirements of
Standard 90.1-2001 and which do not include provision for
bilevel switching in all occupancies except hotel and motel
guest rooms, store rooms, restrooms, and public lobbies, or
``(ii) which does not meet the minimum requirements for
calculated lighting levels as set forth in the Illuminating
Engineering Society of North America Lighting Handbook,
Performance and Application, Ninth Edition, 2000.
``(g) Regulations.--The Secretary shall promulgate such
regulations as necessary--
``(1) to take into account new technologies regarding
energy efficiency and renewable energy for purposes of
determining energy efficiency and savings under this section,
and
``(2) to provide for a recapture of the deduction allowed
under this section if the plan described in subsection
(c)(1)(C) or (d)(1)(A) is not fully implemented.
``(h) Termination.--This section shall not apply with
respect to property placed in service after December 31,
2007.''.
(b) Conforming Amendments.--
(1) Section 1016(a), as amended by this section, is amended
by striking ``and'' at the end of paragraph (30), by striking
the period at the end of paragraph (31) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(32) to the extent provided in section 179B(e).''.
(2) Section 1245(a) is amended by inserting ``179B,'' after
``179A,'' both places it appears in paragraphs (2)(C) and
(3)(C).
(3) Section 1250(b)(3) is amended by inserting before the
period at the end of the first sentence ``or by section
179B''.
(4) Section 263(a)(1) is amended by striking ``or'' at the
end of subparagraph (G), by striking the period at the end of
subparagraph (H) and inserting ``, or'', and by inserting
after subparagraph (H) the following new subparagraph:
``(I) expenditures for which a deduction is allowed under
section 179B.''.
(5) Section 312(k)(3)(B) is amended by striking ``or 179A''
each place it appears in the heading and text and inserting
``, 179A, or 179B''.
(c) Clerical Amendment.--The table of sections for part VI
of subchapter B of chapter 1 is amended by inserting after
section 179A the following new item:
``Sec. 179B. Energy efficient commercial buildings deduction.''.
(d) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act in taxable years ending after such
date.
SEC. 1309. THREE-YEAR APPLICABLE RECOVERY PERIOD FOR
DEPRECIATION OF QUALIFIED ENERGY MANAGEMENT
DEVICES.
(a) In General.--Section 168(e)(3)(A) (defining 3-year
property) is amended by striking ``and'' at the end of clause
(ii), by striking the period at the end of clause (iii) and
inserting ``, and'', and by adding at the end the following
new clause:
``(iv) any qualified energy management device.''.
(b) Definition of Qualified Energy Management Device.--
Section 168(i) (relating to definitions and special rules) is
amended by inserting at the end the following new paragraph:
``(15) Qualified energy management device.--
``(A) In general.--The term `qualified energy management
device' means any energy management device which is placed in
service before January 1, 2008, by a taxpayer who is a
supplier of electric energy or a provider of electric energy
services.
``(B) Energy management device.--For purposes of
subparagraph (A), the term `energy management device' means
any meter or metering device which is used by the taxpayer--
``(i) to measure and record electricity usage data on a
time-differentiated basis in at least 4 separate time
segments per day, and
``(ii) to provide such data on at least a monthly basis to
both consumers and the taxpayer.''.
(c) Alternative System.--The table contained in section
168(g)(3)(B) is amended by inserting after the item relating
to subparagraph (A)(iii) the following:
``(A) (iv)........................................................20''.
(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. 1310. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER
FACILITIES.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business related credits), as amended
by this Act, is amended by adding after section 45K the
following new section:
``SEC. 45L. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER
FACILITIES.
``(a) General Rule.--For purposes of section 38, the
advanced nuclear power facility production credit of any
taxpayer for any taxable year is equal to the product of--
``(1) 1.8 cents, multiplied by
``(2) the kilowatt hours of electricity--
[[Page H4082]]
``(A) produced by the taxpayer at an advanced nuclear power
facility during the 8-year period beginning on the date the
facility was originally placed in service, and
``(B) sold by the taxpayer to an unrelated person during
the taxable year.
``(b) National Limitation.--
``(1) In general.--The amount of credit which would (but
for this subsection and subsection (c)) be allowed with
respect to any facility for any taxable year shall not exceed
the amount which bears the same ratio to such amount of
credit as--
``(A) the national megawatt capacity limitation allocated
to the facility, bears to
``(B) the total megawatt nameplate capacity of such
facility.
``(2) Amount of national limitation.--The national megawatt
capacity limitation shall be 6,000 megawatts.
``(3) Allocation of limitation.--The Secretary shall
allocate the national megawatt capacity limitation in such
manner as the Secretary may prescribe.
``(4) Regulations.--Not later than 6 months after the date
of the enactment of this section, the Secretary shall
prescribe such regulations as may be necessary or appropriate
to carry out the purposes of this subsection. Such
regulations shall provide a certification process under which
the Secretary, after consultation with the Secretary of
Energy, shall approve and allocate the national megawatt
capacity limitation.
``(c) Other Limitations.--
``(1) Annual limitation.--The amount of the credit
allowable under subsection (a) (after the application of
subsection (b)) for any taxable year with respect to any
facility shall not exceed an amount which bears the same
ratio to $125,000,000 as--
``(A) the national megawatt capacity limitation allocated
under subsection (b) to the facility, bears to
``(B) 1,000.
``(2) Other limitations.--Rules similar to the rules of
section 45(b) shall apply for purposes of this section,
except that paragraph (2) thereof shall not apply to the 1.8
cents under subsection (a)(1).
``(d) Advanced Nuclear Power Facility.--For purposes of
this section--
``(1) In general.--The term `advanced nuclear power
facility' means any advanced nuclear facility--
``(A) which is owned by the taxpayer and which uses nuclear
energy to produce electricity, and
``(B) which is placed in service after the date of the
enactment of this paragraph and before January 1, 2021.
``(2) Advanced nuclear facility.--For purposes of paragraph
(1), the term `advanced nuclear facility' means any nuclear
facility the reactor design for which is approved after the
date of the enactment of this paragraph by the Nuclear
Regulatory Commission (and such design or a substantially
similar design of comparable capacity was not approved on or
before such date).
``(e) Other Rules to Apply.--Rules similar to the rules of
paragraphs (1), (2), (3), (4), and (5) of section 45(e) shall
apply for purposes of this section.''.
(b) Credit Treated as Business Credit.--Section 38(b), as
amended by this Act, is amended by striking ``plus'' at the
end of paragraph (20), by striking the period at the end of
paragraph (21) and inserting ``, plus'', and by adding at the
end the following:
``(22) the advanced nuclear power facility production
credit determined under section 45L(a).''.
(c) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1, as amended by this
Act, is amended by adding at the end the following:
``Sec. 45L. Credit for production from advanced nuclear power
facilities.''.
(d) Effective Date.--The amendments made by this section
shall apply to production in taxable years beginning after
December 31, 2003.
PART II--FUELS AND ALTERNATIVE MOTOR VEHICLES
SEC. 1311. 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. 1312. 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).''.
(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 January 1, 2004.
SEC. 1313. SMALL ETHANOL PRODUCER CREDIT.
(a) Allocation of Alcohol Fuels Credit to Patrons of a
Cooperative.--Section 40(g) (relating to definitions and
special rules for eligible small ethanol producer credit) is
amended by adding at the end the following new paragraph:
``(6) Allocation of small ethanol producer credit to
patrons of cooperative.--
``(A) Election to allocate.--
``(i) In general.--In the case of a cooperative
organization described in section 1381(a), any portion of the
credit determined under subsection (a)(3) for the taxable
year may, at the election of the organization, be apportioned
pro rata among patrons of the organization on the basis of
the quantity or value of business done with or for such
patrons for the taxable year.
[[Page H4083]]
``(ii) Form and effect of election.--An election under
clause (i) for any taxable year shall be made on a timely
filed return for such year. Such election, once made, shall
be irrevocable for such taxable year.
``(B) Treatment of organizations and patrons.--The amount
of the credit apportioned to patrons under subparagraph (A)--
``(i) shall not be included in the amount determined under
subsection (a) with respect to the organization for the
taxable year, and
``(ii) shall be included in the amount determined under
subsection (a) for the taxable year of each patron for which
the patronage dividends for the taxable year described in
subparagraph (A) are included in gross income.
``(C) Special rule.--If the amount of a credit which has
been apportioned to any patron under this paragraph is
decreased for any reason--
``(i) such amount shall not increase the tax imposed on
such patron, and
``(ii) the tax imposed by this chapter on such organization
shall be increased by such amount.
The increase under clause (ii) shall not be treated as tax
imposed by this chapter for purposes of determining the
amount of any credit under this chapter or for purposes of
section 55.''.
(b) Definition of Small Ethanol Producer.--Section 40(g)
(relating to definitions and special rules for eligible small
ethanol producer credit) is amended by striking
``30,000,000'' each place it appears and inserting
``60,000,000''.
(c) Conforming Amendment.--Section 1388 (relating to
definitions and special rules for cooperative organizations)
is amended by adding at the end the following new subsection:
``(k) Cross Reference.--For provisions relating to the
apportionment of the alcohol fuels credit between cooperative
organizations and their patrons, see section 40(g)(6).''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2003.
SEC. 1314. INCENTIVES FOR BIODIESEL.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business related credits) is amended
by inserting after section 40 the following new section:
``SEC. 40A. BIODIESEL USED AS FUEL.
``(a) General Rule.--For purposes of section 38, the
biodiesel fuels credit determined under this section for the
taxable year is an amount equal to the sum of--
``(1) the biodiesel mixture credit, plus
``(2) the biodiesel credit.
``(b) Definition of Biodiesel Mixture Credit and Biodiesel
Credit.--For purposes of this section--
``(1) Biodiesel mixture credit.--
``(A) In general.--The biodiesel mixture credit of any
taxpayer for any taxable year is 50 cents for each gallon of
biodiesel used by the taxpayer in the production of a
qualified biodiesel mixture.
``(B) Qualified biodiesel mixture.--The term `qualified
biodiesel mixture' means a mixture of biodiesel and a taxable
fuel (within the meaning of section 4083(a)(1)) which--
``(i) is sold by the taxpayer producing such mixture to any
person for use as a fuel, or
``(ii) is used as a fuel by the taxpayer producing such
mixture.
``(C) Sale or use must be in trade or business, etc.--
Biodiesel used in the production of a qualified biodiesel
mixture shall be taken into account--
``(i) only if the sale or use described in subparagraph (B)
is in a trade or business of the taxpayer, and
``(ii) for the taxable year in which such sale or use
occurs.
``(D) Casual off-farm production not eligible.--No credit
shall be allowed under this section with respect to any
casual off-farm production of a qualified biodiesel mixture.
``(2) Biodiesel credit.--
``(A) In general.--The biodiesel credit of any taxpayer for
any taxable year is 50 cents for each gallon of biodiesel
which is not in a mixture and which during the taxable year--
``(i) is used by the taxpayer as a fuel in a trade or
business, or
``(ii) is sold by the taxpayer at retail to a person and
placed in the fuel tank of such person's vehicle.
``(B) User credit not to apply to biodiesel sold at
retail.--No credit shall be allowed under subparagraph (A)(i)
with respect to any biodiesel which was sold in a retail sale
described in subparagraph (A)(ii).
``(3) Credit for agri-biodiesel.--In the case of any
biodiesel which is agri-biodiesel, paragraphs (1)(A) and
(2)(A) shall be applied by substituting `$1.00' for `50
cents'.
``(4) Certification for biodiesel.--No credit shall be
allowed under this section unless the taxpayer obtains a
certification (in such form and manner as prescribed by the
Secretary) from the producer of the biodiesel which
identifies the product produced and the percentage of
biodiesel and agri-biodiesel in the product.
``(c) Coordination With Credit Against Excise Tax.--The
amount of the credit determined under this section with
respect to any biodiesel shall be properly reduced to take
into account any benefit provided with respect to such
biodiesel solely by reason of the application of section
6426.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Biodiesel.--The term `biodiesel' means the monoalkyl
esters of long chain fatty acids derived from plant or animal
matter which meet--
``(A) the registration requirements for fuels and fuel
additives established by the Environmental Protection Agency
under section 211 of the Clean Air Act (42 U.S.C. 7545), and
``(B) the requirements of the American Society of Testing
and Materials D6751.
``(2) Agri-biodiesel.--The term `agri-biodiesel' means
biodiesel derived solely from virgin oils, including esters
derived from virgin vegetable oils from corn, soybeans,
sunflower seeds, cottonseeds, canola, crambe, rapeseeds,
safflowers, flaxseeds, rice bran, and mustard seeds, and from
animal fats.
``(3) Mixture or biodiesel not used as a fuel, etc.--
``(A) Mixtures.--If--
``(i) any credit was determined under this section with
respect to biodiesel used in the production of any qualified
biodiesel mixture, and
``(ii) any person--
``(I) separates the biodiesel from the mixture, or
``(II) without separation, uses the mixture other than as a
fuel,
then there is hereby imposed on such person a tax equal to
the product of the rate applicable under subsection (b)(1)(A)
and the number of gallons of such biodiesel in such mixture.
``(B) Biodiesel.--If--
``(i) any credit was determined under this section with
respect to the retail sale of any biodiesel, and
``(ii) any person mixes such biodiesel or uses such
biodiesel other than as a fuel,
then there is hereby imposed on such person a tax equal to
the product of the rate applicable under subsection (b)(2)(A)
and the number of gallons of such biodiesel.
``(C) Applicable laws.--All provisions of law, including
penalties, shall, insofar as applicable and not inconsistent
with this section, apply in respect of any tax imposed under
subparagraph (A) or (B) as if such tax were imposed by
section 4081 and not by this chapter.
``(4) Pass-thru in the case of estates and trusts.--Under
regulations prescribed by the Secretary, rules similar to the
rules of subsection (d) of section 52 shall apply.
``(e) Termination.--This section shall not apply to any
sale or use after December 31, 2005.''.
(b) Credit Treated as Part of General Business Credit.--
Section 38(b) (relating to current year business credit) is
amended by striking ``plus'' at the end of paragraph (16), by
striking the period at the end of paragraph (17) and
inserting ``, plus'', and by adding at the end the following
new paragraph:
``(18) the biodiesel fuels credit determined under section
40A(a).''.
(c) Conforming Amendments.--
(1)(A) Section 87 is amended to read as follows:
``SEC. 87. ALCOHOL AND BIODIESEL FUELS CREDITS.
``Gross income includes--
``(1) the amount of the alcohol fuels credit determined
with respect to the taxpayer for the taxable year under
section 40(a), and
``(2) the biodiesel fuels credit determined with respect to
the taxpayer for the taxable year under section 40A(a).''.
(B) The item relating to section 87 in the table of
sections for part II of subchapter B of chapter 1 is amended
by striking ``fuel credit'' and inserting ``and biodiesel
fuels credits''.
(2) Section 196(c), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (11), by striking
the period at the end of paragraph (12) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(13) the biodiesel fuels credit determined under section
40A(a).''.
(3) The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by adding after the item
relating to section 40 the following new item:
``Sec. 40A. Biodiesel used as fuel.''.
(d) Effective Date.--The amendments made by this section
shall apply to fuel produced, and sold or used, after
December 31, 2003, in taxable years ending after such date.
SEC. 1315. ALCOHOL FUEL AND BIODIESEL MIXTURES EXCISE TAX
CREDIT.
(a) In General.--Subchapter B of chapter 65 (relating to
rules of special application) is amended by inserting after
section 6425 the following new section:
``SEC. 6426. CREDIT FOR ALCOHOL FUEL AND BIODIESEL MIXTURES.
``(a) Allowance of Credits.--There shall be allowed as a
credit against the tax imposed by section 4081 an amount
equal to the sum of--
``(1) the alcohol fuel mixture credit, plus
``(2) the biodiesel mixture credit.
``(b) Alcohol Fuel Mixture Credit.--
``(1) In general.--For purposes of this section, the
alcohol fuel mixture credit is the product of the applicable
amount and the number of gallons of alcohol used by the
taxpayer in producing any alcohol fuel mixture for sale or
use in a trade or business of the taxpayer.
``(2) Applicable amount.--For purposes of this subsection--
``(A) In general.--Except as provided in subparagraph (B),
the applicable amount is 52 cents (51 cents in the case of
any sale or use after 2004).
``(B) Mixtures not containing ethanol.--In the case of an
alcohol fuel mixture in which none of the alcohol consists of
ethanol, the applicable amount is 60 cents.
``(3) Alcohol fuel mixture.--For purposes of this
subsection, the term `alcohol fuel
[[Page H4084]]
mixture' means a mixture of alcohol and a taxable fuel
which--
``(A) is sold by the taxpayer producing such mixture to any
person for use as a fuel,
``(B) is used as a fuel by the taxpayer producing such
mixture, or
``(C) is removed from the refinery by a person producing
such mixture.
``(4) Other definitions.--For purposes of this subsection--
``(A) Alcohol.--The term `alcohol' includes methanol and
ethanol but does not include--
``(i) alcohol produced from petroleum, natural gas, or coal
(including peat), or
``(ii) alcohol with a proof of less than 190 (determined
without regard to any added denaturants).
Such term also includes an alcohol gallon equivalent of ethyl
tertiary butyl ether or other ethers produced from such
alcohol.
``(B) Taxable fuel.--The term `taxable fuel' has the
meaning given such term by section 4083(a)(1).
``(5) Termination.--This subsection shall not apply to any
sale, use, or removal for any period after December 31, 2010.
``(c) Biodiesel Mixture Credit.--
``(1) In general.--For purposes of this section, the
biodiesel mixture credit is the product of the applicable
amount and the number of gallons of biodiesel used by the
taxpayer in producing any biodiesel mixture for sale or use
in a trade or business of the taxpayer.
``(2) Applicable amount.--For purposes of this subsection--
``(A) In general.--Except as provided in subparagraph (B),
the applicable amount is 50 cents.
``(B) Amount for agri-biodiesel.--In the case of any
biodiesel which is agri-biodiesel, the applicable amount is
$1.00.
``(3) Biodiesel mixture.--For purposes of this section, the
term `biodiesel mixture' means a mixture of biodiesel and a
taxable fuel which--
``(A) is sold by the taxpayer producing such mixture to any
person for use as a fuel,
``(B) is used as a fuel by the taxpayer producing such
mixture, or
``(C) is removed from the refinery by a person producing
such mixture.
``(4) Certification for biodiesel.--No credit shall be
allowed under this section unless the taxpayer obtains a
certification (in such form and manner as prescribed by the
Secretary) from the producer of the biodiesel which
identifies the product produced and the percentage of
biodiesel and agri-biodiesel in the product.
``(5) Other definitions.--Any term used in this subsection
which is also used in section 40A shall have the meaning
given such term by section 40A.
``(6) Termination.--This subsection shall not apply to any
sale, use, or removal for any period after December 31, 2005.
``(d) Mixture not Used as a Fuel, Etc.--
``(1) Imposition of tax.--If--
``(A) any credit was determined under this section with
respect to alcohol or biodiesel used in the production of any
alcohol fuel mixture or biodiesel mixture, respectively, and
``(B) any person--
``(i) separates the alcohol or biodiesel from the mixture,
or
``(ii) without separation, uses the mixture other than as a
fuel,
then there is hereby imposed on such person a tax equal to
the product of the applicable amount and the number of
gallons of such alcohol or biodiesel.
``(2) Applicable laws.--All provisions of law, including
penalties, shall, insofar as applicable and not inconsistent
with this section, apply in respect of any tax imposed under
paragraph (1) as if such tax were imposed by section 4081 and
not by this section.
``(e) Coordination With Exemption From Excise Tax.--Rules
similar to the rules under section 40(c) shall apply for
purposes of this section.''.
(b) Registration Requirement.--Section 4101(a) (relating to
registration) is amended by inserting ``and every person
producing biodiesel (as defined in section 40A(d)(1)) or
alcohol (as defined in section 6426(b)(4)(A))'' after
``4091''.
(c) Additional Amendments.--
(1) Section 40(c) is amended by striking ``or section
4091(c)'' and inserting ``section 4091(c), or section 6426''.
(2) Section 40(e)(1) is amended--
(A) by striking ``2007'' in subparagraph (A) and inserting
``2010'', and
(B) by striking ``2008'' in subparagraph (B) and inserting
``2011''.
(3) Section 40(h) is amended--
(A) by striking ``2007'' in paragraph (1) and inserting
``2010'', and
(B) by striking ``, 2006, or 2007'' in the table contained
in paragraph (2) and inserting ``through 2010''.
(4)(A) Subpart C of part III of subchapter A of chapter 32
is amended by adding at the end the following new section:
``SEC. 4104. INFORMATION REPORTING FOR PERSONS CLAIMING
CERTAIN TAX BENEFITS.
``(a) In General.--The Secretary shall require any person
claiming tax benefits under the provisions of section 34, 40,
40A, 4041(b)(2), 4041(k), 4081(c), 6426, or 6427(f) to file a
quarterly return (in such manner as the Secretary may
prescribe) providing such information relating to such
benefits and the coordination of such benefits as the
Secretary may require to ensure the proper administration and
use of such benefits.
``(b) Enforcement.--With respect to any person described in
subsection (a) and subject to registration requirements under
this title, rules similar to rules of section 4222(c) shall
apply with respect to any requirement under this section.''.
(B) The table of sections for subpart C of part III of
subchapter A of chapter 32 is amended by adding at the end
the following new item:
``Sec. 4104. Information reporting for persons claiming certain tax
benefits.''.
(5) Section 6427(i)(3) is amended--
(A) by adding at the end of subparagraph (A) the following
new flush sentence:
``In the case of an electronic claim, this subparagraph shall
be applied without regard to clause (i).'', and
(B) by striking ``20 days of the date of the filing of such
claim'' in subparagraph (B) and inserting ``45 days of the
date of the filing of such claim (20 days in the case of an
electronic claim)''.
(6) Section 9503(b)(1) is amended by adding at the end the
following new flush sentence:
``For purposes of this paragraph, taxes received under
sections 4041 and 4081 shall be determined without reduction
for credits under section 6426.''.
(d) Clerical Amendment.--The table of sections for
subchapter B of chapter 65 is amended by inserting after the
item relating to section 6425 the following new item:
``Sec. 6426. Credit for alcohol fuel and biodiesel mixtures.''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraphs (2) and
(3), the amendments made by this section shall apply to fuel
sold, used, or removed after December 31, 2003.
(2) Subsection (c)(4).--The amendments made by subsection
(c)(4) shall take effect on January 1, 2004.
(3) Subsection (c)(5).--The amendments made by subsection
(c)(5) shall apply to claims filed after December 31, 2004.
(f) Format for Filing.--The Secretary of the Treasury shall
prescribe the electronic format for filing claims described
in section 6427(i)(3)(B) of the Internal Revenue Code of 1986
(as amended by subsection (c)(5)(A)) not later than December
31, 2004.
SEC. 1316. NONAPPLICATION OF EXPORT EXEMPTION TO DELIVERY OF
FUEL TO MOTOR VEHICLES REMOVED FROM UNITED
STATES.
(a) In General.--Section 4221(d)(2) (defining export) is
amended by adding at the end the following new sentence:
``Such term does not include the delivery of a taxable fuel
(as defined in section 4083(a)(1)) into a fuel tank of a
motor vehicle which is shipped or driven out of the United
States.''.
(b) Conforming Amendments.--
(1) Section 4041(g) (relating to other exemptions) is
amended by adding at the end the following new sentence:
``Paragraph (3) shall not apply to the sale for delivery of a
liquid into a fuel tank of a motor vehicle which is shipped
or driven out of the United States.''.
(2) Clause (iv) of section 4081(a)(1)(A) (relating to tax
on removal, entry, or sale) is amended by inserting ``or at a
duty-free sales enterprise (as defined in section 555(b)(8)
of the Tariff Act of 1930)'' after ``section 4101''.
(c) Effective Date.--The amendments made by this section
shall apply to sales or deliveries made after the date of the
enactment of this Act.
SEC. 1317. 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).''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act.
SEC. 1318. 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),
``(2) the new advanced lean burn technology motor vehicle
credit determined under subsection (c),
``(3) the new qualified hybrid motor vehicle credit
determined under subsection (d), and
[[Page H4085]]
``(4) the new qualified alternative fuel motor vehicle
credit determined under subsection (e).
``(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 shall be determined in accordance with the
following table:
``In the case of aThe new qualified fuel cell motor vehicle credit is--
Not more than 8,500 lbs........................................$4,000
More than 8,500 lbs but not more than 14,000 lbs..............$10,000
More than 14,000 lbs but not more than 26,000 lbs.............$20,000
More than 26,000 lbs.........................................$40,000.
``(2) Increase for fuel efficiency.--
``(A) In general.--The amount determined under paragraph
(1) with respect to a new qualified fuel cell motor vehicle
which is a passenger automobile or light truck shall be
increased by the additional credit amount.
``(B) Additional credit amount.--For purposes of
subparagraph (A), the additional credit amount shall be
determined in accordance with the following table:
``In the case of a vehicle which achieves a fuel economy (expressed as
a percentage of the 2002 model year The additional credit amount is--
At least 150 percent but less than 175 percent.................$1,000
At least 175 percent but less than 200 percent.................$1,500
At least 200 percent but less than 225 percent.................$2,000
At least 225 percent but less than 250 percent.................$2,500
At least 250 percent but less than 275 percent.................$3,000
At least 275 percent but less than 300 percent.................$3,500
At least 300 percent..........................................$4,000.
``(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, has received--
``(i) 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) a certificate that such vehicle meets or exceeds the
Bin 5 Tier II emission standard established in regulations
prescribed by the Administrator of the Environmental
Protection Agency under section 202(i) of the Clean Air Act
for that make and model year vehicle,
``(C) the original use of which commences with the
taxpayer,
``(D) which is acquired for use or lease by the taxpayer
and not for resale, and
``(E) which is made by a manufacturer.
``(c) New Advanced Lean Burn Technology Motor Vehicle
Credit.--
``(1) In general.--For purposes of subsection (a), the new
advanced lean burn technology motor vehicle credit determined
under this subsection with respect to a new 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) Fuel economy.--The credit amount determined under
this paragraph shall be determined in accordance with the
following table:
``In the case of a vehicle which achieves a fuel economy (expressed as
a percentage of the 2002 model year city fuel eThe credit amount is--
At least 125 percent but less than 150 percent...................$400
At least 150 percent but less than 175 percent...................$800
At least 175 percent but less than 200 percent.................$1,200
At least 200 percent but less than 225 percent.................$1,600
At least 225 percent but less than 250 percent.................$2,000
At least 250 percent..........................................$2,400.
``(B) Conservation credit.--The amount determined under
subparagraph (A) with respect to a new advanced lean burn
technology motor vehicle shall be increased by the
conservation credit amount determined in accordance with the
following table:
``In the case of a vehicle which achieves a lifetime fuel savings
(expressed in gallons of gasoline)The conservation credit amount is--
At least 1,200 but less than 1,800...............................$250
At least 1,800 but less than 2,400...............................$500
At least 2,400 but less than 3,000...............................$750
At least 3,000................................................$1,000.
``(3) New advanced lean burn technology motor vehicle.--For
purposes of this subsection, the term `new advanced lean burn
technology motor vehicle' means a passenger automobile or a
light truck--
``(A) with an internal combustion engine which--
``(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 2002 model
year city fuel economy,
``(iv) for 2004 and later model vehicles, has received a
certificate that such vehicle meets or exceeds--
``(I) in the case of a vehicle having a gross vehicle
weight rating of 6,000 pounds or less, the Bin 5 Tier II
emission standard 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, and
``(II) in the case of a vehicle having a gross vehicle
weight rating of more than 6,000 pounds but not more than
8,500 pounds, the Bin 8 Tier II emission standard which is so
established.
``(B) the original use of which commences with the
taxpayer,
``(C) which is acquired for use or lease by the taxpayer
and not for resale, and
``(D) which is made by a manufacturer.
``(4) Lifetime fuel savings.--For purposes of this
subsection, the term `lifetime fuel savings' means, in the
case of any new advanced lean burn technology motor vehicle,
an amount equal to the excess (if any) of--
``(A) 120,000 divided by the 2002 model year city fuel
economy for the vehicle inertia weight class, over
``(B) 120,000 divided by the city fuel economy for such
vehicle.
``(d) New Qualified Hybrid Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
qualified hybrid motor vehicle credit determined under this
subsection with respect to a new qualified hybrid motor
vehicle placed in service by the taxpayer during the taxable
year is the credit amount determined under paragraph (2).
``(2) Credit amount.--
``(A) Credit amount for passenger automobiles and light
trucks.--In the case of a new qualified hybrid motor vehicle
which is a passenger automobile or light truck and which has
a gross vehicle weight rating of not more than 8,500 pounds,
the amount determined under this paragraph is the sum of the
amounts determined under clauses (i) and (ii).
``(i) Fuel economy.--The amount determined under this
clause is the amount which would be determined under
subsection (c)(2)(A) if such vehicle were a vehicle referred
to in such subsection.
``(ii) Conservation credit.--The amount determined under
this clause is the amount which would be determined under
subsection (c)(2)(B) if such vehicle were a vehicle referred
to in such subsection.
``(B) Credit amount for other motor vehicles.--
``(i) In general.--In the case of any new qualified hybrid
motor vehicle to which subparagraph (A) does not apply, the
amount determined under this paragraph is the amount equal to
the applicable percentage of the qualified incremental hybrid
cost of the vehicle as certified under clause (v).
``(ii) Applicable percentage.--For purposes of clause (i),
the applicable percentage is--
``(I) 20 percent if the vehicle achieves an increase in
city fuel economy relative to a comparable vehicle of at
least 30 percent but less than 40 percent,
``(II) 30 percent if the vehicle achieves such an increase
of at least 40 percent but less than 50 percent, and
``(III) 40 percent if the vehicle achieves such an increase
of at least 50 percent.
``(iii) Qualified incremental hybrid cost.--For purposes of
this subparagraph, the qualified incremental hybrid cost of
any vehicle is equal to the amount of the excess of the
manufacturer's suggested retail price for such vehicle over
such price for a comparable vehicle, to the extent such
amount does not exceed--
``(I) $7,500, if such vehicle has a gross vehicle weight
rating of not more than 14,000 pounds,
``(II) $15,000, if such vehicle has a gross vehicle weight
rating of more than 14,000 pounds but not more than 26,000
pounds, and
``(III) $30,000, if such vehicle has a gross vehicle weight
rating of more than 26,000 pounds.
``(iv) Comparable vehicle.--For purposes of this
subparagraph, the term `comparable vehicle' means, with
respect to any new qualified hybrid motor vehicle, any
vehicle which is powered solely by a gasoline or diesel
internal combustion engine and which is comparable in weight,
size, and use to such vehicle.
``(v) Certification.--A certification described in clause
(i) shall be made by the manufacturer and shall be determined
in accordance with guidance prescribed by the Secretary. Such
guidance shall specify procedures and methods for calculating
fuel economy savings and incremental hybrid costs.
``(3) New qualified hybrid motor vehicle.--For purposes of
this subsection--
[[Page H4086]]
``(A) In general.--The term `new qualified hybrid motor
vehicle' means a motor vehicle--
``(i) which draws propulsion energy from onboard sources of
stored energy which are both--
``(I) an internal combustion or heat engine using
consumable fuel, and
``(II) a rechargeable energy storage system,
``(ii) which, in the case of a vehicle to which paragraph
(2)(A) applies, 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
``(I) in the case of a vehicle having a gross vehicle
weight rating of 6,000 pounds or less, the Bin 5 Tier II
emission standard 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, and
``(II) in the case of a vehicle having a gross vehicle
weight rating of more than 6,000 pounds but not more than
8,500 pounds, the Bin 8 Tier II emission standard which is so
established,
``(iii) which has a maximum available power of at least--
``(I) 4 percent in the case of a vehicle to which paragraph
(2)(A) applies,
``(II) 10 percent in the case of a vehicle which has a
gross vehicle weight rating or more than 8,500 pounds and not
than 14,000 pounds, and
``(III) 15 percent in the case of a vehicle in excess of
14,000 pounds,
``(iv) which, in the case of a vehicle to which paragraph
(2)(B) applies, has an internal combustion or heat engine
which has received a certificate of conformity under the
Clean Air Act as meeting the emission standards set in the
regulations prescribed by the Administrator of the
Environmental Protection Agency for 2004 through 2007 model
year diesel heavy duty engines or ottocycle heavy duty
engines, as applicable,
``(v) the original use of which commences with the
taxpayer,
``(vi) which is acquired for use or lease by the taxpayer
and not for resale, and
``(vii) which is made by a manufacturer.
Such term shall not include any vehicle which is not a
passenger automobile or light truck if such vehicle has a
gross vehicle weight rating of less than 8,500 pounds.
``(B) Consumable fuel.--For purposes of subparagraph
(A)(i)(I), the term `consumable fuel' means any solid,
liquid, or gaseous matter which releases energy when consumed
by an auxiliary power unit.
``(C) Maximum available power.--
``(i) Certain passenger automobiles and light trucks.--In
the case of a vehicle to which paragraph (2)(A) applies, the
term `maximum available power' means the maximum power
available from the rechargeable energy storage system, during
a standard 10 second pulse power or equivalent test, divided
by such maximum power and the SAE net power of the heat
engine.
``(ii) Other motor vehicles.--In the case of a vehicle to
which paragraph (2)(B) applies, the term `maximum available
power' means the maximum power available from the
rechargeable energy storage system, during a standard 10
second pulse power or equivalent test, divided by the
vehicle's total traction power. For purposes of the preceding
sentence, the term `total traction power' means the sum of
the peak power from the rechargeable energy storage system
and the heat engine peak power of the vehicle, except that if
such storage system is the sole means by which the vehicle
can be driven, the total traction power is the peak power of
such storage system.
``(e) New Qualified Alternative Fuel Motor Vehicle
Credit.--
``(1) Allowance of credit.--Except as provided in paragraph
(5), the new qualified alternative fuel motor vehicle credit
determined under this subsection is an amount equal to the
applicable percentage of the incremental cost of any new
qualified alternative fuel motor vehicle placed in service by
the taxpayer during the taxable year.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage with respect to any new
qualified alternative fuel motor vehicle is--
``(A) 40 percent, plus
``(B) 30 percent, if such vehicle--
``(i) has received a certificate of conformity under the
Clean Air Act and meets or exceeds the most stringent
standard available for certification under the Clean Air Act
for that make and model year vehicle (other than a zero
emission standard), or
``(ii) has received an order certifying the vehicle as
meeting the same requirements as vehicles which may be sold
or leased in California and meets or exceeds the most
stringent standard available for certification under the
State laws of California (enacted in accordance with a waiver
granted under section 209(b) of the Clean Air Act) for that
make and model year vehicle (other than a zero emission
standard).
For purposes of the preceding sentence, in the case of any
new qualified alternative fuel motor vehicle which has a
gross vehicle weight rating of more than 14,000 pounds, the
most stringent standard available shall be such standard
available for certification on the date of the enactment of
the Energy Tax Policy Act of 2003.
``(3) Incremental cost.--For purposes of this subsection,
the incremental cost of any new qualified alternative fuel
motor vehicle is equal to the amount of the excess of the
manufacturer's suggested retail price for such vehicle over
such price for a gasoline or diesel fuel motor vehicle of the
same model, to the extent such amount does not exceed--
``(A) $5,000, if such vehicle has a gross vehicle weight
rating of not more than 8,500 pounds,
``(B) $10,000, if such vehicle has a gross vehicle weight
rating of more than 8,500 pounds but not more than 14,000
pounds,
``(C) $25,000, if such vehicle has a gross vehicle weight
rating of more than 14,000 pounds but not more than 26,000
pounds, and
``(D) $40,000, if such vehicle has a gross vehicle weight
rating of more than 26,000 pounds.
``(4) New qualified alternative fuel motor vehicle.--For
purposes of this subsection--
``(A) In general.--The term `new qualified alternative fuel
motor vehicle' means any motor vehicle--
``(i) which is only capable of operating on an alternative
fuel,
``(ii) the original use of which commences with the
taxpayer,
``(iii) which is acquired by the taxpayer for use or lease,
but not for resale, and
``(iv) which is made by a manufacturer.
``(B) Alternative fuel.--The term `alternative fuel' means
compressed natural gas, liquefied natural gas, liquefied
petroleum gas, hydrogen, and any liquid at least 85 percent
of the volume of which consists of methanol.
``(5) Credit for mixed-fuel vehicles.--
``(A) In general.--In the case of a mixed-fuel vehicle
placed in service by the taxpayer during the taxable year,
the credit determined under this subsection is an amount
equal to--
``(i) in the case of a 75/25 mixed-fuel vehicle, 70 percent
of the credit which would have been allowed under this
subsection if such vehicle was a qualified alternative fuel
motor vehicle, and
``(ii) in the case of a 90/10 mixed-fuel vehicle, 90
percent of the credit which would have been allowed under
this subsection if such vehicle was a qualified alternative
fuel motor vehicle.
``(B) Mixed-fuel vehicle.--For purposes of this subsection,
the term `mixed-fuel vehicle' means any motor vehicle
described in subparagraph (C) or (D) of paragraph (3),
which--
``(i) is certified by the manufacturer as being able to
perform efficiently in normal operation on a combination of
an alternative fuel and a petroleum-based fuel,
``(ii) either--
``(I) has received a certificate of conformity under the
Clean Air Act, or
``(II) has received an order certifying the vehicle as
meeting the same requirements as vehicles which may be sold
or leased in California and meets or exceeds the low emission
vehicle standard under section 88.105-94 of title 40, Code of
Federal Regulations, for that make and model year vehicle,
``(iii) the original use of which commences with the
taxpayer,
``(iv) which is acquired by the taxpayer for use or lease,
but not for resale, and
``(v) which is made by a manufacturer.
``(C) 75/25 mixed-fuel vehicle.--For purposes of this
subsection, the term `75/25 mixed-fuel vehicle' means a
mixed-fuel vehicle which operates using at least 75 percent
alternative fuel and not more than 25 percent petroleum-based
fuel.
``(D) 90/10 mixed-fuel vehicle.--For purposes of this
subsection, the term `90/10 mixed-fuel vehicle' means a
mixed-fuel vehicle which operates using at least 90 percent
alternative fuel and not more than 10 percent petroleum-based
fuel.
``(f) Limitation on Number of New Qualified Hybrid and
Advanced Lean-Burn Technology Vehicles Eligible for Credit.--
``(1) In general.--In the case of a qualified vehicle sold
during the phaseout period, only the applicable percentage of
the credit otherwise allowable under subsection (c) or (d)
shall be allowed.
``(2) Phaseout period.--For purposes of this subsection,
the phaseout period is the period beginning with the second
calendar quarter following the calendar quarter which
includes the first date on which the number of qualified
vehicles manufactured by the manufacturer of the vehicle
referred to in paragraph (1) sold for use in the United
States after the date of the enactment of this section is at
least 80,000.
``(3) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage is--
``(A) 50 percent for the first 2 calendar quarters of the
phaseout period,
``(B) 25 percent for the 3d and 4th calendar quarters of
the phaseout period, and
``(C) 0 percent for each calendar quarter thereafter.
``(4) Controlled groups.--
``(A) In general.--For purposes of this subsection, all
persons treated as a single employer under subsection (a) or
(b) of section 52 or subsection (m) or (o) of section 414
shall be treated as a single manufacturer.
``(B) Inclusion of foreign corporations.--For purposes of
subparagraph (A), in applying subsections (a) and (b) of
section 52 to this section, section 1563 shall be applied
without regard to subsection (b)(2)(C) thereof.
``(5) Qualified vehicle.--For purposes of this subsection,
the term `qualified vehicle'
[[Page H4087]]
means any new qualified hybrid motor vehicle and any new
advanced lean burn technology motor vehicle.
``(g) 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 and 30 for the taxable year.
``(h) Other Definitions and Special Rules.--For purposes of
this section--
``(1) Motor vehicle.--The term `motor vehicle' has the
meaning given such term by section 30(c)(2).
``(2) 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.).
``(3) 2002 model year city fuel economy.--
``(A) In general.--The 2002 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:
``(ii) In the case of a light truck:
``(B) Vehicle inertia weight class.--For purposes of
subparagraph (A), 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.).
``(4) Fuel economy.--Fuel economy with respect to any
vehicle shall be measured under rules similar to the rules
under section 4064(c).
``(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 credits
allowable under this section and section 30) shall be reduced
by the amount of credit allowed under subsection (a) for such
vehicle for the taxable year.
``(7) 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).
``(8) 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.
``(9) Election not to 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.
``(10) Business carryovers allowed.--If the credit
allowable under subsection (a) for a taxable year exceeds the
limitation under subsection (g) for such taxable year, such
excess (to the extent of the credit allowable with respect to
property subject to the allowance for depreciation) shall be
allowed as a credit carryback and carryforward under rules
similar to the rules of section 39.
``(11) Interaction with 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 the motor
vehicle safety provisions of sections 30101 through 30169 of
title 49, United States Code.
``(i) 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, after 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.
``(j) Termination.--This section shall not apply to any
property placed in service after--
``(1) in the case of a new qualified alternative fuel motor
vehicle, December 31, 2006,
``(2) in the case of a new advanced lean burn technology
motor vehicle or a new qualified hybrid motor vehicle,
December 31, 2008, and
``(3) in the case of a new qualified fuel cell motor
vehicle, December 31, 2012.''.
(b) Conforming Amendments.--
(1) Section 30(d) (relating to special rules) is amended by
adding at the end the following new paragraphs:
``(5) No double benefit.--No credit shall be allowed under
this section for any motor vehicle for which a credit is also
allowed under section 30B.''.
(2) Section 1016(a), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (31), by striking
the period at the end of paragraph (32) and inserting ``,
and'', and by adding at the end the following:
``(33) to the extent provided in section 30B(h)(5).''.
(3) Section 6501(m) is amended by inserting ``30B(h)(9),''
after ``30(d)(4),''.
(4) The table of sections for subpart B of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 30A the following:
``Sec. 30B. Alternative motor vehicle credit.''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act, in taxable years ending after such
date.
(d) Sticker Information Required at Retail Sale.--
(1) In general.--The Secretary of the Treasury shall issue
regulations under which each qualified vehicle sold at retail
shall display a notice--
(A) that such vehicle is a qualified vehicle, and
(B) that the buyer may not benefit from the credit allowed
under section 30B of the Internal Revenue Code of 1986 if
such buyer has insufficient tax liability.
(2) Qualified vehicle.--For purposes of paragraph (1), the
term ``qualified vehicle'' means a vehicle with respect to
which a credit is allowed under section 30B of the Internal
Revenue Code of 1986.
SEC. 1319. MODIFICATIONS OF DEDUCTION FOR CERTAIN REFUELING
PROPERTY.
(a) In General.--Subsection (f) of section 179A is amended
to read as follows:
``(f) Termination.--This section shall not apply to any
property placed in service--
``(1) in the case of property relating to hydrogen, after
December 31, 2011, and
``(2) in the case of any other property, after December 31,
2008.''.
(b) Incentive for Production of Hydrogen at Qualified
Clean-Fuel Vehicle Refueling Property.--Section 179A(d)
(defining qualified clean-fuel vehicle refueling property) is
amended by adding at the end the following new flush
sentence:
``In the case of clean-burning fuel which is hydrogen
produced from another clean-burning fuel, paragraph (3)(A)
shall be applied by substituting `production, storage, or
dispensing' for `storage or dispensing' both places it
appears.''.
(c) Increase in Location Expenditures.--Section
179A(b)(2)(A)(i) is amended by striking ``$100,000'' and
inserting ``$150,000''.
(d) Nonbusiness Use of Qualified Clean-Fuel Vehicle
Refueling Property.--Section 179A(d) is amended by striking
paragraph (1) and by redesignating paragraphs (2) and (3) as
paragraphs (1) and (2), respectively.
(e) 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.
Subtitle B--Reliability
SEC. 1321. NATURAL GAS GATHERING LINES TREATED AS 7-YEAR
PROPERTY.
(a) In General.--Subparagraph (C) of section 168(e)(3)
(relating to classification of certain property) is amended
by striking ``and'' at the end of clause (i), by
redesignating clause (ii) as clause (iii), and by inserting
after clause (i) the following new clause:
``(ii) any natural gas gathering line, and''.
(b) Natural Gas Gathering Line.--Subsection (i) of section
168, as amended by this Act, is amended by adding 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 for
which a certificate as an interstate transmission pipeline
has been issued by the Federal Energy Regulatory Commission,
``(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)........................................................14''.
(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 placed in service after the date of
the enactment of this Act, in taxable years ending after such
date.
SEC. 1322. 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)........................................................35''.
[[Page H4088]]
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act, in taxable years ending after such
date.
SEC. 1323. ELECTRIC TRANSMISSION PROPERTY TREATED AS 15-YEAR
PROPERTY.
(a) In General.--Subparagraph (E) of section 168(e)(3)
(relating to classification of certain property), as amended
by this Act, 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 the original use of which commences
with the taxpayer after the date of the enactment of this
clause.''.
(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).........................................................30''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act, in taxable years ending after such
date.
SEC. 1324. EXPENSING OF CAPITAL COSTS INCURRED IN COMPLYING
WITH ENVIRONMENTAL PROTECTION AGENCY SULFUR
REGULATIONS.
(a) In General.--Part VI of subchapter B of chapter 1
(relating to itemized deductions for individuals and
corporations), as amended by this Act, is amended by
inserting after section 179B the following new section:
``SEC. 179C. 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 45I(c)(1)) may elect to treat 75 percent
of qualified capital costs (as defined in section 45I(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 December 31, 2002, 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.''.
``(d) Coordination With Other Provisions.--Section 280B
shall not apply to amounts which are treated as expenses
under this section.''.
(b) Conforming Amendments.--
(1) Section 263(a)(1), as amended by this Act, is amended
by striking ``or'' at the end of subparagraph (H), by
striking the period at the end of subparagraph (I) and
inserting ``; or'', and by adding at the end the following
new subparagraph:
``(J) expenditures for which a deduction is allowed under
section 179C.''.
(2) Section 263A(c)(3) is amended by inserting ``179C,''
after ``section''.
(3) Section 312(k)(3)(B), as amended by this Act, is
amended by striking ``or 179B'' each place it appears in the
heading and text and inserting ``179B, or 179C''.
(4) Section 1016(a), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (32), by striking
the period at the end of paragraph (33) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(34) to the extent provided in section 179C(c).''.
(5) Paragraphs (2)(C) and (3)(C) of section 1245(a), as
amended by this Act, are each amended by inserting ``179C,''
after ``179B,''.
(6) The table of sections for part VI of subchapter B of
chapter 1, as amended by this Act, is amended by inserting
after the item relating to section 179B the following new
item:
``Sec. 179C. Deduction for 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 December 31,
2002, in taxable years ending after such date.
SEC. 1325. 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), as amended
by this Act, is amended by adding at the end the following
new section:
``SEC. 45I. 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 December 31, 2002, 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 and Special Rule.--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--
``(A) with respect to which not more than 1,500 individuals
are engaged in the refinery operations of the business on any
day during such taxable year, and
``(B) the average daily domestic refinery run or average
retained production of which for all facilities of the
taxpayer for the 1-year period ending on December 31, 2002,
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
January 1, 2003, and ending on the earlier of 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 or December 31, 2009.
``(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) Special Rule for Determination of Refinery Runs.--For
purposes this section and section 179C(b), in the calculation
of average daily domestic refinery run or retained
production, only refineries which on April 1, 2003, were
refineries of the refiner or a related person (within the
meaning of section 613A(d)(3)), shall be taken into account.
``(f) Certification.--
``(1) Required.--No credit shall be allowed unless, 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 obtains certification from the
Secretary, after 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, after consultation with the Administrator of
the Environmental Protection Agency, to determine that such
qualified capital costs are necessary for compliance with the
applicable EPA regulations.
``(3) Review period.--Any application shall be reviewed and
notice of certification, if applicable, shall be made within
60 days of receipt of such application. In the event the
Secretary does not notify the taxpayer of the results of such
certification within such period, the taxpayer may presume
the certification to be issued until so notified.
``(4) Statute of limitations.--With respect to the credit
allowed under this section--
``(A) the statutory period for the assessment of any
deficiency attributable to such credit shall not expire
before the end of the 3-year period ending on the date that
the review period described in paragraph (3) ends with
respect to the taxpayer, 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.
``(g) Cooperative Organizations.--
``(1) Apportionment of credit.--
[[Page H4089]]
``(A) In general.--In the case of a cooperative
organization described in section 1381(a), any portion of the
credit determined under subsection (a) for the taxable year
may, at the election of the organization, be apportioned
among patrons eligible to share in patronage dividends on the
basis of the quantity or value of business done with or for
such patrons for the taxable year.
``(B) Form and effect of election.--An election under
subparagraph (A) for any taxable year shall be made on a
timely filed return for such year. Such election, once made,
shall be irrevocable for such taxable year.
``(2) Treatment of organizations and patrons.--
``(A) Organizations.--The amount of the credit not
apportioned to patrons pursuant to paragraph (1) shall be
included in the amount determined under subsection (a) for
the taxable year of the organization.
``(B) Patrons.--The amount of the credit apportioned to
patrons pursuant to paragraph (1) shall be included in the
amount determined under subsection (a) for the first taxable
year of each patron ending on or after the last day of the
payment period (as defined in section 1382(d)) for the
taxable year of the organization or, if earlier, for the
taxable year of each patron ending on or after the date on
which the patron receives notice from the cooperative of the
apportionment.
``(3) Special rule.--If the amount of a credit which has
been apportioned to any patron under this subsection is
decreased for any reason--
``(A) such amount shall not increase the tax imposed on
such patron, and
``(B) the tax imposed by this chapter on such organization
shall be increased by such amount.
The increase under subparagraph (B) shall not be treated as
tax imposed by this chapter for purposes of determining the
amount of any credit under this chapter or for purposes of
section 55.''.
(b) Credit Made Part of General Business Credit.--
Subsection (b) of section 38 (relating to general business
credit), as amended by this Act, is amended by striking
``plus'' at the end of paragraph (17), by striking the period
at the end of paragraph (18) and inserting ``, plus'', and by
adding at the end the following new paragraph:
``(19) in the case of a small business refiner, the low
sulfur diesel fuel production credit determined under section
45I(a).''.
(c) Denial of Double Benefit.--Section 280C (relating to
certain expenses for which credits are allowable) is amended
by adding at the end the following new subsection:
``(d) 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 45I(a).''.
(d) Basis Adjustment.--Section 1016(a) (relating to
adjustments to basis), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (33), by striking
the period at the end of paragraph (34) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(35) in the case of a facility with respect to which a
credit was allowed under section 45I, to the extent provided
in section 45I(d).''.
(e) Deduction for Certain Unused Business Credits.--Section
196(c) (defining qualified business credits), as amended by
this Act, is amended by striking ``and'' at the end of
paragraph (12), by striking the period at the end of
paragraph (13) and inserting ``, and'', and by adding after
paragraph (13) the following new paragraph:
``(14) the low sulfur diesel fuel production credit
determined under section 45I(a).''.
(f) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1, as amended by this
Act, is amended by adding at the end the following new item:
``Sec. 45I. Credit for production of low sulfur diesel fuel.''.
(g) Effective Date.--The amendments made by this section
shall apply to expenses paid or incurred after December 31,
2002, in taxable years ending after such date.
SEC. 1326. DETERMINATION OF SMALL REFINER EXCEPTION TO OIL
DEPLETION DEDUCTION.
(a) In General.--Paragraph (4) of section 613A(d) (relating
to limitations on application of subsection (c)) is amended
to read as follows:
``(4) Certain refiners excluded.--If the taxpayer or 1 or
more related persons engages in the refining of crude oil,
subsection (c) shall not apply to the taxpayer for a taxable
year if the average daily refinery runs of the taxpayer and
such persons for the taxable year exceed 67,500 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 ending after the date of the
enactment of this Act.
SEC. 1327. 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 for 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
[[Page H4090]]
``(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.
``(10) Nonapplication of installment sales treatment.--
Section 453 shall not apply to any qualifying electric
transmission transaction with respect to which an election to
apply this subsection is made.''.
(b) Effective Date.--The 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. 1328. 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 (relating to special rules for
nuclear decommissioning costs) 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.--Section
468A(e) (relating to Nuclear Decommissioning Reserve Fund) is
amended by adding at the end the following new paragraph:
``(8) Treatment of fund transfers.--
``(A) In general.--If, in connection with the transfer of
the taxpayer's interest in a nuclear power plant, the
taxpayer transfers the Fund with respect to such power plant
to the transferee of such interest and the transferee elects
to continue the application of this section to such Fund--
``(i) the transfer of such Fund shall not cause such Fund
to be disqualified from the application of this section, and
``(ii) no amount shall be treated as distributed from such
Fund, or be includable in gross income, by reason of such
transfer.
``(B) Special rules if transferor is tax-exempt entity.--
``(i) In general.--If--
``(I) a person exempt from taxation under this title
transfers an interest in a nuclear power plant,
``(II) such person has set aside amounts for nuclear
decommissioning which are transferred to the transferee of
the interest, and
``(III) the transferee elects the application of this
subparagraph no later than the due date (including
extensions) of its return of tax for the taxable year in
which the transfer occurs,
the amounts so set aside shall be treated as if contributed
by such person to a Fund immediately before the transfer and
then transferred in the Fund to the transferee.
``(ii) Limitation.--The amount treated as transferred to a
Fund under clause (i) shall not exceed the amount which bears
the same ratio to the present value of the nuclear
decommissioning costs of the transferor with respect to the
nuclear power plant as the number of years the nuclear power
plant has been in service bears to the estimated useful life
of such power plant.
``(iii) Basis.--The transferee's basis in any asset treated
as transferred in the Fund shall be the same as the adjusted
basis of such asset in the hands of the transferor.
``(iv) Ruling amount required.--This subparagraph shall not
apply to any transfer unless the transferee requests from the
Secretary a schedule of ruling amounts.
``(v) Election disregarded.--An election under this
subparagraph shall be disregarded in determining the Federal
income tax of the transferor.''.
(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 not more than an amount equal to the present value of
the portion of the total nuclear decommissioning costs with
respect to such nuclear power plant previously excluded for
such nuclear power plant under subsection (d)(2)(A) as in
effect immediately before the date of the enactment of the
Energy Tax Policy Act of 2004.
``(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 to the taxpayer (or a predecessor) or a
corresponding amount was not included in gross income of the
taxpayer (or a predecessor). 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 not exceed 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) (defining ruling
amount) 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) Technical Amendments.--Section 468A(e)(2) (relating to
taxation of Fund) is amended--
(1) by striking ``rate set forth in subparagraph (B)'' in
subparagraph (A) and inserting ``rate of 20 percent'',
(2) by striking subparagraph (B), and
(3) by redesignating subparagraphs (C) and (D) as
subparagraphs (B) and (C), respectively.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2003.
SEC. 1329. 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 electric energy
transmission services or ancillary services if such services
are provided on a nondiscriminatory open access basis under
an open access transmission tariff approved or accepted by
FERC or under an independent transmission provider agreement
approved or accepted by FERC (other than income received or
accrued directly or indirectly from a member),
``(iii) from the provision or sale of electric energy
distribution services or ancillary services if such services
are provided on a nondiscriminatory open access basis to
distribute electric energy not owned by the mutual or
electric cooperative company--
``(I) to end-users who are served by distribution
facilities not owned by such company or any of its members
(other than income received or accrued directly or indirectly
from a member), or
``(II) generated by a generation facility not owned or
leased by such company or any of its members and which is
directly connected to distribution facilities owned by such
company or any of its members (other than income received or
accrued directly or indirectly from a member),
``(iv) from any nuclear decommissioning transaction, or
``(v) 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--
[[Page H4091]]
``(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 mutual or cooperative
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 first year that the mutual or cooperative
electric company offers nondiscriminatory open access or the
calendar year which includes the date of the enactment of
this subparagraph, if later, at the election of such company.
``(viii) A company shall not fail to be treated as a mutual
or cooperative electric 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. 1330. 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 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) Exception for Qualified Electric and Natural Gas Supply
Contracts.--Section
[[Page H4092]]
141(d) is amended by adding at the end the following new
paragraph:
``(7) Exception for qualified electric and natural gas
supply contracts.--The term `nongovernmental output property'
shall not include any contract for the prepayment of
electricity or natural gas which is not investment property
under section 148(b)(2).''.
(d) Effective Date.--The amendments made by this section
shall apply to obligations issued after the date of the
enactment of this Act.
Subtitle C--Production
PART I--OIL AND GAS PROVISIONS
SEC. 1341. OIL AND GAS FROM MARGINAL WELLS.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 (relating to business credits), as amended by this
Act, is amended by adding at the end the following:
``SEC. 45J. 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 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 45K(d)(2)(C), and
``(ii) in the case of qualified natural gas production, the
Secretary's estimate of the annual average wellhead price per
1,000 cubic feet for all domestic natural gas.
``(c) Qualified Crude Oil and Natural Gas Production.--For
purposes of this section--
``(1) In general.--The terms `qualified crude oil
production' and `qualified natural gas production' mean
domestic crude oil or natural gas which is produced from a
qualified marginal well.
``(2) Limitation on amount of production which may
qualify.--
``(A) In general.--Crude oil or natural gas produced during
any taxable year from any well shall not be treated as
qualified crude oil production or qualified natural gas
production to the extent production from the well during the
taxable year exceeds 1,095 barrels or barrel-of-oil
equivalents (as defined in section 45K(d)(5)).
``(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-of-oil equivalents (as so defined), 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).
``(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 45K for the
taxable year, no credit shall be allowable under this section
unless the taxpayer elects not to claim the credit under
section 45K with respect to the well.''.
(b) Credit Treated as Business Credit.--Section 38(b), as
amended by this Act, is amended by striking ``plus'' at the
end of paragraph (18), by striking the period at the end of
paragraph (19) and inserting ``, plus'', and by adding at the
end the following:
``(20) the marginal oil and gas well production credit
determined under section 45J(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) 5-year carryback for marginal oil and gas well
production credit.--Notwithstanding subsection (d), 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 `5
taxable years' for `1 taxable years' in subparagraph (A)
thereof, and
``(C) paragraph (2) shall be applied--
``(i) by substituting `25 taxable years' for `21 taxable
years' in subparagraph (A) thereof, and
``(ii) by substituting `24 taxable years' for `20 taxable
years' in subparagraph (B) thereof.''.
(d) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1, as amended by this
Act, is amended by adding at the end the following:
``Sec. 45J. Credit for producing oil and gas from marginal wells.''.
(e) Effective Date.--The amendments made by this section
shall apply to production in taxable years beginning after
December 31, 2003.
SEC. 1342. 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, 2005,
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 ``2005''.
(c) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2003.
SEC. 1343. 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 amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after the date of the enactment of this Act.
[[Page H4093]]
SEC. 1344. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL
EXPENDITURES.
(a) In General.--Section 167 (relating to depreciation), as
amended by this Act, 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) Conforming Amendment.--Section 263A(c)(3) is amended by
inserting ``167(h), 167(i),'' after ``under section''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after the date of the enactment of this Act.
SEC. 1345. EXTENSION AND MODIFICATION OF CREDIT FOR PRODUCING
FUEL FROM A NONCONVENTIONAL SOURCE.
(a) In General.--Section 29 (relating to credit for
producing fuel from a nonconventional source) is amended by
adding at the end the following new subsection:
``(h) Extension for Other Facilities.--Notwithstanding
subsection (f)--
``(1) New oil and gas wells and facilities.--In the case of
a well or facility for producing qualified fuels described in
subparagraph (A) or (B) of subsection (c)(1) which was
drilled or placed in service after the date of the enactment
of this subsection and before January 1, 2007, this section
shall apply with respect to such fuels produced at such well
or facility and sold during the period--
``(A) beginning on the later of January 1, 2004, or the
date that such well is drilled or such facility is placed in
service, and
``(B) ending on the earlier of the date which is 4 years
after the date such period began or December 31, 2009.
``(2) Old oil and gas wells and facilities.--In the case of
a well or facility producing qualified fuels described in
subparagraph (A) or (B)(i) of subsection (c)(1) or a facility
producing natural gas and byproducts by coal gasification
from lignite, subsection (f)(2) shall be applied by
substituting `2008' for `2003' with respect to wells and
facilities described in subsection (f)(1) with respect to
such fuels.
``(3) 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 which was placed in service
after June 30, 1998, and before January 1, 2007, this section
shall apply to fuel produced at such facility and sold during
the period--
``(i) beginning on the later of January 1, 2004, or the
date that such facility is placed in service, and
``(ii) ending on the earlier of the date which is 4 years
after the date such period began or December 31, 2009.
``(B) Reduction of credit for certain landfill
facilities.--In the case of a facility to which subparagraph
(A) 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.
``(4) Facilities producing fuels from agricultural and
animal waste.--
``(A) In general.--In the case of any facility for
producing liquid, gaseous, or solid fuels from qualified
agricultural and animal wastes, including such fuels when
used as feedstocks, which is placed in service after the date
of the enactment of this subsection and before January 1,
2007, this section shall apply with respect to fuel produced
at such facility and sold during the period--
``(i) beginning on the later of January 1, 2004, or the
date that such facility is placed in service, and
``(ii) ending on the earlier of the date which is 4 years
after the date such period began or December 31, 2009.
``(B) Qualified agricultural and animal waste.--For
purposes of this paragraph, the term `qualified agricultural
and animal waste' means agriculture and animal waste,
including by-products, packaging, and any materials
associated with the processing, feeding, selling,
transporting, or disposal of agricultural or animal products
or wastes.
``(5) Facilities producing refined coal.--
``(A) In general.--In the case of a facility described in
subparagraph (C) for producing refined coal which is placed
in service after the date of the enactment of this subsection
and before January 1, 2008, this section shall apply with
respect to fuel produced at such facility and sold before the
close of the 5-year period beginning on the date such
facility is placed in service.
``(B) Refined coal.--For purposes of this paragraph, the
term `refined coal' means a fuel which is a liquid, gaseous,
or solid synthetic fuel produced from coal (including
lignite) or high carbon fly ash, including such fuel used as
a feedstock.
``(C) Covered facilities.--
``(i) In general.--A facility is described in this
subparagraph if such facility produces refined coal using a
technology which the taxpayer certifies (in such manner as
the Secretary may prescribe) results in--
``(I) a qualified emission reduction, and
``(II) a qualified enhanced value.
``(ii) Qualified emission reduction.--For purposes of this
subparagraph, the term `qualified emission reduction' means a
reduction of at least 20 percent of the emissions of nitrogen
oxide and either sulfur dioxide or mercury released when
burning the refined coal (excluding any dilution caused by
materials combined or added during the production process),
as compared to the emissions released when burning the
feedstock coal or comparable coal predominantly available in
the marketplace as of January 1, 2003.
``(iii) Qualified enhanced value.--For purposes of this
subparagraph, the term `qualified enhanced value' means an
increase of at least 50 percent in the market value of the
refined coal (excluding any increase caused by materials
combined or added during the production process), as compared
to the value of the feedstock coal.
``(iv) Advanced clean coal technology units excluded.--A
facility described in this subparagraph shall not include any
advanced clean coal technology unit (as defined in section
48A(e)).
``(6) Coalmine gas.--
``(A) In general.--This section shall apply to coalmine
gas--
``(i) captured or extracted by the taxpayer during the
period beginning on the day after the date of the enactment
of this subsection and ending on December 31, 2006, and
``(ii) utilized as a fuel source or sold by or on behalf of
the taxpayer to an unrelated person during such period.
``(B) Coalmine gas.--For purposes of this paragraph, the
term `coalmine gas' means any methane gas which is--
``(i) liberated during or as a result of coal mining
operations, or
``(ii) extracted up to 10 years in advance of coal mining
operations as part of a specific plan to mine a coal deposit.
``(C) Special rule for advanced extraction.--In the case of
coalmine gas which is captured in advance of coal mining
operations, the credit under subsection (a) shall be allowed
only after the date the coal extraction occurs in the
immediate area where the coalmine gas was removed.
``(D) Noncompliance with pollution laws.--This paragraph
shall not apply to the capture or extraction of coalmine gas
from coal mining operations with respect to any period in
which such coal mining operations are not in compliance with
applicable Federal pollution prevention, control, and permit
requirements.
``(7) Coke and coke gas.--In the case of a facility for
producing coke or coke gas which was placed in service before
January 1, 1993, or after June 30, 1998, and before January
1, 2007, this section shall apply with respect to coke and
coke gas produced in such facility and sold during the during
the period--
``(A) beginning on the later of January 1, 2004, or the
date that such facility is placed in service, and
``(B) ending on the earlier of the date which is 4 years
after the date such period began or December 31, 2009.
``(8) Special rules.--In determining the amount of credit
allowable under this section solely by reason of this
subsection--
``(A) Fuels treated as qualified fuels.--Any fuel described
in paragraph (3), (4), (5), or (6) shall be treated as a
qualified fuel for purposes of this section.
``(B) 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 property or
facility shall not exceed an average barrel-of-oil equivalent
of 200,000 cubic feet of natural gas per day. Days before the
date the property or facility is placed in service shall not
be taken into account in determining such average.
``(C) Extension period to commence with unadjusted credit
amount and new phaseout adjustment.--For purposes of applying
subsection (b)(2), in the case of fuels sold after 2003--
``(i) paragraphs (1)(A) and (2) of subsection (b) shall be
applied by substituting `$35.00' for `$23.50', and
``(ii) subparagraph (B) of subsection (d)(2) shall be
applied by substituting `2002' for `1979'.
``(D) Denial of double benefit.--This subsection shall not
apply to any facility producing qualified fuels for which a
credit was allowed under this section for the taxable year or
any preceding taxable year by reason of subsection (g).''.
(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 amended by this Act, as section
45K and by moving section 45K (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 (19), by
striking the period at the end of paragraph (20) and
inserting ``, plus'', and by adding at the end the following:
[[Page H4094]]
``(21) the nonconventional source production credit
determined under section 45K(a).''.
(3) Conforming amendments.--
(A) Section 30(b)(2)(A), as redesignated by section
1317(a), is amended by striking ``sections 27 and 29'' and
inserting ``section 27''.
(B) Sections 43(b)(2) and 613A(c)(6)(C) are each amended by
striking ``section 29(d)(2)(C)'' and inserting ``section
45K(d)(2)(C)''.
(C) Section 45K(a), as 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''.
(D) Section 45K(b), as so redesignated, is amended by
striking paragraph (6).
(E) Section 53(d)(1)(B)(iii) is amended by striking ``under
section 29'' and all that follows through ``or not allowed''.
(F) Section 55(c)(2) is amended by striking ``29(b)(6),''.
(G) 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).
(H) 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''.
(I) 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.
(J) The table of sections for subpart D of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by inserting after the item relating to section 45J the
following new item:
``Sec. 45K. Credit for producing fuel from a nonconventional source.''.
(c) Determinations Under Natural Gas Policy Act of 1978.--
Subparagraph (A) of section 45K(c)(2), as redesignated by
subsection (b)(1), is amended--
(1) by inserting ``by the Secretary, after consultation
with the Federal Energy Regulatory Commission,'' after
``shall be made'', and
(2) by inserting ``(as in effect before the repeal of such
section)'' after ``1978''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to fuel produced
and sold after December 31, 2003, in taxable years ending
after such date.
(2) Determinations under natural gas policy act of 1978.--
The amendments made by subsection (c) shall apply as if
included in the provisions repealing section 503 of the
Natural Gas Policy Act of 1978.
PART II--ALTERNATIVE MINIMUM TAX PROVISIONS
SEC. 1346. NEW NONREFUNDABLE PERSONAL CREDITS ALLOWED AGAINST
REGULAR AND MINIMUM TAXES.
(a) In General.--
(1) Section 25c.--Section 25C(b), as added by section 1301
of this Act, is amended by adding at the end the following
new paragraph:
``(3) Limitation based on amount of tax.--The credit
allowed under subsection (a) for the taxable year shall not
exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this subpart
(other than this section and section 25D) and section 27 for
the taxable year.''.
(2) Section 25d.--Section 25D(b), as added by section 1304
of this Act, 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 and 25D'' after ``this section''.
(2) Section 24(b)(3)(B) is amended by striking ``and 25B''
and inserting ``, 25B, 25C, and 25D''.
(3) Section 25(e)(1)(C) is amended by inserting ``25C, and
25D'' after ``25B,''.
(4) Section 25B(g)(2) is amended by striking ``section 23''
and inserting ``sections 23, 25C, and 25D''.
(5) Section 26(a)(1) is amended by striking ``and 25B'' and
inserting ``25B, 25C, and 25D''.
(6) Section 904(h) is amended by striking ``and 25B'' and
inserting ``25B, 25C, and 25D''.
(7) Section 1400C(d) is amended by striking ``and 25B'' and
inserting ``25B, 25C, and 25D''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2003.
SEC. 1347. 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, 45I, and 45J. For
taxable years beginning after December 31, 2003, such term
includes the credit determined under section 40. For taxable
years beginning after December 31, 2003, and before January
1, 2006, such term includes the credit determined under
section 43.
``(C) Special rule for electricity produced from qualified
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 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.--
(1) Paragraph (2)(A)(ii)(II) of section 38(c) is amended by
striking ``or'' and inserting a comma and by inserting ``,
and the specified energy credits'' after ``employee credit''.
(2) Paragraph (3)(A)(ii)(II) of section 38(c) is amended by
inserting ``and 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. 1348. 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.
PART III--CLEAN COAL INCENTIVES
SEC. 1351. CREDIT FOR CLEAN COAL TECHNOLOGY UNITS.
(a) In General.--Subpart E of part IV of subchapter A of
chapter 1 (relating to rules for computing investment credit)
is amended by inserting after section 48 the following new
section:
``SEC. 48A. CLEAN COAL TECHNOLOGY CREDIT.
``(a) In General.--For purposes of section 46, the clean
coal technology credit for any taxable year is an amount
equal to the applicable percentage of the basis of qualified
clean coal property placed in service during such year.
``(b) Applicable Percentage.--For purposes of this section,
the applicable percentage is--
``(1) 15 percent in the case of property placed in service
in connection with any basic clean coal technology unit, and
``(2) 17.5 percent in the case of property placed in
service in connection with any advanced clean coal technology
unit.
``(c) Qualified Clean Coal Property.--For purposes of this
section--
``(1) In general.--The term `qualified clean coal property'
means section 1245 property--
``(A) which is installed in connection with--
``(i) an existing coal-based unit as part of the conversion
of such unit to any basic or advanced clean coal technology
unit, or
``(ii) any new advanced clean coal technology unit,
``(B) which is placed in service after December 31, 2003,
and before--
``(i) in the case of property to which subsection (b)(1)
applies, January 1, 2014, and
``(ii) in the case of property to which subsection (b)(2)
applies, January 1, 2017 (January 1, 2013, in the case of
property installed in connection with an eligible advanced
pulverized coal or atmospheric fluidized bed combustion
technology unit),
``(C) the original use of which commences with the
taxpayer, and
``(D) which has a useful life of not less than 4 years.
``(2) Existing coal-based unit.--The term `existing coal-
based unit' means a coal-based electricity generating steam
generator-turbine unit--
``(A) which is not a basic or advanced clean coal
technology unit, and
``(B) which is in operation on or before January 1, 2004.
In the case of a unit being converted to a basic clean coal
technology unit, such term shall not include a unit having a
nameplate capacity rating of more than 300 megawatts.
``(3) New advanced clean coal technology unit.--The term
`new advanced clean coal technology unit' means any advanced
clean coal technology unit which is placed in
[[Page H4095]]
service after December 31, 2003, and the original use of
which commences with the taxpayer.
``(d) Basic Clean Coal Technology Unit.--For purposes of
this section--
``(1) In general.--The term `basic clean coal technology
unit' means a unit which--
``(A) uses clean coal technology (including advanced
pulverized coal or atmospheric fluidized bed combustion,
pressurized fluidized bed combustion, and integrated
gasification combined cycle) for the production of
electricity,
``(B) uses an input of at least 75 percent coal to produce
at least 50 percent of its thermal output as electricity,
``(C) has a design net heat rate of at least 500 less than
that of the existing coal-based unit prior to its conversion,
``(D) has a maximum design net heat rate of not more than
9,500, and
``(E) meets the pollution control requirements of paragraph
(2).
Such term shall not include an advanced clean coal technology
unit.
``(2) Pollution control requirements.--
``(A) In general.--A unit meets the requirements of this
paragraph if--
``(i) its emissions of sulfur dioxide, nitrogen oxide, or
particulates meet the lower of the emission levels for each
such emission specified in--
``(I) subparagraph (B), or
``(II) the new source performance standards of the Clean
Air Act (42 U.S.C. 7411) which are in effect for the category
of source at the time of the conversion of the unit, and
``(ii) its emissions do not exceed any relevant emission
level specified by regulation pursuant to the hazardous air
pollutant requirements of the Clean Air Act (42 U.S.C. 7412)
in effect at the time of the conversion of the unit.
``(B) Specific levels.--The levels specified in this
subparagraph are--
``(i) in the case of sulfur dioxide emissions, 50 percent
of the sulfur dioxide emission levels specified in the new
source performance standards of the Clean Air Act (42 U.S.C.
7411) in effect on the date of the enactment of this section
for the category of source,
``(ii) in the case of nitrogen oxide emissions--
``(I) 0.1 pound per million Btu of heat input if the unit
is not a cyclone-fired boiler, and
``(II) if the unit is a cyclone-fired boiler, 15 percent of
the uncontrolled nitrogen oxide emissions from such boilers,
and
``(iii) in the case of particulate emissions, 0.02 pound
per million Btu of heat input.
``(3) Design net heat rate.--The design net heat rate with
respect to any unit, measured in Btu per kilowatt hour
(HHV)--
``(A) shall be based on the design annual heat input to and
the design annual net electrical power, fuels, and chemicals
output from such unit (determined without regard to such
unit's co-generation of steam),
``(B) shall be adjusted for the heat content of the design
coal to be used by the unit if it is less than 12,000 Btu per
pound according to the following formula:
``(C) shall be corrected for the site reference conditions
of--
``(i) elevation above sea level of 500 feet,
``(ii) air pressure of 14.4 pounds per square inch absolute
(psia),
``(iii) temperature, dry bulb of 63 deg.F,
``(iv) temperature, wet bulb of 54 deg.F, and
``(v) relative humidity of 55 percent, and
``(D) if carbon capture controls have been installed with
respect to any existing coal-based unit and such controls
remove at least 50 percent of the unit's carbon dioxide
emissions, shall be adjusted up to the design heat rate level
which would have resulted without the installation of such
controls.
``(4) HHV.--The term `HHV' means higher heating value.
``(e) Advanced Clean Coal Technology Unit.--For purposes of
this section--
``(1) In general.--The term `advanced clean coal technology
unit' means any electricity generating unit of the taxpayer--
``(A) which is--
``(i) an eligible advanced pulverized coal or atmospheric
fluidized bed combustion technology unit,
``(ii) an eligible pressurized fluidized bed combustion
technology unit,
``(iii) an eligible integrated gasification combined cycle
technology unit, or
``(iv) an eligible other technology unit,
``(B) which uses an input of at least 75 percent coal to
produce at least 50 percent of its thermal output as
electricity, and
``(C) which meets the carbon emission rate requirements of
paragraph (6).
``(2) Eligible advanced pulverized coal or atmospheric
fluidized bed combustion technology unit.--The term `eligible
advanced pulverized coal or atmospheric fluidized bed
combustion technology unit' means a clean coal technology
unit using advanced pulverized coal or atmospheric fluidized
bed combustion technology which has a design net heat rate of
not more than 8,500 (8,900 in the case of units placed in
service before 2009).
``(3) Eligible pressurized fluidized bed combustion
technology unit.--The term `eligible pressurized fluidized
bed combustion technology unit' means a clean coal technology
unit using pressurized fluidized bed combustion technology
which has a design net heat rate of not more than 7,720
(8,900 in the case of units placed in service before 2009,
and 8,500 in the case of units placed in service after 2008
and before 2013).
``(4) Eligible integrated gasification combined cycle
technology unit.--The term `eligible integrated gasification
combined cycle technology unit' means a clean coal technology
unit using integrated gasification combined cycle technology,
with or without fuel or chemical co-production--
``(A) which has a design net heat rate of not more than
7,720 (8,900 in the case of units placed in service before
2009, and 8,500 in the case of units placed in service after
2008 and before 2013), and
``(B) has a net thermal efficiency (HHV) using coal with
fuel or chemical co-production of not less than 44.2 percent
(38.4 percent in the case of units placed in service before
2009, and 40.2 percent in the case of units placed in service
after 2008 and before 2013).
``(5) Eligible other technology unit.--The term `eligible
other technology unit' means a clean coal technology unit--
``(A) which uses any other technology for the production of
electricity, and
``(B) which has a design net heat rate which meets the
requirement of paragraph (2).
``(6) Carbon emission rate requirements.--
``(A) In general.--Except as provided in subparagraph (B),
a unit meets the requirements of this paragraph if--
``(i) in the case of a unit using design coal with a heat
content of not more than 9,000 Btu per pound, the carbon
emission rate is less than 0.60 pound of carbon per kilowatt
hour, and
``(ii) in the case of a unit using design coal with a heat
content of more than 9,000 Btu per pound, the carbon emission
rate is less than 0.54 pound of carbon per kilowatt hour.
``(B) Eligible other technology unit.--In the case of an
eligible other technology unit, subparagraph (A) shall be
applied by substituting `0.51' and `0.459' for `0.60' and
`0.54', respectively.
``(f) National Limitations on Credit.--For purposes of this
section--
``(1) In general.--The amount of credit which would (but
for this subsection) be allowed with respect to any property
shall not exceed the amount which bears the same ratio to
such amount of credit as--
``(A) the national megawatt capacity limitation allocated
to the taxpayer with respect to the basic or advanced clean
coal technology unit to which such property relates, bears to
``(B) the total megawatt capacity of such unit.
The capacity described in subparagraph (B) shall be the
reasonably expected capacity after the installation of the
property.
``(2) Amount of national limitation.--
``(A) Advanced units.--The national megawatt capacity
limitation for advanced clean coal technology units shall be
6,000 megawatts. Of such amount, the national megawatt
capacity limitation is--
``(i) for advanced clean coal technology units using
advanced pulverized coal or atmospheric fluidized bed
combustion technology, not more than 1,500 megawatts (not
more than 750 megawatts in the case of units placed in
service before 2009),
``(ii) for such units using pressurized fluidized bed
combustion technology, not more than 750 megawatts (not more
than 375 megawatts in the case of units placed in service
before 2009),
``(iii) for such units using integrated gasification
combined cycle technology, with or without fuel or chemical
co-production, not more than 3,000 megawatts (not more than
1,250 megawatts in the case of units placed in service before
2009), and
``(iv) for such units using other technology for the
production of electricity, not more than 750 megawatts (not
more than 375 megawatts in the case of units placed in
service before 2009).
``(B) Basic units.--The national megawatt capacity
limitation for basic clean coal technology units shall be
4,000 megawatts.
``(3) Allocation of limitation.--The Secretary shall
allocate the national megawatt capacity limitations in such
manner as the Secretary may prescribe, except that the
Secretary may not allocate more than 300 megawatts to any
basic clean coal technology unit.
``(4) Regulations.--Not later than 6 months after the date
of the enactment of this section, the Secretary shall
prescribe such regulations as may be necessary or appropriate
to carry out the purposes of this subsection. Such
regulations shall provide a certification process under which
the Secretary, after consultation with the Secretary of
Energy, shall approve and allocate the national megawatt
capacity limitations--
``(A) to encourage that units with the highest thermal
efficiencies, when adjusted for the heat content of the
design coal and site reference conditions, and environmental
performance, be placed in service as soon as possible, and
``(B) to allocate capacity to taxpayers which have a
definite and credible plan for placing into commercial
operation a basic or advanced clean coal technology unit,
including--
``(i) a site,
``(ii) contractual commitments for procurement and
construction or, in the case of regulated utilities, the
agreement of the State utility commission,
``(iii) filings for all necessary preconstruction
approvals,
``(iv) a demonstrated record of having successfully
completed comparable projects on a timely basis, and
``(v) such other factors which the Secretary determines are
appropriate.
[[Page H4096]]
``(g) Special Rules.--For purposes of this section--
``(1) Certain progress expenditure rules made applicable.--
Rules similar to the rules of subsections (c)(4) and (d) of
section 46 (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of this section.
``(2) Property financed by subsidized financing or
industrial development bonds.--Rules similar to the rules of
section 45(b)(3) shall apply for purposes of this section.
``(3) Noncompliance with pollution laws.--The terms `basic
clean coal technology unit' and `advanced clean coal
technology unit' shall not include any unit which is not in
compliance with the applicable Federal pollution prevention,
control, and permit requirements at any time during the
period applicable under subsection (c)(1)(B).
``(4) Denial of credit for units receiving certain other
federal assistance.--The terms `basic clean coal technology
unit' and `advanced clean coal technology unit' shall not
include any unit if, at any time during the period applicable
under subsection (c)(1)(B), any funding is provided to such
unit under the Clean Coal Technology Program, the Power Plant
Improvement Initiative, or the Clean Coal Power Initiative
administered by the Secretary of Energy.
``(5) Coordination with other credits.--This section shall
not apply to any property with respect to which the
rehabilitation credit under section 47, the energy credit
under section 48, or any credit under section 45 or 45K is
allowable unless the taxpayer elects to waive the application
of such credit to such property.''.
(b) Special Recapture Rules.--
(1) Subsection (a) of section 50 is amended by
redesignating paragraph (3), (4), and (5) as paragraphs (4),
(5), and (6), respectively, and by inserting after paragraph
(2) the following new paragraph:
``(3) Special rules for clean coal technology credits.--
``(A) Early disposition, etc.--If, during any taxable year,
qualified clean coal property is disposed of, or otherwise
ceases to be part of a basic or advanced clean coal
technology unit with respect to the taxpayer, before the
close of the recovery period under section 168 for such unit,
then the tax under this chapter for such taxable year shall
be increased by--
``(i) the aggregate decrease in the credits allowed under
section 38 for all prior taxable years which would have
resulted solely from reducing to zero any credit determined
under section 48A with respect to such property, multiplied
by
``(ii) a fraction--
``(I) the numerator of which is the number of years in the
period beginning with the year of such disposition or
cessation and ending with the last year of such recovery
period, and
``(II) the denominator of which is the total number of
years in such recovery period.
``(B) Property ceases to qualify for progress
expenditures.--Rules similar to the rules of this paragraph
shall apply in cases where qualified progress expenditures
were taken into account under the rules referred to in
section 48A(g)(1).
``(C) Increased recapture in certain cases.--The fraction
in subparagraph (A)(ii) shall be 1 in any case in which the
property ceases to be a basic or advanced clean coal
technology unit by reason of paragraph (3), (4), or (5) of
section 48A(g).
``(D) Coordination with other recapture rules.--Paragraphs
(1) and (2) shall not apply to qualified clean coal property.
``(E) Definitions.--Terms used in this section which are
also used in section 48A shall have the meanings given to
such terms in section 48A.''.
(2) Paragraph (4) of section 50(a), as redesignated by
paragraph (1), is amended by striking ``or (2)'' and
inserting ``, (2), or (3)''.
(3) Paragraph (5) of section 50(a), as so redesignated, is
amended by striking ``and (2)'' and inserting ``, (2), and
(3)''.
(4) Section 1371(d)(1) is amended by striking ``section
50(a)(4)'' and inserting ``section 50(a)(5)''.
(c) Technical Amendments.--
(1) Section 46 (relating to amount of credit) is amended by
striking ``and'' at the end of paragraph (2), by striking the
period at the end of paragraph (3) and inserting ``, and'',
and by adding at the end the following new paragraph:
``(4) the clean coal technology credit.''.
(2) Section 49(a)(1)(C) is amended by striking ``and'' at
the end of clause (ii), by striking the period at the end of
clause (iii) and inserting ``, and'', and by adding at the
end the following new clause:
``(iv) the portion of the basis of any qualified clean coal
property (as defined by section 48A(c)).''.
(3) The table of sections for subpart E of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 48 the following new item:
``Sec. 48A. Clean coal technology credit.''.
(d) Effective Date.--The amendments made by this section
shall apply to periods 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).
SEC. 1352. EXPANSION OF AMORTIZATION FOR CERTAIN POLLUTION
CONTROL FACILITIES.
(a) Eligibility of Post-1975 Pollution Control
Facilities.--
(1) In general.--Paragraph (1) of section 169(d) is amended
by striking ``before January 1, 1976,'' and by striking ``a
new identifiable'' and inserting ``an identifiable''.
(2) Identifiable treatment facility.--Paragraph (4) of
section 169(d) is amended to read as follows:
``(4) Identifiable treatment facility.--For purposes of
paragraph (1), the term `identifiable treatment facility'
includes only tangible property (not including a building and
its structural components, other than a building which is
exclusively a treatment facility) which is of a character
subject to the allowance for depreciation provided in section
167, which is identifiable as a treatment facility, and which
is property--
``(A) the construction, reconstruction, or erection of
which is completed by the taxpayer, or
``(B) the original use of the property commences with the
taxpayer.''.
(3) Technical amendment.--Section 169(d)(3) is amended by
striking ``Health, Education, and Welfare'' and inserting
``Health and Human Services''.
(b) Coordination With Section 48A Investment Credit.--
Section 169 is amended by redesignating subsections (e)
though (j) as subsection (f) through (k), respectively, and
by inserting after subsection (d) the following new
subsection:
``(e) Coordination With Section 48A Investment Credit.--
``(1) In general.--In the case of any treatment facility
used in connection with a plant or other property to which an
amount is allocated under section 48A(f), this section shall
apply only if such plant or other property was in operation
before January 1, 1976.
``(2) 36-month amortization with respect to pre-1976 plants
not allocated credit.--References in this section to 60
months shall be treated as references to 36 months in the
case of treatment facilities used in connection with a plant
or other property in operation before January 1, 1976, if no
allocation is made under section 48A(f) with respect to such
plant or property.''.
(c) Effective Date.--The amendments made by this section
shall apply to facilities placed in service after the date of
the enactment of this Act.
SEC. 1353. 5-YEAR RECOVERY PERIOD FOR ELIGIBLE INTEGRATED
GASIFICATION COMBINED CYCLE TECHNOLOGY UNIT
ELIGIBLE FOR CREDIT.
(a) In General.--Subparagraph (B) of section 168(e)(3)
(defining 5-year property) is amended by striking ``and'' at
the end of clause (v), by striking the period at the end of
clause (vi) and inserting ``, and'', and by inserting after
clause (vi) the following new clause:
``(vii) any section 1245 property which is part of an
eligible integrated gasification combined cycle technology
unit (as defined in section 48A(e)(4)) for which an
allocation is made under section 48A(f).''.
(b) Alternative System.--The table contained in section
168(g)(3)(B) (relating to special rule for certain property
assigned to classes) is amended by inserting after the item
relating to subparagraph (B)(iii) the following new item:
``(B) (vii).......................................................20''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after the date of
the enactment of this Act in taxable years ending after such
date.
PART IV--HIGH VOLUME NATURAL GAS PROVISIONS
SEC. 1355. HIGH VOLUME NATURAL GAS PIPE TREATED AS 7-YEAR
PROPERTY.
(a) In General.--Section 168(e)(3)(C) (defining 7-year
property), as amended by this Act, is amended by striking
``and'' at the end of clause (ii), by redesignating clause
(iii) as clause (iv), and by inserting after clause (ii) the
following new clause:
``(iii) any high volume natural gas pipe the original use
of which commences with the taxpayer after the date of the
enactment of this clause, and''.
(b) High Volume Natural Gas Pipe.--Section 168(i) (relating
to definitions and special rules), as amended by this Act, is
amended by adding at the end the following new paragraph:
``(17) High volume natural gas pipe.--The term `high volume
natural gas pipe' means--
``(A) pipe which has an interior diameter of at least 42
inches and which is part of a natural gas pipeline system,
and
``(B) any related equipment and appurtenances used in
connection with such pipe.''.
(c) Alternative System.--The table contained in section
168(g)(3)(B) (relating to special rule for certain property
assigned to classes), as amended by this Act, is amended by
inserting after the item relating to subparagraph (C)(ii) the
following new item:
``(C) (iii).......................................................22''.
(d) Alternative Minimum Tax Exception.--Subparagraph (B) of
section 56(a)(1), as amended by this Act, is amended by
inserting before the period the following: ``, or in section
168(e)(3)(C)(iii)''.
(e) Effective Date.--The amendments made by this section
shall apply to property placed in service on or after the
date of the enactment of this Act.
[[Page H4097]]
SEC. 1356. EXTENSION OF ENHANCED OIL RECOVERY CREDIT TO HIGH
VOLUME NATURAL GAS FACILITIES.
(a) In General.--Section 43(c)(1) (defining qualified
enhanced oil recovery costs) is amended by adding at the end
the following new subparagraph:
``(D) Any amount which is paid or incurred during the
taxable year in connection with the construction of a gas
treatment plant which--
``(i) prepares natural gas for transportation through a
pipeline with a capacity of at least 1,000,000,000,000 Btu of
natural gas per day, and
``(ii) produces carbon dioxide which is injected into
hydrocarbon-bearing geological formations.''.
(b) Effective Date.--The amendment made by this section
shall apply to costs paid or incurred in taxable years
beginning after December 31, 2003.
Subtitle D--Additional Provisions
SEC. 1361. EXTENSION OF ACCELERATED DEPRECIATION BENEFIT FOR
ENERGY-RELATED BUSINESSES ON INDIAN
RESERVATIONS.
Paragraph (8) of section 168(j) (relating to termination)
is amended by adding at the end the following new sentence:
``The preceding sentence shall be applied by substituting
``December 31, 2005'' for ``December 31, 2004'' in the case
of property placed in service as part of a facility for--
``(A) the generation or transmission of electricity
(including from any qualified energy resource, as defined in
section 45(c)),
``(B) an oil or gas well,
``(C) the transmission or refining of oil or gas, or
``(D) the production of any qualified fuel (as defined in
section 45K(c)).''.
SEC. 1362. PAYMENT OF DIVIDENDS ON STOCK OF COOPERATIVES
WITHOUT REDUCING PATRONAGE DIVIDENDS.
(a) In General.--Subsection (a) of section 1388 (relating
to patronage dividend defined) is amended by adding at the
end the following: ``For purposes of paragraph (3), net
earnings shall not be reduced by amounts paid during the year
as dividends on capital stock or other proprietary capital
interests of the organization to the extent that the articles
of incorporation or bylaws of such organization or other
contract with patrons provide that such dividends are in
addition to amounts otherwise payable to patrons which are
derived from business done with or for patrons during the
taxable year.''.
(b) Effective Date.--The amendment made by this section
shall apply to distributions in taxable years ending after
the date of the enactment of this Act.
SEC. 1363. DISTRIBUTIONS FROM PUBLICLY TRADED PARTNERSHIPS
TREATED AS QUALIFYING INCOME OF REGULATED
INVESTMENT COMPANIES.
(a) In General.--Paragraph (2) of section 851(b) (defining
regulated investment company) is amended to read as follows:
``(2) at least 90 percent of its gross income is derived
from--
``(A) dividends, interest, payments with respect to
securities loans (as defined in section 512(a)(5)), and gains
from the sale or other disposition of stock or securities (as
defined in section 2(a)(36) of the Investment Company Act of
1940, as amended) or foreign currencies, or other income
(including but not limited to gains from options, futures or
forward contracts) derived with respect to its business of
investing in such stock, securities, or currencies, and
``(B) distributions or other income derived from an
interest in a qualified publicly traded partnership (as
defined in subsection (h)); and''.
(b) Source Flow-Through Rule not to Apply.--The last
sentence of section 851(b) is amended by inserting ``(other
than a qualified publicly traded partnership as defined in
subsection (h))'' after ``derived from a partnership''.
(c) Limitation on Ownership.--Subsection (c) of section 851
is amended by redesignating paragraph (5) as paragraph (6)
and inserting after paragraph (4) the following new
paragraph:
``(5) The term `outstanding voting securities of such
issuer' shall include the equity securities of a qualified
publicly traded partnership (as defined in subsection
(h)).''.
(d) Definition of Qualified Publicly Traded Partnership.--
Section 851 is amended by adding at the end the following new
subsection:
``(h) Qualified Publicly Traded Partnership.--For purposes
of this section, the term `qualified publicly traded
partnership' means a publicly traded partnership described in
section 7704(b) other than a partnership which would satisfy
the gross income requirements of section 7704(c)(2) if
qualifying income included only income described in
subsection (b)(2)(A).''.
(e) Definition of Qualifying Income.--Section 7704(d)(4) is
amended by striking ``section 851(b)(2)'' and inserting
``section 851(b)(2)(A)''.
(f) Limitation on Composition of Assets.--Subparagraph (B)
of section 851(b)(3) is amended to read as follows:
``(B) not more than 25 percent of the value of its total
assets is invested in--
``(i) the securities (other than Government securities or
the securities of other regulated investment companies) of
any one issuer,
``(ii) the securities (other than the securities of other
regulated investment companies) of two or more issuers which
the taxpayer controls and which are determined, under
regulations prescribed by the Secretary, to be engaged in the
same or similar trades or businesses or related trades or
businesses, or
``(iii) the securities of one or more qualified publicly
traded partnerships (as defined in subsection (h)).''.
(g) Application of Special Passive Activity Rule to
Regulated Investment Companies.--Subsection (k) of section
469 (relating to separate application of section in case of
publicly traded partnerships) is amended by adding at the end
the following new paragraph:
``(4) Application to regulated investment companies.--For
purposes of this section, a regulated investment company (as
defined in section 851) holding an interest in a qualified
publicly traded partnership (as defined in section 851(h))
shall be treated as a taxpayer described in subsection (a)(2)
with respect to items attributable to such interest.''.
(h) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
SEC. 1364. CEILING FANS.
(a) In General.--Subchapter II of chapter 99 of the
Harmonized Tariff Schedule of the United States is amended by
inserting in numerical sequence the following new heading:
`` 9902.84.14 Ceiling fans for Free No change No change On or before 12/ ''
permanent 31/2005 .
installation
(provided for in
subheading
8414.51.00)......
(b) Effective Date.--The amendment made by this section
applies to goods entered, or withdrawn from warehouse, for
consumption on or after the 15th day after the date of
enactment of this Act.
SEC. 1365. CERTAIN STEAM GENERATORS, AND CERTAIN REACTOR
VESSEL HEADS, USED IN NUCLEAR FACILITIES.
(a) Certain Steam Generators.--Heading 9902.84.02 of the
Harmonized Tariff Schedule of the United States is amended by
striking ``12/31/2006'' and inserting ``12/31/2008''.
(b) Certain Reactor Vessel Heads.--Subchapter II of chapter
99 of the Harmonized Tariff Schedule of the United States is
amended by inserting in numerical sequence the following new
heading:
`` 9902.84.03 Reactor vessel Free No change No change On or before 12/ ''
heads for nuclear 31/2007 .
reactors
(provided for in
subheading
8401.40.00)......
(c) Effective Date.--
(1) Subsection (a).--The amendment made by subsection (a)
shall take effect on the date of the enactment of this Act.
(2) Subsection (b).--The amendment made by subsection (b)
shall apply to goods entered, or withdrawn from warehouse,
for consumption on or after the 15th day after the date of
the enactment of this Act.
SEC. 1366. BROWNFIELDS DEMONSTRATION PROGRAM FOR QUALIFIED
GREEN BUILDING AND SUSTAINABLE DESIGN PROJECTS.
(a) Treatment as Exempt Facility Bond.--Subsection (a) of
section 142 (relating to the definition of exempt facility
bond) is amended by striking ``or'' at the end of paragraph
(12), by striking the period at the end of paragraph (13) and
inserting ``, or'', and by inserting at the end the following
new paragraph:
``(14) qualified green building and sustainable design
projects.''.
(b) Qualified Green Building and Sustainable Design
Projects.--Section 142 (relating to exempt facility bonds) is
amended by adding at the end thereof the following new
subsection:
``(l) Qualified Green Building and Sustainable Design
Projects.--
``(1) In general.--For purposes of subsection (a)(14), the
term `qualified green building and sustainable design
project' means any project which is designated by the
Secretary, after consultation with the Administrator of the
Environmental Protection Agency, as a qualified green
building and sustainable design project and which meets the
requirements of clauses (i), (ii), (iii), and (iv) of
paragraph (4)(A).
``(2) Designations.--
``(A) In general.--Within 60 days after the end of the
application period described in paragraph (3)(A), the
Secretary, after consultation with the Administrator of the
Environmental Protection Agency, shall designate qualified
green building and sustainable design projects. At least one
of the projects designated shall be located in, or within a
10-mile radius of, an empowerment zone as designated pursuant
to section 1391, and at least one of the projects designated
shall be located in a rural State. No more than one project
shall be designated in a State. A project shall not be
designated if
[[Page H4098]]
such project includes a stadium or arena for professional
sports exhibitions or games.
``(B) Minimum conservation and technology innovation
objectives.--The Secretary, after consultation with the
Administrator of the Environmental Protection Agency, shall
ensure that, in the aggregate, the projects designated
shall--
``(i) reduce electric consumption by more than 150
megawatts annually as compared to conventional construction,
``(ii) reduce daily sulfur dioxide emissions by at least 10
tons compared to coal generation power,
``(iii) expand by 75 percent the domestic solar
photovoltaic market in the United States (measured in
megawatts) as compared to the expansion of that market from
2001 to 2002, and
``(iv) use at least 25 megawatts of fuel cell energy
generation.
``(3) Limited designations.--A project may not be
designated under this subsection unless--
``(A) the project is nominated by a State or local
government within 180 days of the enactment of this
subsection, and
``(B) such State or local government provides written
assurances that the project will satisfy the eligibility
criteria described in paragraph (4).
``(4) Application.--
``(A) In general.--A project may not be designated under
this subsection unless the application for such designation
includes a project proposal which describes the energy
efficiency, renewable energy, and sustainable design features
of the project and demonstrates that the project satisfies
the following eligibility criteria:
``(i) Green building and sustainable design.--At least 75
percent of the square footage of commercial buildings which
are part of the project is registered for United States Green
Building Council's LEED certification and is reasonably
expected (at the time of the designation) to receive such
certification.
``(ii) Brownfield redevelopment.--The project includes a
brownfield site as defined by section 101(39) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 U.S.C. 9601), including a site
described in subparagraph (D)(ii)(II)(aa) thereof.
``(iii) State and local support.--The project receives
specific State or local government resources which will
support the project in an amount equal to at least
$5,000,000. For purposes of the preceding sentence, the term
`resources' includes tax abatement benefits and contributions
in kind.
``(iv) Size.--The project includes at least one of the
following:
``(I) At least 1,000,000 square feet of building.
``(II) At least 20 acres.
``(v) Use of tax benefit.--The project proposal includes a
description of the net benefit of the tax-exempt financing
provided under this subsection which will be allocated for
financing of one or more of the following:
``(I) The purchase, construction, integration, or other use
of energy efficiency, renewable energy, and sustainable
design features of the project.
``(II) Compliance with LEED certification standards.
``(III) The purchase, remediation, and foundation
construction and preparation of the brownfields site.
``(vi) Employment.--The project is projected to provide
permanent employment of at least 1,500 full time equivalents
(150 full time equivalents in rural States) when completed
and construction employment of at least 1,000 full time
equivalents (100 full time equivalents in rural States).
The application shall include an independent analysis which
describes the project's economic impact, including the amount
of projected employment.
``(B) Project description.--Each application described in
subparagraph (A) shall contain for each project a description
of--
``(i) the amount of electric consumption reduced as
compared to conventional construction,
``(ii) the amount of sulfur dioxide daily emissions reduced
compared to coal generation,
``(iii) the amount of the gross installed capacity of the
project's solar photovoltaic capacity measured in megawatts,
and
``(iv) the amount, in megawatts, of the project's fuel cell
energy generation.
``(5) Certification of use of tax benefit.--No later than
30 days after the completion of the project, each project
must certify to the Secretary that the net benefit of the
tax-exempt financing was used for the purposes described in
paragraph (4).
``(6) Definitions.--For purposes of this subsection--
``(A) Rural state.--The term `rural State' means any State
which has--
``(i) a population of less than 4,500,000 according to the
2000 census,
``(ii) a population density of less than 150 people per
square mile according to the 2000 census, and
``(iii) increased in population by less than half the rate
of the national increase between the 1990 and 2000 censuses.
``(B) Local government.--The term `local government' has
the meaning given such term by section 1393(a)(5).
``(C) Net benefit of tax-exempt financing.--The term `net
benefit of tax-exempt financing' means the present value of
the interest savings (determined by a calculation established
by the Secretary) which result from the tax-exempt status of
the bonds.
``(7) Aggregate face amount of tax-exempt financing.--
``(A) In general.--An issue shall not be treated as an
issue described in subsection (a)(14) if the aggregate face
amount of bonds issued by the State or local government
pursuant thereto for a project (when added to the aggregate
face amount of bonds previously so issued for such project)
exceeds an amount designated by the Secretary as part of the
designation.
``(B) Limitation on amount of bonds.--The Secretary may not
allocate authority to issue qualified green building and
sustainable design project bonds in an aggregate face amount
exceeding $2,000,000,000.
``(8) Termination.--Subsection (a)(14) shall not apply with
respect to any bond issued after September 30, 2009.
``(9) Treatment of current refunding bonds.--Paragraphs
(7)(B) and (8) shall not apply to any bond (or series of
bonds) issued to refund a bond issued under subsection
(a)(14) before October 1, 2009, if--
``(A) the average maturity date of the issue of which the
refunding bond is a part is not later than the average
maturity date of the bonds to be refunded by such issue,
``(B) the amount of the refunding bond does not exceed the
outstanding amount of the refunded bond, and
``(C) the net proceeds of the refunding bond are used to
redeem the refunded bond not later than 90 days after the
date of the issuance of the refunding bond.
For purposes of subparagraph (A), average maturity shall be
determined in accordance with section 147(b)(2)(A).''.
(c) Exemption From General State Volume Caps.--Paragraph
(3) of section 146(g) (relating to exception for certain
bonds) is amended--
(1) by striking ``or (13)'' and inserting ``(13), or
(14)'', and
(2) by striking ``and qualified public educational
facilities'' and inserting ``qualified public educational
facilities, and qualified green building and sustainable
design projects''.
(d) Special Rule for Assets Financed Under This Section and
Accountability.--
(1) Denial of double benefit.--Any asset financed with
bonds issued pursuant to this section shall be ineligible for
any credit or deduction established under the Energy Tax
Policy Act of 2004.
(2) Accountability.--Each issuer shall maintain, on behalf
of each project, an interest bearing reserve account equal to
1 percent of the net proceeds of any bond issued under this
section for such project. Not later than 5 years after the
date of issuance, the Secretary of the Treasury, after
consultation with the Administrator of the Environmental
Protection Agency, shall determine whether the project
financed with such bonds has substantially complied with the
terms and conditions described in section 142(l)(4) of the
Internal Revenue Code of 1986 (as added by this section). If
the Secretary, after such consultation, certifies that the
project has substantially complied with such terms and
conditions and meets the commitments set forth in the
application for such project described in section 142(l)(4)
of such Code, amounts in the reserve account, including all
interest, shall be released to the project. If the Secretary
determines that the project has not substantially complied
with such terms and conditions, amounts in the reserve
account, including all interest, shall be paid to the United
States Treasury.
(e) Effective Date.--The amendments made by this section
shall apply to bonds issues after the date of the enactment
of this Act.
TITLE XIV--MISCELLANEOUS
Subtitle A--Rural and Remote Electricity Construction
SEC. 1401. DENALI COMMISSION PROGRAMS.
(a) Power Cost Equalization Program.--There are authorized
to be appropriated to the Denali Commission established by
the Denali Commission Act of 1998 (42 U.S.C. 3121 note) not
more than $5,000,000 for each of fiscal years 2005 through
2011 for the purposes of funding the power cost equalization
program established under section 42.45.100 of the Alaska
Statutes.
(b) Availability of Funds.--
(1) Purpose.--Amounts described in paragraph (2) shall be
available to the Denali Commission to permit energy
generation and development (including fuel cells,
hydroelectric, solar, wind, wave, and tidal energy, and
alternative energy sources), energy transmission (including
interties), fuel tank replacement and clean-up, fuel
transportation networks and related facilities, power cost
equalization programs, and other energy programs,
notwithstanding any other provision of law.
(2) Amounts.--(A) Except as provided in subparagraph (B),
the amounts referred to in paragraph (1) shall be any Federal
royalties, rents, and bonuses derived from the Federal share
of Federal oil and gas leases in the National Petroleum
Reserve in Alaska, up to a maximum of $50,000,000, for each
of the fiscal years 2004 through 2013.
(B) If amounts available under subparagraph (A) for one of
the fiscal years 2004 through 2013 are less than $50,000,000,
the Secretary of Energy shall make available an amount
sufficient to ensure that the amount
[[Page H4099]]
available under this subsection for that fiscal year equals
$50,000,000, from amounts remaining after deposits are made
under section 949(a)(1), from the same source from which
those deposits are made.
SEC. 1402. RURAL AND REMOTE COMMUNITY ASSISTANCE.
(a) Program.--Section 19 of the Rural Electrification Act
of 1936 (7 U.S.C 918a) is amended by striking all that
precedes subsection (b) and inserting the following:
``SEC. 19. ELECTRIC GENERATION, TRANSMISSION, AND
DISTRIBUTION FACILITIES EFFICIENCY GRANTS AND
LOANS TO RURAL AND REMOTE COMMUNITIES WITH
EXTREMELY HIGH ELECTRICITY COSTS.
``(a) In General.--The Secretary, acting through the Rural
Utilities Service, may--
``(1) in coordination with State rural development
initiatives, make grants and loans to persons, States,
political subdivisions of States, and other entities
organized under the laws of States, to acquire, construct,
extend, upgrade, and otherwise improve electric generation,
transmission, and distribution facilities serving communities
in which the average revenue per kilowatt hour of electricity
for all consumers is greater than 150 percent of the average
revenue per kilowatt hour of electricity for all consumers in
the United States (as determined by the Energy Information
Administration using the most recent data available);
``(2) make grants and loans to the Denali Commission
established by the Denali Commission Act of 1998 (42 U.S.C.
3121 note; Public 105-277) to be used for the purpose of
providing funds to acquire, construct, extend, upgrade,
finance, and otherwise improve electric generation,
transmission, and distribution facilities serving communities
described in paragraph (1); and
``(3) make grants to State entities to establish and
support a revolving fund to provide a more cost-effective
means of purchasing fuel in areas where the fuel cannot be
shipped by means of surface transportation.''.
(b) Definition of Person.--Section 13 of the Rural
Electrification Act of 1936 (7 U.S.C. 913) is amended by
striking ``or association'' and inserting ``association, or
Indian tribe (as defined in section 4 of the Indian Self-
Determination and Education Assistance Act)''.
Subtitle B--Coastal Programs
SEC. 1411. 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 1990 (Public Law
101-380), a lessee may withhold from payment any royalty due
and owing to the United States under any leases 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
Secretary of the Interior of 44 cents for every $1 of royalty
withheld.
(2) Use of amounts paid to secretary.--Within 30 days after
the Secretary of the Interior receives payments under
paragraph (1), the Secretary of the Interior shall--
(A) make 47.5 percent of such payments available to the
State referred to in section 6004(c) of the Oil Pollution Act
of 1990; and
(B) make 52.5 percent of such payments available equally,
only for the programs and purposes identified as number 282
at page 1389 of House Report number 108-10 and for a program
described at page 1159 of that Report in the State referred
to in such section 6004(c).
(3) Treatment of amounts.--Any royalty withheld by a lessee
in accordance with this section (including any portion
thereof that is paid to the Secretary of the Interior under
paragraph (1)) shall be treated as paid for purposes of
satisfaction of the royalty obligations of the lessee to the
United States.
(4) 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--
(i) the dollar amount stated at page 47 of Senate Report
number 101-534, which is designated therein as the total
drainage claim for the West Delta field; plus
(ii) interest as described at page 47 of that Report.
(b) Period of Royalty Relief.--Subsection (a) shall apply
to royalty amounts that are due and payable in the period
beginning on January 1, 2004, and ending on the date on which
the Secretary of the Treasury publishes a certification under
subsection (a)(4)(B).
(c) Definitions.--As used in this section:
(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''--
(A) means a person or entity that, on the date of the
enactment of the Oil Pollution Act of 1990, 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; and
(B) includes successors and affiliates of a person or
entity described in subparagraph (A).
SEC. 1412. DOMESTIC OFFSHORE ENERGY REINVESTMENT.
(a) Domestic Offshore Energy Reinvestment Program.--The
Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) is
amended by adding at the end the following:
``SEC. 32. DOMESTIC OFFSHORE ENERGY REINVESTMENT PROGRAM.
``(a) Definitions.--In this section:
``(1) Approved plan.--The term `approved plan' means a
Secure Energy Reinvestment Plan approved by the Secretary
under this section.
``(2) Coastal energy state.--The term `Coastal Energy
State' means a Coastal State off the coastline of which,
within the seaward lateral boundary as determined by the map
referenced in subsection (c)(2)(A), outer Continental Shelf
bonus bids or royalties are generated, other than bonus bids
or royalties from a leased tract within any area of the outer
Continental Shelf for which a moratorium on new leasing was
in effect as of January 1, 2002, unless the lease was issued
before the establishment of the moratorium and was in
production on such date.
``(3) Coastal political subdivision.--The term `coastal
political subdivision' means a county, parish, or other
equivalent subdivision of a Coastal Energy State, all or part
of which lies within the boundaries of the coastal zone of
the State, as identified in the State's approved coastal zone
management program under the Coastal Zone Management Act of
1972 (16 U.S.C. 1451 et seq.) on the date of the enactment of
this section.
``(4) Coastal population.--The term `coastal population'
means the population of a coastal political subdivision, as
determined by the most recent official data of the Census
Bureau.
``(5) Coastline.--The term `coastline' has the same meaning
as the term `coast line' in subsection 2(c) of the Submerged
Lands Act (43 U.S.C. 1301(c)).
``(6) Fund.--The term `Fund' means the Secure Energy
Reinvestment Fund established by this section.
``(7) Leased tract.--The term `leased tract' means a tract
maintained under section 6 or leased under section 8 for the
purpose of drilling for, developing, and producing oil and
natural gas resources.
``(8) Qualified outer continental shelf revenues.--(A)
Except as provided in subparagraph (B), the term `qualified
outer Continental Shelf revenues' means all amounts received
by the United States on or after October 1, 2003, from each
leased tract or portion of a leased tract lying seaward of
the zone defined and governed by section 8(g), or lying
within such zone but to which section 8(g) does not apply,
including bonus bids, rents, royalties (including payments
for royalties taken in kind and sold), net profit share
payments, and related interest.
``(B) Such term does not include any revenues from a leased
tract or portion of a leased tract that is included within
any area of the outer Continental Shelf for which a
moratorium on new leasing was in effect as of January 1,
2002, unless the lease was issued before the establishment of
the moratorium and was in production on such date.
``(9) Secretary.--The term `Secretary' means the Secretary
of the Interior.
``(b) Secure Energy Reinvestment Fund.--
``(1) Establishment.--There is established in the Treasury
of the United States a separate account which shall be known
as the `Secure Energy Reinvestment Fund'. The Fund shall
consist of amounts deposited under paragraph (2), and such
other amounts as may be appropriated to the Fund.
``(2) Deposits.--For each fiscal year after fiscal year
2003, the Secretary of the Treasury shall deposit into the
Fund the following:
``(A) Notwithstanding section 9, all qualified outer
Continental Shelf revenues attributable to royalties received
by the United States in the fiscal year that are in excess of
the following amount:
``(i) $3,455,000,000 in the case of royalties received in
fiscal year 2004.
``(ii) $3,726,000,000 in the case of royalties received in
fiscal year 2005.
``(iii) $4,613,000,000 in the case of royalties received in
fiscal year 2006.
``(iv) $5,226,000,000 in the case of royalties received in
fiscal year 2007.
``(v) $5,841,000,000 in the case of royalties received in
fiscal year 2008.
``(vi) $5,763,000,000 in the case of royalties received in
fiscal year 2009.
``(vii) $6,276,000,000 in the case of royalties received in
fiscal year 2010.
``(viii) $6,351,000,000 in the case of royalties received
in fiscal year 2011.
``(ix) $6,551,000,000 in the case of royalties received in
fiscal year 2012.
``(x) $5,120,000,000 in the case of royalties received in
fiscal year 2013.
``(B) Notwithstanding section 9, all qualified outer
Continental shelf revenues attributable to bonus bids
received by the United States in each of the fiscal years
2004 through 2013 that are in excess of $1,000,000,000.
``(C) Notwithstanding section 9, in addition to amounts
deposited under subparagraphs (A) and (B), $35,000,000 of
amounts received by the United States each fiscal year as
royalties for oil or gas production on the outer Continental
Shelf, except that no amounts shall be deposited under this
subparagraph before fiscal year 2004 or after fiscal year
2013.
[[Page H4100]]
``(D) All interest earned under paragraph (4).
``(E) All repayments under subsection (f).
``(3) Reduction in deposit.--(A) For each fiscal year after
fiscal year 2013 in which amounts received by the United
States as royalties for oil or gas production on the outer
Continental Shelf are less than the sum of the amounts
described in subparagraph (B) (before the application of this
subparagraph), the Secretary of the Treasury shall reduce
each of the amounts described in subparagraph (B)
proportionately.
``(B) The amounts referred to in subparagraph (A) are the
following:
``(i) The amount required to be covered into the Historic
Preservation Fund under section 108 of the National Historic
Preservation Act (16 U.S.C. 470h) on the date of the
enactment of this paragraph.
``(ii) The amount required to be credited to the Land and
Water Conservation Fund under section 2(c)(2) of the Land and
Water Conservation Fund Act of 1965 (16 U.S.C. 4601-5(c)(2))
on the date of the enactment of this paragraph.
``(iii) The amount required to be deposited under
subparagraph (C) of paragraph (2) of this subsection.
``(4) Investment.--The Secretary of the Treasury shall
invest moneys in the Fund (including interest) in public debt
securities with maturities suitable to the needs of the Fund,
as determined by the Secretary of the Treasury, and bearing
interest at rates determined by the Secretary of the
Treasury, taking into consideration current market yields on
outstanding marketable obligations of the United States of
comparable maturity. Such invested moneys shall remain
invested until needed to meet requirements for disbursement
under this section.
``(5) Review and revision of baseline amounts.--Not later
than December 31, 2008, the Secretary of the Interior, in
consultation with the Secretary of the Treasury, shall--
``(A) determine the amount and composition of outer
Continental Shelf revenues that were received by the United
States in each of the fiscal years 2004 through 2008;
``(B) project the amount and composition of outer
Continental Shelf revenues that will be received in the
United States in each of the fiscal years 2009 through 2013;
and
``(C) submit to the Congress a report regarding whether any
of the dollar amounts set forth in clauses (v) though (x) of
paragraph (2)(A) or paragraph (2)(B) should be modified to
reflect those projections.
``(6) Authorization of appropriation of additional
amounts.--In addition to the amounts deposited into the Fund
under paragraph (2) there are authorized to be appropriated
to the Fund--
``(A) for each of fiscal years 2004 through 2013 up to
$500,000,000; and
``(B) for each fiscal year after fiscal year 2013 up to 25
percent of qualified outer Continental Shelf revenues
received by the United States in the preceding fiscal year.
``(c) Use of Secure Energy Reinvestment Fund.--
``(1) In general.--(A) The Secretary shall use amounts in
the Fund remaining after the application of subsections (h)
and (i) to pay to each Coastal Energy State that has a Secure
Energy Reinvestment Plan approved by the Secretary under this
section, and to coastal political subdivisions of such State,
the amount allocated to the State or coastal political
subdivision, respectively, under this subsection.
``(B) The Secretary shall make payments under this
paragraph in December of 2004, and of each year thereafter,
from revenues received by the United States in the
immediately preceding fiscal year.
``(2) Allocation.--The Secretary shall allocate amounts
deposited into the Fund in a fiscal year, and other amounts
determined by the Secretary to be available, among Coastal
Energy States that have an approved plan, and to coastal
political subdivisions of such States, as follows:
``(A)(i) Of the amounts made available for each of the
first 10 fiscal years for which amounts are available for
allocation under this paragraph, the allocation for each
Coastal Energy State shall be calculated based on the ratio
of qualified outer Continental Shelf revenues generated off
the coastline of the Coastal Energy State to the qualified
outer Continental Shelf revenues generated off the coastlines
of all Coastal Energy States for the period beginning January
1, 1992, and ending December 31, 2001.
``(ii) Of the amounts available for a fiscal year in a
subsequent 10-fiscal-year period, the allocation for each
Coastal Energy State shall be calculated based on such ratio
determined by the Secretary with respect to qualified outer
Continental Shelf revenues generated in each subsequent
corresponding 10-year period.
``(iii) For purposes of this subparagraph, qualified outer
Continental Shelf revenues shall be considered to be
generated off the coastline of a Coastal Energy State if the
geographic center of the lease tract from which the revenues
are generated is located within the area formed by the
extension of the State's seaward lateral boundaries,
calculated using the strict and scientifically derived
conventions established to delimit international lateral
boundaries under the Law of the Sea, as indicated on the map
entitled `Calculated Seaward Lateral Boundaries' and dated
October 2003, on file in the Office of the Director, Minerals
Management Service.
``(B) 35 percent of each Coastal Energy State's allocable
share as determined under subparagraph (A) shall be allocated
among and paid directly to the coastal political subdivisions
of the State by the Secretary based on the following formula:
``(i) 25 percent shall be allocated based on the ratio of
each coastal political subdivision's coastal population to
the coastal population of all coastal political subdivisions
of the Coastal Energy State.
``(ii) 25 percent shall be allocated based on the ratio of
each coastal political subdivision's coastline miles to the
coastline miles of all coastal political subdivisions of the
State. In the case of a coastal political subdivision without
a coastline, the coastline of the political subdivision for
purposes of this clause shall be one-third the average length
of the coastline of the other coastal political subdivisions
of the State.
``(iii) 50 percent shall be allocated based on a formula
that allocates 75 percent of the funds based on such coastal
political subdivision's relative distance from any leased
tract used to calculate that State's allocation and 25
percent of the funds based on the relative level of outer
Continental Shelf oil and gas activities in a coastal
political subdivision to the level of outer Continental Shelf
oil and gas activities in all coastal political subdivisions
in such State, as determined by the Secretary, except that in
the case of a coastal political subdivision in the State of
California that has a coastal shoreline, that is not within
200 miles of the geographic center of a leased tract or
portion of a leased tract, and in which there is located one
or more oil refineries the allocation under this clause shall
be determined as if that coastal political subdivision were
located within a distance of 50 miles from the geographic
center of the closest leased tract with qualified outer
Continental Shelf revenues.
``(3) Reallocation.--Any amount allocated to a Coastal
Energy State or coastal political subdivision of such a State
but not disbursed because of a failure of a Coastal Energy
State to have an approved plan shall be reallocated by the
Secretary among all other Coastal Energy States in a manner
consistent with this subsection, except that the Secretary--
``(A) shall hold the amount in escrow within the Fund until
the earlier of the end of the next fiscal year in which the
allocation is made or the final resolution of any appeal
regarding the disapproval of a plan submitted by the State
under this section; and
``(B) shall continue to hold such amount in escrow until
the end of the subsequent fiscal year thereafter, if the
Secretary determines that such State is making a good faith
effort to develop and submit, or update, a Secure Energy
Reinvestment Plan under subsection (d).
``(4) Minimum share.--Notwithstanding any other provision
of this subsection, the amount allocated under this
subsection to each Coastal Energy State each fiscal year
shall be not less than 5 percent of the total amount
available for that fiscal year for allocation under this
subsection to Coastal Energy States, except that for any
Coastal Energy State determined by the Secretary to have an
area formed by the extension of the State's seaward lateral
boundary, as designated by the map referenced in paragraph
(2)(A)(iii), of less than 490 square statute miles, the
amount allocated to such State shall not be less than 10
percent of the total amount available for that fiscal year
for allocation under this subsection.
``(5) Recomputation.--If the allocation to one or more
Coastal Energy States under paragraph (4) with respect to a
fiscal year is greater than the amount that would be
allocated to such States under this subsection if paragraph
(4) did not apply, then the allocations under this subsection
to all other Coastal Energy States shall be paid from the
amount remaining after deduction of the amounts allocated
under paragraph (4), but shall be reduced on a pro rata basis
by the sum of the allocations under paragraph (4) so that not
more than 100 percent of the funds available in the Fund for
allocation with respect to that fiscal year is allocated.
``(d) Secure Energy Reinvestment Plan.--
``(1) Development and submission of state plans.--The
Governor of each State seeking to receive funds under this
section shall prepare, and submit to the Secretary, a Secure
Energy Reinvestment Plan describing planned expenditures of
funds received under this section. The Governor shall include
in the State plan submitted to the Secretary plans prepared
by the coastal political subdivisions of the State. The
Governor and the coastal political subdivision shall solicit
local input and provide for public participation in the
development of the State plan. In describing the planned
expenditures, the State and coastal political subdivisions
shall include only items that are uses authorized under
subsection (e).
``(2) Approval or disapproval.--
``(A) In general.--The Secretary may not disburse funds to
a State or coastal political subdivision of a State under
this section before the date the State has an approved plan.
The Secretary shall approve a Secure Energy Reinvestment Plan
submitted by a State under paragraph (1) if the Secretary
determines that the expenditures provided for in the plan are
uses authorized under subsection (e), and that the plan
contains each of the following:
``(i) The name of the State agency that will have the
authority to represent and act for
[[Page H4101]]
the State in dealing with the Secretary for purposes of this
section.
``(ii) A program for the implementation of the plan, that
(I) has as a goal improving the environment, (II) has as a
goal addressing the impacts of oil and gas production from
the outer Continental Shelf, and (III) includes a description
of how the State and coastal political subdivisions of the
State will evaluate the effectiveness of the plan.
``(iii) Certification by the Governor that ample
opportunity has been accorded for public participation in the
development and revision of the plan.
``(iv) Measures for taking into account other relevant
Federal resources and programs. The plan shall be correlated
so far as practicable with other State, regional, and local
plans.
``(v) For any State for which the ratio determined under
subsection (c)(2)(A)(i) or (c)(2)(A)(ii), as appropriate,
expressed as a percentage, exceeds 25 percent, a plan to
spend not less than 30 percent of the total funds provided
under this section each fiscal year to that State and
appropriate coastal political subdivisions, to address the
socioeconomic or environmental impacts identified in the plan
that remain significant or progressive after implementation
of mitigation measures identified in the most current
environmental impact statement (as of the date of the
enactment of this clause) required under the National
Environmental Protection Act of 1969 for lease sales under
this Act.
``(vi) A plan to utilize at least one-half of the funds
provided pursuant to subsection (c)(2)(B), and a portion of
other funds provided to such State under this section, on
programs or projects that are coordinated and conducted in
partnership between the State and coastal political
subdivision.
``(B) Procedure and timing.--The Secretary shall approve or
disapprove each plan submitted in accordance with this
subsection within 90 days after its submission.
``(3) Amendment or revision.--Any amendment to or revision
of an approved plan shall be prepared and submitted in
accordance with the requirements under this paragraph for the
submittal of plans, and shall be approved or disapproved by
the Secretary in accordance with paragraph (2)(B).
``(e) Authorized Uses.--A Coastal Energy State, and a
coastal political subdivision of such a State, shall use
amounts paid under this section (including any such amounts
deposited into a trust fund administered by the State or
coastal political subdivision dedicated to uses consistent
with this subsection), in compliance with Federal and State
law and the approved plan of the State, only for one or more
of the following purposes:
``(1) Projects and activities, including educational
activities, for the conservation, protection, or restoration
of coastal areas including wetlands.
``(2) Mitigating damage to, or the protection of, fish,
wildlife, or natural resources.
``(3) To the extent of such sums as are considered
reasonable by the Secretary, planning assistance and
administrative costs of complying with this section.
``(4) Implementation of federally approved plans or
programs for marine, coastal, subsidence, or conservation
management or for protection of resources from natural
disasters.
``(5) Mitigating impacts of outer Continental Shelf
activities through funding onshore infrastructure and public
service needs.
``(f) Compliance With Authorized Uses.--If the Secretary
determines that an expenditure of an amount made by a Coastal
Energy State or coastal political subdivision is not in
accordance with the approved plan of the State (including the
plans of coastal political subdivisions included in such
plan), the Secretary shall not disburse any further amounts
under this section to that Coastal Energy State or coastal
political subdivision until--
``(1) the amount is repaid to the Secretary; or
``(2) the Secretary approves an amendment to the plan that
authorizes the expenditure.
``(g) Arbitration of State and Local Disputes.--The
Secretary may require, as a condition of any payment under
this section, that a State or coastal political subdivision
in a State must submit to arbitration--
``(1) any dispute between the State or coastal political
subdivision (or both) and the Secretary regarding
implementation of this section; and
``(2) any dispute between the State and political
subdivision regarding implementation of this section,
including any failure to include, in the plan submitted by
the State for purposes of subsection (d), any spending plan
of the coastal political subdivision.
``(h) Administrative Expenses.--Of amounts in the Fund each
fiscal year, the Secretary may use up to one-half of one
percent for the administrative costs of implementing this
section.
``(i) Funding for Consortium.--
``(1) In general.--Of amounts deposited into the Fund in
each fiscal year 2004 through 2013, 2 percent shall be
available to the Secretary of the Interior to provide funding
for the Coastal Restoration and Enhancement through Science
and Technology program.
``(2) Treatment.--Any amount available under this
subsection for a fiscal year shall, for purposes of
determining the amount appropriated under any other provision
of law that authorizes appropriations to carry out the
program referred to in paragraph (1), be treated as
appropriated under that other provision.
``(j) Disposition of Funds.--A Coastal Energy State or
coastal political subdivision may use funds provided to such
entity under this section, subject to subsection (e), for any
payment that is eligible to be made with funds provided to
States under section 35 of the Mineral Leasing Act (30 U.S.C.
191).
``(k) Reports.--Each fiscal year following a fiscal year in
which a Coastal Energy State or coastal political subdivision
of a Coastal Energy State receives funds under this section,
the Governor of the Coastal Energy State, in coordination
with such State's coastal political subdivisions, shall
account for all funds so received for the previous fiscal
year in a written report to the Secretary. The report shall
include, in accordance with regulations prescribed by the
Secretary, a description of all projects and activities that
received such funds. In order to avoid duplication, such
report may incorporate, by reference, any other reports
required to be submitted under other provisions of law.
``(l) Signs.--The Secretary shall require, as a condition
of any allocation of funds provided with amounts made
available by this section, that each State and coastal
political subdivision shall include on any sign otherwise
installed at any site at or near an entrance or public use
focal point area for which such funds are used, a statement
that the existence or development of the site (or both), as
appropriate, is a product of such funds.''.
(b) Additional Amendments.--Section 31 of the Outer
Continental Shelf Lands Act (43 U.S.C. 1356a) is amended--
(1) by striking subsection (a);
(2) in subsection (c) by striking ``For fiscal year 2001,
$150,000,000 is'' and inserting ``Such sums as may be
necessary to carry out this section are'';
(3) in subsection (d)(1)(B) by striking ``, except'' and
all that follows through the end of the sentence and
inserting a period;
(4) by redesignating subsections (b) though (g) in order as
subsection (a) through (f); and
(5) by striking ``subsection (f)'' each place it appears
and inserting ``subsection (e)''.
(c) Utilization of Coastal Restoration and Enhancement
Through Science and Technology Program.--
(1) Authorization.--The Secretary of the Interior and the
Secretary of Commerce may each use the Coastal Restoration
and Enhancement through Science and Technology program for
the purposes of--
(A) assessing the effects of coastal habitat restoration
techniques;
(B) developing improved ecosystem modeling capabilities for
improved predictions of coastal conditions and habitat change
and for developing new technologies for restoration
activities; and
(C) identifying economic options to address socioeconomic
consequences of coastal degradation.
(2) Condition.--The Secretary of the Interior, in
consultation with the Secretary of Commerce, shall ensure
that the program--
(A) establishes procedures designed to avoid duplicative
activities among Federal agencies and entities receiving
Federal funds;
(B) coordinates with persons involved in similar
activities; and
(C) establishes a mechanism to collect, organize, and make
available information and findings on coastal restoration.
(3) Report.--Not later than September 30, 2008, the
Secretary of the Interior, in consultation with the Secretary
of Commerce, shall transmit a report to the Congress on the
effectiveness of any Federal and State restoration efforts
conducted pursuant to this subsection and make
recommendations to improve coordinated coastal restoration
efforts.
(4) Funding.--For each of fiscal years 2004 through 2013,
there is authorized to be appropriated to the Secretary
$10,000,000 to carry out activities under this subsection.
Subtitle C--Reforms to the Board of Directors of the Tennessee Valley
Authority
SEC. 1431. CHANGE IN COMPOSITION, OPERATION, AND DUTIES OF
THE BOARD OF DIRECTORS OF THE TENNESSEE VALLEY
AUTHORITY.
The Tennessee Valley Authority Act of 1933 (16 U.S.C. 831
et seq.) is amended by striking section 2 and inserting the
following:
``SEC. 2. MEMBERSHIP, OPERATION, AND DUTIES OF THE BOARD OF
DIRECTORS.
``(a) Membership.--
``(1) Appointment.--The Board of Directors of the
Corporation (referred to in this Act as the `Board') shall be
composed of 9 members appointed by the President by and with
the advice and consent of the Senate, at least 5 of whom
shall be a legal resident of a State any part of which is in
the service area of the Corporation.
``(2) Chairman.--The members of the Board shall select 1 of
the members to act as chairman of the Board.
``(b) Qualifications.--To be eligible to be appointed as a
member of the Board, an individual--
``(1) shall be a citizen of the United States;
``(2) shall have management expertise relative to a large
for-profit or nonprofit corporate, government, or academic
structure;
``(3) shall not be an employee of the Corporation; and
``(4) shall make full disclosure to Congress of any
investment or other financial interest that the individual
holds in the energy industry.
[[Page H4102]]
``(c) Recommendations.--In appointing members of the Board,
the President shall--
``(1) consider recommendations from such public officials
as--
``(A) the Governors of States in the service area;
``(B) individual citizens;
``(C) business, industrial, labor, electric power
distribution, environmental, civic, and service
organizations; and
``(D) the congressional delegations of the States in the
service area; and
``(2) seek qualified members from among persons who reflect
the diversity, including the geographical diversity, and
needs of the service area of the Corporation.
``(d) Terms.--
``(1) In general.--A member of the Board shall serve a term
of 5 years. A member of the Board whose term has expired may
continue to serve after the member's term has expired until
the date on which a successor takes office, except that the
member shall not serve beyond the end of the session of
Congress in which the term of the member expires.
``(2) Vacancies.--A member appointed to fill a vacancy on
the Board occurring before the expiration of the term for
which the predecessor of the member was appointed shall be
appointed for the remainder of that term.
``(e) Quorum.--
``(1) In general.--Five of the members of the Board shall
constitute a quorum for the transaction of business.
``(2) Vacancies.--A vacancy on the Board shall not impair
the power of the Board to act.
``(f) Compensation.--
``(1) In general.--A member of the Board shall be entitled
to receive--
``(A) a stipend of--
``(i) $45,000 per year; or
``(ii)(I) in the case of the chairman of any committee of
the Board created by the Board, $46,000 per year; or
``(II) in the case of the chairman of the Board, $50,000
per year; and
``(B) travel expenses, including per diem in lieu of
subsistence, in the same manner as persons employed
intermittently in Government service under section 5703 of
title 5, United States Code.
``(2) Adjustments in stipends.--The amount of the stipend
under paragraph (1)(A)(i) shall be adjusted by the same
percentage, at the same time and manner, and subject to the
same limitations as are applicable to adjustments under
section 5318 of title 5, United States Code.
``(g) Duties.--
``(1) In general.--The Board shall--
``(A) establish the broad goals, objectives, and policies
of the Corporation that are appropriate to carry out this
Act;
``(B) develop long-range plans to guide the Corporation in
achieving the goals, objectives, and policies of the
Corporation and provide assistance to the chief executive
officer to achieve those goals, objectives, and policies;
``(C) ensure that those goals, objectives, and policies are
achieved;
``(D) approve an annual budget for the Corporation;
``(E) adopt and submit to Congress a conflict-of-interest
policy applicable to members of the Board and employees of
the Corporation;
``(F) establish a compensation plan for employees of the
Corporation in accordance with subsection (i);
``(G) approve all compensation (including salary or any
other pay, bonuses, benefits, incentives, and any other form
of remuneration) of all managers and technical personnel that
report directly to the chief executive officer (including any
adjustment to compensation);
``(H) ensure that all activities of the Corporation are
carried out in compliance with applicable law;
``(I) create an audit committee, composed solely of Board
members independent of the management of the Corporation,
which shall--
``(i) in consultation with the inspector general of the
Corporation, recommend to the Board an external auditor;
``(ii) receive and review reports from the external auditor
of the Corporation and inspector general of the Corporation;
and
``(iii) make such recommendations to the Board as the audit
committee considers necessary;
``(J) create such other committees of Board members as the
Board considers to be appropriate;
``(K) conduct such public hearings as it deems appropriate
on issues that could have a substantial effect on--
``(i) the electric ratepayers in the service area; or
``(ii) the economic, environmental, social, or physical
well-being of the people of the service area;
``(L) establish the electricity rates charged by the
Corporation; and
``(M) engage the services of an external auditor for the
Corporation.
``(2) Meetings.--The Board shall meet at least 4 times each
year.
``(h) Chief Executive Officer.--
``(1) Appointment.--The Board shall appoint a person to
serve as chief executive officer of the Corporation.
``(2) Qualifications.--
``(A) In general.--To serve as chief executive officer of
the Corporation, a person--
``(i) shall have senior executive-level management
experience in large, complex organizations;
``(ii) shall not be a current member of the Board or have
served as a member of the Board within 2 years before being
appointed chief executive officer; and
``(iii) shall comply with the conflict-of-interest policy
adopted by the Board.
``(B) Expertise.--In appointing a chief executive officer,
the Board shall give particular consideration to appointing
an individual with expertise in the electric industry and
with strong financial skills.
``(3) Tenure.--The chief executive officer shall serve at
the pleasure of the Board.
``(i) Compensation Plan.--
``(1) In general.--The Board shall approve a compensation
plan that specifies all compensation (including salary or any
other pay, bonuses, benefits, incentives, and any other form
of remuneration) for the chief executive officer and
employees of the Corporation.
``(2) Annual survey.--The compensation plan shall be based
on an annual survey of the prevailing compensation for
similar positions in private industry, including engineering
and electric utility companies, publicly owned electric
utilities, and Federal, State, and local governments.
``(3) Considerations.--The compensation plan shall provide
that education, experience, level of responsibility,
geographic differences, and retention and recruitment needs
will be taken into account in determining compensation of
employees.
``(4) Positions at or below level iv.--The chief executive
officer shall determine the salary and benefits of employees
whose annual salary is not greater than the annual rate
payable for positions at level IV of the Executive Schedule
under section 5315 of title 5, United States Code.
``(5) Positions above level iv.--On the recommendation of
the chief executive officer, the Board shall approve the
salaries of employees whose annual salaries would be in
excess of the annual rate payable for positions at level IV
of the Executive Schedule under section 5315 of title 5,
United States Code.''.
SEC. 1432. CHANGE IN MANNER OF APPOINTMENT OF STAFF.
Section 3 of the Tennessee Valley Authority Act of 1933 (16
U.S.C. 831b) is amended--
(1) by striking the first undesignated paragraph and
inserting the following:
``(a) Appointment by the Chief Executive Officer.--The
chief executive officer shall appoint, with the advice and
consent of the Board, and without regard to the provisions of
the civil service laws applicable to officers and employees
of the United States, such managers, assistant managers,
officers, employees, attorneys, and agents as are necessary
for the transaction of the business of the Corporation.'';
and
(2) by striking ``All contracts'' and inserting the
following:
``(b) Wage Rates.--All contracts''.
SEC. 1433. CONFORMING AMENDMENTS.
(a) The Tennessee Valley Authority Act of 1933 (16 U.S.C.
831 et seq.) is amended--
(1) by striking ``board of directors'' each place it
appears and inserting ``Board of Directors''; and
(2) by striking ``board'' each place it appears and
inserting ``Board''.
(b) Section 9 of the Tennessee Valley Authority Act of 1933
(16 U.S.C. 831h) is amended--
(1) by striking ``The Comptroller General of the United
States shall audit'' and inserting the following:
``(c) Audits.--The Comptroller General of the United States
shall audit''; and
(2) by striking ``The Corporation shall determine'' and
inserting the following:
``(d) Administrative Accounts and Business Documents.--The
Corporation shall determine''.
(c) Title 5, United States Code, is amended--
(1) in section 5314, by striking ``Chairman, Board of
Directors of the Tennessee Valley Authority.''; and
(2) in section 5315, by striking ``Members, Board of
Directors of the Tennessee Valley Authority.''.
SEC. 1434. APPOINTMENTS; EFFECTIVE DATE; TRANSITION.
(a) Appointments.--
(1) In general.--As soon as practicable after the date of
enactment of this Act, the President shall submit to the
Senate nominations of 6 persons to serve as members of the
Board of Directors of the Tennessee Valley Authority in
addition to the members serving on the date of enactment of
this Act.
(2) Initial terms.--Notwithstanding section 2(d) of the
Tennessee Valley Authority Act of 1933 (as amended by this
subtitle), in making the appointments under paragraph (1),
the President shall appoint--
(A) 2 members for a term to expire on May 18, 2006;
(B) 2 members for a term to expire on May 18, 2008; and
(C) 2 members for a term to expire on May 18, 2010.
(b) Effective Date.--The amendments made by this section
and sections 1431, 1432, and 1433 take effect on the later of
the date on which at least 3 persons nominated under
subsection (a) take office or May 18, 2005.
(c) Selection of Chairman.--The Board of Directors of the
Tennessee Valley Authority shall select 1 of the members to
act as chairman of the Board not later than 30 days after the
effective date of this section.
(d) Conflict-Of-Interest Policy.--The Board of Directors of
the Tennessee Valley
[[Page H4103]]
Authority shall adopt and submit to Congress a conflict-of-
interest policy, as required by section 2(g)(1)(E) of the
Tennessee Valley Authority Act of 1933 (as amended by this
subtitle), as soon as practicable after the effective date of
this section.
(e) Transition.--A person who is serving as a member of the
board of directors of the Tennessee Valley Authority on the
date of enactment of this Act--
(1) shall continue to serve until the end of the current
term of the member; but
(2) after the effective date specified in subsection (b),
shall serve under the terms of the Tennessee Valley Authority
Act of 1933 (as amended by this subtitle); and
(3) may not be reappointed.
Subtitle D--Other Provisions
SEC. 1441. CONTINUATION OF TRANSMISSION SECURITY ORDER.
Department of Energy Order No. 202-03-2, issued by the
Secretary of Energy on August 28, 2003, shall remain in
effect unless rescinded by Federal statute.
SEC. 1442. REVIEW OF AGENCY DETERMINATIONS.
Section 7 of the Natural Gas Act (15 U.S.C. 717f) is
amended by adding at the end the following:
``(i)(1) The United States Court of Appeals for the
District of Columbia Circuit shall have original and
exclusive jurisdiction over any civil action--
``(A) for review of any order or action of any Federal or
State administrative agency or officer to issue, condition,
or deny any permit, license, concurrence, or approval issued
under authority of any Federal law, other than the Coastal
Zone Management Act of 1972 (16 U.S.C. 1451 et seq.),
required for the construction of a natural gas pipeline for
which a certificate of public convenience and necessity is
issued by the Commission under this section;
``(B) alleging unreasonable delay by any Federal or State
administrative agency or officer in entering an order or
taking other action described in subparagraph (A); or
``(C) challenging any decision made or action taken under
this subsection.
``(2)(A) If the Court finds that the order, action, or
failure to act is not consistent with the public convenience
and necessity (as determined by the Commission under this
section), or would prevent the construction and operation of
natural gas facilities authorized by the certificate of
public convenience and necessity, the permit, license,
concurrence, or approval that is the subject of the order,
action, or failure to act shall be deemed to have been issued
subject to any conditions set forth in the reviewed order or
action that the Court finds to be consistent with the public
convenience and necessity.
``(B) For purposes of paragraph (1)(B), the failure of an
agency or officer to issue any such permit, license,
concurrence, or approval within the latter of 1 year after
the date of filing of an application for the permit, license,
concurrence, or approval or 60 days after the date of
issuance of the certificate of public convenience and
necessity under this section, shall be considered to be
unreasonable delay unless the Court, for good cause shown,
determines otherwise.
``(C) The Court shall set any action brought under
paragraph (1) for expedited consideration.''.
SEC. 1443. ATTAINMENT DATES FOR DOWNWIND OZONE NONATTAINMENT
AREAS.
Section 181 of the Clean Air Act (42 U.S.C.7511) is amended
by adding the following new subsection at the end thereof:
``(d) Extended Attainment Date for Certain Downwind
Areas.--
``(1) Definitions.--(A) The term `upwind area' means an
area that--
``(i) significantly contributes to nonattainment in another
area, hereinafter referred to as a `downwind area'; and
``(ii) is either--
``(I) a nonattainment area with a later attainment date
than the downwind area, or
``(II) an area in another State that the Administrator has
found to be significantly contributing to nonattainment in
the downwind area in violation of section 110(a)(2)(D) and
for which the Administrator has established requirements
through notice and comment rulemaking to eliminate the
emissions causing such significant contribution.
``(B) The term `current classification' means the
classification of a downwind area under this section at the
time of the determination under paragraph (2).
``(2) Extension.--If the Administrator--
``(A) determines that any area is a downwind area with
respect to a particular national ambient air quality standard
for ozone; and
``(B) approves a plan revision for such area as provided in
paragraph (3) prior to a reclassification under subsection
(b)(2)(A),
the Administrator, in lieu of such reclassification, shall
extend the attainment date for such downwind area for such
standard in accordance with paragraph (5).
``(3) Required approval.--In order to extend the attainment
date for a downwind area under this subsection, the
Administrator must approve a revision of the applicable
implementation plan for the downwind area for such standard
that--
``(A) complies with all requirements of this Act applicable
under the current classification of the downwind area,
including any requirements applicable to the area under
section 172(c) for such standard; and
``(B) includes any additional measures needed to
demonstrate attainment by the extended attainment date
provided under this subsection.
``(4) Prior reclassification determination.--If, no more
than 18 months prior to the date of enactment of this
subsection, the Administrator made a reclassification
determination under subsection (b)(2)(A) for any downwind
area, and the Administrator approves the plan revision
referred to in paragraph (3) for such area within 12 months
after the date of enactment of this subsection, the
reclassification shall be withdrawn and the attainment date
extended in accordance with paragraph (5) upon such approval.
The Administrator shall also withdraw a reclassification
determination under subsection (b)(2)(A) made after the date
of enactment of this subsection and extend the attainment
date in accordance with paragraph (5) if the Administrator
approves the plan revision referred to in paragraph (3)
within 12 months of the date the reclassification
determination under subsection (b)(2)(A) is issued. In such
instances the `current classification' used for evaluating
the revision of the applicable implementation plan under
paragraph (3) shall be the classification of the downwind
area under this section immediately prior to such
reclassification.
``(5) Extended date.--The attainment date extended under
this subsection shall provide for attainment of such national
ambient air quality standard for ozone in the downwind area
as expeditiously as practicable but no later than the date on
which the last reductions in pollution transport necessary
for attainment in the downwind area are required to be
achieved by the upwind area or areas.''.
SEC. 1444. ENERGY PRODUCTION INCENTIVES.
(a) In General.--A State may provide to any entity--
(1) a credit against any tax or fee owed to the State under
a State law, or
(2) any other tax incentive,
determined by the State to be appropriate, in the amount
calculated under and in accordance with a formula determined
by the State, for production described in subsection (b) in
the State by the entity that receives such credit or such
incentive.
(b) Eligible Entities.--Subsection (a) shall apply with
respect to the production in the State of--
(1) electricity from coal mined in the State and used in a
facility, if such production meets all applicable Federal and
State laws and if such facility uses scrubbers or other forms
of clean coal technology,
(2) electricity from a renewable source such as wind,
solar, or biomass, or
(3) ethanol.
(c) Effect on Interstate Commerce.--Any action taken by a
State in accordance with this section with respect to a tax
or fee payable, or incentive applicable, for any period
beginning after the date of the enactment of this Act shall--
(1) be considered to be a reasonable regulation of
commerce; and
(2) not be considered to impose an undue burden on
interstate commerce or to otherwise impair, restrain, or
discriminate, against interstate commerce.
SEC. 1445. USE OF GRANULAR MINE TAILINGS.
(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:
``SEC. 6006. USE OF GRANULAR MINE TAILINGS.
``(a) Mine Tailings.--
``(1) In general.--Not later than 180 days after the date
of enactment of this section, the Administrator, in
consultation with the Secretary of Transportation and heads
of other Federal agencies, shall establish criteria
(including an evaluation of whether to establish a numerical
standard for concentration of lead and other hazardous
substances) for the safe and environmentally protective use
of granular mine tailings from the Tar Creek, Oklahoma Mining
District, known as `chat', for--
``(A) cement or concrete projects; and
``(B) transportation construction projects (including
transportation construction projects involving the use of
asphalt) that are carried out, in whole or in part, using
Federal funds.
``(2) Requirements.--In establishing criteria under
paragraph (1), the Administrator shall consider--
``(A) the current and previous uses of granular mine
tailings as an aggregate for asphalt; and
``(B) any environmental and public health risks and
benefits derived from the removal, transportation, and use in
transportation projects of granular mine tailings.
``(3) Public participation.--In establishing the criteria
under paragraph (1), the Administrator shall solicit and
consider comments from the public.
``(4) Applicability of criteria.--On the establishment of
the criteria under paragraph (1), any use of the granular
mine tailings described in paragraph (1) in a transportation
project that is carried out, in whole or in part, using
Federal funds, shall meet the criteria established under
paragraph (1).
``(b) Effect of Sections.--Nothing in this section or
section 6005 affects any requirement of any law (including a
regulation) in effect on the date of enactment of this
section.''.
(b) Conforming Amendment.--The table of contents of the
Solid Waste Disposal Act (42 U.S.C. prec. 6901) is amended by
adding at the end of the items relating to subtitle F the
following:
``Sec. 6006. Use of granular mine tailings.''.
[[Page H4104]]
TITLE XV--ETHANOL AND MOTOR FUELS
Subtitle A--General Provisions
SEC. 1501. 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) Ethanol.--(i) 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; and
``(VI) fibers.
``(ii) The term `waste derived ethanol' means ethanol
derived from--
``(I) animal wastes, including poultry fats and poultry
wastes, and other waste materials; or
``(II) municipal solid waste.
``(B) Renewable fuel.--
``(i) In general.--The term `renewable fuel' means motor
vehicle fuel that--
``(I)(aa) is produced from grain, starch, oilseeds, or
other biomass; or
``(bb) is natural gas produced from a biogas source,
including a landfill, sewage waste treatment plant, feedlot,
or other place where decaying organic material is found; and
``(II) is used to replace or reduce the quantity of fossil
fuel present in a fuel mixture used to operate a motor
vehicle.
``(ii) Inclusion.--The term `renewable fuel' includes
cellulosic biomass ethanol, waste derived 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 after the
enactment of this subsection, the Administrator shall
promulgate regulations ensuring that motor vehicle fuel 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 renewable fuel
can be used, or impose any per-gallon obligation for the use
of renewable fuel. If the Administrator does not promulgate
such regulations, the applicable percentage referred to in
paragraph (4), on a volume percentage of gasoline basis,
shall be 2.2 in 2005.
``(B) Applicable volume.--
``(i) Calendar years 2005 through 2012.--For the purpose of
subparagraph (A), the applicable volume for any of calendar
years 2005 through 2012 shall be determined in accordance
with the following table:
Applicable volume of renewable fuel
``Calendar year (in billions of gallons)
2005..............................................................3.1
2006..............................................................3.3
2007..............................................................3.5
2008..............................................................3.8
2009..............................................................4.1
2010..............................................................4.4
2011..............................................................4.7
2012..............................................................5.0
``(ii) Calendar year 2013 and thereafter.--For the purpose
of subparagraph (A), the applicable volume for calendar year
2013 and each calendar year thereafter shall be equal to the
product obtained by multiplying--
``(I) the number of gallons of gasoline that the
Administrator estimates will be sold or introduced into
commerce in the calendar year; and
``(II) the ratio that--
``(aa) 5.0 billion gallons of renewable fuels; bears to
``(bb) the number of gallons of gasoline sold or introduced
into commerce in calendar year 2012.
``(3) Non-contiguous state opt-in.--Upon the petition of a
non-contiguous State, the Administrator may allow the
renewable fuel program established by subtitle A of title XV
of the Energy Policy Act of 2003 to apply in such non-
contiguous State at the same time or any time after the
Administrator promulgates regulations under paragraph (2).
The Administrator may promulgate or revise regulations under
paragraph (2), establish applicable percentages under
paragraph (4), provide for the generation of credits under
paragraph (6), and take such other actions as may be
necessary to allow for the application of the renewable fuels
program in a non-contiguous State.
``(4) Applicable percentages.--
``(A) Provision of estimate of volumes of gasoline sales.--
Not later than October 31 of each of calendar years 2004
through 2011, the Administrator of the Energy Information
Administration shall provide to the Administrator of the
Environmental Protection Agency an estimate of the volumes of
gasoline that will be sold or introduced into commerce in the
United States during the following calendar year.
``(B) Determination of applicable percentages.--
``(i) In general.--Not later than November 30 of each of
the calendar years 2004 through 2011, based on the estimate
provided under subparagraph (A), the Administrator shall
determine and publish in the Federal Register, with respect
to the following calendar year, the renewable fuel obligation
that ensures that the requirements of paragraph (2) are met.
``(ii) Required elements.--The renewable fuel obligation
determined for a calendar year under clause (i) shall--
``(I) be applicable to refiners, blenders, and importers,
as appropriate;
``(II) be expressed in terms of a volume percentage of
gasoline sold or introduced into commerce; and
``(III) subject to subparagraph (C)(i), consist of a single
applicable percentage that applies to all categories of
persons specified in subclause (I).
``(C) Adjustments.--In determining the applicable
percentage for a calendar year, the Administrator shall make
adjustments--
``(i) to prevent the imposition of redundant obligations to
any person specified in subparagraph (B)(ii)(I); and
``(ii) to account for the use of renewable fuel during the
previous calendar year by small refineries that are exempt
under paragraph (11).
``(5) Equivalency.--For the purpose of paragraph (2), 1
gallon of either cellulosic biomass ethanol or waste derived
ethanol--
``(A) shall be considered to be the equivalent of 1.5
gallon of renewable fuel; or
``(B) if the cellulostic biomass ethanol or waste derived
ethanol is derived from agricultural residue or is an
agricultural byproduct (as that term is used in section 919
of the Energy Policy Act of 2003), shall be considered to be
the equivalent of 2.5 gallons of renewable fuel.
``(6) 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 paragraph (11), 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 (7).
``(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 renewable
fuel deficit provided that, in the calendar year following
the year in which the renewable fuel deficit is created, such
person shall achieve compliance with the renewable fuel
requirement under paragraph (2), and shall generate or
purchase additional renewable fuel credits to offset the
renewable fuel deficit of the previous year.
``(7) Seasonal variations in renewable fuel use.--
``(A) Study.--For each of the calendar years 2005 through
2012, the Administrator of the Energy Information
Administration shall conduct a study of renewable fuels
blending to determine whether there are excessive seasonal
variations in the use of renewable fuels.
``(B) Regulation of excessive seasonal variations.--If, for
any calendar year, the Administrator of the Energy
Information Administration, based on the study under
subparagraph (A), makes the determinations specified in
subparagraph (C), the Administrator shall promulgate
regulations to ensure that 35 percent or more of the quantity
of renewable fuels necessary to meet the requirement of
paragraph (2) is used during each of the periods specified in
subparagraph (D) of each subsequent calendar year.
``(C) Determinations.--The determinations referred to in
subparagraph (B) are that--
``(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;
[[Page H4105]]
``(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 percent 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).
``(8) Waivers.--
``(A) In general.--The Administrator, in consultation with
the Secretary of Agriculture and the Secretary of Energy, may
waive the requirement of paragraph (2) in whole or in part on
petition by one or more States by reducing the national
quantity of renewable fuel required under this subsection--
``(i) based on a determination by the Administrator, after
public notice and opportunity for comment, that
implementation of the requirement would severely harm the
economy or environment of a State, a region, or the United
States; or
``(ii) based on a determination by the Administrator, after
public notice and opportunity for comment, that there is an
inadequate domestic supply or distribution capacity to meet
the requirement.
``(B) Petitions for waivers.--The Administrator, in
consultation with the Secretary of Agriculture and the
Secretary of Energy, shall approve or disapprove a State
petition for a waiver of the requirement of paragraph (2)
within 90 days after the date on which the petition is
received by the Administrator.
``(C) Termination of waivers.--A waiver granted under
subparagraph (A) shall terminate after 1 year, but may be
renewed by the Administrator after consultation with the
Secretary of Agriculture and the Secretary of Energy.
``(9) Study and waiver for initial year of program.--Not
later than 180 days after the enactment of this subsection,
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
after the enactment of this subsection, 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
paragraph shall not be interpreted as limiting the
Administrator's authority to waive the requirements of
paragraph (2) in whole, or in part, under paragraph (8) or
paragraph (10), pertaining to waivers.
``(10) Assessment and waiver.--The Administrator, in
consultation with the Secretary of Energy and the Secretary
of Agriculture, shall evaluate the requirement of paragraph
(2) and determine, prior to January 1, 2007, and 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 Administrator 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 of paragraph (2);
``(B) the potential of the requirement of paragraph (2) to
significantly raise the price of gasoline, food (excluding
the net price impact on the requirement in paragraph (2) on
commodities used in the production of ethanol), 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 such requirement;
``(C) the potential of the requirement of 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 of paragraph (2) to
cause or promote exceedances of Federal, State, or local air
quality standards.
If the Administrator determines, by clear and convincing
information, 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, public
health, or environment of any significant area or region of
the country, the Administrator may waive, in whole or in
part, the requirement of paragraph (2) in any one year for
which the determination is made for that area or region of
the country, except that any such waiver shall not have the
effect of reducing the applicable volume of renewable fuel
specified in paragraph (2)(B) with respect to any year for
which the determination is made. In determining economic
impact under this paragraph, the Administrator shall not
consider the reduced revenues available from the Highway
Trust Fund (section 9503 of the Internal Revenue Code of
1986) as a result of the use of ethanol.
``(11) 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,
2007, 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).
``(12) Ethanol market concentration analysis.--
``(A) Analysis.--
``(i) In general.--Not later than 180 days after the date
of enactment of this subsection, and annually thereafter, the
Federal Trade Commission shall perform a market concentration
analysis of the ethanol production industry using the
Herfindahl-Hirschman Index to determine whether there is
sufficient competition among industry participants to avoid
price setting and other anticompetitive behavior.
``(ii) Scoring.--For the purpose of scoring under clause
(i) using the Herfindahl-Hirschman Index, all marketing
arrangements among industry participants shall be considered.
``(B) Report.--Not later than December 1, 2004, and
annually thereafter, the Federal Trade Commission shall
submit to Congress and the Administrator a report on the
results of the market concentration analysis performed under
subparagraph (A)(i).''.
(b) Penalties and Enforcement.--Section 211(d) of the Clean
Air Act (42 U.S.C. 7545(d)) is amended as follows:
(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)''.
(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 of the Environmental Protection Agency
(hereinafter in this subsection referred to as 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, to avoid duplicative
requirements, shall rely, to the extent
[[Page H4106]]
practicable, on existing reporting and recordkeeping
requirements and other information available to the
Administrator including gasoline distribution patterns that
include multistate use areas.
(3) Applicable law.--Activities carried out under this
subsection shall be conducted in a manner designed to protect
confidentiality of individual responses.
SEC. 1502. 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 methyl tertiary
butyl ether (hereinafterin this section referred to as
``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 a defective product 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 of the Environmental Protection Agency
(hereinafter in this section referred to as 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 of such
Act. If the safe harbor provided by this section does not
apply, the existence of a claim of defective product shall be
determined under otherwise applicable law. Nothing in this
subsection shall be construed to affect the liability of any
person for environmental remediation costs, drinking water
contamination, negligence for spills or other reasonably
foreseeable events, public or private nuisance, trespass,
breach of warranty, breach of contract, or any other
liability other than liability based upon a claim of
defective product.
(b) Effective Date.--This section shall be effective as of
September 5, 2003, and shall apply with respect to all claims
filed on or after that date.
SEC. 1503. FINDINGS AND MTBE TRANSITION ASSISTANCE.
(a) Findings.--Congress finds that--
(1) since 1979, methyl tertiary butyl ether (hereinafter in
this section referred to 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) having previously required oxygenates like MTBE for air
quality purposes, Congress has--
(A) reconsidered the relative value of MTBE in gasoline;
(B) decided to establish a date certain for action by the
Environmental Protection Agency to prohibit the use of MTBE
in gasoline; and
(C) decided to provide for the elimination of the oxygenate
requirement for reformulated gasoline and to provide for a
renewable fuels 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 and from the decision
to establish a date certain for action by the Environmental
Protection Agency to prohibit the use of MTBE in 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.--
``(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 (hereinafter in this
subsection referred to as `MTBE') 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, iso-octene, alkylates, or renewable fuels.
``(ii) Determination.--The Administrator, in consultation
with the Secretary of Energy, may determine that transition
assistance for the production of iso-octane, iso-octene,
alkylates, or renewable fuels is inconsistent with the
provisions of subparagraph (B) and, on that basis, may deny
applications for grants authorized by this paragraph.
``(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 (unless the Administrator
determines that such fuel additives may reasonably be
anticipated to endanger public health or the environment)
that, consistent with this subsection--
``(i) have been registered and have been tested or are
being tested in accordance with the requirements of this
section; and
``(ii) will contribute to replacing gasoline volumes lost
as a result of amendments made to subsection (k) of this
section by section 1504(a) and 1506 of the Energy Policy Act
of 2003.
``(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 MTBE for consumption before April 1, 2003
and ceased production at any time after the date of enactment
of this paragraph.
``(D) Authorization of appropriations.--There are
authorized to be appropriated to carry out this paragraph
$250,000,000 for each of fiscal years 2005 through 2012, 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. 1504. USE OF MTBE.
(a) In General.--Subject to subsections (e) and (f), not
later than December 31, 2014, the use of methyl tertiary
butyl ether (hereinafter in this section referred to as
``MTBE'') in motor vehicle fuel in any State other than a
State described in subsection (c) is prohibited.
(b) Regulations.--The Administrator of the Environmental
Protection Agency (hereafter referred to in this section as
the ``Administrator'') shall promulgate regulations to effect
the prohibition in subsection (a).
(c) States That Authorize Use.--A State described in this
subsection is a State in which the Governor of the State
submits a notification to the Administrator authorizing the
use of MTBE in motor vehicle fuel sold or used in the State.
(d) Publication of Notice.--The Administrator shall publish
in the Federal Register each notice submitted by a State
under subsection (c).
(e) Trace Quantities.--In carrying out subsection (a), the
Administrator may allow trace quantities of MTBE, not to
exceed 0.5 percent by volume, to be present in motor vehicle
fuel in cases that the Administrator determines to be
appropriate.
(f) Limitation.--The Administrator, under authority of
subsection (a), shall not prohibit or control the production
of MTBE for export from the United States or for any other
use other than for use in motor vehicle fuel.
SEC. 1505. NATIONAL ACADEMY OF SCIENCES REVIEW AND
PRESIDENTIAL DETERMINATION.
(a) NAS Review.--Not later than May 31, 2013, the Secretary
shall enter into an arrangement with the National Academy of
Sciences to review the use of methyl tertiary butyl ether
(hereafter referred to in this section as ``MTBE'') in fuel
and fuel additives. The review shall only use the best
available scientific information and data collected by
accepted methods or the best available means. The review
shall examine the use of MTBE in fuel and fuel additives,
significant beneficial and detrimental effects of this use on
environmental quality or public health or welfare including
the costs and benefits of such effects, likely effects of
controls or prohibitions on MTBE regarding fuel availability
and price, and other appropriate and reasonable actions that
are available to protect the environment or public health or
welfare from any detrimental effects of the use of MTBE in
fuel or fuel additives. The review shall be peer-reviewed
prior to publication and all supporting data and analytical
models shall be available to the public. The review shall be
completed no later than May 31, 2014.
(b) Presidential Determination.--No later than June 30,
2014, the President may make a determination that
restrictions on the use of MTBE to be implemented pursuant to
section 1504 shall not take place and that the legal
authority contained in section 1504 to prohibit the use of
MTBE in motor vehicle fuel shall become null and void.
SEC. 1506. 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 as follows:
(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.
[[Page H4107]]
(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).
(II) by redesignating clause (iii) as clause (ii).
(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 such date
of 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 as follows:
(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,''.
(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 of the Environmental Protection Agency
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 of
the Environmental Protection Agency (hereinafter in this
subsection referred to as the ``Administrator'') prior to the
date of 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 Federal or State
prohibitions on the use of methyl tertiary butyl ether
imposed after the 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 years 1999-2000 in the
average annual aggregate emissions of toxic air pollutants
from reformulated gasoline produced or distributed by the
refinery or importer; Provided, that 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. 1507. 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 subsection, the Administrator shall
publish for public comment a draft analysis of the changes in
emissions of air pollutants and air quality due to the use of
motor vehicle fuel and fuel additives resulting from
implementation of the amendments made by subtitle A of title
XV 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. 1508. 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 each of the following:
``(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.
``(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 5
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. 1509. REDUCING THE PROLIFERATION OF STATE FUEL CONTROLS.
(a) EPA Approval of State Plans With Fuel Controls.--
Section 211(c)(4)(C) of the Clean Air Act (42 U.S.C.
7545(c)(4)(C)) is amended by adding at the end the following:
``The Administrator shall not approve a control or
prohibition respecting the use of a
[[Page H4108]]
fuel or fuel additive under this subparagraph unless the
Administrator, after consultation with the Secretary of
Energy, publishes in the Federal Register a finding that, in
the Administrator's judgment, such control or prohibition
will not cause fuel supply or distribution interruptions or
have a significant adverse impact on fuel producibility in
the affected area or contiguous areas.''.
(b) Study.--The Administrator of the Environmental
Protection Agency (hereinafter in this subsection referred to
as the ``Administrator''), in cooperation with the Secretary
of Energy, shall undertake a study of the projected effects
on air quality, the proliferation of fuel blends, fuel
availability, and fuel costs of providing a preference for
each of the following:
(A) Reformulated gasoline referred to in subsection (k) of
section 211 of the Clean Air Act.
(B) A low RVP gasoline blend that has been certified by the
Administrator as having a Reid Vapor Pressure of 7.0 pounds
per square inch (psi).
(C) A low RVP gasoline blend that has been certified by the
Administrator as having a Reid Vapor Pressure of 7.8 pounds
per square inch (psi).
In carrying out such study, the Administrator shall obtain
comments from affected parties. The Administrator shall
submit the results of such study to the Congress not later
than 18 months after the date of enactment of this Act,
together with any recommended legislative changes.
SEC. 1510. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.
(a) Study.--
(1) In general.--The Administrator of the Environmental
Protection Agency (hereinafter in this section referred to as
the ``Administrator'') 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, 2007, the
Administrator 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 under this subsection 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 under this
subsection, the Administrator 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. 1511. COMMERCIAL BYPRODUCTS FROM MUNICIPAL SOLID WASTE
AND CELLULOSIC BIOMASS 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
(hereinafter in this section referred to as the
``Secretary'') 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 and cellulosic biomass 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;
(B) the availability of sufficient quantities of cellulosic
biomass; or
(C) 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.
SEC. 1512. RESOURCE CENTER.
(a) Definition.--In this section, the term ``RFG State''
means a State in which is located one or more covered areas
(as defined in section 211(k)(10)(D) of the Clean Air Act (42
U.S.C. 7545(k)(10)(D)).
(b) Authorization of Appropriations for Resource Center.--
There are authorized to be appropriated, for a resource
center to further develop bioconversion technology using low-
cost biomass for the production of ethanol at the Center for
Biomass-Based Energy at the University of Mississippi and the
University of Oklahoma, $4,000,000 for each of fiscal years
2004 through 2006.
(c) Renewable Fuel Production Research and Development
Grants.--
(1) In general.--The Administrator of the Environmental
Protection Agency shall provide grants for the research into,
and development and implementation of, renewable fuel
production technologies in RFG States with low rates of
ethanol production, including low rates of production of
cellulosic biomass ethanol.
[[Page H4109]]
(2) Eligibility.--
(A) In general.--The entities eligible to receive a grant
under this subsection are academic institutions in RFG
States, and consortia made up of combinations of academic
institutions, industry, State government agencies, or local
government agencies in RFG States, that have proven
experience and capabilities with relevant technologies.
(B) Application.--To be eligible to receive a grant under
this subsection, an eligible entity shall submit to the
Administrator an application in such manner and form, and
accompanied by such information, as the Administrator may
specify.
(3) Authorization of appropriations.--There are authorized
to be appropriated to carry out this subsection $25,000,000
for each of fiscal years 2004 through 2008.
SEC. 1513. CELLULOSIC BIOMASS AND WASTE-DERIVED ETHANOL
CONVERSION ASSISTANCE.
Section 211 of the Clean Air Act (42 U.S.C. 7545) is
amended by adding at the end the following:
``(r) Cellulosic Biomass and Waste-Derived Ethanol
Conversion Assistance.--
``(1) In general.--The Secretary of Energy may provide
grants to merchant producers of cellulosic biomass ethanol
and waste-derived ethanol in the United States to assist the
producers in building eligible production facilities
described in paragraph (2) for the production of ethanol.
``(2) Eligible production facilities.--A production
facility shall be eligible to receive a grant under this
subsection if the production facility--
``(A) is located in the United States; and
``(B) uses cellulosic biomass or waste-derived feedstocks
derived from agricultural residues, municipal solid waste, or
agricultural byproducts as that term is used in section 919
of the Energy Policy Act of 2003.
``(3) Authorization of appropriations.--There are
authorized to be appropriated the following amounts to carry
out this subsection:
``(A) $100,000,000 for fiscal year 2004.
``(B) $250,000,000 for fiscal year 2005.
``(C) $400,000,000 for fiscal year 2006.''.
SEC. 1514. BLENDING OF COMPLIANT REFORMULATED GASOLINES.
Section 211 of the Clean Air Act (42 U.S.C. 7545) is
amended by adding at the end the following:
``(s) Blending of Compliant Reformulated Gasolines.--
``(1) In general.--Notwithstanding subsections (h) and (k)
and subject to the limitations in paragraph (2) of this
subsection, it shall not be a violation of this subtitle for
a gasoline retailer, during any month of the year, to blend
at a retail location batches of ethanol-blended and non-
ethanol-blended reformulated gasoline, provided that--
``(A) each batch of gasoline to be blended has been
individually certified as in compliance with subsections (h)
and (k) prior to being blended;
``(B) the retailer notifies the Administrator prior to such
blending, and identifies the exact location of the retail
station and the specific tank in which such blending will
take place;
``(C) the retailer retains and, as requested by the
Administrator or the Administrator's designee, makes
available for inspection such certifications accounting for
all gasoline at the retail outlet; and
``(D) the retailer does not, between June 1 and September
15 of each year, blend a batch of VOC-controlled, or
`summer', gasoline with a batch of non-VOC-controlled, or
`winter', gasoline (as these terms are defined under
subsections (h) and (k)).
``(2) Limitations.--
``(A) Frequency limitation.--A retailer shall only be
permitted to blend batches of compliant reformulated gasoline
under this subsection a maximum of two blending periods
between May 1 and September 15 of each calendar year.
``(B) Duration of blending period.--Each blending period
authorized under subparagraph (A) shall extend for a period
of no more than 10 consecutive calendar days.
``(3) Surveys.--A sample of gasoline taken from a retail
location that has blended gasoline within the past 30 days
and is in compliance with subparagraphs (A), (B), (C), and
(D) of paragraph (1) shall not be used in a VOC survey
mandated by 40 C.F.R. Part 80.
``(4) State implementation plans.--A State shall be held
harmless and shall not be required to revise its State
implementation plan under section 110 to account for the
emissions from blended gasoline authorized under paragraph
(1).
``(5) Preservation of state law.--Nothing in this
subsection shall--
``(A) preempt existing State laws or regulations regulating
the blending of compliant gasolines; or
``(B) prohibit a State from adopting such restrictions in
the future.
``(6) Regulations.--The Administrator shall promulgate,
after notice and comment, regulations implementing this
subsection within one year after the date of enactment of
this subsection.
``(7) Effective date.--This subsection shall become
effective 15 months after the date of its enactment and shall
apply to blended batches of reformulated gasoline on or after
that date, regardless of whether the implementing regulations
required by paragraph (6) have been promulgated by the
Administrator by that date.
``(8) Liability.--No person other than the person
responsible for blending under this subsection shall be
subject to an enforcement action or penalties under
subsection (d) solely arising from the blending of compliant
reformulated gasolines by the retailers.
``(9) Formulation of gasoline.--This subsection does not
grant authority to the Administrator or any State (or any
subdivision thereof) to require reformulation of gasoline at
the refinery to adjust for potential or actual emissions
increases due to the blending authorized by this
subsection.''.
Subtitle B--Underground Storage Tank Compliance
SEC. 1521. SHORT TITLE.
This subtitle may be cited as the ``Underground Storage
Tank Compliance Act of 2004''.
SEC. 1522. LEAKING UNDERGROUND STORAGE TANKS.
(a) In General.--Section 9004 of the Solid Waste Disposal
Act (42 U.S.C. 6991c) is amended by adding at the end the
following:
``(f) Trust Fund Distribution.--
``(1) In general.--
``(A) Amount and permitted uses of distribution.--The
Administrator shall distribute to States not less than 80
percent of the funds from the Trust Fund that are made
available to the Administrator under section 9014(2)(A) for
each fiscal year for use in paying the reasonable costs,
incurred under a cooperative agreement with any State for--
``(i) actions taken by the State under section
9003(h)(7)(A);
``(ii) necessary administrative expenses, as determined by
the Administrator, that are directly related to State fund or
State assurance programs under subsection (c)(1);
``(iii) any State fund or State assurance program carried
out under subsection (c)(1) for a release from an underground
storage tank regulated under this subtitle to the extent
that, as determined by the State in accordance with
guidelines developed jointly by the Administrator and the
States, the financial resources of the owner and operator of
the underground storage tank (including resources provided by
a program in accordance with subsection (c)(1)) are not
adequate to pay the cost of a corrective action without
significantly impairing the ability of the owner or operator
to continue in business; or
``(iv) enforcement, by a State or a local government, of
State or local regulations pertaining to underground storage
tanks regulated under this subtitle.
``(B) Use of funds for enforcement.--In addition to the
uses of funds authorized under subparagraph (A), the
Administrator may use funds from the Trust Fund that are not
distributed to States under subparagraph (A) for enforcement
of any regulation promulgated by the Administrator under this
subtitle.
``(C) Prohibited uses.--Funds provided to a State by the
Administrator under subparagraph (A) shall not be used by the
State to provide financial assistance to an owner or operator
to meet any requirement relating to underground storage tanks
under subparts B, C, D, H, and G of part 280 of title 40,
Code of Federal Regulations (as in effect on the date of
enactment of this subsection).
``(2) Allocation.--
``(A) Process.--Subject to subparagraphs (B) and (C), in
the case of a State with which the Administrator has entered
into a cooperative agreement under section 9003(h)(7)(A), the
Administrator shall distribute funds from the Trust Fund to
the State using an allocation process developed by the
Administrator.
``(B) Diversion of state funds.--The Administrator shall
not distribute funds under subparagraph (A)(iii) of
subsection (f)(1) to any State that has diverted funds from a
State fund or State assurance program for purposes other than
those related to the regulation of underground storage tanks
covered by this subtitle, with the exception of those
transfers that had been completed earlier than the date of
enactment of this subsection.
``(C) Revisions to process.--The Administrator may revise
the allocation process referred to in subparagraph (A)
after--
``(i) consulting with State agencies responsible for
overseeing corrective action for releases from underground
storage tanks; and
``(ii) taking into consideration, at a minimum, each of the
following:
``(I) The number of confirmed releases from federally
regulated leaking underground storage tanks in the States.
``(II) The number of federally regulated underground
storage tanks in the States.
``(III) The performance of the States in implementing and
enforcing the program.
``(IV) The financial needs of the States.
``(V) The ability of the States to use the funds referred
to in subparagraph (A) in any year.
``(3) Distributions to state agencies.--Distributions from
the Trust Fund under this subsection shall be made directly
to a State agency that--
``(A) enters into a cooperative agreement referred to in
paragraph (2)(A); or
``(B) is enforcing a State program approved under this
section.
``(4) Cost recovery prohibition.--Funds from the Trust Fund
provided by States to owners or operators under paragraph
(1)(A)(iii) shall not be subject to cost recovery by the
Administrator under section 9003(h)(6).''.
(b) Withdrawal of Approval of State Funds.--Section 9004(c)
of the Solid Waste Disposal Act (42 U.S.C. 6991c(c)) is
amended by inserting the following new paragraph at the end
thereof:
[[Page H4110]]
``(6) Withdrawal of approval.--After an opportunity for
good faith, collaborative efforts to correct financial
deficiencies with a State fund, the Administrator may
withdraw approval of any State fund or State assurance
program to be used as a financial responsibility mechanism
without withdrawing approval of a State underground storage
tank program under section 9004(a).''.
SEC. 1523. INSPECTION OF UNDERGROUND STORAGE TANKS.
(a) Inspection Requirements.--Section 9005 of the Solid
Waste Disposal Act (42 U.S.C. 6991d) is amended by inserting
the following new subsection at the end thereof:
``(c) Inspection Requirements.--
``(1) Uninspected tanks.--In the case of underground
storage tanks regulated under this subtitle that have not
undergone an inspection since December 22, 1998, not later
than 2 years after the date of enactment of this subsection,
the Administrator or a State that receives funding under this
subtitle, as appropriate, shall conduct on-site inspections
of all such tanks to determine compliance with this subtitle
and the regulations under this subtitle (40 C.F.R. 280) or a
requirement or standard of a State program developed under
section 9004.
``(2) Periodic inspections.--After completion of all
inspections required under paragraph (1), the Administrator
or a State that receives funding under this subtitle, as
appropriate, shall conduct on-site inspections of each
underground storage tank regulated under this subtitle at
least once every 3 years to determine compliance with this
subtitle and the regulations under this subtitle (40 C.F.R.
280) or a requirement or standard of a State program
developed under section 9004. The Administrator may extend
for up to one additional year the first 3-year inspection
interval under this paragraph if the State demonstrates that
it has insufficient resources to complete all such
inspections within the first 3-year period.
``(3) Inspection authority.--Nothing in this section shall
be construed to diminish the Administrator's or a State's
authorities under section 9005(a).''.
(b) Study of Alternative Inspection Programs.--The
Administrator of the Environmental Protection Agency, in
coordination with a State, shall gather information on
compliance assurance programs that could serve as an
alternative to the inspection programs under section 9005(c)
of the Solid Waste Disposal Act (42 U.S.C. 6991d(c)) and
shall, within 4 years after the date of enactment of this
Act, submit a report to the Congress containing the results
of such study.
SEC. 1524. OPERATOR TRAINING.
(a) In General.--Section 9010 of the Solid Waste Disposal
Act (42 U.S.C. 6991i) is amended to read as follows:
``SEC. 9010. OPERATOR TRAINING.
``(a) Guidelines.--
``(1) In general.--Not later than 2 years after the date of
enactment of the Underground Storage Tank Compliance Act of
2004, in consultation and cooperation with States and after
public notice and opportunity for comment, the Administrator
shall publish guidelines that specify training requirements
for persons having primary daily on-site management
responsibility for the operation and maintenance of
underground storage tanks.
``(2) Considerations.--The guidelines described in
paragraph (1) shall take into account--
``(A) State training programs in existence as of the date
of publication of the guidelines;
``(B) training programs that are being employed by tank
owners and tank operators as of the date of enactment of the
Underground Storage Tank Compliance Act of 2004;
``(C) the high turnover rate of tank operators and other
personnel;
``(D) the frequency of improvement in underground storage
tank equipment technology;
``(E) the nature of the businesses in which the tank
operators are engaged; and
``(F) such other factors as the Administrator determines to
be necessary to carry out this section.
``(b) State Programs.--
``(1) In general.--Not later than 2 years after the date on
which the Administrator publishes the guidelines under
subsection (a)(1), each State that receives funding under
this subtitle shall develop State-specific training
requirements that are consistent with the guidelines
developed under subsection (a)(1).
``(2) Requirements.--State requirements described in
paragraph (1) shall--
``(A) be consistent with subsection (a);
``(B) be developed in cooperation with tank owners and tank
operators;
``(C) take into consideration training programs implemented
by tank owners and tank operators as of the date of enactment
of this section; and
``(D) be appropriately communicated to tank owners and
operators.
``(3) Financial incentive.--The Administrator may award to
a State that develops and implements requirements described
in paragraph (1), in addition to any funds that the State is
entitled to receive under this subtitle, not more than
$200,000, to be used to carry out the requirements.
``(c) Operators.--All persons having primary daily on-site
management responsibility for the operation and maintenance
of any underground storage tank shall--
``(1) meet the training requirements developed under
subsection (b); and
``(2) repeat the applicable requirements developed under
subsection (b), if the tank for which they have primary daily
on-site management responsibilities is determined to be out
of compliance with--
``(A) a requirement or standard promulgated by the
Administrator under section 9003; or
``(B) a requirement or standard of a State program approved
under section 9004.''.
(b) State Program Requirement.--Section 9004(a) of the
Solid Waste Disposal Act (42 U.S.C. 6991c(a)) is amended by
striking ``and'' at the end of paragraph (7), by striking the
period at the end of paragraph (8) and inserting ``; and'',
and by adding the following new paragraph at the end thereof:
``(9) State-specific training requirements as required by
section 9010.''.
(c) Enforcement.--Section 9006(d)(2) of such Act (42 U.S.C.
6991e) is amended as follows:
(1) By striking ``or'' at the end of subparagraph (B).
(2) By adding the following new subparagraph after
subparagraph (C):
``(D) the training requirements established by States
pursuant to section 9010 (relating to operator training);
or''.
(d) Table of Contents.--The item relating to section 9010
in table of contents for the Solid Waste Disposal Act is
amended to read as follows:
``Sec. 9010. Operator training.''.
SEC. 1525. REMEDIATION FROM OXYGENATED FUEL ADDITIVES.
Section 9003(h) of the Solid Waste Disposal Act (42 U.S.C.
6991b(h)) is amended as follows:
(1) In paragraph (7)(A)--
(A) by striking ``paragraphs (1) and (2) of this
subsection'' and inserting ``paragraphs (1), (2), and (12)''
; and
(B) by striking ``and including the authorities of
paragraphs (4), (6), and (8) of this subsection'' and
inserting ``and the authority under sections 9011 and 9012
and paragraphs (4), (6), and (8),''.
(2) By adding at the end the following:
``(12) Remediation of oxygenated fuel contamination.--
``(A) In general.--The Administrator and the States may use
funds made available under section 9014(2)(B) to carry out
corrective actions with respect to a release of a fuel
containing an oxygenated fuel additive that presents a threat
to human health or welfare or the environment.
``(B) Applicable authority.--The Administrator or a State
shall carry out subparagraph (A) in accordance with paragraph
(2), and in the case of a State, in accordance with a
cooperative agreement entered into by the Administrator and
the State under paragraph (7).''.
SEC. 1526. RELEASE PREVENTION, COMPLIANCE, AND ENFORCEMENT.
(a) Release Prevention and Compliance.--Subtitle I of the
Solid Waste Disposal Act (42 U.S.C. 6991 et seq.) is amended
by adding at the end the following:
``SEC. 9011. USE OF FUNDS FOR RELEASE PREVENTION AND
COMPLIANCE.
``Funds made available under section 9014(2)(D) from the
Trust Fund may be used to conduct inspections, issue orders,
or bring actions under this subtitle--
``(1) by a State, in accordance with a grant or cooperative
agreement with the Administrator, of State regulations
pertaining to underground storage tanks regulated under this
subtitle; and
``(2) by the Administrator, for tanks regulated under this
subtitle (including under a State program approved under
section 9004).''.
(b) Government-Owned Tanks.--Section 9003 of the Solid
Waste Disposal Act (42 U.S.C. 6991b) is amended by adding at
the end the following:
``(i) Government-Owned Tanks.--
``(1) State compliance report.--(A) Not later than 2 years
after the date of enactment of this subsection, each State
that receives funding under this subtitle shall submit to the
Administrator a State compliance report that--
``(i) lists the location and owner of each underground
storage tank described in subparagraph (B) in the State that,
as of the date of submission of the report, is not in
compliance with section 9003; and
``(ii) specifies the date of the last inspection and
describes the actions that have been and will be taken to
ensure compliance of the underground storage tank listed
under clause (i) with this subtitle.
``(B) An underground storage tank described in this
subparagraph is an underground storage tank that is--
``(i) regulated under this subtitle; and
``(ii) owned or operated by the Federal, State, or local
government.
``(C) The Administrator shall make each report, received
under subparagraph (A), available to the public through an
appropriate media.
``(2) Financial incentive.--The Administrator may award to
a State that develops a report described in paragraph (1), in
addition to any other funds that the State is entitled to
receive under this subtitle, not more than $50,000, to be
used to carry out the report.
``(3) Not a safe harbor.--This subsection does not relieve
any person from any obligation or requirement under this
subtitle.''.
(c) Public Record.--Section 9002 of the Solid Waste
Disposal Act (42 U.S.C. 6991a) is amended by adding at the
end the following:
``(d) Public Record.--
[[Page H4111]]
``(1) In general.--The Administrator shall require each
State that receives Federal funds to carry out this subtitle
to maintain, update at least annually, and make available to
the public, in such manner and form as the Administrator
shall prescribe (after consultation with States), a record of
underground storage tanks regulated under this subtitle.
``(2) Considerations.--To the maximum extent practicable,
the public record of a State, respectively, shall include,
for each year--
``(A) the number, sources, and causes of underground
storage tank releases in the State;
``(B) the record of compliance by underground storage tanks
in the State with--
``(i) this subtitle; or
``(ii) an applicable State program approved under section
9004; and
``(C) data on the number of underground storage tank
equipment failures in the State.''.
(d) Incentive for Performance.--Section 9006 of the Solid
Waste Disposal Act (42 U.S.C. 6991e) is amended by adding at
the end the following:
``(e) Incentive for Performance.--Both of the following may
be taken into account in determining the terms of a civil
penalty under subsection (d):
``(1) The compliance history of an owner or operator in
accordance with this subtitle or a program approved under
section 9004.
``(2) Any other factor the Administrator considers
appropriate.''.
(e) Table of Contents.--The table of contents for such
subtitle I is amended by adding the following new item at the
end thereof:
``Sec. 9011. Use of funds for release prevention and compliance.''.
SEC. 1527. DELIVERY PROHIBITION.
(a) In General.--Subtitle I of the Solid Waste Disposal Act
(42 U.S.C. 6991 et seq.) is amended by adding at the end the
following:
``SEC. 9012. DELIVERY PROHIBITION.
``(a) Requirements.--
``(1) Prohibition of delivery or deposit.--Beginning 2
years after the date of enactment of this section, it shall
be unlawful to deliver to, deposit into, or accept a
regulated substance into an underground storage tank at a
facility which has been identified by the Administrator or a
State implementing agency to be ineligible for fuel delivery
or deposit.
``(2) Guidance.--Within 1 year after the date of enactment
of this section, the Administrator and States that receive
funding under this subtitle shall, in consultation with the
underground storage tank owner and product delivery
industries, for territory for which they are the primary
implementing agencies, publish guidelines detailing the
specific processes and procedures they will use to implement
the provisions of this section. The processes and procedures
include, at a minimum--
``(A) the criteria for determining which underground
storage tank facilities are ineligible for delivery or
deposit;
``(B) the mechanisms for identifying which facilities are
ineligible for delivery or deposit to the underground storage
tank owning and fuel delivery industries;
``(C) the process for reclassifying ineligible facilities
as eligible for delivery or deposit; and
``(D) a delineation of, or a process for determining, the
specified geographic areas subject to paragraph (4).
``(3) Delivery prohibition notice.--
``(A) Roster.--The Administrator and each State
implementing agency that receives funding under this subtitle
shall establish within 24 months after the date of enactment
of this section a Delivery Prohibition Roster listing
underground storage tanks under the Administrator's or the
State's jurisdiction that are determined to be ineligible for
delivery or deposit pursuant to paragraph (2).
``(B) Notification.--The Administrator and each State, as
appropriate, shall make readily known, to underground storage
tank owners and operators and to product delivery industries,
the underground storage tanks listed on a Delivery
Prohibition Roster by:
``(i) posting such Rosters, including the physical location
and street address of each listed underground storage tank,
on official web sites and, if the Administrator or the State
so chooses, other electronic means;
``(ii) updating these Rosters periodically; and
``(iii) installing a tamper-proof tag, seal, or other
device blocking the fill pipes of such underground storage
tanks to prevent the delivery of product into such
underground storage tanks.
``(C) Roster updates.--The Administrator and the State
shall update the Delivery Prohibition Rosters as appropriate,
but not less than once a month on the first day of the month.
``(D) Tampering with device.--
``(i) Prohibition.--It shall be unlawful for any person,
other than an authorized representative of the Administrator
or a State, as appropriate, to remove, tamper with, destroy,
or damage a device installed by the Administrator or a State,
as appropriate, under subparagraph (B)(iii) of this
subsection.
``(ii) Civil penalties.--Any person violating clause (i) of
this subparagraph shall be subject to a civil penalty not to
exceed $10,000 for each violation.
``(4) Limitation.--
``(A) Rural and remote areas.--Subject to subparagraph (B),
the Administrator or a State shall not include an underground
storage tank on a Delivery Prohibition Roster under paragraph
(3) if an urgent threat to public health, as determined by
the Administrator, does not exist and if such a delivery
prohibition would jeopardize the availability of, or access
to, fuel in any rural and remote areas.
``(B) Applicability of limitation.--The limitation under
subparagraph (A) shall apply only during the 180-day period
following the date of a determination by the Administrator or
the appropriate State that exercising the authority of
paragraph (3) is limited by subparagraph (A).
``(b) Effect on State Authority.--Nothing in this section
shall affect the authority of a State to prohibit the
delivery of a regulated substance to an underground storage
tank.
``(c) Defense to Violation.--A person shall not be in
violation of subsection (a)(1) if the underground storage
tank into which a regulated substance is delivered is not
listed on the Administrator's or the appropriate State's
Prohibited Delivery Roster 7 calendar days prior to the
delivery being made.''.
(b) Enforcement.--Section 9006(d)(2) of such Act (42 U.S.C.
6991e(d)(2)) is amended as follows:
(1) By adding the following new subparagraph after
subparagraph (D):
``(E) the delivery prohibition requirement established by
section 9012,''.
(2) By adding the following new sentence at the end
thereof: ``Any person making or accepting a delivery or
deposit of a regulated substance to an underground storage
tank at an ineligible facility in violation of section 9012
shall also be subject to the same civil penalty for each day
of such violation.''.
(c) Table of Contents.--The table of contents for such
subtitle I is amended by adding the following new item at the
end thereof:
``Sec. 9012. Delivery prohibition.''.
SEC. 1528. FEDERAL FACILITIES.
Section 9007 of the Solid Waste Disposal Act (42 U.S.C.
6991f) is amended to read as follows:
``SEC. 9007. FEDERAL FACILITIES.
``(a) In General.--Each department, agency, and
instrumentality of the executive, legislative, and judicial
branches of the Federal Government (1) having jurisdiction
over any underground storage tank or underground storage tank
system, or (2) engaged in any activity resulting, or which
may result, in the installation, operation, management, or
closure of any underground storage tank, release response
activities related thereto, or in the delivery, acceptance,
or deposit of any regulated substance to an underground
storage tank or underground storage tank system shall be
subject to, and comply with, all Federal, State, interstate,
and local requirements, both substantive and procedural
(including any requirement for permits or reporting or any
provisions for injunctive relief and such sanctions as may be
imposed by a court to enforce such relief), respecting
underground storage tanks in the same manner, and to the same
extent, as any person is subject to such requirements,
including the payment of reasonable service charges. The
Federal, State, interstate, and local substantive and
procedural requirements referred to in this subsection
include, but are not limited to, all administrative orders
and all civil and administrative penalties and fines,
regardless of whether such penalties or fines are punitive or
coercive in nature or are imposed for isolated, intermittent,
or continuing violations. The United States hereby expressly
waives any immunity otherwise applicable to the United States
with respect to any such substantive or procedural
requirement (including, but not limited to, any injunctive
relief, administrative order or civil or administrative
penalty or fine referred to in the preceding sentence, or
reasonable service charge). The reasonable service charges
referred to in this subsection include, but are not limited
to, fees or charges assessed in connection with the
processing and issuance of permits, renewal of permits,
amendments to permits, review of plans, studies, and other
documents, and inspection and monitoring of facilities, as
well as any other nondiscriminatory charges that are assessed
in connection with a Federal, State, interstate, or local
underground storage tank regulatory program. Neither the
United States, nor any agent, employee, or officer thereof,
shall be immune or exempt from any process or sanction of any
State or Federal Court with respect to the enforcement of any
such injunctive relief. No agent, employee, or officer of the
United States shall be personally liable for any civil
penalty under any Federal, State, interstate, or local law
concerning underground storage tanks with respect to any act
or omission within the scope of the official duties of the
agent, employee, or officer. An agent, employee, or officer
of the United States shall be subject to any criminal
sanction (including, but not limited to, any fine or
imprisonment) under any Federal or State law concerning
underground storage tanks, but no department, agency, or
instrumentality of the executive, legislative, or judicial
branch of the Federal Government shall be subject to any such
sanction. The President may exempt any underground storage
tank of any department, agency, or instrumentality in the
executive branch from compliance with such a requirement if
he determines it to be in the paramount interest of the
United States to do so. No such exemption shall be
[[Page H4112]]
granted due to lack of appropriation unless the President
shall have specifically requested such appropriation as a
part of the budgetary process and the Congress shall have
failed to make available such requested appropriation. Any
exemption shall be for a period not in excess of one year,
but additional exemptions may be granted for periods not to
exceed one year upon the President's making a new
determination. The President shall report each January to the
Congress all exemptions from the requirements of this section
granted during the preceding calendar year, together with his
reason for granting each such exemption.
``(b) Review of and Report on Federal Underground Storage
Tanks.--
``(1) Review.--Not later than 12 months after the date of
enactment of the Underground Storage Tank Compliance Act of
2004, each Federal agency that owns or operates 1 or more
underground storage tanks, or that manages land on which 1 or
more underground storage tanks are located, shall submit to
the Administrator, the Committee on Energy and Commerce of
the United States House of Representatives, and the Committee
on the Environment and Public Works of the United States
Senate a compliance strategy report that--
``(A) lists the location and owner of each underground
storage tank described in this paragraph;
``(B) lists all tanks that are not in compliance with this
subtitle that are owned or operated by the Federal agency;
``(C) specifies the date of the last inspection by a State
or Federal inspector of each underground storage tank owned
or operated by the agency;
``(D) lists each violation of this subtitle respecting any
underground storage tank owned or operated by the agency;
``(E) describes the operator training that has been
provided to the operator and other persons having primary
daily on-site management responsibility for the operation and
maintenance of underground storage tanks owned or operated by
the agency; and
``(F) describes the actions that have been and will be
taken to ensure compliance for each underground storage tank
identified under subparagraph (B).
``(2) Not a safe harbor.--This subsection does not relieve
any person from any obligation or requirement under this
subtitle.''.
SEC. 1529. TANKS ON TRIBAL LANDS.
(a) In General.--Subtitle I of the Solid Waste Disposal Act
(42 U.S.C. 6991 et seq.) is amended by adding the following
at the end thereof:
``SEC. 9013. TANKS ON TRIBAL LANDS.
``(a) Strategy.--The Administrator, in coordination with
Indian tribes, shall, not later than 1 year after the date of
enactment of this section, develop and implement a strategy--
``(1) giving priority to releases that present the greatest
threat to human health or the environment, to take necessary
corrective action in response to releases from leaking
underground storage tanks located wholly within the
boundaries of--
``(A) an Indian reservation; or
``(B) any other area under the jurisdiction of an Indian
tribe; and
``(2) to implement and enforce requirements concerning
underground storage tanks located wholly within the
boundaries of--
``(A) an Indian reservation; or
``(B) any other area under the jurisdiction of an Indian
tribe.
``(b) Report.--Not later than 2 years after the date of
enactment of this section, the Administrator shall submit to
Congress a report that summarizes the status of
implementation and enforcement of this subtitle in areas
located wholly within--
``(1) the boundaries of Indian reservations; and
``(2) any other areas under the jurisdiction of an Indian
tribe.
The Administrator shall make the report under this subsection
available to the public.
``(c) Not a Safe Harbor.--This section does not relieve any
person from any obligation or requirement under this
subtitle.
``(d) State Authority.--Nothing in this section applies to
any underground storage tank that is located in an area under
the jurisdiction of a State, or that is subject to regulation
by a State, as of the date of enactment of this section.''.
(b) Table of Contents.--The table of contents for such
subtitle I is amended by adding the following new item at the
end thereof:
``Sec. 9013. Tanks on Tribal lands.''.
SEC. 1530. FUTURE RELEASE CONTAINMENT TECHNOLOGY.
Not later than 2 years after the date of enactment of this
Act, the Administrator of the Environmental Protection
Agency, after consultation with States, shall make available
to the public and to the Committee on Energy and Commerce of
the House of Representatives and the Committee on Environment
and Public Works of the Senate information on the
effectiveness of alternative possible methods and means for
containing releases from underground storage tanks systems.
SEC. 1531. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--Subtitle I of the Solid Waste Disposal Act
(42 U.S.C. 6991 et seq.) is amended by adding at the end the
following:
``SEC. 9014. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to the
Administrator the following amounts:
``(1) To carry out subtitle I (except sections 9003(h),
9005(c), 9011 and 9012) $50,000,000 for each of fiscal years
2004 through 2008.
``(2) From the Trust Fund, notwithstanding section
9508(c)(1) of the Internal Revenue Code of 1986:
``(A) to carry out section 9003(h) (except section
9003(h)(12)) $200,000,000 for each of fiscal years 2004
through 2008;
``(B) to carry out section 9003(h)(12), $200,000,000 for
each of fiscal years 2004 through 2008;
``(C) to carry out sections 9004(f) and 9005(c)
$100,000,000 for each of fiscal years 2004 through 2008; and
``(D) to carry out sections 9011 and 9012 $55,000,000 for
each of fiscal years 2004 through 2008.''.
(b) Table of Contents.--The table of contents for such
subtitle I is amended by adding the following new item at the
end thereof:
``Sec. 9014. Authorization of appropriations.''.
SEC. 1532. CONFORMING AMENDMENTS.
(a) In General.--Section 9001 of the Solid Waste Disposal
Act (42 U.S.C. 6991) is amended as follows:
(1) By striking ``For the purposes of this subtitle--'' and
inserting ``In this subtitle:''.
(2) By redesignating paragraphs (1), (2), (3), (4), (5),
(6), (7), and (8) as paragraphs (10), (7), (4), (3), (8),
(5), (2), and (6), respectively.
(3) By inserting before paragraph (2) (as redesignated by
paragraph (2) of this subsection) the following:
``(1) Indian tribe.--
``(A) In general.--The term `Indian tribe' means any Indian
tribe, band, nation, or other organized group or community
that is recognized as being eligible for special programs and
services provided by the United States to Indians because of
their status as Indians.
``(B) Inclusions.--The term `Indian tribe' includes an
Alaska Native village, as defined in or established under the
Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.);
and''.
(4) By inserting after paragraph (8) (as redesignated by
paragraph (2) of this subsection) the following:
``(9) Trust fund.--The term `Trust Fund' means the Leaking
Underground Storage Tank Trust Fund established by section
9508 of the Internal Revenue Code of 1986.''.
(b) Conforming Amendments.--The Solid Waste Disposal Act
(42 U.S.C. 6901 and following) is amended as follows:
(1) Section 9003(f) (42 U.S.C. 6991b(f)) is amended--
(A) in paragraph (1), by striking ``9001(2)(B)'' and
inserting ``9001(7)(B)''; and
(B) in paragraphs (2) and (3), by striking ``9001(2)(A)''
each place it appears and inserting ``9001(7)(A)''.
(2) Section 9003(h) (42 U.S.C. 6991b(h)) is amended in
paragraphs (1), (2)(C), (7)(A), and (11) by striking
``Leaking Underground Storage Tank Trust Fund'' each place it
appears and inserting ``Trust Fund''.
(3) Section 9009 (42 U.S.C. 6991h) is amended--
(A) in subsection (a), by striking ``9001(2)(B)'' and
inserting ``9001(7)(B)''; and
(B) in subsection (d), by striking ``section 9001(1) (A)
and (B)'' and inserting ``subparagraphs (A) and (B) of
section 9001(10)''.
SEC. 1533. TECHNICAL AMENDMENTS.
The Solid Waste Disposal Act is amended as follows:
(1) Section 9001(4)(A) (42 U.S.C. 6991(4)(A)) is amended by
striking ``sustances'' and inserting ``substances''.
(2) Section 9003(f)(1) (42 U.S.C. 6991b(f)(1)) is amended
by striking ``subsection (c) and (d) of this section'' and
inserting ``subsections (c) and (d)''.
(3) Section 9004(a) (42 U.S.C. 6991c(a)) is amended by
striking ``in 9001(2) (A) or (B) or both'' and inserting ``in
subparagraph (A) or (B) of section 9001(7)''.
(4) Section 9005 (42 U.S.C. 6991d) is amended--
(A) in subsection (a), by striking ``study taking'' and
inserting ``study, taking'';
(B) in subsection (b)(1), by striking ``relevent'' and
inserting ``relevant''; and
(C) in subsection (b)(4), by striking ``Evironmental'' and
inserting ``Environmental''.
TITLE XVI--STUDIES
SEC. 1601. STUDY ON INVENTORY OF PETROLEUM AND NATURAL GAS
STORAGE.
(a) Definition.--For purposes of this section ``petroleum''
means crude oil, motor gasoline, jet fuel, distillates, and
propane.
(b) Study.--The Secretary of Energy shall conduct a study
on petroleum and natural gas storage capacity and operational
inventory levels, nationwide and by major geographical
regions.
(c) Contents.--The study shall address--
(1) historical normal ranges for petroleum and natural gas
inventory levels;
(2) historical and projected storage capacity trends;
(3) estimated operation inventory levels below which
outages, delivery slowdown, rationing, interruptions in
service, or other indicators of shortage begin to appear;
(4) explanations for inventory levels dropping below normal
ranges; and
(5) the ability of industry to meet United States demand
for petroleum and natural gas without shortages or price
spikes, when inventory levels are below normal ranges.
(d) Report to Congress.--Not later than 1 year after the
date of enactment of this Act, the Secretary of Energy shall
submit a report to Congress on the results of the study,
[[Page H4113]]
including findings and any recommendations for preventing
future supply shortages.
SEC. 1602. NATURAL GAS SUPPLY SHORTAGE REPORT.
(a) Report.--Not later than 6 months after the date of
enactment of this Act, the Secretary of Energy shall submit
to Congress a report on natural gas supplies and demand. In
preparing the report, the Secretary shall consult with
experts in natural gas supply and demand as well as
representatives of State and local units of government,
tribal organizations, and consumer and other organizations.
As the Secretary deems advisable, the Secretary may hold
public hearings and provide other opportunities for public
comment. The report shall contain recommendations for Federal
actions that, if implemented, will result in a balance
between natural gas supply and demand at a level that will
ensure, to the maximum extent practicable, achievement of the
objectives established in subsection (b).
(b) Objectives of Report.--In preparing the report, the
Secretary shall seek to develop a series of recommendations
that will result in a balance between natural gas supply and
demand adequate to--
(1) provide residential consumers with natural gas at
reasonable and stable prices;
(2) accommodate long-term maintenance and growth of
domestic natural gas-dependent industrial, manufacturing, and
commercial enterprises;
(3) facilitate the attainment of national ambient air
quality standards under the Clean Air Act;
(4) permit continued progress in reducing emissions
associated with electric power generation; and
(5) support development of the preliminary phases of
hydrogen-based energy technologies.
(c) Contents of Report.--The report shall provide a
comprehensive analysis of natural gas supply and demand in
the United States for the period from 2004 to 2015. The
analysis shall include, at a minimum--
(1) estimates of annual domestic demand for natural gas
that take into account the effect of Federal policies and
actions that are likely to increase and decrease demand for
natural gas;
(2) projections of annual natural gas supplies, from
domestic and foreign sources, under existing Federal
policies;
(3) an identification of estimated natural gas supplies
that are not available under existing Federal policies;
(4) scenarios for decreasing natural gas demand and
increasing natural gas supplies comparing relative economic
and environmental impacts of Federal policies that--
(A) encourage or require the use of natural gas to meet air
quality, carbon dioxide emission reduction, or energy
security goals;
(B) encourage or require the use of energy sources other
than natural gas, including coal, nuclear, and renewable
sources;
(C) support technologies to develop alternative sources of
natural gas and synthetic gas, including coal gasification
technologies;
(D) encourage or require the use of energy conservation and
demand side management practices; and
(E) affect access to domestic natural gas supplies; and
(5) recommendations for Federal actions to achieve the
objectives of the report, including recommendations that--
(A) encourage or require the use of energy sources other
than natural gas, including coal, nuclear, and renewable
sources;
(B) encourage or require the use of energy conservation or
demand side management practices;
(C) support technologies for the development of alternative
sources of natural gas and synthetic gas, including coal
gasification technologies; and
(D) will improve access to domestic natural gas supplies.
SEC. 1603. SPLIT-ESTATE FEDERAL OIL AND GAS LEASING AND
DEVELOPMENT PRACTICES.
(a) Review.--In consultation with affected private surface
owners, oil and gas industry, and other interested parties,
the Secretary of the Interior shall undertake a review of the
current policies and practices with respect to management of
Federal subsurface oil and gas development activities and
their effects on the privately owned surface. This review
shall include--
(1) a comparison of the rights and responsibilities under
existing mineral and land law for the owner of a Federal
mineral lease, the private surface owners and the Department;
(2) a comparison of the surface owner consent provisions in
section 714 of the Surface Mining Control and Reclamation Act
of 1977 (30 U.S.C. 1304) concerning surface mining of Federal
coal deposits and the surface owner consent provisions for
oil and gas development, including coalbed methane
production; and
(3) recommendations for administrative or legislative
action necessary to facilitate reasonable access for Federal
oil and gas activities while addressing surface owner
concerns and minimizing impacts to private surface.
(b) Report.--The Secretary of the Interior shall report the
results of such review to Congress not later than 180 days
after the date of enactment of this Act.
SEC. 1604. RESOLUTION OF FEDERAL RESOURCE DEVELOPMENT
CONFLICTS IN THE POWDER RIVER BASIN.
The Secretary of the Interior shall--
(1) undertake a review of existing authorities to resolve
conflicts between the development of Federal coal and the
development of Federal and non-Federal coalbed methane in the
Powder River Basin in Wyoming and Montana; and
(2) not later than 6 months after the date of enactment of
this Act, report to Congress on alternatives to resolve these
conflicts and identification of a preferred alternative with
specific legislative language, if any, required to implement
the preferred alternative.
SEC. 1605. 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 after the date 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
Congress.
SEC. 1606. TELECOMMUTING STUDY.
(a) Study Required.--The Secretary, in consultation with
the Commission, the Director of the Office of Personnel
Management, the Administrator of General Services, and the
Administrator of NTIA, shall conduct a study of the energy
conservation implications of the widespread adoption of
telecommuting by Federal employees in the United States.
(b) Required Subjects of Study.--The study required by
subsection (a) shall analyze the following subjects in
relation to the energy saving potential of telecommuting by
Federal employees:
(1) Reductions of energy use and energy costs in commuting
and regular office heating, cooling, and other operations.
(2) Other energy reductions accomplished by telecommuting.
(3) Existing regulatory barriers that hamper telecommuting,
including barriers to broadband telecommunications services
deployment.
(4) Collateral benefits to the environment, family life,
and other values.
(c) Report Required.--The Secretary shall submit to the
President and Congress a report on the study required by this
section not later than 6 months after the date of enactment
of this Act. Such report shall include a description of the
results of the analysis of each of the subject described in
subsection (b).
(d) Definitions.--As used in this section:
(1) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(2) Commission.--The term ``Commission'' means the Federal
Communications Commission.
(3) NTIA.--The term ``NTIA'' means the National
Telecommunications and Information Administration of the
Department of Commerce.
(4) Telecommuting.--The term ``telecommuting'' means the
performance of work functions using communications
technologies, thereby eliminating or substantially reducing
the need to commute to and from traditional worksites.
(5) Federal employee.--The term ``Federal employee'' has
the meaning provided the term ``employee'' by section 2105 of
title 5, United States Code.
SEC. 1607. LIHEAP REPORT.
Not later than 1 year after the date of enactment of this
Act, the Secretary of Health and Human Services shall
transmit to 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. 1608. 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;
(2) examine the feasibility of using oil bypass filtration
technology in Federal motor vehicle fleets; and
(3) include in such study, prior to any determination of
the feasibility of using oil bypass filtration technology,
the evaluation of products and various manufacturers.
SEC. 1609. TOTAL INTEGRATED THERMAL SYSTEMS.
The Secretary of Energy 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. 1610. UNIVERSITY COLLABORATION.
Not later than 2 years after the date of enactment of this
Act, the Secretary of Energy shall transmit to 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.
[[Page H4114]]
SEC. 1611. RELIABILITY AND CONSUMER PROTECTION ASSESSMENT.
Not later than 5 years after the date of enactment of this
Act, and each 5 years thereafter, the Federal Energy
Regulatory Commission shall assess the effects of the
exemption of electric cooperatives and government-owned
utilities from Commission regulation under section 201(f) of
the Federal Power Act. The assessment shall include any
effects on--
(1) reliability of interstate electric transmission
networks;
(2) benefit to consumers, and efficiency, of competitive
wholesale electricity markets;
(3) just and reasonable rates for electricity consumers;
and
(4) the ability of the Commission to protect electricity
consumers.
If the Commission finds that the 201(f) exemption results in
adverse effects on consumers or electric reliability, the
Commission shall make appropriate recommendations to Congress
pursuant to section 311 of the Federal Power Act.
{time} 1415
The SPEAKER pro tempore (Mr. Isakson). Pursuant to House Resolution
671, the gentleman from Texas (Mr. Hall) and the gentleman from
Michigan (Mr. Dingell) each will control 20 minutes. The gentleman from
California (Mr. Pombo), the gentleman from West Virginia (Mr. Rahall),
the gentleman from Louisiana (Mr. McCrery), and the gentleman from
Maryland (Mr. Cardin) each will control 5 minutes.
The Chair recognizes the gentleman from Texas (Mr. Hall).
Mr. HALL. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 4503, which is the same as the
H.R. 6 conference report. This bill is the most comprehensive energy
bill we have debated in decades. We have debated energy legislation
hard and fast for the past two Congresses, and we debated it for many
Congresses prior to that.
Those who oppose a comprehensive energy bill seem to forget that they
use the very resources that the energy bill seeks to produce, the very
resources that are now in short supply.
People who oppose this bill will no doubt question why we are
debating and voting on this bill today. They will claim that it is
merely a political ploy to force passage of the conference report on
H.R. 6. The real question is why opponents are willing to fiddle while
Rome is burning by refusing to vote for this bill. I suppose their
constituents walk to work or ride horses, burn candles instead of
electricity, do not use furnaces or air conditioners, and do not use
plastics. If we continue, Mr. Speaker, to do absolutely nothing, then
that may be the scenario that will come to pass for all of us. I, for
one, do not want to go back to those days.
One section of the bill that will do as much good as any other
provision to alleviate supply shortages in the future is the Ultra
Deepwater Research and Development Program. With public lands being
increasingly more difficult to lease for oil and gas exploration and
significant areas of the offshore still off limits, the ultra deepwater
holds the key to our continued ability to supply most of our energy
needs domestically. However, to tap resources that lie deep beneath the
ocean floor in water depths greater than 1,500 meters will require a
considerable amount of research and development.
The program this bill establishes through the Department of Energy
provides the necessary funding to extract natural gas in an
environmentally safe and secure manner, while providing much-needed
natural gas to fuel our growing economy. Therefore, I urge the passage
of H.R. 4503.
Mr. Speaker, I reserve the balance of my time.
Mr. DINGELL. Mr. Speaker, I yield myself 3 minutes.
(Mr. DINGELL asked and was given permission to revise and extend his
remarks.)
Mr. DINGELL. Mr. Speaker, the House is again considering a bill that
has already passed the body, but it has not been enacted into law. This
might be called the ``summer reruns.'' It might also be called low
comedy, or ancient history, because this is an unfortunate waste, not
only of this body's time but, quite frankly, the taxpayers' money.
We are about to set about passing a bill that was unacceptable to the
Senate before, surrounded itself with enormous controversy, and will
serve no purpose in terms of addressing energy concerns of this
country.
Meanwhile, I note we have neither passed any budget nor any single
appropriations measure. If there is ever a bill that does not deserve
to pass twice, this is it. It should not even have been passed the
first time. Rarely has a bill been so criticized in all quarters. This
so-called Energy Policy Act is a conglomeration of costly special
interest subsidies and antienvironmental provisions that newspapers
from coast to coast have denounced. It includes the denunciation of
such conservative newspapers as the editorial pages of the Wall Street
Journal.
One prominent Republican Senator refers to this bill as one which
helps ``hooters and polluters,'' because it provides subsidies for a
Louisiana mall that will feature a Hooter's Restaurant, and because it
has dozens of other provisions that threaten clean air, safe drinking
water, like easing the regulations on such good-hearted American
corporations as Halliburton, which uses hydraulic fracturing.
Indeed, the only support for this bill comes from the special
interests and industries that met in secret with the Cheney task force
to hatch this outrageous piece of legislation.
The conference on this bill was also, as I noted, held in secret and
kept from the light of day. As I said when the Congress considered this
legislation last year, ``when you lift the lid, it's like lifting the
lid on a garbage can, because you get a strong smell of special
interest provisions.''
While I support the recycling of trash, this piece of legislation
looks worse the second time around. It is more than three times more
costly than even the President requested. The Energy Information
Administration says it will have no short-term impact on gasoline
prices and, in the long run, will actually raise gasoline prices.
If my colleagues on the Republican side were paying attention to all
Americans and not just special interests, they would recognize that
there have been three important matters to deal with which have
occurred on this President's watch: 1, gasoline prices and natural gas
prices have reached all-time highs; 2, an electricity blackout that
affected better than 50 million Americans; 3, the gouging of
electricity consumers on the west coast has been a noteworthy outrage.
Democrats have proposed commonsense steps that we should take to
address these problems, and we will discuss these matters and measures
during the debate on the motion to recommit.
I usually applaud the recycling of trash, but this trash is well
passed recycling. It is too tart. It should be put in the legislative
trash heap where it belongs.
Mr. Speaker, I reserve the balance of my time.
Mr. HALL. Mr. Speaker, I yield 3 minutes to the gentleman from
Georgia (Mr. Norwood).
Mr. NORWOOD. Mr. Speaker, I thank the chairman for his generosity and
for yielding me this time.
I just would point out that some might think this bill should not
deserve to pass for the second time; but it did, it did pass very
nicely the first time. Sixty-six Members of this House of
Representatives above the passing mark decided this was a very good
bill. So we are not in agreement as to whether it is a good bill or
not.
Just this last November, I stood before this body and urged my
colleagues to support the energy conference report. I have watched in
frustration, along with the rest of the country, as gas prices continue
to go through the roof and the other body sits on our hard work for the
sake of election-year politicians. We are in desperate need of a
comprehensive energy policy, and I want to extend my gratitude to the
gentleman from Texas (Chairman Barton) for bringing this legislation to
the floor once again.
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,
because oh, how we forget just some months ago; energy efficiency
incentives, conservation measures, and targeted research dollars
[[Page H4115]]
with an eye on the future, and that is what this bill does.
Mr. Speaker, this bill achieves all of this and strikes the necessary
balance. I rise today, Mr. Speaker, to support this bill; and I am
happy to say I believe the majority of the House of Representatives
will support it.
Not since early 1992 and, in fact, until this administration came
along has the importance of U.S. energy policy been prioritized again
where it should be. 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.
I encourage all Members to support this sound, coherent,
comprehensive policy for America. Let us send our colleagues in the
other body a reminder that our constituents should come first. It is
time to push politics to the side and do what is right for this
country.
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore. The Chair would remind Members to refrain
from characterizations of the other body.
Mr. CARDIN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, the fact that we are considering this bill for the
second time does not make it any better. On behalf of the Democrats on
the Committee on Ways and Means, we would like to point out that this
bill will cost $23.5 billion over the next 10 years and add to the
deficit of this Nation. Every dollar of relief provided in this bill
will have to be borrowed; and we are going to have to pay interest on
it, adding to the irresponsible economic program that the majority has
thrust upon us.
Mr. Speaker, it is interesting to look at the evolution of this bill.
The President had requested that an energy bill be passed that cost $8
billion. When we passed the bill originally in this body, it cost $17.8
billion. In the other body, they passed a bill that was $15.8 billion,
but with set-offs, with revenue provisions. Now we have a bill that has
grown to $23.5 billion.
The reason, quite frankly, Mr. Speaker, is that this bill contains
numerous special interest provisions to provide breaks for different
corporate interests. It is not an energy policy. It is a corporate
giveaway in many respects. It does not reduce our dependency on
imported oil. We should be doing a much more aggressive program on
renewables and alternative fuels, but we are not. This bill does very
little to make us energy self-sufficient. It does nothing. It is
actually counterproductive. It does not deal with the electricity
blackouts that we have suffered. It certainly is not environmental
friendly; in fact, it hurts our environment.
This is why this bill has been labeled by many of the editorial
writers, USA Today: ``Costly local giveaways overload energy plan.''
The Detroit Free Press: ``Wrong direction on national energy strategy.
This country would be better off if they shelve this effort.''
Philadelphia Inquirer: ``Leaders are using the blackout as an excuse to
try to ram through a bill that has been wrong-headed since the day it
emerged.''
Mr. Speaker, this bill was not worthy of our support before; it is
not worthy of our support today.
Mr. Speaker, I ask unanimous consent that the remainder of my time be
yielded to and controlled by the gentleman from Michigan (Mr. Dingell).
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Maryland?
There was no objection.
Mr. HALL. Mr. Speaker, I yield 2 minutes to the gentleman from
Oklahoma (Mr. Sullivan).
Mr. SULLIVAN. Mr. Speaker, I rise in support of this legislation
because it will create jobs across the country and make us more secure
by reducing our dependence on foreign oil.
The America that I know strives to be the best in everything. Our
people are remarkably driven in their pursuit of excellence. We are
home to the top scientists, doctors, inventors, and entrepreneurs.
Why, then, do we settle for honorable mention when it comes to our
role as a player in the world energy market? Why are we not the gold
medallist? Why has our country been without an energy policy for more
than a decade? Why do we wait to act as each day puts us more in
jeopardy while our foreign counterparts run up the tab at our expense?
We import more than half of our oil from foreign sources, and that
number will grow to more than 66 percent by the end of the decade if we
do not act now.
America loses when we import foreign oil. For every $1 billion that
we import, we lose more than 12,000 jobs. At today's oil prices, that
means we send more than 1.7 million jobs overseas. By passing a
comprehensive energy policy, we will create more than 800,000 new jobs
in the energy industry.
In my home State of Oklahoma, more than 100,000 people are employed
by the energy industry. Mr. Speaker, I can tell my colleagues that
these are good, high-wage jobs.
I have heard my colleagues on the other side of the aisle paint a
gloom and doom picture of our economy. Well, here is their chance to
make a difference.
We have a responsibility to pass this legislation and send it to
President Bush. Rarely do we have an opportunity to create so many
jobs, and it is time to act now.
Let us send an energy bill to the President, let us create more than
800,000 new jobs, and let it begin now.
{time} 1430
Mr. RAHALL. Mr. Speaker, I yield myself such time as I may consume
under my time.
Mr. Speaker, the latest edition of Business Week notes that ``$2 a
gallon gasoline have given the oil companies a Mississippi River of
cash flow.''
Big oil is reeling in profit, reaching deep into the pockets of
Americans at the pump. What happens in response? Today, the Republican
majority wants to reward them with billions of dollars of tax breaks
and directed spending that will not improve our energy situation one
iota.
Indeed, this past February the Energy Information Administration
performed an assessment of the pending legislation. It examined the
billions in offshore oil and gas royalty relief and various tax credits
in this bill and concluded that ``the impact on total primary energy
consumption is small.''
That is not me saying that. That is the administration's own Energy
Information Administration. So what is the purpose here today? What is
the purpose in resurrecting this bloated bill on the floor?
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 them even further through a whole host of
taxpayer subsidies to energy producers. This is misguided relief. It is
not for the consumers. It is not for the consumers, but it is for the
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 taxpayers foot the bill by foregoing royalty
payments.
An unwarranted drilling incentive at a time of high energy prices, a
staggering budget deficit, and the yet unknown full cost of conducting
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, none of which I might add will do anything to enhance
our energy security as evidenced by the Energy Information
Administration's own assessment.
There is no wonder that newspapers in my congressional district
editorialize against this bill. The Bluefield Daily Telegraph, for
example, noted, ``The bill was ill-conceived and would reach deep into
the pockets of West Virginians without providing any benefits to the
State.''
The Huntington Herald Dispatch took issue with the provision in this
bill that would put Appalachian and Midwestern mined coal at a
competitive disadvantage to Western coal. And the newspaper is right on
target in that respect.
The pending legislation would hurt the majority of coal producing
regions and in other respects pays lip service to our most abundant
domestic source of energy. According to CBO, of the close to $26
billion in tax breaks in this bill only $2.5 billion of that is for
coal;
[[Page H4116]]
and this $2.5 billion is for clean coal technology applications. Yet
there is a nationwide cap of 6,000 megawatts. That is peanuts. It is
comparable to the annual energy output of the Grand Coulee Dam.
In fact, on a per capita basis, Mr. Speaker, Home Depot does better
in this bill than the entire coal industry when you consider the $48
million that it would receive for not having to pay tariffs on ceiling
fans. This is an energy bill?
I urge a no vote on the pending measure and urge that this body get
serious about devising a national energy policy that takes into account
all of our energy sources and our consumers' complaints.
Mr. Speaker, I ask unanimous consent that the balance of my time be
yielded to the gentleman from Michigan (Mr. Dingell) for purposes of
control.
The SPEAKER pro tempore (Mr. Isakson). Is there objection to the
request of the gentleman from West Virginia?
There was no objection.
Mr. DINGELL. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Massachusetts (Mr. Markey).
Mr. MARKEY. Mr. Speaker, I thank the gentleman for yielding me time.
Does the Republican energy bill help the American consumer? Does it
have any meaningful help whatsoever? Well, the answer is no. And who do
we get the answer from? We get the answer from the Department of
Energy, the Bush administration. Here is what it says.
It says, ``The impact of this bill analyzed in this report on total
primary energy consumption is small on a fuel specific basis; changes
to production, consumption, imports and prices are negligible.''
What else does it say? It says, ``In 2015 the average gasoline prices
relative to the reference case are 3 cents per gallon higher and
average reformulated gasoline prices are 8 cents per gallon higher than
in the reference case,'' meaning today.
So this bill, according to the Bush administration's own Department
of Energy, is going to lead to gas prices that are 3 to 8 cents higher
than today. The American people are thinking, I wonder what Congress is
going to do about high gasoline prices?
Well, according to the Bush administrations's own Department of
Energy, this bill will increase them by 3 to 8 cents per gallon. That
is a travesty.
This bill will have a negligible impact on energy production, a
negligible impact on energy consumption, a negligible impact on energy
imports, will increase the price of gasoline by 3 cents a gallon for
regular. It will increase gas prices by 8 cents a gallon for
reformulated. It provides $23 billion worth of special interest tax
breaks for the oil, gas, coal, nuclear, utility industry. It weakens
the Clean Air Act. It weakens the Clean Water Act. It repeals the
protections against cross-subsidies amongst these big energy giants.
But what is not in here? SUVs, automobiles, vehicles, where we put 70
percent of all oil in our country. Not a word. We will not be doing
anything about that in this bill. We now import 60 percent of our oil
and we have 135,000 young people over in the Middle East. This bill
does not do anything about that. We are coming back in 15 more years
importing 80 percent of our oil as the next generation of young men and
women go over to the Middle East to protect the oil lines coming into
our country.
This bill does not meet the challenge of those 135,000 young men and
women over in the Middle East. It does not meet the challenge of the 24
million children and adults with asthma in our country from all of this
pollution. It does not meet the challenge of 60, 70, 80 percent of our
oil being imported into our country. It does not meet the challenge of
the day. We have young men and women over in the Middle East. This bill
does not reduce our dependence upon imported oil. It raises the price
of gasoline at the pump, and it leaves the next generation wondering
when they will have to go over to the Middle East.
This bill is a failure. It does not do the job for the American
public. It must be rejected as historically inappropriate for the
challenge this generation faces to meet the challenge of the times that
we live in.
Mr. HALL. Mr. Speaker, I yield 3 minutes to the gentleman from Texas
(Mr. Barton), the chairman of the Committee on Energy and Commerce.
Mr. BARTON of Texas. Mr. Speaker, how much time is remaining?
The SPEAKER pro tempore. The gentleman from Texas (Mr. Hall) has 13
minutes remaining. The gentleman from Michigan (Mr. Dingell) has 19\1/
2\ minutes remaining. The gentleman from Louisiana (Mr. McCrery) has
been designated 5 minutes but is currently not on the floor of the
House. The gentleman from California (Mr. Pombo) has 5 minutes.
Mr. BARTON of Texas. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I want to respond to my good friend, the gentleman from
Massachusetts (Mr. Markey) and his eloquent remarks when he talked
about the impact of this bill, and that it would not have an impact, or
if it did it would have a negative impact. I would agree with him in
the short term that that is probably correct, that if we pass this bill
and the other body passes this bill and the President signed it
tomorrow, I think it is fair to say that the energy prices would not go
immediately down. But I would dispute the assertion that over the long
term there is no positive impact.
I would offer the analogy of deciding whether to plant a field of
corn. Obviously, the day you plant it you are not going to get an ear
of corn to eat. But over time you are going to get bushels and bushels
of corn to eat and to feed your family and to feed the world.
Well, the same thing could be said about this energy bill. We have
already passed it once in this body, 246 to 180. The reason that we are
bringing it up again is because the other body has not seen fit to even
bring it to a vote, and we are hopeful that if we pass it yet once
again that at some point this summer the other body may see fit to at
least bring it up to a vote.
We need a comprehensive energy bill because gasoline prices are up,
coal prices are up, natural gas prices are up, crude imports are up,
refined product imports are up. We need to reform our electricity grid.
This bill does that. We need to repeal PUHCA, the Public Utility
Holding Company Act. This bill does that. We need to set up a program
to go in and refit our existing old coal fired power plans. This bill
does that. We need to determine if there is a better way to do
automobile fuel efficiency in the program that is called CAFE. This
bill does that. We need to increase our conservation efforts. This bill
has provisions that it is estimated would eliminate the need for 130
additional power plants. We need to reform our hydroelectric
relicensing process. This bill does that.
I could go on and on and on, Mr. Speaker, but I will simply conclude
by saying this. There is not an alternative. If my friends in the other
body or my friends on the other sides that are opposed to this bill
have a better way to do it, let us see it. This bill has passed this
House 246 to 180. It will pass the other body if it ever gets up to a
vote. We need a comprehensive energy policy in my opinion in this
country that is market based. This bill is that policy.
So I hope that as we did back in November we once again pass this
bill, send it to the other body, and hopefully get the other body to
bring it up.
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore. The Chair would remind Members on both sides
of the aisle, as the Chair recently ruled on September 19, 2002, in
response to a point of order, that Members must confine remarks about
the Senate to factual references, avoiding characterizations of Senate
action or inaction, remarks urging Senate action or inaction, and
references to Members of the Senate other than as sponsors of
legislation.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Minnesota (Mr. Oberstar).
(Mr. OBERSTAR asked and was given permission to revise and extend his
remarks.)
Mr. OBERSTAR. Mr. Speaker, from the perspective of the Committee on
Transportation and the Infrastructure on which I serve, the Democrats
on that committee, we find a number of
[[Page H4117]]
offensive provisions littered throughout this bill that fall within the
jurisdiction of our committee. I want to be very specific.
Section 328 exempts the oil and gas industry from complying with the
stormwater permitting requirements of the Clean Water Act of 1972 for
construction purposes. This is the only construction action that would
not be subject to clean water requirements should this provision
prevail.
Section 756(c) of the conference report allows a 250 pound increase
in the weight of some heavy trucks purportedly for the purpose of
providing an incentive to use a certain type of idle reduction
technology. Well, we have examined this issue in great detail and with
the Department of Transportation and the Federal Highway
Administration, the increase in truck weight will inflict damage on the
highway infrastructure and create a safety problem and will cost about
$300 million a year in increased highway damage. The exemption is
unnecessary. The industry's own figures show that idling reduction
technologies pay for themselves in reduced fuel costs in about 2 years.
Section 1502 provides special protection for MTBE producers from
liability associated with the cleanup costs and damage caused by
contamination of groundwater. As a result of the special interest
provision here, taxpayers will be forced to pay an estimated $29
billion cost of cleaning MTBE contaminated water across the country.
That is egregious and unnecessary.
Section 326 establishes a dangerous precedent under the National
Environmental Policy Act by authorizing the Federal Government to
reimburse oil and gas companies for the cost of undertaking
environmental impact analyses for oil and gas leasing. They are going
to make money off of it. They ought to do their own environmental
impact analysis costs.
Mr. HALL. Mr. Speaker, I yield 2 minutes to the gentleman from
Louisiana (Mr. Tauzin), the chairman emeritus of the Committee on
Commerce.
Mr. TAUZIN. Mr. Speaker, I thank the gentleman from Texas (Mr. Hall)
for yielding me time.
Mr. Speaker, this will be the second time the House votes on this
identical conference report. We have already passed another energy bill
in a previous Congress that never made it to final passage out of the
Congress, it was not yet signed into law. This is the second time now
this body will vote on the comprehensive energy conference report
following the passage in the House and the Senate of the energy bills.
{time} 1445
A conference report came out of the conference committee between the
House and the Senate. It was chaired by Senator Domenici. The last time
this House voted on the conference report, 246 of my colleagues voted
for it, 180 voted against it. I suspect we will get something like the
same vote today, and I want to commend the House for doing what the
other body has not yet done, for taking final action on comprehensive
energy for our country.
This Nation is suffering. We are in dire need of a policy that tells
the energy future traders on Wall Street to quit running the prices up
and to begin thinking about a future where we are producing more energy
at home for our own people instead of constantly fighting over
battlefields to defend other people's energy supplies that we depend
upon.
When the last Arab oil embargo hit, we were 30 percent dependent on
foreign oil. Today, we are 60 percent dependent, and that number
continues to rise. The last refinery built in America was built in my
district 25 years ago. We have not stopped building roads, we have not
stopped building automobiles, we have not stopped building houses or
factories in the country. We just stopped building the factories that
produce the energy for the country.
My colleagues wonder why we are so dependent, have so much at risk,
why this Nation depends upon people we cannot depend upon anymore, just
to keep the lights on anymore? That is our fault.
I want to commend this House. Whatever my colleagues might agree or
disagree about, this hugely important energy bill that contains
conservation, alternative measures, good incentives to produce energy
here at home, bills to make sure our grids are more reliable, we avoid
the catastrophe California went through and the Northeast went through,
the blackouts provisions that make sure we change the energy future by
incentivizing a new freedom initiative; whatever my colleagues felt
about it, I thank them for passing it before. Pass it again. Let us
continue to do what the other body so far refuses to do and help
consumers in America for a change.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished
gentlewoman from California (Mrs. Capps).
Mrs. CAPPS. Mr. Speaker, I thank my colleague from Michigan for
yielding to me.
I want to welcome back our distinguished colleague from Louisiana and
note that his old fire is still with him, and that is a pleasure.
I do rise in strong opposition to this legislation and to the rest of
these ill-conceived energy bills. This much-vaunted Energy Week is not
about enacting solutions to our energy problems. It is about election-
year politics.
The Republican leadership wants to look as if it is doing something
about these record-high gas prices. If they were serious about
addressing this and a myriad of other energy issues, we would not be
addressing this bill today.
This bill, Mr. Speaker, is a monstrosity. At a time of record-high
deficits, the bill itself costs a whopping $31 billion. At a time of
record-high oil industry profits, the bill would shovel billions in
taxpayer subsidies to these very companies. At a time of record-high
gas prices, this bill would actually raise gas prices, but that is not
all.
The bill drills holes in the Clean Water Act; the Safe Drinking Water
Act; NEPA, the National Environmental Protection Act; and the Coastal
Zone Management Act. It lets MTBE producers off the hook for
groundwater contamination their product caused, and it gives these same
companies $2 billion of our constituents' money to get into a new line
of work. What a deal.
Mr. Speaker, as we know, this is the same bill that passed this House
last November and was thankfully not brought up in the Senate. The
American people owe a debt of gratitude to the other body for stopping
this awful bill last year. This House should follow such a good example
and kill it today.
I urge a ``no'' vote on this bill.
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (Mr. Isakson). The Chair would once again
remind the Members that characterizations of the other body should be
refrained from in this debate.
The gentleman from Texas (Mr. Hall) has 8 minutes remaining. The
gentleman from Michigan (Mr. Dingell) has 16\1/2\ minutes remaining.
The gentleman from California (Mr. Pombo) has 5 minutes remaining, and
the gentleman from Louisiana (Mr. McCrery) has 5 minutes remaining.
The Chair recognizes the gentleman from Texas (Mr. Hall).
Mr. HALL. Mr. Speaker, I yield 2 minutes to the gentleman from
Illinois (Mr. Shimkus).
(Mr. SHIMKUS asked and was given permission to revise and extend his
remarks.)
Mr. SHIMKUS. Mr. Speaker, I would like to thank the chairman for the
time.
While Rome burns, Nero fiddles, and that is what we seem to be doing
here in Washington. When we have historically the highest gas prices
that any of us have ever seen, highest natural gas prices in our
lifetime, a major blackout of the northeast, and we cannot pass an
energy bill, we ought to be ashamed of ourselves.
The nay-sayers point out all these little problems for them and
disregard all the humongous benefits that we have in this bill.
Let me talk about MTBE. I am an ethanol guy, ethanol State, Illinois.
We grow it, we refine it, we use it. The MTBE provisions do not relieve
people of their liability if they spill MTBE. It does not relieve
people of their liabilities if it goes out of their storage areas and
contaminates the groundwater.
What it does is it says if the Federal Government asks these people
to refine MTBE, we told them to make MTBE, and now we are going to say
they created a faulty product after the Federal
[[Page H4118]]
Government told them to produce MTBE? That is why we do not have
industry investing in this country. We have no certainty. Who else but
the government tell them to go build a product and then that same
government 15 years later sues them and says you can sue them, take
them to court, close down this industry. It is a shame, it is
embarrassing, and for that to be the reason that this bill fails, we
ought to be embarrassed for ourselves.
This country has to make a decision. If we want to use electricity,
guess what, we have got to have a fuel, we have got to have generation,
and then we have got to be able to transmit that electricity over
lines. This bill does that.
Our country is a large country. We are going to be a very mobile
society for decades. We are going to need to drive in our vehicles, and
we are going to need to have fuel for our vehicles. This bill does
that.
Mr. DINGELL. Mr. Speaker, I yield 2\1/2\ minutes to the distinguished
gentleman from New York (Mr. Engel).
Mr. ENGEL. Mr. Speaker, I thank the gentleman for yielding time to
me, and I would certainly agree that we are fiddling while Rome is
burning.
While our people in our districts are disgusted with the high
gasoline prices, while our people in our districts understand that they
need help from Congress to make ends meet, we are instead not passing
an energy bill that would bring down gas prices, not passing an energy
bill that would help the average person in all of our districts, but
passing an energy bill that helps the big companies, the big
industries, that says to polluters, we will take you off the hook, you
do not even have to pay for the mess you have created; we are going to
pay for it.
Some of my friends on the other side of the aisle say that we do not
have enough money in government to pay for programs. Yet this bill
contains obscene giveaways to those people that are doing the worst
things when it comes to energy, the worst pollution. This is not a very
good bill.
Many of my friends on the other side of the aisle say they oppose
cloning when it comes to living organisms, but it is obvious that they
fully support cloning legislative proposals, and as if fulfilling our
greatest fears, the Energy Policy Act before us today is a clone of a
monstrous bill that the House dealt with months ago.
Just like last time, the bill contains an ethanol mandate that hurts
New Yorkers, my State, by forcing up gas prices, just to provide
subsidies to multibillion dollar corporations like Archer Daniels
Midland. Just like last time, it would open up our own public lands for
huge corporations to drill and destroy. Just like last time, this act
emphasizes drilling over conservation.
Whatever happened to conservation? It does nothing to reduce the
United States' dependence on foreign oil or protect consumers from
skyrocketing gas prices.
Just like last time, it ignores that there is great bipartisan
support for the desperately needed electric reliability provision. We
should be passing just that section and getting it to the President's
desk. He would sign it, and we would be accomplishing something.
Just like last time, the House majority leadership is ignoring that
there is bipartisan opposition to this bill in its present form. Mr.
Speaker, let us drop the ethanol provision and the MTBE provision and
the drilling provision. Let us concentrate on conservation and electric
reliability. Let us have a bill that is a center, not a bill that is
extreme, that cannot pass, that cannot be signed into law.
Let us start doing the work that needs to be done. Let us bring gas
prices down. Let us get a bill that the American people can stand up
and say, when the gas prices went up, Congress really did something to
help us, not to help the big companies that pollute, not to continue
our dependence on foreign oil, not to just pass a bill that was passed
before, that we know has virtually no chance of being signed. Let us
pass a commonsense bill. Defeat this bill.
Mr. HALL. Mr. Speaker, I am pleased to yield 1 minute to the
gentleman from Texas (Mr. DeLay), the majority leader.
Mr. DeLAY. Mr. Speaker, I thank the gentleman for yielding me the
time.
Mr. Speaker, 3 long years the American people have waited. In fact,
some people have been working on a long-term energy policy for 8 to 10
years. President Bush promised to establish a national energy policy to
prepare America's producers and distributors of energy for the changing
times of the 21st century before he was even elected. His energy task
force was formed inside the White House within 10 days of his
inauguration.
The first comprehensive energy bill was introduced in the House in
the summer of 2001. The House has passed it three times; and it has
been stalled in the Senate all this time, even though a majority in the
Senate supports the bill, but they will not let them vote on it. Three
long years, Democrat obstruction in the Senate, obstruction, make no
mistake, undertaken at the highest levels of Democrat leadership, at
the beck and call of extreme special interests has kept the American
people without a national energy policy.
For most of those 3 years, the United States has been at war with an
ideology that makes its home in the very region that produces most of
the world's oil. We depend to too large a degree on the energy
resources produced in this unstable region, and we have had before us
for 3 years a policy to change that fact.
The comprehensive energy policy we will pass once again today will
reduce America's dependence on foreign oil. That greater independence
will increase America's political and economic security which, in turn,
will increase our national security; and in addition to protecting our
security, this bill will also add to our prosperity.
Provisions in this bill would increase domestic energy production,
would create hundreds of thousands of new jobs here at home while the
Democrats' dithering in the Senate, solely responsible for America's
continued overreliance on Middle East oil, is sending jobs overseas
every week.
All along, provisions in this legislation that would encourage
conservation and innovation and new fuel technologies have stagnated,
thereby harming our economy, our environment, and letting us fall
behind international competitors.
While the Democrats have hamstrung the energy bill in the Senate, gas
prices have risen, and the Northeast was struck with the largest
blackout in history. The summer traveling season is upon us, the fourth
since the President first delivered his legislation to us; and still,
the American people wait for action.
These are the facts. Jobs are waiting to be created. Our economy is
waiting to be stronger and our Nation is waiting to be safer. I urge
all my colleagues to help bring this waiting to an end. Vote ``yes'' on
the comprehensive energy bill and give the Senate Democrats one more
chance to do their duty.
announcement by the speaker pro tempore
The SPEAKER pro tempore. The Chair would ask the Members' attention
on both sides of the aisle.
Remarks in debate may not include characterizations of Senate action
or inaction or attribute actions other than sponsorship to Members of
the Senate. In further elaboration, adjectives tend to characterize
what otherwise might be a permissible factual reference. Members are
asked to heed the rule against characterizing Senate action or
inaction.
{time} 1500
The SPEAKER pro tempore (Mr. Isakson). The Chair recognizes the
gentleman from Michigan (Mr. Dingell).
Parliamentary Inquiry
Mr. DINGELL. Mr. Speaker, parliamentary inquiry before I yield time.
I note that the majority members on the Committee on Ways and Means and
the Committee on Resources have time available which has not yet been
used. I am happy to yield time to our Members, but I would simply note
that that time is pending over there. I would like to see what policies
the Chair might have with regard to the yielding of those times.
The SPEAKER pro tempore. The Chair is proceeding based on who yields
time among those who have been allocated time.
In reference to time, the gentleman from Michigan (Mr. Dingell) has
13\1/2\ minutes. The gentleman from Texas (Mr. Hall) has 5 minutes. The
gentleman from Louisiana (Mr. McCrery) has 5 minutes, and the gentleman
from California (Mr. Pombo) has 5 minutes.
[[Page H4119]]
Mr. DINGELL. And I would note for the benefit of the Chair that the
Committee on Energy and Commerce is the major committee of jurisdiction
here.
Mr. Speaker, I will therefore yield 2 minutes to the distinguished
gentleman from Texas (Mr. Green).
Mr. GREEN of Texas. Mr. Speaker, I thank my ranking member and good
friend, the gentleman from Michigan (Mr. Dingell), for yielding me this
time.
I rise again and again in support of a comprehensive energy
legislation, and I will continue to stand as long as it takes for us to
have a sane energy policy to make our economy stronger and more secure
in the short- and the medium term.
Energy-producing States actually have a stronger interest in energy
production, but consuming States need to realize that the U.S. energy
market, gasoline, natural gas and electricity, does not develop by
magic. It takes exploration, production, refining, pipelines. We do
have an energy crisis, and we are seeing the offshoring of the chemical
manufacturing industry, rising electric prices, rising heating and
cooling costs, and rising gasoline prices at the pump.
Cuba is drilling 60 miles from Key West; and, yet, the Governor of
Florida does not want, and we do not allow, American drilling companies
to drill within 100 miles of Florida, even for zero-emitting platforms.
We are not exploring or producing from our own domestic opportunities.
I support renewable energy and hydrogen energy and everything else;
but, Mr. Speaker, those things are 25 and 50 years away. What we need
to do is address something on a short- and medium term. A bipartisan
majority of this House should approve the Energy Policy Act again.
The H.R. 6 conference report contains a narrow liability provision
applicable only to the claims of defective products. The provision
preserves all other negligence, nuisance and trespass claims, each of
which is alleged in these pending MTBE suits. The fact is that the bill
does not block recovery of these damages, and I have heard that time
and time today. MTBE was de facto mandated to clean many of our cities'
air; and while tasting and smelling bad, it is not a health threat. In
fact, it has cleaned up a lot of our cities.
The U.S. Department of Health and Human Services, the U.S. National
Research Council, Canada's Priority Substance Assessment Program, the
European Union, the World Health Organization, the International Agency
For Research on Cancer, and even the California Science Advisory Board
have determined that MTBE should not be considered a carcinogen or a
developmental or reproductive toxic.
Mr. Speaker, MTBE is a small part of this bill, but we need to make
sure if we tell people to produce it and it cleans our air, we need to
not punish them for it.
Mr. HALL. Mr. Speaker, I yield 2 minutes to the gentleman from
Nebraska (Mr. Terry).
(Mr. TERRY asked and was given permission to revise and extend his
remarks.)
Mr. TERRY. Mr. Speaker, it is important that as we approach the
summer of 2004, more than 3 years since Congress started the current
energy debate, that we are still without an energy bill. Although as a
member of the Energy and Commerce Committee, I think we have passed it
on this side about three times.
In those 4 years, the price of oil has increased 75 percent from
around $23 a barrel in 2001 to $40 a barrel as we stand here today.
Natural gas has increased 80 percent, from between $3 and $4 a few
years ago to more than $6 today. Since 2001, the price of gasoline has
increased 52 percent. A blackout last summer showed vulnerabilities in
our electrical transmission, which this bill addresses.
Our $11 trillion economy depends on a foundation of affordable
energy, and we need a modern energy plan today.
This bill contains incentives to increase production of all energy
sources, provisions to expedite construction of a natural gas pipeline
from Alaska; renewable fuel standards, including 5 billion gallons of
ethanol; tax credits for the purchase of fuel-efficient hybrid
automobiles; electrical reliability language; a 50 percent increase in
energy efficiency and conservation funding over the next 5 years; and
new funding for futuristic alternative technologies, such as the
hydrogen fuel cell, which are really within our grasp but we need to
just remain to make usable and feasible. That is what is in this bill.
There is so much good that can be accomplished while we just stand here
and engage in this endless debate over years and years. We need this
House energy bill to pass today.
Mr. DINGELL. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman
from Texas (Mr. Doggett).
Mr. DOGGETT. Mr. Speaker, there is a very good reason why we do not
have an energy bill: the only bill this House can consider, this one,
is a sorry piece of legislation.
The only energy bill that we have is one that relies on the energy of
generous campaign fund-raising and high-powered lobbying. It encourages
pollution and it discourages conservation. Instead of securing our
energy independence, it ensures our continued overdependence on
countries as volatile as the oil they possess.
This bill pays some pretense to supporting renewable energy, but the
focus is definitely not on conservation or sustainable energy. The real
focus is on subsidizing the same high-pollution industries that we have
always relied on, with $32.5 billion in tax incentives and loan
guarantees.
One of the best examples of the energy scams that are in this bill is
the so-called synthetic fuels tax credit, the ``synfuels'' credit, and
my, is it a ``sin''. Starch or pine tar is poured on coal, and when
that is done, the coal does not burn any more efficiently and it does
not burn with any less pollution, but it does decrease taxes. If you
take the costly synfuels provision in this bill that these folks have
tried to peddle once again as a retread energy bill and pile the dollar
bills up past the ceiling of this building and burn them, you will
generate more energy than they do with the money that they have wasted
from the public treasury. And this is only one of the many outrageous
examples of the scams in this bill.
At the same time that they do this, they ignore the public health by
making our air dirtier, by weakening the Clean Water Act, and by
granting total protection to MTBE as it pollutes the public waterways.
They endanger the health of Americans at the same time that they fail
to ensure that we will pay less at the pump or anywhere else.
What we have, in short, is a collection of unjustified tax breaks,
loopholes, exemptions and dodges masquerading as a new energy policy.
These tax giveaways are not offset. They endanger our fiscal health and
our national treasury, as well as our hope for a better energy policy.
Mr. Speaker, we need a conservative national energy policy that
conserves our resources, that increases energy efficiency, and provides
reasonable production incentives. This bill fails on all fronts. Energy
conservation can be a great jobs program for America, but not through
this bill.
Mr. HALL. Mr. Speaker, I yield 1 minute to the gentleman from Florida
(Mr. Stearns).
(Mr. STEARNS asked and was given permission to revise and extend his
remarks.)
Mr. STEARNS. Mr. Speaker, I would just like to respond to the
gentleman from Texas (Mr. Doggett). I would point out to the gentleman
that the gentleman who was the author of this bill originally, H.R. 6,
and who has been the propelling force on H.R. 4503, which I support
which is identical to the conference report, had 80 hearings on this.
When we have 80 hearings, that is exceptional. For the gentleman to say
this is a bill which is a sorry piece of mishmash is downright wrong
because we cannot have 80 hearings and listen to everybody, and the
patience that it requires. I would urge the gentleman to reconsider his
thinking on this.
In fact, 46 Democrats supported this when the bill passed the floor
before. Those 46 Democrats agree with the bill. The gentleman from
Texas (Mr. Doggett) is from the same State as the chairman of the
Committee on Energy and Commerce, and so I am surprised the gentleman
does not support this bill.
Mr. Speaker, I rise in support of this bill. I believe when we look
at the other 246 people who actually support
[[Page H4120]]
this bill, all of us will realize that it is very important that we
pass it today. It provides incentives, renewable energy production,
clean coal technology, low-income energy assistance, provides for
certainty and reliable operation of our energy markets, and increased
domestic production.
Mr. Speaker, it is a comprehensive energy bill. It is vital to our
national security. All of us realize not too long ago we had the
blackouts. We also are so dependent on other countries for our oil. Why
not take this bill and pass it and realize if we do so with one-half of
the United States' homes relying on natural gas as their main heating
fuel, this energy bill allows for more oil and natural gas exploration.
Mr. DINGELL. Mr. Speaker, I reserve the balance of my time to enable
the Committee on Resources and the Committee on Ways and Means on the
majority side to yield such time as they may consume.
Mr. HALL. Mr. Speaker, I yield myself 1 minute.
Mr. Speaker, when we look at this bill and read this bill and we
debate the item called energy, I think we need to call upon ourselves
and ask ourselves what probably is the major duty of a Member of
Congress. It is probably to prevent a war. And how do you prevent wars?
You prevent wars by removing the cause of wars.
Energy caused the war against Japan in 1941 when Cordell Hull and
Henry Stimpson cut off their energy. They had 13 months' national
existence, they were going to strike out somewhere. That brought on
World War II.
George Bush's father sent 450,000 kids to a desert; that was a battle
for energy. We did not love the Emir of Kuwait, that was to keep them
from getting a bad man's, Saddam Hussein, foot, on half the known
energy resources in the world.
Loss of energy and lack of energy will cause us to send our sons
overseas. We do not get to drill on ANWR. We turn our backs on the next
generation when we do that. We do not get to drill the ultra-deep. We
are turning our backs on this next generation when we do not do that.
Lack of energy causes wars.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the gentleman from New
Jersey (Mr. Holt).
(Mr. HOLT asked and was given permission to revise and extend his
remarks.)
Mr. HOLT. Mr. Speaker, our friends on the other side of the aisle may
not be writing much environmentally friendly legislation, but they
certainly are good at recycling. What we have before us today is a bill
identical to H.R. 6, a grab bag of special interest goodies, certainly
not a real energy policy. And rather than coming up with a rational
energy policy to meet our Nation's needs for the foreseeable future,
the authors of this legislation are simply coming out with a bag of
goodies.
It is a simple mathematical problem. America possesses less than 3
percent of the world's oil reserves and makes up 25 percent of the
world's petroleum consumption. Members can do the math.
This bill does not provide what we need in this country which is a
rational energy policy.
Mr. Speaker, I rise in opposition to this legislation and the entire
``energy week'' charade the House leadership has brought to us. Once
again, rather than spending the time we have here on the House floor to
honestly debate critical issues and solve problems, the House
leadership has decided to simply bring back the same tired,
unimaginative legislation. Our friends on the other side of the aisle
may not write environmentally friendly legislation, but at least they
are good at recycling.
Unfortunately, as this body is busy reshuffling papers and giving new
titles to old bills, our Nation's dependence on foreign oil is growing
worse. Rather than leading us into a secure energy future with a lower
dependence on foreign oil, the bill before us merely subsidizes oil and
gas companies to do more drilling--a short-term, ineffective solution.
It's a simple mathematical problem--America possesses less than 3% of
the world's oil reserves but makes up 25 percent of the world's
petroleum consumption. We can ravage our environment all we want and
drill all over the country, but the simple truth is that we cannot use
domestic sources of oil to satisfy our dangerous addiction.
The longer we continue to have such an unhealthy dependence on fossil
fuels, the more we will have to rely on supplies from unstable
countries like Nigeria and Venezuela--and of course, from the Middle
East. Saudi Arabia has the largest remaining proven oil reserves--and
recent attacks on America show the price we pay for drinking so deeply
from there.
It is time that we create a real energy policy that reduces our
overall dependence on oil so we can look forward to a sustainable
energy future that underpins a healthy economy. Sadly, H.R. 4053 is
identical to H.R. 6--a grab bag of special interest goodies, not a real
energy policy. Rather than coming up with a rational energy plan to
meet our Nation's needs for the foreseeable future, the authors of this
legislation simply asked every energy industry what they want and
turned it into legislative language.
This bill is notable for a few glaring omissions. First, it contains
no renewable portfolio standard, a provision that would actually move
our country toward a sustainable energy future by increasing our
reliance on renewable energy. It contains pitiful levels of incentives
for creating new renewable energy sources. It also fails to close the
SUV loophole, a shameful part of our tax code that gives the wealthy
tremendous incentives to continue buying the largest and most
inefficient vehicles on the road.
What's worse, the bill does virtually nothing to save oil. At a time
when it is clear that our dependence on foreign oil affects national
security and it is apparent that we will never drill our way to
independence domestically, we have an energy bill that refuses to
mandate greater efficiency. Not only are there no provisions to
increase automobile efficiency, this bill could actually undermine
current fuel economy standards. In fact, the nonpartisan Energy
Information Administration says that passage of this legislation will
not reduce energy consumption and will actually lead to a three cent
per gallon increase in average gasoline prices by the year 2015. So not
only is this legislation doing nothing to reduce our dangerous
dependence on foreign oil, it will actually increase gas prices.
I also want to express my displeasure at the cynical attempt by the
House leadership to link drilling in the Arctic National Wildlife
Refugee with the reauthorization of the Abandoned Mine Reclamation
Fund. Drilling in ANWR makes no sense not only because it ravages a
spectacular and sensitive environment, but also because it sets a
senseless precedent of drilling for a tiny amount of oil rather than
dealing with our problem of runaway oil consumption.
Mr. Speaker, I am voting against this conference agreement today
because it is the wrong policy for America's future. Rather than
leading us into a secure energy future with a lower dependence on
foreign oil, this bill merely subsidizes oil and gas companies to do
more drilling--a short-term, ineffective solution.
We need a responsible and sustainable approach to addressing our
nation's energy needs. As an energy scientist who spent nearly a decade
working at one the Nation's premiere alternative energy research labs,
I have worked in Congress to help craft a strategy that will provide
real energy security for central New Jersey residents and the United
States. That's why Congress should focus on the development of
renewable energy sources, including fuel cells, solar power, and
fusion. We can fulfill the energy needs of a growing economy without
compromising our national security interests or devastating our
environment.
Mr. HALL. Mr. Speaker, I yield the balance of my time to the
gentleman from Texas (Mr. Barton), the chairman of the Committee on
Energy and Commerce.
Mr. BARTON of Texas. Mr. Speaker, I thank the gentleman for yielding
me this time.
Mr. Speaker, this bill which has been called a mishmash is the most
comprehensive package of energy legislation that has been on the floor
of the House of Representatives in almost 50 years.
{time} 1515
It touches on all aspects of energy production. It has a
comprehensive conservation title. It has an extensive electricity
reform title. It got bipartisan support when it came out as H.R. 6. It
got bipartisan support when it came out as the conference report after
a majority of the House and Senate conferees voted to bring it back to
the respective bodies. I hope this afternoon when it comes up for a
vote that once again we will send it to the other body and I hope it
gets unanimous support this time.
Mr. POMBO. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, the Energy Policy Act of 2004 protects and strengthens
America's economy, our standard of living and our national security by
reducing
[[Page H4121]]
dependence on imported oil and increasing domestic energy production.
America is in danger. All credible projections indicate a growing gap
between the amount of energy America uses and the amount that we
produce, even after factoring in healthy increases in efficiency and
conservation.
The Energy Security Act of 2003 will increase, diversify and
facilitate delivery of energy supplies from Federal lands to regions of
our Nation with energy shortages. This bill, among other things,
encourages energy production from American Indian lands and increases
Indian self-determination; provides better access to oil and gas
reserves on federally controlled lands and facilitates better pipeline
and transmission infrastructure through Federal lands; encourages the
use of waste material produced from the Healthy Forests Initiative as a
source of energy, turning a fire hazard into energy; maximizes the
value of the hydroelectric power production of existing Bureau of
Reclamation facilities; provides incentives for the development of
geothermal energy on public lands; and encourages the maximum recovery
of coal on our Federal lands.
This bill does not include opening 2,000 acres of ANWR, which could
increase our domestic reserves of oil by 50 percent or more, but we
will get to that later. America now depends on foreign governments,
such as Saudi Arabia, Nigeria and Venezuela for our chief
transportation fuel, oil. This dependence continues to increase. To
make matters worse, experts forecast that over the next two decades
there will be a huge gap between demand and production of natural gas,
a gap that can be made up only by imports of liquified natural gas.
What makes more sense? Buying most of our two most important fuels, oil
and gas, from foreign governments in politically unstable countries? Or
developing our resources and helping our people right here in America?
With our troops engaged in Iraq, does it not make sense for us to
adopt some sensible policies here at home that will boost our energy
security? The committee passed a similar bill in the last Congress
prior to the September 11 attack against our Nation. Since then our
energy situation has gotten worse. Last year we passed energy
legislation twice, and it is caught up in politics. This winter the
poor and elderly suffered while they worried how to pay their utility
bills. Factories have closed because of the cost of natural gas, and
chemical and fertilizer production has been stopped in some places.
Truckers, motorists and airlines are suffering from vastly increased
fuel prices and this hurts all Americans.
President Bush asked Congress over 3 years ago to put our Nation on a
path that would supply clean and affordable energy that we would use in
smarter ways for our Nation's future. We have not yet succeeded. It is
time for us to do our part for our national energy security by passing
a balanced but strong energy bill.
Mr. Speaker, I reserve the balance of my time.
Mr. DINGELL. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from California (Mr. Waxman).
Mr. WAXMAN. Mr. Speaker, once again I rise to oppose the Republican
energy bill. The House has passed this bill several times already and
now the majority wants to pass it again. It is time for the majority to
face facts. They have overreached and they have failed.
The Republican energy bill is stunningly expensive. The total price
tag for America is around $140 billion. As the deficit continues to
grow, this bill is only getting less affordable. The energy bill is
also laden with giveaways to major campaign contributors. The oil and
electric utility industries are among the Republicans' largest donors.
This bill returns the favor using taxpayer dollars. It would provide
roughly $20 billion in subsidies to the oil industry alone. It would
also relax Clean Water Act and other environmental requirements for the
oil industry. And it would let the oil industry off the hook for
contaminating groundwater across the country, forcing taxpayers to pay
for the cleanup. The tragedy is that we have real energy problems which
are approaching a crisis.
The United States' increasing dependence on oil adversely affects our
economy, national security and the environment. Polluting and
inefficient energy sources are driving potentially devastating global
warming. U.S. energy markets are vulnerable to rampant manipulation and
price spikes. But this bill would not solve any of these problems. In
fact, it would make them worse. If we enacted this bill, the United
States' dependence on foreign oil would continue to worsen. According
to the Energy Information Administration, the U.S. will increase
imports of foreign oil by 86 percent by 2025, and they project that
this energy bill would reduce the amount of imports by only 1.2 percent
by 2025.
Reducing demand for oil by making motor vehicles more efficient would
help hold down gas prices. If we enacted this bill, it would move us in
the wrong direction on global warming by subsidizing traditional energy
sources. If we enacted this bill, energy marketers could continue to
manipulate markets and drive prices through the roof. Congress has done
nothing since California and the West Coast States faced repeated
blackouts and astronomic energy bills 3 years ago. The gentleman from
Michigan (Mr. Dingell) and the gentleman from Massachusetts (Mr.
Markey) proposed energy bill provisions to penalize fraud and
manipulation in energy markets, but the Republicans rejected these
provisions.
This bill is a failure. It is a collection of subsidies for energy
industries, masquerading as an energy policy. The Senate, the other
body, including some of the Republican Members of the other body,
rightly rejected this bill and I hope they will do so again. It is time
for the House Republicans to give up the charade. We need an energy
bill that will address our urgent energy problems. I suggest that this
one does not do it.
Announcement By the Speaker Pro Tempore
The SPEAKER pro tempore. The Chair would remind Members to avoid
characterizations of the other body.
Mr. POMBO. Mr. Speaker, I yield 2 minutes to the gentleman from
Oklahoma (Mr. Cole).
Mr. COLE. I thank the gentleman for yielding me this time.
Mr. Speaker, I am here to talk briefly about the reasons that I
support this particular energy bill. I think we ought to talk first
about the need, then about the process and then about, finally, some of
the important provisions in this bill.
In terms of the need, the President warned us 3 years ago what would
happen if we did not have a comprehensive energy policy. He warned us
that natural gas prices would go up and that would make American
industry less competitive. He warned us that we would become more
dependent upon foreign supplies, and he warned us that the price of
gasoline was going to become prohibitive for many Americans. All of
those warnings have been vindicated by the facts as we have frankly in
Congress failed to act on I think a series of excellent recommendations
by the administration.
So we have had the warning. We should have acted. I compliment this
body for having acted in a bipartisan fashion. Frankly I am
appreciative for the majority of our friends in the other body for
having been supportive of this particular piece of legislation. If it
were not for a technicality that prevents us from getting the
legislation to a vote, we could have had the energy policy that this
country needs months and months and months ago, and it would have
resulted in more natural gas, lower prices at the pump and more
security for the United States of America.
That is something we ought to think about. This bill is the product
of an intricate negotiated compromise that will lead this country down
the path toward energy independence, something we have needed for many,
many years. Particularly I am pleased, Mr. Speaker, in the fact that it
allows for the construction of a natural gas pipeline from Alaska's
North Slope to the Lower 48 States. That would open up a tremendous new
source of energy for this country. It allows for more natural gas
exploration development by providing royalty relief for deep and
ultradeep gas wells in the shallow waters off the Gulf of Mexico. I
would have liked frankly to have seen those same provisions extended to
deep gas drilling on land but as one of the compromises that was not
included in the
[[Page H4122]]
bill. I hope we can do that later. It authorizes and encourages more
nuclear power, more energy.
Mr. Speaker, I urge my colleagues to support this legislation which
is genuinely bipartisan and move this country toward energy
independence.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Washington (Mr. Inslee).
(Mr. INSLEE asked and was given permission to revise and extend his
remarks.)
Mr. INSLEE. Mr. Speaker, this bill, this alleged energy bill, reminds
me a little bit of a reverse Energizer bunny because it just keeps not
going, not going and not going. One of the reasons it does not go
anywhere is it perpetuates the fraud on the American people that the
Enron Corporation put over on the West Coast. It does not have one
single dime of refunds for the people of California for the billions of
dollars that were stolen from them by the Enron Corporation. It does
not have the $122 million that the people of Snohomish County,
Washington have coming to them. It does not have the over $1 billion
that the people of Washington have coming to them.
What does it take for my Republican friends to join us to finally get
refunds for the American people? We have heard these tapes of the Enron
traders talk about jamming Grandma Millie, stealing millions of
dollars, saying ``burn, baby, burn'' when the West Coast had brownouts.
And the Republicans gave us nothing, not a dollar in refunds. What does
it take? We have got the equivalent of fingerprints, DNA, videotape and
confessions from Enron and yet this bill does not do a single thing to
get refunds for the consumers of the West Coast of the United States.
Goodness knows we have tried. We asked the Vice President of the
United States 2 years ago to help us. We told the Vice President of the
United States that while there were brownouts in California, while
stoplights were not working, 32 percent of all the generating capacity
was turned off. What he said was, ``The problem with you is you just
don't understand economics.'' Well, we do understand economics. We just
do not understand Enronomics. The majority party unfortunately is
forcing down the throats of consumers in this country Enronomics. They
are allowing Enron to continue to pillage and burn the West Coast. We
deserve refunds. Reject this bill and get a bill that will stand up to
Enron.
Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
I try on the floor of the House when I speak to treat all Members of
the House, Republican, Democrat, majority, minority with respect, both
for their views and for their integrity. Unfortunately today, I have
heard from some members of the minority reckless and baseless charges,
ranging from supporters of the legislation before us rewarding their
fat cat friends in the energy industry, repaying contributions, charges
which we could just as easily hurl at some Members of the minority for
the votes they make in favor of legislation proposed and supported by
their supporters and their contributors. But I choose not to do that. I
do not think it is fitting for Members to question the motives of
Members for supporting or opposing legislation.
It would also be easy for me to charge Members of the minority with
not caring about the price of energy in this country, not caring what
people pay at the gas pump for gasoline, because they have supported
over the years tremendous increases in gas taxes. Up to 50 percent
increase in gas taxes has been proposed by Members of the minority.
{time} 1530
And a few years ago, there was a tax on BTUs, on energy, that the
minority supported. They do not care, it would be easy for me to say,
about what people in this country, taxpayers, pay for their energy use
in this country, whether they are from the Northeast or from the South
or the West.
But those things are not before us today. We have before us today a
very serious, well-crafted, well-rounded approach to energy policy,
comprehensive energy policy, in this country. That is what we should
focus on, and that is what I will focus on in the remainder of my
remarks.
Mr. Speaker, I reserve the balance of my time.
Mr. DINGELL. Mr. Speaker, I yield myself 3 minutes.
(Mr. DINGELL asked and was given permission to revise and extend his
remarks.)
Mr. DINGELL. Mr. Speaker, I can understand the frustrations of my
good friends on the Republican side. They brought forward a piece of
legislation that is redolent of special interests. Quite frankly, it
smells bad. It is tired in that it has been before this body before. It
has been rejected by the Senate because it was such a clear mishmash of
special interest legislation, and I can understand the frustration
because my good friends over there could not shoehorn something through
in a closed conference after they had denied the right of the House to
really fully amend and address these matters and after they had denied
us the right to participate in the debates and the discussions which
went on in the conference between the House and Senate.
We will shortly be offering legislation in a form of a motion to
recommit which will do the three things that really need to be done to
protect our consumers and our economy. First, we are going to address
the problem which rose with regards to electricity prices in California
and other west coast States spiraling out of control as Enron and other
thieves and scoundrels exploited an inadequate and poorly implemented
regulatory system. We will be inserting into the Record some of the
wonderful comments of Enron executives describing how they had treated
the consuming public of the United States.
Second, my own State of Michigan and six others suffered severe
practical and economic consequences from a massive blackout caused
partly by malfeasance and partly by inadequate emergency planning and
communications. That will be addressed here.
Third, this spring and summer consumers throughout the Nation have
been hit by high gasoline prices that show no sign of returning to
normal levels at any time soon. We will try to deal with this question.
The bill, H.R. 4503, does not address the answers to these questions.
While there are some good provisions in the bill, it has a plethora of
other problems, not the least of which is a price tag to the consuming
public and the taxpaying public of better than $31 billion.
It is a shame that our Republican colleagues have chosen to continue
beating a dead horse. They sent a bad bill to the Senate. The Senate in
a bipartisan fashion, and I am sure this is immensely frustrating to my
Republican colleagues, has rejected that legislation. It has not been
brought up. This is quite obviously an attempt, and has been so
described by my Republican colleagues, as an effort to embarrass the
Senate into moving that legislation.
But I think we need to address something here which we could do. The
Senate in its wisdom has chosen to reject this historically bad piece
of legislation, and I would urge us to address now the things which we
can do: fraud and criminal misbehavior in the electricity markets,
blackouts, and high gasoline prices. This would be a responsible step,
and it should be for this body to stop playing games and having summer
reruns which have as little merit, for example, as ``The Cabinet of Dr.
Caligari'' or perhaps ``Night of the Living Dead.''
In any event, I will be offering a motion to recommit with the
distinguished gentlewoman from California (Ms. Eshoo), and I will
describe that at a time later. It will address these questions.
[From the Energy Daily, May 25, 2004]
Enron Traders Brag of Stealing Money From California
(By Tina Davis)
Newly unearthed transcripts of Enron Corp. traders reveal
employees unapologetically talking about California and its
consumers by driving up power prices and exporting power from
the state during the 2000-2001 energy crisis.
The transcripts were sent to the Federal Energy Regulatory
Commission last week by the Snohomish County Public Utility
District No. 1, a public power entity that is seeking refunds
for price manipulation that affected the West.
``This latest evidence provide the impetus for FERC to
finally bring meaningful rate relief to the West Coast
electric consumers who were the primary victims of Enron's
[[Page H4123]]
fraudulent schemes,'' said Mike Gianunzio, general counsel of
Snohomish PUD.
Two Democratic Congressmen from Washington, Reps. Jay
Inslee and Rick Larsen, last week called on FERC to strip
Enron of its market-based rate authority retroactively. The
congressmen argued that by revoking the company's market-
based rates on June 25, 2003, FERC failed to establish the
punishment from the moment Enron began gaming the market.
The transcripts largely provide yet more evidence that
Enron was engaged in several sophisticated trading strategies
aimed at driving up prices and congestion, in order to reap
millions from the California and western power markets.
In perhaps the most damning portion of the transcripts, a
person identifying himself as ``David up at Enron'' calls an
employee of El Paso Electric and asks if that company can
shut down a unit.
``. . . There's no much, ah, demand for power at all and
we're running kind of fat. Um, if you took down the steamer,
how long would it take to get it back up?'' David asks.
``Oh, it's not something you want to just be turning on and
off every hour, let's put it that way,'' the El Paso employee
responds.
After ascertaining that the unit could be brought up within
three to four hours, David says, ``Well, why don't you just
go ahead and shut her down, then, if that's OK.''
Later in the conversation, David says that ISO hasn't
``told us anything. We're just kind of assuming that some of
this stuff's going to get cut again and--we're running fat
enough to where he shut down the, ah, steamer when we take--
there'll be a net, ah, decrease of about 80 it will be all
right to, ah, still meet the load.''
That day, Dec. 4, 2000, the ISO declares a Stage 2
emergency, indicating that reserve levels have fallen below 5
percent for the day.
A spokesperson for El Paso confirmed the conversation took
place, but said it occurred at 1 a.m., when the state had an
``overabundance of power in the market.'' Tereza Sousa said
she did not know if the power was restored to the state in
the afternoon, when peak demands hit, but she said El Paso
had an agreement that called for Enron to market its
generation for off-peak hours in the West.
El Paso Electric later reached a settlement agreement with
staff of the Federal Energy Regulatory Commission as well as
California officials over its role in the state's power
crisis. That deal, opposed by Snohomish, included a $15.5
million payment from El Paso and the surrender of its ability
to charge market-based rates for two years.
At one point, the transcripts capture Bob Badeer, head of
Enron's California trading desk in Portland, saying the
``best thing'' for California would be an earthquake. ``. . .
Let that thing float out to the Pacific and [give] `em
candles. . . . They should just bring back horses and
carriages, lamps, kerosene lamps. . . .
Kevin McGowan, at one time the director of coal trading for
Enron, asks Badeer: ``So the rumor's true? They're takin' all
the money back from you guys? All those money [sic] you guys
stole from those poor grandmothers in California?''
Badeer responds: ``Yeah, grandma Millie, man. But she's the
one who couldn't figure out how to vote on the butterfly
ballot.''
``Yeah,'' says McGowan, ``now she wants her money back for
all the power you've charged right up--jammed right up her
for $250 a megawatt-hour.''
Another phone conversation includes talk of exporting power
from the state. Hearing of a Stage 2 emergency called by the
California Independent System Operator, a speaker identified
only as ``Matt'' says, ``They're on the ropes today. I
exported like a 400 [megawatts].
``Wow,'' the other voice, identified as Tom, says.
``I bought it all. I'll see you guys--I'm takin' mine to
the desert,'' Matt states.
``em, right?'' adds Tom.
``I think those gamblers in Las Vegas need the power more
than you,'' says Matt.
Later on Tom tells Matt, ``It's going good for you. Just
keep exporting the'' ``Yeah,'' says Matt. ``That's what we
do. Every day, we just export, export, export.''
In another conversation, Enron's Tim Belden, the former
head West Coast energy trader, is questioned by what seems to
be another Enron employee trying to figure out how to book
the revenues from western trades.
Explaining the sales, Belden tells the other person, that
Richter (believed to be Jeffrey Richter, head of Enron's
Western Power Division) ``makes between one and two [million
dollars] a day, um, which never shows up on any curve shift,
where he just buys it from the day-ahead. He just . . .
California. . . . He steals money from California to the tune
of about a million--''
The other person interrupts, ``Will you re-phrase that?''
Belden: ``OK, he um--he arbitrages that California market
to the tune of a million bucks or two a day.''
The SPEAKER pro tempore (Mr. Isakson). The gentleman's time has
expired.
Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
My good friend from Michigan misspoke when he said that the Senate
has rejected this legislation. He knows full well the Senate has not
even voted on this legislation. They have used parliamentary procedures
in the Senate to force a supermajority vote just to get the bill to a
vote, and they have not overcome that 60 vote supermajority to get to
the floor. So the Senate indeed has not rejected this legislation. They
have yet to vote on it. We wish they would vote on it.
Mr. DINGELL. Mr. Speaker, will the gentleman yield?
Mr. McCRERY. I yield to the gentleman from Michigan.
Mr. DINGELL. I thank my good friend for yielding to me. Is that
rejection or not?
Mr. McCRERY. No, Mr. Speaker, it is not. They have not had an up-or-
down vote on this bill, and that is a fact.
Reclaiming my time, Mr. Speaker, this legislation before us today
would promote vital improvements in our energy infrastructure while
diversifying our economy's sources of energy. The bill's provisions are
indeed the same as the incentives the House approved in the conference
report on H.R. 6 by a bipartisan vote of 246 to 180, and those measures
still merit enactment today.
This bill addresses crucial needs in our infrastructure by promoting
new electrical and gas transmission capabilities through accelerated
depreciation, promoting production of new low sulfur diesel fuels, and
by improvements in the tax rules governing electric utilities.
Infrastructure is indeed not very exciting, but it is important. The
ability to produce power will mean nothing if we cannot upgrade our
ability to get energy to those who need it.
This bill also extends and expands incentives for the production of
energy from alternative sources. This bill provides tax incentives for
producing electricity from solar, wind, and biomass, for the production
of clean fuels from farm waste, and the incentives we agreed upon last
year to extend tax credits for ethanol and biodiesel production. These
incentives are as important to promoting diversity of supply today as
they were when we passed this bill earlier on. The incentives for
alternate sources are coupled with the robust package of incentives for
the production of coal, oil, and natural gas, which we still need for
our energy in this country.
Finally, House Members can take pride in the incentives in this bill
to conserve energy and to promote cleaner power, from incentives to
create cleaner-burning coal products, produce more efficient cars, and
to clean up the air from coal-burning power plants to the incentives
the bill provides to make buildings far more efficient in their use of
energy. This bill includes measures that encourage prudent use of our
resources.
Mr. Speaker, once again this House ought to pass this bill, send it
to our colleagues across the Capitol, and hope this time that those who
would block this legislation indeed allow an up-or-down vote and let us
see how it goes. I predict they would pass this bill. It is a good
bill. We ought to pass it today again.
Mr. SWEENEY. Mr. Speaker, I rise today in opposition of H.R. 4503,
the Energy Policy Act of 2004. While I wholeheartedly understand the
need for a national energy policy, I cannot in good conscience, support
this legislation.
I am a proponent of tax incentives to spur growth, both in our
economy, and in different sectors of our Nation's energy industries.
The promotion of renewable forms of energy is a responsible move in
many ways. It diversifies our energy supply, which curbs demand and
lessens our dependence on foreign oil. Moreover, these renewable forms
of energy are environmentally friendly, reducing emissions which
prevent pollution, such as acid rain, from contaminating our lakes and
forests. However, I feel there is much room for improvement in this
bill. Certainly, more steps must be taken to control our Nation's
gasoline prices and prevent massive blackouts, such as the blackout
last year in the Midwest and Northeast.
Clearly, the most pressing concern I have with this legislation is
the MTBE (methyl tertiary butyl ether) liability waiver. In one town in
my district alone, Hyde Park, New York, there are nearly 100 homes with
water contaminated by MTBE. Some of these homeowners are considering
filing liability lawsuits against the MTBE manufactures, and some have
already reached settlements with these manufactures for cleanup.
However, the retroactivity provision of this bill will negate their
arguments made in these claims. Furthermore, there are over 14,000 MTBE
sites awaiting cleanup throughout New York State. This will,
undoubtedly, transfer the liability from the
[[Page H4124]]
manufacturers to the taxpayer. Why should we adopt such a dangerous
policy in a time when we call for fiscal responsibility? I stand in
clear opposition of this issue.
Mr. Speaker, I hope this Congress will consider the aforementioned
points on this legislation and we draft an energy bill that is both
responsible and effective.
Mr. SMITH of Michigan. Mr. Speaker, our dependence on foreign energy
leaves American consumers at the mercy of events occurring all over the
world, from OPEC production decisions to increases in demand in China
and India to terrorism in Saudi Arabia to incipient dictatorship in
Venezuela. Reducing our dependence would ease the unpredictable swings
in oil prices that now cause such havoc with both family budgets and
the larger economy. As Director of Energy at USDA, I served on
President Nixon's Oil Policy Commission during the 1970s Arab oil
embargo, and I can tell you that this problem is greater today. There
are no easy and simple answers.
We can make significant progress, but we have to go about it by
making energy independence a national priority and by making
investments in many key scientific areas. That's why I supported the
energy bill the House passed last year and why I am supporting this
legislation. This bill would increase conservation, encourage the use
of domestic clean coal, permit greater domestic oil production, add to
research into new energy sources, and expand the use of ethanol,
biodiesel, biomass, and other renewable energy sources.
As Chairman of the Science Research Subcommittee, the bill includes
amendments I offered that were put in the bill, including nitrogen
fixation, nuclear power research, clean coal research, and school bus
emission reductions. Section 962 of the bill supports research and
development programs on biological nitrogen fixation, including plant
genomics research. Today's nitrogen fertilizers are made from natural
gas. We now have the technology to develop and enhance plants to put
nitrogen in the soil. This section of the bill will reduce natural gas
consumption and in turn will lower farmers' costs.
This bill contains important provisions to increase domestic fuel
production, improve homeland security, and encourage the production of
renewable fuels like hydrogen and ethanol. Currently, 2.5 billion
gallons of ethanol are put into the American gasoline supply. With this
new legislation, 5 billion gallons will be blended in by 2012. Ethanol
is an oxygenate and is good for reducing pollution and lessening our
dependence on imported fuels. We can grow it in abundance in our own
fields every year. However, current ethanol technology production needs
a continued tax break. Ethanol is only profitable with efficient
production when you use the corn by-products. One bushel of corn makes
2.6 gallons, and 90 percent of ethanol is produced from corn. About 1.7
billion bushels of corn will go towards ethanol under this bill. By
guaranteeing that 5 billion gallons of ethanol will be used, American
farmers and ethanol producers can invest with confidence that, for at
least the next 10 to 15 years, ethanol investments will pay off. By
increasing ethanol usage, this bill bolsters corn prices.
Agreement on a modernized energy policy focusing on our nation's
innovative strengths in science and technology and a reduction on our
reliance on the hostile and politically unstable Middle East for fuel
will help achieve energy self sufficiency and improve our country's
economy and security for decades to come.
Mr. SHAYS. Mr. Speaker, protecting our environment and promoting
energy independence are two of the most important jobs I have as a
Member of Congress. Unfortunately, the legislation before us today is
another missed opportunity to reduce our dependence on foreign oil,
lower gasoline prices, promote energy efficiency and conservation, and
improve our air, land and water quality.
We had a chance to devise a forward-looking energy policy that would
have increased fuel efficiency, prioritized conservation, made
polluters, including MTBE producers, pay for harming our environment,
and advanced a renewable portfolio standard. Instead what we have is
quite a bad bill.
I fail to understand why the major thrust of the bill's tax
provisions involve further subsidizing the fossil fuel industry, rather
than providing incentives for conservation and renewable sources of
energy. These are enormously profitable industries operating in a time
of record energy prices. Clearly, these profits demonstrate the market
has already provided the fossil fuel industries with sufficient
incentive to increase production.
Instead of creating a balanced energy policy that provides incentives
to make renewable energy more affordable and widely available, we are
making fiscally irresponsible and environmentally-reckless decisions
for the benefit of a few profitable industries that don't need this
kind of help from taxpayers.
I strongly oppose a provision in the bill that allows for the
permanent activation of the Cross Sound Cable. In doing so, the bill
subverts the regulatory process and ignores sound environmental policy.
I also oppose provisions in this bill related to the transmission of
electricity. For instance, the Energy Policy Act allows the Federal
Electric Regulatory Commission (FERC) to preempt state sitting
authority when it is determined that a high-voltage power line is of
``national significance.'' The fact is FERC arbitrarily gets to make
that determination.
While I find the bulk of this bill environmentally-shortsighted, I am
pleased it does not include provisions to open the Arctic National
Wildlife Refuge to oil and gas exploration and drilling. In my
judgment, it would be far better to develop prudent and lasting
renewable energy sources than to risk irreparable damage to the
wilderness of one of North America's most beautiful frontiers.
I look forward to the day when we will have an opportunity to vote
for a fiscally-prudent, environmentally-responsible national energy
policy. Today is not that day.
Mr. VAN HOLLEN. Mr. Speaker, this week we are going to be asked to
vote--in some cases, for a second time--on a package of misguided and
previously discarded energy initiatives we are alternately told will
enhance our Nation's energy independence, provide price relief at the
pump and create good paying jobs for those still looking for work in
the Bush economy. If only that were true.
From the shrouded memos of the Cheney Energy Task Force to the most
recent audio revelations of rampant profiteering at the trading desks
of Enron, we can now see clearly that the approach embraced by this
Administration and embodied in these proposals is a policy process run
completely amok. Unfortunately, one need not rely solely on history to
reject this legislation. A straightforward evaluation of its merits
leads inexorably to the same conclusion.
Take energy independence. We all have an interest in moving away from
our current reliance on foreign oil. But according to the Bush
Administration's own Energy Information Administration (EIA), the
energy conference report before us today will have non appreciable
impact on reducing demand for foreign petroleum--allowing oil imports
to jump a staggering 82.9 percent by 2025, only slightly lower than the
84.8 percent rise expected under current projections.
And what about gasoline prices? The same EIA analysis concludes that
gas prices will actually be higher with this legislation than without
it--increasing 10.3 percent by 2025 under the bill, compared to an 8.2
percent rise with no action.
As for all those jobs purportedly waiting for out of work American if
only Congress passes this bill, the nonpartisan Center for Economic and
Policy Research reports: ``Republican claims that their energy bill
will create one million jobs are not credible on their face . . . The
number of jobs affected by the bill will certainly only be a small
fraction (almost certainly less than one tenth) of the size claimed by
Republicans.''
What's going on here? If we're not credibly enhancing our nation's
energy independence, battling prices at the pump, or creating the next
generation of high-tech, high-wage energy jobs, what in the world are
we doing? Given the enormous size of our current budget deficit, along
with the hefty $31 billion price tag on the energy bill alone, the
taxpaying public has a right to know.
Notwithstanding my serious objections to the priorities reflected in
the bills before us, I sincerely believe this nation needs a
comprehensive energy policy. For that reason, I will be supporting the
common sense provisions in the Democratic motion to recommit. But
frankly, I would do more.
Rather than drilling in the Arctic National Wildlife Refuge (ANWR)--
an enormously environmentally destructive exercise expected to yield
the equivalent of about 6 months of oil some 10 years from now--I
believe we should increase the corporate average fuel economy (CAFE)
standards for cars, SUVs and light trucks to 40 MPG. According to the
national Academy of Sciences, a 40 MPG CAFE standard is feasible with
existing technology, and conservative estimates place the energy
savings at a multiple of the amount of recoverable oil in the ANWR. As
an added benefit, consumers would save billions at the pump, and
localities would be significantly aided in their efforts to comply with
the Clean Air Act.
Additionally, I think it is foolhardy to talk about formulating a
national energy policy without reference to that policy's potential
implications for global climate change. So long as fossil fuels are
part of our energy mix, we will be contributing to the ongoing carbon
buildup in the earth's atmosphere. For that reason, Mr. Gilchrest, Mr.
Olver and I offered an amendment at the Rule Committee directing the
federal government to establish a comprehensive, principle-based, date-
certain national climate change policy along with a national database
for registering greenhouse gas emissions. The language we suggested
[[Page H4125]]
was far more modest than the Climate Stewardship Act legislation we
have introduced this Congress and, in fact, passed the Senate by a non-
controversial voice vote in 2002. Nevertheless, on a bipartisan basis,
we went to the Rules Committee--because we believe that the day for
denial on this issue is over, and because we felt it was important to
get this particular conversation started. Unfortunately, our amendment
was not made in order.
Finally, I think it is high time we stop paying lip service to energy
conservation, energy efficiency and renewables--and start investing
seriously in the green technologies of tomorrow. We should invite
business, labor and the environmental movement to construct a new
forward-looking energy policy for the 21st century--one that rewards
innovation; propels American dominance in the global marketplace; moves
us credibly in the direction of energy independence; safeguards our
environment; creates hundreds of thousands of new, domestic, high-
skill, high-wage jobs; and incentivizes the production and consumption
of ever more efficient products and services.
Mr. Speaker, we as a nation have a choice to make. We can embrace the
majority's vision of watered down environmental protections paired with
hefty subsidies for the mature, highly profitable, and yes, polluting,
industries of the 20th century. Or we can craft a new, more dynamic
energy policy that meets both the serious challenges and the
substantial opportunities of the 21st century. That is the vision I
will be fighting for, and I invite my colleagues on both sides of the
aisle to do the same.
Ms. BALDWIN. Mr. Speaker, today, the House of Representatives will
disprove the old saying ``the third time's a charm.'' Three times in
the last three years, this House has brought an energy bill to the
floor with the charge of reducing our dependence on foreign oil and
charting our nation's future energy course. And three times this House
has failed miserably in drafting a bill that meets these goals.
My constituents in Wisconsin and the rest of America are starting to
think Congress has not only lost its long-term memories, but its short-
term memory as well. After all, rolling burnouts along the coast of
California three years ago, a massive blackout that shadowed much of
the northeast last summer, and skyrocketing prices at the pump right
now, should be motivation enough to compel Congress to pass
comprehensive energy legislation. Sadly, it has not.
The four energy bills on the House floor today are more for political
show rather than good-faith efforts to meet America's current and
future energy needs. Their sole intent is to put the blame for having a
stalled energy bill on the shoulders of Democrats, and to provide
evidence to big energy lobbyists that they have done what was asked of
them. I believe the reason past energy bills have not been signed into
law, and the reason this one will not either, is because our President
and House Republicans have ignored the real energy problems facing our
country and allowed special interests to come before the nation's best
interests. This is government at its worst.
I think it may be helpful to do a quick recap of some of the reasons
why Congress has been unable to get an energy bill to the President's
desk. The first energy bill gave oil companies $50 billion in tax
subsidies to give them more incentive to drill for oil and gas.
Continuing their record profits from the year before obviously wasn't
incentive enough.
The last energy bill (and the identical one on the floor today)
included many of these same subsidies, but added millions more for
``pork'' projects to Members' congressional districts to help muster
additional support for the bill. For example, the bill includes $180
million to build an ``energy efficient'' Hooters Restaurant in
Louisiana.
Ultimately, the bill stalled because the Republican leadership
insisted on giving liability protection to manufacturers that produce
the fuel additive MTBE. MTBE helps vehicles burn fuel cleaner, but also
causes widespread groundwater contamination. The provision would shield
MTBE manufacturers from paying for the $29 billion worth of damage they
knowingly caused in 36 states, and would even provide $750 million in
taxpayer dollars to help them ``transition'' to another line of work. I
do support a provision in the bill that would provide more incentives
to use ethanol to replace MTBE.
High fuel prices are hurting consumers everywhere. However, there is
nothing in this week's energy bill that would lower these prices
anytime soon. Almost $8 of the increased price per barrel of crude--or
about 30 cents per gallon of gasoline--is directly related to the
market's fears about violence in the gulf region and our difficulties
in Iraq. While OPEC's decision to boost oil output will help meet the
demands of China's economic surge and the U.S.'s rebounding economy,
consumers shouldn't expect prices to fall dramatically during the busy
summer travel season.
Since gas prices wouldn't be affected anytime soon even if the
current energy bill was signed into law today, the bill is primarily
about what our energy policies will be tomorrow and will into the
future. I believe there are two different courses we can take.
The first course continues our reliance on finite natural resources
and mistakenly assumes that we can reduce our dependence on foreign oil
even though the U.S. has only 3 percent of the world's oil reserves.
This course calls for no political will to harness American ingenuity
to develop technology that makes our fuel more efficient and healthier
for our environment. This course is simply more drilling. It continues
the way of our past energy policies and inspires no one except CEOs at
Chevron, Exxon Mobile, and BP.
The second course is much different, and is the one I believe we must
take. It requires our Nation to ``think big'' and make difficult
choices. We can give electric utilities tax credits to increase the
amount of energy they produce from wind and other alternative sources.
Ask almost any electric utility executive--if you give them incentives
to use coal and gas they will, if you give them incentives to use
renewable they will. To me, it's an easy choice to make.
Some legislators have proposed a sort of ``Apollo-like project'' to
reduce our dependence on foreign oil. This undertaking would call for
much more investment into the development of alternative and renewable
fuels, fuel-efficient technologies, and other measures to conserve
energy. While this undertaking would be expensive, I believe it is
something this Congress should consider. These energy sources would be
entirely under our control: no terrorist could seize them; and no
cartel or foreign government can play games with them.
It is my hope that Congress will come to its senses, ``think big'',
and address our nation's current energy needs while confronting its
future challenges head-on. The energy bill on the floor this week does
none of these things despite being over 1,000 pages long and taking
hundreds of hours to draft--possibly making it one of the biggest
wastes of energy in recent memory.
Mr. STARK. Mr. Speaker, I rise in strong opposition to the Energy
Policy Act, the U.S. Refinery Revitalization Act, and the Renewable
Energy Project Siting Improvement Act.
Billions of dollars in last-minute industry giveaways couldn't save
the energy bill when we voted on it for the second time last November,
so I guess the Republican Leadership is hoping that the third time is a
charm. This is what now passes for legislating: declare ``energy
week,'' bring up the exact same bill with a different number, and add a
couple others that by all accounts have no effect on the problems they
purport to solve.
We all agree that gas prices are too high and that we need to bring
stability to the energy market; but, not surprisingly, the Energy
Information Administration found that giving billions of taxpayer
dollars to oil companies won't have any effect on what consumers pay.
It gets worse. Because the subsidies couldn't pass on their own
merits, the Republican Leadership threw in an MTBE waiver and ethanol
mandate to buy votes. Under this legislation, our municipalities would
be stuck with a $29 billion to clean up MTBE contamination, and drivers
in California could pay up to 9.6 cents more per gallon for ethanol
that neither saves energy nor reduces smog.
What passes for investment in renewable energy in this bill is the
repeal of the excise tax on diesel fuel for railroads and inland
waterway barges and a tax credit for nuclear power production. I'd call
that conserving corporate profits, not energy.
The Energy Policy Act is one of the worst examples of cynical,
industry-driven legislating I have seen in Congress. Yet just when we
thought every bad idea had been rolled into one big bill, industry has
two more: waive environmental protections in disadvantaged communities
for refinery construction and change government oversight of renewable
energy projects from best alternatives to a no options, yes-or-no on
what industry wants to build.
If you kicked out the industry lobbyists and asked economists and
energy experts what would lower gas prices, they'd tell you to make a
significant investment in renewable energy research, reduce the number
of fuel blends in the country, and raise the fuel efficiency standards
of cars and SUVs. If we made the SUV standard the same as it is for
cars, we'd save one million barrels of oil per day and reduce our
dependence on foreign oil by ten percent. None of these bills contains
these simple, effective changes.
On behalf of my constituents in California, who pay among the highest
gas prices in the country; on behalf of our environment, on behalf of
our energy security, and on behalf of the old-fashioned notion that
science and reason should have something to do with our national
policies, I vote no on these industry giveaways.
Mr. LEVIN. Mr. Speaker, it is unwise to waste energy. It is also
wrong to waste time. But somehow the House Leadership has found a way
to waste both time and energy by bringing this misguided bill before
the House.
[[Page H4126]]
We have a problem with energy in this country today. We import more
than half the oil we use. The price of gasoline has soared with the
rapid run up in oil prices over the last year. These energy price hikes
hurt consumers and threaten to reignite inflation and lead to higher
interest rates. In addition, our electricity transmission system is
antiquated and prone to failure. Just last summer, the largest power
blackout in U.S. history plunged tens of millions of Americans into
darkness. We need to take immediate action on electricity reliability
legislation to prevent this from happening again.
And what is the response of the House of Representatives? Today we
are taking up the same flawed legislation the House passed last year
that met with bipartisan opposition in the Senate because the bill was
loaded with special interest provisions and billions of dollars of
industry subsidies. It would be one thing if all these subsidies
resulted in dramatically increased U.S. energy production or reduced
energy consumption, but according to a recent analysis by the Energy
Department's Energy Information Administration, this is not the case.
The EIA analysis concluded that passage of this legislation would
likely result in ``negligible'' changes in U.S. energy production,
consumption, imports and prices.
If the House of Representatives is serious about dealing effectively
with energy policy, passing this flawed retread energy bill is not the
way to get the job done. We can do much better than this.
The SPEAKER pro tempore. The gentleman's time has expired. All time
for debate has expired.
Pursuant to House Resolution 671, the bill is considered read for
amendment, and the previous question is ordered.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit by Mr. Dingell
Mr. DINGELL. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore. Is the gentleman opposed to the bill?
Mr. DINGELL. I am, Mr. Speaker.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Mr. Dingell moves to recommit the bill H.R. 4503 to the
Committee on Energy and Commerce with instructions to report
the same back to the House forthwith with the following
amendment:
Strike all after the enacting clause and insert the
following:
SECTION 1. FRAUDULENT OR MANIPULATIVE PRACTICES.
(a) Unlawful Acts.--It shall be unlawful for any entity,
directly or indirectly, by the use of any means or
instrumentality of interstate commerce or of the mails to use
or employ, in 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, or the sale in interstate commerce of
natural gas for resale for ultimate public consumption for
domestic, commercial, industrial, or any other use, any
fraudulent, manipulative, or deceptive device or contrivance
in contravention of such rules and regulations as the Federal
Energy Regulatory Commission may prescribe as necessary or
appropriate in the public interest.
(b) Application of Federal Power Act to This Act.--The
provisions of section 307 through 309 and 313 through 317 of
the Federal Power Act shall apply to violations of section
1201 of this Act in the same manner and to the same extent as
such provisions apply to entities subject to Part II of the
Federal Power Act.
SEC. 2. RULEMAKING ON EXEMPTIONS, WAIVERS, ETC. UNDER FEDERAL
POWER ACT.
Part III of the Federal Power Act is amended by inserting
the following new section after section 319 and by
redesignating sections 320 and 321 as sections 321 and 322,
respectively:
``SEC. 320. CRITERIA FOR CERTAIN EXEMPTIONS, WAIVERS, ETC.
``(a) Rule Required for Certain Waivers, Exemptions, Etc.--
Not later than 6 months after the enactment of this Act, the
Commission shall promulgate a rule establishing specific
criteria for providing an exemption, waiver, or other reduced
or abbreviated form of compliance with the requirements of
sections 204, 301, 304, and 305 (including any prospective
blanket order). Such criteria shall be sufficient to insure
that any such action taken by the Commission will be
consistent with the purposes of such requirements and will
otherwise protect the public interest.
``(b) Moratorium on Certain Waivers, Exemptions, Etc.--
After the date of enactment of this section, the Commission
may not issue, adopt, order, approve, or promulgate any
exemption, waiver, or other reduced or abbreviated form of
compliance with the requirements of section 204, 301, 304, or
305 (including any prospective blanket order) until after the
rule promulgated under subsection (a) has taken effect.
``(c) Previous Ferc Action.--The Commission shall undertake
a review, by rule or order, of each exemption, waiver, or
other reduced or abbreviated form of compliance described in
subsection (a) that was taken before the date of enactment of
this section. No such action may continue in force and effect
after the date 18 months after the date of enactment of this
section unless the Commission finds that such action complies
with the rule under subsection (a).
``(d) Exemption Under 204(f) not Applicable.--For purposes
of this section, in applying section 204, the provisions of
section 204(f) shall not apply.''.
SEC. 3. REPORTING REQUIREMENTS IN ELECTRIC POWER SALES AND
TRANSMISSION.
(a) Audit Trails.--Section 304 of the Federal Power Act is
amended by adding the following new subsection at the end
thereof:
``(c)(1) The Commission shall, by rule or order, require
each person or other entity engaged in the transmission of
electric energy in interstate commerce or the sale of
electric energy at wholesale in interstate commerce, and each
broker, dealer, and power marketer involved in any such
transmission or sale, to maintain, and periodically submit to
the Commission, such records, in electronic form, of each
transaction relating to such transmission or sale as may be
necessary to determine whether any person has employed any
fraudulent, manipulative, or deceptive device or contrivance
in contravention of rules promulgated by the Commission.
``(2) Section 201(f) shall not limit the application of
this subsection.''.
(b) Natural Gas.--Section 8 of the Natural Gas Act is
amended by adding the following new subsection at the end
thereof:
``(d) The Commission shall, by rule or order, require each
person or other entity engaged in the transportation of
natural gas in interstate commerce, or the sale in interstate
commerce of natural gas for resale for ultimate public
consumption for domestic, commercial, industrial, or any
other use, and each broker, dealer, and power marketer
involved in any such transportation or sale, to maintain, and
periodically submit to the Commission, such records, in
electronic form, of each transaction relating to such
transmission or sale as may be necessary to determine whether
any person has employed any fraudulent, manipulative, or
deceptive device or contrivance in contravention of rules
promulgated by the Commission.''.
SEC. 4. TRANSPARENCY.
(a) Definition.--As used in this section the term
``electric power or natural gas information processor'' means
any person engaged in the business of--
(1) collecting, processing, or preparing for distribution
or publication, or assisting, participating in, or
coordinating the distribution or publication of, information
with respect to transactions in or quotations involving the
purchase or sale of electric power, natural gas, the
transmission of electric energy, or the transportation of
natural gas, or
(2) distributing or publishing (whether by means of a
ticker tape, a communications network, a terminal display
device, or otherwise) on a current and continuing basis,
information with respect to such transactions or quotations.
The term does not include any bona fide newspaper, news
magazine, or business or financial publication of general and
regular circulation, any self-regulatory organization, any
bank, broker, dealer, building and loan, savings and loan, or
homestead association, or cooperative bank, if such bank,
broker, dealer, association, or cooperative bank would be
deemed to be an electric power or natural gas information
processor solely by reason of functions performed by such
institutions as part of customary banking, brokerage,
dealing, association, or cooperative bank activities, or any
common carrier, as defined in section 3 of the Communications
Act of 1934, subject to the jurisdiction of the Federal
Communications Commission or a State commission, as defined
in section 3 of that Act, unless the Commission determines
that such carrier is engaged in the business of collecting,
processing, or preparing for distribution or publication,
information with respect to transactions in or quotations
involving the purchase or sale of electric power, natural
gas, the transmission of electric energy, or the
transportation of natural gas.
(b) Prohibition.--No electric power or natural gas
information processor may make use of the mails or any means
or instrumentality of interstate commerce--
(1) to collect, process, distribute, publish, or prepare
for distribution or publication any information with respect
to quotations for, or transactions involving the purchase or
sale of electric power, natural gas, the transmission of
electric energy, or the transportation of natural gas, or
(2) to assist, participate in, or coordinate the
distribution or publication of such information in
contravention of such rules and regulations as the Federal
Energy Regulatory Commission shall prescribe as necessary or
appropriate in the public interest to
(A) prevent the use, distribution, or publication of
fraudulent, deceptive, or manipulative information with
respect to quotations for and transactions involving the
purchase or sale of electric power, natural gas, the
transmission of electric energy, or the transportation of
natural gas;
[[Page H4127]]
(B) assure the prompt, accurate, reliable, and fair
collection, processing, distribution, and publication of
information with respect to quotations for and transactions
involving the purchase or sale of electric power, natural
gas, the transmission of electric energy, or the
transportation of natural gas, and the fairness and
usefulness of the form and content of such information;
(C) assure that all such information processors may, for
purposes of distribution and publication, obtain on fair and
reasonable terms such information with respect to quotations
for and transactions involving the purchase or sale of
electric power, natural gas, the transmission of electric
energy, or the transportation of natural gas as is collected,
processed, or prepared for distribution or publication by any
exclusive processor of such information acting in such
capacity;
(D) assure that, subject to such limitations as the
Commission, by rule, may impose as necessary or appropriate
for the maintenance of fair and orderly markets, all persons
may obtain on terms which are not unreasonably discriminatory
such information with respect to quotations for and
transactions involving the purchase or sale of electric
power, natural gas, the transmission of electric energy, or
the transportation of natural gas as is published or
distributed by any electric power or natural gas information
processor;
(E) assure that all electricity and natural gas electronic
communication networks transmit and direct orders for the
purchase and sale of electricity or natural gas in a manner
consistent with the establishment and operation of an
efficient, fair, and orderly market system for electricity
and natural gas; and
(F) assure equal regulation of all markets involving the
purchase or sale of electric power, natural gas, the
transmission of electric energy, or the transportation of
natural gas and all persons effecting transactions involving
the purchase or sale of electric power, natural gas, the
transmission of electric energy, or the transportation of
natural gas.
(c) Related Commodities.--For purposes of this section, the
phrase ``purchase or sale of electric power, natural gas, the
transmission of electric energy, or the transportation of
natural gas'' includes the purchase or sale of any commodity
(as defined in the Commodities Exchange Act) relating to any
such purchase or sale if such commodity is excluded from
regulation under the Commodities Exchange Act pursuant to
section 2 of that Act.
(d) Prohibition.--No person who owns, controls, or is under
the control or ownership of a public utility, a natural gas
company, or a public utility holding company may own,
control, or operate any electronic computer network or other
mulitateral trading facility utilized to trade electricity or
natural gas.
SEC. 5. PENALTIES.
(a) Criminal Penalties.--Section 316 of the Federal Power
Act (16 U.S.C. 825o(c)) is amended as follows:
(1) By striking ``$5,000'' in subsection (a) and inserting
``$5,000,000 for an individual and $25,000,000 for any other
defendant''
(2) By striking ``$500'' in subsection (b) and inserting
``$1,000,000''.
(2) By striking subsection (c).
(b) Civil Penalties.--Section 316A of the Federal Power Act
(16 U.S.C. 825o-1) is amended as follows:
(1) By striking ``section 211, 212, 213, or 214'' each
place it appears and inserting ``Part II''.
(2) By striking ``$10,000 for each day that such violation
continues'' and inserting ``the greater of $1,000,000 or
three times the profit made or gain or loss avoided by reason
of such violation''.
(3) By adding the following at the end thereof:
``(c) Authority of a Court to Prohibit Persons From Certain
Activities.--In any proceeding under this section, the court
may censure, place limitations on the activities, functions,
or operations of, suspend or revoke the ability of any entity
(without regard to section 201(f)) to participate in the
transmission of electric energy in interstate commerce or the
sale of electric energy at wholesale in interstate commerce
if it finds that such censure, placing of limitations,
suspension, or revocation is in the public interest and that
one or more of the following applies to such entity:
``(1) Such entity has willfully made or caused to be made
in any application or report required to be filed with the
Commission or with any other appropriate regulatory agency,
or in any proceeding before the Commission, any statement
which was at the time and in the light of the circumstances
under which it was made false or misleading with respect to
any material fact, or has omitted to state in any such
application or report any material fact which is required to
be stated therein.
``(2) Such entity has been convicted of any felony or
misdemeanor or of a substantially equivalent crime by a
foreign court of competent jurisdiction which the court
finds--
``(A) involves the purchase or sale of electricity, the
taking of a false oath, the making of a false report,
bribery, perjury, burglary, any substantially equivalent
activity however denominated by the laws of the relevant
foreign government, or conspiracy to commit any such offense;
``(B) arises out of the conduct of the business of
transmitting electric energy in interstate commerce or
selling or purchasing electric energy at wholesale in
interstate commerce;
``(C) involves the larceny, theft, robbery, extortion,
forgery, counterfeiting, fraudulent concealment,
embezzlement, fraudulent conversion, or misappropriation of
funds, or securities, or substantially equivalent activity
however denominated by the laws of the relevant foreign
government; or
``(D) involves the violation of section 152, 1341, 1342, or
1343 or chapter 25 or 47 of title 18, United States Code, or
a violation of a substantially equivalent foreign statute.
``(3) Such entity is permanently or temporarily enjoined by
order, judgment, or decree of any court of competent
jurisdiction from acting as an investment adviser,
underwriter, broker, dealer, municipal securities dealer,
government securities broker, government securities dealer,
transfer agent, foreign person performing a function
substantially equivalent to any of the above, or entity or
person required to be registered under the Commodity Exchange
Act or any substantially equivalent foreign statute or
regulation, or as an affiliated person or employee of any
investment company, bank, insurance company, foreign entity
substantially equivalent to any of the above, or entity or
person required to be registered under the Commodity Exchange
Act or any substantially equivalent foreign statute or
regulation, or from engaging in or continuing any conduct or
practice in connection with any such activity, or in
connection with the purchase or sale of any security.
``(4) Such entity has willfully violated any provision of
this Act.
``(5) Such entity has willfully aided, abetted, counseled,
commanded, induced, or procured the violation by any other
person of any provision of this Act, or has failed reasonably
to supervise, with a view to preventing violations of the
provisions of this Act, another person who commits such a
violation, if such other person is subject to his
supervision. For the purposes of this paragraph no person
shall be deemed to have failed reasonably to supervise any
other person, if--
``(A) there have been established procedures, and a system
for applying such procedures, which would reasonably be
expected to prevent and detect, insofar as practicable, any
such violation by such other person, and
``(B) such person has reasonably discharged the duties and
obligations incumbent upon him by reason of such procedures
and system without reasonable cause to believe that such
procedures and system were not being complied with.
``(6) Such entity has been found by a foreign financial or
energy regulatory authority to have--
``(A) made or caused to be made in any application or
report required to be filed with a foreign regulatory
authority, or in any proceeding before a foreign financial or
energy regulatory authority, any statement that was at the
time and in the light of the circumstances under which it was
made false or misleading with respect to any material fact,
or has omitted to state in any application or report to the
foreign regulatory authority any material fact that is
required to be stated therein;
``(B) violated any foreign statute or regulation regarding
the transmission or sale of electricity or natural gas;
``(C) aided, abetted, counseled, commanded, induced, or
procured the violation by any person of any provision of any
statutory provisions enacted by a foreign government, or
rules or regulations thereunder, empowering a foreign
regulatory authority regarding transactions in electricity or
natural gas, or contracts of sale of electricity or natural
gas, traded on or subject to the rules of a contract market
or any board of trade, or has been found, by a foreign
regulatory authority, to have failed reasonably to supervise,
with a view to preventing violations of such statutory
provisions, rules, and regulations, another person who
commits such a violation, if such other person is subject to
his supervision.
``(7) Such entity is subject to any final order of a State
commission (or any agency or officer performing like
functions), State authority that supervises or examines
banks, savings associations, or credit unions, State
insurance commission (or any agency or office performing like
functions), an appropriate Federal banking agency (as defined
in section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813(q))), or the National Credit Union Administration,
that--
``(A) bars such person from association with an entity
regulated by such commission, authority, agency, or officer,
or from engaging in the business of securities, insurance,
banking, savings association activities, or credit union
activities; or
``(B) constitutes a final order based on violations of any
laws or regulations that prohibit fraudulent, manipulative,
or deceptive conduct.
``(8) Such entity is subject to statutory disqualification
within the meaning of section 3(a)(39) of the Securities
Exchange Act of 1934.''.
(c) Natural Gas Act Penalties.--Section 21 of the Natural
Gas Act is amended by adding the following new subsection at
the end thereof:
``(c) Authority of a Court to Prohibit Persons From Certain
Activities.--In any proceeding under this section, the court
may censure, place limitations on the activities, functions,
or operations of, suspend or revoke the ability of any entity
(without regard to section 201(f)) to participate in the
[[Page H4128]]
transportation of natural gas in interstate commerce, or the
sale in interstate commerce of natural gas for resale for
ultimate public consumption for domestic, commercial,
industrial, or any other use if it finds that such censure,
placing of limitations, suspension, or revocation is in the
public interest and that one or more of the following applies
to such entity:
``(1) Such entity has willfully made or caused to be made
in any application or report required to be filed with the
Commission or with any other appropriate regulatory agency,
or in any proceeding before the Commission, any statement
which was at the time and in the light of the circumstances
under which it was made false or misleading with respect to
any material fact, or has omitted to state in any such
application or report any material fact which is required to
be stated therein.
``(2) Such entity has been convicted of any felony or
misdemeanor or of a substantially equivalent crime by a
foreign court of competent jurisdiction which the court
finds--
``(A) involves the purchase or sale of natural gas, the
taking of a false oath, the making of a false report,
bribery, perjury, burglary, any substantially equivalent
activity however denominated by the laws of the relevant
foreign government, or conspiracy to commit any such offense;
``(B) arises out of the conduct of the business of
transmitting natural gas in interstate commerce, or the
selling in interstate commerce of natural gas for resale for
ultimate public consumption for domestic, commercial,
industrial, or any other use;
``(C) involves the larceny, theft, robbery, extortion,
forgery, counterfeiting, fraudulent concealment,
embezzlement, fraudulent conversion, or misappropriation of
funds, or securities, or substantially equivalent activity
however denominated by the laws of the relevant foreign
government; or
``(D) involves the violation of section 152, 1341, 1342, or
1343 or chapter 25 or 47 of title 18, United States Code, or
a violation of a substantially equivalent foreign statute.
``(3) Such entity is permanently or temporarily enjoined by
order, judgment, or decree of any court of competent
jurisdiction from acting as an investment adviser,
underwriter, broker, dealer, municipal securities dealer,
government securities broker, government securities dealer,
transfer agent, foreign person performing a function
substantially equivalent to any of the above, or entity or
person required to be registered under the Commodity Exchange
Act or any substantially equivalent foreign statute or
regulation, or as an affiliated person or employee of any
investment company, bank, insurance company, foreign entity
substantially equivalent to any of the above, or entity or
person required to be registered under the Commodity Exchange
Act or any substantially equivalent foreign statute or
regulation, or from engaging in or continuing any conduct or
practice in connection with any such activity, or in
connection with the purchase or sale of any security.
``(4) Such entity has willfully violated any provision of
this Act.
``(5) Such entity has willfully aided, abetted, counseled,
commanded, induced, or procured the violation by any other
person of any provision of this Act, or has failed reasonably
to supervise, with a view to preventing violations of the
provisions of this Act, another person who commits such a
violation, if such other person is subject to his
supervision. For the purposes of this paragraph no person
shall be deemed to have failed reasonably to supervise any
other person, if--
``(A) there have been established procedures, and a system
for applying such procedures, which would reasonably be
expected to prevent and detect, insofar as practicable, any
such violation by such other person, and
``(B) such person has reasonably discharged the duties and
obligations incumbent upon him by reason of such procedures
and system without reasonable cause to believe that such
procedures and system were not being complied with.
``(6) Such entity has been found by a foreign financial or
energy regulatory authority to have--
``(A) made or caused to be made in any application or
report required to be filed with a foreign regulatory
authority, or in any proceeding before a foreign financial or
energy regulatory authority, any statement that was at the
time and in the light of the circumstances under which it was
made false or misleading with respect to any material fact,
or has omitted to state in any application or report to the
foreign regulatory authority any material fact that is
required to be stated therein;
``(B) violated any foreign statute or regulation regarding
the transmission or sale of electricity or natural gas;
``(C) aided, abetted, counseled, commanded, induced, or
procured the violation by any person of any provision of any
statutory provisions enacted by a foreign government, or
rules or regulations thereunder, empowering a foreign
regulatory authority regarding transactions in electricity or
natural gas, or contracts of sale of electricity or natural
gas, traded on or subject to the rules of a contract market
or any board of trade, or has been found, by a foreign
regulatory authority, to have failed reasonably to supervise,
with a view to preventing violations of such statutory
provisions, rules, and regulations, another person who
commits such a violation, if such other person is subject to
his supervision.
``(7) Such entity is subject to any final order of a State
commission (or any agency or officer performing like
functions), State authority that supervises or examines
banks, savings associations, or credit unions, State
insurance commission (or any agency or office performing like
functions), an appropriate Federal banking agency (as defined
in section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813(q))), or the National Credit Union Administration,
that--
``(A) bars such person from association with an entity
regulated by such commission, authority, agency, or officer,
or from engaging in the business of securities, insurance,
banking, savings association activities, or credit union
activities; or
``(B) constitutes a final order based on violations of any
laws or regulations that prohibit fraudulent, manipulative,
or deceptive conduct.
``(8) Such entity is subject to statutory disqualification
within the meaning of section 3(a)(39) of the Securities
Exchange Act of 1934.''.
SEC. 6. REVIEW OF PUHCA EXEMPTIONS.
Not later than 12 months after the enactment of this Act
the Securities and Exchange Commission shall review each
exemption granted to any person under section 3(a) of the
Public Utility Holding Company Act of 1935 and shall review
the action of persons operating pursuant to a claim of exempt
status under section 3 to determine if such exemptions and
claims are consistent with the requirements of such section
3(a) and whether or not such exemptions or claims of
exemption should continue in force and effect.
SEC. 7. REVIEW OF ACCOUNTING FOR CONTRACTS INVOLVED IN ENERGY
TRADING.
Not later than 12 months after the enactment of this Act,
the Financial Accounting Standards Board shall submit to the
Congress a report of the results of its review of accounting
for contracts in energy trading and risk management
activities. The review and report shall include, among other
issues, the use of mark-to-market accounting and when gains
and losses should be recognized, with a view toward improving
the transparency of energy trading activities for the benefit
of investors, consumers, and the integrity of these markets.
SEC. 8. PROTECTION OF FERC REGULATED SUBSIDIARIES.
Section 205 of the Federal Power Act is amended by adding
after subsection (f) the following new subsection:
``(g) Rules and Procedures to Protect Consumers of Public
Utilities.--Not later than 9 months after the date of
enactment of this Act, the Commission shall adopt rules and
procedures for the protection of electric consumers from
self-dealing, interaffiliate abuse, and other harmful actions
taken by persons owning or controlling public utilities. Such
rules shall ensure that no asset of a public utility company
shall be used as collateral for indebtedness incurred by the
holding company of, and any affiliate of, such public utility
company, and no public utility shall acquire or own any
securities of the holding company or other affiliates of the
holding company unless the Commission has determined that
such acquisition or ownership is consistent with the public
interest and the protection of consumers of such public
utility.''.
SEC. 9. REFUNDS UNDER THE FEDERAL POWER ACT.
Section 206(b) of the Federal Power Act is amended as
follows:
(1) By amending the first sentence to read as follows: ``In
any proceeding under this section, the refund effective date
shall be the date of the filing of a complaint or the date of
the Commission motion initiating the proceeding, except that
in the case of a complaint with regard to market-based rates,
the Commission shall establish such earlier refund effective
date as is necessary to provide a refund of any rate or
charge that is not just and reasonable, as determined by the
Commission. To the extent necessary to achieve the purposes
of this section, the Commission shall initiate new
proceedings, including investigations, and issue appropriate
refunds.''.
(2) By striking the second and third sentences.
(3) By striking out ``the refund effective date or by'' and
``, whichever is earlier,'' in the fifth sentence.
(4) In the seventh sentence by striking ``through a date
fifteen months after such refund effective date'' and insert
``and prior to the conclusion of the proceeding'' and by
striking the proviso.
SEC. 10. ACCOUNTS AND REPORTS.
Section 318 of the Federal Power Act is amended by adding
the following at the end thereof: ``This section shall not
apply to sections 301 and 304 of this Act.''.
SEC. 11. MARKET-BASED RATES.
Section 205 of the Federal Power Act is amended by adding
the following new subsection at the end thereof:
``(g) For each public utility granted the authority by the
Commission to sell electric energy at market-based rates, the
Commission shall review the activities and characteristics of
such utility not less frequently than annually to determine
whether such rates are just and reasonable. Each such utility
shall notify the Commission promptly of any change in the
activities and characteristics relied upon by the Commission
in granting such public utility the authority to sell
electric energy at market-based rates. If the Commission
finds that:
[[Page H4129]]
``(1) a rate charged by a public utility authorized to sell
electric energy at market-based rates is unjust,
unreasonable, unduly discriminatory or preferential,
``(2) the public utility has intentionally engaged in an
activity that violates any other rule, tariff, or order of
the Commission, or
``(3) any violation of section 101 of the Energy Markets
Fraud Prevention and Consumer Protection Act of 2002,
the Commission shall issue an order immediately modifying or
revoking the authority of that public utility to sell
electric energy at market-based rates.''.
SEC. 12. 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. 215. 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.
``(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; and
``(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.
[[Page H4130]]
``(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 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.
``(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.''.
SEC. 13. STRATEGIC PETROLEUM RESERVE CONTRACTS.
Section 160 of the Energy Policy and Conservation Act (42
U.S.C. 6240) is amended by inserting after subsection (b) the
following new subsection:
``(c) Whenever there is a substantial increase in the
market price of a petroleum product which is subject to a
contract for delivery to the Reserve, the Secretary shall, to
the extent possible under the contract or through
renegotiation of the terms and conditions of the contract
(including terms and conditions relating to the delivery
date), take such actions as are necessary to protect
consumers or achieve the objectives described in subsection
(b).''.
Mr. DINGELL (during the reading). Mr. Speaker, I ask unanimous
consent that the motion to recommit be considered as read and printed
in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
The SPEAKER pro tempore. The gentleman from Michigan (Mr. Dingell) is
recognized for 5 minutes in support of his motion.
Mr. DINGELL. Mr. Speaker, I yield 2\1/2\ minutes to the distinguished
gentlewoman from California (Ms. Eshoo), who is cosponsor of the motion
to recommit.
Ms. ESHOO. Mr. Speaker, I thank the very distinguished ranking member
of the Committee on Energy and Commerce for yielding me this time.
I rise today in support of this motion to recommit. And, Mr. Speaker,
I do so for the following reasons. One of the great things about our
country is that we recognize when mistakes have been made, when the
American people have suffered an injustice, a wrong, and we stand to
make it right. That is what this motion to recommit is all about.
Two weeks ago the people of our country heard all over the airwaves
the disgraceful and disgusting tapes, the audio tapes of the Enron
traders and how they planned and how they executed the gouging and the
manipulation of the energy market in the Pacific Northwest and in
California. Time and again we have sought amendments. Time and again we
have gone to the Speaker of the House. Time and again the three
delegations from the Pacific Northwest and California have attempted to
make this right.
Today in this energy bill we ask that it be recommitted, and with
this recommittal we will direct the Federal Energy Commission that is
charged with the consumers' best interest to refund the dollars that
were robbed out of greed from the American people. We are a great and
good Nation. We can correct this. That is what the motion to recommit
is all about. Every single Member of this House, Republicans and
Democrats, have a stake in this. If they vote against the motion to
recommit, they are saluting those that robbed American consumers. So
stand with them. Do the right thing.
Mr. DINGELL. Mr. Speaker, I yield myself such time as I may consume.
I urge my colleagues to vote for the motion to recommit. It is very
simple. It is passive. It is something which the Senate, I believe,
would consider; and it is something which will be accepted by the
American people and which will help with the energy problems.
First of all, it contains energy antifraud provisions to avoid a
recurrence of the widespread unchecked fraud that rocked Western power
markets in recent years. The motion requires FERC to refund
overcharges, updates various provisions of the Federal Power Act, and
gives the Federal Energy Regulatory Commission authority to deter and
to punish market manipulation.
It has electric reliability provisions. The motion includes what is
perhaps the most widely supported provision in the bill before us
today, making the rules that govern the operation of the interstate
electric grid mandatory and enforceable. The U.S.-Canada Task Force
report called this the most important step that this Nation can take to
prevent future blackouts.
It includes legislation which relates to the Strategic Petroleum
Reserve; and regardless of how the Members feel about drawing down the
Strategic Petroleum Reserve to address prices, an idea which, by the
way, I oppose, no one can quarrel with the premise that the Department
of Energy should manage additions of crude oil to the reserves in such
a way as to minimize
[[Page H4131]]
costs and to avoid exerting upward pressure on oil prices when markets
are awry.
The administration has been inexplicably reluctant to defer
deliveries of crude to SPR during the current market run-up in oil
prices, despite the fact that it has been done before. The motion
directs the Secretary to pursue this option and to utilize futures and
other devices which would enable him to address this.
All of us, I think, here in the House favor certain aspects of H.R.
4503, but the good provisions are being held hostage to other aspects
that are controversial, provisions which are clearly special interests
and, quite frankly, will not pass the sniff test. It is too late in the
session to continue playing chicken with this issue. The time has come
to enact carefully drawn provisions in addressing the Nation's most
immediate needs. This motion addresses the three most important major
energy problems, market manipulation, electric reliability, and high
gasoline prices, in ways that Members should be able to agree upon.
{time} 1545
We can pursue the goal of a broader energy bill later in a better
fashion, hopefully a more bipartisan way, in which the Members of the
Congress will have an opportunity to address it with proper amendments
on the floor or to attend the meetings of the conferees, which were
foreclosed to Members on the minority side in a most curious and, I
would note, unparliamentary fashion.
I urge my colleagues to endorse and support and vote for the motion
to recommit. It is a good piece of legislation. It converts a bad piece
of legislation into something which will work, and it has a chance of
being considered and passed in the Senate. I urge my colleagues to vote
for the motion to recommit.
Mr. BARTON of Texas. Mr. Speaker, I rise in opposition to the motion
to recommit.
The SPEAKER pro tempore (Mr. Isakson). The gentleman is recognized
for 5 minutes.
Mr. BARTON of Texas. Mr. Speaker, I wish to say as I rise in
opposition that I am in total support of the Dean of the House, the
gentleman from Michigan, in his efforts to help develop a comprehensive
energy plan for our country, but I cannot support this particular
motion to recommit.
It is true that some elements of the motion to recommit would be
helpful. There is an increase in civil fines for wrongdoing, but that
is already in the pending bill that is before us. In fact, the bill
that is before us would increase the fine to $1 million.
The pending bill before us bans round trip trades. The gentleman's
motion to recommit does not ban round trip trades.
The pending bill before us would encourage the development and siting
of new transmission lines. The motion to recommit does not do that.
The pending bill before us protects native load in those States that
wish to do that. The gentleman's motion to recommit does not protect
native load.
The pending bill repeals the Public Utility Holding Company Act so we
get more capital into our energy markets. That is one area where the
gentleman from Michigan and I have a policy difference. He does totally
oppose the repeal of PUHCA, and that is just an honest difference of
opinion.
The pending bill before us would reform PURPA, which allows
cogeneration facilities to sell their surplus electricity into the
power grid. The motion to recommit does not do that.
There is no provision in the motion to recommit for clean coal
technology. There is no provision in the motion to recommit for
hydrogen fuel cell research. There is no provision in the motion to
recommit for investment tax credits for wind power and solar power and
other alternative energy resources.
There is no provision in the motion to recommit to incentivize the
construction of the Alaska natural gas pipeline, where we have 40
trillion cubic feet of natural gas that is not being used at the
current time because we cannot get it to the Lower 48 States.
In fact, the gentleman's motion to recommit has not one molecule of
new energy in the motion to recommit. So while it may be well-intended,
I do not think it is a substitute for a comprehensive energy bill,
which, I will point out, has passed the House in its current form by a
vote of 246 to 180, which was a bipartisan vote.
The motion to recommit in a similar form failed before this body 193
to 237, although I must admit that that particular motion to recommit
did not have the section on the Strategic Petroleum Reserve. I have
tried to understand the section on the Strategic Petroleum Reserve and
I will take the gentleman from Michigan at his word that the intent of
the SPR language is to provide some protection for price flexibility.
But as a layman; i.e. myself, reads it, it is unclear to me that it
actually does that. But I will take him at his word, that if he says
that is what it does, I will stipulate that is what it does.
In summary, while the motion to recommit is well intended, it is not
a substitute for a comprehensive energy bill. In a form very similar to
what it is today, it has failed before this body 237 to 193, and I hope
when we come to the vote, if it comes to a rollcall vote, that once
again it will fail, with all due respect to my good friend from
Michigan.
Mr. Speaker, I yield back the balance of my time, and urge a no vote
on the motion to recommit.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit
offered by the gentleman from Michigan (Mr. Dingell).
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. DINGELL. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clauses 8 and 9 of rule XX, this
15-minute vote on the motion to recommit will be followed by 5-minute
votes as ordered on the question of passage of H.R. 4503 and the
question postponed earlier today on the passage of H.R. 4513.
The vote was taken by electronic device, and there were--yeas 192,
nays 230, not voting 11, as follows:
[Roll No. 240]
YEAS--192
Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldwin
Becerra
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boswell
Boucher
Boyd
Brady (PA)
Brown (OH)
Brown, Corrine
Capps
Capuano
Cardin
Cardoza
Case
Chandler
Clay
Clyburn
Conyers
Cooper
Costello
Cramer
Crowley
Cummings
Davis (AL)
Davis (CA)
Davis (FL)
Davis (IL)
Davis (TN)
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Dingell
Doggett
Dooley (CA)
Doyle
Emanuel
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Filner
Ford
Frank (MA)
Frost
Gephardt
Gonzalez
Gordon
Green (TX)
Grijalva
Gutierrez
Harman
Hastings (FL)
Herseth
Hill
Hinchey
Hinojosa
Hoeffel
Holden
Holt
Honda
Hooley (OR)
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
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
Maloney
Markey
Marshall
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McIntyre
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Michaud
Miller (NC)
Miller, George
Mollohan
Moore
Moran (VA)
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
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
Schakowsky
Schiff
Scott (VA)
Serrano
Shays
Sherman
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Towns
Turner (TX)
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Waters
Watt
Waxman
Weiner
Wexler
Woolsey
Wu
Wynn
NAYS--230
Aderholt
Akin
Alexander
Bachus
Baker
Ballenger
[[Page H4132]]
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
Cox
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
Diaz-Balart, M.
Doolittle
Dreier
Duncan
Dunn
Edwards
Emerson
English
Everett
Feeney
Ferguson
Flake
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
Houghton
Hulshof
Hunter
Hyde
Isakson
Issa
Istook
Jenkins
John
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)
Majette
Manzullo
Matheson
McCotter
McCrery
McHugh
McInnis
McKeon
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Murphy
Musgrave
Myrick
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Osborne
Ose
Otter
Oxley
Paul
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)
Sandlin
Saxton
Schrock
Scott (GA)
Sensenbrenner
Sessions
Shadegg
Shaw
Sherwood
Shimkus
Shuster
Simmons
Simpson
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Stearns
Stenholm
Sullivan
Sweeney
Tancredo
Tauzin
Taylor (NC)
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)
NOT VOTING--11
Bell
Carson (IN)
Carson (OK)
Collins
DeMint
Deutsch
Diaz-Balart, L.
Ehlers
Millender-McDonald
Pascrell
Watson
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (Mrs. Biggert) (during the vote). Members are
advised there are 2 minutes remaining in this vote.
{time} 1614
Messrs. NEUGEBAUER, NUNES, REGULA, PUTNAM, and BRADY of Texas changed
their vote from ``yea'' to ``nay.''
Ms. HARMAN, and Messrs. HOEFFEL, LANGEVIN, ORTIZ, MEEKS of New York,
and MOLLOHAN changed their vote from ``nay'' to ``yea.''
So the motion to recommit was rejected.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. DINGELL. Madam Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. This is a 5-minute vote.
The vote was taken by electronic device, and there were--yeas 244,
nays 178, not voting 11, as follows:
[Roll No. 241]
YEAS--244
Aderholt
Akin
Alexander
Baca
Bachus
Baker
Ballenger
Barrett (SC)
Bartlett (MD)
Barton (TX)
Beauprez
Bereuter
Berry
Biggert
Bilirakis
Bishop (GA)
Bishop (UT)
Blackburn
Blunt
Boehner
Bonilla
Bonner
Bono
Boozman
Boswell
Boucher
Brady (TX)
Brown (SC)
Brown-Waite, Ginny
Burgess
Burns
Burr
Burton (IN)
Buyer
Calvert
Camp
Cannon
Cantor
Capito
Cardoza
Carter
Chabot
Chocola
Coble
Cole
Costello
Cox
Cramer
Crane
Crenshaw
Cubin
Culberson
Cunningham
Davis (AL)
Davis (TN)
Davis, Jo Ann
Davis, Tom
Deal (GA)
DeLay
Diaz-Balart, M.
Dooley (CA)
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Emerson
English
Evans
Everett
Feeney
Ferguson
Foley
Forbes
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gibbons
Gillmor
Gingrey
Gonzalez
Goode
Goodlatte
Gordon
Goss
Granger
Graves
Green (TX)
Greenwood
Gutknecht
Hall
Harris
Hart
Hastings (WA)
Hayes
Hayworth
Hefley
Hensarling
Herger
Herseth
Hinojosa
Hobson
Hoekstra
Holden
Hostettler
Hulshof
Hunter
Hyde
Isakson
Issa
Istook
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson (IL)
Johnson, Sam
Jones (NC)
Kanjorski
Keller
Kennedy (MN)
King (IA)
Kingston
Kline
Knollenberg
Kolbe
LaHood
Lampson
Latham
LaTourette
Leach
Lewis (CA)
Lewis (KY)
Linder
Lipinski
Lucas (KY)
Lucas (OK)
Manzullo
Matheson
McCotter
McCrery
McHugh
McInnis
McIntyre
McKeon
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Mollohan
Moran (KS)
Murphy
Murtha
Musgrave
Myrick
Nethercutt
Neugebauer
Ney
Northup
Norwood
Nunes
Nussle
Ortiz
Osborne
Otter
Oxley
Pearce
Pence
Peterson (MN)
Peterson (PA)
Pickering
Pitts
Platts
Pombo
Pomeroy
Porter
Portman
Pryce (OH)
Putnam
Quinn
Radanovich
Ramstad
Regula
Rehberg
Renzi
Reyes
Reynolds
Rodriguez
Rogers (AL)
Rogers (KY)
Rogers (MI)
Ros-Lehtinen
Ross
Ryun (KS)
Sandlin
Schrock
Scott (GA)
Sessions
Shadegg
Shaw
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skelton
Smith (MI)
Smith (TX)
Souder
Stearns
Stenholm
Sullivan
Tancredo
Tauzin
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tiberi
Toomey
Towns
Turner (OH)
Turner (TX)
Upton
Visclosky
Vitter
Walden (OR)
Walsh
Wamp
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wynn
Young (AK)
Young (FL)
NAYS--178
Abercrombie
Ackerman
Allen
Andrews
Baird
Baldwin
Bass
Becerra
Berkley
Berman
Bishop (NY)
Blumenauer
Boehlert
Boyd
Bradley (NH)
Brady (PA)
Brown (OH)
Brown, Corrine
Capps
Capuano
Cardin
Case
Castle
Chandler
Clay
Clyburn
Conyers
Cooper
Crowley
Cummings
Davis (CA)
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Dingell
Doggett
Emanuel
Engel
Eshoo
Etheridge
Farr
Fattah
Filner
Flake
Ford
Fossella
Frank (MA)
Frost
Gephardt
Gilchrest
Green (WI)
Grijalva
Gutierrez
Harman
Hastings (FL)
Hill
Hinchey
Hoeffel
Holt
Honda
Hooley (OR)
Houghton
Hoyer
Inslee
Israel
Jackson (IL)
Johnson, E. B.
Jones (OH)
Kaptur
Kelly
Kennedy (RI)
Kildee
Kilpatrick
Kind
King (NY)
Kirk
Kleczka
Kucinich
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
LoBiondo
Lofgren
Lowey
Lynch
Majette
Maloney
Markey
Marshall
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McDermott
McGovern
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Michaud
Miller (NC)
Miller, George
Moore
Moran (VA)
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ose
Owens
Pallone
Pastor
Paul
Payne
Pelosi
Petri
Price (NC)
Rahall
Rangel
Rohrabacher
Rothman
Roybal-Allard
Royce
Ruppersberger
Rush
Ryan (OH)
Ryan (WI)
Sabo
Sanchez, Linda T.
Sanchez, Loretta
Sanders
Saxton
Schakowsky
Schiff
Scott (VA)
Sensenbrenner
Serrano
Shays
Sherman
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Spratt
Stark
Strickland
Stupak
Sweeney
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Tierney
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Waters
Watt
Waxman
Weiner
Wexler
Wolf
Woolsey
Wu
NOT VOTING--11
Bell
Carson (IN)
Carson (OK)
Collins
DeMint
Deutsch
Diaz-Balart, L.
Ehlers
Millender-McDonald
Pascrell
Watson
{time} 1624
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________