[Congressional Record (Bound Edition), Volume 148 (2002), Part 4]
[Senate]
[Pages 5201-5289]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 3177. Mr. MURKOWSKI submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 81, strike line 14 and all that follows through 
     page 92, line 16.
                                  ____

  SA 3178. Mr. MURKOWSKI submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 94, line 5, strike ``renewable''.
                                  ____

  SA 3179. Mr. MURKOWSKI submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 109, line 5, strike ``renewable''.
                                  ____

  SA 3180. Mr. MURKOWSKI submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 109, line 12, strike ``renewable''.
                                  ____

  SA 3181. Mr. MURKOWSKI submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 109, line 14, strike ``renewable''.
                                  ____

  SA 3182. Mr. KYL (for himself and Mr. Graham) submitted an amendment 
intended to be proposed to amendment SA 2917 proposed by Mr. Daschle 
(for himself and Mr. Bingaman) to the bill (S. 517) to authorize 
funding the Department of Energy to enhance its mission areas through 
technology transfer and partnerships for fiscal years 2002 through 
2006, and for other purposes; which was ordered to lie on the table; as 
follows:

       At the appropriate place insert the following:

     SEC.  . PERMANENT REPEAL OF ESTATE TAXES.

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

  SA 3183. Mr. ROBERTS submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following section.

     SEC.  . RESEARCH PROGRAM.

       (a) In General.--The Secretary may fund comprehensive 
     geological, engineering, and geophysical studies concerning--
       (1) natural gas products in storage facilities; and
       (2) other related research topics.
       (b) Priority.--In funding studies under subsection (a), the 
     Secretary shall give priority to studies relating to storage 
     facilities that have experienced releases of natural gas.
       (c) Research Areas.--Studies under subsection (a) shall--
       (1) interpret geology in the context of possible releases 
     of natural gas;
       (2) develop a comprehensive and quantitative understanding 
     of geology relevant to past and possible future migration and 
     loss of stored natural gas;
       (3) include an engineering analysis of existing storage 
     facilities, including laboratory analysis of well 
     construction and operations;
       (4) integrate information through simulations using 
     geomechanical and fluid flow models to reconstruct or predict 
     geological events that caused or may cause releases of 
     natural gas from storage facilities;
       (5) evaluate--
       (A) properties of underground reservoirs and surrounding 
     geological strata;
       (B) natural geological stresses; and
       (C) possible geological alterations caused by the process 
     of storage in storage facilities; and
       (6) use a cross-disciplinary approach using technologies in 
     geophysical, petrophysical, hydrological, geomechanical, and 
     remote sensing to characterize and model geology in the 
     vicinity of a storage facility.
       (d) Review.--The Office of Fossil Energy Research of the 
     Department of Energy shall review applications for funding of 
     studies under this section.
       (e) Unsolicited Applications.--In addition to applications 
     for funding of studies received in response to requests for 
     proposals issued by the Secretary, the Secretary shall accept 
     and consider for funding under this section any unsolicited 
     application for research funding received by the Secretary 
     that has research goals consistent with this section.
       (f) Research Support.--The Secretary shall facilitate 
     research support from other Federal agencies that have 
     related geological, engineering, and other specialties.
       (g) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $500,000 for 
     each of fiscal years 2003 through 2006.
                                  ____

  SA 3184. Mr. KYL submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 28 following line 16 insert the following:

     SEC. 211. SERVICE OBLIGATIONS OF LOAD-SERVING ENTITIES.

       Part II of the Federal Power Act is amended by inserting 
     after section 207 the following new section:


                         ``SERVICE OBLIGATIONS

       ``Sec. 207A. (a)(1) The Commission shall exercise its 
     authority under this act to ensure that any load-serving 
     entity that, as of the date of enactment of this section--
       ``(A) owns generation facilities, or holds rights under one 
     or more long-term contracts to purchase electric energy, for 
     the purpose of meeting a service obligation, and
       ``(B) by reason of ownership of transmission facilities, or 
     one or more contracts 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 in order to deliver such output or purchased energy to 
     meet that service obligation.
       ``(2) 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) For purposes of this section:
       ``(1) The term `distribution utility' means an electric 
     utility that has a service obligation to end-users.
       ``(2) The term `load-serving entity' means a distribution 
     utility or an electric utility that has a service obligation 
     to a distribution utility.
       ``(3) The term `service obligation' means (i) a requirement 
     applicable to an electric utility under Federal, State or 
     local law to provide electric service to end-users or to a 
     distribution utility, or (ii) an obligation under a long-term 
     firm sales contract (executed before the date of enactment of 
     this section) to provide all or part of the electric energy 
     necessary for a distribution utility to meet a requirement 
     under clause (i).''
                                  ____

  SA 3185. Mr. KYL submitted an amendment intended to be proposed to

[[Page 5202]]

amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 28 following line 16 insert the following:

     SEC. 211. SERVICE OBLIGATIONS OF LOAD-SERVING ENTITIES.

       Part II of the Federal Power Act is amended by inserting 
     after section 207 the following new section:


                         ``service obligations

       ``Sec. 207A. (a)(1) The Commission shall exercise its 
     authority under this Act to ensure that any load-serving 
     entity that, as of the date of enactment of this section--
       ``(A) owns generation facilities, or holds rights under one 
     or more long-term contracts to purchase electric energy, for 
     the purpose of meeting a service obligation, and
       ``(B) by reason of ownership of transmission facilities, or 
     one or more long-term contracts or 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 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 meet that service obligation.
       ``(2) The Commission shall exercise its authority under 
     this Act in a manner that facilities the planning and 
     expansion of transmission facilities to meet the reasonable 
     needs of load-serving entities to satisfy their existing and 
     reasonably forecast service obligations.
       ``(b) For purposes of this section:
       ``(1) The term `distribution utility' means an electric 
     utility that has a service obligation to end-users.
       ``(2) The term `load-serving entity' means a distribution 
     utility or an electric utility that has a service obligation 
     to a distribution utility.
       ``(3) The term `service obligation' means (i) a requirement 
     applicable to an electric utility under Federal, State or 
     local law or under long-term contract to provide electric 
     service to end-users or to a distribution utility, or (ii) an 
     obligation under a long-term firm sales contract (executed 
     before the date of enactment of this section) to provide all 
     or part of the electric energy necessary for a distribution 
     utility to meet a requirement under clause (i).''
       ``(4) The term `long-term' means for a period of one year 
     or more.''
                                  ____

  SA 3186. Mr. HAGEL submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 370, strike line 3 and all that follows 
     through page 384, line 19, and insert the following:

     SEC. 1101. PURPOSE.

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

     SEC. 1102. DEFINITIONS.

       In this title:
       (1) Database.--The term ``database'' means the National 
     Greenhouse Gas Database established under section 1104.
       (2) Designated agency or agencies.--The term ``Designated 
     Agency or Agencies'' means the Department or Departments or 
     Agency or Agencies given the responsibility for a function or 
     program under the Memorandum of Agreement entered into 
     pursuant to section 1103.
       (3) Direct emissions.--The term ``direct emissions'' means 
     greenhouse gas emissions by an entity from a facility that is 
     owned or controlled by that entity.
       (4) Entity.--The term ``entity'' means--
       (A) a person located in the United States; or
       (B) a public or private entity, to the extent that the 
     entity operates in the United States.
       (5) Facility.--The term ``facility'' means all buildings, 
     structures, or installations located on any 1 or more of 
     contiguous or adjacent property or properties, or a fleet of 
     20 or more transportation vehicles, under common control of 
     the same entity.
       (6) Greenhouse gas.--The term ``greenhouse gas'' means--
       (A) carbon dioxide;
       (B) methane;
       (C) nitrous oxide;
       (D) hydrofluorocarbons;
       (E) perfluorocarbons; and
       (F) sulfur hexafluoride.
       (7) Indirect emissions.--The term `indirect emissions' 
     means greenhouse gas emissions that are a consequence of the 
     activities of an entity but that are emitted from a facility 
     owned or controlled by another entity and are not already 
     reported as direct emissions by a covered entity.
       (8) Sequestration.--The term `sequestration' means the 
     capture, long-term separation, isolation, or removal of 
     greenhouse gases from the atmosphere, including through a 
     biological or geologic method such as reforestation or an 
     underground reservoir.

     SEC. 1103. ESTABLISHMENT OF MEMORANDUM OF AGREEMENT.

       (a) Not later than 1 year after the date of enactment of 
     this Act, the President, acting through the Chairman of the 
     Council on Environmental Quality, shall direct the Department 
     of Energy, the Department of Commerce, the Department of 
     Agriculture, the Department of Transportation and the 
     Environmental Protection Agency, to enter into a Memorandum 
     of Agreement that will--
       (1) recognize and maintain existing statutory and 
     regulatory authorities, functions and programs that collect 
     data on greenhouse gas emissions and effects and that are 
     necessary for the operation of the National Greenhouse Gas 
     Database;
       (2) distribute additional responsibilities and activities 
     identified by this title to Federal departments or agencies 
     according to their mission and expertise and to maximize the 
     use of existing resources; and
       (3) provide for the comprehensive collection and analysis 
     of data on the emissions related to product use, including 
     fossil fuel and energy consuming appliances and vehicles.
       (b) The Memorandum of Agreement entered into under 
     subsection (a) shall, at a minimum, retain the following 
     functions for the respective Departments and agencies:
       (1) The Department of Energy shall be primarily responsible 
     for developing, maintaining, and verifying the emissions 
     reduction registry, under both this title and its authority 
     under section 1605(b) of the Energy Policy Act of 1992 (42 
     U.S.C. 13385(b)).
       (2) The Department of Commerce shall be primarily 
     responsible for the development of measurement standards for 
     emissions monitoring and verification technologies and 
     methods to ensure that there is a consistent and technically 
     accurate record of emissions, reductions and atmospheric 
     concentrations of greenhouse gases for the database under 
     this title.
       (3) The Environmental Protection Agency shall be primarily 
     responsible for emissions monitoring, measurement, 
     verification and data collection, pursuant to this title and 
     existing authority under titles IV and VIII of the Clean Air 
     Act, and including mobile source emissions information from 
     implementation of the Corporate Average Fuel Economy program 
     under chapter 329 of title 49, United States Code, and the 
     Agency's role in completing the national inventory for 
     compliance with the United Nations Framework Convention on 
     Climate Change.
       (c) The Chairman shall publish a draft version of the 
     Memorandum of Agreement in the Federal Register and solicit 
     comments on it as soon as practicable and publish the final 
     Memorandum of Agreement in the Federal Register not later 
     than 15 months after the date of enactment of this Act.
       (d) The final Memorandum of Agreement shall not be subject 
     to judicial review.

     SEC. 1104. NATIONAL GREENHOUSE GAS DATABASE.

       (a) Establishment.--The Designated Agency or Agencies, 
     working in consultation with the private sector and 
     nongovernmental organizations, shall establish, operate and 
     maintain a database to be known as the National Greenhouse 
     Gas Database to collect, verify, and analyze information on--
       (1) greenhouse gas emissions by entities located in the 
     United States; and
       (2) greenhouse gas emission reductions by entities based in 
     the United States.
       (b) National Greenhouse Gas Database Components.--The 
     database shall consist of a registry of greenhouse gas 
     emissions reductions.
       (c) Deadline.--Not later than 2 years after the date of 
     enactment of this Act, the Designated Agency or Agencies 
     shall promulgate a rule to implement a comprehensive system 
     for greenhouse gas emissions reporting and reductions 
     registration. The Designated Agency or Agencies shall ensure 
     that the system is designed to maximize completeness, 
     transparency, and accuracy and to minimize measurement and 
     reporting costs for covered entities.
       (d) Required Elements of Database Reporting System.--
       (1) Voluntary reporting.--An entity may voluntarily report 
     to the Designated Agency or Agencies, for inclusion in the 
     registry portion of the national database--
       (A) with respect to the preceding calendar year and any 
     greenhouse gas emitted by the entity--
       (i) project reductions from facilities owned or controlled 
     by the reporting entity in the United States;

[[Page 5203]]

       (ii) transfers of project reductions to and from any other 
     entity;
       (iii) project reductions and transfers of project 
     reductions outside the United States;
       (iv) other indirect emissions; and
       (v) product use phase emissions; and
       (B) with respect to greenhouse gas emissions reductions 
     activities carried out since 1990 and verified according to 
     rules implementing paragraphs (3) and (5) and submitted to 
     the Designated Agency or Agencies before the date that is 
     three years after the date of enactment of this Act, those 
     reductions that have been reported or submitted by an entity 
     under section 1605(b) of the Energy Policy Act of 1992 (42 
     U.S.C. 13385(b)) or under other Federal or State voluntary 
     greenhouse gas reduction programs.
       (2) Types of activities.--Under paragraph (1), an entity 
     may report projects that reduce greenhouse gas emissions or 
     sequester a greenhouse gas, including--
       (A) fuel switching;
       (B) energy efficiency improvements;
       (C) use of renewable energy;
       (D) use of combined heat and power systems;
       (E) management of cropland, grassland, and grazing land;
       (F) forestry activities that increase forest carbon stocks 
     or reduce forest carbon missions;
       (G) carbon capture and storage;
       (H) methane recovery; and
       (I) greenhouse gas offset investments.
       (3) Provision of verification information by reporting 
     entities.--Each reporting entity shall provide information 
     sufficient for the Designated Agency or Agencies to verify, 
     in accordance with measurement and verification criteria 
     developed under section 1106, that the greenhouse gas report 
     of the reporting entity--
       (A) has been accurately reported; and
       (B) in the case of each voluntary report, represents--
       (i) actual reductions in direct greenhouse gas emissions 
     relative to historic emission levels and net of any increases 
     in--

       (I) direct emissions; and
       (II) indirect emissions from--

       (aa) all outsourced activities, contract manufacturing, 
     wastes transferred from the control of an entity, and other 
     relevant instances, as determined to be practicable under the 
     rule promulgated under subsection (c); or
       (bb) electricity, heat, and steam imported from another 
     entity, as determined to be practicable under the rule 
     promulgated under subsection (c); or
       (ii) actual increases in net sequestration.
       (4) Independent third-party verification.--A reporting 
     entity may--
       (A) obtain independent third-party verification; and
       (B) present the results of the third-party verification to 
     the Designated Agency or Agencies for consideration by the 
     Designated Agency or Agencies in carrying out this 
     subsection.
       (5) Data quality.--The rule promulgated under subsection 
     (c) shall establish procedures and protocols needed to--
       (A) prevent the reporting of some or all of the same 
     greenhouse gas emissions or emission reductions by more than 
     1 reporting entity;
       (B) provide for corrections to errors in data submitted to 
     the database;
       (C) provide for adjustment to data by reporting entities 
     that have had a significant organizational change (including 
     mergers, acquisitions, and divestiture), in order to maintain 
     comparability among data in the database over time;
       (D) provide for adjustments to reflect new technologies or 
     methods for measuring or calculating greenhouse gas 
     emissions; and
       (E) account for changes in registration of ownership of 
     emissions reductions resulting from a voluntary private 
     transaction between reporting entities.
       (6) Availability of data.--The Designated Agency or 
     Agencies shall ensure that information in the database is 
     published, accessible to the public, and made available in 
     electronic format on the Internet, except in cases where the 
     Designated Agency or Agencies determine that publishing or 
     making available the information would disclose information 
     vital to national security.
       (7) Data infrastructure.--The Designated Agency or Agencies 
     shall ensure that the database uses and is integrated with 
     existing Federal, regional, and state greenhouse gas data 
     collection and reporting systems to the maximum extent 
     possible and avoid duplication of such systems.
       (8) Additional issues to be considered.--In promulgating 
     the rules for and implementing the Database, the Designated 
     Agency or Agencies shall consider a broad range of issues 
     involved in establishing an effective database, including the 
     following:
       (A) Units for reporting.--The appropriate units for 
     reporting each greenhouse gas, and whether to require 
     reporting of emission efficiency rates (including emissions 
     per kilowatt-hour for electricity generators) in addition to 
     mass emissions of greenhouse gases,
       (B) International consistency.--The greenhouse gas 
     reduction and sequestration methods and standards applied in 
     other countries, as applicable or relevant; and
       (C) Data sufficiency.--The extent to which available fossil 
     fuels, greenhouse gas emissions, and greenhouse gas 
     production and importation data are adequate to implement a 
     comprehensive National Greenhouse Gas Database.
       (e) Annual Report.--The Designated Agency or Agencies shall 
     publish an annual report that--
       (1) describes the total greenhouse gas emissions and 
     emission reductions reported to the database;
       (2) provides entity-by-entity and sector-by-sector analyses 
     of the emissions and emission reductions reported; and
       (3) describes the atmospheric concentrations of greenhouse 
     gases and tracks such information over time.
                                  ____

  SA 3187. Mr. BYRD (for himself and Mr. Jeffords) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 283, between lines 8 and 9, insert the following:

     SEC. 9__. INCREASED USE OF RECOVERED MATERIAL IN FEDERALLY 
                   FUNDED PROJECTS INVOLVING PROCUREMENT OF CEMENT 
                   OR CONCRETE.

       (a) Definitions.--In this section:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Agency head.--The term ``agency head'' means--
       (A) the Secretary of Transportation; and
       (B) the head of each other Federal agency that on a regular 
     basis procures, or provides Federal funds to pay or assist in 
     paying the cost of procuring, material for cement or concrete 
     projects.
       (3) Cement or concrete project.--The term ``cement or 
     concrete project'' means a project for the construction or 
     maintenance of a highway or other transportation facility or 
     a Federal, State, or local government building or other 
     public facility that--
       (A) involves the procurement of cement or concrete; and
       (B) is carried out in whole or in part using Federal funds.
       (4) Recovered material.--The term ``recovered material'' 
     means--
       (A) ground granulated blast furnace slag;
       (B) coal combustion fly ash; and
       (C) any other waste material or byproduct recovered or 
     diverted from solid waste that the Administrator, in 
     consultation with an agency head, determines should be 
     treated as recovered material under this section for use in 
     cement or concrete projects paid for, in whole or in part, by 
     the agency head.
       (b) Implementation of Requirements.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator and each agency head 
     shall take such actions as are necessary to implement fully 
     all procurement requirements and incentives in effect as of 
     the date of enactment of this Act (including guidelines under 
     section 6002 of the Solid Waste Disposal Act (42 U.S.C. 
     6963)) that provide for the use of cement and concrete 
     incorporating recovered material in cement or concrete 
     projects.
       (2) Priority.--In carrying out paragraph (1) an agency head 
     shall give priority to achieving greater use of recovered 
     material in cement or concrete projects for which recovered 
     materials historically have not been used or have been used 
     only minimally.
       (c) Full Implementation Study.--
       (1) In general.--The Administrator and the Secretary of 
     Transportation, in cooperation with the Secretary of Energy, 
     shall conduct a study to determine the extent to which 
     current procurement requirements, when fully implemented in 
     accordance with subsection (b), may realize energy savings 
     and greenhouse gas emission reduction benefits attainable 
     with substitution of recovered material in cement used in 
     cement or concrete projects.
       (2) Matters to be addressed.--The study shall--
       (A) quantify the extent to which recovered materials are 
     being substituted for Portland cement, particularly as a 
     result of current procurement requirements, and the energy 
     savings and greenhouse gas emission reduction benefits 
     associated with that substitution;
       (B) identify all barriers in procurement requirements to 
     fuller realization of energy savings and greenhouse gas 
     emission reduction benefits, including barriers resulting 
     from exceptions from current law; and
       (C)(i) identify potential mechanisms to achieve greater 
     substitution of recovered material in types of cement or 
     concrete projects for which recovered materials historically 
     have not been used or have been used only minimally;
       (ii) evaluate the feasibility of establishing guidelines or 
     standards for optimized substitution rates of recovered 
     material in those cement or concrete projects; and
       (iii) identify any potential environmental or economic 
     effects that may result from greater substitution of 
     recovered material in those cement or concrete projects.

[[Page 5204]]

       (3) Report.--Not later than 30 months after the date of 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Appropriations and Committee on Environment and 
     Public Works of the Senate and the Committee on 
     Appropriations and Committee on Energy and Commerce of the 
     House of Representatives a report on the study.
       (d) Additional Procurement Requirements.--The Administrator 
     and each agency head shall take additional actions authorized 
     under the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.) 
     to establish procurement requirements and incentives that 
     provide for the use of cement and concrete with increased 
     substitution of recovered material in the construction and 
     maintenance of cement or concrete projects, so as to--
       (1) realize more fully the energy savings and greenhouse 
     gas emission reduction benefits associated with increased 
     substitution; and
       (2) eliminate barriers identified under subsection (c).
       (e) Effect of Section.--Nothing in this section affects the 
     requirements of section 6002 of the Solid Waste Disposal Act 
     (42 U.S.C. 6962) (including the guidelines and specifications 
     for implementing those requirements).
                                  ____

  SA 3188. Mr. GRAHAM (for himself and Mr. Nelson of Florida) submitted 
an amendment intended to be proposed to amendment SA 2917 proposed by 
Mr. Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 130, between lines 7 and 8, insert the following:

     SEC. 6__. REACQUISITION OF CERTAIN NONPRODUCING LEASES ON THE 
                   OUTER CONTINENTAL SHELF OFF THE COAST OF 
                   FLORIDA.

       (a) Definitions.--In this section:
       (1) Qualified lease.--The term ``qualified lease'' means 
     any of the following leases in the Outer Continental Shelf 
     Eastern Gulf of Mexico Planning Area: G06401, G06402, G08333, 
     G08334, G06408, G06409, G08346, G10426, G10427, G06432, 
     G06433, G06436, G06440, G06442, G06443, G06444, G10446, 
     G10447, G10448, G10449, G10450, G10451, G10452, G10453, 
     G10454, G10455, G10456, G10459, G10460, G06464, G06469, 
     G10461, G06470, G10462, G10463, G06474, G06475, G10464, 
     G06476, G06477, G10465, G10466, G10471, G10472, G10473, 
     G10477, G10498, G10499, G10500, G10501, G10502, G10503, 
     G10504, G10505, G10506, G10507, G10508, G10509, G10510, 
     G10511, G10512, G10513, G10514, G10404, G10405, G08308, 
     G08309, G08310, G10408, G10409, G10410, G10413, G10414, 
     G10415, G10417, G08317, G08318, G08319, G10493, G10494, 
     G10495, G10496, G10497, G10430, G10431, G10432, G10433, 
     G10434, G10435, G10484, G10485, G08361, G08362, G08363, 
     G08364, G08365, G08366, G08367, and G08368.
       (2) Qualified lessee.--The term ``qualified lessee'' means 
     a person that, on the date of enactment of this section, 
     holds an interest in a qualified lease that is recorded with 
     the Minerals Management Service.
       (3) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (b) Lease Cancellation.--
       (1) In general.--The Secretary shall carry out a program 
     under which the Secretary shall--
       (A) issue credits to qualified lessees that elect to 
     participate in the program in exchange for the cancellation 
     of a qualified lease; and
       (B) accept credits issued under this section--
       (i) to pay royalties on oil or gas production conducted in 
     any area outside the Eastern Gulf of Mexico; and
       (ii) to pay rental fees on leases in existence on the date 
     of enactment of this Act that are located outside the Eastern 
     Gulf of Mexico.
       (2) Submission of financial information.--
       (A) In general.--During the period beginning on the January 
     1, 2003 and ending on March 30, 2008, a qualified lessee that 
     seeks to receive credits in consideration for the 
     cancellation of a qualified lease may do so by submitting to 
     the Secretary the financial information and documentation 
     relating to the amounts referred to in clauses (i) and (ii) 
     of paragraph (4)(A), certified by a certified public 
     accountant.
       (B) Notification of final opportunity.--Between January 1, 
     2008 and January 31, 2008, the Secretary shall notify each 
     qualified lessee that has not submitted the information and 
     documentation required under subparagraph (A) in writing--
       (i) of the opportunity to receive credits in consideration 
     for the cancellation of a qualified lease;
       (ii) of the financial information and documentation 
     required under subparagraph (A); and
       (iii) that the deadline for the submission of the financial 
     information and documentation is March 30, 2008.
       (3) Review.--
       (A) Initial review.--Not later than 60 days after the date 
     on which the Secretary receives the financial information and 
     documentation under paragraph (2)(A), the Secretary shall--
       (i) complete an initial review of the information and 
     documentation submitted; and
       (ii) request any additional information that may be 
     necessary to determine the value of credits to be offered 
     under paragraph (4).
       (B) Final review.--Not later than 90 days after the date on 
     which the Secretary completes the initial review under 
     subparagraph (B), the Secretary--
       (i) shall complete a final review of the information and 
     documentation provided by the qualified lessee under 
     paragraph (2)(A) and any additional information submitted 
     under subparagraph (A)(ii); and
       (ii) in accordance with paragraph (4), determine the amount 
     of credits to be offered to the qualified lessee.
       (4) Amount of credits.--
       (A) In general.--For each qualified lessee that complies 
     with the requirements of paragraphs (2) and (3), the 
     Secretary shall offer credits in an amount equal to--
       (i) the amount of consideration paid by the qualified 
     lessee to acquire the interest in the qualified lease; and
       (ii) the amount of direct expenditures made by the 
     qualified lessee in connection with the exploration and 
     development of the qualified lease during the period from the 
     date of acquisition of the qualified lease to the date of 
     enactment of this Act.
       (B) Exclusions.--In determining the amount of credits under 
     subparagraph (A), the Secretary shall not consider the 
     potential value of oil and gas resources associated with the 
     qualified lease.
       (5) Offer.--Not later than 90 days after completing the 
     final review under paragraph (3)(B), the Secretary shall make 
     an offer to the qualified lessee to issue credits in an 
     amount determined under paragraph (4) in exchange for the 
     cancellation of the qualified lease.
       (6) Acceptance.--To accept the offer of the Secretary under 
     paragraph (5) with respect to a qualified lease, not later 
     than 60 days after the date on which the offer is made under 
     that paragraph, a qualified lessee shall submit to the 
     Secretary a written agreement that if credits are issued 
     under paragraph (7), the qualified lessee--
       (A) consents to the cancellation of any qualified lease;
       (B) will dismiss any civil or administrative action brought 
     by the qualified lessee against the United States relating to 
     the qualified lease that is pending as of the date of 
     cancellation of the eligible lease; and
       (C) waives the right to bring any further civil or 
     administrative action relating to the qualified lease after 
     that date.
       (7) Issuance of credits.--If, not later than 60 days after 
     the date of the offer under paragraph (5), a qualified lessee 
     accepts the offer in accordance with paragraph (6), the 
     Secretary shall--
       (A) cancel the qualified lease; and
       (B) issue to the qualified lessee credits in the amount 
     determined under paragraph (4).
       (8) Acceptance of credits.--
       (A) In general.--On or after October 1, 2012, the Secretary 
     shall accept credits issued under paragraph (7) in the same 
     manner as rental fees and royalty payments on oil and gas 
     production conducted in any area outside the Eastern Gulf of 
     Mexico under the Outer Continental Shelf Lands Act (43 U.S.C. 
     1331 et seq.).
       (B) Exception.--The Secretary shall not accept credits 
     under subparagraph (A) for oil or gas production in an area--
       (i) that is within 3 miles of the seaward boundary of a 
     coastal State;
       (ii) that is subject to an administrative or legislative 
     leasing moratorium; or
       (iii) in which leasing is otherwise prohibited on the date 
     of enactment of this Act.
       (C) Adjustment for inflation.--The Secretary shall adjust 
     the amount of credits accepted under subparagraph (A) to 
     reflect changes in the implicit Gross Domestic Product 
     deflator during the period from the date on which the credits 
     were issued under paragraph (7) to October 1, 2012.
       (9) Sale or transfer.--
       (A) In general.--A qualified lessee may transfer or sell 
     any credits issued under paragraph (7) to any other person 
     qualified to hold leases under the Outer Continental Shelf 
     Lands Act (43 U.S.C. 1331 et seq.).
       (B) Requirements.--A sale or transfer of credits under 
     subparagraph (A) shall be subject to the requirements of this 
     section.
       (C) Limitations.--Credits transferred or sold under 
     subparagraph (A) shall be accepted in accordance with 
     paragraph (8).
       (D) Notification.--
       (i) In general.--Not later than 30 days after the date on 
     which a qualified lessee transfers or sells any credits, the 
     qualified lessee shall notify the Secretary of the transfer 
     or sale.
       (ii) Validity.--The transfer or sale of a credit shall not 
     be valid until the date on which the Secretary receives the 
     notification required under clause (i).
       (10) No additional compensation.--A qualified lessee that 
     participates in the cancellation of a qualified lease under 
     this Act--
       (A) shall be considered to be fully compensated for the 
     value of the qualified lease; and

[[Page 5205]]

       (B) shall not be eligible to seek additional compensation 
     from the Federal Government for the qualified lease.
       (11) Effect.--Nothing in this section constitutes a finding 
     by Congress that--
       (A) actions by the Federal Government involving the 
     qualified leases before the date of enactment of this Act 
     constituted a breach of contract or a taking of property 
     under the Constitution of the United States; or
       (B) the qualified leases have any particular value.
                                  ____

  SA 3189. Mr. TORRICELLI (for himself and Mr. Graham) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the appropriate place, insert the following:

TITLE __--ENVIRONMENTAL CLEANUP FINANCING AND REINSURANCE AND CORPORATE 
                         INVERSION LIMITATIONS

              Subtitle A--Environmental Cleanup Financing

     SEC. __01. EXTENSION OF SUPERFUND, OIL SPILL LIABILITY, AND 
                   LEAKING UNDERGROUND STORAGE TANK TAXES.

       (a) Excise Taxes.--
       (1) Superfund taxes.--Section 4611(e) is amended to read as 
     follows:
       ``(e) Application of Hazardous Substance Superfund 
     Financing Rate.--The Hazardous Substance Superfund financing 
     rate under this section shall apply after December 31, 1986, 
     and before January 1, 1996, and after the date of the 
     enactment of the Energy Policy Act of 2002 and before October 
     1, 2007.''.
       (2) Oil spill liability tax.--Section 4611(f) is amended to 
     read as follows:
       ``(f) Application of Oil Spill Liability Trust Fund 
     Financing Rate.--The Oil Spill Liability Trust Fund financing 
     rate under subsection (c) shall apply after December 31, 
     1989, and before January 1, 1995, and after the date of the 
     enactment of the Energy Policy Act of 2002 and before October 
     1, 2007.''.
       (3) Leaking underground storage tank rate.--Section 
     4081(d)(3) is amended by striking ``April 1, 2005'' and 
     inserting ``October 1, 2007.''.
       (b) Corporate Environmental Income Tax.--Section 59A is 
     amended--
       (1) by striking ``0.12 percent'' in subsection (a) and 
     inserting ``0.06 percent'', and
       (2) by striking subsection (e) and inserting the following:
       ``(e) Application of Tax.--The tax imposed by this section 
     shall apply to taxable years beginning after December 31, 
     1986, and before January 1, 1996, and to taxable years 
     beginning after the date of the enactment of the Energy 
     Policy Act of 2002 and before January 1, 2007.''.
       (c) Technical Amendments.--
       (1) Section 4611(b) is amended--
       (A) by striking ``or exported from'' in paragraph (1)(A),
       (B) by striking ``or exportation'' in paragraph (1)(B), and
       (C) by striking ``and Exportation'' in the heading.
       (2) Section 4611(d)(3) is amended--
       (A) by striking ``or exporting the crude oil, as the case 
     may be'' in the text and inserting ``the crude oil'', and
       (B) by striking ``or exports'' in the heading.
       (d) Effective Dates.--
       (1) Excise taxes.--The amendments made by subsections (a) 
     and (c) shall take effect on the date of the enactment of 
     this Act.
       (2) Income tax.--The amendment made by subsection (b) shall 
     apply to taxable years beginning after the date of the 
     enactment of this Act.

             Subtitle B--Reinsurance Inversion Limitations

     SEC. __11. PREVENTION OF EVASION OF UNITED STATES INCOME TAX 
                   ON NONLIFE INSURANCE COMPANIES THROUGH USE OF 
                   REINSURANCE WITH FOREIGN PERSONS.

       (a) In General.--Subparagraph (A) of section 832(b)(4) 
     (relating to insurance company taxable income) is amended to 
     read as follows:
       ``(A) From the amount of gross premiums written on 
     insurance contracts during the taxable year, deduct return 
     premiums and premiums paid for reinsurance (except as 
     provided in paragraph (9)).''
       (b) Treatment of Reinsurance With Related Reinsurers.--
     Subsection (b) of section 832 is amended by adding at the end 
     the following new paragraph:
       ``(9) Denial of deduction under paragraph (4) for 
     reinsurance of u.s. risks with certain related persons.--
       ``(A) In general.--No deduction shall be allowed under 
     paragraph (4) for premiums paid for the direct or indirect 
     reinsurance of United States risks with a related reinsurer.
       ``(B) Exceptions.--This paragraph shall not apply to any 
     premium to the extent that--
       ``(i) the income attributable to the reinsurance to which 
     such premium relates is includible in the gross income of--

       ``(I) such reinsurer, or
       ``(II) 1 or more domestic corporations or citizens or 
     residents of the United States, or

       ``(ii) the related insurer establishes to the satisfaction 
     of the Secretary that the taxable income (determined in 
     accordance with this section 832) attributable to such 
     reinsurance is subject to an effective rate of income tax 
     imposed by a foreign country at a rate greater than 20 
     percent of the maximum rate of tax specified in section 11.
       ``(C) Election by reinsurer to be taxed on income.--Income 
     of a related reinsurer attributable to the reinsurance of 
     United States risks which is not otherwise includible in 
     gross income shall be treated as gross income which is 
     effectively connected with the conduct of a trade or business 
     in the United States if such reinsurer--
       ``(i) elects to so treat such income, and
       ``(ii) meets such requirements as the Secretary shall 
     prescribe to ensure that the taxes imposed by this chapter on 
     such income are paid.
       ``(D) Definitions.--For purposes of this paragraph--
       ``(i) United states risk.--The term `United States risk' 
     means any risk related to property in the United States, or 
     liability arising out of activity in, or in connection with 
     the lives or health of residents of, the United States.
       ``(ii) Related insurer.--The term `related insurer' means 
     any reinsurer owned or controlled directly or indirectly by 
     the same interests (within the meaning of section 482) as the 
     person making the premium payment.''
       (c) Technical Amendment.--Subparagraph (A) of section 
     832(b)(5) is amended by inserting after clause (iii) the 
     following new clause:
       ``(iv) To the results so obtained, add reinsurance 
     recovered from a related reinsurer to the extent a deduction 
     for the premium paid for the reinsurance was disallowed under 
     paragraph (9).''
       (d) Effective Date.--The amendments made by this section 
     shall apply to premiums paid after the date that the 
     Committee on Ways and Means of the House of Representatives 
     or the Committee on Finance of the Senate votes to report 
     this bill.

              Subtitle C--Corporate Inversion Limitations

     SEC. __21. PREVENTION OF CORPORATE EXPATRIATION TO AVOID 
                   UNITED STATES INCOME TAX.

       (a) In General.--Paragraph (4) of section 7701(a) (defining 
     domestic) is amended to read as follows:
       ``(4) Domestic.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `domestic' when applied to a corporation or 
     partnership means created or organized in the United States 
     or under the law of the United States or of any State unless, 
     in the case of a partnership, the Secretary provides 
     otherwise by regulations.
       ``(B) Certain corporations treated as domestic.--
       ``(i) In general.--The acquiring corporation in a corporate 
     expatriation transaction shall be treated as a domestic 
     corporation.
       ``(ii) Corporate expatriation transaction.--For purposes of 
     this subparagraph, the term `corporate expatriation 
     transaction' means any transaction if--

       ``(I) a nominally foreign corporation (referred to in this 
     subparagraph as the `acquiring corporation') acquires, as a 
     result of such transaction, directly or indirectly 
     substantially all of the properties held directly or 
     indirectly by a domestic corporation, and
       ``(II) immediately after the transaction, more than 80 
     percent of the stock (by vote or value) of the acquiring 
     corporation is held by former shareholders of the domestic 
     corporation by reason of holding stock in the domestic 
     corporation.

       ``(iii) Lower stock ownership requirement in certain 
     cases.--Subclause (II) of clause (ii) shall be applied by 
     substituting `50 percent' for `80 percent' with respect to 
     any nominally foreign corporation if--

       ``(I) such corporation does not have substantial business 
     activities (when compared to the total business activities of 
     the expanded affiliated group) in the foreign country in 
     which or under the law of which the corporation is created or 
     organized, and
       ``(II) the stock of the corporation is publicly traded and 
     the principal market for the public trading of such stock is 
     in the United States.

       ``(iv) Partnership transactions.--The term `corporate 
     expatriation transaction' includes any transaction if--

       ``(I) a nominally foreign corporation (referred to in this 
     subparagraph as the `acquiring corporation') acquires, as a 
     result of such transaction, directly or indirectly properties 
     constituting a trade or business of a domestic partnership,
       ``(II) immediately after the transaction, more than 80 
     percent of the stock (by vote or value) of the acquiring 
     corporation is held by former partners of the domestic 
     partnership (determined without regard to stock of the 
     acquiring corporation which is sold in a public offering 
     related to the transaction), and
       ``(III) the acquiring corporation meets the requirements of 
     subclauses (I) and (II) of clause (iii).

       ``(v) Special rules.--For purposes of this subparagraph--

[[Page 5206]]

       ``(I) a series of related transactions shall be treated as 
     1 transaction, and
       ``(II) stock held by members of the expanded affiliated 
     group which includes the acquiring corporation shall not be 
     taken into account in determining ownership.

       ``(vi) Other definitions.--For purposes of this 
     subparagraph--

       ``(I) Nominally foreign corporation.--The term `nominally 
     foreign corporation' means any corporation which would (but 
     for this subparagraph) be treated as a foreign corporation.
       ``(II) Expanded affiliated group.--The term `expanded 
     affiliated group' means an affiliated group (as defined in 
     section 1504(a) without regard to section 1504(b)).''

       (b) Effective Dates.--
       (1) In general.--The amendment made by this section shall 
     apply to corporate expatriation transactions completed after 
     September 11, 2001.
       (2) Special rule.--The amendment made by this section shall 
     also apply to corporate expatriation transactions completed 
     on or before September 11, 2001, but only with respect to 
     taxable years of the acquiring corporation beginning after 
     December 31, 2003.
                                  ____

  SA 3190. Mr. TORRICELLI (for himself and Mr. Graham) submitted an 
amendment intended to be proposed to amendmnt SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the appropriate place, insert the following:

TITLE __--ENVIRONMENTAL CLEANUP FINANCING AND REINSURANCE AND CORPORATE 
                         INVERSION LIMITATIONS

              Subtitle A--Environmental Cleanup Financing

     SEC. __01. EXTENSION OF SUPERFUND, OIL SPILL LIABILITY, AND 
                   LEAKING UNDERGROUND STORAGE TANK EXCISE TAXES.

       (a) Superfund Taxes.--Section 4611(e) is amended to read as 
     follows:
       ``(e) Application of Hazardous Substance Superfund 
     Financing Rate.--The Hazardous Substance Superfund financing 
     rate under this section shall apply after December 31, 1986, 
     and before January 1, 1996, and after the date of the 
     enactment of the Energy Policy Act of 2002 and before October 
     1, 2007.''.
       (b) Oil Spill Liability Tax.--Section 4611(f) is amended to 
     read as follows:
       ``(f) Application of Oil Spill Liability Trust Fund 
     Financing Rate.--The Oil Spill Liability Trust Fund financing 
     rate under subsection (c) shall apply after December 31, 
     1989, and before January 1, 1995, and after the date of the 
     enactment of the Energy Policy Act of 2002 and before October 
     1, 2007.''.
       (c) Leaking Underground Storage Tank Rate.--Section 
     4081(d)(3) is amended by striking ``April 1, 2005'' and 
     inserting ``October 1, 2007.''.
       (d) Technical Amendments.--
       (1) Section 4611(b) is amended--
       (A) by striking ``or exported from'' in paragraph (1)(A),
       (B) by striking ``or exportation'' in paragraph (1)(B), and
       (C) by striking ``and Exportation'' in the heading.
       (2) Section 4611(d)(3) is amended--
       (A) by striking ``or exporting the crude oil, as the case 
     may be'' in the text and inserting ``the crude oil'', and
       (B) by striking ``or exports'' in the heading.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

             Subtitle B--Reinsurance Inversion Limitations

     SEC. __11. PREVENTION OF EVASION OF UNITED STATES INCOME TAX 
                   ON NONLIFE INSURANCE COMPANIES THROUGH USE OF 
                   REINSURANCE WITH FOREIGN PERSONS.

       (a) In General.--Subparagraph (A) of section 832(b)(4) 
     (relating to insurance company taxable income) is amended to 
     read as follows:
       ``(A) From the amount of gross premiums written on 
     insurance contracts during the taxable year, deduct return 
     premiums and premiums paid for reinsurance (except as 
     provided in paragraph (9)).''
       (b) Treatment of Reinsurance With Related Reinsurers.--
     Subsection (b) of section 832 is amended by adding at the end 
     the following new paragraph:
       ``(9) Denial of deduction under paragraph (4) for 
     reinsurance of u.s. risks with certain related persons.--
       ``(A) In general.--No deduction shall be allowed under 
     paragraph (4) for premiums paid for the direct or indirect 
     reinsurance of United States risks with a related reinsurer.
       ``(B) Exceptions.--This paragraph shall not apply to any 
     premium to the extent that--
       ``(i) the income attributable to the reinsurance to which 
     such premium relates is includible in the gross income of--

       ``(I) such reinsurer, or
       ``(II) 1 or more domestic corporations or citizens or 
     residents of the United States, or

       ``(ii) the related insurer establishes to the satisfaction 
     of the Secretary that the taxable income (determined in 
     accordance with this section 832) attributable to such 
     reinsurance is subject to an effective rate of income tax 
     imposed by a foreign country at a rate greater than 20 
     percent of the maximum rate of tax specified in section 11.
       ``(C) Election by reinsurer to be taxed on income.--Income 
     of a related reinsurer attributable to the reinsurance of 
     United States risks which is not otherwise includible in 
     gross income shall be treated as gross income which is 
     effectively connected with the conduct of a trade or business 
     in the United States if such reinsurer--
       ``(i) elects to so treat such income, and
       ``(ii) meets such requirements as the Secretary shall 
     prescribe to ensure that the taxes imposed by this chapter on 
     such income are paid.
       ``(D) Definitions.--For purposes of this paragraph--
       ``(i) United states risk.--The term `United States risk' 
     means any risk related to property in the United States, or 
     liability arising out of activity in, or in connection with 
     the lives or health of residents of, the United States.
       ``(ii) Related insurer.--The term `related insurer' means 
     any reinsurer owned or controlled directly or indirectly by 
     the same interests (within the meaning of section 482) as the 
     person making the premium payment.''
       (c) Technical Amendment.--Subparagraph (A) of section 
     832(b)(5) is amended by inserting after clause (iii) the 
     following new clause:
       ``(iv) To the results so obtained, add reinsurance 
     recovered from a related reinsurer to the extent a deduction 
     for the premium paid for the reinsurance was disallowed under 
     paragraph (9).''
       (d) Effective Date.--The amendments made by this section 
     shall apply to premiums paid after the date that the 
     Committee on Ways and Means of the House of Representatives 
     or the Committee on Finance of the Senate votes to report 
     this bill.

              Subtitle C--Corporate Inversion Limitations

     SEC. __21. PREVENTION OF CORPORATE EXPATRIATION TO AVOID 
                   UNITED STATES INCOME TAX.

       (a) In General.--Paragraph (4) of section 7701(a) (defining 
     domestic) is amended to read as follows:
       ``(4) Domestic.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `domestic' when applied to a corporation or 
     partnership means created or organized in the United States 
     or under the law of the United States or of any State unless, 
     in the case of a partnership, the Secretary provides 
     otherwise by regulations.
       ``(B) Certain corporations treated as domestic.--
       ``(i) In general.--The acquiring corporation in a corporate 
     expatriation transaction shall be treated as a domestic 
     corporation.
       ``(ii) Corporate expatriation transaction.--For purposes of 
     this subparagraph, the term `corporate expatriation 
     transaction' means any transaction if--

       ``(I) a nominally foreign corporation (referred to in this 
     subparagraph as the `acquiring corporation') acquires, as a 
     result of such transaction, directly or indirectly 
     substantially all of the properties held directly or 
     indirectly by a domestic corporation, and
       ``(II) immediately after the transaction, more than 80 
     percent of the stock (by vote or value) of the acquiring 
     corporation is held by former shareholders of the domestic 
     corporation by reason of holding stock in the domestic 
     corporation.

       ``(iii) Lower stock ownership requirement in certain 
     cases.--Subclause (II) of clause (ii) shall be applied by 
     substituting `50 percent' for `80 percent' with respect to 
     any nominally foreign corporation if--

       ``(I) such corporation does not have substantial business 
     activities (when compared to the total business activities of 
     the expanded affiliated group) in the foreign country in 
     which or under the law of which the corporation is created or 
     organized, and
       ``(II) the stock of the corporation is publicly traded and 
     the principal market for the public trading of such stock is 
     in the United States.

       ``(iv) Partnership transactions.--The term `corporate 
     expatriation transaction' includes any transaction if--

       ``(I) a nominally foreign corporation (referred to in this 
     subparagraph as the `acquiring corporation') acquires, as a 
     result of such transaction, directly or indirectly properties 
     constituting a trade or business of a domestic partnership,
       ``(II) immediately after the transaction, more than 80 
     percent of the stock (by vote or value) of the acquiring 
     corporation is held by former partners of the domestic 
     partnership (determined without regard to stock of the 
     acquiring corporation which is sold in a public offering 
     related to the transaction), and
       ``(III) the acquiring corporation meets the requirements of 
     subclauses (I) and (II) of clause (iii).

       ``(v) Special rules.--For purposes of this subparagraph--

       ``(I) a series of related transactions shall be treated as 
     1 transaction, and

[[Page 5207]]

       ``(II) stock held by members of the expanded affiliated 
     group which includes the acquiring corporation shall not be 
     taken into account in determining ownership.

       ``(vi) Other definitions.--For purposes of this 
     subparagraph--

       ``(I) Nominally foreign corporation.--The term `nominally 
     foreign corporation' means any corporation which would (but 
     for this subparagraph) be treated as a foreign corporation.
       ``(II) Expanded affiliated group.--The term `expanded 
     affiliated group' means an affiliated group (as defined in 
     section 1504(a) without regard to section 1504(b)).''

       (b) Effective Dates.--
       (1) In general.--The amendment made by this section shall 
     apply to corporate expatriation transactions completed after 
     September 11, 2001.
       (2) Special rule.--The amendment made by this section shall 
     also apply to corporate expatriation transactions completed 
     on or before September 11, 2001, but only with respect to 
     taxable years of the acquiring corporation beginning after 
     December 31, 2003.
                                  ____

  SA 3191. Mr. GRAHAM submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC.   . CUSTOMS USER FEES.

       Section 13031(j)(3) of the Consolidated Omnibus Budget 
     Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended 
     by striking ``2003'' and inserting ``2012''.
                                  ____

  SA 3192. Mr. GRAHAM submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

                       TITLE __--CURB TAX ABUSES

                        Subtitle A--Tax Shelters

     SEC. __01. SHORT TITLE.

       This subtitle may be cited as the ``Abusive Tax Shelter 
     Shutdown Act of 2002''.

     SEC. __02. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress hereby finds that:
       (1) Many corporate tax shelter transactions are complicated 
     ways of accomplishing nothing aside from claimed tax 
     benefits, and the legal opinions justifying those 
     transactions take an inappropriately narrow and restrictive 
     view of well-developed court doctrines under which--
       (A) the taxation of a transaction is determined in 
     accordance with its substance and not merely its form,
       (B) transactions which have no significant effect on the 
     taxpayer's economic or beneficial interests except for tax 
     benefits are treated as sham transactions and disregarded,
       (C) transactions involving multiple steps are collapsed 
     when those steps have no substantial economic meaning and are 
     merely designed to create tax benefits,
       (D) transactions with no business purpose are not given 
     effect, and
       (E) in the absence of a specific congressional 
     authorization, it is presumed that Congress did not intend a 
     transaction to result in a negative tax where the taxpayer's 
     economic position or rate of return is better after tax than 
     before tax.
       (2) Permitting aggressive and abusive tax shelters not only 
     results in large revenue losses but also undermines voluntary 
     compliance with the Internal Revenue Code of 1986.
       (b) Purpose.--The purpose of this subtitle is to eliminate 
     abusive tax shelters by denying tax attributes claimed to 
     arise from transactions that do not meet a heightened 
     economic substance requirement and by repealing the provision 
     that permits legal opinions to be used to avoid penalties on 
     tax underpayments resulting from transactions without 
     significant economic substance or business purpose.

          PART I--CLARIFICATION OF ECONOMIC SUBSTANCE DOCTRINE

     SEC. __11. CLARIFICATION OF ECONOMIC SUBSTANCE DOCTRINE.

       (a) In General.--Section 7701 is amended by redesignating 
     subsection (m) as subsection (n) and by inserting after 
     subsection (l) the following new subsection:
       ``(m) Clarification of Economic Substance Doctrine; Etc.--
       ``(1) General rules.--
       ``(A) In general.--In applying the economic substance 
     doctrine, the determination of whether a transaction has 
     economic substance shall be made as provided in this 
     paragraph.
       ``(B) Definition of economic substance.--For purposes of 
     subparagraph (A)--
       ``(i) In general.--A transaction has economic substance 
     only if--

       ``(I) the transaction changes in a meaningful way (apart 
     from Federal income tax effects) the taxpayer's economic 
     position, and
       ``(II) the taxpayer has a substantial nontax purpose for 
     entering into such transaction and the transaction is a 
     reasonable means of accomplishing such purpose.

       ``(ii) Special rule where taxpayer relies on profit 
     potential.--A transaction shall not be treated as having 
     economic substance by reason of having a potential for profit 
     unless--

       ``(I) the present value of the reasonably expected pre-tax 
     profit from the transaction is substantial in relation to the 
     present value of the expected net tax benefits that would be 
     allowed if the transaction were respected, and
       ``(II) the reasonably expected pre-tax profit from the 
     transaction exceeds a risk-free rate of return.

       ``(C) Treatment of fees and foreign taxes.--Fees and other 
     transaction expenses and foreign taxes shall be taken into 
     account as expenses in determining pre-tax profit under 
     subparagraph (B)(ii).
       ``(2) Special rules for transactions with tax-indifferent 
     parties.--
       ``(A) Special rules for financing transactions.--The form 
     of a transaction which is in substance the borrowing of money 
     or the acquisition of financial capital directly or 
     indirectly from a tax-indifferent party shall not be 
     respected if the present value of the deductions to be 
     claimed with respect to the transaction are substantially in 
     excess of the present value of the anticipated economic 
     returns of the person lending the money or providing the 
     financial capital. A public offering shall be treated as a 
     borrowing, or an acquisition of financial capital, from a 
     tax-indifferent party if it is reasonably expected that at 
     least 50 percent of the offering will be placed with tax-
     indifferent parties.
       ``(B) Artificial income shifting and basis adjustments.--
     The form of a transaction with a tax-indifferent party shall 
     not be respected if--
       ``(i) it results in an allocation of income or gain to the 
     tax-indifferent party in excess of such party's economic 
     income or gain, or
       ``(ii) it results in a basis adjustment or shifting of 
     basis on account of overstating the income or gain of the 
     tax-indifferent party.
       ``(3) Definitions and special rules.--For purposes of this 
     subsection--
       ``(A) Economic substance doctrine.--The term `economic 
     substance doctrine' means the common law doctrine under which 
     tax benefits under subtitle A with respect to a transaction 
     are not allowable if the transaction does not have economic 
     substance or lacks a business purpose.
       ``(B) Tax-indifferent party.--The term `tax-indifferent 
     party' means any person or entity not subject to tax imposed 
     by subtitle A. A person shall be treated as a tax-indifferent 
     party with respect to a transaction if the items taken into 
     account with respect to the transaction have no substantial 
     impact on such person's liability under subtitle A.
       ``(C) Exception for personal transactions of individuals.--
     In the case of an individual, this subsection shall apply 
     only to transactions entered into in connection with a trade 
     or business or an activity engaged in for the production of 
     income.
       ``(D) Treatment of lessors.--In applying subclause (I) of 
     paragraph (1)(B)(ii) to the lessor of tangible property 
     subject to a lease, the expected net tax benefits shall not 
     include the benefits of depreciation, or any tax credit, with 
     respect to the leased property and subclause (II) of 
     paragraph (1)(B)(ii) shall be disregarded in determining 
     whether any of such benefits are allowable.
       ``(4) Other common law doctrines not affected.--Except as 
     specifically provided in this subsection, the provisions of 
     this subsection shall not be construed as altering or 
     supplanting any other rule of law referred to in section 
     6662(i)(2), and the requirements of this subsection shall be 
     construed as being in addition to any such other rule of 
     law.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to transactions after the date of the enactment 
     of this Act.

                           PART II--PENALTIES

     SEC. __21. INCREASE IN PENALTY ON UNDERPAYMENTS RESULTING 
                   FROM FAILURE TO SATISFY CERTAIN COMMON LAW 
                   RULES.

       (a) In General.--Section 6662 (relating to imposition of 
     accuracy-related penalty) is amended by adding at the end the 
     following new subsection:
       ``(i) Increase in Penalty in Case of Failure To Satisfy 
     Certain Common Law Rules.--
       ``(1) In general.--To the extent that an underpayment is 
     attributable to a disallowance described in paragraph (2)--
       ``(A) subsection (a) shall be applied with respect to such 
     portion by substituting `40 percent' for `20 percent', and
       ``(B) subsection (d)(2)(B) and section 6664(c) shall not 
     apply.

[[Page 5208]]

       ``(2) Disallowances described.--A disallowance is described 
     in this subsection if such disallowance is on account of--
       ``(A) a lack of economic substance (within the meaning of 
     section 7701(m)(1)) for the transaction giving rise to the 
     claimed benefit or the transaction was not respected under 
     section 7701(m)(2),
       ``(B) a lack of business purpose for such transaction or 
     because the form of the transaction does not reflect its 
     substance, or
       ``(C) a failure to meet the requirements of any other 
     similar rule of law.
       ``(3) Increase in penalty not to apply if compliance with 
     disclosure requirements.--Paragraph (1)(A) shall not apply if 
     the taxpayer discloses to the Secretary (as such time and in 
     such manner as the Secretary shall prescribe) such 
     information as the Secretary shall prescribe with respect to 
     such transaction.''.
       (b) Modifications to Penalty on Substantial Understatement 
     of Income Tax.--
       (1) Modification of threshold.--Subparagraph (A) of section 
     6662(d)(1) is amended to read as follows:
       ``(A) In general.--For purposes of this section, there is a 
     substantial understatement of income tax for any taxable year 
     if the amount of the understatement for the taxable year 
     exceeds the lesser of--
       ``(i) $500,000, or
       ``(ii) the greater of 10 percent of the tax required to be 
     shown on the return for the taxable year or $5,000.''
       (2) Modification of penalty on tax shelters, etc.--Clauses 
     (i) and (ii) of section 6662(d)(2)(C) are amended to read as 
     follows:
       ``(i) In general.--Subparagraph (B) shall not apply to any 
     item attributable to a tax shelter.''
       ``(ii) Determination of understatements with respect to tax 
     shelters, etc.--In any case in which there are one or more 
     items attributable to a tax shelter, the amount of the 
     understatement under subparagraph (A) shall in no event be 
     less than the amount of understatement which would be 
     determined for the taxable year if all items shown on the 
     return which are not attributable to any tax shelter were 
     treated as being correct. A similar rule shall apply in cases 
     to which subsection (i) applies, whether or not the items are 
     attributable to a tax shelter.''
       (c) Treatment of Amended Returns.--Subsection (a) of 
     section 6664 is amended by adding at the end the following 
     new sentence: ``For purposes of this subsection, an amended 
     return shall be disregarded if such return is filed on or 
     after the date the taxpayer is first contacted by the 
     Secretary regarding the examination of the return.''

     SEC. __22. PENALTY ON PROMOTERS OF TAX AVOIDANCE STRATEGIES 
                   WHICH HAVE NO ECONOMIC SUBSTANCE, ETC.

       (a) Penalty.--
       (1) In general.--Section 6700 (relating to promoting 
     abusive tax shelters, etc.) is amended by redesignating 
     subsection (c) as subsection (d) and by inserting after 
     subsection (b) the following new subsection:
       ``(c) Penalty on Substantial Promoters for Promoting Tax 
     Avoidance Strategies Which Have No Economic Substance, Etc.--
       ``(1) Imposition of penalty.--Any substantial promoter of a 
     tax avoidance strategy shall pay a penalty in the amount 
     determined under paragraph (2) with respect to such strategy 
     if such strategy (or any similar strategy promoted by such 
     promoter) fails to meet the requirements of any rule of law 
     referred to in section 6662(i)(2).
       ``(2) Amount of penalty.--The penalty under paragraph (1) 
     with respect to a promoter of a tax avoidance strategy is an 
     amount equal to 100 percent of the gross income derived (or 
     to be derived) by such promoter from such strategy.
       ``(3) Tax avoidance strategy.--For purposes of this 
     subsection, the term `tax avoidance strategy' means any 
     entity, plan, arrangement, or transaction a significant 
     purpose of the structure of which is the avoidance or evasion 
     of Federal income tax.
       ``(4) Substantial promoter.--For purposes of this 
     subsection--
       ``(A) In general.--The term `substantial promoter' means, 
     with respect to any tax avoidance strategy, any promoter if--
       ``(i) such promoter offers such strategy to more than 1 
     potential participant, and
       ``(ii) such promoter may receive fees in excess of $500,000 
     in the aggregate with respect to such strategy.
       ``(B) Aggregation rules.--For purposes of this paragraph--
       ``(i) Related persons.--A promoter and all persons related 
     to such promoter shall be treated as 1 person who is a 
     promoter.
       ``(ii) Similar strategies.--All similar tax avoidance 
     strategies of a promoter shall be treated as 1 tax avoidance 
     strategy.
       ``(C) Promoter.--The term `promoter' means any person who 
     participates in the promotion, offering, or sale of the tax 
     avoidance strategy.
       ``(D) Related person.--Persons are related if they bear a 
     relationship to each other which is described in section 
     267(b) or 707(b).
       ``(4) Coordination with subsection (a).--No penalty shall 
     be imposed by this subsection on any promoter with respect to 
     a tax avoidance strategy if a penalty is imposed under 
     subsection (a) on such promoter with respect to such 
     strategy.''
       (2) Conforming amendment.--Subsection (d) of section 6700 
     is amended--
       (A) by striking ``Penalty'' and inserting ``Penalties'', 
     and
       (B) by striking ``penalty'' the first place it appears in 
     the text and inserting ``penalties''.
       (b) Increase in Penalty on Promoting Abusive Tax 
     Shelters.--The first sentence of section 6700(a) is amended 
     by striking ``a penalty equal to'' and all that follows and 
     inserting ``a penalty equal to the greater of $1,000 or 100 
     percent of the gross income derived (or to be derived) by 
     such person from such activity.''

     SEC. __23. MODIFICATIONS OF PENALTIES FOR AIDING AND ABETTING 
                   UNDERSTATEMENT OF TAX LIABILITY INVOLVING TAX 
                   SHELTERS.

       (a) Imposition of Penalty.--Section 6701(a) (relating to 
     imposition of penalty) is amended to read as follows:
       ``(a) Imposition of Penalties.--
       ``(1) In general.--Any person--
       ``(A) who aids or assists in, procures, or advises with 
     respect to, the preparation or presentation of any portion of 
     a return, affidavit, claim, or other document,
       ``(B) who knows (or has reason to believe) that such 
     portion will be used in connection with any material matter 
     arising under the internal revenue laws, and
       ``(C) who knows that such portion (if so used) would result 
     in an understatement of the liability for tax of another 
     person,
     shall pay a penalty with respect to each such document in the 
     amount determined under subsection (b).
       ``(2) Certain tax shelters.--If--
       ``(A) any person--
       ``(i) aids or assists in, procures, or advises with respect 
     to the creation, organization, sale, implementation, 
     management, or reporting of a tax shelter (as defined in 
     section 6662(d)(2)(C)(iii)) or of any entity, plan, 
     arrangement, or transaction that fails to meet the 
     requirements of any rule of law referred to in section 
     6662(i)(2), and
       ``(ii) opines, advises, represents, or otherwise indicates 
     (directly or indirectly) that the taxpayer's tax treatment of 
     items attributable to such tax shelter or such entity, plan, 
     arrangement, or transaction and giving rise to an 
     understatement of tax liability would more likely than not 
     prevail or not give rise to a penalty,
       ``(B) such opinion, advice, representation, or indication 
     is unreasonable,

     then such person shall pay a penalty in the amount determined 
     under subsection (b). If a standard higher than the more 
     likely than not standard was used in any such opinion, 
     advice, representation, or indication, then subparagraph 
     (A)(ii) shall be applied as if such standard were substituted 
     for the more likely than not standard.''
       (b) Amount of Penalty.--Section 6701(b) (relating to amount 
     of penalty) is amended--
       (1) by inserting ``or (3)'' after ``paragraph (2)'' in 
     paragraph (1),
       (2) by striking ``subsection (a)'' each place it appears 
     and inserting ``subsection (a)(1)'', and
       (3) by redesignating paragraph (3) as paragraph (4) and by 
     adding after paragraph (2) the following:
       ``(3) Tax shelters.--In the case of--
       ``(A) a penalty imposed by subsection (a)(1) which involves 
     a return, affidavit, claim, or other document relating to a 
     tax shelter or an entity, plan, arrangement, or transaction 
     that fails to meet the requirements of any rule of law 
     referred to in section 6662(i)(2), and
       ``(B) any penalty imposed by subsection (a)(2),

     the amount of the penalty shall be equal to 100 percent of 
     the gross proceeds derived (or to be derived) by the person 
     in connection with the tax shelter or entity, plan, 
     arrangement, or transaction.''
       (c) Referral and Publication.--If a penalty is imposed 
     under section 6701(a)(2) of the Internal Revenue Code of 1986 
     (as added by subsection (a)) on any person, the Secretary of 
     the Treasury shall--
       (1) notify the Director of Practice of the Internal Revenue 
     Service and any appropriate State licensing authority of the 
     penalty and the circumstances under which it was imposed, and
       (2) publish the identity of the person and the fact the 
     penalty was imposed on the person.
       (d) Conforming Amendments.--
       (1) Section 6701(d) is amended by striking ``Subsection 
     (a)'' and inserting ``Subsection (a)(1)''.
       (2) Section 6701(e) is amended by striking ``subsection 
     (a)(1)'' and inserting ``subsection (a)(1)(A)''.
       (3) Section 6701(f) is amended by inserting ``, tax 
     shelter, or entity, plan, arrangement, or transaction'' after 
     ``document'' each place it appears.

     SEC. __24. FAILURE TO MAINTAIN LISTS.

       Section 6708(a) (relating to failure to maintain lists of 
     investors in potentially abusive tax shelters) is amended by 
     adding at the end the following: ``In the case of a tax 
     shelter (as defined in section 6662(d)(2)(C)(iii)) or entity, 
     plan, arrangement, or transaction that fails to meet the 
     requirements of any rule of law referred to in section 
     6662(i)(2), the penalty shall be equal to 50 percent of the 
     gross proceeds derived (or to be derived) from each person 
     with respect to which there was a

[[Page 5209]]

     failure and the limitation of the preceding sentence shall 
     not apply.''

     SEC. __25. PENALTY FOR FAILING TO DISCLOSE REPORTABLE 
                   TRANSACTION.

       (a) In General.--Part I of subchapter B of chapter 68 
     (relating to assessable penalties) is amended by inserting 
     after section 6707 the following new section:

     ``SEC. 6707A. PENALTY FOR FAILURE TO INCLUDE TAX SHELTER 
                   INFORMATION WITH RETURN.

       ``(a) Imposition of Penalty.--Any person who fails to 
     include with its return of Federal income tax any information 
     required to be included under section 6011 with respect to a 
     reportable transaction shall pay a penalty in the amount 
     determined under subsection (b). No penalty shall be imposed 
     on any such failure if it is shown that such failure is due 
     to reasonable cause.
       ``(b) Amount of Penalty.--
       ``(1) In general.--The amount of the penalty under 
     subsection (a) shall be equal to the greater of--
       ``(A) 5 percent of any increase in Federal tax which 
     results from a difference between the taxpayer's treatment 
     (as shown on its return) of items attributable to the 
     reportable transaction to which the failure relates and the 
     proper tax treatment of such items, or
       ``(B) $100,000.

     For purposes of subparagraph (A), the last sentence of 
     section 6664(a) shall apply.
       ``(2) Listed transaction.--If the failure under subsection 
     (a) relates to a reportable transaction which is the same as, 
     or substantially similar to, a transaction specifically 
     identified by the Secretary as a tax avoidance transaction 
     for purposes of section 6011, paragraph (1)(A) shall be 
     applied by substituting `10 percent' for `5 percent'.
       ``(c) Reportable Transaction.--For purposes of this 
     section, the term `reportable transaction' means any 
     transaction with respect to which information is required 
     under section 6011 to be included with a taxpayer's return of 
     tax because, as determined under regulations prescribed under 
     section 6011, such transaction has characteristics which may 
     be indicative of a tax avoidance transaction.
       ``(d) Coordination With Other Penalties.--The penalty 
     imposed by this section is in addition to any penalty imposed 
     under section 6662.''
       (b) Conforming Amendment.--The table of sections for part I 
     of subchapter B of chapter 68 is amended by inserting after 
     the item relating to section 6707 the following:

``Sec. 6707A. Penalty for failure to include tax shelter information on 
              return.''

     SEC. __26. REGISTRATION OF CERTAIN TAX SHELTERS WITHOUT 
                   CORPORATE PARTICIPANTS.

       Section 6111(d)(1)(A) (relating to certain confidential 
     arrangements treated as tax shelters) is amended by striking 
     ``for a direct or indirect participant which is a 
     corporation''.

     SEC. __27. EFFECTIVE DATES.

       (a) In General.--Except as provided in subsections (b) and 
     (c), the amendments made by this part shall apply to 
     transactions after the date of the enactment of this Act.
       (b) Section __21.--The amendments made by subsections (b) 
     and (c) of section __21 shall apply to taxable years ending 
     after the date of the enactment of this Act.
       (c) Section __22.--The amendments made by subsection (a) of 
     section __22 shall apply to any tax avoidance strategy (as 
     defined in section 6700(c) of the Internal Revenue Code of 
     1986, as amended by this part) interests in which are offered 
     to potential participants after the date of the enactment of 
     this Act.
       (d) Section __26.--The amendment made by section __26 shall 
     apply to any tax shelter interest which is offered to 
     potential participants after the date of the enactment of 
     this Act.

  PART III--LIMITATIONS ON IMPORTATION OR TRANSFER OF BUILT-IN LOSSES

     SEC. __31. LIMITATION ON IMPORTATION OF BUILT-IN LOSSES.

       (a) In General.--Section 362 (relating to basis to 
     corporations) is amended by adding at the end the following 
     new subsection:
       ``(e) Limitation on Importation of Built-in Losses.--
       ``(1) In general.--If in any transaction described in 
     subsection (a) or (b) there would (but for this subsection) 
     be an importation of a net built-in loss, the basis of each 
     property described in paragraph (2) which is acquired in such 
     transaction shall (notwithstanding subsections (a) and (b)) 
     be its fair market value immediately after such transaction.
       ``(2) Property described.--For purposes of paragraph (1), 
     property is described in this paragraph if--
       ``(A) gain or loss with respect to such property is not 
     subject to tax under this subtitle in the hands of the 
     transferor immediately before the transfer, and
       ``(B) gain or loss with respect to such property is subject 
     to such tax in the hands of the transferee immediately after 
     such transfer.

     In any case in which the transferor is a partnership, the 
     preceding sentence shall be applied by treating each partner 
     in such partnership as holding such partner's proportionate 
     share of the property of such partnership.
       ``(3) Importation of net built-in loss.--For purposes of 
     paragraph (1), there is an importation of a net built-in loss 
     in a transaction if the transferee's aggregate adjusted bases 
     of property described in paragraph (2) which is transferred 
     in such transaction would (but for this subsection) exceed 
     the fair market value of such property immediately after such 
     transaction.''
       (b) Comparable Treatment Where Liquidation.--Paragraph (1) 
     of section 334(b) (relating to liquidation of subsidiary) is 
     amended to read as follows:
       ``(1) In general.--If property is received by a corporate 
     distributee in a distribution in a complete liquidation to 
     which section 332 applies (or in a transfer described in 
     section 337(b)(1)), the basis of such property in the hands 
     of such distributee shall be the same as it would be in the 
     hands of the transferor; except that the basis of such 
     property in the hands of such distributee shall be the fair 
     market value of the property at the time of the 
     distribution--
       ``(A) in any case in which gain or loss is recognized by 
     the liquidating corporation with respect to such property, or
       ``(B) in any case in which the liquidating corporation is a 
     foreign corporation, the corporate distributee is a domestic 
     corporation, and the corporate distributee's aggregate 
     adjusted bases of property described in section 362(e)(2) 
     which is distributed in such liquidation would (but for this 
     subparagraph) exceed the fair market value of such property 
     immediately after such liquidation.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to transactions after the date of the enactment 
     of this Act.

     SEC. __32. DISALLOWANCE OF PARTNERSHIP LOSS TRANSFERS.

       (a) Treatment of Contributed Property With Built-In Loss.--
     Paragraph (1) of section 704(c) is amended by striking 
     ``and'' at the end of subparagraph (A), by striking the 
     period at the end of subparagraph (B) and inserting ``, 
     and'', and by adding at the end the following:
       ``(C) if any property so contributed has a built-in loss--
       ``(i) such built-in loss shall be taken into account only 
     in determining the amount of items allocated to the 
     contributing partner, and
       ``(ii) except as provided in regulations, in determining 
     the amount of items allocated to other partners, the basis of 
     the contributed property in the hands of the partnership 
     shall be treated as being equal to its fair market value 
     immediately after the contribution.

     For purposes of subparagraph (C), the term `built-in loss' 
     means the excess of the adjusted basis of the property over 
     its fair market value immediately after the contribution.''
       (b) Adjustment to Basis of Partnership Property on Transfer 
     of Partnership Interest If There Is Substantial Built-In 
     Loss.--
       (1) Adjustment required.--Subsection (a) of section 743 
     (relating to optional adjustment to basis of partnership 
     property) is amended by inserting before the period ``or 
     unless the partnership has a substantial built-in loss 
     immediately after such transfer''.
       (2) Adjustment.--Subsection (b) of section 743 is amended 
     by inserting ``or with respect to which there is a 
     substantial built-in loss immediately after such transfer'' 
     after ``section 754 is in effect''.
       (3) Substantial built-in loss.--Section 743 is amended by 
     adding at the end the following new subsection:
       ``(d) Substantial Built-In Loss.--For purposes of this 
     section, a partnership has a substantial built-in loss with 
     respect to a transfer of an interest in a partnership if the 
     transferee partner's proportionate share of the adjusted 
     basis of the partnership property exceeds 110 percent of the 
     basis of such partner's interest in the partnership.''
       (4) Clerical amendments.--
       (A) The section heading for section 743 is amended to read 
     as follows:

     ``SEC. 743. ADJUSTMENT TO BASIS OF PARTNERSHIP PROPERTY WHERE 
                   SECTION 754 ELECTION OR SUBSTANTIAL BUILT-IN 
                   LOSS.''

       (B) The table of sections for subpart C of part II of 
     subchapter K of chapter 1 is amended by striking the item 
     relating to section 743 and inserting the following new item:

``Sec. 743. Adjustment to basis of partnership property where section 
              754 election or substantial built-in loss.''

       (c) Adjustment to Basis of Undistributed Partnership 
     Property if There Is Substantial Basis Reduction.--
       (1) Adjustment required.--Subsection (a) of section 734 
     (relating to optional adjustment to basis of undistributed 
     partnership property) is amended by inserting before the 
     period ``or unless there is a substantial basis reduction''.
       (2) Adjustment.--Subsection (b) of section 734 is amended 
     by inserting ``or unless there is a substantial basis 
     reduction'' after ``section 754 is in effect''.
       (3) Substantial basis reduction.--Section 734 is amended by 
     adding at the end the following new subsection:

[[Page 5210]]

       ``(d) Substantial Basis Reduction.--For purposes of this 
     section, there is a substantial basis reduction with respect 
     to a distribution if the sum of the amounts described in 
     subparagraphs (A) and (B) of subsection (b)(2) exceeds 10 
     percent of the aggregate adjusted basis of partnership 
     property immediately after the distribution.''
       (4) Clerical amendments.--
       (A) The section heading for section 734 is amended to read 
     as follows:

     ``SEC. 734. ADJUSTMENT TO BASIS OF UNDISTRIBUTED PARTNERSHIP 
                   PROPERTY WHERE SECTION 754 ELECTION OR 
                   SUBSTANTIAL BASIS REDUCTION.''

       (B) The table of sections for subpart B of part II of 
     subchapter K of chapter 1 is amended by striking the item 
     relating to section 734 and inserting the following new item:

``Sec. 734. Adjustment to basis of undistributed partnership property 
              where section 754 election or substantial basis 
              reduction.''

       (d) Effective Dates.--
       (1) Subsection (a).--The amendment made by subsection (a) 
     shall apply to contributions made after the date of the 
     enactment of this Act.
       (2) Subsection (b).--The amendments made by subsection (a) 
     shall apply to transfers after the date of the enactment of 
     this Act.
       (3) Subsection (c).--The amendments made by subsection (a) 
     shall apply to distributions after the date of the enactment 
     of this Act.

                        Subtitle B--Reinsurance

     SEC. __41. SHORT TITLE.

       This subtitle may be cited as the ``Reinsurance Tax Equity 
     Act of 2002''.

     SEC. __42. PREVENTION OF EVASION OF UNITED STATES INCOME TAX 
                   ON NONLIFE INSURANCE COMPANIES THROUGH USE OF 
                   REINSURANCE WITH FOREIGN PERSONS.

       (a) In General.--Subparagraph (A) of section 832(b)(4) 
     (relating to insurance company taxable income) is amended to 
     read as follows:
       ``(A) From the amount of gross premiums written on 
     insurance contracts during the taxable year, deduct return 
     premiums and premiums paid for reinsurance (except as 
     provided in paragraph (9)).''
       (b) Treatment of Reinsurance With Related Reinsurers.--
     Subsection (b) of section 832 is amended by adding at the end 
     the following new paragraph:
       ``(9) Denial of deduction under paragraph (4) for 
     reinsurance of u.s. risks with certain related persons.--
       ``(A) In general.--No deduction shall be allowed under 
     paragraph (4) for premiums paid for the direct or indirect 
     reinsurance of United States risks with a related reinsurer.
       ``(B) Exceptions.--This paragraph shall not apply to any 
     premium to the extent that--
       ``(i) the income attributable to the reinsurance to which 
     such premium relates is includible in the gross income of--

       ``(I) such reinsurer, or
       ``(II) 1 or more domestic corporations or citizens or 
     residents of the United States, or

       ``(ii) the related insurer establishes to the satisfaction 
     of the Secretary that the taxable income (determined in 
     accordance with this section 832) attributable to such 
     reinsurance is subject to an effective rate of income tax 
     imposed by a foreign country at a rate greater than 20 
     percent of the maximum rate of tax specified in section 11.
       ``(C) Election by reinsurer to be taxed on income.--Income 
     of a related reinsurer attributable to the reinsurance of 
     United States risks which is not otherwise includible in 
     gross income shall be treated as gross income which is 
     effectively connected with the conduct of a trade or business 
     in the United States if such reinsurer--
       ``(i) elects to so treat such income, and
       ``(ii) meets such requirements as the Secretary shall 
     prescribe to ensure that the taxes imposed by this chapter on 
     such income are paid.
       ``(D) Definitions.--For purposes of this paragraph--
       ``(i) United states risk.--The term `United States risk' 
     means any risk related to property in the United States, or 
     liability arising out of activity in, or in connection with 
     the lives or health of residents of, the United States.
       ``(ii) Related insurer.--The term `related insurer' means 
     any reinsurer owned or controlled directly or indirectly by 
     the same interests (within the meaning of section 482) as the 
     person making the premium payment.''
       (c) Technical Amendment.--Subparagraph (A) of section 
     832(b)(5) is amended by inserting after clause (iii) the 
     following new clause:
       ``(iv) To the results so obtained, add reinsurance 
     recovered from a related reinsurer to the extent a deduction 
     for the premium paid for the reinsurance was disallowed under 
     paragraph (9).''
       (d) Effective Date.--The amendments made by this section 
     shall apply to premiums paid after the date that the 
     Committee on Ways and Means of the House of Representatives 
     or the Committee on Finance of the Senate votes to report 
     this bill.

                    Subtitle C--Corporate Inversions

     SEC. __51. SHORT TITLE.

       This subtitle may be cited as the ``Corporate Patriot 
     Enforcement Act of 2002''.

     SEC. __52. PREVENTION OF CORPORATE EXPATRIATION TO AVOID 
                   UNITED STATES INCOME TAX.

       (a) In General.--Paragraph (4) of section 7701(a) (defining 
     domestic) is amended to read as follows:
       ``(4) Domestic.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the term `domestic' when applied to a corporation or 
     partnership means created or organized in the United States 
     or under the law of the United States or of any State unless, 
     in the case of a partnership, the Secretary provides 
     otherwise by regulations.
       ``(B) Certain corporations treated as domestic.--
       ``(i) In general.--The acquiring corporation in a corporate 
     expatriation transaction shall be treated as a domestic 
     corporation.
       ``(ii) Corporate expatriation transaction.--For purposes of 
     this subparagraph, the term `corporate expatriation 
     transaction' means any transaction if--

       ``(I) a nominally foreign corporation (referred to in this 
     subparagraph as the `acquiring corporation') acquires, as a 
     result of such transaction, directly or indirectly 
     substantially all of the properties held directly or 
     indirectly by a domestic corporation, and
       ``(II) immediately after the transaction, more than 80 
     percent of the stock (by vote or value) of the acquiring 
     corporation is held by former shareholders of the domestic 
     corporation by reason of holding stock in the domestic 
     corporation.

       ``(iii) Lower stock ownership requirement in certain 
     cases.--Subclause (II) of clause (ii) shall be applied by 
     substituting `50 percent' for `80 percent' with respect to 
     any nominally foreign corporation if--

       ``(I) such corporation does not have substantial business 
     activities (when compared to the total business activities of 
     the expanded affiliated group) in the foreign country in 
     which or under the law of which the corporation is created or 
     organized, and
       ``(II) the stock of the corporation is publicly traded and 
     the principal market for the public trading of such stock is 
     in the United States.

       ``(iv) Partnership transactions.--The term `corporate 
     expatriation transaction' includes any transaction if--

       ``(I) a nominally foreign corporation (referred to in this 
     subparagraph as the `acquiring corporation') acquires, as a 
     result of such transaction, directly or indirectly properties 
     constituting a trade or business of a domestic partnership,
       ``(II) immediately after the transaction, more than 80 
     percent of the stock (by vote or value) of the acquiring 
     corporation is held by former partners of the domestic 
     partnership (determined without regard to stock of the 
     acquiring corporation which is sold in a public offering 
     related to the transaction), and
       ``(III) the acquiring corporation meets the requirements of 
     subclauses (I) and (II) of clause (iii).

       ``(v) Special rules.--For purposes of this subparagraph--

       ``(I) a series of related transactions shall be treated as 
     1 transaction, and
       ``(II) stock held by members of the expanded affiliated 
     group which includes the acquiring corporation shall not be 
     taken into account in determining ownership.

       ``(vi) Other definitions.--For purposes of this 
     subparagraph--

       ``(I) Nominally foreign corporation.--The term `nominally 
     foreign corporation' means any corporation which would (but 
     for this subparagraph) be treated as a foreign corporation.
       ``(II) Expanded affiliated group.--The term `expanded 
     affiliated group' means an affiliated group (as defined in 
     section 1504(a) without regard to section 1504(b)).''

       (b) Effective Dates.--
       (1) In general.--The amendment made by this section shall 
     apply to corporate expatriation transactions completed after 
     September 11, 2001.
       (2) Special rule.--The amendment made by this section shall 
     also apply to corporate expatriation transactions completed 
     on or before September 11, 2001, but only with respect to 
     taxable years of the acquiring corporation beginning after 
     December 31, 2003.
                                  ____

  SA 3193. Ms. LANDRIEU submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 130, between lines 7 and 8, insert the following:

     SEC. 608. STATE REFERENDA TO LIFT MORATORIA ON OFFSHORE OIL 
                   AND GAS DRILLING.

       (a) In General.--Notwithstanding any moratorium or 
     executive order temporarily suspending or permanently 
     prohibiting offshore oil or gas drilling on submerged land 
     off the coast of a State--
       (1) the State may hold a referendum on whether to allow 
     production of oil or gas on

[[Page 5211]]

     the submerged land, including whether to impose any 
     restrictions on the proximity of such drilling to the shore; 
     and
       (2) if such production is approved by the referendum, the 
     President shall authorize a lease sale for the submerged 
     land.
       (b) Royalties.--
       (1) New leases under subsection (a).--Of any royalties 
     collected after the date of enactment of this Act from 
     drilling conducted under subsection (a), 30 percent shall be 
     distributed to the State off the shore of which oil or gas is 
     produced.
       (2) New deep water leases.--For fiscal year 2007, and each 
     fiscal year thereafter, of any royalties collected during the 
     fiscal year from leases in water 800 or more meters deep that 
     are issued after the date of enactment of this Act, 30 
     percent shall be distributed to the States offshore of which 
     the leases lie.
       (3) Existing leases.--Notwithstanding section 8(g)(2) of 
     the Outer Continental Shelf Lands Act (43 U.S.C. 1338(g)(2)), 
     on and after the date that is 10 years after the date of 
     enactment of this Act, 30 percent of amounts collected from 
     leases issued before, on, or after the date of enactment of 
     this Act shall be distributed to the States offshore of which 
     the leases lie.
                                  ____

  SA 3194. Ms. LANDRIEU (for herself and Mr. Domenici) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the end of subtitle B of title V, add the following:

     SEC. 5__. NEW NUCLEAR REACTOR TECHNOLOGY PROGRAM.

       (a) In General.--Chapter 19 of the Atomic Energy Act of 
     1954 is amended by inserting after section 276 (42 U.S.C. 
     2023) the following:

     ``SEC. 277. NEW NUCLEAR REACTOR TECHNOLOGY PROGRAM.

       ``(a) In General.--The Commission shall develop and 
     maintain a program to identify and address safety and 
     environmental issues associated with designs for nuclear 
     power plants that would incorporate new reactor technologies, 
     as identified by the Department of Energy and the nuclear 
     power industry.
       ``(b) Activities.--In carrying out the program under 
     subsection (a), the Commission shall--
       ``(1) conduct modeling and analyses of, and tests and 
     experiments on, designs for nuclear power plants to determine 
     total system behavior and the response of the nuclear power 
     plants to hypothetical accidents; and
       ``(2) consider--
       ``(A) new reactor technologies that may affect--
       ``(i) risk-informed licensing of new nuclear power plants;
       ``(ii) the behavior of advanced fuels; and
       ``(iii) environmental considerations relating to--

       ``(I) spent fuel management; and
       ``(II) standards for limiting negative health effects;

       ``(B) other new technologies (including advanced sensors, 
     digital instrumentation, and digital controls) and human 
     factors that affect the application of new reactor technology 
     to nuclear power plants in existence as of the date of 
     enactment of this section; and
       ``(C) any other emerging technical issue relating to new 
     reactor technologies, as determined by the Commission.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums are necessary to 
     carry out this section.''.
       (b) Conforming Amendment.--The table of contents of the 
     Atomic Energy Act of 1954 (42 U.S.C. prec. 2011) is amended 
     by inserting after the item relating to section 276 the 
     following:

``Sec. 277. New nuclear reactor technology program.''.
                                  ____

  SA 3195. Mr. HARKIN (for himself, Mr. Cochran, Mr. Grassley, and Mrs. 
Lincoln) submitted an amendment intended to be proposed to amendment SA 
2917 proposed by Mr. Daschle (for himself and Mr. Bingaman) to the bill 
(S. 517) to authorize funding the Department of Energy to enhance its 
mission areas through technology transfer and partnerships for fiscal 
years 2002 through 2006, and for other purposes; which was ordered to 
lie on the table; as follows:

       Beginning on page 293, strike line 5 and all that follows 
     through page 294 and insert the following:
       Section 325(d)(3) of the Energy Policy and Conservation Act 
     (42 U.S.C. 6295)d)) is amended by adding at the end the 
     following:
       ``(C) Revision of standards.--Not later than 60 days after 
     the date of enactment of this subparagraph, the Secretary 
     shall amend the standards established under paragraph (1).''.
                                  ____

  SA 3196. Mr. JOHNSON submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

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

     SEC. 2  . SENSE OF THE SENATE RESOLUTION CONCERNING ELECTRIC 
                   POWER TRANSMISSION SYSTEMS.

       It is the sense of the Senate that the development of 
     regional energy markets and the magnitude of constraints in 
     electric power transmission systems require that the Federal 
     Government be attentive to electric power transmission 
     issues, particularly issues that can be addressed through 
     policies that facilitate investment in, the enhancement of, 
     and the efficiency of electric power transmission systems.
                                  ____

  SA 3197. Mr. CARPER (for himself, Ms. Collins, Mr. Levin, Ms. 
Landrieu, Ms. Stabenow, and Mr. Jeffords) submitted an amendment 
intended to be proposed to amendment SA 2917 proposed by Mr. Daschle 
(for himself and Mr. Bingaman) to the bill (S. 517) to authorize 
funding the Department of Energy to enhance its mission areas through 
technology transfer and partnerships for fiscal years 2002 through 
2006, and for other purposes; which was ordered to lie on the table; as 
follows:

       Beginning on page 47, strike line 23 and all that follows 
     through page 48, line 20, and insert the following:
       ``(m) Termination of Mandatory Purchase and Sale 
     Requirements.--
       ``(1) Obligation to purchase.-- After the date of enactment 
     of this subsection, no electric utility shall be required to 
     enter into a new contract or obligation to purchase electric 
     energy from a qualifying cogeneration facility or a 
     qualifying small power production facility under this section 
     if the Commission finds that the qualifying cogeneration 
     facility or qualifying small power production facility has 
     access to independently administered, auction-based day ahead 
     and real time wholesale markets for the sale of electric 
     energy.
       ``(2) Obligation to sell.--After the date of enactment of 
     this subsection, no electric utility shall be required to 
     enter into a new contract or obligation to sell electric 
     energy to a qualifying cogeneration facility or a qualifying 
     small power production facility under this section if 
     competing retail electric suppliers are able to provide 
     electric energy to the qualifying cogeneration facility or 
     qualifying small power production facility.
       ``(3) No effect on existing rights and remedies.--Nothing 
     in this subsection affects the rights or remedies of any 
     party under any contract or obligation, in effect on the date 
     of enactment of this subsection, to purchase electric energy 
     or capacity from or to sell electric energy or capacity to a 
     facility under this Act (including the right to recover costs 
     of purchasing electric energy or capacity).
                                  ____

  SA 3198. Mr. CARPER (for himself, Mr. Specter, and Ms. Landrieu) 
submitted an amendment intended to be proposed to amendment SA 2917 
proposed by Mr. Daschle (for himself and Mr. Bingaman) to the bill (S. 
517) to authorize funding the Department of Energy to enhance its 
mission areas through technology transfer and partnerships for fiscal 
years 2002 through 2006, and for other purposes; which was ordered to 
lie on the table; as follows:

       On page 177, before line 1, insert the following:

     SEC. 811. REQUIREMENT FOR REGULATIONS TO REDUCE OIL 
                   CONSUMPTION.

       (a) Oil Savings.--
       (1) In general.--The new regulations required by section 
     801 shall include regulations that apply to passenger and 
     non-passenger automobiles manufactured after model year 2006 
     and are designed to result in a reduction in the amount of 
     oil (including oil refined into gasoline) used by automobiles 
     of at least 1,000,000 barrels per day by 2015.
       (2) Calculation of reduction.--To determine the amount of 
     the reduction in oil used by passenger and non-passenger 
     automobiles, the Secretary of Transportation shall make 
     calculations based on the number of barrels of oil projected 
     by the Energy Information Administration of the Department of 
     Energy in table A7 of the report entitled ``Annual Energy 
     Outlook 2002'' (report no. DOE/EIA-0383(2002)) to be consumed 
     by light-duty vehicles in 2015 without the regulations 
     required by paragraph (1).

[[Page 5212]]

       (3) Consideration of alternative fuel technologies.--The 
     Secretary of Transportation shall consult with the Secretary 
     of Energy to identify alternative fuel technologies that 
     could be utilized in the transportation sector to reduce 
     dependence on crude-oil-derived fuels. The Secretary of 
     Transportation shall take those technologies into 
     consideration in prescribing the regulations under this 
     section.
       (4) Final regulations.--The Secretary of Transportation 
     shall issue the final regulations required by this subsection 
     after carrying out the consultation described in paragraph 
     (3), but not later than 15 months after the date of the 
     enactment of this Act.
       (b) Reports to Congress.--
       (1) Requirement.--Beginning in 2007, the Secretary of 
     Transportation shall, after consulting with the Administrator 
     of the Environmental Protection Agency, submit to Congress in 
     January of every odd-numbered year through 2015 a report on 
     the implementation of the requirements of this section.
       (2) Content.--The report required by paragraph (1) shall 
     explain and assess the progress in reducing oil consumption 
     by automobiles as required by this section.
                                  ____

  SA 3199. Mrs. BOXER (for herself and Mrs. Feinstein) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       Beginning on page 204, strike line 14 and all that follows 
     through page 205, line 8.
                                  ____

  SA 3200. Mrs. BOXER (for herself and Mrs. Feinstein) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 191, strike lines 8 through 11 and insert the 
     following:
       ``(4) Cellulosic biomass ethanol.--For the purpose of 
     paragraph (2)--
       ``(A) except as provided in subparagraph (B), 1 gallon of 
     cellulosic biomass ethanol shall be considered to be the 
     equivalent of 1.5 gallons of renewable fuel; and
       ``(B) 1 gallon of cellulosic biomass ethanol shall be 
     considered the equivalent of 2 gallons of renewable fuel if 
     the cellulosic biomass ethanol is derived from agricultural 
     residues.''.
                                  ____

  SA 3201. Mrs. BOXER submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC.   . FERC STUDY ON EFFECTS OF JUST AND REASONABLE 
                   ELECTRICITY RATES.

       Not later than August 15, 2002, the Federal Energy 
     Regulatory Commission shall submit a report to the Senate 
     Energy and Natural Resources Committee and the House Energy 
     and Commerce Committee detailing how the order of June 18, 
     2001, ``Addressing Price Mitigation in California and the 
     Western United States'', helped establish just and reasonable 
     electricity prices in the 11 states, including California, 
     that comprise the Western Systems Coordinating Council.
                                  ____

  SA 3202. Mr. JEFFORDS submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 568, strike line 6 and all that follows through 
     page 570, line 7 and insert the following:

     SEC. 1701. REGULATORY REVIEWS.

       (a) Regulatory Reviews.--Not later than one year after the 
     date of enactment of this section, each Federal agency shall 
     review relevant regulations and standards to identify--
       (1) existing regulations and standards that act as barriers 
     to market entry for emerging energy technologies (including 
     fuel cells, combined heat and power, distributed power 
     generation, small-scale renewable energy, geothermal heat 
     pump technology, and energy recovery in industrial 
     processes), and
       (2) actions the agency is taking or could take to, 
     consistent with the purposes of the regulations the agency 
     administers--
       (A) remove barriers to market entry for emerging energy 
     technologies,
       (B) increase energy efficiency and conservation, or
       (C) encourage the use of new and existing processes to meet 
     energy and environmental goals.
       (b) Report to Congress.--Not later than 18 months after the 
     date of enactment of this section, the Director of the Office 
     of Science and Technology Policy shall report to the Congress 
     on the results of the agency reviews conducted under 
     subsection (a).
       (c) Contents of the Report.--The report shall identify--
       (1) all regulatory barriers to--
       (A) the development and commercialization of emerging 
     energy technologies and processes, and
       (B) the further development and expansion of existing 
     energy conservation technologies and processes, and
       (2) actions taken, or proposed to be taken, to remove such 
     barriers.
                                  ____

  SA 3203. Mr. JEFFORDS (for himself and Mr. Smith of New Hampshire) 
submitted an amendment intended to be proposed to amendment SA 2917 
proposed by Mr. Daschle (for himself and Mr. Bingaman) to the bill (S. 
517) to authorize funding the Department of Energy to enhance its 
mission areas through technology transfer and partnerships for fiscal 
years 2002 through 2006, and for other purposes; which was ordered to 
lie on the table; as follows:

       On page 119, between lines 10 and 11, insert the following:

                      Subtitle B--Nuclear Security

     SEC. 511. REPORT ON NUCLEAR SECURITY.

       Report to Congress.--Not later than 60 days after the date 
     of enactment of this section, the Nuclear Regulator 
     Commission shall report to the relevant committees of 
     Congress on any changes and on-going review of the design 
     basis threat since September 11, 2001.
                                  ____

  SA 3204. Mrs. CARNAHAN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 294, after line 18, insert the following:
       ``(6) Small duct, high velocity air conditioners and heat 
     pumps, a niche product with external static pressures several 
     times those of conventional products, are exempt from 
     paragraphs (1) through (4). No later than January 1, 2004, 
     the Secretary shall, in accordance with subsections (o) and 
     (p), prescribe a standard for small duct, high velocity 
     equipment.''
                                  ____

  SA 3205. Mr. TORRICELLI submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 137, between lines 7 and 8, insert the following:

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

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

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

       ``(a) Allowance of Deduction.--In the case of a taxpayer 
     who is an eligible resupplier, there shall be allowed as a 
     deduction an amount equal to the cost of each qualified water 
     submetering device placed in service during the taxable year.
       ``(b) Maximum Deduction.--The deduction allowed by this 
     section with respect to each qualified water submetering 
     device shall not exceed $30.
       ``(c) Eligible Resupplier.--For purposes of this section, 
     the term `eligible resupplier' means any taxpayer who 
     purchases and installs qualified water submetering devices in 
     every unit in any multi-unit property.
       ``(d) Qualified Water Submetering Device.--The term 
     `qualified water submetering device' means any tangible 
     property to which section 168 applies if such

[[Page 5213]]

     property is a submetering device (including ancillary 
     equipment)--
       ``(1) which is purchased and installed by the taxpayer to 
     enable consumers to manage their purchase or use of water in 
     response to water price and usage signals, and
       ``(2) which permits reading of water price and usage 
     signals on at least a daily basis.
       ``(e) Property Used Outside the United States Not 
     Qualified.--No deduction shall be allowed under subsection 
     (a) with respect to property which is used predominantly 
     outside the United States or with respect to the portion of 
     the cost of any property taken into account under section 
     179.
       ``(f) Basis Reduction.--
       ``(1) In general.--For purposes of this title, the basis of 
     any property shall be reduced by the amount of the deduction 
     with respect to such property which is allowed by subsection 
     (a).
       ``(2) Ordinary income recapture.--For purposes of section 
     1245, the amount of the deduction allowable under subsection 
     (a) with respect to any property that is of a character 
     subject to the allowance for depreciation shall be treated as 
     a deduction allowed for depreciation under section 167.''.
       (b) Conforming Amendments.--
       (1) Section 263(a)(1), as amended by this Act, is amended 
     by striking ``or'' at the end of subparagraph (J), by 
     striking the period at the end of subparagraph (K) and 
     inserting ``, or'', and by inserting after subparagraph (K) 
     the following new subparagraph:
       ``(L) expenditures for which a deduction is allowed under 
     section 179E.''.
       (2) Section 312(k)(3)(B), as amended by this Act, is 
     amended by striking ``or 179D'' each place it appears in the 
     heading and text and inserting ``, 179D, or 179E''.
       (3) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (34), by striking 
     the period at the end of paragraph (35) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(36) to the extent provided in section 179E(f)(1).''.
       (4) Section 1245(a), as amended by this Act, is amended by 
     inserting ``179E,'' after ``179D,'' both places it appears in 
     paragraphs (2)(C) and (3)(C).
       (5) The table of contents for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 179D the 
     following new item:

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

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

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

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

  SA 3206. Mr. TORRICELLI submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 574, between lines 11 and 12, insert the following:

     SEC. 17__. STUDY OF ETHANOL-FROM-SOLID WASTE LOAN GUARANTEE 
                   PROGRAM.

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

  SA 3207. Mr. BAUCUS (for himself and Mr. Bingaman) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 126, strike line 2 and all that follows through 
     line 14 and insert the following:

     ``the States; and
       (3) improve the collection, storage, and retrieval of 
     information related to such leasing activities.
       (b) Improved Enforcement.--The Secretary shall improve 
     inspection and enforcement of oil and gas activities, 
     including enforcement of terms and conditions in permits to 
     drill.
       (c) Report.--No later than 180 days after enactment of this 
     Act, the Secretary shall report to Congress describing the 
     actions she has taken to comply with subsections (a) and (b).
       (d) Authorization of Appropriations.--For each of the 
     fiscal years 2003 through 2006, in addition to amounts 
     otherwise authorized to be appropriated for the purpose of 
     carrying out section 17 of the Mineral Leasing Act (30 U.S.C. 
     226), there are authorized to be appropriated to the 
     Secretary of the Interior.
       (1) $40,000,000 for the purpose of carrying out paragraphs 
     (1) through (3) of subsection (a); and
       (2) $20,000,000 for the purpose of carrying out subsection 
     (b).''
                                  ____

  SA 3208. Mr. BAUCUS submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, add the following:

     SEC.  . ENHANCED DOMESTIC PRODUCTION OF OIL AND GAS THROUGH 
                   EXCHANGE OF NONPRODUCING LEASES.

       (a) Definition.--For purposes of this section:
       (1) the term ``Badger-two Medicine Area'' means federal 
     lands, owned by the United States Forest Service, located in: 
     T 31 N, R 12-13 W; T 30 N, R 11-13 W; T 29 N, R 10-16 W; and, 
     T 28 N, R 10-14 W.
       (2) the term ``Blacklead Area'' means federal lands, owned 
     by the United States Forest Service lands and Bureau of Land 
     Management, located in: T 27 N, R 9 W; T 26 N, R 9-10 W, T 25 
     N, R 8-10 W, T 24 N, R 8-9 W.
       (3) the term ``noproducing leases'' means authorized 
     Federal oil and gas leases that are in existence and in good 
     standing as of the date of enactment of this Act and are 
     located in the Badger-Two Medicine Area or the Blackleaf 
     Area.
       (4) the term ``Secretary'' means the Secretary of the 
     Interior.
       (b) Evaluation.--The Secretary is directed to undertake an 
     evaluation of opportunities to enhance domestic production 
     through the exchange of the nonproducing leases in the 
     Badger-Two Medicine Area and the Blackleaf Area. In 
     undertaking the evaluation, the Secretary shall consult with 
     the Governor of Montana, the lessees holding the nonproducing 
     leases, and interested members of the public. The evaluation 
     shall include--
       (1) A discussion of opportunities to enhance domestic 
     production of oil and gas through an exchange of the 
     nonproducing leases for oil and gas lease tracts of 
     comparable value in Montana or in the Central and Western 
     Gulf of Mexico Planning Areas on the Outer Continental Shelf;
       (2) A discussion of opportunities to enhance domestic 
     production of oil and gas through the issuance of bidding, 
     royalty, or rental credits for use on federal onshore oil and 
     gas leases in Montana or in the Central and Western Gulf of 
     Mexico Planning Areas on the Outer Continental Shelf in 
     exchange for the cancellation of the nonproducing leases:
       (3) A discussion of any other appropriate opportunities to 
     exchange the nonproducing leases or provide compensation for 
     their cancellation with the consent of the lessee.
       (4) Views of interested parties, including the written 
     views of the State of Montana;
       (5) A discussion of the level of interest of the holders of 
     the nonproducing lessees in the exchange of such interest;
       (6) Recommendations regarding the advisability of pursuing 
     such exchanges; and
       (7) Recommendations regarding changes in law and regulation 
     needed to enable the Secretary to undertake such an exchange.
       The Secretary shall transmit the evaluation to the 
     Committee on Energy and Natural Resources of the Senate and 
     the Committee on Resources of the House of Representatives 
     within two years after the date of enactment of this Act.
       (c) Valuation of Nonproducing Leases.--For purposes of the 
     evaluation, the value of

[[Page 5214]]

     each nonproducing lease shall be an amount equal to--
       (1) consideration paid by the current lessee for each 
     nonproducing lease; plus
       (2) all direct expenditures made by the current lessee 
     prior to the date of enactment of this Act in connection with 
     the exploration or development, or both, of such lease (plus 
     interest on such consideration and such expenditures from the 
     date of payment to date of issuance of the credits); minus
       (3) the sum of the revenues from the nonproducing lease.
       (d) Suspension of Leases.--In order to allow for the 
     evaluation under this section and review by the Congress, 
     nonproducing leases in the Badger-Two Medicine Area shall be 
     suspended for a period of three years commencing from the 
     date of enactment of this Act.
       (e) Limitation on Suspension of Leases.--The suspension 
     referred to in subsection (d) shall not apply to nonproducing 
     leases located in the Blackleaf Area.
       (f) Authorization of Appropriations.--There are hereby 
     authorized to be appropriated such sums as may be necessary 
     to carry out the purposes of this section.
                                  ____

  SA 3209. Mr. WELLSTONE submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 373, strike lines 3 and 4 and insert the following:
     sources;
       (3) take into account the findings of the initial report 
     developed under section 1317(a); and
       (4) provide for the comprehensive collection and

       On page 476, between lines 16 and 17, insert the following:

  PART I--CARBON SEQUESTRATION RESEARCH, DEMONSTRATION PROJECTS, AND 
                                OUTREACH

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

 PART II--FOUNDATIONS FOR A NATIONAL CARBON SEQUESTRATION BASELINE AND 
                           ACCOUNTING SYSTEM

     SEC. 1315. PURPOSE.

       The purpose of this part is to establish foundations for a 
     national carbon sequestration baseline and accounting system 
     to support development and assessment of programs and 
     policies that encourage environmentally beneficial carbon 
     sequestration and carbon storage practices.

     SEC. 1316. DEFINITIONS.

       In this part:
       (1) Accounting system.--
       (A) In general.--The term ``accounting system'' means a 
     system for quantifying increases or decreases, relative to a 
     comprehensive baseline and a reference case, in carbon 
     release, carbon sequestration, or carbon storage in biomass 
     and soil (excluding carbon release, carbon sequestration, or 
     carbon storage resulting from the planting or harvesting of 
     annual crops) that result from natural or human-caused 
     changes in natural resources or land uses, practices, or 
     activities.
       (B) Inclusion.--The term ``accounting system'' includes 
     parameters that are sufficient to provide a basis for spatial 
     or georeferenced tracking of changes in levels of carbon 
     storage that can be measured and assessed over time.
       (2) Baseline.--The term ``baseline'' means a quantification 
     of the carbon stored in biomass and soil that is associated 
     with all natural resources, or land uses, practices, or 
     activities, within a specific land area at a specific point 
     in time.
       (3) Biomass.--The term ``biomass'' means roots, stems, or 
     foliage of vegetation.
       (4) Carbon release.--
       (A) In general.--The term ``carbon release'' means a 
     release of carbon as a result of a natural cause or a change 
     in a land or resource use, practice, or activity.
       (B) Exclusion.--The term ``carbon release'' does not 
     include a release of carbon as a result of the burning of 
     fossil fuel.
       (5) Carbon sequestration.--The term ``carbon 
     sequestration'' means the process of increasing the carbon 
     content in biomass and soil through a biological method (such 
     as photosynthesis) that captures or removes carbon from the 
     atmosphere.
       (6) Carbon storage.--The term ``carbon storage'' means the 
     quantity of carbon stored in biomass and soil.
       (7) Carbon storage performance indicator.--The term 
     ``carbon storage performance indicator'' means a set of 
     scientifically based computations (including a model and a 
     reference table) that can be used by landowners and others to 
     easily extrapolate a quantification of carbon storage 
     independent from or in combination with sampling.
       (8) Federal agency.--The term ``Federal agency'' includes--
       (A) the Environmental Protection Agency;
       (B) the National Air and Space Administration; and
       (C) appropriate agencies in--
       (i) the Department of Agriculture;
       (ii) the Department of Commerce;
       (iii) the Department of Energy; and
       (iv) the Department of the Interior.
       (9) Pilot area.--The term ``pilot area'' means an area 
     consisting of 1 or more States in which a pilot program under 
     section 1318 is carried out.
       (10) Reference case.--The term ``reference case'' means a 
     quantified projection of carbon release, carbon 
     sequestration, or carbon storage reflecting a typical 
     scenario against which the effects of a program, policy, or 
     project can be assessed.
       (11) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.

     SEC. 1317. ESTABLISHMENT OF FOUNDATIONS FOR A NATIONAL 
                   BASELINE AND ACCOUNTING SYSTEM.

       (a) Annual Reports on Establishment.--Not later than 1 year 
     after the date of enactment of this Act, the Secretary, in 
     collaboration with other Federal agencies and in consultation 
     with eligible entities carrying out pilot programs under 
     section 1318, shall submit to Congress a report, and in each 
     of the 4 years thereafter shall submit an updated report, on 
     the technical, information, and administrative requirements, 
     institutional relationships, infrastructure, and funding 
     (including funding of startup costs and maintenance costs) 
     needed to establish a national baseline and accounting 
     system, including--
       (1) methodologies for quantification and measurement of 
     carbon release, carbon sequestration, and carbon storage, and 
     release and sequestration of other greenhouse gases, 
     including methodologies--
       (A) to develop reference cases for various types of 
     activities and geographic locations;
       (B) to cover subsequent releases under the accounting 
     system; and
       (C) to track or estimate changes in carbon release, carbon 
     sequestration, or carbon storage in land outside an area that 
     are caused by changes in activities in another area;
       (2) institutional relationships necessary to collect 
     information, including the role that States may fulfill;
       (3) means of determining the adequacy of information and 
     the necessary level of precision;
       (4) alternative approaches for developing a national 
     baseline and accounting system in the most cost-effective 
     manner while maintaining necessary levels of precision and 
     accuracy;
       (5) an assessment of the appropriate uses for, and the 
     feasibility of developing, carbon storage performance 
     indicators for carbon release, carbon sequestration, and 
     carbon storage, and performance indicators for other 
     greenhouse gases, for various land and resource uses and 
     forest, agricultural, and cropland management practices 
     (including an evaluation of associated economic and financial 
     costs);
       (6) the extent to which a national baseline and accounting 
     system could support a range of policy and program 
     initiatives to encourage environmentally beneficial carbon 
     sequestration and carbon storage practices, including 
     practices that result in the benefits described in section 
     1318(c)(2)(D);
       (7) requirements for the management and access to data by 
     the public;
       (8) issues, options, and methodologies relating to 
     accounting for carbon content in wood products and annual 
     crops;
       (9) an assessment of national, State, and local policies 
     and programs--
       (A) to encourage carbon sequestration and carbon storage 
     practices that also have other beneficial impacts on the 
     environment; and
       (B) to discourage those practices that have harmful 
     impacts;
       (10) innovative methods for financing the continued 
     development of a national baseline and accounting system; and
       (11) recommendations to Congress on appropriate 
     considerations in carrying out the purposes of this part.
       (b) Development of Carbon Storage Performance Indicators.--
       (1) In general.--During the 5-year period beginning on the 
     date of enactment of this Act, the Secretary, in 
     collaboration with other Federal agencies, shall conduct 
     research on, develop, and publish as appropriate, carbon 
     storage performance indicators that assist landowners and 
     others in cost-effective and reliable quantification of the 
     carbon release, carbon sequestration, and carbon storage 
     expected to result from various land and resource uses, 
     practices, or activities over various periods of time.
       (2) Required elements.--In carrying out paragraph (1), the 
     Secretary shall--
       (A) review relevant information, including information 
     developed under the pilot programs under section 1318;
       (B) determine the extent to which carbon storage 
     performance indicators should vary according to--
       (i) region of the United States;
       (ii) biological, ecological, or physiological criterion; or
       (iii) type of management practice;
       (C) consider--
       (i) various levels of precision for quantification and 
     measurement based on a range of uses; and
       (ii) implications for potential uses of the carbon storage 
     performance indicators, including such uses as--

[[Page 5215]]

       (I) communications to encourage beneficial practices;
       (II) initial screening for potential benefits from certain 
     practices;
       (III) quantification of a national baseline and accounting 
     system and reference case, including uses--

       (aa) to augment sampling to reduce costs;
       (bb) to ensure inclusion of subsequent releases of 
     quantified carbon storage and carbon sequestration to address 
     permanence and long-term trends in carbon storage; and
       (cc) to simplify assessment of impacts within and outside a 
     specific area; and

       (IV) project-level quantification of carbon release, carbon 
     sequestration, and carbon storage;

       (D) consider the implications of establishing performance 
     indicators for greenhouse gases other than carbon;
       (E)(i) identify practices that--
       (I) consistently store, release, or sequester carbon over a 
     specified period of time; and
       (II) offer additional environmental benefits, including 
     practices that result in the benefits described in section 
     1318(c)(2)(D); and
       (ii) identify factors that may serve to affect the 
     performance of the practices described in clause (i) with 
     respect to carbon sequestration and environmental impacts; 
     and
       (F) provide information on methods by which landowners and 
     others may evaluate costs and return on investment over time.
       (3) Peer review.--The carbon storage performance indicators 
     developed under paragraph (1) shall be subjected to peer 
     review by members of the public and private science and 
     policy communities and potential user groups, including 
     eligible entities carrying out pilot programs under section 
     1318.
       (c) Report on Design Options for National Baseline and 
     Accounting System.--Not later than 5 years after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report that--
       (1) assesses and describes options for the design and 
     development of a publicly accessible national baseline and 
     accounting system; and
       (2) summarizes and synthesizes relevant findings of the 
     annual reports submitted under subsection (a).

     SEC. 1318. PILOT PROGRAMS TO ESTABLISH BASELINES AND 
                   ACCOUNTING SYSTEMS.

       (a) Grants.--
       (1) In general.--The Secretary, in consultation with other 
     Federal agencies, shall make competitive grants to not more 
     than 5 eligible entities to carry out pilot programs to 
     demonstrate and assess the feasibility of publicly 
     accessible, automated baselines and accounting systems that 
     are designed--
       (A) to assess trends; and
       (B) to assist in developing and assessing carbon 
     sequestration and storage policies and programs.
       (2) Eligible entities.--To be eligible to receive a grant 
     under this section, an entity shall be--
       (A) a State entity or consortium of State entities;
       (B) a research institution with a demonstrated capacity for 
     research relating to this part, such as--
       (i) an institution of higher education (as defined in 
     section 101 of the Higher Education Act of 1965 (20 U.S.C. 
     1001)); and
       (ii) a land-grant college or university (as defined in 
     section 1404 of the National Agricultural Research, 
     Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103));
       (C) an intergovernmental entity;
       (D) a nonprofit entity; or
       (E) a consortium of entities described in any of 
     subparagraphs (A) through (D).
       (b) Applications.--
       (1) In general.--To receive a grant to carry out a pilot 
     program, an eligible entity shall submit to the Secretary an 
     application at such time, in such form, and containing such 
     information as the Secretary may require.
       (2) Required elements.--An application by an eligible 
     entity to carry out a pilot program shall contain, at a 
     minimum, a description of--
       (A) sources, level of detail, aggregation, and plans for 
     filling gaps in information that the eligible entity would 
     use to carry out the pilot program;
       (B) proposed management of, and access by the public to, 
     the information described in subparagraph (A), including--
       (i) design of automation support; and
       (ii) reporting and quality control of data submissions and 
     data entry in a manner that protects confidentiality;
       (C) means by which recommendations for cost-effective 
     mechanisms for a national, multistate, or State baseline and 
     accounting system may result from the pilot program;
       (D) means by which a baseline and accounting system, 
     including a reference case, may be developed;
       (E) institutional arrangements that the eligible entity 
     will use to collect and manage relevant information from 
     various sources and levels of government;
       (F) the participation of the governmental and 
     nongovernmental interests that would be affected by the pilot 
     program;
       (G) a sampling plan to provide for the measurement of 
     carbon at the beginning and end of the pilot program; and
       (H) information on how the pilot program could--
       (i) support improved agricultural and forest management 
     practices to reduce greenhouse gas emissions and offer other 
     environmental, social, and economic benefits;
       (ii) recognize long-term commitment of land to uses that 
     store rather than release carbon and that offer other 
     environmental benefits; and
       (iii) lead to development of new mechanisms for improved 
     institutional coordination, cooperation, and communication 
     among Federal, State, and local governmental organizations 
     involved in public and private land management, policy, and 
     practice.
       (c) Priorities in Funding.--
       (1) In general.--In selecting pilot programs for grants 
     under this section, the Secretary shall give priority to 
     pilot programs that have the greatest potential for advancing 
     the purpose of this part.
       (2) Considerations.--In carrying out paragraph (1), the 
     Secretary shall consider--
       (A) the percentage of land in a pilot area that is forest 
     and the percentage of land in a pilot area that is cropland, 
     as determined under the National Resources Inventory for 1997 
     conducted by the Natural Resources Conservation Service;
       (B) the regional distribution of pilot areas to reflect a 
     wide variety of forest, agriculture, and ecosystem settings;
       (C) innovations in regulations, policies, programs, or 
     voluntary incentives adopted or proposed by the eligible 
     entity to encourage legal, financial, and other mechanisms 
     that would create incentives for environmentally beneficial 
     carbon sequestration and carbon storage on public and private 
     land; and
       (D) the potential for beneficial environmental, social, and 
     economic results through--
       (i) reduction of threats from global climate change; and
       (ii) ancillary benefits such as--

       (I) prevention of erosion;
       (II) flood control;
       (III) soil conservation, fertility, and productivity;
       (IV) improved water quality;
       (V) protection and restoration of ecosystems and fish and 
     wildlife habitat;
       (VI) management and conservation of forests, including 
     through reforestation practices; and
       (VII) management of water resources.

       (d) Guidelines for Pilot Programs.--Not later than 1 year 
     after the date of enactment of this Act, the Secretary, in 
     collaboration with other Federal agencies and eligible 
     entities desiring to carry out pilot programs, shall develop 
     guidelines for the pilot programs.
       (e) Access to Information.--To assist States in developing 
     baselines and accounting systems, the Secretary shall 
     facilitate access to the most up-to-date information on 
     carbon sequestration and carbon storage from--
       (1) the Department of Agriculture, through involvement of 
     the Agricultural Research Service, the Cooperative State 
     Research, Education, and Extension Service, the Forest 
     Service, and the Natural Resources Conservation Service;
       (2) the Environmental Protection Agency;
       (3) the National Aeronautics and Space Administration; and
       (4) other agencies and Federal, State, or private sources 
     of information.
       (f) Reports.--An eligible entity that receives a grant 
     under this section shall submit to the Secretary such reports 
     as the Secretary may require.

     SEC. 1319. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated to carry out this 
     part $20,000,000 for the period of fiscal years 2003 through 
     2007, of which--
       (1) $5,000,000 shall be used--
       (A) to carry out section 1317; and
       (B) to pay administrative expenses incurred in carrying out 
     section 1318; and
       (2) $15,000,000 shall be used for grants under section 
     1318.
                                  ____

  SA 3210. Mr. CORZINE (for himself and Mr. Fitzgerald) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 143, between lines 22 and 23, insert the following:
       (d) Financial Protection of Government.--
       (1) In general.--To the extent practicable, the Secretary 
     of Energy shall ensure that the Government is compensated for 
     the risk assumed in making loan guarantees under this 
     section.
       (2) Government participation in gains.--To the extent to 
     which any entity accepts financial assistance under this 
     section by accepting the proceeds of a loan guaranteed by the 
     Government under this section, the Secretary of Energy may 
     enter into a contract

[[Page 5216]]

     under which the Government, contingent on the financial 
     success of the entity, will participate in the gains of the 
     entity or of holders of securities of the entity through the 
     use of such instruments as warrants, stock options, common or 
     preferred stock, or other appropriate equity instruments.
       (3) Deposit in treasury.--All amounts collected by the 
     Secretary of the Treasury under this section shall be 
     deposited in the Treasury as miscellaneous receipts.
                                  ____

  SA 3211. Mrs. FEINSTEIN (for herself and Ms. Snowe) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the end of subtitle A of title VIII, insert the 
     following:

     SEC. 820A. ADDITIONAL REQUIREMENTS FOR VEHICLE FUEL ECONOMY.

       (a) Relationship to Provision on Fuel Economy Standards for 
     Pickup Trucks.--Section 811 (relating to fuel economy 
     standards for pickup trucks) shall not take effect.
       (b) Increased Average Fuel Economy Standard for Light 
     Trucks.--
       (1) Definition of light truck.--Section 32901(a) of title 
     49, United States Code, is amended by adding at the end the 
     following new paragraph:
       ``(17) `light truck' has the meaning given that term in 
     regulations prescribed by the Secretary of Transportation in 
     the administration of this chapter.''.
       (2) Requirement for increased standard.--Section 32902(a) 
     of title 49, United States Code, is amended--
       (A) by inserting ``(1)'' after ``automobiles.--'';
       (B) by inserting before the period at the end of the third 
     sentence the following: ``, subject to paragraph (2)''; and
       (C) by adding at the end the following new paragraph:
       ``(2) The average fuel economy standard for light trucks 
     manufactured by a manufacturer may not be less than 27.5 
     miles per gallon, except that the average fuel economy 
     standard for--
       ``(A) light trucks manufactured by a manufacturer in a 
     model year after model year 2005 and before model year 2008 
     may not be less than 22.5 miles per gallon; and
       ``(B) light trucks manufactured by a manufacturer in a 
     model year after model year 2007 and before model year 2012 
     may not be less than 25 miles per gallon.''.
       (3) Applicability.--Paragraph (2) of section 32902(a) of 
     such title does not apply with respect to light trucks 
     manufactured before model year 2003.
       (c) Fuel Economy Standards for Automobiles Up to 10,000 
     Pounds Gross Vehicle Weight.--
       (1) Vehicles defined as automobiles.--Section 32901(a)(3) 
     of title 49, United States Code, is amended by striking ``is 
     rated at--'' and all that follows through the end and 
     inserting ``is rated at not more than 10,000 pounds gross 
     vehicle weight.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on January 1, 2007.
       (d)  Fuel Economy of the Federal Fleet of Vehicles.--
       (1) Baseline average fuel economy.--The head of each 
     executive agency shall determine, for each class of vehicles 
     that are in the agency's fleet of vehicles in fiscal year 
     2002, the average fuel economy for all of the vehicles in 
     that class that are in the agency's fleet of vehicles for 
     that fiscal year. For the purposes of this section, the 
     average fuel economy so determined for the agency's vehicles 
     in a class of vehicles shall be the baseline average fuel 
     economy for the agency's fleet of vehicles in that class.
       (2) Increase of average fuel economy.--The head of an 
     executive agency shall manage the procurement of vehicles in 
     each class of vehicles for that agency in such a manner 
     that--
       (A) not later than September 30, 2003, the average fuel 
     economy of the new vehicles in the agency's fleet of vehicles 
     in each class of vehicles is not less than 3 miles per gallon 
     higher than the baseline average fuel economy determined for 
     that class; and
       (B) not later than September 30, 2005, the average fuel 
     economy of the new vehicles in the agency's fleet of vehicles 
     in each class of vehicles is not less than 6 miles per gallon 
     higher than the baseline average fuel economy determined for 
     that class.
       (3) Calculation of average fuel economy.--Average fuel 
     economy shall be calculated for the purposes of this section 
     in accordance with guidance which the Secretary of 
     Transportation shall prescribe for the implementation of this 
     section.
       (4) Definitions.--In this subsection:
       (A) The term ``class of vehicles'' means a class of 
     vehicles for which an average fuel economy standard is in 
     effect under chapter 329 of title 49, United States Code.
       (B) The term ``executive agency'' has the meaning given the 
     term in section 4(1) of the Office of Federal Procurement 
     Policy Act (41 U.S.C. 403(1)).
       (C) The term ``new vehicle'', with respect to the fleet of 
     vehicles of an executive agency, means a vehicle procured by 
     or for the agency after September 30, 2002.
                                  ____

  SA 3212. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC.   . SUSPENSION OF DUTIES ON ETHANOL.

       Notwithstanding any other provision of law, no duty shall 
     be imposed on ethanol entered, or withdrawn from warehouse 
     for consumption, beginning on the date that is 15 days after 
     the date of enactment of this Act.
                                  ____

  SA 3213. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 188, line 15, insert ``(excluding California, New 
     York, and any other State that demonstrates to the 
     satisfaction of the Administrator that the State is in 
     compliance with all requirements of this Act)'' after 
     ``United States''.
                                  ____

  SA 3214. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 188, line 15, insert ``(excluding California and 
     New York)'' after ``United States''.
                                  ____

  SA 3215. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 189, strike line 3 and all that follows 
     through page 199, line 17, and insert the following:
     shall be 1.62 in 2007.
       ``(B) Applicable volume.--
       (i) Calendar years 2007 through 2012.--For the purpose of 
     subparagraph (A), the applicable volume for any of calendar 
     years 2007 through 2012 shall be determined in accordance 
     with the following table:

                  Applicable volume of renewable fuel

``Calendar year:                               (In billions of gallons)
    2007............................................................3.2

    2008............................................................3.5

    2009............................................................3.9

    2010............................................................4.3

    2011............................................................4.7

    2012...........................................................5.0.
       ``(ii) Calendar year 2013 and thereafter.--For the purpose 
     of subparagraph (A), the applicable volume for calendar year 
     2013 and each calendar year thereafter shall be equal to the 
     product obtained by multiplying--

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

       ``(aa) 5.0 billion gallons of renewable fuels; bears to
       ``(bb) the number of gallons of gasoline sold or introduced 
     into commerce in calendar year 2012.
       ``(3) Applicable percentages.--Not later than October 31 of 
     each of calendar years 2006 through 2011, the Administrator 
     of the Energy Information Administration shall provide the 
     Administrator an estimate of the volumes of gasoline sales in 
     the United States for the coming calendar year. Based on such 
     estimates, the Administrator shall by November 30 of each of 
     calendar years 2008 through 2011, determine and publish in

[[Page 5217]]

     the Federal Register, the renewable fuel obligation, on a 
     volume percentage of gasoline basis, applicable to refiners, 
     blenders, distributors and importers, as appropriate, for the 
     coming calendar year, to ensure that the requirements of 
     paragraph (2) are met. For each calendar year, the 
     Administrator shall establish a single applicable percentage 
     that applies to all parties, and make provision to avoid 
     redundant obligations. In determining the applicable 
     percentages, the Administrator shall make adjustments to 
     account for the use of renewable fuels by exempt small 
     refiners during the previous year.
       ``(4) Cellulosic biomass ethanol.--For the purpose of 
     paragraph (2), 1 gallon of cellulosic biomass ethanol shall 
     be considered to be the equivalent of 1.5 gallon of renewable 
     fuel.
       ``(5) Credit program.--
       ``(A) In general.--The regulations promulgated to carry out 
     this subsection shall provide for the generation of an 
     appropriate amount of credits by any person that refines, 
     blends, distributes or imports gasoline that contains a 
     quantity of renewable fuel that is greater than the quantity 
     required under paragraph (2). Such regulations shall provide 
     for the generation of an appropriate amount of credits for 
     biodiesel fuel. If a small refinery notifies the 
     Administrator that it waives the exemption provided by this 
     Act, the regulations shall provide for the generation of 
     credits by the small refinery beginning in the year following 
     such notification.
       ``(B) Use of credits.--A person that generates credits 
     under subparagraph (A) may use the credits, or transfer all 
     or a portion of the credits to another person, for the 
     purpose of complying with paragraph (2).
       ``(C) Life of credits.--A credit generated under this 
     paragraph shall be valid to show compliance:
       (i) in the calendar year in which the credit was generated 
     or the next calendar year, or
       (ii) in the calendar year in which the credit was generated 
     or next two consecutive calendar years if the Administrator 
     promulgates regulations under paragraph (6).
       ``(D) Inability to purchase sufficient credits.--The 
     regulations promulgated to carry out this subsection shall 
     include provisions allowing any person that is unable to 
     generate or purchase sufficient credits to meet the 
     requirements under paragraph (2) to carry forward a 
     renewables deficit provided that, in the calendar year 
     following the year in which the renewables deficit is 
     created, such person shall achieve compliance with the 
     renewables requirement under paragraph (2), and shall 
     generate or purchase additional renewables credits to offset 
     the renewables deficit of the previous year.
       ``(6) Seasonal variations in renewable fuel use.--
       ``(A) Study.--For each of calendar years 2007 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 1 of the periods specified in subparagraph 
     (D) of the calendar year; and
       ``(ii) a pattern of excessive seasonal variation described 
     in clause (i) will continue in subsequent calendar years.
       ``(D) Periods.--The two periods referred to in this 
     paragraph are--
       ``(i) April through September; and
       ``(ii) January through March and October through December.
       ``(E) Exclusions.--Renewable fuels blended or consumed in 
     2007 in a state which has received a waiver under section 
     209(b) shall not be included in the study in subparagraph 
     (A).
       ``(7) Waivers.--
       ``(A) In general.--The Administrator, in consultation with 
     the Secretary of Agriculture and the Secretary of Energy, may 
     waive the requirement of paragraph (2) in whole or in part on 
     petition by 1 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--
       ``(i) shall approve or deny a State petition for a waiver 
     of the requirement of paragraph (2) within 180 days after the 
     date on which the petition is received; but
       ``(ii) may extend that period for up to 60 additional days 
     to provide for public notice and opportunity for comment and 
     for consideration of the comments submitted.
       ``(C) Termination of waivers.--A waiver granted under 
     subparagraph (A) shall terminate after 1 year, but may be 
     renewed by the Administrator after consultation with the 
     Secretary of Agriculture and the Secretary of Energy.
       ``(8) Study and waiver for initial year of program.--Not 
     later than 180 days from enactment, the Secretary of Energy 
     shall complete for the Administrator a study assessing 
     whether the renewable fuels requirement under paragraph (2) 
     will likely result in significant adverse consumer impacts in 
     2007, on a national, regional or state basis. Such study 
     shall evaluate renewable fuel supplies and prices, blendstock 
     supplies, and supply and distribution system capabilities. 
     Based on such study, the Secretary shall make specific 
     recommendations to the Administrator regarding waiver of the 
     requirements of paragraph (2), in whole or in part, to avoid 
     any such adverse impacts. Within 270 days from enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2007. This provision shall not be interpreted as limiting the 
     Administrator's authority to waive the requirements of 
     paragraph (2) in whole, or in part, under paragraph (7), 
     pertaining to waivers.
       ``(9) Small refineries.--
       ``(A) In general.--The requirement of paragraph (2) shall 
     not apply to small refineries until January 1, 2008. Not 
     later than December 31, 2006, the Secretary of Energy shall 
     complete for the Administrator a study to determine whether 
     the requirement of paragraph (2) would impose a 
     disproportionate economic hardship on small refineries. For 
     any small refinery that the Secretary of Energy determines 
     would experience a disproportionate economic hardship, the 
     Administrator shall extend the small refinery exemption for 
     such small refinery for no less than two additional years.
       ``(B) Economic hardship.--
       ``(i) 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).
       ``(10) Study.--Not later than 180 days after the date of 
     enactment, the Secretary of Energy shall complete for the 
     Administrator a study assessing whether the renewable fuels 
     requirement under paragraph (2) will likely result in 
     significant adverse consumer impacts in 2007, 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 date of enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2007. This provision
                                  ____

  SA 3216. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 189, strike line 3 and all that follows 
     through page 199, line 17, and insert the following:
     shall be 1.62 in 2008.
       ``(B) Applicable volume.--
       (i) Calendar years 2008 through 2012.--For the purpose of 
     subparagraph (A), the applicable volume for any of calendar 
     years 2008

[[Page 5218]]

     through 2012 shall be determined in accordance with the 
     following table:

                  Applicable volume of renewable fuel

``Calendar year:                               (In billions of gallons)
    2008............................................................3.5

    2009............................................................3.9

    2010............................................................4.3

    2011............................................................4.7

    2012...........................................................5.0.
       ``(ii) Calendar year 2013 and thereafter.--For the purpose 
     of subparagraph (A), the applicable volume for calendar year 
     2013 and each calendar year thereafter shall be equal to the 
     product obtained by multiplying--

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

       ``(aa) 5.0 billion gallons of renewable fuels; bears to
       ``(bb) the number of gallons of gasoline sold or introduced 
     into commerce in calendar year 2012.
       ``(3) Applicable percentages.--Not later than October 31 of 
     each of calendar years 2007 through 2011, the Administrator 
     of the Energy Information Administration shall provide the 
     Administrator an estimate of the volumes of gasoline sales in 
     the United States for the coming calendar year. Based on such 
     estimates, the Administrator shall by November 30 of each of 
     calendar years 2007 through 2011, determine and publish in 
     the Federal Register, the renewable fuel obligation, on a 
     volume percentage of gasoline basis, applicable to refiners, 
     blenders, distributors and importers, as appropriate, for the 
     coming calendar year, to ensure that the requirements of 
     paragraph (2) are met. For each calendar year, the 
     Administrator shall establish a single applicable percentage 
     that applies to all parties, and make provision to avoid 
     redundant obligations. In determining the applicable 
     percentages, the Administrator shall make adjustments to 
     account for the use of renewable fuels by exempt small 
     refiners during the previous year.
       ``(4) Cellulosic biomass ethanol.--For the purpose of 
     paragraph (2), 1 gallon of cellulosic biomass ethanol shall 
     be considered to be the equivalent of 1.5 gallon of renewable 
     fuel.
       ``(5) Credit program.--
       ``(A) In general.--The regulations promulgated to carry out 
     this subsection shall provide for the generation of an 
     appropriate amount of credits by any person that refines, 
     blends, distributes or imports gasoline that contains a 
     quantity of renewable fuel that is greater than the quantity 
     required under paragraph (2). Such regulations shall provide 
     for the generation of an appropriate amount of credits for 
     biodiesel fuel. If a small refinery notifies the 
     Administrator that it waives the exemption provided by this 
     Act, the regulations shall provide for the generation of 
     credits by the small refinery beginning in the year following 
     such notification.
       ``(B) Use of credits.--A person that generates credits 
     under subparagraph (A) may use the credits, or transfer all 
     or a portion of the credits to another person, for the 
     purpose of complying with paragraph (2).
       ``(C) Life of credits.--A credit generated under this 
     paragraph shall be valid to show compliance:
       (i) in the calendar year in which the credit was generated 
     or the next calendar year, or
       (ii) in the calendar year in which the credit was generated 
     or next two consecutive calendar years if the Administrator 
     promulgates regulations under paragraph (6).
       ``(D) Inability to purchase sufficient credits.--The 
     regulations promulgated to carry out this subsection shall 
     include provisions allowing any person that is unable to 
     generate or purchase sufficient credits to meet the 
     requirements under paragraph (2) to carry forward a 
     renewables deficit provided that, in the calendar year 
     following the year in which the renewables deficit is 
     created, such person shall achieve compliance with the 
     renewables requirement under paragraph (2), and shall 
     generate or purchase additional renewables credits to offset 
     the renewables deficit of the previous year.
       ``(6) Seasonal variations in renewable fuel use.--
       ``(A) Study.--For each of calendar years 2008 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 1 of the periods specified in subparagraph 
     (D) of the calendar year; and
       ``(ii) a pattern of excessive seasonal variation described 
     in clause (i) will continue in subsequent calendar years.
       ``(D) Periods.--The two periods referred to in this 
     paragraph are--
       ``(i) April through September; and
       ``(ii) January through March and October through December.
       ``(E) Exclusions.--Renewable fuels blended or consumed in 
     2008 in a state which has received a waiver under section 
     209(b) shall not be included in the study in subparagraph 
     (A).
       ``(7) Waivers.--
       ``(A) In general.--The Administrator, in consultation with 
     the Secretary of Agriculture and the Secretary of Energy, may 
     waive the requirement of paragraph (2) in whole or in part on 
     petition by 1 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--
       ``(i) shall approve or deny a State petition for a waiver 
     of the requirement of paragraph (2) within 180 days after the 
     date on which the petition is received; but
       ``(ii) may extend that period for up to 60 additional days 
     to provide for public notice and opportunity for comment and 
     for consideration of the comments submitted.
       ``(C) Termination of waivers.--A waiver granted under 
     subparagraph (A) shall terminate after 1 year, but may be 
     renewed by the Administrator after consultation with the 
     Secretary of Agriculture and the Secretary of Energy.
       ``(8) Study and waiver for initial year of program.--Not 
     later than 180 days from enactment, the Secretary of Energy 
     shall complete for the Administrator a study assessing 
     whether the renewable fuels requirement under paragraph (2) 
     will likely result in significant adverse consumer impacts in 
     2008, on a national, regional or state basis. Such study 
     shall evaluate renewable fuel supplies and prices, blendstock 
     supplies, and supply and distribution system capabilities. 
     Based on such study, the Secretary shall make specific 
     recommendations to the Administrator regarding waiver of the 
     requirements of paragraph (2), in whole or in part, to avoid 
     any such adverse impacts. Within 270 days from enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2008. This provision shall not be interpreted as limiting the 
     Administrator's authority to waive the requirements of 
     paragraph (2) in whole, or in part, under paragraph (7), 
     pertaining to waivers.
       ``(9) Small refineries.--
       ``(A) In general.--The requirement of paragraph (2) shall 
     not apply to small refineries until January 1, 2008. Not 
     later than December 31, 2006, the Secretary of Energy shall 
     complete for the Administrator a study to determine whether 
     the requirement of paragraph (2) would impose a 
     disproportionate economic hardship on small refineries. For 
     any small refinery that the Secretary of Energy determines 
     would experience a disproportionate economic hardship, the 
     Administrator shall extend the small refinery exemption for 
     such small refinery for no less than two additional years.
       ``(B) Economic hardship.--
       ``(i) 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).
       ``(10) Study.--Not later than 180 days after the date of 
     enactment, the Secretary of Energy shall complete for the 
     Administrator a study assessing whether the renewable fuels

[[Page 5219]]

     requirement under paragraph (2) will likely result in 
     significant adverse consumer impacts in 2008, 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 date of enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2007. This provision
                                  ____

  SA 3217. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 189, strike line 3 and all that follows 
     through page 199, line 17, and insert the following:
     shall be 1.62 in 2009.
       ``(B) Applicable volume.--
       (i) Calendar years 2009 through 2012.--For the purpose of 
     subparagraph (A), the applicable volume for any of calendar 
     years 2009 through 2012 shall be determined in accordance 
     with the following table:

                  Applicable volume of renewable fuel

``Calendar year:                               (In billions of gallons)
    2009............................................................3.9

    2010............................................................4.3

    2011............................................................4.7

    2012...........................................................5.0.
       ``(ii) Calendar year 2013 and thereafter.--For the purpose 
     of subparagraph (A), the applicable volume for calendar year 
     2013 and each calendar year thereafter shall be equal to the 
     product obtained by multiplying--

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

       ``(aa) 5.0 billion gallons of renewable fuels; bears to
       ``(bb) the number of gallons of gasoline sold or introduced 
     into commerce in calendar year 2012.
       ``(3) Applicable percentages.--Not later than October 31 of 
     each of calendar years 2008 through 2011, the Administrator 
     of the Energy Information Administration shall provide the 
     Administrator an estimate of the volumes of gasoline sales in 
     the United States for the coming calendar year. Based on such 
     estimates, the Administrator shall by November 30 of each of 
     calendar years 2008 through 2011, determine and publish in 
     the Federal Register, the renewable fuel obligation, on a 
     volume percentage of gasoline basis, applicable to refiners, 
     blenders, distributors and importers, as appropriate, for the 
     coming calendar year, to ensure that the requirements of 
     paragraph (2) are met. For each calendar year, the 
     Administrator shall establish a single applicable percentage 
     that applies to all parties, and make provision to avoid 
     redundant obligations. In determining the applicable 
     percentages, the Administrator shall make adjustments to 
     account for the use of renewable fuels by exempt small 
     refiners during the previous year.
       ``(4) Cellulosic biomass ethanol.--For the purpose of 
     paragraph (2), 1 gallon of cellulosic biomass ethanol shall 
     be considered to be the equivalent of 1.5 gallon of renewable 
     fuel.
       ``(5) Credit program.--
       ``(A) In general.--The regulations promulgated to carry out 
     this subsection shall provide for the generation of an 
     appropriate amount of credits by any person that refines, 
     blends, distributes or imports gasoline that contains a 
     quantity of renewable fuel that is greater than the quantity 
     required under paragraph (2). Such regulations shall provide 
     for the generation of an appropriate amount of credits for 
     biodiesel fuel. If a small refinery notifies the 
     Administrator that it waives the exemption provided by this 
     Act, the regulations shall provide for the generation of 
     credits by the small refinery beginning in the year following 
     such notification.
       ``(B) Use of credits.--A person that generates credits 
     under subparagraph (A) may use the credits, or transfer all 
     or a portion of the credits to another person, for the 
     purpose of complying with paragraph (2).
       ``(C) Life of credits.--A credit generated under this 
     paragraph shall be valid to show compliance:
       (i) in the calendar year in which the credit was generated 
     or the next calendar year, or
       (ii) in the calendar year in which the credit was generated 
     or next two consecutive calendar years if the Administrator 
     promulgates regulations under paragraph (6).
       ``(D) Inability to purchase sufficient credits.--The 
     regulations promulgated to carry out this subsection shall 
     include provisions allowing any person that is unable to 
     generate or purchase sufficient credits to meet the 
     requirements under paragraph (2) to carry forward a 
     renewables deficit provided that, in the calendar year 
     following the year in which the renewables deficit is 
     created, such person shall achieve compliance with the 
     renewables requirement under paragraph (2), and shall 
     generate or purchase additional renewables credits to offset 
     the renewables deficit of the previous year.
       ``(6) Seasonal variations in renewable fuel use.--
       ``(A) Study.--For each of calendar years 2009 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 1 of the periods specified in subparagraph 
     (D) of the calendar year; and
       ``(ii) a pattern of excessive seasonal variation described 
     in clause (i) will continue in subsequent calendar years.
       ``(D) Periods.--The two periods referred to in this 
     paragraph are--
       ``(i) April through September; and
       ``(ii) January through March and October through December.
       ``(E) Exclusions.--Renewable fuels blended or consumed in 
     2009 in a state which has received a waiver under section 
     209(b) shall not be included in the study in subparagraph 
     (A).
       ``(7) Waivers.--
       ``(A) In general.--The Administrator, in consultation with 
     the Secretary of Agriculture and the Secretary of Energy, may 
     waive the requirement of paragraph (2) in whole or in part on 
     petition by 1 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--
       ``(i) shall approve or deny a State petition for a waiver 
     of the requirement of paragraph (2) within 180 days after the 
     date on which the petition is received; but
       ``(ii) may extend that period for up to 60 additional days 
     to provide for public notice and opportunity for comment and 
     for consideration of the comments submitted.
       ``(C) Termination of waivers.--A waiver granted under 
     subparagraph (A) shall terminate after 1 year, but may be 
     renewed by the Administrator after consultation with the 
     Secretary of Agriculture and the Secretary of Energy.
       ``(8) Study and waiver for initial year of program.--Not 
     later than 180 days from enactment, the Secretary of Energy 
     shall complete for the Administrator a study assessing 
     whether the renewable fuels requirement under paragraph (2) 
     will likely result in significant adverse consumer impacts in 
     2009, on a national, regional or state basis. Such study 
     shall evaluate renewable fuel supplies and prices, blendstock 
     supplies, and supply and distribution system capabilities. 
     Based on such study, the Secretary shall make specific 
     recommendations to the Administrator regarding waiver of the 
     requirements of paragraph (2), in whole or in part, to avoid 
     any such adverse impacts. Within 270 days from enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2008. This provision shall not be interpreted as limiting the 
     Administrator's authority to waive the requirements of 
     paragraph (2) in whole, or in part, under paragraph (7), 
     pertaining to waivers.
       ``(9) Small refineries.--
       ``(A) In general.--The requirement of paragraph (2) shall 
     not apply to small refineries until January 1, 2009. Not 
     later than December 31, 2006, the Secretary of Energy shall 
     complete for the Administrator a study

[[Page 5220]]

     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) 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).
       ``(10) Study.--Not later than 180 days after the date of 
     enactment, the Secretary of Energy shall complete for the 
     Administrator a study assessing whether the renewable fuels 
     requirement under paragraph (2) will likely result in 
     significant adverse consumer impacts in 2009, 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 date of enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2008. This provision
                                  ____

  SA 3218. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 189, strike line 3 and all that follows 
     through page 199, line 17, and insert the following:
     shall be 1.62 in 2010.
       ``(B) Applicable volume.--
       (i) Calendar years 2010 through 2012.--For the purpose of 
     subparagraph (A), the applicable volume for any of calendar 
     years 2010 through 2012 shall be determined in accordance 
     with the following table:

                  Applicable volume of renewable fuel

``Calendar year:                               (In billions of gallons)
    2010............................................................4.3

    2011............................................................4.7

    2012...........................................................5.0.
       ``(ii) Calendar year 2013 and thereafter.--For the purpose 
     of subparagraph (A), the applicable volume for calendar year 
     2013 and each calendar year thereafter shall be equal to the 
     product obtained by multiplying--

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

       ``(aa) 5.0 billion gallons of renewable fuels; bears to
       ``(bb) the number of gallons of gasoline sold or introduced 
     into commerce in calendar year 2012.
       ``(3) Applicable percentages.--Not later than October 31 of 
     each of calendar years 2009 through 2011, the Administrator 
     of the Energy Information Administration shall provide the 
     Administrator an estimate of the volumes of gasoline sales in 
     the United States for the coming calendar year. Based on such 
     estimates, the Administrator shall by November 30 of each of 
     calendar years 2009 through 2011 determine and publish in the 
     Federal Register, the renewable fuel obligation, on a volume 
     percentage of gasoline basis, applicable to refiners, 
     blenders, distributors and importers, as appropriate, for the 
     coming calendar year, to ensure that the requirements of 
     paragraph (2) are met. For each calendar year, the 
     Administrator shall establish a single applicable percentage 
     that applies to all parties, and make provision to avoid 
     redundant obligations. In determining the applicable 
     percentages, the Administrator shall make adjustments to 
     account for the use of renewable fuels by exempt small 
     refiners during the previous year.
       ``(4) Cellulosic biomass ethanol.--For the purpose of 
     paragraph (2), 1 gallon of cellulosic biomass ethanol shall 
     be considered to be the equivalent of 1.5 gallon of renewable 
     fuel.
       ``(5) Credit program.--
       ``(A) In general.--The regulations promulgated to carry out 
     this subsection shall provide for the generation of an 
     appropriate amount of credits by any person that refines, 
     blends, distributes or imports gasoline that contains a 
     quantity of renewable fuel that is greater than the quantity 
     required under paragraph (2). Such regulations shall provide 
     for the generation of an appropriate amount of credits for 
     biodiesel fuel. If a small refinery notifies the 
     Administrator that it waives the exemption provided by this 
     Act, the regulations shall provide for the generation of 
     credits by the small refinery beginning in the year following 
     such notification.
       ``(B) Use of credits.--A person that generates credits 
     under subparagraph (A) may use the credits, or transfer all 
     or a portion of the credits to another person, for the 
     purpose of complying with paragraph (2).
       ``(C) Life of credits.--A credit generated under this 
     paragraph shall be valid to show compliance:
       (i) in the calendar year in which the credit was generated 
     or the next calendar year, or
       (ii) in the calendar year in which the credit was generated 
     or next two consecutive calendar years if the Administrator 
     promulgates regulations under paragraph (6).
       ``(D) Inability to purchase sufficient credits.--The 
     regulations promulgated to carry out this subsection shall 
     include provisions allowing any person that is unable to 
     generate or purchase sufficient credits to meet the 
     requirements under paragraph (2) to carry forward a 
     renewables deficit provided that, in the calendar year 
     following the year in which the renewables deficit is 
     created, such person shall achieve compliance with the 
     renewables requirement under paragraph (2), and shall 
     generate or purchase additional renewables credits to offset 
     the renewables deficit of the previous year.
       ``(6) Seasonal variations in renewable fuel use.--
       ``(A) Study.--For each of calendar years 2010 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 1 of the periods specified in subparagraph 
     (D) of the calendar year; and
       ``(ii) a pattern of excessive seasonal variation described 
     in clause (i) will continue in subsequent calendar years.
       ``(D) Periods.--The two periods referred to in this 
     paragraph are--
       ``(i) April through September; and
       ``(ii) January through March and October through December.
       ``(E) Exclusions.--Renewable fuels blended or consumed in 
     2010 in a state which has received a waiver under section 
     209(b) shall not be included in the study in subparagraph 
     (A).
       ``(7) Waivers.--
       ``(A) In general.--The Administrator, in consultation with 
     the Secretary of Agriculture and the Secretary of Energy, may 
     waive the requirement of paragraph (2) in whole or in part on 
     petition by 1 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--
       ``(i) shall approve or deny a State petition for a waiver 
     of the requirement of paragraph (2) within 180 days after the 
     date on which the petition is received; but
       ``(ii) may extend that period for up to 60 additional days 
     to provide for public notice and opportunity for comment and 
     for consideration of the comments submitted.
       ``(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

[[Page 5221]]

     Secretary of Agriculture and the Secretary of Energy.
       ``(8) Study and waiver for initial year of program.--Not 
     later than 180 days from enactment, the Secretary of Energy 
     shall complete for the Administrator a study assessing 
     whether the renewable fuels requirement under paragraph (2) 
     will likely result in significant adverse consumer impacts in 
     2010, on a national, regional or state basis. Such study 
     shall evaluate renewable fuel supplies and prices, blendstock 
     supplies, and supply and distribution system capabilities. 
     Based on such study, the Secretary shall make specific 
     recommendations to the Administrator regarding waiver of the 
     requirements of paragraph (2), in whole or in part, to avoid 
     any such adverse impacts. Within 270 days from enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2010. This provision shall not be interpreted as limiting the 
     Administrator's authority to waive the requirements of 
     paragraph (2) in whole, or in part, under paragraph (7), 
     pertaining to waivers.
       ``(9) Small refineries.--
       ``(A) In general.--The requirement of paragraph (2) shall 
     not apply to small refineries until January 1, 2010. Not 
     later than December 31, 2006, the Secretary of Energy shall 
     complete for the Administrator a study to determine whether 
     the requirement of paragraph (2) would impose a 
     disproportionate economic hardship on small refineries. For 
     any small refinery that the Secretary of Energy determines 
     would experience a disproportionate economic hardship, the 
     Administrator shall extend the small refinery exemption for 
     such small refinery for no less than two additional years.
       ``(B) Economic hardship.--
       ``(i) 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).
       ``(10) Study.--Not later than 180 days after the date of 
     enactment, the Secretary of Energy shall complete for the 
     Administrator a study assessing whether the renewable fuels 
     requirement under paragraph (2) will likely result in 
     significant adverse consumer impacts in 2010, 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 date of enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2009. This provision''.
                                  ____

  SA 3219. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 189, strike line 3 and all that follows 
     through page 199, line 17, and insert the following:
     shall be 1.62 in 2011.
       ``(B) Applicable volume.--
       (i) Calendar years 2011 and 2012.--For the purpose of 
     subparagraph (A), the applicable volume for any of calendar 
     years 2011 and 2012 shall be determined in accordance with 
     the following table:

                  Applicable volume of renewable fuel

``Calendar year:                               (In billions of gallons)
    2011............................................................4.7

    2012...........................................................5.0.
       ``(ii) Calendar year 2013 and thereafter.--For the purpose 
     of subparagraph (A), the applicable volume for calendar year 
     2013 and each calendar year thereafter shall be equal to the 
     product obtained by multiplying--

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

       ``(aa) 5.0 billion gallons of renewable fuels; bears to
       ``(bb) the number of gallons of gasoline sold or introduced 
     into commerce in calendar year 2012.
       ``(3) Applicable percentages.--Not later than October 31 of 
     each of calendar years 2010 and 2011, the Administrator of 
     the Energy Information Administration shall provide the 
     Administrator an estimate of the volumes of gasoline sales in 
     the United States for the coming calendar year. Based on such 
     estimates, the Administrator shall by November 30 of each of 
     calendar years 2010 and 2011 determine and publish in the 
     Federal Register, the renewable fuel obligation, on a volume 
     percentage of gasoline basis, applicable to refiners, 
     blenders, distributors and importers, as appropriate, for the 
     coming calendar year, to ensure that the requirements of 
     paragraph (2) are met. For each calendar year, the 
     Administrator shall establish a single applicable percentage 
     that applies to all parties, and make provision to avoid 
     redundant obligations. In determining the applicable 
     percentages, the Administrator shall make adjustments to 
     account for the use of renewable fuels by exempt small 
     refiners during the previous year.
       ``(4) Cellulosic biomass ethanol.--For the purpose of 
     paragraph (2), 1 gallon of cellulosic biomass ethanol shall 
     be considered to be the equivalent of 1.5 gallon of renewable 
     fuel.
       ``(5) Credit program.--
       ``(A) In general.--The regulations promulgated to carry out 
     this subsection shall provide for the generation of an 
     appropriate amount of credits by any person that refines, 
     blends, distributes or imports gasoline that contains a 
     quantity of renewable fuel that is greater than the quantity 
     required under paragraph (2). Such regulations shall provide 
     for the generation of an appropriate amount of credits for 
     biodiesel fuel. If a small refinery notifies the 
     Administrator that it waives the exemption provided by this 
     Act, the regulations shall provide for the generation of 
     credits by the small refinery beginning in the year following 
     such notification.
       ``(B) Use of credits.--A person that generates credits 
     under subparagraph (A) may use the credits, or transfer all 
     or a portion of the credits to another person, for the 
     purpose of complying with paragraph (2).
       ``(C) Life of credits.--A credit generated under this 
     paragraph shall be valid to show compliance:
       (i) in the calendar year in which the credit was generated 
     or the next calendar year, or
       (ii) in the calendar year in which the credit was generated 
     or next two consecutive calendar years if the Administrator 
     promulgates regulations under paragraph (6).
       ``(D) Inability to purchase sufficient credits.--The 
     regulations promulgated to carry out this subsection shall 
     include provisions allowing any person that is unable to 
     generate or purchase sufficient credits to meet the 
     requirements under paragraph (2) to carry forward a 
     renewables deficit provided that, in the calendar year 
     following the year in which the renewables deficit is 
     created, such person shall achieve compliance with the 
     renewables requirement under paragraph (2), and shall 
     generate or purchase additional renewables credits to offset 
     the renewables deficit of the previous year.
       ``(6) Seasonal variations in renewable fuel use.--
       ``(A) Study.--For each of calendar years 2011 and 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 1 of the periods specified in subparagraph 
     (D) of the calendar year; and
       ``(ii) a pattern of excessive seasonal variation described 
     in clause (i) will continue in subsequent calendar years.
       ``(D) Periods.--The two periods referred to in this 
     paragraph are--
       ``(i) April through September; and
       ``(ii) January through March and October through December.
       ``(E) Exclusions.--Renewable fuels blended or consumed in 
     2011 in a state which has received a waiver under section 
     209(b) shall not be included in the study in subparagraph 
     (A).

[[Page 5222]]

       ``(7) Waivers.--
       ``(A) In general.--The Administrator, in consultation with 
     the Secretary of Agriculture and the Secretary of Energy, may 
     waive the requirement of paragraph (2) in whole or in part on 
     petition by 1 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--
       ``(i) shall approve or deny a State petition for a waiver 
     of the requirement of paragraph (2) within 180 days after the 
     date on which the petition is received; but
       ``(ii) may extend that period for up to 60 additional days 
     to provide for public notice and opportunity for comment and 
     for consideration of the comments submitted.
       ``(C) Termination of waivers.--A waiver granted under 
     subparagraph (A) shall terminate after 1 year, but may be 
     renewed by the Administrator after consultation with the 
     Secretary of Agriculture and the Secretary of Energy.
       ``(8) Study and waiver for initial year of program.--Not 
     later than 180 days from enactment, the Secretary of Energy 
     shall complete for the Administrator a study assessing 
     whether the renewable fuels requirement under paragraph (2) 
     will likely result in significant adverse consumer impacts in 
     2011, on a national, regional or state basis. Such study 
     shall evaluate renewable fuel supplies and prices, blendstock 
     supplies, and supply and distribution system capabilities. 
     Based on such study, the Secretary shall make specific 
     recommendations to the Administrator regarding waiver of the 
     requirements of paragraph (2), in whole or in part, to avoid 
     any such adverse impacts. Within 270 days from enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2011. This provision shall not be interpreted as limiting the 
     Administrator's authority to waive the requirements of 
     paragraph (2) in whole, or in part, under paragraph (7), 
     pertaining to waivers.
       ``(9) Small refineries.--
       ``(A) In general.--The requirement of paragraph (2) shall 
     not apply to small refineries until January 1, 2011. Not 
     later than December 31, 2006, the Secretary of Energy shall 
     complete for the Administrator a study to determine whether 
     the requirement of paragraph (2) would impose a 
     disproportionate economic hardship on small refineries. For 
     any small refinery that the Secretary of Energy determines 
     would experience a disproportionate economic hardship, the 
     Administrator shall extend the small refinery exemption for 
     such small refinery for no less than two additional years.
       ``(B) Economic hardship.--
       ``(i) 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).
       ``(10) Study.--Not later than 180 days after the date of 
     enactment, the Secretary of Energy shall complete for the 
     Administrator a study assessing whether the renewable fuels 
     requirement under paragraph (2) will likely result in 
     significant adverse consumer impacts in 2011, 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 date of enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2011. This provision
                                  ____

  SA 3220. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 189, strike line 3 and all that follows 
     through page 199, line 17, and insert the following:

     ``shall be 1.62 in 2012.
       ``(B) Applicable volume.--
       ``(i) Calendar year 2012.--For the purpose of subparagraph 
     (A), the applicable volume for calendar year 2012 shall be 
     determined in accordance with the following table:

                 ``Applicable volume of renewable fuel

``Calendar year:                               (In billions of gallons)
    2012...........................................................5.0.
       ``(ii) Calendar year 2013 and thereafter.--For the purpose 
     of subparagraph (A), the applicable volume for calendar year 
     2013 and each calendar year thereafter shall be equal to the 
     product obtained by multiplying--

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

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

[[Page 5223]]

     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 1 of the periods specified in subparagraph 
     (D) of the calendar year; and
       ``(ii) a pattern of excessive seasonal variation described 
     in clause (i) will continue in subsequent calendar years.
       ``(D) Periods.--The two periods referred to in this 
     paragraph are--
       ``(i) April through September; and
       ``(ii) January through March and October through December.
       ``(E) Exclusions.--Renewable fuels blended or consumed in 
     2012 in a state which has received a waiver under section 
     209(b) shall not be included in the study in subparagraph 
     (A).
       ``(7) Waivers.--
       ``(A) In general.--The Administrator, in consultation with 
     the Secretary of Agriculture and the Secretary of Energy, may 
     waive the requirement of paragraph (2) in whole or in part on 
     petition by 1 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--
       ``(i) shall approve or deny a State petition for a waiver 
     of the requirement of paragraph (2) within 180 days after the 
     date on which the petition is received; but
       ``(ii) may extend that period for up to 60 additional days 
     to provide for public notice and opportunity for comment and 
     for consideration of the comments submitted.
       ``(C) Termination of waivers.--A waiver granted under 
     subparagraph (A) shall terminate after 1 year, but may be 
     renewed by the Administrator after consultation with the 
     Secretary of Agriculture and the Secretary of Energy.
       ``(8) Study and waiver for initial year of program.--Not 
     later than 180 days from enactment, the Secretary of Energy 
     shall complete for the Administrator a study assessing 
     whether the renewable fuels requirement under paragraph (2) 
     will likely result in significant adverse consumer impacts in 
     2012, on a national, regional or state basis. Such study 
     shall evaluate renewable fuel supplies and prices, blendstock 
     supplies, and supply and distribution system capabilities. 
     Based on such study, the Secretary shall make specific 
     recommendations to the Administrator regarding waiver of the 
     requirements of paragraph (2), in whole or in part, to avoid 
     any such adverse impacts. Within 270 days from enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2012. This provision shall not be interpreted as limiting the 
     Administrator's authority to waive the requirements of 
     paragraph (2) in whole, or in part, under paragraph (7), 
     pertaining to waivers.
       ``(9) Small refineries.--
       ``(A) In general.--The requirement of paragraph (2) shall 
     not apply to small refineries until January 1, 2012. Not 
     later than December 31, 2006, the Secretary of Energy shall 
     complete for the Administrator a study to determine whether 
     the requirement of paragraph (2) would impose a 
     disproportionate economic hardship on small refineries. For 
     any small refinery that the Secretary of Energy determines 
     would experience a disproportionate economic hardship, the 
     Administrator shall extend the small refinery exemption for 
     such small refinery for no less than two additional years.
       ``(B) Economic hardship.--
       ``(i) 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).
       ``(10) Study.--Not later than 180 days after the date of 
     enactment, the Secretary of Energy shall complete for the 
     Administrator a study assessing whether the renewable fuels 
     requirement under paragraph (2) will likely result in 
     significant adverse consumer impacts in 2012, 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 date of enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2012. This provision''.
                                  ____

  SA 3221. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 199, strike line 21 and insert the following: 
     pertaining waivers.
       ``(11) Exclusion of certain states.--Notwithstanding any 
     other provision of this subsection, this subsection shall not 
     apply to the States of California and New York.''.
                                  ____

  SA 3222. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 199, strike line 21 and insert the following: 
     pertaining waivers.
       ``(11) Exclusion of certain states.--Notwithstanding any 
     other provision of this subsection, this subsection shall not 
     apply to the States of California and New York, or any other 
     State.''.
                                  ____

  SA 3223. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 188, strike line 10 and all that follows 
     through page 190, line 11, and insert the following:
       ``(2) Renewable fuel program.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of this subsection, the Administrator shall 
     promulgate regulations ensuring that gasoline sold or 
     dispensed to consumers in the United States in any of 
     calendar years 2004 through 2012, on an annual average basis, 
     contains the applicable volume of renewable fuel as specified 
     in subparagraph (B). Regardless of the date of promulgation, 
     the regulations shall contain compliance provisions for 
     refiners, blenders, distributors and importers, as 
     appropriate, to ensure that the requirements of this section 
     are met, but shall not restrict where renewables can be used, 
     or impose any per-gallon obligation for the use of 
     renewables. If the Administrator does not promulgate such 
     regulations, the applicable percentage, on a volume 
     percentage of gasoline basis, shall be 1.62 in 2004.
       ``(B) Applicable volume.--For the purpose of subparagraph 
     (A), the applicable volume for any of calendar years 2004 
     through 2012 shall be determined in accordance with the 
     following table:

                 ``Applicable volume of renewable fuel

``Calendar year:                               (In billions of gallons)
    2004............................................................2.3

    2005............................................................2.6

    2006............................................................2.9

    2007............................................................3.2

    2008............................................................3.5

[[Page 5224]]


    2009............................................................3.9

    2010............................................................4.3

    2011............................................................4.7

5.0.''............................................................
                                  ____

  SA 3224. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 189, strike line 3 and all that follows 
     through page 199, line 17, and insert the following:

     ``shall be 1.62 in 2006.
       ``(B) Applicable volume.--
       ``(i) Calendar years 2006 through 2012.--For the purpose of 
     subparagraph (A), the applicable volume for any of calendar 
     years 2006 through 2012 shall be determined in accordance 
     with the following table:

                 ``Applicable volume of renewable fuel

``Calendar year:                               (In billions of gallons)
    2006............................................................2.9

    2007............................................................3.2

    2008............................................................3.5

    2009............................................................3.9

    2010............................................................4.3

    2011............................................................4.7

    2012...........................................................5.0.

       ``(ii) Calendar year 2013 and thereafter.--For the purpose 
     of subparagraph (A), the applicable volume for calendar year 
     2013 and each calendar year thereafter shall be equal to the 
     product obtained by multiplying--

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

       ``(aa) 5.0 billion gallons of renewable fuels; bears to
       ``(bb) the number of gallons of gasoline sold or introduced 
     into commerce in calendar year 2012.
       ``(3) Applicable percentages.--Not later than October 31 of 
     each of calendar years 2005 through 2011, the Administrator 
     of the Energy Information Administration shall provide the 
     Administrator an estimate of the volumes of gasoline sales in 
     the United States for the coming calendar year. Based on such 
     estimates, the Administrator shall by November 30 of each of 
     calendar years 2005 through 2011 determine and publish in the 
     Federal Register, the renewable fuel obligation, on a volume 
     percentage of gasoline basis, applicable to refiners, 
     blenders, distributors and importers, as appropriate, for the 
     coming calendar year, to ensure that the requirements of 
     paragraph (2) are met. For each calendar year, the 
     Administrator shall establish a single applicable percentage 
     that applies to all parties, and make provision to avoid 
     redundant obligations. In determining the applicable 
     percentages, the Administrator shall make adjustments to 
     account for the use of renewable fuels by exempt small 
     refiners during the previous year.
       ``(4) Cellulosic biomass ethanol.--For the purpose of 
     paragraph (2), 1 gallon of cellulosic biomass ethanol shall 
     be considered to be the equivalent of 1.5 gallon of renewable 
     fuel.
       ``(5) Credit program.--
       ``(A) In general.--The regulations promulgated to carry out 
     this subsection shall provide for the generation of an 
     appropriate amount of credits by any person that refines, 
     blends, distributes or imports gasoline that contains a 
     quantity of renewable fuel that is greater than the quantity 
     required under paragraph (2). Such regulations shall provide 
     for the generation of an appropriate amount of credits for 
     biodiesel fuel. If a small refinery notifies the 
     Administrator that it waives the exemption provided by this 
     Act, the regulations shall provide for the generation of 
     credits by the small refinery beginning in the year following 
     such notification.
       ``(B) Use of credits.--A person that generates credits 
     under subparagraph (A) may use the credits, or transfer all 
     or a portion of the credits to another person, for the 
     purpose of complying with paragraph (2).
       ``(C) Life of credits.--A credit generated under this 
     paragraph shall be valid to show compliance:
       (i) in the calendar year in which the credit was generated 
     or the next calendar year, or
       (ii) in the calendar year in which the credit was generated 
     or next two consecutive calendar years if the Administrator 
     promulgates regulations under paragraph (6).
       ``(D) Inability to purchase sufficient credits.--The 
     regulations promulgated to carry out this subsection shall 
     include provisions allowing any person that is unable to 
     generate or purchase sufficient credits to meet the 
     requirements under paragraph (2) to carry forward a 
     renewables deficit provided that, in the calendar year 
     following the year in which the renewables deficit is 
     created, such person shall achieve compliance with the 
     renewables requirement under paragraph (2), and shall 
     generate or purchase additional renewables credits to offset 
     the renewables deficit of the previous year.
       ``(6) Seasonal variations in renewable fuel use.--
       ``(A) Study.--For each of calendar years 2006 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 1 of the periods specified in subparagraph 
     (D) of the calendar year; and
       ``(ii) a pattern of excessive seasonal variation described 
     in clause (i) will continue in subsequent calendar years.
       ``(D) Periods.--The two periods referred to in this 
     paragraph are--
       ``(i) April through September; and
       ``(ii) January through March and October through December.
       ``(E) Exclusions.--Renewable fuels blended or consumed in 
     2006 in a state which has received a waiver under section 
     209(b) shall not be included in the study in subparagraph 
     (A).
       ``(7) Waivers.--
       ``(A) In general.--The Administrator, in consultation with 
     the Secretary of Agriculture and the Secretary of Energy, may 
     waive the requirement of paragraph (2) in whole or in part on 
     petition by 1 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--
       ``(i) shall approve or deny a State petition for a waiver 
     of the requirement of paragraph (2) within 180 days after the 
     date on which the petition is received; but
       ``(ii) may extend that period for up to 60 additional days 
     to provide for public notice and opportunity for comment and 
     for consideration of the comments submitted.
       ``(C) Termination of waivers.--A waiver granted under 
     subparagraph (A) shall terminate after 1 year, but may be 
     renewed by the Administrator after consultation with the 
     Secretary of Agriculture and the Secretary of Energy.
       ``(8) Study and waiver for initial year of program.--Not 
     later than 180 days from enactment, the Secretary of Energy 
     shall complete for the Administrator a study assessing 
     whether the renewable fuels requirement under paragraph (2) 
     will likely result in significant adverse consumer impacts in 
     2006, on a national, regional or state basis. Such study 
     shall evaluate renewable fuel supplies and prices, blendstock 
     supplies, and supply and distribution system capabilities. 
     Based on such study, the Secretary shall make specific 
     recommendations to the Administrator regarding waiver of the 
     requirements of paragraph (2), in whole or in part, to avoid 
     any such adverse impacts. Within 270 days from enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2006. This provision shall not be interpreted as limiting the 
     Administrator's authority to waive the requirements of 
     paragraph (2) in whole, or in part, under paragraph (7), 
     pertaining to waivers.
       ``(9) Small refineries.--
       ``(A) In general.--The requirement of paragraph (2) shall 
     not apply to small refineries until January 1, 2008. Not 
     later than December 31, 2006, the Secretary of Energy shall 
     complete for the Administrator a study to determine whether 
     the requirement of paragraph (2) would impose a 
     disproportionate economic hardship on small refineries. For 
     any small refinery that the Secretary of Energy determines 
     would experience a disproportionate economic hardship,

[[Page 5225]]

     the Administrator shall extend the small refinery exemption 
     for such small refinery for no less than two additional 
     years.
       ``(B) Economic hardship.--
       ``(i) 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).
       ``(10) Study.--Not later than 180 days after the date of 
     enactment, the Secretary of Energy shall complete for the 
     Administrator a study assessing whether the renewable fuels 
     requirement under paragraph (2) will likely result in 
     significant adverse consumer impacts in 2006, 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 date of enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2006. This provision''.
                                  ____

  SA 3225. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 189, strike line 3 and all that follows 
     through page 199, line 17, and insert the following:

     ``shall be 1.62 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............................................................2.6

    2006............................................................2.9

    2007............................................................3.2

    2008............................................................3.5

    2009............................................................3.9

    2010............................................................4.3

    2011............................................................4.7

    2012...........................................................5.0.

       ``(ii) Calendar year 2013 and thereafter.--For the purpose 
     of subparagraph (A), the applicable volume for calendar year 
     2013 and each calendar year thereafter shall be equal to the 
     product obtained by multiplying--

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

       ``(aa) 5.0 billion gallons of renewable fuels; bears to
       ``(bb) the number of gallons of gasoline sold or introduced 
     into commerce in calendar year 2012.
       ``(3) Applicable percentages.--Not later than October 31 of 
     each calendar year, through 2011, the Administrator of the 
     Energy Information Administration shall provide the 
     Administrator an estimate of the volumes of gasoline sales in 
     the United States for the coming calendar year. Based on such 
     estimates, the Administrator shall by November 30 of each 
     calendar year, through 2011, determine and publish in the 
     Federal Register, the renewable fuel obligation, on a volume 
     percentage of gasoline basis, applicable to refiners, 
     blenders, distributors and importers, as appropriate, for the 
     coming calendar year, to ensure that the requirements of 
     paragraph (2) are met. For each calendar year, the 
     Administrator shall establish a single applicable percentage 
     that applies to all parties, and make provision to avoid 
     redundant obligations. In determining the applicable 
     percentages, the Administrator shall make adjustments to 
     account for the use of renewable fuels by exempt small 
     refiners during the previous year.
       ``(4) Cellulosic biomass ethanol.--For the purpose of 
     paragraph (2), 1 gallon of cellulosic biomass ethanol shall 
     be considered to be the equivalent of 1.5 gallon of renewable 
     fuel.
       ``(5) Credit program.--
       ``(A) In general.--The regulations promulgated to carry out 
     this subsection shall provide for the generation of an 
     appropriate amount of credits by any person that refines, 
     blends, distributes or imports gasoline that contains a 
     quantity of renewable fuel that is greater than the quantity 
     required under paragraph (2). Such regulations shall provide 
     for the generation of an appropriate amount of credits for 
     biodiesel fuel. If a small refinery notifies the 
     Administrator that it waives the exemption provided by this 
     Act, the regulations shall provide for the generation of 
     credits by the small refinery beginning in the year following 
     such notification.
       ``(B) Use of credits.--A person that generates credits 
     under subparagraph (A) may use the credits, or transfer all 
     or a portion of the credits to another person, for the 
     purpose of complying with paragraph (2).
       ``(C) Life of credits.--A credit generated under this 
     paragraph shall be valid to show compliance:
       (i) in the calendar year in which the credit was generated 
     or the next calendar year, or
       (ii) in the calendar year in which the credit was generated 
     or next two consecutive calendar years if the Administrator 
     promulgates regulations under paragraph (6).
       ``(D) Inability to purchase sufficient credits.--The 
     regulations promulgated to carry out this subsection shall 
     include provisions allowing any person that is unable to 
     generate or purchase sufficient credits to meet the 
     requirements under paragraph (2) to carry forward a 
     renewables deficit provided that, in the calendar year 
     following the year in which the renewables deficit is 
     created, such person shall achieve compliance with the 
     renewables requirement under paragraph (2), and shall 
     generate or purchase additional renewables credits to offset 
     the renewables deficit of the previous year.
       ``(6) Seasonal variations in renewable fuel use.--
       ``(A) Study.--For each of calendar years 2005 through 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 1 of the periods specified in subparagraph 
     (D) of the calendar year; and
       ``(ii) a pattern of excessive seasonal variation described 
     in clause (i) will continue in subsequent calendar years.
       ``(D) Periods.--The two periods referred to in this 
     paragraph are--
       ``(i) April through September; and
       ``(ii) January through March and October through December.
       ``(E) Exclusions.--Renewable fuels blended or consumed in 
     2005 in a state which has received a waiver under section 
     209(b) shall not be included in the study in subparagraph 
     (A).
       ``(7) Waivers.--
       ``(A) In general.--The Administrator, in consultation with 
     the Secretary of Agriculture and the Secretary of Energy, may 
     waive the requirement of paragraph (2) in whole or in part on 
     petition by 1 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--
       ``(i) shall approve or deny a State petition for a waiver 
     of the requirement of paragraph (2) within 180 days after the 
     date on which the petition is received; but
       ``(ii) may extend that period for up to 60 additional days 
     to provide for public notice

[[Page 5226]]

     and opportunity for comment and for consideration of the 
     comments submitted.
       ``(C) Termination of waivers.--A waiver granted under 
     subparagraph (A) shall terminate after 1 year, but may be 
     renewed by the Administrator after consultation with the 
     Secretary of Agriculture and the Secretary of Energy.
       ``(8) Study and waiver for initial year of program.--Not 
     later than 180 days from enactment, the Secretary of Energy 
     shall complete for the Administrator a study assessing 
     whether the renewable fuels requirement under paragraph (2) 
     will likely result in significant adverse consumer impacts in 
     2005, on a national, regional or state basis. Such study 
     shall evaluate renewable fuel supplies and prices, blendstock 
     supplies, and supply and distribution system capabilities. 
     Based on such study, the Secretary shall make specific 
     recommendations to the Administrator regarding waiver of the 
     requirements of paragraph (2), in whole or in part, to avoid 
     any such adverse impacts. Within 270 days from enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2005. This provision shall not be interpreted as limiting the 
     Administrator's authority to waive the requirements of 
     paragraph (2) in whole, or in part, under paragraph (7), 
     pertaining to waivers.
       ``(9) Small refineries.--
       ``(A) In general.--The requirement of paragraph (2) shall 
     not apply to small refineries until January 1, 2008. Not 
     later than December 31, 2006, the Secretary of Energy shall 
     complete for the Administrator a study to determine whether 
     the requirement of paragraph (2) would impose a 
     disproportionate economic hardship on small refineries. For 
     any small refinery that the Secretary of Energy determines 
     would experience a disproportionate economic hardship, the 
     Administrator shall extend the small refinery exemption for 
     such small refinery for no less than two additional years.
       ``(B) Economic hardship.--
       ``(i) 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).
       ``(10) Study.--Not later than 180 days after the date of 
     enactment, the Secretary of Energy shall complete for the 
     Administrator a study assessing whether the renewable fuels 
     requirement under paragraph (2) will likely result in 
     significant adverse consumer impacts in 2005, on a national, 
     regional or state basis. Such study shall evaluate renewable 
     fuel supplies and prices, blendstock supplies, and supply and 
     distribution system capabilities. Based on such study, the 
     Secretary shall make specific recommendations to the 
     Administrator regarding waiver of the requirements of 
     paragraph (2), in whole or in part, to avoid any such adverse 
     impacts. Within 270 days after the date of enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2005. This provision''.
                                  ____

  SA 3226. Mr. SCHUMER (for himself and Mrs. Clinton) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the appropriate place, insert the following:

     SEC.   . FINGER LAKES NATIONAL FOREST.

       Notwithstanding any other provision of law, all Federal 
     land within the boundary of Finger Lakes National Forest in 
     the State of New York is withdrawn from--
       (a) all forms of entry, appropriation, or disposal under 
     the public land laws;
       (2) location, entry, and patent under the mining laws; and
       (3) disposition under all laws relating to mineral and 
     geothermal leasing (including the Act of July 31, 1947 
     (commonly known as the ``Materials Act of 1947'') (30 U.S.C. 
     601)).
                                  ____

  SA 3227. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the end of Title VI, insert the following:

     SEC. 610. NORTHEAST HOME HEATING OIL RESERVE.

       ``Section 6250b(b)(1) of the Energy and Conservation Policy 
     Act (42 U.S.C. 6250b(b)(1)) is amended by inserting the 
     following ``(considered as a heating season average)'' after 
     the words ``mid-October through March''.
                                  ____

  SA 3228. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Strike Title III and insert the following:

     SEC. 301. STREAMLINING HYDROELECTRIC RELICENSING PROCEDURES.

       (a) Review of Licensing Process.--The Federal Energy 
     Regulatory Commission, the Secretary of the Interior, the 
     Secretary of Commerce, and the Secretary of Agriculture, in 
     consultation with the affected states, shall undertake a 
     review of the process for issuance of a license under Part I 
     of the Federal Power Act in order to: (1) improve 
     coordination of their respective responsibilities; (2) 
     coordinate the schedule for all major actions by the 
     applicant, the Commission, affected Federal and State 
     agencies, Indian Tribes, and other affected parties; (3) 
     ensure resolution at an early stage of the process of the 
     scope and type of reasonable and necessary information, 
     studies, data, and analysis to be provided by the license 
     applicant; (4) facilitate coordination between the Commission 
     and the resource agencies of analysis under the National 
     Environmental Policy Act; and (5) provide for streamlined 
     procedures.
       (b) Report.--Within twelve months after the date of 
     enactment of this Act, the Federal Energy Regulatory 
     Commission and the Secretaries of the Interior, Commerce, and 
     Agriculture, shall jointly submit a report to the Committee 
     on Energy and Natural Resources of the Senate and the 
     appropriate committees of the House of Representatives 
     addressing the issues specified in subsection (a) of this 
     section and reviewing the responsibilities and procedures of 
     each agency involved in the licensing process. The report 
     shall contain any legislative or administrative 
     recommendations to improve coordination and streamline 
     procedures for the issuance of licenses under Part I of the 
     Federal Power Act. The Commission and each Secretary shall 
     set forth a plan and schedule to implement any administrative 
     recommendations contained in the report, which shall also be 
     contained in the report.
                                  ____

  SA 3229. Mr. WYDEN (for himself, Ms. Cantwell, and Mr. Durbin) 
submitted an amendment intended to be proposed to amendment SA 2917 
proposed by Mr. Daschle (for himself and Mr. Bingaman) to the bill (S. 
517) to authorize funding the Department of Energy to enhance its 
mission areas through technology transfer and partnerships for fiscal 
years 2002 through 2006, and for other purposes; which was ordered to 
lie on the table; as follows:

       Section 202(a)(4) of the amendment (No. 2917) proposed by 
     Mr. Daschle (as modified by the Thomas Amendment #3000) is 
     amended by striking ``and'' following subparagraph (D), 
     renumbering ``(D)'' as ``(E)'' and inserting the following:
       ``(D) will include employee protective arrangements, 
     defined as a provision that may be necessary for (i) the 
     preservation of rights, privileges, and benefits (including 
     continuation of pension rights and benefits) under existing 
     collective bargaining agreements or otherwise; (ii) the 
     continuation of collective bargaining rights; (iii) the 
     protection of individual employees against a worsening of 
     their positions related to employment; (iv) assurances of 
     employment to employees of acquired companies; (v) assurances 
     of priority of reemployment of employees whose employment is 
     ended or who are laid off; and (vi) paid training or 
     retraining programs, that the Commission concludes will 
     fairly and equitably protect the interests of employees 
     affected by the proposed transaction; and''.
                                  ____

  SA 3230. Mr. WYDEN submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr.

[[Page 5227]]

Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

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

     SEC. 2__. BONNEVILLE POWER ADMINISTRATION BONDS.

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

     ``SEC. 13. BONNEVILLE POWER ADMINISTRATION BONDS.

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

  SA 3231. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table as follows:

       On page 470, beginning with line 10, strike through line 7 
     on page 532 and insert the following:

           TITLE XIII--CLIMATE CHANGE SCIENCE AND TECHNOLOGY

               Subtitle A--Department of Energy Programs

     SEC. 1301. DEPARTMENT OF ENERGY GLOBAL CHANGE RESEARCH.

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

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

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

             Subtitle B--Department of Agriculture Programs

     SEC. 1311. CARBON SEQUESTRATION BASIC AND APPLIED RESEARCH.

       (a) Basic Research.--
       (1) In general.--The Secretary of Agriculture shall carry 
     out research in the areas of soil science that promote 
     understanding of--
       (A) the net sequestration of organic carbon in soil; and
       (B) net emissions of other greenhouse gases from 
     agriculture.
       (2) Agricultural research service.--The Secretary of 
     Agriculture, acting through the Agricultural Research 
     Service, shall collaborate with other Federal agencies in 
     developing data and carrying out research addressing soil 
     carbon fluxes (losses and gains) and net emissions of methane 
     and nitrous oxide from cultivation and animal management 
     activities.
       (3) Cooprerative state research, extension, and education 
     service.--
       (A) In general.--The Secretary of Agriculture, acting 
     through the Cooperative State Research, Extension, and 
     Education Service, shall establish a competitive grant 
     program to carry out research on the matters described in 
     paragraph (1) in land grant universities and other research 
     institutions.
       (B) Consultation on research topics.--Before issuing a 
     request for proposals for basic research under paragraph (1), 
     the Cooperative State Research, Extension, and Education 
     Service shall consult with the Agricultural research Service 
     to ensure that proposed research areas are complementary with 
     and do not duplicate research projects underway at the 
     Agricultural Research Service or other Federal agencies.
       (b) Applied Research.--
       (1) In general.--The Secretary of Agriculture shall carry 
     out applied research in the areas of soil science, agronomy, 
     agricultural economics and other agricultural sciences to--
       (A) promote understanding of--
       (i) how agricultural and forestry practices affect the 
     sequestration of organic and inorganic carbon in soil and net 
     emissions of other greenhouse gases;
       (ii) how changes in soil carbon pools are cost-effectively 
     measured, monitored, and verified; and
       (iii) how public programs and private market approaches can 
     be devised to incorporate carbon sequestration in a broader 
     societal greenhouse gas emission reduction effort;
       (B) develop methods for establishing baselines for 
     measuring the quantities of carbon and other greenhouse gased 
     sequestered; and

[[Page 5228]]

       (C) evaluate leakage and performance issues.
       (2) Requirements.--To the maximum extent practicable, 
     applied research under paragraph (1) shall--
       (A) draw on existing technologies and methods; and
       (B) strive to provide methodologies that are accessible to 
     a nontechnical audience.
       (3) Minimization of adverse environmental impacts.--All 
     applied research under paragraph (1) shall be conducted with 
     an emphasis on minimizing adverse environmental impacts.
       (4) Natural resources conservation services.--The Secretary 
     of Agriculture, acting through the Natural Resources 
     Conservation Service, shall collaborate with other Federal 
     agencies, including the National Institute of Standards and 
     Technology, in developing new measuring techniques and 
     equipment or adapting existing techniques and equipment to 
     enable cost-effective and accurate monitoring and 
     verification, for a wide range of agricultural and forestry 
     practices, of--
       (A) changes in soil carbon content in agricultural soils, 
     plants, and trees; and
       (B) net emissions of other greenhouse gases.
       (5) Cooperative state research, extension, and education 
     service.--
       (A) In general.--The Secretary of Agriculture, acting 
     through the Cooperative State Research, Extension, and 
     Education Service, shall establish a competitive grant 
     program to encourage research on the matters described in 
     paragraph (1) by land grant universities and other research 
     institutions.
       (B) Consultation on research topics.--Before issuing a 
     request for proposals for applied research under paragraph 
     (1), the Cooperative State Research, Extension, and Education 
     Service shall consult with the National Resources 
     Conservation Service and the Agricultural Research Service to 
     ensure that proposed research areas are complementary with 
     and do not duplicate research projects underway at the 
     Agricultural Research Service or other Federal agencies.
       (c) Research Consortia.--
       (1) In general.--The Secretary of Agriculture may designate 
     not more than two research consortia to carry out research 
     projects under this section, with the requirement that the 
     consortia propose to conduct basic research under subsection 
     (a) and applied research under subsection (b).
       (2) Selection.--The consortia shall be selected in a 
     competitive manner by the Cooperative State Research, 
     Extension, and Education Service.
       (3) Eligible consortium participants.--Entities eligible to 
     participate in a consortium include--
       (A) land grant colleges and universities;
       (B) private research institutions;
       (C) State geological surveys;
       (D) agencies of the Department of Agriculture;
       (E) research centers of the National Aeronautics and Space 
     Administration and the Department of Energy;
       (F) other Federal agencies;
       (G) representatives of agricultural businesses and 
     organizations with demonstrated expertise in these areas; and
       (H) representatives of the private sector with demonstrated 
     expertise in these areas.
       (4) Reservation of funding.--If the Secretary of 
     Agriculture designates one or two consortia, the Secretary of 
     Agriculture shall reserve for research projects carried out 
     by the consortium or consortia not more than 25 percent of 
     the amounts made available to carry out this section for a 
     fiscal year.
       (d) Standards of Precision.--
       (1) Conference.--Not later than 3 years after the date of 
     enactment of this subtitle, the Secretary of Agriculture, 
     acting through the Agricultural Research Service and in 
     consultation with the Natural Resources Conservation Service, 
     shall convene a conference of key scientific experts on 
     carbon sequestration and measurement techniques from various 
     sectors (including the Government, academic, and private 
     sectors) to--
       (A) discuss benchmark standards of precision for measuring 
     soil carbon content and net emissions of other greenhouse 
     gases;
       (B) designate packages of measurement techniques and 
     modeling approaches to achieve a level of precision agreed on 
     by the participants in the conference; and
       (C) evaluate results of analyses on baseline, permanence, 
     and leakage issues.
       (2) Development of benchmark standards.--
       (A) In general.--The Secretary shall develop benchmark 
     standards for measuring the carbon content of soils and 
     plants (including trees) based on--
       (i) information from the conference under paragraph (1);
       (ii) research conducted under this section; and
       (iii) other information available to the Secretary.
       (B) Opportunity for public comment.--The Secretary shall 
     provide an opportunity for the public to comment on benchmark 
     standards developed under subparagraph (A).
       (3) Report.--Not later than 180 days after the conclusion 
     of the conference under paragraph (1), the Secretary of 
     Agriculture shall submit to the Committee on Agriculture of 
     the House of Representatives and the Committee on 
     Agriculture, Nutrition, and Forestry, of the Senate a report 
     on the results of the conference.
       (e) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     carry out this section $25,000,000 for each of fiscal years 
     2003 through 2006.
       (2) Allocation.--Of the amounts made available to carry out 
     this section for a fiscal year, at least 50 percent shall be 
     allocated for competitive grants by the Cooperative State 
     Research, Extension, and Education Service.

     SEC. 1312. CARBON SEQUESTRATION DEMONSTRATION PROJECTS AND 
                   OUTREACH.

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

          Subtitle C--International Energy Technology Transfer

     SEC. 1321. CLEAN ENERGY TECHNOLOGY EXPORTS PROGRAM.

       (a) Definitions.--In this section:
       (1) Clean energy technology.--The term ``clean energy 
     technology'' means an energy supply or end-use technology 
     that, over its lifecycle and compared to a similar technology 
     already in commercial use in developing countries, countries 
     in transition, and other partner countries--
       (A) emits substantially lower levels of pollutants or 
     greenhouse gases; and

[[Page 5229]]

       (B) may generate substantially smaller or less toxic 
     volumes of solid or liquid waste.
       (2) Interagency working group.--The term ``interagency 
     working group'' means the Interagency Working Group on Clean 
     Energy Technology Exports established under subsection (b).
       (b) Interagency Working Group.--
       (1) Establishment.--Not later than 90 days after the date 
     of enactment of this section, the Secretary of Energy, the 
     Secretary of Commerce, and the Administrator of the U.S. 
     Agency for International Development shall jointly establish 
     a Interagency Working Group on Clean Energy Technology 
     Exports. The interagency working group will focus on opening 
     and expanding energy markets and transferring clean energy 
     technology to the developing countries, countries in 
     transition, and other partner countries that are expected to 
     experience, over the next 20 years, the most significant 
     growth in energy production and associated greenhouse gas 
     emissions, including through technology transfer programs 
     under the Framework Convention on Climate Change, other 
     international agreements, and relevant Federal efforts.
       (2) Membership.--The interagency working group shall be 
     jointly chaired by representatives appointed by the agency 
     heads under paragraph (1) and shall also include 
     representatives from the Department of State, the Department 
     of Treasury, the Environmental Protection Agency, the Export-
     Import Bank, the Overseas Private Investment Corporation, the 
     Trade and Development Agency, and other Federal agencies as 
     deemed appropriate by all three agency heads under paragraph 
     (1).
       (3) Duties.--The interagency working group shall--
       (A) analyze technology, policy, and market opportunities 
     for international development, demonstration, and development 
     of clean energy technology;
       (B) investigate issues associated with building capacity to 
     deploy clean energy technology in developing countries, 
     countries in transition, and other partner countries, 
     including--
       (i) energy-sector reform;
       (ii) creation of open, transparent, and competitive markets 
     for energy technologies,
       (iii) availability of trained personnel to deploy and 
     maintain the technology; and
       (iv) demonstration and cost-buydown mechanisms to promote 
     first adoption of the technology;
       (C) examine relevant trade, tax, international, and other 
     policy issues to asses what policies would help open markets 
     and improve U.S. clean energy technology exports in support 
     of the following areas--
       (i) enhancing energy innovation and cooperation, including 
     energy sector and market reform, capacity building, and 
     financing measures;
       (ii) improving energy end-use efficiency technologies, 
     including buildings and facilities, vehicle, industrial, and 
     co-generation technology initiatives; and
       (iii) promoting energy supply technologies, including 
     fossil, nuclear, and renewable technology initiatives;
       (D) establish an advisory committee involving the private 
     sector and other interested groups on the export and 
     deployment of clean energy technology;
       (E) monitor each agency's progress towards meeting goals in 
     the 5-year strategic plan submitted to Congress pursuant to 
     the Energy and Water Development Appropriations Act, 2001, 
     and the Energy and Water Development Appropriations Act, 
     2002;
       (F) make recommendations to heads of appropriate Federal 
     agencies on ways to streamline Federal programs and policies 
     to improve each agency's role in the international 
     development, demonstration, and deployment of clean energy 
     technology;
       (G) make assessments and recommendations regarding the 
     distinct technological, market, regional, and stakeholder 
     challenges necessary to carry out the program; and
       (H) recommend conditions and criteria that will help ensure 
     that United States funds promote sound energy policies in 
     participating countries while simultaneously opening their 
     markets and exporting United States energy technology.
       (c) Federal Support for Clean Energy Technology Transfer.--
     Notwithstanding any other provision of law, each Federal 
     agency or Government corporation carrying out an assistance 
     program in support of the activities of United States persons 
     in the environment or energy sector of a developing country, 
     country in transition, or other partner country shall 
     support, to the maximum extent practicable, the transfer of 
     United States clear energy technology as part of that 
     program.
       (d) Annual Report.--Not later than 90 days after the date 
     of the enactment of this Act, and on the April 1st of each 
     year thereafter, 2002, and each year thereafter, the 
     Interagency Working Group shall submit a report to Congress 
     on its activities during the preceding calendar year. The 
     report shall include a description of the technology, policy, 
     and market opportunities for international development, 
     demonstration, and deployment of clean energy technology 
     investigated by the Interagency Working Group in that year, 
     as well as any policy recommendations to improve the 
     expansion of clean energy markets and U.S. clean energy 
     technology exports.
       (e) Report on Use of Funds.--Not later than October 1, 
     2002, and each year thereafter, the Secretary of State, in 
     consultation with other Federal agencies, shall submit a 
     report to Congress indicating how United States funds 
     appropriated for clean energy technology exports and other 
     relevant Federal programs are being directed in a manner that 
     promotes sound energy policy commitments in developing 
     countries, countries in transition, and other partner 
     countries, including efforts pursuant to multilateral 
     environmental agreements.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to the departments, agencies, and entities 
     of the United States described in subsection (b) such sums as 
     may be necessary to support the transfer of clean energy 
     technology, consistent with the subsidy codes of the World 
     Trade Organization, as part of assistance programs carried 
     out by those departments, agencies, and entities in support 
     of activities of United States persons in the energy sector 
     of a developing country, country in transition, or other 
     partner country.

     SEC. 1322. INTERNATIONAL ENERGY TECHNOLOGY DEPLOYMENT 
                   PROGRAM.

       Section 1608 of the Energy Policy Act of 1992 (42 U.S.C. 
     13387) is amended by striking subsection (1) and inserting 
     the following:
       ``(l) International Energy Technology Deployment Program.--
       ``(1) Definitions.--In this subsection:
       ``(A) International energy deployment project.--The term 
     `international energy deployment project' means a project to 
     construct an energy production facility outside the United 
     States--
       ``(i) the output of which will be consumed outside the 
     United States; and
       ``(ii) the deployment of which will result in a greenhouse 
     gas reduction per unit of energy produced when compared to 
     the technology that would otherwise be implemented--
       ``(I) 10 percentage points or more, in the case of a unit 
     placed in service before January 1, 2010;
       ``(II) 20 percentage points or more, in the case of a unit 
     placed in service after December 31, 2009, and before January 
     1, 2020; or
       ``(III) 30 percentage points or more, in the case of a unit 
     placed in service after December 31, 2019, and before January 
     1, 2030.
       ``(B) Qualifying international energy deployment project.--
     The term `qualifying international energy deployment project' 
     means an international energy deployment project that--
       ``(i) is submitted by a United States firm to the Secretary 
     in accordance with procedures established by the Secretary by 
     regulation;
       ``(ii) uses technology that has been successfully developed 
     or deployed in the United States;
       ``(iii) meets the criteria of subsection (k);
       ``(iv) is approved by the Secretary, with notice of the 
     approval being published in the Federal Register; and
       ``(v) complies with such terms and conditions as the 
     Secretary establishes by regulation.
       ``(C) United states.--For purposes of this paragraph, the 
     term `United States', when used in a geographical sense, 
     means the 50 States, the District of Columbia, Puerto Rico, 
     Guam, the Virgin Islands, American Samoa, and the 
     Commonwealth of the Northern Mariana Islands.
       ``(2) Pilot program for financial assistance.--
       ``(A) In general.--Not later than 180 days after the date 
     of enactment of this subsection, the Secretary shall, by 
     regulation, provide for a pilot program for financial 
     assistance for qualifying international energy deployment 
     projects.
       ``(B) Selection criteria.--After consultation with the 
     Secretary of State, the Secretary of Commerce, and the United 
     States Trade Representative, the Secretary shall select 
     projects for participation in the program based solely on the 
     criteria under this title and without regard to the country 
     in which the project is located.
       ``(C) Financial assistance.--
       ``(i) In general.--A United States firm that undertakes a 
     qualifying international energy deployment project that is 
     selected to participate in the pilot program shall be 
     eligible to receive a loan or a loan guarantee from the 
     Secretary.
       ``(ii) Rate of interest.--The rate of interest of any loan 
     made under clause (i) shall be equal to the rate for Treasury 
     obligations then issued for periods of comparable maturities.
       ``(iii) Amount.--The amount of a loan or loan guarantee 
     under clause (i) shall not exceed 50 percent of the total 
     cost of the qualified international energy deployment 
     project.
       ``(iv) Developed countries.--Loans or loan guarantees made 
     for projects to be located in a developed country, as listed 
     in Annex I of the United Nations Framework Convention on 
     Climate Change, shall require at least a 50 percent 
     contribution towards the total cost of the loan or loan 
     guarantee by the host country.
       ``(v) Developing countries.--Loans or loan guarantees made 
     for projects to be located in a developing country (those 
     countries not listed in Annex I of the United Nations 
     Framework Convention on Climate

[[Page 5230]]

     Change) shall require at least a 50 percent contribution 
     towards the total cost of the loan or loan guarantee by the 
     host country.
       ``(vi) Capacity building research.--Proposals made for 
     projects to be located in a developing country may include a 
     research component intended to build technological capacity 
     within the host country. Such research must be related to the 
     technologies being deployed and must involve both an 
     institution in the host country and an industry, university 
     or national laboratory participant from the United States. 
     The host institution shall contribute at least 50 percent of 
     funds provided for the capacity building research.
       ``(D) Coordination with other programs.--A qualifying 
     international energy deployment project funded under this 
     section shall not be eligible as a qualifying clean coal 
     technology under section 415 of the Clean Air Act (42 U.S.C. 
     7651n).
       ``(E) Report.--Not later than 5 years after the date of 
     enactment of this subsection, the Secretary shall submit to 
     the President a report on the results of the pilot projects.
       ``(F) Recommendation.--Not later than 60 days after 
     receiving the report under subparagraph (E), the President 
     shall submit to Congress a recommendation, based on the 
     results of the pilot projects as reported by the Secretary of 
     Energy, concerning whether the financial assistance program 
     under this section should be continued, expanded, reduced, or 
     eliminated.
       ``(3) Authorization of appropriations.--There are 
     authorized to be appropriated to the Secretary to carry out 
     this section $100,000,000 for each of fiscal years 2003 
     through 2011, to remain available until expended.''.

           Subtitle D--Climate Change Science and Information

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

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

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

     SEC. 1332. CHANGES IN DEFINITIONS.

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

     SEC. 1333. CHANGE IN COMMITTEE NAME AND STRUCTURE.

       Section 102 (15 U.S.C. 2932) is amended--
       (1) by striking ``EARTH AND ENVIRONMENT SCIENCES'' in 
     section heading and inserting ``GLOBAL CHANGE RESEARCH'';
       (2) by striking ``Earth and Environmental Sciences'' in 
     subsection (a) and inserting ``Global Change Research'';
       (3) by striking the last sentence of subsection (b) and 
     inserting ``The representatives shall be the Deputy Secretary 
     or the Deputy Secretary's designee (or, in the case of an 
     agency other than a department, the deputy head of that 
     agency or the deputy's designee).'';
       (4) by striking ``Chairman of the Council,'' in subsection 
     (c) and inserting ``Director of the Office of National 
     Climate Change Policy with advice from the Chairman of the 
     Council, and'';
       (5) by redesignating subsection (d) and (e) as subsections 
     (e) and (f), respectively; and
       (6) by inserting after subsection (c) the following:
       ``(d) Subcommittees and Working Groups.--
       ``(1) In general.--There shall be a Subcommittee on Global 
     Change Research, which shall carry out such functions of the 
     Committee as the Committee may assign to it.
       ``(2) Membership.--The membership of the Subcommittee shall 
     consist of--
       ``(A) the membership of the Subcommittee on Global Change 
     Research of the Committee on Environment and Natural 
     Resources (the functions of which are transferred to the 
     Subcommittee established by this subsection) established by 
     the National Science and Technology Council; and
       ``(B) such additional members as the Chair of the Committee 
     may, from time to time, appoint.
       ``(3) Chair.--A high ranking official of one of departments 
     or agencies described in subsection (b), appointed by the 
     Chair of the Committee with advice from the Chairman of the 
     Council, shall chair the subcommittee. The Chairperson shall 
     be knowledgeable and experienced with regard to the 
     administration of the scientific research programs, and shall 
     be a representative of an agency that contributes 
     substantially, in terms of scientific research capability and 
     budget, to the Program.''.
       ``(4) Other subcommittees and working groups.--The 
     Committee may establish such additional subcommittees and 
     working groups as it sees fit.''.

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

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

     SEC. 1335. INTEGRATED PROGRAM OFFICE.

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

     SEC. 1336. RESEARCH GRANTS.

       Section 105 (15 U.S.C. 2935) is amended--
       (1) by redesignating subsection (c) as (d); and
       (2) by inserting after subsection (b) the following:
       ``(c) Research Grants.--
       ``(1) Committee to develop list of priority research 
     areas.--The Committee shall develop a list of priority areas 
     for research and development on climate change that are not 
     being addressed by Federal agencies.
       ``(2) Director of ostp to transmit list to nsf.--The 
     Director of the Office of Science and Technology Policy shall 
     transmit the list to the National Science Foundation.
       ``(3) Funding through nsf.--
       ``(A) Budget request.--The National Science Foundation 
     shall include, as part of

[[Page 5231]]

     the annual request for appropriations for the Science and 
     Technology Policy Institute, a request for appropriations to 
     fund research in the priority areas on the list developed 
     under paragraph (1).
       ``(B) Authorization.--For fiscal year 2003 and each fiscal 
     year thereafter, there are authorized to be appropriated to 
     the National Science Foundation not less than $17,000,000, to 
     be made available through the Science and Technology Policy 
     Institute, for research in those priority areas.''.

     SEC. 1337. EVALUATION OF INFORMATION.

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

           PART II--NATIONAL CLIMATE SERVICES AND MONITORING

     SEC. 1341. AMENDMENT OF NATIONAL CLIMATE PROGRAM ACT.

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

     SEC. 1342. CHANGES IN FINDINGS.

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

     SEC. 1343. TOOLS FOR REGIONAL PLANNING.

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

     SEC. 1344. AUTHORIZATION OF APPROPRIATIONS.

       Section 9 (15 U.S.C. 2908) is amended--
       (1) by striking ``1979,'' and inserting ``2002,'';
       (2) by striking ``1980,'' and inserting ``2003,'';
       (3) by striking ``1981,'' and inserting ``2004,''; and
       (4) by striking ``$25,500,000'' and inserting 
     ``$75,500,000''.

     SEC. 1345. NATIONAL CLIMATE SERVICE PLAN.

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

     SEC. 6. NATIONAL CLIMATE SERVICE PLAN.

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

     SEC. 1346. INTERNATIONAL PACIFIC RESEARCH AND COOPERATION.

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

     SEC. 1347. REPORTING ON TRENDS.

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

     SEC. 1348. ARCTIC RESEARCH AND POLICY.

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

     SEC. 1349. ABRUPT CLIMATE CHANGE RESEARCH.

       (a) In General.--The Secretary of Commerce, through the 
     National Oceanic and Atmospheric Administration, shall carry 
     out a program of scientific research on potential abrupt 
     climate change designed--
       (1) to develop a global array of terrestrial and 
     oceanographic indicators of paleoclimate in order 
     sufficiently to identify and describe past instances of 
     abrupt climate change;
       (2) to improve understanding of thresholds and 
     nonlinearities in geophysical systems related to the 
     mechanisms of abrupt climate change;
       (3) to incorporate these mechanisms into advanced 
     geophysical models of climate change; and
       (4) to test the output of these models against an improved 
     global array of records of past abrupt climate changes.
       (b) Abrupt Climate Change Defined.--In this section, the 
     term ``abrupt climate

[[Page 5232]]

     change'' means a change in climate that occurs so rapidly or 
     unexpectedly that human or natural systems may have 
     difficulty adapting to it.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Commerce $10,000,000 
     for each of the fiscal years 2003 through 2008, and such sums 
     as may be necessary for fiscal years after fiscal year 2008, 
     to carry out subsection (a).

              Part III--Ocean and Coastal Observing System

     SEC. 1351. OCEAN AND COASTAL OBSERVING SYSTEM.

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

     SEC. 1352. AUTHORIZATION OF APPROPRIATIONS.

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

                 Subtitle E--Climate Change Technology

     SEC. 1361. NIST GREENHOUSE GAS FUNCTIONS.

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

     SEC. 1362. DEVELOPMENT OF NEW MEASUREMENT TECHNOLOGIES.

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

     SEC. 1363. ENHANCED ENVIRONMENTAL MEASUREMENTS AND STANDARDS

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

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

       ``(a) In General.--The Director shall establish within the 
     Institute a program to perform and support research on global 
     climate change standards and processes, with the goal of 
     providing scientific and technical knowledge applicable to 
     the reduction of greenhouse gases (as defined in section 4 of 
     the Global Climate Change Act of 2002).
       ``(b) Research Program.--
       ``(1) In general.--The Director is authorized to conduct, 
     directly or through contracts or grants, a global climate 
     change standards and processes research program.
       ``(2) Research projects.--The specific contents and 
     priorities of the research program shall be determined in 
     consultation with appropriate Federal agencies, including the 
     Environmental Protection Agency, the National Oceanic and 
     Atmospheric Administration, and the National Aeronautics and 
     Space Administration. The program generally shall include 
     basic and applied research--
       ``(A) to develop and provide the enhanced measurements, 
     calibrations, data, models, and reference material standards 
     which will enable the monitoring of greenhouse gases;
       ``(B) to assist in establishing of a baseline reference 
     point for future trading in greenhouse gases and the 
     measurement of progress in emissions reduction;
       ``(C) that will be exchanged internationally as scientific 
     or technical information which has the stated purpose of 
     developing mutually recognized measurements, standards, and 
     procedures for reducing greenhouses gases; and
       ``(D) to assist in developing improved industrial processes 
     designed to reduce or eliminate greenhouse gases.
       ``(c) National Measurement Laboratories.--
       ``(1) In general.--In carrying out this section, the 
     Director shall utilize the collective skills of the National 
     Measurement Laboratories of the National Institute of 
     Standards and Technology to improve the accuracy of 
     measurements that will permit better understanding and 
     control of these industrial chemical processes and result in 
     the reduction or elimination of greenhouse gases.
       ``(2) Material, process, and building research.--The 
     National Measurement Laboratories shall conduct research 
     under this subsection that includes--
       ``(A) developing material and manufacturing processes which 
     are designed for energy efficiency and reduced greenhouse gas 
     emissions into the environment;
       ``(B) developing environmentally-friendly, `green' chemical 
     processes to be used by industry; and

[[Page 5233]]

       ``(C) enhancing building performance with a focus in 
     developing standards or tools which will help incorporate low 
     or no-emission technologies into building designs.
       ``(3) Standards and tools.--The National Measurement 
     Laboratories shall develop standards and tools under this 
     subsection that include software to assist designers in 
     selecting alternate building materials, performance data on 
     materials, artificial intelligence-aided design procedures 
     for building sub-systems and `smart buildings', and improve 
     test methods and rating procedures for evaluating the energy 
     performance of residential and commercial appliances and 
     products.
       ``(d) National Voluntary Laboratory Accreditation 
     Program.--The Director shall utilize the National Voluntary 
     Laboratory Accreditation Program under this section to 
     establish a program to include specific calibration or test 
     standards and related methods and protocols assembled to 
     satisfy the unique needs for accreditation in measuring the 
     production of greenhouse gases. In carrying out this 
     subsection the Director may cooperate with other departments 
     and agencies of the Federal Government, State and local 
     governments, and private organizations.''.

     SEC. 1364. TECHNOLOGY DEVELOPMENT AND DIFFUSION.

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

     SEC. 1365. AUTHORIZATION OF APPROPRIATIONS.

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

         Subtitle F--Climate Adaptation and Hazards Prevention

                   Part I--Assessment and Adaptation

     SEC. 1371. REGIONAL CLIMATE ASSESSMENT AND ADAPTATION 
                   PROGRAM.

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

     SEC. 1372. COASTAL VULNERABILITY AND ADAPTATION.

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

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     Coastal Zone Management Act of 1972 (16 U.S.C. 1453) has the 
     meaning given it by that section.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated $3,000,000 annually for regional 
     assessments under subsection (a), and $3,000,000 annually for 
     coastal adaptation grants under subsection (d).

     SEC. 1373. ARCTIC RESEARCH CENTER.

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

            Part II--Forecasting and Planning Pilot Programs

     SEC. 1381. REMOTE SENSING PILOT PROJECTS.

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

     SEC. 1382. DATABASE ESTABLISHMENT.

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

     SEC. 1383. DEFINITIONS.

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

     SEC. 1384. AUTHORIZATION OF APPROPRIATIONS.

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

  SA 3232. Mr. BINGAMAN (for himself, Mr. Murkowski, Mr. Byrd, Mr. 
Lieberman, Mr. Thompson, Mr. Hollings, Mr. Kerry, Mr. Hagel, and Ms. 
Snowe) submitted an amendment intended to be proposed to amendment SA 
2917 proposed by Mr. Daschle (for himself and Mr. Bingaman) to the bill 
(S. 517) to authorize funding the Department of Energy to enhance its 
mission areas through technology transfer and partnerships for fiscal 
years 2002 through 2006, and for other purposes; which was ordered to 
lie on the table; as follows:

       On page 307, strike line 3 and all that follows through 
     page 369, line 22 and insert the following:

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

                TITLE X--NATIONAL CLIMATE CHANGE POLICY

                     Subtitle A--Sense of Congress

     SEC. 1001. SENSE OF CONGRESS ON CLIMATE CHANGE.

       (a) Findings.--The Congress makes the following findings:
       (1) Evidence continues to build that increases in 
     atmospheric concentrations of man-made greenhouse gases are 
     contributing to global climate change.
       (2) The Intergovernmental Panel on Climate Change (IPCC) 
     has concluded that ``there is new and stronger evidence that 
     most of the warming observed over the last 50 years is 
     attributable to human activities'' and that the Earth's 
     average temperature can be expected to rise between 2.5 and 
     10.4 degrees Fahrenheit in this century.
       (3) The National Academy of Sciences confirmed the findings 
     of the IPCC, stating that ``the IPCC's conclusion that most 
     of the observed warming of the last 50 years is likely to 
     have been due to the increase of greenhouse gas 
     concentrations accurately reflects the current thinking of 
     the scientific community on this issue'' and that ``there is 
     general agreement that the observed warming is real and 
     particularly strong within the past twenty years.'' The 
     National Academy of Sciences also noted that ``because there 
     is considerable uncertainty in current understanding of how 
     the climate system varies naturally and reacts to emissions 
     of greenhouse gases and aerosols, current estimates of the 
     magnitude of future warming should be regarded as tentative 
     and subject to future adjustments upward or downward.''
       (4) The IPCC has stated that in the last 40 years, the 
     global average sea level has risen, ocean heat content has 
     increased, and snow cover and ice extent have decreased, 
     which threatens to inundate low-lying island nations and 
     coastal regions throughout the world.
       (5) In October 2000, a U.S. government report found that 
     global climate change may harm the United States by altering 
     crop yields, accelerating sea-level rise, and increasing the 
     spread of tropical infectious diseases.
       (6) In 1992, the United States ratified the United Nations 
     Framework Convention on Climate Change (UNFCCC), the ultimate 
     objective of which is the ``stabilization of greenhouse gas 
     concentrations in the atmosphere at a level that would 
     prevent dangerous anthropogenic interference with the climate 
     system. Such a level should be achieved within a time-frame 
     sufficient to allow ecosystems to adapt naturally to climate 
     change, to ensure that food production is not threatened and 
     to enable economic development to proceed in a sustainable 
     manner.''
       (7) The UNFCCC stated in part that the Parties to the 
     Convention are to implement policies ``with the aim of 
     returning . . . to their 1990 levels anthropogenic emissions 
     of carbon dioxide and other greenhouse gases'' under the 
     principle that ``policies and measures . . . should be 
     appropriate for the specific conditions of each Party and 
     should be integrated with national development programmes, 
     taking into account that economic development is essential 
     for adopting measures to address climate change.''
       (8) There is a shared international responsibility to 
     address this problem, as industrial nations are the largest 
     historic and current emitters of greenhouse gases and 
     developing nations' emissions will significantly increase in 
     the future.
       (9) The UNFCCC further stated that ``developed country 
     Parties should take the lead in combating climate change and 
     the adverse effects thereof,'' as these nations are the 
     largest historic and current emitters of greenhouse gases. 
     The UNFCCC also stated that ``steps required to understand 
     and address climate change will be environmentally, socially 
     and economically most effective if they are based on relevant 
     scientific, technical and economic considerations and 
     continually re-evaluated in the light of new findings in 
     these areas.''
       (10) Senate Resolution 98 of the 105th Congress, which 
     expressed that developing nations must also be included in 
     any future,

[[Page 5235]]

     binding climate change treaty and such a treaty must not 
     result in serious harm to the United States economy, should 
     not cause the United States to abandon its shared 
     responsibility to help reduce the risks of climate change and 
     its impacts. Future international efforts in this regard 
     should focus on recognizing the equitable responsibilities 
     for addressing climate change by all nations, including 
     commitments by the largest developing country emitters in a 
     future, binding climate change treaty.
       (11) It is the position of the United States that it will 
     not interfere with the plans of any nation that chooses to 
     ratify and implement the Kyoto Protocol to the UNFCCC.
       (12) American businesses need to know how governments 
     worldwide will address the risks of climate change.
       (13) The United States benefits from investments in the 
     research, development and deployment of a range of clean 
     energy and efficiency technologies that can reduce the risks 
     of climate change and its impacts and that can make the 
     United States economy more productive, bolster energy 
     security, create jobs, and protect the environment.
       (b) Sense of Congress.--It is the sense of the United 
     States Congress that the United States should demonstrate 
     international leadership and responsibility in reducing the 
     health, environmental, and economic risks posed by climate 
     change by:
       (1) taking responsible action to ensure significant and 
     meaningful reductions in emissions of greenhouse gases from 
     all sectors:
       (2) creating flexible international and domestic 
     mechanisms, including joint implementation, technology 
     deployment, tradable credits for emissions reductions and 
     carbon sequestration projects that will reduce, avoid, and 
     sequester greenhouse gas emissions; and
       (3) participating in international negotiations, including 
     putting forth a proposal to the Conference of the Parties, 
     with the objective of securing United States' participation 
     in a future binding climate change Treaty in a manner that is 
     consistent with the environmental objectives of the UNFCCC, 
     that protects the economic interests of the United States, 
     and recognizes the shared international responsibility for 
     addressing climate change, including developing country 
     participation.

                  Subtitle B--Climate Change Strategy

     SEC. 1011. SHORT TITLE.

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

     SEC. 1012. DEFINITIONS.

       In this subtitle:
       (1) Climate-friendly technology.--The term ``climate-
     friendly technology'' means any energy supply or end-use 
     technology that, over the life of the technology and compared 
     to similar technology in commercial use as of the date of 
     enactment of this Act--
       (A) results in reduced emissions of greenhouse gases;
       (B) may substantially lower emissions of other pollutants; 
     and
       (C) may generate substantially smaller or less hazardous 
     quantities of solid or liquid waste.
       (2) Department.--The term ``Department'' means the 
     Department of Energy.
       (3) Department office.--The term ``Department Office'' 
     means the Office of Climate Change Technology of the 
     Department established by section 1015(a).
       (4) Federal agency.--The term ``Federal agency'' has the 
     meaning given the term ``agency'' in section 551 of title 5, 
     United States Code.
       (5) Greenhouse gas.--The term ``greenhouse gas'' means--
       (A) an anthropogenic gaseous constituent of the atmosphere 
     (including carbon dioxide, methane, nitrous oxide, 
     chlorofluorocarbons, hydrofluorocarbons, perfluorocarbons, 
     sulfur hexafluoride, and tropospheric ozone) that absorbs and 
     re-emits infrared radiation and influences climate; and
       (B) an anthropogenic aerosol (such as black soot) that 
     absorbs solar radiation and influences climate.
       (6) Interagency task force.--The term ``Interagency Task 
     Force'' means the Interagency Task Force established under 
     section 1014(e).
       (7) Key element.--The term ``key element'', with respect to 
     the Strategy, means--
       (A) definition of interim emission mitigation levels, that, 
     coupled with specific mitigation approaches and after taking 
     into account actions by other nations (if any), would result 
     in stabilization of greenhouse gas concentrations;
       (B) technology development, including--
       (i) a national commitment to double energy research and 
     development by the United States public and private sectors; 
     and
       (ii) in carrying out such research and development, a 
     national commitment to provide a high degree of emphasis on 
     bold, breakthrough technologies that will make possible a 
     profound transformation of the energy, transportation, 
     industrial, agricultural, and building sectors of the United 
     States;
       (C) climate adaptation research that focuses on actions 
     necessary to adapt to climate change--
       (i) that may have already occurred; or
       (ii) that may occur under future climate change scenarios;
       (D) climate science research that--
       (i) builds on the substantial scientific understanding of 
     climate change that exists as of the date of enactment of 
     this subtitle; and
       (ii) focuses on reducing the remaining scientific, 
     technical, and economic uncertainties to aid in the 
     development of sound response strategies.
       (8) Long-term goal of the strategy.--The term ``long-term 
     goal of the Strategy'' means the long-term goal in section 
     1013(a)(1).
       (9) Mitigation.--The term ``mitigation'' means actions that 
     reduce, avoid, or sequester greenhouse gases.
       (10) National academy of sciences.--The term ``National 
     Academy of Sciences'' means the National Academy of Sciences, 
     the National Academy of Engineering, the Institute of 
     Medicine, and the National Research Council.
       (11) Qualified individual.--
       (A) In general.--The term ``qualified individual'' means an 
     individual who has demonstrated expertise and leadership 
     skills to draw on other experts in diverse fields of 
     knowledge that are relevant to addressing the climate change 
     challenge.
       (B) Fields of knowledge.--The fields of knowledge referred 
     to in subparagraph (A) are--
       (i) the science of climate change and its impacts;
       (ii) energy and environmental economics;
       (iii) technology transfer and diffusion;
       (iv) the social dimensions of climate change;
       (v) climate change adaptation strategies;
       (vi) fossil, nuclear, and renewable energy technology;
       (vii) energy efficiency and energy conservation;
       (viii) energy systems integration;
       (ix) engineered and terrestrial carbon sequestration;
       (x) transportation, industrial, and building sector 
     concerns;
       (xi) regulatory and market-based mechanisms for addressing 
     climate change;
       (xii) risk and decision analysis;
       (xiii) strategic planning; and
       (xiv) the international implications of climate change 
     strategies.
       (12) Secretry.--The term ``Secretary'' means the Secretary 
     of Energy.
       (13) Stabilization of greenhouse gas concentrations.--The 
     term ``stabilization of greenhouse gas concentrations'' means 
     the stabilization of greenhouse gas concentrations in the 
     atmosphere at a level that would prevent dangerous 
     anthropogenic interference with the climate system, 
     recognizing that such a level should be achieved within a 
     time frame sufficient to allow ecosystems to adapt naturally 
     to climate change, to ensure that food production is not 
     threatened and to enable economic development to proceed in a 
     sustainable manner, as contemplated by the United Nations 
     Framework Convention on Climate Change, done at New York on 
     May 9, 1992.
       (14) Strategy.--The term ``Strategy'' means the National 
     Climate Change Strategy developed under section 1013.
       (15) White house office.--The term ``White House Office'' 
     means the Office of National Climate Change Policy 
     established by section 1014(a).

     SEC. 1013. NATIONAL CLIMATE CHANGE STRATEGY.

       (a) In General.--The President, through the director of the 
     White House Office and in consultation with the Interagency 
     Task Force, shall develop a National Climate Change Strategy, 
     which shall--
       (1) have the long-term goal of stabilization of greenhouse 
     gas concentrations through actions taken by the United States 
     and other nations;
       (2) recognize that accomplishing the long-term goal of the 
     Strategy will take from many decades to more than a century, 
     but acknowledging that significant actions must begin in the 
     near term;
       (3) incorporate the 4 key elements;
       (4) be developed on the basis of an examination of a broad 
     range of emissions levels and dates for achievement of those 
     levels (including those evaluated by the Intergovernmental 
     Panel on Climate Change and those consistent with U.S. treaty 
     commitments) that, after taking into account actions by other 
     nations, would achieve the long-term goal of the Strategy;
       (5) consider the broad range of activities and actions that 
     can be taken by United States entities to reduce, avoid, or 
     sequester greenhouse gas emissions both within the United 
     States and in other nations through the use of market 
     mechanisms, which may include, but not be limited to, 
     mitigation activities, terrestrial sequestration, earning 
     offsets through carbon capture or project-based activities, 
     trading of emissions credits in domestic and international 
     markets, and the application of the resulting credits from 
     any of the above within the United States;
       (6) minimize any adverse short-term and long-term social, 
     economic, national security, and environmental impacts, 
     including ensuring that the strategy is developed in an 
     economically and environmentally sound manner.
       (7) incorporate mitigation approaches leading to the 
     development and deployment of

[[Page 5236]]

     advanced technologies and practices that will reduce, avoid, 
     or sequester greenhouse gas emissions;
       (8) be consistent with the goals of energy, transportation, 
     industrial, agricultural, forestry, environmental, economic, 
     and other relevant policies of the United States;
       (9) take into account--
       (A) the diversity of energy sources and technologies;
       (B) supply-side and demand-side solutions; and
       (C) national infrastructure, energy distribution, and 
     transportation systems;
       (10) be based on an evaluation of a wide range of 
     approaches for achieving the long-term goal of the Strategy, 
     including evaluation of--
       (A) a variety of cost-effective Federal and State policies, 
     programs, standards, and incentives;
       (B) policies that integrate and promote innovative, market-
     based solutions in the United States and in foreign 
     countries; and
       (C) participation in other international institutions, or 
     in the support of international activities, that are 
     established or conducted to achieve the long-term goal of the 
     Strategy;
       (11) in the final recommendations of the Strategy--
       (A) emphasize policies and actions that achieve the long-
     term goal of the Strategy; and
       (B) provide specific recommendations concerning--
       (i) measures determined to be appropriate for short-term 
     implementation, giving preference to cost-effective and 
     technologically feasible measures that will--
       (I) produce measurable net reductions in United States 
     emissions, compared to expected trends, that lead toward 
     achievement of the long-term goal of the Strategy; and
       (II) minimize any adverse short-term and long-term 
     economic, environmental, national security, and social 
     impacts on the United States;
       (ii) the development of technologies that have the 
     potential for long-term implementation--
       (I) giving preference to technologies that have the 
     potential to reduce significantly the overall cost of 
     achieving the long-term goal of the Strategy; and
       (II) considering a full range of energy sources, energy 
     conversion and use technologies, and efficiency options;
       (iii) such changes in institutional and technology systems 
     are necessary to adapt to climate change in the short-term 
     and the long-term;
       (iv) such review, modification, and enhancement of the 
     scientific, technical, and economic research efforts of the 
     United States, and improvements to the data resulting from 
     research, as are appropriate to improve the accuracy of 
     predictions concerning climate change and the economic and 
     social costs and opportunities relating to climate change; 
     and
       (v) changes that should be made to project and grant 
     evaluation criteria under other Federal research and 
     development programs so that those criteria do not inhibit 
     development of climate-friendly technologies;
       (12) recognize that the Strategy is intended to guide the 
     nation's effort to address climate change, but it shall not 
     create a legal obligation on the part of any person or entity 
     other than the duties of the Director of the White House 
     Office and Interagency Task Force in the development of the 
     Strategy;
       (13) have a scope that considers the totality of United 
     States public, private, and public-private sector actions 
     that bear on the long-term goal;
       (14) be developed in a manner that provides for meaningful 
     participation by, and consultation among, Federal, State, 
     tribal, and local government agencies, nongovernmental 
     organizations, academia, scientific bodies, industry, the 
     public, and other interested parties in accordance with 
     subsections (b)(3)(C)(iv)(II) and (e)(3)(B)(ii) of section 
     1014;
       (15) address how the United States should engage State, 
     tribal, and local governments in developing and carrying out 
     a response to climate change;
       (16) promote, to the maximum extent practicable, public 
     awareness, outreach, and information-sharing to further the 
     understanding of the full range of climate change-related 
     issues;
       (17) provide a detailed explanation of how the measures 
     recommended by the Strategy will ensure that they do not 
     result in serious harm to the economy of the United States;
       (18) provide a detailed explanation of how the measures 
     recommended by the Strategy will achieve its long-term goal;
       (19) include any recommendations for legislative and 
     administrative actions necessary to implement the Strategy;
       (20) serve as a framework for climate change actions by all 
     Federal agencies;
       (21) recommend which Federal agencies are, or should be, 
     responsible for the various aspects of implementation of the 
     Strategy and any budgetary implications;
       (22) address how the United States should engage foreign 
     governments in developing an international response to 
     climate change; and
       (23) incorporate initiatives to open markets and promote 
     the deployment of a range of climate-friendly technologies 
     developed in the United States and abroad.
       (b) Submission to Congress.--Not later than 1 year after 
     the date of enactment of this section, the President, through 
     the Interagency Task Force and the Director, shall submit to 
     Congress the Strategy, in the form of a report that 
     includes--
       (1) a description of the Strategy and its goals, including 
     how the Strategy addresses each of the 4 key elements;
       (2) an inventory and evaluation of Federal programs and 
     activities intended to carry out the Strategy;
       (3) a description of how the Strategy will serve as a 
     framework of climate change response actions by all Federal 
     agencies, including a description of coordination mechanisms 
     and interagency activities;
       (4) evidence that the Strategy is consistent with other 
     energy, transportation, industrial, agricultural, forestry, 
     environmental, economic, and other relevant policies of the 
     United States;
       (5) a description of provisions in the Strategy that ensure 
     that it minimizes any adverse short-term and long-term 
     social, economic, national security, and environmental 
     impacts, including ensuring that the Strategy is developed in 
     an economically and environmentally sound manner;
       (6) evidence that the Strategy has been developed in a 
     manner that provides for participation by, and consultation 
     among, Federal, State, tribal, and local government agencies, 
     non-governmental organizations, academia, scientific bodies, 
     industry, the public, and other interested parties;
       (7) a description of Federal activities that promote, to 
     the maximum extent practicable, public awareness, outreach, 
     and information-sharing to further the understanding of the 
     full range of climate change-related issues; and
       (8) recommendations for legislative or administrative 
     changes to Federal programs or activities implemented to 
     carry out this Strategy, in light of new knowledge of climate 
     change and its impacts and costs or benefits, or 
     technological capacity to improve mitigation or adaption 
     activities.
       (c) Updates.--Not later than 4 years after the date of 
     submission of the Strategy to Congress under subsection (b), 
     and at the end of each 4-year period thereafter, the 
     President shall submit to Congress an updated version of the 
     Strategy.
       (d) Progress Reports.--Not later than 1 year after the date 
     of submission of the Strategy to Congress under subsection 
     (b), and annually thereafter at the time that the President 
     submits to the Congress the budget of the United States 
     Government under section 1105 of title 21, United States 
     Code, the President shall submit to Congress a report that--
       (1) describes the Strategy, its goals, the Federal programs 
     and activities intended to carry out the Strategy through 
     technological, scientific, mitigation, and adaption 
     activities;
       (2) evaluates the Federal programs and activities 
     implemented as part of this Strategy against the goals and 
     implementation dates outlined in the Strategy;
       (3) assesses the progress in implementation of the 
     Strategy;
       (4) incorporates the technology program reports required 
     pursuant to section 1015(a)(3) and subsections (d) and (e) of 
     section 1321;
       (5) describes any changes to Federal programs or activities 
     implemented to carry out this Strategy, in light of new 
     knowledge of climate change and its impacts and costs or 
     benefits, or technological capacity to improve mitigation or 
     adaptation activities;
       (6) describes all Federal spending on climate change for 
     the current fiscal year and each of the five years previous; 
     categorized by Federal agency and program function (including 
     scientific research, energy research and development, 
     regulation, education, and other activities);
       (7) estimates the budgetary impact for the current fiscal 
     year and each of the five years previous of any Federal tax 
     credits, tax deductions or other incentives claimed by 
     taxpayers that are directly or indirectly attributable to 
     greenhouse gas emissions reduction activities;
       (8) estimates the amount, in metric tons, of net greenhouse 
     gas emissions reduced, avoided, or sequestered directly or 
     indirectly as a result of the implementation of the Strategy;
       (9) evaluates international research and development and 
     market-based activities and the mitigation actions taken by 
     the United States and other nations to achieve the long-term 
     goal of the Strategy; and
       (10) makes recommendations for legislative or 
     administrative actions or adjustments that will accelerate 
     progress towards meeting the near-term and long-term goals 
     contained in the Strategy.
       (e) National Academy of Sciences review.--
       (1) In general.--Not later than 90 days after the date of 
     publication of the Strategy under subsection (b) and each 
     update under subsection (c), the Director of the National 
     Science Foundation, on behalf of the Director of the White 
     House Office and the Interagency Task Force, shall enter into 
     appropriate arrangements with the National Academy of 
     Sciences to conduct a review of the Strategy or update.

[[Page 5237]]

       (2) Criteria.--The review by the National Academy of 
     Sciences shall evaluate the goals and recommendations 
     contained in the Strategy or update, taking into 
     consideration--
       (A) the adequacy of effort and the appropriateness of focus 
     of the totality of all public, private, and public-private 
     sector actions of the United States with respect to the 
     Strategy, including the 4 key elements;
       (B) the adequacy of the budget and the effectiveness with 
     which each Federal agency is carrying out its 
     responsibilities;
       (C) current scientific knowledge regarding climate change 
     and its impacts;
       (D) current understanding of human social and economic 
     responses to climate change, and responses of natural 
     ecosystems to climate change;
       (E) advancements in energy technologies that reduce, avoid, 
     or sequester greenhouse gases or otherwise mitigate the risks 
     of climate change;
       (F) current understanding of economic costs and benefits of 
     mitigation or adaptation activities;
       (G) the existence of alternative policy options that could 
     achieve the Strategy goals at lower economic, environmental, 
     or social cost; and
       (H) international activities and the actions taken by the 
     United States and other nations to achieve the long-term goal 
     of the Strategy.
       (3) Report.--Not later than 1 year after the date of 
     submittal to the Congress of the Strategy or update, as 
     appropriate, the National Academy of Sciences shall prepare 
     and submit to the Congress and the President a report 
     concerning the results of its review, along with any 
     recommendations as appropriate. Such report shall also be 
     made available to the public.
       (4) Authorization of appropriations.--For the purposes of 
     this subsection, there are authorized to be appropriated to 
     the National Science Foundation such sums as may be 
     necessary.

     SEC. 1014. OFFICE OF NATIONAL CLIMATE CHANGE POLICY.

       (a) Establishment.--
       (1) In general.--There is established, within the Executive 
     Office of the President, the Office of National Climate 
     Change Policy.
       (2) Focus.--The White House Office shall have the focus of 
     achieving the long-term goal of the Strategy while minimizing 
     adverse short-term and long-term economic and social impacts.
       (3) Duties.--Consistent with paragraph (2), the White House 
     Office shall--
       (A) establish policies, objectives, and priorities for the 
     Strategy;
       (B) in accordance with subsection (d), establish the 
     Interagency Task Force to serve as the primary mechanism 
     through which the heads of Federal agencies shall assist the 
     Director of the White House Office in developing and 
     implementing the Strategy;
       (C) to the maximum extent practicable, ensure that the 
     Strategy is based on objective, quantitative analysis, 
     drawing on the analytical capabilities of Federal and State 
     agencies, especially the Department Office;
       (D) advise the President concerning necessary changes in 
     organization, management, budgeting, and personnel allocation 
     of Federal agencies involved in climate change response 
     activities; and
       (E) advise the President and notify a Federal agency if the 
     policies and discretionary programs of the agency are not 
     well aligned with, or are not contributing effectively to, 
     the long-term goal of the Strategy.
       (b) Director of the White House Office.--
       (1) In general.--The White House Office shall be headed by 
     a Director, who shall report directly to the President, and 
     shall consult with the appropriate economic, environmental, 
     national security, domestic policy, science and technology 
     and other offices with the Executive Office of the President.
       (2) Appointment.--The Director of the White House Office 
     shall be a qualified individual appointed by the President, 
     by and with the advice and consent of the Senate.
       (3) Duties of the director of the white house office.--
       (A) Strategy.--In accordance with section 1013, the 
     Director of the White House Office shall coordinate the 
     development and updating of the Strategy.
       (B) Interagency task force.--The Director of the White 
     House Office shall serve as Chair of the Interagency Task 
     Force.
       (C) Advisory duties.--
       (i) Energy, economic, environmental, transportation, 
     industrial, agricultural, building, forestry, and other 
     programs.--The Director of the White House Office, using an 
     integrated perspective considering the totality of actions in 
     the United States, shall advise the President and the heads 
     of Federal agencies on--
       (I) the extent to which United States energy, economic, 
     environmental, transportation, industrial, agricultural, 
     forestry, building, and other relevant programs are capable 
     of producing progress on the long-term goal of the Strategy; 
     and
       (II) the extent to which proposed or newly created energy, 
     economic, environmental, transportation, industrial, 
     agricultural, forestry, building, and other relevant programs 
     positively or negatively affect the ability of the United 
     States to achieve the long-term goal of the Strategy.
       (ii) Tax, trade, and foreign policies.--The Director of the 
     White House Office, using an integrated perspective 
     considering the totality of actions in the United States, 
     shall advise the President and the heads of Federal agencies 
     on--
       (I) the extent to which the United States tax policy, trade 
     policy, and foreign policy are capable of producing progress 
     on the long-term goal of the Strategy; and
       (II) the extent to which proposed or newly created tax 
     policy, trade policy, and foreign policy positively or 
     negatively affect the ability of the United States to achieve 
     the long-term goal of the Strategy.
       (iii) International treaties.--The Secretary of State, 
     acting in conjunction with the Interagency Task Force and 
     using the analytical tools available to the White House 
     Office, shall provide to the Director of the White House 
     Office an opinion that--
       (I) specifies, to the maximum extent practicable, the 
     economic and environmental costs and benefits of any proposed 
     international treaties or components of treaties that have an 
     influence on greenhouse gas management; and
       (II) assesses the extent to which the treaties advance the 
     long-term goal of the Strategy, while minimizing adverse 
     short-term and long-term economic and social impacts and 
     considering other impacts.
       (iv) Consultation.--
       (I) With members of interagency task force.--To the extent 
     practicable and appropriate, the Director of the White House 
     Office shall consult with all members of the Interagency Task 
     Force before providing advice to the President.
       (II) With other interested parties.--The Director of the 
     White House Office shall establish a process for obtaining 
     the meaningful participation of Federal, State, tribal, and 
     local government agencies, nongovernmental organizations, 
     academia, scientific bodies, industry, the public, and other 
     interested parties in the development and updating of the 
     Strategy.
       (D) Public education, awareness, outreach, and information-
     sharing.--The Director of the White House Office, to the 
     maximum extent practicable, shall promote public awareness, 
     outreach, and information-sharing to further the 
     understanding of the full range of climate change-related 
     issues.
       (4) Annual reports.--The Director of the White House 
     Office, in consultation with the Interagency Task Force and 
     other interested parties, shall prepare the annual reports 
     for submission by the President to Congress under section 
     1013(d).
       (5) Analysis.--During development of the Strategy, 
     preparation of the annual reports submitted under paragraph 
     (4), and provision of advice to the President and the heads 
     of Federal agencies, the Director of the White House Office 
     shall place significant emphasis on the use of objective, 
     quantitative analysis, taking into consideration any 
     uncertainties associated with the analysis.
       (c) Staff.--
       (1) In general.--The Director of the White House Office 
     shall employ a professional staff, including the staff 
     appointed under paragraph (2), of not more than 25 
     individuals to carry out the duties of the White House 
     Office.
       (2) Intergovernmental personnel and fellowships.--The 
     Director of the White House Office may use the authority 
     provided by the Intergovernmental Personnel Act of 1970 (42 
     U.S.C. 4701 et seq.) and subchapter VI of chapter 33 of title 
     5, United States Code, and fellowships, to obtain staff from 
     Federal agencies, academia, scientific bodies, or a National 
     Laboratory (as that term is defined in section 1203), for 
     appointments of a limited term.
       (d) Authorization of Appropriations.--
       (1) Use of available appropriations.--From funds made 
     available to Federal agencies for the fiscal year in which 
     this Title is enacted, the President shall provide such sums 
     as are necessary to carry out the duties of the White House 
     Office under this title until the date on which funds are 
     made available under paragraph (2).
       (2) Authorization of appropriations.--There is authorized 
     to be appropriated to the Executive Office of the President 
     to carry out the duties of the White House Office under this 
     subtitle, $5,000,000 for each of fiscal years 2003 through 
     2011, to remain available through September 30, 2011.
       (e) Interagency Task Force.--
       (1) In general.--The Director of the White House Office 
     shall establish the Interagency Task Force.
       (2) Composition.--The Interagency Task Force shall be 
     composed of--
       (A) the Director off the White House Office, who shall 
     serve as Chair;
       (B) the Secretary of State;
       (C) the Secretary of Energy;
       (D) the Secretary of Commerce;
       (E) the Secretary of Transportation;
       (F) the Secretary of Agriculture;
       (G) the Administrator of the Environmental Protection 
     Agency;
       (H) the Chairman of the Council of Economic Advisers;
       (I) the Chairman of the Council on Environmental Quality;
       (J) the Director of the Office of Science and Technology 
     Policy;

[[Page 5238]]

       (K) the Director of the Office of Management and Budget; 
     and
       (L) the heads of such other Federal agencies as the 
     President considers appropriate.
       (3) Strategy.--
       (A) In general.--The Interagency Task Force shall serve as 
     the primary forum through which the Federal agencies 
     represented on the Interagency Task Force jointly assist the 
     Director of the White House Office in--
       (i) developing and updating the Strategy; and
       (ii) preparing annual reports under section 1013(d).
       (B) Required elements.--In carrying out subparagraph (A), 
     the Interagency Task Force shall--
       (i) take into account the long-term goal and other 
     requirements of the Strategy specified in section 1013(a);
       (A) manage an energy technology research and development 
     program that directly supports the Strategy by--
       (i) focusing on high-risk, bold, breakthrough technologies 
     that--
       (I) have significant promise of contributing to the long-
     term goal of the Strategy by--
       (aa) mitigating the emissions of greenhouse gases;
       (bb) removing and sequestering greenhouse gases from 
     emission streams; or
       (cc) removing and sequestering greenhouse gases from the 
     atmosphere;
       (II) are not being addressed significantly by other Federal 
     programs; and
       (III) would represent a substantial advance beyond 
     technology available on the date of enactment of this 
     subtitle;
       (ii) forging fundamentally new research and development 
     partnerships among various Department, other Federal, and 
     State programs, particularly between basic science and energy 
     technology programs, in cases in which such partnerships have 
     significant potential to affect the ability of the United 
     States to achieve the long-term goal of the Strategy at the 
     lowest possible cost;
       (iii) forging international research and development 
     partnerships that are in the interests of the United States 
     and make progress on achieving the long-term goal of the 
     Strategy;
       (iv) making available, through monitoring, experimentation, 
     and analysis, data that are essential to proving the 
     technical and economic viability of technology central to 
     addressing climate change; and
       (v) transferring research and development programs to other 
     program offices of the Department once such a research and 
     development program crosses the threshold of high-risk 
     research and moves into the realm of more conventional 
     technology development;
       (B) through active participation in the Interagency Task 
     Force and utilization of the analytical capabilities of the 
     Department Office, share analyses of alternative climate 
     change strategies with other agencies represented on the 
     Interagency Task Force to assist them in understanding--
       (i) the scale of the climate change challenge; and
       (ii) how actions of the Federal agencies on the Interagency 
     Task Force postively or negatively contribute to climate 
     change solutions;
       (C) provide analytical support to the White House Office, 
     particularly in support of the development of the Strategy 
     and associated progress reporting;
       (D) foster the development of tools, data, and capabilities 
     to ensure that--
       (i) the United States has a robust capability for 
     evaluating alternative climate change response scenarios; and
       (ii) the Department Office provides long-term analytical 
     continuity during the terms of service of successive 
     Presidents.
       (E) identify the total contribution of all Department 
     programs to the Strategy; and
       (F) advise the Secretary on all aspects of climate change-
     related issues, including necessary changes in Department 
     organization, management, budgeting, and personnel allocation 
     in the programs involved in climate change response-related 
     activities.
       (3) Annual reports.--The Department Office shall prepare an 
     annual report for submission by the Secretary to Congress and 
     the White House Office that--
       (A) assesses progress toward meeting the goals of the 
     energy technology research and development program described 
     in this section;
       (B) assesses the activities of the Department Office;
       (C) assesses the contributions of all energy technology 
     research and development programs of the Department 
     (including science programs) to the long-term goal and other 
     requirements of the Strategy; and
       (D) make recommendations for actions by the Department and 
     other Federal agencies to address the components of 
     technology development that are necessary to support the 
     Strategy.
       (b) Director of the Department Office.--
       (1) In general.--The Department Office shall be headed by a 
     Director, who shall be a qualified individual appointed by 
     the President, and who shall be compensated at a rate 
     provided for level IV of the Executive Schedule under section 
     5315 of title 5, United States Code.
       (2) Reporting.--The Director of the Department Office shall 
     report directly to the Under Secretary for Energy and 
     Science.
       (3) Vacancies.--A vacancy in the position of the Director 
     of the Department Office shall be filled in the same manner 
     as the original appointment was made.
       (c) Intergovernmental Personnel.--The Department Office may 
     use the authority provided by the Intergovernmental Personnel 
     Act of 1970 (42 U.S.C. 4701 et seq.), subchapter VI of 
     chapter 33 of title 5, United States Code, and other 
     Departmental personnel authorities, to obtain staff for 
     appointments of a limited term.
       (d) Relationship to Other Department Programs.--Each 
     project carried out by the Department Office shall be--
       (1) initiated only after consultation with 1 or more other 
     appropriate program offices of the Department that support 
     research and development in the areas relating to the 
     project;
       (2) managed by the Department Office; and
       (3) in the case of a project that reaches a sufficient 
     level of maturity, with the concurrence of the Department 
     Office and the appropriate office described in paragraph (1), 
     transferred to the appropriate office, along with the funds 
     necessary to continue the project to the point at which non-
     Federal funding can provide substantial support for the 
     project.
       (e) Collaboration and Cost Sharing.--
       (1) With other federal agencies.--Projects supported by the 
     Department Office may include participation of, and be 
     supported by, other Federal agencies that have a role in the 
     development, commercialization, or transfer of energy, 
     transportation, industrial, agricultural, forestry, or other 
     change-related technology.
       (2) With the private sector.--
       (A) In general.--Notwithstanding section 1403, the 
     Department Office shall create an operating model that allows 
     for collaboration, division of effort, and cost sharing with 
     industry on individual climate change response projects.
       (B) Requirements.--Although cost sharing in some cases may 
     be appropriate, the Department Office shall focus on long-
     term high-risk research and development and should not make 
     industrial partnerships or cost sharing a requirement, if 
     such a requirement would bias the activities of the 
     Department Office toward incremental innovations.
       (C) Reevaluation on transfer.--At such time as any bold, 
     breakthrough research and development program reaches a 
     sufficient level of technological maturity such that the 
     program is transferred to a program office of the Department 
     other than the Department Office, the cost-sharing 
     requirements and criteria applicable to the program shall be 
     reevaluated.
       (D) Publication in federal register.--Each cost-sharing 
     agreement entered into under this paragraph shall be 
     published in the Federal Register.
       (f) Analysis of Climate Change Strategy.--
       (1) In general.--The Department Office shall foster the 
     development and application of advanced computational tools, 
     data, and capabilities that, together with the capabilities 
     of other federal agencies, support integrated assessment of 
     alternative climate change response scenarios and 
     implementation of the Strategy.
       (2) Programs.--
       (A) In general.--The Department Office shall--
       (i) develop and maintain core analytical competencies and 
     complex, integrated computational modeling capabilities that, 
     together with the capabilities of other federal agencies, are 
     necessary to support the design and implementation of the 
     Strategy; and
       (ii) track United States and international progress toward 
     the long-term goal of the Strategy.
       (B) International carbon dioxide sequestration monitoring 
     and data program.--In consultation with Federal, State, 
     academic, scientific, private sector, nongovernmental, 
     tribal, and international carbon capture and sequestration 
     technology programs, the Department Office shall design and 
     carry out an international carbon dioxide sequestration 
     monitoring and data program to collect, analyze, and make 
     available the technical and economic data to ascertain--
       (i) whether engineered sequestration and terrestrial 
     sequestration will be acceptable technologies from 
     regulatory, economic, and international perspectives;
       (ii) whether carbon dioxide sequestered in geological 
     formations or ocean systems is stable and has inconsequential 
     leakage rates on a geologic time-scale; and
       (iii) the extent to which forest, agricultural, and other 
     terrestrial systems are suitable carbon sinks.
       (3) Areas of expertise.--
       (A) In general.--The Department Office shall develop and 
     maintain expertise in integrated assessment, modeling, and 
     related capabilities necessary--
       (i) to understand the relationship between natural, 
     agricultural, industrial, energy, and economic systems;
       (ii) to design effective research and development programs; 
     and
       (iii) to assist with the development and implementation of 
     the Strategy.
       (B) Technology transfer and diffusion.--The expertise 
     described in clause (i) shall include knowledge of technology 
     transfer and technology diffusion in United States and 
     foreign markets.

[[Page 5239]]

       (4) Dissemination of information.--The Department Office 
     shall ensure, to the maximum extent practicable, that 
     technical and scientific knowledge relating to greenhouse gas 
     emission reduction, avoidance, and sequestration is broadly 
     disseminated through publications, fellowships, and training 
     programs.
       (5) Assessments.--In a manner consistent with the Strategy, 
     the Department shall conduct assessments of deployment of 
     climate-friendly technology.
       (6) Analysis.--During development of the Strategy, annual 
     reports submitted under subsection (a)(3), and advice to the 
     Secretary, the Director of the Department Office shall place 
     significant emphasis on the use of objective, quantitative 
     analysis, taking into consideration any associated 
     uncertainties.
       (g) Authorization of Approporiations.--
       (1) Use of available appropriations.--From funds made 
     available to Federal agencies for the fiscal year in which 
     this subtitle is enacted, the President shall provide such 
     sums as are necessary to carry out the duties of the 
     Department Office under this subtitle until the date on which 
     funds are made available under paragraph (2).
       (2) Authorization of appropriations.--There is authorized 
     to be appropriated to the Secretary, to carry out the duties 
     of the Department Office under this subtitle, $4,750,000,000 
     for the period of fiscal years 2003 through 2011, to remain 
     available through September 30, 2011.
       (3) Additonal amounts.--Amounts authorized to be 
     appropriated under this section shall be in addition to--
       (A) amounts made available to carry out the United States 
     Global Change Research Program under the Global Change 
     Research Act of 1990 (15 U.S.C. 2921 et seq.); and
       (B) amounts made available under other provisions of law 
     for energy research and development.

     SEC. 1016. ADDITIONAL OFFICES AND ACTIVITIES.

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

               Subtitle C--Science and Technology Policy

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

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

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

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

                  Subtitle D--Miscellaneous Provisions

     SEC. 1031. ADDITIONAL INFORMATION FOR REGULATORY REVIEW.

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

     SEC. 1032. GREENHOUSE GAS EMISSIONS FROM FEDERAL FACILITIES.

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

  SA 3233. Mr. DAYTON (for himself, Mr. Wellstone, Mr. Feingold, Ms. 
Cantwell, Mrs. Boxer, Mr. Wyden, Mrs. Murray, Ms. Stabenow, Mr. 
Jeffords, and Mr. Durbin) submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517 to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 28 strike line 17 and all that follows 
     through page 36, line 4, and insert the following:

     SEC. 2. ELECTRIC UTILITY MERGER PROVISIONS.

       Section 203(a) of the Federal Power Act (16 U.S.C. 824b(a)) 
     (as amended by section 202) is amended by striking paragraph 
     (4) and inserting the following:
       ``(4) Approval.--
       ``(A) In general.--After notice and opportunity for 
     hearing, if the Commission finds that the proposed 
     transaction will serve the public interest, the Commission 
     shall approve the transaction.
       ``(B) Minimum required findings.--In making the finding 
     under subparagraph (A) with respect to proposed transaction, 
     the Commission shall at a minimum, find that the proposed 
     transaction will--
       ``(i)(I) enhance competition in wholesale electricity 
     markets; and
       ``(II) if a State commission requests the Commission to 
     consider the effect of the proposed transaction on 
     competition in retail electricity markets, enhance 
     competition in retail electricity markets;
       ``(ii) produce significant gains in operational and 
     economic efficiency;
       ``(iii) include employee protective arrangements, as 
     defined in Sec. 222 of the Public Utility Holding Company Act 
     of 2002, that the Commission concludes will fairly and 
     equitably protect the interests of employees affected by the 
     proposed transaction; and
       ``(iv) result in a corporate and capital structure that 
     facilitates effective regulatory oversight.''.

     SEC. 2. WHOLESALE MARKETS AND MARKET POWER.

       (a) Rules and Procedures To Ensure Competitive Wholesale 
     Markets;
       (1) In general.--Section 205 of the Federal Power Act (16 
     U.S.C. 824d) is amended by adding at the end the following:
       (g) Rules and Procedures To Ensure Competitive Wholesale 
     Markets.--
       ``(1) In general.--Not later than 270 days after the date 
     of enactment of this subsection, the Commission shall adopt 
     such rules and procedures as the commission determines are 
     necessary to define and determine the conditions necessary--
       ``(A) to maintain competitive wholesale markets;
       ``(B) to effectively monitor market conditions and trends;
       ``(C) to prevent the abuse of market power and market 
     manipulation;
       ``(D) to protect the public interests; and
       ``(E) to ensure the maintenance of just and reasonable 
     wholesale rates.
       ``(2) Conditions on grants of authority.--The Commission 
     shall--
       ``(A) ensure that any grant of authority by the Commission 
     to a public utility to charge market-based rates for any sale 
     of electric energy subject to the jurisdiction of the 
     Commission is consistent with the rules and procedures 
     adopted by the Commission under paragraph (1); and
       ``(B) establish and impose applicable to a public utility 
     that--
       ``(i) violates a rule or procedures adopted under paragraph 
     (1); or
       ``(ii) by any other means uses a grant of authority to 
     exercise market power or manipulate the market.
       ``(3) No limitation on federal antitrust remedies.--The 
     filing with the Commission of a request or authorization to 
     charge market-based rates, and the acceptance or approval by 
     the Commission of such a request, shall not affect the 
     availability of any remedy under Federal antitrust law with 
     respect to any rate, charge, or service that is subject to 
     the authorization.''.
       ``(2) Inefffectiveness of other provision.--
       Section 203 of this Act (relating to market-based rates) 
     shall be of no effect.
       ``(b) Remedial Measures for Market Power.--
       Part II of the Federal Power Act (16 U.S.C. 824 et seq.) 
     (as amended by Section 209) is amended by adding at the end 
     the following:

     ``SEC. 218 REMEDIAL MEASURES FOR MARKET POWER.

       ``(a) Definition of Market Power.--In this section, the 
     term `market power' with respect to public utility, means the 
     ability of the public utility to maintain energy prices above 
     competitive levels.
       ``(b) Commission Jurisdictional Sales.--If the Commission, 
     on receipt of a complaint

[[Page 5240]]

     by any person or on a motion of the Commission, determines 
     that there exist markets for any service or use of a facility 
     subject to the jurisdiction of the Commission under this Act 
     in which a public utility has exercised market power, the 
     Commission, in accordance with this Act, shall issue such 
     orders as are necessary to mitigate and remedy the adverse 
     competitive effects of the market power exercised.''.

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

     SEC. 221. SHORT TITLE.

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

     SEC. 222. DEFINITIONS.

       In 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) Employee protective arrangement.--The term ``employee 
     protective arrangement'' means a provision that may be 
     necessary for--
       (A) the preservation of rights, privileges, and benefits 
     (including continuation of pension rights and benefits) under 
     existing collective bargaining agreements or otherwise;
       (B) the continuation of collective bargaining rights;
       (C) the protection of individual employees against a 
     worsening of their positions related to employment;
       (D) assurances of employment to employees of acquired 
     companies;
       (E) assurances of priority of reemployment of employees 
     whose employment is ended or who are laid off; and
       (F) paid training or retraining programs.
       (7) Exempt wholesale generator and foreign utility 
     company.--The terms ``exempt wholesale generator'' and 
     ``foreign utility company'' have the same meaning 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.
       (8) 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 
     won use and not for resale) of natural or manufactured gas 
     for heat, light, or power.
       (9) Holding company.--The term ``holding company'' means--
       (A) any company that directly or indirectly owns, controls, 
     or holds, with power to vote, 10 percent of more of the 
     outstanding voting securities of a public utility company or 
     of a holding company of any public utility company; and
       (B) any person, determined by the Commission, after notice 
     and opportunity for hearing, to exercise directly or 
     indirectly (either alone or pursuant to an arrangement or 
     understanding with one or more persons) such a controlling 
     influence over the management or policies of any public 
     utility company or holding company as to make it necessary or 
     appropriate for the rate protection of utility customers with 
     respect to rates that such person be subject to the 
     obligations, duties, and liabilities imposed by this subtitle 
     upon holding companies.
       (10) Holding company system.--The term ``holding company 
     system'' means a holding company, together with its 
     subsidiary companies.
       (11) Jurisdictional rates.--The term ``jurisdictional 
     rates'' means rates established by the Commission for the 
     transmission of electric energy in interstate commerce, the 
     sale of electric energy at wholesale in interstate commerce, 
     the transportation of natural gas in interstate commerce, and 
     the sale in interstate commerce of natural gas for resale for 
     ultimate public consumption for domestic, commercial, 
     industrial, or any other use.
       (12) 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.
       (13) Person.--The term ``person'' means an individual or 
     company.
       (14) 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.
       (15) Public utility company.--The term ``public utility 
     company'' means an electric utility company or a gas utility 
     company.
       (16) 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.
       (17) 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 one or more 
     other persons) so as to make it necessary for the rate 
     protection of utility customers with respect to rates that 
     such person be subject to the obligations, duties, and 
     liabilities imposed by this subtitle upon subsidiary 
     companies of holding companies.
       (18) 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. 223. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 
                   1935.

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

     SEC. 224. ACCESS TO BOOKS AND RECORDS.

       (a) In General.--Each holding company and each affiliate or 
     associate company thereof shall produce for examination such 
     personnel, books, accounts, memoranda, records, and any other 
     materials upon an order of the Commission or any State 
     commission finding that the production of such materials will 
     assist the Commission or the State commission in carrying out 
     its responsibilities.
       (b) Court Jurisdiction.--Any United States district court 
     located within the State in which the State commission is 
     seeking to examine personnel or materials described in 
     subsection (a), or within the District of Columbia or within 
     any State in which the public utility is headquartered, shall 
     have the jurisdiction to enforce compliance with this 
     section.
       (c) Cost Recovery.--The cost of any audit of a holding 
     company or any affiliate or associate company ordered by the 
     Commission or a State commission under this section shall be 
     borne by the holding company and the associate or affiliate 
     company thereof.
       (d) Confidentiality.--Information provided to the 
     Commission or State commission shall be treated as 
     confidential only if the holding company or affiliate or 
     associate company thereof demonstrates to the court that such 
     information should not be made public.
       (e) Auditing.--The Commission, in consultation with 
     appropriate State commissions, shall conduct an audit every 3 
     years of the books and records of each holding company and 
     each affiliate or associate company thereof.
       (f) Preemption.--Nothing in this section shall preempt any 
     State law obligating a holding company or any associate or 
     affiliate company thereof to produce books and records.

     SEC. 225. TRANSACTION TRANSPARENCY.

       (a) Prohibited Activities.--No holding company or affiliate 
     thereof, shall enter into any--
       (1) transaction for the purchase, sale, lease, or other 
     transfer of assets, goods, or services (other than the sale 
     of electricity or gas) or into any financial transaction 
     (including the issuance of securities, loans or guarantees of 
     indebtedness or value) with a public utility company that is 
     an affiliate of that holding company, unless--
       (A) the transaction is clearly and fully disclosed by the 
     public utility company in a financial statement or other 
     report that is available to the public; and
       (B) prior to such transaction, the Commission has 
     determined that the transaction will not be detrimental to 
     the public interest or the interests of electricity and 
     natural gas consumers or competition; or
       (2) financial transaction (including the issuance, 
     purchase, or sale of securities, loans, or guarantees of 
     indebtedness or value) that does not appear in the financial 
     statements or reports maintained by that holding company or 
     affiliate for accounting purposes, unless the transaction is 
     clearly and fully disclosed by that holding company or 
     affiliate in a financial statement or other report that is 
     made available to the public.
       (b) Commission Rules.--Notwithstanding section 236, the 
     Commission shall promulgate final rules to the effective date 
     of this subtitle, providing for the expeditious review of 
     transactions referred to in subsection (a)(1) on a case by 
     case basis and protection of electricity and natural gas 
     consumers from holding company diversification.
       (c) Requirements.--Rules required under subsection (c) 
     shall ensure, at a minimum, that--
       (1) no asset of a public utility company shall be used as 
     collateral for indebtedness

[[Page 5241]]

     incurred by the holding company of, or any affiliate of, such 
     public utility company;
       (2) no public utility company shall make any loan to, or 
     guarantee the indebtedness or value of, any holding company 
     or affiliate thereof;
       (3) sale, lease, or transfer of assets, goods or services 
     to a public utility company by its holding company or any 
     affiliate thereof shall be at terms that are no less 
     favorable to the public utility company than the cost to such 
     holding company or affiliate;
       (4) any sale, lease, or transfer of assets, goods, or 
     services by a public utility company to its holding company 
     or any affiliate thereof, or the provision of assets, goods, 
     or services for the use by, or benefit of, such holding 
     company or affiliate, shall be at terms that are no less 
     favorable to the public utility company than the market price 
     of such assets, goods or services;
       (5) any loan to, or guarantee of, the indebtedness or value 
     of, a public utility company by a holding company or 
     affiliate thereof, shall be at terms that are no less 
     favorable than the cost to such holding company or affiliate;
       (6) information necessary to monitor and regulate a holding 
     company or affiliate thereof is made available to the 
     Commission;
       (7) electricity and natural gas consumers are protected 
     against the financial risks of holding company 
     diversification and transactions with and among any holding 
     company or affiliate thereof; and
       (8) the interest of employees affected by a proposed 
     transaction shall be protected under employee protective 
     arrangements the Commission concludes are fair and equitable.
       (d) Limitation on Authority.--Nothing in this section or 
     the regulations promulgated under this section shall limit 
     the authority of any State to prevent holding company 
     diversification from adversely affecting electricity or 
     natural gas consumers.
                                  ____

  SA 3234. Mr. DAYTON (for himself, Mr. Wellstone, Mr. Feingold, Ms. 
Cantwell, Mrs. Boxer, Mr. Wyden, Mrs. Murray, Ms. Stabenow, and Mr. 
Jeffords) submitted an amendment intended to be proposed to amendment 
SA 2917 proposed by Mr. Daschle (for himself and Mr. Bingaman) to the 
bill (S. 517) to authorize funding the Department of Energy to enhance 
its mission areas through technology transfer and partnerships for 
fiscal years 2002 through 2006, and for other purposes; which was 
ordered to lie on the table; as follows:

       Beginning on page 28 strike line 17 and all that follows 
     through page 36, line 4, and insert the following:

     SEC. 2  . ELECTRIC UTILITY MERGER PROVISIONS.

       Section 203(a) of the Federal Power Act (16 U.S.C. 824b(a)) 
     (as amended by section 202) is amended by striking paragraph 
     (4) and inserting the following:
       ``(4) Approval.--
       ``(A) In general.--After notice and opportunity for 
     hearing, if the Commission finds that the proposed 
     transaction will advance the public interest, the Commission 
     shall approve the transaction.
       ``(B) Minimum required findings.--In making the finding 
     under subparagraph (A) with respect to a proposed 
     transaction, the Commission shall, at a minimum, find that 
     the proposed transaction will--
       ``(i)(I) enhance competition in wholesale electricity 
     markets; and
       ``(II) if a State commission request the Commission to 
     consider the effect of the proposed transaction on 
     competition in retail electricity markets, enhance 
     competition in retail electricity markets;
       ``(ii) produce significant gains in operational and 
     economic efficiency; and
       ``(iii) result in a corporate and capital structure that 
     facilitates effective regulatory oversight.''.

     SEC. 2  . WHOLESALE MARKETS AND MARKET POWER.

       (a) Rules and Procedures To Ensure Competitive Wholesale 
     Markets.--
       (1) In general.--Section 205 of the Federal Power Act (16 
     U.S.C. 824d) is amended by adding at the end the following:
       ``(g) Rules and Procedures To Ensure Competitive Wholesale 
     Markets.--
       ``(1) In general.--Not later than 270 days after the date 
     of enactment of this subsection, the Commission shall adopt 
     such rules and procedures as the Commission determines are 
     necessary to define and determine the conditions necessary--
       ``(A) to maintain competitive wholesale markets;
       ``(B) to effectively monitor market conditions and trends;
       ``(C) to prevent the abuse of market power and market 
     manipulation;
       ``(D) to protect the public interest; and
       ``(E) to ensure the maintenance of just and reasonable 
     wholesale rates.
       ``(2) Conditions on grants of authority.--The Commission 
     shall--
       ``(A) ensure that any grant of authority by the Commission 
     to a public utility to charge market-based rates for any sale 
     of electric energy subject to the jurisdiction of the 
     Commission is consistent with the rules and procedures 
     adopted by the Commission under paragraph (1); and
       ``(B) establish and impose remedies applicable to a public 
     utility that--
       ``(i) violates a rule or procedures adopted under paragraph 
     (1); or
       ``(ii) by any other means uses a grant of authority to 
     exercise market power or manipulate the market.
       ``(3) No limitation on federal antitrust remedies.--The 
     filing with the Commission of a request for authorization to 
     charge market-based rates, and the acceptance or approval by 
     the Commission of such a request, shall not affect the 
     availability of any remedy under Federal antitrust laws with 
     respect to any rate, charge, or services that is subject to 
     the authorization.''.
       (2) Ineffectiveness of other provision.--
       Section 203 of this Act (relating to market-based rates) 
     shall be of no effect.
       (b) Remedial Measures for Market Power.--
       Part II of the Federal Power Act (16 U.S.C. 824 et seq.) 
     (as amended by Section 209) is amended by adding at the end 
     the following:

     ``SEC. 218. REMEDIAL MEASURES FOR MARKET POWER.

       ``(a) Definition of Market Power.--In this section, the 
     term `market power' with respect to a public utility, means 
     the ability of the public utility to maintain energy prices 
     above competitive levels.
       ``(b) Commission Jurisdictional Sales.--If the Commission, 
     on receipt of a complaint by any person or on a motion of the 
     Commission, determines that there exist markets for any 
     service or use of a facility subject to the jurisdiction of 
     the Commission under this Act in which a public utility has 
     exercised market power, the Commission, in accordance with 
     this Act, shall issue such orders as are necessary to 
     mitigate and remedy the adverse competitive effects of the 
     market power exercised.''.

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

     SEC. 221. SHORT TITLE.

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

     SEC. 222. DEFINITIONS.

       In 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 meaning 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 one or more persons) such a controlling 
     influence over the management or policies of any public 
     utility company or holding company as to make it necessary or 
     appropriate for the rate protection of utility customers with 
     respect to rates that such person be subject to the 
     obligations, duties, and liabilities imposed by this subtitle 
     upon holding companies.
       (9) 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 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

[[Page 5242]]

     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, energy, 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 one or more 
     other persons) so as to make it necessary for the rate 
     protection of utility customers with respect to rates that 
     such person be subject to the obligations, duties, and 
     liabilities imposed by this subtitle upon subsidiary 
     companies of holding companies.
       (17) 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. 223. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 
                   1935.

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

     SEC. 224. ACCESS TO BOOKS AND RECORDS.

       (a) In General.--Each holding company and each affiliate or 
     associate company thereof shall produce for examination such 
     personnel, books, accounts, memoranda, records, and any other 
     materials upon an order of the Commission or any State 
     commission finding that the production of such materials will 
     assist the Commission or the State commission in carrying out 
     its responsibilities.
       (b) Court Jurisdiction.--Any United States district court 
     located within the State in which the State commission is 
     seeking to examine personnel or materials described in 
     subsection (a), or within the District of Columbia or within 
     any State in which the public utility is headquartered, shall 
     have the jurisdiction to enforce compliance with this 
     section.
       (c) Cost Recovery.--The cost of any audit of a holding 
     company or any affiliate or associate company ordered by the 
     Commission or a State commission under this section shall be 
     borne by the holding company and the associate or affiliate 
     company thereof.
       (d) Confidentiality.--Information provided to the 
     Commission or State commission shall be treated as 
     confidential only if the holding company or affiliate or 
     associate company thereof demonstrates to the court that such 
     information should not be made public.
       (e) Auditing.--The Commission, in consultation with 
     appropriate State commissions, shall conduct an audit every 3 
     years of the books and records of each holding company and 
     each affiliate or associate company thereof.
       (f) Preemption.--Nothing in this section shall preempt any 
     State law obligating a holding company or any associate or 
     affiliate company thereof to produce books and records.

     SEC. 225. TRANSACTION TRANSPARENCY.

       (a) Prohibited Activities.--No holding company or affiliate 
     thereof, shall enter into any--
       (1) transaction for the purchase, sale, lease, or other 
     transfer of assets, goods, or services (other than the sale 
     of electricity or gas) or into any financial transaction 
     (including the issuance of securities, loans, or guarantees 
     of indebtedness or value) with a public utility company that 
     is an affiliate of that holding company, unless--
       (A) the transaction is clearly and fully disclosed by the 
     public utility company in a financial statement or other 
     report that is available to the public; and
       (B) prior to such transaction, the Commission has 
     determined that the transaction will not be detrimental to 
     the public interest or the interests of electricity and 
     natural gas consumers or competition; or
       (2) financial transaction (including the issuance, 
     purchase, or sale of securities, loans, or guarantees of 
     indebtedness or value) that does not appear in the financial 
     statements or reports maintained by that holding company or 
     affiliate for accounting purposes, unless the transaction is 
     clearly and fully disclosed by that holding company or 
     affiliate in a financial statement or other report that is 
     made available to the public.
       (b) Commission Rules.--Notwithstanding section 236, the 
     Commission shall promulgate final rules prior to the 
     effective date of this subtitle, providing for the 
     expeditious review of transactions referred to in subsection 
     (a)(1) on a case by case basis and protection of electricity 
     and natural gas consumers from holding company 
     diversification.
       (c) Requirements.--Rules required under subsection (c) 
     shall ensure, at a minimum, that--
       (1) no asset of a public utility company shall be used as 
     collateral for indebtedness incurred by the holding company 
     of, or any affiliate of, such public utility company;
       (2) no public utility company shall make any loan to, or 
     guarantee the indebtedness or value of, any holding company 
     or affiliate thereof;
       (3) any sale, lease, or transfer of assets, goods or 
     services to a public utility company by its holding company 
     or any affiliate thereof shall be at terms that are no less 
     favorable to the public utility company than the cost to such 
     holding company or affiliate;
       (4) any sale, lease, or transfer of assets, goods, or 
     services by a public utility company to its holding company 
     or any affiliate thereof, or the provision of assets, goods, 
     or services for the use by, or benefit of, such holding 
     company or affiliate, shall be at terms that are no less 
     favorable to the public utility company than the market price 
     of such assets, goods or services;
       (5) any loan to, guarantee of, the indebtedness or value 
     of, a public utility company by a holding company or 
     affiliate thereof shall be at terms that are no less 
     favorable than the cost to such holding company or affiliate;
       (6) information necessary to monitor and regulate a holding 
     company or affiliate thereof is made available to the 
     Commission;
       (7) electricity and natural gas consumers are protected 
     against the financial risks of holding company 
     diversification and transactions with and among any holding 
     company or affiliate thereof; and
       (d) Limitation on Authority.--Nothing in this section or 
     the regulations promulgated under this section shall limit 
     the authority of any State to prevent holding company 
     diversification from adversely affecting electricity or 
     natural gas consumers.
                                  ____

  SA 3235. Mr. Dayton (for himself, Mr. Wellstone, Mr. Feingold, Ms. 
Cantwell, Mrs. Boxer, Mr. Wyden, Mrs. Murray, Ms. Stabenow and Mr. 
Jeffords) submitted an amendment intended to be proposed to amendment 
SA 2917 proposed by Mr. Daschle (for himself and Mr. Bingaman) to the 
bill (S. 517) to authorize funding the Department of Energy to enhance 
its mission areas through technology transfer and partnerships for 
fiscal years 2002 through 2006, and for other purposes; which was 
ordered to lie on the table; as follows:

       Beginning on page 28 strike line 17 and all that follows 
     through page 33, line 17, and insert the following:

     SEC. 2  . ELECTRIC UTILITY MERGER PROVISIONS.

       Section 203(a) of the Federal Power Act (16 U.S.C. 824b(a)) 
     (as amended by section 202) is amended by striking paragraph 
     (4) and inserting the following:
       ``(4) Approval.--
       ``(A) In general.--After notice and opportunity for 
     hearing, if the Commission finds that the proposed 
     transaction will serve the public interest, the Commission 
     shall approve the transaction.
       ``(B) Minimum required findings.--In making the finding 
     under subparagraph (A) with respect to a proposed 
     transaction, the Commission shall, at a minimum, find that 
     the proposed transaction will--
       ``(i)(I) enhance competition in wholesale electricity 
     markets; and
       ``(II) if a State commission requests the Commission to 
     consider the effect of the proposed transaction on 
     competition in retail electricity markets, enhance 
     competition in retail electricity markets;
       ``(ii) produce significant gains in operational and 
     economic efficiency; and
       ``(iii) result in a corporate and capital structure that 
     facilitates effective regulatory oversight.''.

     SEC. 2  . WHOLESALE MARKETS AND MARKET POWER.

       (a) Rules and Procedures To Ensure Competitive Wholesale 
     Markets.--
       (1) In general.--Section 205 of the Federal Power Act (16 
     U.S.C. 824d) is amended by adding at the end the following:
       ``(g) Rules and Procedures To Ensure Competitive Wholesale 
     Markets.--
       ``(1) In general.--Not later than 270 days after the date 
     of enactment of this subsection, the Commission shall adopt 
     such rules and procedures as the Commission determines are 
     necessary to define and determine the conditions necessary--
       ``(A) to maintain competitive wholesale markets;

[[Page 5243]]

       ``(B) to effectively monitor market conditions and trends;
       ``(C) to prevent the abuse of market power and market 
     manipulation;
       ``(D) to protect the public interest; and
       ``(E) to ensure the maintenance of just and reasonable 
     wholesale rates.
       ``(2) Conditions on grants of authority.--The Commission 
     shall--
       ``(A) ensure that any grant of authority by the Commission 
     to a public utility to charge market-based rates for any sale 
     of electric energy subject to the jurisdiction of the 
     Commission is consistent with the rules and procedures 
     adopted by the Commission under paragraph (1); and
       ``(B) establish and impose remedies applicable to a public 
     utility that--
       ``(i) violates a rule or procedures adopted under paragraph 
     (1); or
       ``(ii) by any other means uses a grant of authority to 
     exercise market power or manipulate the market.
       ``(3) No limitation on federal antitrust remedies.--The 
     filing with the Commission of a request for authorization to 
     charge market-based rates, and the acceptance or approval by 
     the Commission of such a request, shall not affect the 
     availability of any remedy under Federal antitrust law with 
     respect to any rate, charge, or service that is subject to 
     the authorization.''
       (2) Ineffectiveness of other provision.--
       Section 203 of this Act (relating to market-based rates) 
     shall be of no effect.
       (b) Remedial Measures for Market Power.--
       Part II of the Federal Power Act (16 U.S.C. 824 et seq.) 
     (as amended by Section 209) is amended by adding at the end 
     the following:

     ``SEC. 218 REMEDIAL MEASURES FOR MARKET POWER.

       ``(a) Definition of Market Power.--In this section, the 
     term `market power' with respect to a public utility, means 
     the ability of the public utility to maintain energy prices 
     above competitive levels.
       ``(b) Commission Jurisdictional Sales.--If the Commission, 
     on receipt of a complaint by any person or on a motion of the 
     Commission, determines that there exist markets for any 
     service or use of a facility subject to the jurisdiction of 
     the Commission under this Act in which a public utility has 
     exercised market power, the Commission, in accordance with 
     this Act, shall issue such orders as are necessary to 
     mitigate and remedy the adverse competitive effects of the 
     market power exercised.''.

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

     SEC. 221. SHORT TITLE

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

     SEC. 222. DEFINITIONS

       In 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 meaning 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 one or more persons) such a controlling 
     influence over the management or policies of any public 
     utility company or holding company as to make it necessary or 
     appropriate for the rate protection of utility customers with 
     respect to rates that such person be subject to the 
     obligations, duties, and liabilities imposed by this subtitle 
     upon holding companies.
       (9) 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 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) Publc 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 one or more 
     other persons) so as to make it necessary for the rate 
     protection of utility customers with respect to rates that 
     such person be subject to the obligations, duties, and 
     liabilities imposed by this subtitle upon subsidiary 
     companies of holding companies.
       (17) 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. 223. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 
                   1935.

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

     SEC. 224. ACCESS TO BOOKS AND RECORDS.

       (a) In General.--Each holding company and each affiliate or 
     associate company thereof shall maintain, and shall produce 
     for the Commission's examination, such books accounts, 
     memoranda, records, and any other materials the Commission 
     deems to be relevant to costs incurred by a public utility or 
     natural gas company that is an affiliate or associate company 
     of such holding company and necessary or appropriate for the 
     protection of utility customers with respect to 
     jurisdictional rates.
  SA 3236. Mr. DAYTON (for himself, Mr. Wellstone, Mr. Feingold, Ms. 
Cantwell, Mrs. Boxer, Mr. Wyden, Mrs. Murray, Ms. Stabenow, and Mr. 
Jeffords) submitted an amendment intended to be proposed to amendment 
SA 2917 proposed by Mr. Daschle (for himself and Mr. Bingaman) to the 
bill (S. 517) to authorize funding the Department of Energy to enhance 
its mission areas through technology transfer and partnerships for 
fiscal years 2002 through 2006, and for other purposes; which was 
ordered to lie on the table; as follows:

       Beginning on page 28 strike line 17 and all that follows 
     through page 33, line 17, and insert the following:

     SEC. 2  . ELECTRIC UTILITY MERGER PROVISIONS.

       Section 203(a) of the Federal Power Act (16 U.S.C. 824b(a)) 
     (as amended by section 202) is amended by striking paragraph 
     (4) and inserting the following:
       ``(4)Approval.--
       ``(A) In general.--After notice and opportunity for 
     hearing, if the Commission finds that the proposed 
     transaction is consistent with the public interest, the 
     Commission shall approve the transaction.
       ``(B) Minimum required findings.--In making the finding 
     under subparagraph (A) with respect to a proposed 
     transaction, the Commission shall, at a minimum, find that 
     the proposed transaction will--
       ``(i)(I) enhance competition in wholesale electricity 
     markets; and
       ``(II) if a State commission requests the Commission to 
     consider the effect of the proposed transaction on 
     competition in retail

[[Page 5244]]

     electricity markets, enhance competition in retail 
     electricity markets;
       ``(ii) produce significant gains in operational and 
     economic efficiency; and
       ``(iii) result in a corporate and capital structure that 
     facilitates effective regulatory oversight.''.

     SEC. 2  . WHOLESALE MARKETS AND MARKET POWER.

       (a) Rules and Procedures To Ensure Competitive Wholesale 
     Markets.--
       (1) In general.--Section 205 of the Federal Power Act (16 
     U.S.C. 824d) is amended by adding at the end the following:
       ``(g) Rules and Procedures To Ensure Competitive Wholesale 
     Markets.--
       ``(1) In general.--Not later than 270 days after the date 
     of enactment of this subsection, the Commission shall adopt 
     such rules and procedures as the Commission determines are 
     necessary to define and determine the conditions necessary--
       ``(A) to maintain competitive wholesale markets;
       ``(B) to effectively monitor market conditions and trends;
       ``(C) to prevent the abuse of market power and market 
     manipulation;
       ``(D) to protect the public interest; and
       ``(E) to ensure the maintenance of just and reasonable 
     wholesale rates.
       ``(2) Conditions on grants of authority.--The Commission 
     shall--
       ``(A) ensure that any grant of authority by the Commission 
     to a public utility to charge market-based rates for any sale 
     of electric energy subject to the jurisdiction of the 
     Commission is consistent with the rules and procedures 
     adopted by the Commission under paragraph (1); and
       ``(B) establish and impose remedies applicable to a public 
     utility that--
       ``(i) violates a rule or procedures adopted under paragraph 
     (1); or
       `(ii) by any other means uses a grant of authority to 
     exercise market power or manipulate the market.
       ``(3) No limitation on federal antitrust remedies.--The 
     filing with the Commission of a request for authorization to 
     charge market-based rates, and the acceptance or approval by 
     the Commission of such a request, shall not affect the 
     availability of any remedy under Federal antitrust law with 
     respect to any rate, charge, or service that is subject to 
     the authorization.''.
       (2) Ineffectiveness of other provision.--
       Section 203 of this Act (relating to market-based rates) 
     shall be of no effect.

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

     SEC. 221. SHORT TITLE.

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

     SEC. 222. DEFINITIONS.

       In 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 meaning 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 one or more persons) such a controlling 
     influence over the management or policies of any public 
     utility company or holding company as to make it necessary or 
     appropriate for the rate protection of utility customers with 
     respect to rates that such person be subject to the 
     obligations, duties, and liabilities imposed by this subtitle 
     upon holding companies.
       (9) 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 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 one or more 
     other persons) so as to make it necessary for the rate 
     protection of utility customers with respect to rates that 
     such person be subject to the obligations, duties, and 
     liabilities imposed by the 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. 223. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 
                   1935.

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

     SEC. 224. ACCESS TO BOOKS AND RECORDS.

       (a) In General.--Each holding company and each affiliate or 
     associate company thereof shall maintain, and shall produce 
     for the Commission's examination, such books, accounts, 
     memoranda, records, and any other materials the Commission 
     deems to be relevant to costs incurred by a public utility or 
     natural gas company that is an affiliate or associate company 
     of such holding company and necessary or appropriate for the 
     protection of utility customers with respect to 
     jurisdictional rates.
                                  ____

  SA 3237. Mr. DAYTON (for himself, Mr. Wellstone, Mr. Feingold, Ms. 
Cantwell, Mrs. Boxer, Mr. Wyden, Mrs. Murray, Ms. Stabenow, and Mr. 
Jeffords) submitted an amendment intended to be proposed to amendment 
SA 2917 proposed by Mr. Daschle (for himself and Mr. Bingaman) to the 
bill (S. 517) to authorize funding the Department of Energy to enhance 
its mission areas through technology transfer and partnerships for 
fiscal years 2002 through 2006, and for other purposes; which was 
ordered to lie on the table; as follow:

       Beginning on page 28 strike line 17 and all that follows 
     through page 36, line 4, and insert the following:

     SEC. 2  . ELECTRIC UTILITY MERGER PROVISIONS.

       Section 203(a) of the Federal Power Act (16 U.S.C. 824b(a)) 
     (as amended by section 202) is amended by striking paragraph 
     (4) and inserting the following:
       ``(4) Approval.--
       ``(A) In general.--After notice and opportunity for 
     hearing, if the Commission finds that the proposed 
     transaction will serve the public interest, the Commission 
     shall approve the transaction.
       ``(B) Mininum required findings.--In making the finding 
     under subparagraph (A) with respect to a proposed 
     transaction, the Commission shall, at a minimum, find that 
     the proposed transaction will--
       ``(i)(I) enhance competition in wholesale electricity 
     markets; and
       ``(II) if a State commission requests the Commission to 
     consider the effect of the proposed transaction on 
     competition in retail

[[Page 5245]]

     electricity markets, enhance competition in retail 
     electricity markets;
       ``(ii) produce significant gains in operational and 
     economic efficiency; and
       ``(iii) result in a corporate and capital structure that 
     facilitates effective regulatory oversight.''.

     SEC. 2  . WHOLESALE MARKETS AND MARKET POWER.

       (a) Rules and Procedures To Ensure Competitive Wholesale 
     Markets.--
       (1) In general.--Section 205 of the Federal Power Act (16 
     U.S.C. 824d) is amended by adding at the end the following:
       ``(g) Rules and Procedures To Ensure Competitive Wholesale 
     Markets.--
       ``(1) In general.--Not later than 270 days after the date 
     of enactment of this subsection, the Commission shall adopt 
     such rules and procedures as the Commission determines are 
     necessary to define and determine the conditions necessary--
       ``(A) to maintain competitive wholesale markets;
       ``(B) to effectively monitor market conditions and trends;
       ``(C) to prevent the abuse of market power and market 
     manipulation;
       ``(D) to protect the public interest; and
       ``(E) to ensure the maintenance of just and reasonable 
     wholesale rates.
       ``(2) Conditions on grants of authority.--The Commission 
     shall--
       ``(A) ensure that any grant of authority by the Commission 
     to a public utility to charge market-based rates for any sale 
     of electric energy subject to the jurisdiction of the 
     Commission is consistent with the rules and procedures 
     adopted by the Commission under paragraph (1); and
       ``(B) establish and impose remedies applicable to a public 
     utility that--
       ``(i) violates a rule or procedures adopted under paragraph 
     (1); or
       ``(ii) by any other means uses a grant of authority to 
     exercise market power or manipulate the market.
       ``(3) No limitation on federal antitrust remedies.--The 
     filing with the Commission of a request for authorization to 
     charge market-based rates, and the acceptance or approval by 
     the Commission of such a request, shall not affect the 
     availability of any remedy under Federal antitrust law with 
     respect to any rate, charge, or service that is subject to 
     the authorization.''.
       (2) Ineffectiveness of other provision.--
       Section 203 of this Act (relating to market-based rates) 
     shall be of no effect.
       (b) Remedial Measures for Market Power.--
       Part II of the Federal Power Act (16 U.S.C. 824 et seq.) 
     (as amended by Section 209) is amended by adding at the end 
     the following:

     ``SEC. 218. REMEDIAL MEASURES FOR MARKET POWER.

       ``(a) Definition of Market Power.--In this section, the 
     term `market power' with respect to a public utility, means 
     the ability of the public utility to maintain energy prices 
     above competitive levels.
       ``(b) Commission Jurisdictional Sales.--If the Commission, 
     on receipt of a complaint by any person or on a motion of the 
     Commission, determines that there exist markets for any 
     service or use of a facility subject to the jurisdiction of 
     the Commission under this Act in which a public utility has 
     exercised market power, the Commission, in accordance with 
     this Act, shall issue such orders as are necessary to 
     mitigate and remedy the adverse competitive effects of the 
     market power exercised.''.

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

     SEC. 221. SHORT TITLE.

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

     SEC. 222. DEFINITIONS.

       In 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 one or more persons) such a controlling 
     influence over the management or policies of any public 
     utility company or holding company as to make it necessary or 
     appropriate for the rate protection of utility customers with 
     respect to rates that such person be subject to the 
     obligations, duties, and liabilities imposed by this subtitle 
     upon holding companies.
       (9) 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 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 one or more 
     other persons) so as to make it necessary for the rate 
     protection of utility customers with respect to rates that 
     such person be subject to the obligations, duties, and 
     liabilities imposed by this subtitle upon subsidiary 
     companies of holding companies.
       (17) 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. 223. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 
                   1935.

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

     SEC. 224. ACCESS TO BOOKS AND RECORDS.

       (a) In General.--Each holding company and each associate 
     company thereof shall produce for examination such personnel, 
     books, accounts, memoranda, records, and any other materials 
     upon an order of the Commission or any State commission 
     finding that the production of such materials will assist the 
     Commission or the State commission in carrying out its 
     responsibilities.
       (b) Court Jurisdiction.--Any United States district court 
     located within the State in which the State commission is 
     seeking to examine personnel or materials described in 
     subsection (a), or within the District of Columbia or within 
     any State in which the public utility is headquartered, shall 
     have the jurisdiction to enforce compliance with this 
     section.
       (c) Cost Recovery.--The cost of any audit of a holding 
     company or any affiliate or associate company ordered by the 
     Commission or a State commission under this section shall be 
     borne by the holding company and the associate or affiliate 
     company thereof.
       (d) Confidentiality.--Information provided to the 
     Commission or State commission shall be treated as 
     confidential only if the holding company or affiliate or 
     associate company thereof demonstrates to the court that such 
     information should not be made public.

[[Page 5246]]

       (e) Auditing.--The Commission, in consultation with 
     appropriate State commissions, shall conduct an audit every 3 
     years of the books and records of each holding company and 
     each affiliate or associate company thereof.
       (f) Preemption.--Nothing in this section shall preempt any 
     State law obligating a holding company or any associate or 
     affiliate thereof to produce books and records.
                                  ____

  SA 3238. Mr. DAYTON (for himself, Mr. Wellstone, Mr. Feingold, Ms. 
Cantwell, Mrs. Boxer, Mr. Wyden, Mrs. Murray, Ms. Stabenow, and Mr. 
Jeffords) submitted an amendment intended to be proposed to amendment 
SA 2917 proposed by Mr. Daschle (for himself and Mr. Bingaman) to the 
bill (S. 517) to authorize funding the Department of Energy to enhance 
its mission areas through technology transfer and partnerships for 
fiscal years 2002 through 2006, and for other purposes; which was 
ordered to lie on the table; as follows;

       Beginning on page 28 strike line 17 and all that follows 
     through page 36, line 4, and insert the following:

     SEC. 2  . ELECTRIC UTILITY MERGER PROVISIONS.

       Section 203(a) of the Federal Power Act (16 U.S.C. 824b(a)) 
     (as amended by section 202) is amended by striking paragraph 
     (4) and inserting the following:
       ``(4) Approval.--
       ``(A) In general.--After notice and opportunity for 
     hearing, if the Commission finds that the proposed 
     transaction will serve the public interest, the Commission 
     shall approve the transaction.
       ``(B) Minimum required findings.--In making the finding 
     under subparagraph (A) with respect to a proposed 
     transaction, the Commission shall, at a minimum, find that 
     the proposed transaction will--
       ``(i)(I) enhance competition in wholesale electricity 
     markets; and
       ``(II) if a State commission requests the Commission to 
     consider the effect of the proposed transaction on 
     competition in retail electricity markets, enhance 
     competition in retail electricity markets;
       ``(ii) produce significant gains in operational and 
     economic efficiency; and
       ``(iii) result in a corporate and capital structure that 
     facilitates effective regulatory oversight.''.

     SEC. 2  . WHOLESALE MARKETS AND MARKET POWER.

       (a) Rules and Procedures To Ensure Competitive Wholesale 
     Markets.--
       (1) In general.--Section 205 of the Federal Power Act (16 
     U.S.C. 824d) is amended by adding at the end the following:
       ``(g) Rules and Procedures To Ensure Competitive Wholesale 
     Markets.--
       ``(1) In general.--Not later than 270 days after the date 
     of enactment of this subsection, the Commission shall adopt 
     such rules and procedures as the Commission determines are 
     necessary to define and determine the conditions necessary--
       ``(A) to maintain competitive wholesale markets;
       ``(B) to effectively monitor market conditions and trends;
       ``(C) to prevent the abuse of market power and market 
     manipulation;
       ``(D) to protect the public interest; and
       ``(E) to ensure the maintenance of just and reasonable 
     wholesale rates.
       ``(2) Conditions on grants of authority.--The Commission 
     shall--
       ``(A) ensure that any grant of authority by the Commission 
     to a public utility to charge market-based rates for any sale 
     of electric energy subject to the jurisdiction of the 
     Commission is consistent with the rules and procedures 
     adopted by the Commission under paragraph (1); and
       ``(B) establish and impose remedies applicable to a public 
     utility that--
       ``(i) violates a rule or procedures adopted under paragraph 
     (1); or
       `(ii) by any other means uses a grant of authority to 
     exercise market power or manipulate the market.
       ``(3) No limitation on federal antitrust remedies.--The 
     filing with the Commission of a request for authorization to 
     charge market-based rates, and the acceptance or approval by 
     the Commission of such a request, shall not affect the 
     availability of any remedy under Federal antitrust law with 
     respect to any rate, charge, or service that is subject to 
     the authorization.''.
       (2) Ineffectiveness of other provision.--
       Section 203 of this Act (relating to market-based rates) 
     shall be of no effect.
       (b) Remedial Measures for Market Power.--
       Part II of the Federal Power Act (16 U.S.C. 824 et seq.) 
     (as amended by Section 209) is amended by adding at the end 
     the following:

     ``SEC. 218. REMEDIAL MEASURES FOR MARKET POWER.

       ``(a) Definition of Market Power.--In this section, the 
     term `market power' with respect to a public utility, means 
     the ability of the public utility to maintain energy prices 
     above competitive levels.
       ``(b) Commission Jurisdictional Sales.--If the Commission, 
     on receipt of a complaint by any person or on a motion of the 
     Commission, determines that there exist markets for any 
     service or use of a facility subject to the jurisdiction of 
     the Commission under this Act in which a public utility has 
     exercised market power, the Commission, in accordance with 
     this Act, shall issue such orders as are necessary to 
     mitigate and remedy the adverse competitive effects of the 
     market power exercised.''.

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

     SEC. 221. SHORT TITLE.

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

     SEC. 222. DEFINITIONS.

       In 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) Commisison.--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 meaning 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 one or more persons) such a controlling 
     influence over the management or policies of any public 
     utility company or holding company as to make it necessary or 
     appropriate for the rate protection of utility customers with 
     respect to rates that such person be subject to the 
     obligations, duties, and liabilities imposed by this subtitle 
     upon holding companies.
       (9) 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 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 sale 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

[[Page 5247]]

       (B) any person, the management or policies of which the 
     Commission, after notice and opportunity for hearing, 
     determines to be subject to a controlling influence, directly 
     or indirectly, by such holding company (either alone or 
     pursuant to an arrangement or understanding with one or more 
     other persons) so as to make it necessary for the rate 
     protection of utility customers with respect to rates that 
     such person be subject to the obligation, 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. 223. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 
                   1935.

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

     SEC. 224. ACCESS TO BOOKS AND RECORDS.

       (a) In General.--Each holding company and each affiliate or 
     associate company thereof shall produce for examination such 
     personnel, books, accounts, memoranda, records, and any other 
     materials upon an order of the Commission or any State 
     commission finding that the production of such materials will 
     assist the Commission or the State commission in carrying out 
     its responsibilities.
       (b) Court Jurisdiction.--Any United States district court 
     located within the State in which the State commission is 
     seeking to examine personnel or materials described in 
     subsection (a), or within the District of Columbia or within 
     any state in which the public utility is headquartered, shall 
     have the jurisdiction to enforce compliance with this 
     section.
       (c) Cost Recovery.--The cost of any audit of a holding 
     company or any affiliate or associate company ordered by the 
     Commission or a State commission under this section shall be 
     borne by holding company and the associate or affiliate 
     company thereof.
       (d) Confidentiality.--Information provided to the 
     Commission or State commission shall be treated as 
     confidential only if the holding company or affiliate or 
     associate company thereof demonstrates to the court that such 
     information should not be made public.
       (e) Auditing.--The Commission, in consultation with 
     appropriate State commissions, shall conduct an audit every 3 
     years of the books and records of each holding company and 
     each affiliate or associate company thereof.
       (f) Preemption.--Nothing in this section shall preempt any 
     State law obligating a holding company or any associate or 
     affiliate company thereof to produce books and records.

      SEC. 225. TRANSACTION TRANSPARENCY.

       (a) Prohibited Activities.--No holding company or affiliate 
     thereof, shall enter into any--
       (1) transaction for the purchase, sale, lease, or other 
     transfer of assets, goods, or services (other than the sale 
     of electricity or gas) or into any financial transaction 
     (including the issuance of securities, loans, or guarantees 
     of indebtedness or value) with a public utility company that 
     is an affiliate of that holding company, unless--
       (A) the transaction is clearly and fully disclosed by the 
     public utility company in a financial statement or other 
     report that is available to the public; and
       (B) prior to such transaction, the Commission has 
     determined that the transaction will not be detrimental to 
     the public interest or the interests of electricity and 
     natural gas consumers or competition; or
       (2) financial transaction (including the issuance, 
     purchase, or sale of securities, loans, or guarantees of 
     indebtedness or value) that does not appear in the financial 
     statements or reports maintained by that holding company or 
     affiliate for accounting purposes, unless the transaction is 
     clearly and fully disclosed by that holding company or 
     affiliate in a financial statement or other report that is 
     made available to the public.
       (b) Commission Rules.--Notwithstanding section 236, the 
     Commission shall promulgate final rules prior to the 
     effective date of this subtitle, providing for the 
     expeditious review of transactions referred to in subsection 
     (a)(1) on a case by case basis and protection of electricity 
     and natural gas consumers from holding company 
     diversification.
       (c) Requirements.--Rules required under subsection (c) 
     shall ensure, at a minimum, that--
       (1) no asset of a public utility company shall be used as 
     collateral for indebtedness incurred by the holding company 
     of, or any affiliate of, such public utility company;
       (2) no public utility company shall make any loan to, or 
     guarantee the indebtedness or value of, any holding company 
     or affiliate thereof;
       (3) any sale, lease, or transfer of assets, goods or 
     services to a public utility company by its holding company 
     or any affiliate thereof shall be at terms that are no less 
     favorable to the public utility company than the cost to such 
     holding company or affiliate;
       (4) any sale, lease, or transfer of assets, goods, or 
     services by a public utility company to its holding company 
     or any affiliate thereof, or the provision of assets, goods 
     or services for the use by, or benefit of, such holding 
     company or affiliate, shall be at terms that are no less 
     favorable to the public utility company than the market price 
     of such assets, goods or services;
       (5) any loan to, or guarantee of, the indebtedness or value 
     of, a public utility company by a holding company or 
     affiliate thereof, shall be at terms that are no less 
     favorable than the cost to such holding company or affiliate;
       (6) information necessary to monitor and regulate a holding 
     company or affiliate thereof is made available to the 
     Commission;
       (7) electricity and natural gas consumers are protected 
     against the financial risks of holding company 
     diversification and transactions with and among any holding 
     company or affiliate thereof; and
       (d) Limitation on Authority.--Nothing in this section or 
     the regulations promulgated under this section shall limit 
     the authority of any State to prevent holding company 
     diversification from adversely affecting electricity or 
     natural gas consumers.
                                  ____

  SA 3239. Mr. BROWNBACK (for himself, Mr. Corzine, Mr. Lieberman, Mr. 
McCain, Mr. Jeffords, Mr. Chafee, Mr. Nelson of Nebraska, and Mr. Reid) 
submitted an amendment intended to be proposed to amendment SA 2917 
proposed by Mr. Daschle (for himself and Mr. Bingaman) to the bill (S. 
517) to authorize funding the Department of Energy to enhance its 
mission areas through technology transfer and partnerships for fiscal 
years 2002 through 2006, and for other purposes; which was ordered to 
lie on the table; as follows:

       Strike title XI and insert the following:

               TITLE XI--NATIONAL GREENHOUSE GAS DATABASE

     SEC. 1101. PURPOSE.

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

     SEC. 1102. DEFINITIONS.

       In this title:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Baseline.--The term ``baseline'' means the historic 
     greenhouse gas emission levels of an entity, as adjusted 
     upward by the designated agency to reflect actual reductions 
     that are verified in accordance with--
       (A) regulations promulgated under section 1104(c)(1); and
       (B) relevant standards and methods developed under this 
     title.
       (3) Database.--The term ``database'' means the National 
     Greenhouse Gas Database established under section 1104.
       (4) Designated agency.--The term ``designated agency'' 
     means a department or agency to which responsibility for a 
     function or program is assigned under the memorandum of 
     agreement entered into under section 1103(a).
       (5) Direct emissions.--The term ``direct emissions'' means 
     greenhouse gas emissions by an entity from a facility that is 
     owned or controlled by that entity.
       (6) Entity.--The term ``entity'' means--
       (A) a person located in the United States; or
       (B) a public or private entity, to the extent that the 
     entity operates in the United States.
       (7) Facility.--The term ``facility'' means--
       (A) all buildings, structures, or installations located on 
     any 1 or more contiguous or adjacent properties of an entity; 
     and
       (B) a fleet of 20 or more motor vehicles under the common 
     control of an entity.
       (8) Greenhouse gas.--The term ``greenhouse gas'' means--
       (A) carbon dioxide;
       (B) methane;
       (C) nitrous oxide;
       (D) hydrofluorocarbons;
       (E) perfluorocarbons;
       (F) sulfur hexafluoride; and
       (G) any other anthropogenic climate-forcing emissions with 
     significant ascertainable global warming potential, as--
       (i) recommended by the National Academy of Sciences under 
     section 1107(b)(3); and
       (ii) determined in regulations promulgated under section 
     1104(c)(1) (or revisions to the regulations) to be 
     appropriate and practicable for coverage under this title.
       (9) Indirect emissions.--The term ``indirect emissions'' 
     means greenhouse gas emissions that--
       (A) are a result of the activities of an entity; but
       (B)(i) are emitted from a facility owned or controlled by 
     another entity; and
       (ii) are not reported as direct emissions by the entity the 
     activities of which resulted in the emissions.

[[Page 5248]]

       (10) Registry.--The term ``registry'' means the registry of 
     greenhouse gas emission reductions established as a component 
     of the database under section 1104(b)(2).
       (11) Sequestration.--
       (A) In general.--The term ``sequestration'' means the 
     capture, long-term separation, isolation, or removal of 
     greenhouse gases from the atmosphere.
       (B) Inclusions.--The term ``sequestration'' includes--
       (i) soil carbon sequestration;
       (ii) agricultural and conservation practices;
       (iii) reforestation;
       (iv) forest preservation;
       (v) maintenance of an underground reservoir; and
       (vi) any other appropriate biological or geological method 
     of capture, isolation, or removal of greenhouse gases from 
     the atmosphere, as determined by the Administrator.

     SEC. 1103. ESTABLISHMENT OF MEMORANDUM OF AGREEMENT.

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

     SEC. 1104. NATIONAL GREENHOUSE GAS DATABASE.

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

     SEC. 1105. GREENHOUSE GAS REDUCTION REPORTING.

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

       (I) project reductions from facilities owned or controlled 
     by the reporting entity in the United States;

[[Page 5249]]

       (II) transfers of project reductions to and from any other 
     entity;
       (III) project reductions and transfers of project 
     reductions outside the United States;
       (IV) other indirect emissions that are not required to be 
     reported under paragraph (1); and
       (V) product use phase emissions;

       (ii) with respect to greenhouse gas emission reductions 
     activities of the entity that have been carried out during or 
     after 1990, verified in accordance with regulations 
     promulgated under section 1104(c)(1), and submitted to 1 or 
     more designated agencies before the date that is 3 years 
     after the date of enactment of this Act, any greenhouse gas 
     emission reductions that have been reported or submitted by 
     an entity under--

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

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

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

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

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

       (aa) direct emissions; and
       (bb) indirect emissions described in paragraph (1)(C)(ii); 
     or
       (ii) actual increases in net sequestration.
       (5) Failure to submit report.--An entity that participates 
     or has participated in the registry and that fails to submit 
     a report required under this subsection shall be prohibited 
     from including emission reductions reported to the registry 
     in the calculation of the baseline of the entity in future 
     years.
       (6) Independent third-party verification.--To meet the 
     requirements of this section and section 1106, an entity that 
     is required to submit a report under this section may--
       (A) obtain independent third-party verification; and
       (B) present the results of the third-party verification to 
     each appropriate designated agency.
       (7) Availability of data.--
       (A) In general.--The designated agencies shall ensure, to 
     the maximum extent practicable, that information in the 
     database is--
       (i) published;
       (ii) accessible to the public; and
       (iii) made available in electronic format on the Internet.
       (B) Exception.--Subparagraph (A) shall not apply in any 
     case in which the designated agencies determine that 
     publishing or otherwise making available information 
     described in that subparagraph poses a risk to national 
     security.
       (8) Data infrastructure.--The designated agencies shall 
     ensure, to the maximum extent practicable, that the database 
     uses, and is integrated with, Federal, State, and regional 
     greenhouse gas data collection and reporting systems in 
     effect as of the date of enactment of this Act.
       (9) Additional issues to be considered.--In promulgating 
     the regulations under section 1104(c)(1) and implementing the 
     database, the designated agencies shall take into 
     consideration a broad range of issues involved in 
     establishing an effective database, including--
       (A) the appropriate units for reporting each greenhouse 
     gas;
       (B) the data and information systems and measures necessary 
     to identify, track, and verify greenhouse gas emission 
     reductions in a manner that will encourage the development of 
     private sector trading and exchanges;
       (C) the greenhouse gas reduction and sequestration methods 
     and standards applied in other countries, as applicable or 
     relevant;
       (D) the extent to which available fossil fuels, greenhouse 
     gas emissions, and greenhouse gas production and importation 
     data are adequate to implement the database;
       (E) the differences in, and potential uniqueness of, the 
     facilities, operations, and business and other relevant 
     practices of persons and entities in the private and public 
     sectors that may be expected to participate in the registry; 
     and
       (F) the need of the registry to maintain valid and reliable 
     information on baselines of entities so that, in the event of 
     any future action by Congress to require entities, 
     individually or collectively, to reduce greenhouse gas 
     emissions, Congress will be able--
       (i) to take into account that information; and
       (ii) to avoid enacting legislation that penalizes entities 
     for achieving and reporting reductions.
       (d) Annual Report.--The designated agencies shall jointly 
     publish an annual report that--
       (1) describes the total greenhouse gas emissions and 
     emission reductions reported to the database during the year 
     covered by the report;
       (2) provides entity-by-entity and sector-by-sector analyses 
     of the emissions and emission reductions reported;
       (3) describes the atmospheric concentrations of greenhouse 
     gases; and
       (4) provides a comparison of current and past atmospheric 
     concentrations of greenhouse gases.
       (e) Confidentiality of Reports.--Any privileged and 
     confidential trade secret and commercial or financial 
     information that is submitted under this section shall be 
     protected in accordance with section 552(b)(4) of title 5, 
     United States Code, except that the information shall be made 
     available to the public if the designated agencies jointly 
     determine that disclosure of the information is necessary for 
     a determination of the validity of emission reductions that 
     have been--
       (1) recorded in the registry; and
       (2) transferred or traded based on value created through 
     recording in the registry.

     SEC. 1106. MEASUREMENT AND VERIFICATION.

       (a) Standards.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the designated agencies shall jointly 
     develop comprehensive measurement and verification methods 
     and standards to ensure a consistent and technically accurate 
     record of greenhouse gas emissions, emission reductions, 
     sequestration, and atmospheric concentrations for use in the 
     registry.
       (2) Requirements.--The methods and standards developed 
     under paragraph (1) shall address the need for--
       (A) standardized measurement and verification practices for 
     reports made by all entities participating in the registry, 
     taking into account--
       (i) protocols and standards in use by entities desiring to 
     participate in the registry as of the date of development of 
     the methods and standards under paragraph (1);
       (ii) boundary issues, such as leakage and shifted use;
       (iii) avoidance of double counting of greenhouse gas 
     emissions and emission reductions; and
       (iv) such other factors as the designated agencies 
     determine to be appropriate;
       (B) measurement and verification of actions taken to 
     reduce, avoid, or sequester greenhouse gas emissions;
       (C) in coordination with the Secretary of Agriculture, 
     measurement of the results of the use of carbon sequestration 
     and carbon recapture technologies, including--
       (i) organic soil carbon sequestration practices; and
       (ii) forest preservation and reforestation activities that 
     adequately address the issues of permanence, leakage, and 
     verification;
       (D) such other measurement and verification standards as 
     the Secretary of Commerce, the Secretary of Agriculture, the

[[Page 5250]]

     Administrator, and the Secretary of Energy determine to be 
     appropriate; and
       (E) other factors that, as determined by the designated 
     agencies, will allow entities to adequately establish a fair 
     and reliable measurement and reporting system.
       (b) Review and Revision.--The designated agencies shall 
     periodically review, and revise as necessary, the methods and 
     standards developed under subsection (a).
       (c) Public Participation.--The Secretary of Commerce 
     shall--
       (1) make available to the public for comment, in draft form 
     and for a period of at least 90 days, the methods and 
     standards developed under subsection (a); and
       (2) after the 90-day period referred to in paragraph (1), 
     in coordination with the Secretary of Energy, the Secretary 
     of Agriculture, and the Administrator, adopt the methods and 
     standards developed under subsection (a) for use in 
     implementing the database.
       (d) Experts and Consultants.--
       (1) In general.--The designated agencies may obtain the 
     services of experts and consultants in the private and 
     nonprofit sectors in accordance with section 3109 of title 5, 
     United States Code, in the areas of greenhouse gas 
     measurement, certification, and emission trading.
       (2) Available arrangements.--In obtaining any service 
     described in paragraph (1), the designated agencies may use 
     any available grant, contract, cooperative agreement, or 
     other arrangement authorized by law.

     SEC. 1107. INDEPENDENT REVIEWS.

       (a) In General.--Not later than 5 years after the date of 
     enactment of this Act, and every 3 years thereafter, the 
     Comptroller General of the United States shall submit to 
     Congress a report that--
       (1) describes the efficacy of the implementation and 
     operation of the database; and
       (2) includes any recommendations for improvements to this 
     title and programs carried out under this title--
       (A) to achieve a consistent and technically accurate record 
     of greenhouse gas emissions, emission reductions, and 
     atmospheric concentrations; and
       (B) to achieve the purposes of this title.
       (b) Review of Scientific Methods.--The designated agencies 
     shall enter into an agreement with the National Academy of 
     Sciences under which the National Academy of Sciences shall--
       (1) review the scientific methods, assumptions, and 
     standards used by the designated agencies in implementing 
     this title;
       (2) not later than 4 years after the date of enactment of 
     this Act, submit to Congress a report that describes any 
     recommendations for improving--
       (A) those methods and standards; and
       (B) related elements of the programs, and structure of the 
     database, established by this title; and
       (3) regularly review and update as appropriate the list of 
     anthropogenic climate-forcing emissions with significant 
     global warming potential described in section 1102(8)(G).

     SEC. 1108. REVIEW OF PARTICIPATION.

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

     SEC. 1109. ENFORCEMENT.

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

     SEC. 1110. REPORT ON STATUTORY CHANGES AND HARMONIZATION.

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

     SEC. 1111. AUTHORIZATION OF APPROPRIATIONS.

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

  SA 3240. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Strike Title III and insert the following:

     SEC. 301. ALTERNATIVE MANDATORY CONDITIONS.

       (a) Review of Alternative Mandatory Conditions.--The 
     Federal Energy Regulatory Commission, the Secretary of the 
     Interior, the Secretary of Commerce and the Secretary of 
     Agriculture, in consultation with the affected stats and 
     tribes shall undertake a review of: (1) options for a process 
     whereby license applicants and third parties to a relicensing 
     proceeding being undertaken pursuant to Part I of the Federal 
     Power Act could propose alternative mandatory conditions and 
     alternative mandatory fishway prescriptions to be included in 
     the license in lieu of conditions and prescriptions initially 
     deemed necessary or required pursuant to section 4(e) and 
     section 18, respectively, of the Federal Power Act; (2) the 
     standards which should be applicable in evaluating and 
     accepting such conditions and prescriptions; (3) the nature 
     of participation of parties other than the license applicants 
     in such a process; (4) the advantages and disadvantages of 
     providing for such a process, including the impact of such a 
     process on the length of time needed to complete the 
     relicensing proceedings and the potential economic and 
     operational improvement benefits of providing for such a 
     process; and (5) the level of interest among parties to 
     relicensing proceedings in proposing such alternative 
     conditions and prescriptions and participating in such a 
     process.
       (b) Report.--Within twelve months after the date of 
     enactment of this Act, the Federal Energy Regulatory 
     Commission and the Secretaries of the Interior, Commerce, and 
     Agriculture, shall jointly submit a report to the Committee 
     on Energy and Natural Resources of the Senate and the 
     appropriate committees of the House of Representatives 
     addressing the issues specified in subsection (a) of this 
     section. The report shall contain any legislative or 
     administrative recommendations relating to implementation of 
     the process described in subsection (a).

     SEC. 302. STREAMLINING HYDROELECTRIC RELICENSING PROCEDURES.

       (a) Review of Licensing Process.--The Federal Energy 
     Regulatory Commission, the Secretary of the Interior, the 
     Secretary of Commerce, and the Secretary of Agriculture, in 
     consultation with the affected states and tribes, shall 
     undertake a review of the process for issuance of a license 
     under section Part I of the Federal Power Act in order to: 
     (1) improve coordination of their respective 
     responsibilities; (2) coordinate the schedule for all major 
     actions by the applicant, the Commission, affected Federal 
     and State agencies, Indian Tribes, and other affected 
     parties; (3) ensure resolution at an early stage of the 
     process of the scope and type of reasonable and necessary 
     information, studies, data, and analysis to be provided by 
     the license applicant; (4) facilitate coordination between 
     the Commission and the resource agencies of analysis under 
     the National Environmental Policy Act; and (5) provide for 
     streamlined procedures.
       (b) Report.--Within twelve months after the date of 
     enactment of this Act, the Federal Energy Regulatory 
     Commission and the Secretaries of the Interior, Commerce, and 
     Agriculture, shall jointly submit a report to the Committee 
     on Energy and Natural Resources of the Senate and the 
     appropriate committees of the House of Representatives 
     addressing the issues specified in subsection (a) of this 
     section and reviewing the responsibilities and procedures of 
     each agency involved in the licensing process. The report 
     shall contain any legislative or administrative 
     recommendations to improve coordination and streamline 
     procedures for the issuance of licenses under Part I of the 
     Federal Power Act. The Commission and each Secretary shall 
     set forth a plan and schedule to implement any administrative 
     recommendations contained in the report, which shall also be 
     contained in the report.
                                  ____

  SA 3241. Mr. BINGAMAN (for himself, Mr. Durbin, and Mr. Lieberman) 
submitted an amendment intended to be proposed to amendment SA 2917 
proposed by Mr. Daschle (for himself and

[[Page 5251]]

Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 568, strike line 6 and all that follows through 
     page 570, line 7 and insert the following:

     SEC. 1701. REGULATORY REVIEWS.

       (a) Regulatory Reviews.--Not later than one year after the 
     date of enactment of this section, each Federal agency shall 
     review relevant regulations and standards to identify--
       (1) existing regulations and standards that act as barriers 
     to market entry for emerging energy technologies (including 
     fuel cells, combined heat and power, distributed power 
     generation, small-scale renewable energy, combined heat and 
     power, small-scale renewable energy, geothermal heat pump 
     technology, and energy recovery in industrial processes), and
       (2) actions the agency is taking or could take to--
       (A) remove barriers to market entry for emerging energy 
     technologies,
       (B) increase energy efficiency and conservation, or
       (C) encourage the use of new and existing processes to meet 
     energy and environmental goals.
       (b) Report to Congress.--Not later than 18 months after the 
     date of enactment of this section, the Director of the Office 
     of Science and Technology Policy shall report to the Congress 
     on the results of the agency reviews conducted under 
     subsection (a).
       (c) Contents of the Report.--The report shall--
       (1) identify all regulatory barriers to--
       (A) the development and commercialization of emerging 
     energy technologies and processes, and
       (B) the further development and expansion of existing 
     energy conservation technologies and processes, and
       (2) actions taken, or proposed to be taken, to remove such 
     barriers.
                                  ____

  SA 3242. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 177, line 20, insert after ``information'' the 
     following: ``retrospectively to 1998,''
       On page 177, line 25, strike ``consumed'' and insert 
     ``blended''.
       On page 187, line 2, strike ``commodities and''.
       On page 188, line 20, strike ``distributors''.
       On page 191, line 6, strike ``refiners'' and insert 
     ``refineries''.
       On page 191, line 17, strike ``distributes''.
       On page 198, strike line 24 and all that follows through 
     page 199, line 21.
       On page 204, line 3, strike ``importer, or distributor'' 
     and insert ``or importer''.
       On page 205, line 5, strike ``(2) Effective date.--This 
     section'' and insert the following:
       ``(2) Exceptions.--This subsection shall not apply to 
     others.
       ``(3) Effective Date.--This subsection''.
       On page 222, line 23, strike ``(B)'' and insert ``(C)''.
       On page 233, line 18, strike ``(k)'' and insert 
     ``paragraph''.
                                  ____

  SA 3243. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 148, strike lines 4 through 22, renumber the 
     subsequent section accordingly.
                                  ____

  SA 3244. Mr. BINGAMAN (for Mr. Wyden) submitted an amendment intended 
to be proposed to amendment SA 3041 proposed by Mr. Wyden (for himself, 
Mr. Murkowski, Mr. Bennett, and Mr. Smith of Oregon) to the amendment 
SA 2917 proposed by Mr. Daschle (for himself and Mr. Bingaman) to the 
bill (S. 517) to authorize funding the Department of Energy to enhance 
its mission areas through technology transfer and partnerships for 
fiscal years 2002 through 2006, and for other purposes; which was 
ordered to lie on the table; as follows:

       On page 3, line 4, strike ``Electrical'' and insert 
     ``Energy''.
       On page 3, line 5, strike ``electrical'' and insert 
     ``energy''.
       On page 5, line 4 strike ``electrical'' and insert 
     ``energy''.
       On page 5, lines 12-13 strike ``standard established by a'' 
     and insert ``applicable''.
       On page 5, lines 13-14 strike ``standard described in'' and 
     insert ``low emissions vehicle standards established under 
     authority of''.
       On page 6, line 5, strike ``electrical'' and insert 
     ``energy''.
                                  ____

  SA 3245. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 101, strike line 24 and all that follows through 
     page 102, line 2 and insert the following:
       ``(6) Tribal lands.--The term `tribal lands' means any 
     tribal trust lands, or other lands owned by an Indian tribe 
     that are within such tribe's reservation.''.
                                  ____

  SA 3246. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 93, lines 8 through 9, strike ``on the date of 
     enactment of this section was'' and insert ``is''.
                                  ____

  SA 3247. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Add at the end of title VI the following:

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

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

  SA 3248. Mr. BINGAMAN (for Mr. Thomas) submitted an amendment 
intended to be proposed to amendment SA 2917 proposed by Mr. Daschle 
(for himself and Mr. Bingaman) to the bill (S. 517) to authorize 
funding the Department of Energy to enhance its mission areas through 
technology transfer and partnerships for fiscal years 2002 through 
2006, and for other purposes; which was ordered to lie on the table; as 
follows:

       Add at the end of title VI the following:

     ``SEC. 611. RESOLUTION OF FEDERAL RESOURCE DEVELOPMENT 
                   CONFLICTS IN THE POWDER RIVER BASIN.

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

  SA 3249. Mr. BINGAMAN (for Mr. Baucus) submitted an amendment 
intended to be proposed to amendment SA 2917 proposed by Mr. Daschle 
(for himself and Mr. Bingaman) to the bill (S. 517) to authorize 
funding the Department of Energy to enhance its mission areas through 
technology transfer and partnerships for fiscal years 2002 through 
2006, and for other purposes; which was ordered to lie on the table; as 
follows:

       On page 126, strike line 2 and all that follows through 
     line 14 and insert the following: ``the States; and
       ``(3) improve the collection, storage, and retrieval of 
     information related to such leasing activities.
       ``(b) Improved Enforcement.--The Secretary shall improve 
     inspection and enforcement of oil and gas activities, 
     including enforcement of terms and conditions in permits to 
     drill.

[[Page 5252]]

       ``(c) Authorization of Appropriation.--For each of the 
     fiscal years 2003 through 2006, in addition to amounts 
     otherwise authorized to be appropriated for the purpose of 
     carrying out section 17 of the Mineral Leasing Act (30 U.S.C. 
     226), there are authorized to be appropriated to the 
     Secretary of the Interior:
       ``(1) $40,000,000 for the purpose of carrying out 
     paragraphs (1) through (3) of subsection (a); and
       ``(2) $20,000,000, for the purpose of carrying out 
     subsection (b).''.
                                  ____

  SA 3250. Mr. BINGAMAN (for Mrs. Carnahan) submitted an amendment 
intended to be proposed to amendment SA 2917 proposed by Mr. Daschle 
(for himself and Mr. Bingaman) to the bill (S. 517) to authorize 
funding the Department of Energy to enhance its mission areas through 
technology transfer and partnerships for fiscal years 2002 through 
2006, and for other purposes; which was ordered to lie on the table; as 
follows:

       On page 294, after line 18, insert the following and 
     renumber the subsequent paragraph:
       ``(6) Air conditioners and heat pumps that--
       ``(A) are small duct,
       ``(B) are high velocity, and
       ``(C) have external static pressure several times that of 
     conventional air conditioners or heat pumps--

     shall not be subject to paragraphs (1) through (4), but shall 
     be subject to standards prescribed by the Secretary in 
     accordance with subsections (o) and (p). The Secretary shall 
     prescribe such standards by January 1, 2004.''.
                                  ____

  SA 3251. Mr. BINGAMAN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 267, strike line 15 and all that follows through 
     page 269, line 13, and insert the following:

     SEC. 916. COST SAVINGS FROM REPLACEMENT FACILITIES.

       (a) Cost Savings From Replacement Facilities.--Section 
     801(a) of the National Energy Conservation Policy Act (42 
     U.S.C. 8287(a)) is amended by adding at the end the 
     following:
       ``(3)(A) In the case of an energy savings contract or 
     energy savings performance contract providing for energy 
     savings through the construction and operation of one or more 
     buildings or facilities to replace one or more existing 
     buildings or facilities, benefits ancillary to the purpose of 
     such contract under paragraph (1) may including savings 
     resulting from reduced costs of operation and maintenance at 
     such replacement buildings or facilities when compared with 
     costs of operation and maintenance at the buildings or 
     facilities being replaced.
       ``(B) Notwithstanding paragraph (2)(B), aggregate annual 
     payments by an agency under an energy savings contract or 
     energy savings performance contract referred to in 
     subparagraph (A) may take into account (through the 
     procedures developed pursuant to this section) savings 
     resulting from reduced costs of operation and maintenance as 
     described in subparagraph (A).''.
       (b) Definitions.--
       (1) Energy savings.--Section 804(2) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8287c(2)) is amended to 
     read as follows:
       ``(2) The term `energy savings' means a reduction in the 
     cost of energy or water, from a base cost established through 
     a methodology set forth in the contract, used in either--
       ``(A) an existing federally owned building or buildings or 
     other federally owned facilities as a result of--
       ``(i) the lease or purchase of operating equipment, 
     improvements, altered operation and maintenance, or technical 
     services;
       ``(ii) the increased efficient use of existing energy 
     sources by cogeneration or heat recovery, excluding any 
     cogeneration process for other than a federally owned 
     building or buildings or other federally owned facilities; or
       ``(iii) the increased efficient use of existing water 
     sources; or
       ``(B) a replacement facility under section 801(a)(3).''.
       (2) Energy savings contract.--Section 804(3) of the 
     National Energy Conservation Policy Act (42 U.S.C. 8287c(3)) 
     is amended to read as follows:
       ``(3) The terms `energy savings contract' and `energy 
     savings performance contract' mean a contract which provides 
     for--
       ``(A) the performance of services for the design, 
     acquisition, installation, testing, operation, and, where 
     appropriate, maintenance and repair, of an identified energy 
     or water conservation measure or series of measures at one or 
     more locations; or
       ``(B) energy savings through the construction and operation 
     of one or more buildings or facilities to replace one or more 
     existing buildings or facilities.''.
       (3) Energy or water conservation measure.--Section 804(4) 
     of the National Energy Conservation Policy Act (42 U.S.C. 
     8287c(4)) is amended to read as follows;
       ``(4) the term `energy or water conservation measure' 
     means--
       ``(A) an energy conservation measure, as defined in section 
     551(4) (42 U.S.C. 8259(4)); or
       ``(B) a water conservation measure that improves water 
     efficiency, is life cycle cost effective, and involves water 
     conservation, water recycling or reuse, improvements in 
     operation or maintenance efficiencies, retrofit activities or 
     other related activities, not at a Federal hydroelectric 
     facility.''.
                                  ____

  SA 3252. Mr. LEVIN submitted an amendment intended to be proposed by 
him to the bill S. 517, to authorize funding the Department of Energy 
to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. MODIFICATIONS TO THE INCENTIVES FOR ALTERNATIVE 
                   VEHICLES AND FUELS.

       (a) Modifications to New Qualified Fuel Cell Motor Vehicle 
     Credit.--Subsection (b) of section 30B of the Internal 
     Revenue Code of 1986, as added by this Act, is amended--
       (1) by striking ``$4,000'' in paragraph (1)(A) and 
     inserting ``$6,000'',
       (2) by striking ``$1,000'' in paragraph (2)(A)(i) and 
     inserting ``$2,000'',
       (3) by striking ``$1,500'' in paragraph (2)(A)(ii) and 
     inserting ``$2,500'',
       (4) by striking ``$2,000'' in paragraph (2)(A)(iii) and 
     inserting ``$3,000'',
       (5) by striking ``$2,500'' in paragraph (2)(A)(iv) and 
     inserting ``$3,500'',
       (6) by striking ``$3,000'' in paragraph (2)(A)(v) and 
     inserting ``$4,000'',
       (7) by striking ``$3,500'' in paragraph (2)(A)(vi) and 
     inserting ``$4,500'',
       (8) by striking ``$4,000'' in paragraph (2)(A)(vii) and 
     inserting ``$5,000'', and
       (9) by striking the dash and all that follows through ``for 
     2004'' in paragraph (3)(B) and inserting ``for 2004''.
       (b) Modifications to New Qualified Hybrid Motor Vehicle 
     Credit.--Subsection (c) of section 30B of the Internal 
     Revenue Code of 1986, as added by this Act, is amended--
       (1) by striking the table contained in paragraph (2)(A)(i) 
     and inserting the following new table:

``If percentage of the maximum available power is:The credit amount is:
At least 2.5 percent but less than 5 percent..................$250 ....

At least 5 percent but less than 10 percent...................$500 ....

At least 10 percent but less than 20 percent..................$750 ....

At least 20 percent but less than 30 percent................$1,000 ....

At least 30 percent.........................................$1,500.....

       (2) by striking ``$500'' in paragraph (2)(B)(i)(I) and 
     inserting ``$1,000'',
       (3) by striking ``$1,000'' in paragraph (2)(B)(i)(II) and 
     inserting ``$1,500'',
       (4) by striking ``$1,500'' in paragraph (2)(B)(i)(III) and 
     inserting ``$2,000'',
       (5) by striking ``$2,000'' in paragraph (2)(B)(i)(IV) and 
     inserting ``$2,500'',
       (6) by striking ``$2,500'' in paragraph (2)(B)(i)(V) and 
     inserting ``$3,000'',
       (7) by striking ``$3,000'' in paragraph (2)(B)(i)(VI) and 
     inserting ``$3,500'', and
       (8) by striking ``for 2002'' in paragraph (3)(B)(i) and 
     inserting ``for 2003''.
       (c) Conforming Amendments for Vehicle Credits.--
       (1) Section 30B(f)(11)(A) of the Internal Revenue Code of 
     1986, as added by this Act, is amended by striking 
     ``September 30, 2002'' and inserting ``the effective date of 
     this section''.
       (2) Subsection (h) of section 30B of such Code, as added by 
     this Act, is amended to read as follows:
       ``(h) Application of Section.--This section shall apply 
     to----
       ``(1) any new qualified fuel cell motor vehicle placed in 
     service after December 31, 2003, and purchased before January 
     1, 2012,
       ``(2) any new qualified hybrid motor vehicle which is a 
     passenger automobile or a light truck placed in service after 
     December 31, 2002, and purchased before January 1, 2010, and
       ``(3) any other property placed in service after September 
     30, 2002, and purchased before January 1, 2007.''.
       (d) Additional Modifications to Credit for Qualified 
     Electric Vehicles.--Section 30 of the Internal Revenue Code 
     of 1986, as amended by this Act, is amended--
       (1) by striking ``$3,500'' in subsection (b)(1)(B)(i) and 
     inserting ``$6,000'',
       (2) by striking ``$6,000'' in subsection (b)(1)(B)(ii) and 
     inserting ``$9,000'', and
       (3) by striking ``2006'' in subsection (e) and inserting 
     ``2007''.
       (e) Modifications to Extension of Deduction for Certain 
     Refueling Property.--

[[Page 5253]]

       (1) In general.--Subsection (f) of section 179A of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(f) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2011, and
       ``(2) in the case of any other property, after December 31, 
     2007.''.
       (2) Extension of phaseout.--Section 179A(b)(1)(B) of such 
     Code, as amended by section 606(a) of the Job Creation and 
     Worker Assistance Act of 2002, is amended--
       (A) by striking ``calendar year 2004'' in clause (i) and 
     inserting ``calendar years 2004 and 2005 (calendar years 2004 
     through 2009 in the case of property relating to hydrogen) 
     '',
       (B) by striking ``2005'' in clause (ii) and inserting 
     ``2006 (calendar year 2010 in the case of property relating 
     to hydrogen)'', and
       (C) by striking ``2006'' in clause (iii) and inserting 
     ``2007 (calendar year 2011 in the case of property relating 
     to hydrogen)''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2003, in taxable years ending after such date.
       (f) Modification to Credit for Installation of Alternative 
     Fueling Stations.--Subsection (l) of section 30C of the 
     Internal Revenue Code of 1986, as added by this Act, is 
     amended to read as follows:
       ``(l) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2011, and
       ``(2) in the case of any other property, after December 31, 
     2007.''.
       (g) Effective Date.--Except as provided in subsection 
     (e)(3), the amendments made by this section shall apply to 
     property placed in service after September 30, 2002, in 
     taxable years ending after such date.
                                  ____

  SA 3253. Mr. LEVIN submitted an amendment intended to be proposed by 
him to the bill S. 517, to authorize funding the Department of Energy 
to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. MODIFICATIONS TO THE INCENTIVES FOR ALTERNATIVE 
                   VEHICLES AND FUELS.

       (a) Modifications to New Qualified Fuel Cell Motor Vehicle 
     Credit.--Subsection (b) of section 30B of the Internal 
     Revenue Code of 1986, as added by this Act, is amended--
       (1) by striking ``$4,000'' in paragraph (1)(A) and 
     inserting ``$6,000'',
       (2) by striking ``$1,000'' in paragraph (2)(A)(i) and 
     inserting ``$2,000'',
       (3) by striking ``$1,500'' in paragraph (2)(A)(ii) and 
     inserting ``$2,500'',
       (4) by striking ``$2,000'' in paragraph (2)(A)(iii) and 
     inserting ``$3,000'',
       (5) by striking ``$2,500'' in paragraph (2)(A)(iv) and 
     inserting ``$3,500'',
       (6) by striking ``$3,000'' in paragraph (2)(A)(v) and 
     inserting ``$4,000'',
       (7) by striking ``$3,500'' in paragraph (2)(A)(vi) and 
     inserting ``$4,500'',
       (8) by striking ``$4,000'' in paragraph (2)(A)(vii) and 
     inserting ``$5,000'', and
       (9) by striking the dash and all that follows through ``for 
     2004'' in paragraph (3)(B) and inserting ``for 2004''.
       (b) Modifications to New Qualified Hybrid Motor Vehicle 
     Credit.--Subsection (c) of section 30B of the Internal 
     Revenue Code of 1986, as added by this Act, is amended--
       (1) by striking the table contained in paragraph (2)(A)(i) 
     and inserting the following new table:

``If percentage of the maximum available power is:The credit amount is:
At least 5 percent but less than 10 percent...................$500 ....

At least 10 percent but less than 20 percent..................$750 ....

At least 20 percent but less than 30 percent................$1,000 ....

At least 30 percent.........................................$1,500.....

       (2) by striking ``$500'' in paragraph (2)(B)(i)(I) and 
     inserting ``$1,000'',
       (3) by striking ``$1,000'' in paragraph (2)(B)(i)(II) and 
     inserting ``$1,500'',
       (4) by striking ``$1,500'' in paragraph (2)(B)(i)(III) and 
     inserting ``$2,000'',
       (5) by striking ``$2,000'' in paragraph (2)(B)(i)(IV) and 
     inserting ``$2,500'',
       (6) by striking ``$2,500'' in paragraph (2)(B)(i)(V) and 
     inserting ``$3,000'',
       (7) by striking ``$3,000'' in paragraph (2)(B)(i)(VI) and 
     inserting ``$3,500'', and
       (8) by striking ``for 2002'' in paragraph (3)(B)(i) and 
     inserting ``for 2003''.
       (c) Conforming Amendments for Vehicle Credits.--
       (1) Section 30B(f)(11)(A) of the Internal Revenue Code of 
     1986, as added by this Act, is amended by striking 
     ``September 30, 2002'' and inserting ``the effective date of 
     this section''.
       (2) Subsection (h) of section 30B of such Code, as added by 
     this Act, is amended to read as follows:
       ``(h) Application of Section.--This section shall apply 
     to----
       ``(1) any new qualified fuel cell motor vehicle placed in 
     service after December 31, 2003, and purchased before January 
     1, 2012,
       ``(2) any new qualified hybrid motor vehicle which is a 
     passenger automobile or a light truck placed in service after 
     December 31, 2002, and purchased before January 1, 2010, and
       ``(3) any other property placed in service after September 
     30, 2002, and purchased before January 1, 2007.''.
       (d) Additional Modifications to Credit for Qualified 
     Electric Vehicles.--Section 30 of the Internal Revenue Code 
     of 1986, as amended by this Act, is amended--
       (1) by striking ``$3,500'' in subsection (b)(1)(B)(i) and 
     inserting ``$6,000'',
       (2) by striking ``$6,000'' in subsection (b)(1)(B)(ii) and 
     inserting ``$9,000'', and
       (3) by striking ``2006'' in subsection (e) and inserting 
     ``2007''.
       (e) Modifications to Extension of Deduction for Certain 
     Refueling Property.--
       (1) In general.--Subsection (f) of section 179A of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(f) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2011, and
       ``(2) in the case of any other property, after December 31, 
     2007.''.
       (2) Extension of phaseout.--Section 179A(b)(1)(B) of such 
     Code, as amended by section 606(a) of the Job Creation and 
     Worker Assistance Act of 2002, is amended--
       (A) by striking ``calendar year 2004'' in clause (i) and 
     inserting ``calendar years 2004 and 2005 (calendar years 2004 
     through 2009 in the case of property relating to hydrogen) 
     '',
       (B) by striking ``2005'' in clause (ii) and inserting 
     ``2006 (calendar year 2010 in the case of property relating 
     to hydrogen)'', and
       (C) by striking ``2006'' in clause (iii) and inserting 
     ``2007 (calendar year 2011 in the case of property relating 
     to hydrogen)''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2003, in taxable years ending after such date.
       (f) Modification to Credit for Installation of Alternative 
     Fueling Stations.--Subsection (l) of section 30C of the 
     Internal Revenue Code of 1986, as added by this Act, is 
     amended to read as follows:
       ``(l) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2011, and
       ``(2) in the case of any other property, after December 31, 
     2007.''.
       (g) Effective Date.--Except as provided in subsection 
     (e)(3), the amendments made by this section shall apply to 
     property placed in service after September 30, 2002, in 
     taxable years ending after such date.
                                  ____

  SA 3254. Mr. LEVIN submitted an amendment intended to be proposed by 
him to the bill S. 517, to authorize funding the Department of Energy 
to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. MODIFICATIONS TO THE INCENTIVES FOR ALTERNATIVE 
                   VEHICLES AND FUELS.

       (a) Modifications to New Qualified Fuel Cell Motor Vehicle 
     Credit.--Subsection (b) of section 30B of the Internal 
     Revenue Code of 1986, as added by this Act, is amended--
       (1) by striking ``$4,000'' in paragraph (1)(A) and 
     inserting ``$6,000'',
       (2) by striking ``$1,000'' in paragraph (2)(A)(i) and 
     inserting ``$2,000'',
       (3) by striking ``$1,500'' in paragraph (2)(A)(ii) and 
     inserting ``$2,500'',
       (4) by striking ``$2,000'' in paragraph (2)(A)(iii) and 
     inserting ``$3,000'',
       (5) by striking ``$2,500'' in paragraph (2)(A)(iv) and 
     inserting ``$3,500'',
       (6) by striking ``$3,000'' in paragraph (2)(A)(v) and 
     inserting ``$4,000'',
       (7) by striking ``$3,500'' in paragraph (2)(A)(vi) and 
     inserting ``$4,500'',
       (8) by striking ``$4,000'' in paragraph (2)(A)(vii) and 
     inserting ``$5,000'', and
       (9) by striking the dash and all that follows through ``for 
     2004'' in paragraph (3)(B) and inserting ``for 2004''.
       (b) Modifications to New Qualified Hybrid Motor Vehicle 
     Credit.--Subsection (c) of section 30B of the Internal 
     Revenue Code of 1986, as added by this Act, is amended--
       (1) by striking the table contained in paragraph (2)(A)(i) 
     and inserting the following new table:

``If percentage of the maximum available power is:The credit amount is:
At least 4 percent but less than 10 percent...................$500 ....

At least 10 percent but less than 20 percent..................$750 ....

At least 20 percent but less than 30 percent................$1,000 ....

At least 30 percent.........................................$1,500.....

       (2) by striking ``$500'' in paragraph (2)(B)(i)(I) and 
     inserting ``$1,000'',
       (3) by striking ``$1,000'' in paragraph (2)(B)(i)(II) and 
     inserting ``$1,500'',
       (4) by striking ``$1,500'' in paragraph (2)(B)(i)(III) and 
     inserting ``$2,000'',

[[Page 5254]]

       (5) by striking ``$2,000'' in paragraph (2)(B)(i)(IV) and 
     inserting ``$2,500'',
       (6) by striking ``$2,500'' in paragraph (2)(B)(i)(V) and 
     inserting ``$3,000'',
       (7) by striking ``$3,000'' in paragraph (2)(B)(i)(VI) and 
     inserting ``$3,500'', and
       (8) by striking ``for 2002'' in paragraph (3)(B)(i) and 
     inserting ``for 2003''.
       (c) Conforming Amendments for Vehicle Credits.--
       (1) Section 30B(f)(11)(A) of the Internal Revenue Code of 
     1986, as added by this Act, is amended by striking 
     ``September 30, 2002'' and inserting ``the effective date of 
     this section''.
       (2) Subsection (h) of section 30B of such Code, as added by 
     this Act, is amended to read as follows:
       ``(h) Application of Section.--This section shall apply 
     to----
       ``(1) any new qualified fuel cell motor vehicle placed in 
     service after December 31, 2003, and purchased before January 
     1, 2012,
       ``(2) any new qualified hybrid motor vehicle which is a 
     passenger automobile or a light truck placed in service after 
     December 31, 2002, and purchased before January 1, 2010, and
       ``(3) any other property placed in service after September 
     30, 2002, and purchased before January 1, 2007.''.
       (d) Additional Modifications to Credit for Qualified 
     Electric Vehicles.--Section 30 of the Internal Revenue Code 
     of 1986, as amended by this Act, is amended--
       (1) by striking ``$3,500'' in subsection (b)(1)(B)(i) and 
     inserting ``$6,000'',
       (2) by striking ``$6,000'' in subsection (b)(1)(B)(ii) and 
     inserting ``$9,000'', and
       (3) by striking ``2006'' in subsection (e) and inserting 
     ``2007''.
       (e) Modifications to Extension of Deduction for Certain 
     Refueling Property.--
       (1) In general.--Subsection (f) of section 179A of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(f) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2011, and
       ``(2) in the case of any other property, after December 31, 
     2007.''.
       (2) Extension of phaseout.--Section 179A(b)(1)(B) of such 
     Code, as amended by section 606(a) of the Job Creation and 
     Worker Assistance Act of 2002, is amended--
       (A) by striking ``calendar year 2004'' in clause (i) and 
     inserting ``calendar years 2004 and 2005 (calendar years 2004 
     through 2009 in the case of property relating to hydrogen) 
     '',
       (B) by striking ``2005'' in clause (ii) and inserting 
     ``2006 (calendar year 2010 in the case of property relating 
     to hydrogen)'', and
       (C) by striking ``2006'' in clause (iii) and inserting 
     ``2007 (calendar year 2011 in the case of property relating 
     to hydrogen)''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2003, in taxable years ending after such date.
       (f) Modification to Credit for Installation of Alternative 
     Fueling Stations.--Subsection (l) of section 30C of the 
     Internal Revenue Code of 1986, as added by this Act, is 
     amended to read as follows:
       ``(l) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2011, and
       ``(2) in the case of any other property, after December 31, 
     2007.''.
       (g) Effective Date.--Except as provided in subsection 
     (e)(3), the amendments made by this section shall apply to 
     property placed in service after September 30, 2002, in 
     taxable years ending after such date.
                                  ____

  SA 3255. Mr. THOMAS submitted an amendment intended to be proposed by 
him to the bill S. 517, to authorize funding the Department of Energy 
to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 215, between lines 10 and 11, insert the following:

     SEC. __. TREATMENT OF CERTAIN DEVELOPMENT INCOME OF 
                   COOPERATIVES.

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

  SA 3256. Mr. NICKLES (for himself, Mr. Breaux, and Mr. Miller) 
submitted an amendment intended to be proposed by him to the bill S. 
517, to authorize funding the Department of Energy to enhance its 
mission areas through technology transfer and partnerships for fiscal 
years 2002 through 2006, and for other purposes; which was ordered to 
lie on the table; as follows:

       At the appropriate place in Title II, insert the following:
       Sec.   . Not withstanding any other provision in this Act, 
     ``3 cents'' shall be considered by law to be ``1.5 cents'' in 
     any place ``3 cents'' appears in Title II of this Act.
                                  ____

  SA 3257. Mr. MURKOWSKI submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place insert the following:

     SEC.  . CREDIT FOR PRODUCTION OF ALASKA NATURAL GAS.

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

     ``SEC. 45M. ALASKA NATURAL GAS.

       ``(a) In General.--For purposes of section 38, the Alaska 
     natural gas credit of any taxpayer for any taxable year is 
     the credit amount per 1,000,000 Btu of Alaska natural gas 
     entering any intake or tie-in point which was derived from an 
     area of the state of Alaska lying north of 64 degrees North 
     latitude, which is attributable to the taxpayer and sold by 
     or on behalf of the taxpayer to an unrelated person during 
     such taxable year (within the meaning of section 45).
       ``(b) Credit Amount.--For purposes of this section--
       ``(1) In general.--The credit amount per 1,000,000 Btu of 
     Alaska natural gas entering any intake or tie-in point which 
     was derived from an area of the state of Alaska lying north 
     of 64-degrees North latitude (determined in United States 
     dollars), is the excess of--
       ``(A) $3.25, over
       ``(B) the average monthly price at the AECO C Hub in 
     Alberta, Canada, for Alaska natural gas for the month in 
     which occurs the date of such entering.
       ``(2) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year after the first calendar 
     year ending after the date described in subsection (f)(1), 
     the dollar amount contained in paragraph (1)(A) shall be 
     increased to an amount equal to such dollar amount multiplied 
     by the inflation adjustment factor for such calendar year 
     (determined under section 43(b)(3)(B) by substituting `the 
     calendar year ending before the date described in section 
     45M(f)(1)' for `1990').
       ``(c) Alaska Natural Gas.--For purposes of this section, 
     the term `Alaska natural gas' means natural gas entering any 
     intake or tie-in point which was derived from an area of the 
     state of Alaska lying north of 64 degrees North latitude 
     produced in compliance with the applicable State and Federal 
     pollution prevention, control, and permit requirements from 
     the area generally known as the North Slope of Alaska 
     (including the continental shelf thereof within the meaning 
     of section 638(1)), determined without regard to the area of 
     the Alaska National Wildlife Refuge (including the 
     continental shelf thereof within the meaning of section 
     638(1)).
       ``(d) Recapture.--
       ``(1) In general.--With respect to each 1,000,000 Btu of 
     Alaska natural gas entering any intake or tie-in point which 
     was derived from an area of the state of Alaska lying north 
     of 64 degrees North latitude after the date which is 3 years 
     after the date described in subsection (f)(1), if the average 
     monthly price described in subsection (b)(1)(B) exceeds 150 
     percent of the amount described in subsection (b)(1)(A) for 
     the month in which occurs the date of such entering, the 
     taxpayer's tax under this chapter for the taxable year shall 
     be increased by an amount equal to the lesser of--
       ``(A) such excess, or
       ``(B) the aggregate decrease in the credits allowed under 
     section 38 for all prior taxable years which would have 
     resulted if the Alaska natural gas credit received by the 
     taxpayer for such years had been zero.
       ``(2) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (1) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     this subsection shall not be treated as a tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     under this chapter or for purposes of section 55.
       ``(e) Application of rules.--For purposes of this section, 
     rules similar to the rules of paragraphs (3), (4), and (5) of 
     section 45(d) shall apply.

[[Page 5255]]

       ``(f) No Double Benefit.--The amount of any deduction or 
     other credit allowable under this chapter for any fuel taken 
     into account in computing the amount of the credit determined 
     under subsection (a) shall be reduced by the amount of such 
     credit attributable to such fuel.
       ``(g) Application of Section.--This section shall apply to 
     Alaska natural gas entering any intake or tie-in point which 
     was derived from an area of the state of Alaska lying north 
     of 64 degrees North latitude for the period--
       ``(1) beginning with the later of--
       ``(A) January 1, 2010, or
       ``(B) the initial date for the interstate transportation of 
     such Alaska natural gas, and
       ``(2) except with respect to subsection (d), ending with 
     the date which is __ years after the date described in 
     paragraph (1).''.
       ``(b) Credit Treated as Business Credit.--Section 38(b), as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (22), by striking the period at the end of 
     paragraph (23) and inserting ``, plus'', and by adding at the 
     end the following new paragraph: ``(24) the Alaska natural 
     gas credit determined under section 45M(a).''.
       ``(c) Allowing Credit Against Entire Regular Tax and 
     Minimum Tax.--
       (1) In general.--Subsection (c) of section 38 (relating to 
     limitation based on amount of tax), as amended by this Act, 
     is amended by redesignating paragraph (5) as paragraph (6) 
     and by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Special rules for alaska natural gas credit.--
       ``(A) In general.--In the case of the Alaska natural gas 
     credit--
       ``(i) this section and section 39 shall be applied 
     separately with respect to the credit, and
       ``(ii) in applying paragraph (1) to the credit--
       ``(I) the amounts in subparagraphs (A) and (B) thereof 
     shall be treated as being zero, and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the Alaska 
     natural gas credit).
       ``(B) Alaska natural gas credit.--For purposes of this 
     subsection, the term `Alaska natural gas credit' means the 
     credit allowable under subsection (a) by reason of section 
     45M(a).''.
       (2) Conforming amendments.--Subclause (II) of section 
     38(c)(2)(A)(ii), as amended by this Act, subclause (II) of 
     section 38(c)(3)(A)(ii), as amended by this Act, and 
     subclause (II) of section 38(c)(4)(A)(ii), as added by this 
     Act, are each amended by inserting ``or the Alaska natural 
     gas credit'' after ``producer credit''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45M. Alaska natural gas.''.
                                  ____

  SA 3258. Mr. FITZGERALD submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal year 2002 through 2006, and for other purposes; 
which was ordered to lie on the table; as follows:

       Strike section 708.
                                  ____

  SA 3259. Mr. SMITH of Oregon submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal year 2002 through 2006, and for other purposes; 
which was ordered to lie on the table; as follows:

       On page 63, line 13, after ``geothermal,'' insert ``waste 
     heat produced as a by-product of an agronomic or agricultural 
     manufacturing process,''.
                                  ____

  SA 3260. Mr. SMITH of Oregon submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal year 2002 through 2006, and for other purposes; 
which was ordered to lie on the table; as follows:

       On page 64, line 24, after ``geothermal,'' insert ``waste 
     heat produced as a by-product of an agronomic or agricultural 
     manufacturing process,''.
                                  ____

  SA 3261. Mr. SMITH of Oregon submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 61, line 4, after ``landfill gas,'' insert ``waste 
     heat produced as a by-product of an agronomic or agricultural 
     manufacturing process,''.
       On page 61, line 20, after ``landfill gas,'' insert ``waste 
     heat produced as a by-product of an agronomic or agricultural 
     manufacturing process,''.
       On page 63, line 13, after ``geothermal,'' insert ``waste 
     heat produced as a by-product of an agronomic or agricultural 
     manufacturing process,''.
       On page 64, line 24, after ``geothermal,'' insert ``waste 
     heat produced as a by-product of an agronomic or agricultural 
     manufacturing process,''.
       On page 73, line 13, after ``energy,'' insert ``waste heat 
     produced as a by-product of an agronomic or agricultural 
     manufacturing process,''.
                                  ____

  SA 3262. Mr. SMITH of Oregon submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 73, line 13, after ``energy,'' insert ``waste heat 
     produced as a by-product of an agronomic or agricultural 
     manufacturing process,''.
                                  ____

  SA 3263. Mr. SMITH of Oregon submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. CONSUMER PRODUCT SAFETY ACT.

       (a) Low-Speed Electric Bicycles.--The Consumer Product 
     Safety Act (15 U.S.C. 2051 et seq.) is amended by adding at 
     the end the following:


                     ``low-speed electric bicycles

       ``Sec. 38. (a) Notwithstanding any other provision of law, 
     low-speed electric bicycles are consumer products within the 
     meaning of section 3(a)(1) and shall be subject to the 
     Commission regulations published at section 1500.18(a)(12) 
     and part 1512 of title 16, Code of Federal Regulations.
       ``(b) For the purpose of this section, the term `low-speed 
     electric bicycle' means a 2- or 3-wheeled vehicle with fully 
     operable pedals and an electric motor of less than 750 watts 
     (1 hp), whose maximum speed on a paved level surface, when 
     powered solely by such a motor while ridden by an operator 
     who weighs 170 pounds, is less than 20 mph.
       ``(c) To further protect the safety of consumers who ride 
     low-speed electric bicycles, the Commission may promulgate 
     new or amended requirements applicable to such vehicles as 
     necessary and appropriate.
       ``(d) This section shall supersede any State law or 
     requirement with respect to low-speed electric bicycles to 
     the extent that such State law or requirement is more 
     stringent than the Federal law or requirements referred to in 
     subsection (a).''.
       (b) Conforming Amendments.--Section 1 of the Consumer 
     Products Safety Act (15 U.S.C. 2051 note) is amended by 
     amending the table of contents to read as follows:

                          ``TABLE OF CONTENTS

``Sec. 1. Short title; table of contents.
``Sec. 2. Findings and purposes.
``Sec. 3. Definitions.
``Sec. 4. Consumer Product Safety Commission.
``Sec. 5. Product safety information and research.
``Sec. 6. Public disclosure of information.
``Sec. 7. Consumer product safety standards.
``Sec. 8. Banned hazardous products.
``Sec. 9. Procedure for consumer product safety rules.
``Sec. 11. Judicial review of consumer product safety rules.
``Sec. 12. Imminent hazards.
``Sec. 14. Product certification and labeling.
``Sec. 15. Notification and repair, replacement, or refund.
``Sec. 16. Inspection and recordkeeping.
``Sec. 17. Imported products.
``Sec. 18. Exports.
``Sec. 19. Prohibited acts.
``Sec. 20. Civil penalties.
``Sec. 21. Criminal penalties.
``Sec. 22. Injunctive enforcement and seizure.
``Sec. 23. Suits for damages by persons injured.
``Sec. 24. Private enforcement of product safety rules and of section 
              15 orders.

[[Page 5256]]

``Sec. 25. Effect on private remedies.
``Sec. 26. Effect on State standards.
``Sec. 27. Additional functions of Commission.
``Sec. 28. Chronic Hazards Advisory Panel.
``Sec. 29. Cooperation with States and with other Federal agencies.
``Sec. 30. Transfers of functions.
``Sec. 31. Limitation on jurisdiction.
``Sec. 32. Authorization of appropriations.
``Sec. 33. Separability.
``Sec. 34. Effective date.
``Sec. 35. Interim cellulose insulation safety standard.
``Sec. 36. Congressional veto of consumer product safety rules.
``Sec. 37. Information reporting.
``Sec. 38. Low-speed electric bicycles.''.

       (c) Motor Vehicle Safety Standards.--For purposes of motor 
     vehicle safety standards issued and enforced pursuant to 
     chapter 301 of title 49, United States Code, a low-speed 
     electric bicycle (as defined in section 38(b) of the Consumer 
     Product Safety Act) shall not be considered a motor vehicle 
     as defined by section 30102(6) of title 49, United States 
     Code.
                                  ____

  SA 3264. Mr. SMITH of Oregon (for himself and Mr. Wyden) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       At the end of Section 821, strike the ``'''', and insert 
     the following:
       ``(e) Fuel Delivery Technology System Pilot Program.--
       ``(1) The Secretary of Transportation is directed to 
     establish a pilot program to demonstrate the fuel economy and 
     environmental benefits of fuel delivery system technology. 
     The Secretary is directed to retrofit an existing heavy duty 
     diesel engine federal transit bus fleet to no less than 20 
     vehicles, or to contract with units of local government in 
     areas of non-attainment under the Clean Air Act to retrofit 
     portions of their existing heavy duty diesel engine transit 
     bus fleets, for a combined total of no less than 20 vehicles. 
     The fuel delivery system technology with which these vehicles 
     shall be retrofitted shall be designed to increase fuel 
     economy and reduce exhaust emissions when operating on diesel 
     fuel specified for highway engines, containing 300 to 500 
     parts per million of sulfur. The measured increase in fuel 
     economy shall be minimum of 40 percent and the reduction in 
     exhaust emissions shall be a minimum of 65 percent. The 
     retrofit pilot program shall also include quantification of 
     exhaust emissions when operating on bio-diesel as well as 
     low-sulfur diesel fuel. Upon completion of the retrofit pilot 
     program, the fuel delivery system technology shall be placed 
     on the Environmental Protection Agency's Verified Retrofit 
     Technology List for heavy-duty diesel engines. The Secretary 
     shall establish a baseline average fuel economy for the 
     specified fleet(s), and shall use that baseline to 
     periodically evaluate the performance of the fuel delivery 
     technology system over a one-year period of operation. The 
     results of the retrofit pilot program shall be provided to 
     the National Highway Traffic Safety Administration.
       ``(2) There are authorized such sums as are necessary to 
     carry out the retrofit pilot program authorized by this 
     subsection, not to exceed $2 million.''
                                  ____

  SA 3265. Mr. SMITH of Oregon submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In the Definitions Section, strike (1) in its entirety, and 
     insert:
       ``(1) The term `intermittent generator' means a facility 
     that generates electricity using wind, solar or waste heat 
     produced as a by-product of an agronomic or agricultural 
     manufacturing process.''
                                  ____

  SA 3266. Mr. SMITH of Oregon submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 61, line 4, after ``landfill gas,'' insert ``waste 
     heat produced as a by-product of an agronomic or agricultural 
     manufacturing process,''.
                                  ____

  SA 3267. Mr. VOINOVICH submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       In the section heading for Section 722, after ``PIPELINE'' 
     add: ``AND ELECTRICITY TRANSMISSION AND DISTRIBUTION'' before 
     ``PROJECTS.''
       In paragraph (a), after ``memorandum of understanding to 
     expedite,'' strike the remainder of the paragraph and replace 
     with:

     ``the environmental review and permitting of natural gas 
     pipeline and electricity transmission and distribution 
     projects and shall ensure that agencies are fulfilling their 
     environmental review and permitting obligations in a timely 
     manner, consistent with existing statutory requirements. At a 
     minimum, the memorandum: (1) should address the early 
     identification of a lead federal agency, which shall be 
     designated only if an applicant for federal authorization so 
     requests, when more than one agency is involved in the review 
     and approval of a project and; (2) should establish the 
     authority to set deadlines for all decisions regarding 
     project approval.''
       In paragraph (b), after (8), strike ``and'', and add ``(9) 
     the Secretary of Energy; and''.
                                  ____

  SA 3268. Mr. SHELBY (for himself, Mr. Akaka, Mr. Schumer, and Mrs. 
Clinton) submitted an amendment intended to be proposed to amendment SA 
2917 proposed by Mr. Daschle (for himself and Mr. Bingaman) to the bill 
(S. 517) to authorize funding the Department of Energy to enhance its 
mission areas through technology transfer and partnerships for fiscal 
years 2002 through 2006, and for other purposes; which was ordered to 
lie on the table; as follows:

       On page 205, between lines 8 and 9, insert the following:

     SEC. 8__. COMMERCIAL BYPRODUCTS FROM MUNICIPAL SOLID WASTE 
                   LOAN GUARANTEE PROGRAM.

       (a) Definition of Municipal Solid Waste.--In this section, 
     the term ``municipal solid waste'' has the meaning given the 
     term ``solid waste'' in section 1004 of the Solid Waste 
     Disposal Act (42 U.S.C. 6903).
       (b) Establishment of Program.--The Secretary of Energy 
     shall establish a program to provide guarantees of loans by 
     private institutions for the construction of facilities for 
     the processing and conversion of municipal solid waste into 
     fuel ethanol and other commercial byproducts.
       (c) Requirements.--The Secretary may provide a loan 
     guarantee under subsection (b) to an applicant if--
       (1) without a loan guarantee, credit is not available to 
     the applicant under reasonable terms or conditions sufficient 
     to finance the construction of a facility described in 
     subsection (b);
       (2) the prospective earning power of the applicant and the 
     character and value of the security pledged provide a 
     reasonable assurance of repayment of the loan to be 
     guaranteed in accordance with the terms of the loan; and
       (3) the loan bears interest at a rate determined by the 
     Secretary to be reasonable, taking into account the current 
     average yield on outstanding obligations of the United States 
     with remaining periods of maturity comparable to the maturity 
     of the loan.
       (d) Criteria.--In selecting recipients of loan guarantees 
     from among applicants, the Secretary shall give preference to 
     proposals that--
       (1) meet all applicable Federal and State permitting 
     requirements;
       (2) are most likely to be successful; and
       (3) are located in local markets that have the greatest 
     need for the facility because of--
       (A) the limited availability of land for waste disposal; or
       (B) a high level of demand for fuel ethanol or other 
     commercial byproducts of the facility.
       (e) Maturity.--A loan guaranteed under subsection (b) shall 
     have a maturity of not more than 20 years.
       (f) Terms and Conditions.--The loan agreement for a loan 
     guaranteed under subsection (b) shall provide that no 
     provision of the loan agreement may be amended or waived 
     without the consent of the Secretary.
       (g) Assurance of Repayment.--The Secretary shall require 
     that an applicant for a loan guarantee under subsection (b) 
     provide an assurance of repayment in the form of a 
     performance bond, insurance, collateral, or other means 
     acceptable to the Secretary in an amount equal to not less 
     than 20 percent of the amount of the loan.
       (h) Guarantee Fee.--The recipient of a loan guarantee under 
     subsection (b) shall pay the Secretary an amount determined 
     by the Secretary to be sufficient to cover the administrative 
     costs of the Secretary relating to the loan guarantee.

[[Page 5257]]

       (i) Full Faith and Credit.--The full faith and credit of 
     the United States is pledged to the payment of all guarantees 
     made under this section. Any such guarantee made by the 
     Secretary shall be conclusive evidence of the eligibility of 
     the loan for the guarantee with respect to principal and 
     interest. The validity of the guarantee shall be 
     incontestable in the hands of a holder of the guaranteed 
     loan.
       (j) Reports.--Until each guaranteed loan under this section 
     has been repaid in full, the Secretary shall annually submit 
     to Congress an report on the activities of the Secretary 
     under this section.
       (k) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.
       (l) Termination of Authority.--The authority of the 
     Secretary to issue a loan guarantee under subsection (b) 
     terminates on the date that is 10 years after the date of 
     enactment of this Act.
                                  ____

  SA 3269. Mrs. LINCOLN (for herself and Mr. Akaka) submitted an 
amendment intended to be proposed by her to the bill S. 517, to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 17, between lines 6 and 7, insert the following:

     SEC.  . CREDIT FOR ELECTRICITY PRODUCED FROM MUNICIPAL SOLID 
                   WASTE.

       (a) In General.--Section 45(c)(1) (defining qualified 
     energy resources), as amended by this Act, is amended by 
     striking ``and'' at the end of subparagraph (F), by striking 
     the period at the end of subparagraph (G) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(H) municipal solid waste.''.
       (b) Qualified Facility.--Section 45(c)(3) (relating to 
     qualified facility), as amended by this Act, is amended by 
     adding at the end the following new subparagraph:
       ``(G) Municipal solid waste facility.--
       ``(i) In general.--In the case of a facility using 
     municipal solid waste to produce electricity, the term 
     `qualified facility' means any facility--
       ``(I) owned by the taxpayer which is originally placed in 
     service on or after date of the enactment of this 
     subparagraph and before, or
       ``(II) owned by the taxpayer which is originally placed in 
     service before the date of the enactment of this 
     subparagraph, to which is added a unit before.
       ``(ii) Special rule.--In the case of a qualified facility 
     described in clause (i)(II), the 10-year period referred to 
     in subsection (a) shall be treated as beginning no earlier 
     than the date of the enactment of this subparagraph.''.
       (c) Definition.--Section 45(c), as amended by this Act, is 
     amended by redesignating paragraph (8) as paragraph (9) and 
     by inserting after paragraph (7) the following new paragraph:
       ``(8) 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).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to electricity sold after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.
                                  ____

  SA 3270. Ms. CANTWELL submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place in subtitle E of title II, insert 
     the following:

     SEC. 2__. FEDERAL PURCHASE REQUIREMENT.

       (a) Definitions.--In this section:
       (1) Indian tribe.--The term ``Indian tribe'' means any 
     Indian tribe, band, nation, or other organized group or 
     community, including any Alaska Native village or regional or 
     village corporation (as defined in or established under 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.
       (2) Renewable energy.--The term ``renewable energy'' means 
     electric energy generated from--
       (A) a solar, wind, biomass, geothermal, or fuel cell 
     source; or
       (B)(i) additional hydroelectric generation capacity 
     achieved from increased efficiency; or
       (ii) an addition of new capacity at a hydroelectric dam in 
     existence on the date of enactment of this Act.
       (b) Requirement.--
       (1) In general.--The President shall ensure that, of the 
     total amount of electric energy that all Federal agencies, in 
     the aggregate, consume during any fiscal year, renewable 
     energy shall comprise not less than--
       (A) 3 percent in fiscal years 2003 through 2004;
       (B) 5 percent in fiscal years 2005 through 2009; and
       (C) 7.5 percent in fiscal year 2010 and each fiscal year 
     thereafter.
       (2) Innovative purchasing practices.--In carrying out 
     paragraph (1), the President shall encourage Federal agencies 
     to use innovative purchasing practices.
       (c) Tribal Power Generation.--The President shall seek to 
     ensure that, to the extent economically feasible and 
     technically practicable, not less than \1/10\ of the amount 
     specified in subsection (b) shall be renewable energy that is 
     generated by--
       (1) an Indian tribe; or
       (2) a corporation, partnership, or business association the 
     majority of the interest in which is owned, directly or 
     indirectly, by an Indian tribe.
       (d) Biennial Report.--In 2004 and every 2 years thereafter, 
     the Secretary of Energy shall submit to the Committee on 
     Energy and Natural Resources of the Senate and the 
     appropriate committees of the House of Representatives a 
     report on the progress of the Federal Government in meeting 
     the goals established by this section.
       (e) Ineffectiveness of Other Provision.--Section 263 
     (relating to a Federal purchase requirement) shall be of no 
     effect.
                                  ____

  SA 3271. Ms. CANTWELL submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC.  . NET METERING OF ELECTRIC ENERGY.

       Section 111(d)(13) of the Public Utility Regulatory 
     Policies Act of 1978 (16 U.S.C. 2621(d)(13)) (as amended by 
     section 245) is amended--
       (1) in subparagraph (A), by inserting ``the total sales of 
     electric energy for purposes other than resale of which 
     exceeded 1,000,000,000 kilowatt-hours during the preceding 
     calendar year'' after ``electric utility''; and
       (2) by striking subparagraph (C).
                                  ____

  SA 3272. Ms. LANDRIEU submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 590, after line 14, add the following:

     SEC. 1812. STATE REFERENDA TO LIFT MORATORIA ON OFFSHORE OIL 
                   AND GAS DRILLING.

       (a) In General.--Notwithstanding any moratorium or 
     executive order temporarily suspending or permanently 
     prohibiting offshore oil or gas drilling on submerged land 
     off the coast of a State--
       (1) the State may hold a referendum on whether to allow 
     production of oil or gas on the submerged land, including 
     whether to impose any restrictions on the proximity of such 
     drilling to the shore; and
       (2) if such production is approved by the referendum, the 
     President shall authorize a lease sale for the submerged 
     land.
       (b) Royalties.--
       (1) New leases under subsection (a).--Of any royalties 
     collected after the date of enactment of this Act from 
     drilling conducted under subsection (a), 30 percent shall be 
     distributed to the State off the shore of which oil or gas is 
     produced if the State has a State Plan approved in accordance 
     with section 1811(c)(7).
       (2) New deep water leases.--For fiscal year 2007, and each 
     fiscal year thereafter, of any royalties collected during the 
     fiscal year from leases in water 800 or more meters deep that 
     are issued after the date of enactment of this Act, 30 
     percent shall be distributed to the States offshore of which 
     the leases lie if the State has a State Plan approved in 
     accordance with section 1811(c)(7).
       (3) Existing leases.--Notwithstanding section 8(g)(2) of 
     the Outer Continental Shelf Lands Act (43 U.S.C. 1338(g)(2)), 
     on and after the date that is 10 years after the date of 
     enactment of this Act, 30 percent of amounts collected from 
     leases issued before, on, or after the date of enactment of 
     this Act shall be distributed to the States offshore of which 
     the leases lie if the State has a State Plan approved in 
     accordance with section 1811(c)(7).

[[Page 5258]]

       (c) OCS Production State.--A State that allows production 
     of oil or gas under this section shall be treated as an OCS 
     Production State for the purposes of section 1811.
                                  ____

  SA 3273. Ms. LANDRIEU submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 574, between lines 11 and 12, insert the following:

     SEC. 17  . STATE ENERGY PRODUCTION AND CONSUMPTION REPORT

       (a) Report.--Not later than December 1, 2003, the Secretary 
     of Energy (referred to in this section as the ``Secretary'') 
     shall consult with the Governors of the several States and 
     submit to Congress a report on options for energy production 
     from each state to equal at least 80 percent of the amount of 
     energy consumed in the State by January 1, 2019, as measured 
     by the Energy Information Agency, considering both increases 
     in production and reductions in consumption.
       (b) Information Assistance.--The Secretary shall provide 
     each State with an environmental, economic, and security risk 
     analysis of domestic energy production against importation of 
     energy and a ranged estimate of energy resources within the 
     State, together with an identification of any barriers to 
     development of such resources and options for regional 
     cooperation to achieve the objectives outlined in this 
     section. The Secretary of Interior shall provide such 
     information and assistance as the Secretary may request.
                                  ____

  SA 3274. Ms. LANDRIEU submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC.  . TRANSMISSION EXPANSION.

       Section 205 of the Federal Power Act is amended by 
     inserting after subsection (h) the following:
       ``(i) Rulemaking.--Within six months of Enactment of this 
     Act, the Commission shall issue final rules governing the 
     pricing of transmission services.

     prohibiting offshore oil or gas drilling on submerged land 
     off the coast of a State--
       (1) the State may hold a referendum on whether to allow 
     production of oil or gas on the submerged land, including 
     whether to impose any restrictions on the proximity of such 
     drilling to the shore; and
       (2) if such production is approved by the referendum, the 
     President shall authorize a lease sale for the submerged 
     land.
       (b) Royalties.--
       (1) New leases under subsection (a).--Of any royalties 
     collected after the date of enactment of this Act from 
     drilling conducted under subsection (a), 30 percent shall be 
     distributed to the State off the shore of which oil or gas is 
     produced.
       (2) New deep water leases.--For fiscal year 2007, and each 
     fiscal year thereafter, of any royalties collected during the 
     fiscal year from leases in water 800 or more meters deep that 
     are issued after the date of enactment of this Act, 30 
     percent shall be distributed to the States offshore of which 
     the leases lie.

       (3) Existing leases.--Notwithstanding section 8(g)(2) of 
     the Outer Continental Shelf Lands Act (43 U.S.C. 1338(g)(2)), 
     on and after the date that is 10 years after the date of 
     enactment of this Act, 30 percent of amounts collected from 
     leases issued before, on, or after the date of enactment of 
     this Act shall be distributed to the States offshore of which 
     the leases lie.

     date that the RTO or other transmission organization is 
     approved by the Commission, that--
       ``(A) increases the transfer capability of the transmission 
     system; and
       ``(B) is funded by the entities that, in return for 
     payment, received the tradable transmission rights created by 
     the investment.
       ``(4) Tradable transmission right.--The term `tradable 
     transmission right' means the right of the holder of such 
     right to avoid payment of, or have rebated, transmission 
     congestion charges on the transmission system of a regional 
     transmission organization, the right to use a specified 
     capacity of such transmission system without payment of 
     transmission congestion charges, or other rights as 
     determined by the Commission.''.
                                  ____

  SA 3275. Ms. CANTWELL submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Strike title III and insert the following:

                    TITLE III--HYDROELECTRIC ENERGY

     SEC. 301. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS.

       (a) Alternative Conditions.--The Federal Power Act is 
     amended by inserting after section 4 (16 U.S.C. 797) the 
     following:

     ``SEC. 4A. ALTERNATIVE CONDITIONS.

       ``(a) Definition of Secretary.--In this section, the term 
     `Secretary', with respect to an application under subsection 
     (e) of section 4 for a license for a project works within a 
     reservation of the United States, means the Secretary of the 
     department under whose supervision the reservation falls.
       ``(b) Proposal of Alternative Condition.--When a person 
     applies for a license for any project works within a 
     reservation of the United States under subsection (e) of 
     section 4, and the Secretary deems a condition to the license 
     to be necessary under the first proviso of that subsection, 
     the license applicant or any other interested person may 
     propose an alternative condition.
       ``(c) Acceptance of Proposed Alternative Condition.--
     Notwithstanding the first proviso of section 4(e), the 
     Secretary may accept an alternative condition proposed under 
     subsection (b), and the Commission shall include in the 
     license that alternative condition, if the Secretary 
     determines, based on substantial evidence, that the 
     alternative condition--
       ``(1) provides for the adequate protection and use of the 
     reservation; and
       ``(2) will cost less to implement, or result in improved 
     operation of the project works for electricity production, as 
     compared with the condition initially deemed necessary by the 
     Secretary.
       ``(d) Written Statement.--The Secretary shall submit into 
     the public record of the Commission proceeding, with any 
     condition under section 4(e) or alternative condition that 
     the Secretary accepts under subsection (c), a written 
     statement explaining the basis for the condition or 
     alternative condition, and each reason for not accepting any 
     alternative condition under this subsection, including--
       ``(1) a statement of the goals, objectives, or applicable 
     management requirements established by the Secretary for 
     protection and use of the reservation;
       ``(2) the consideration by the Secretary of all studies, 
     data, and other factual information made available to the 
     Secretary that are relevant to the decision of the Secretary; 
     and
       ``(3) any information made available to the Secretary 
     regarding the effects of the condition or alternative 
     condition on energy supply, distribution, cost, and use, air 
     quality, flood control, navigation, and drinking, irrigation, 
     and recreation water supply (including information 
     voluntarily provided in a timely manner by the applicant and 
     any other person).
       ``(e) Procedure.--Not later than 1 year after the date of 
     enactment of this section, the Secretary of each department 
     that exercises supervision over a reservation of the United 
     States shall, by regulation, establish a procedure to 
     expeditiously resolve any conflict arising under this 
     section.''.
       (b) Alternative Prescriptions.--Section 18 of the Federal 
     Power Act (16 U.S.C. 811) is amended--
       (1) by striking ``Sec. 18. The Commission'' and inserting 
     the following:

     ``SEC. 18. OPERATION OF NAVIGATION FACILITIES.

       ``(a) In General.--The Commission''; and
       (2) by adding at the end the following:
       ``(b) Alternative Prescriptions.--
       ``(1) In general.--When the Secretary of the Interior or 
     the Secretary of Commerce prescribes a fishway under 
     subsection (a), the license applicant or licensee, or any 
     other interested person, may propose an alternative 
     condition.
       ``(2) Acceptance of proposed alternative condition.--
     Notwithstanding subsection (a), the Secretary of the Interior 
     or the Secretary of Commerce, as appropriate, may accept an 
     alternative condition proposed under paragraph (1), and the 
     Commission shall include in the license the alternative 
     condition, if the Secretary of the appropriate department 
     determines, based on substantial evidence, that the 
     alternative condition--
       ``(A) will be no less effective to meet the goals, 
     objectives, or applicable management requirements identified 
     by the Secretary under this section, than the fishway 
     initially prescribed by the Secretary; and
       ``(B) will cost less to implement, or result in improved 
     operation of the project works for electricity production, as 
     compared to the fishway initially prescribed by the 
     Secretary.
       ``(3) Written statement.--The Secretary shall submit into 
     the public record of the Commission proceeding, with any 
     prescription under subsection (a) or alternative condition 
     that the Secretary accepts under

[[Page 5259]]

     paragraph (2), a written statement explaining the basis for 
     the prescription or alternative condition, and reason for not 
     accepting any alternative condition under this subsection, 
     including--
       ``(A) a statement of the biological and other goals, 
     objectives, or applicable management requirements identified 
     by the Secretary under this section;
       ``(B) the consideration by the Secretary of all studies, 
     data, and other factual information made available to the 
     Secretary and relevant to the decision of the Secretary; and
       ``(C) any information made available to the Secretary 
     regarding the effects of the prescription or alternative 
     condition on energy supply, distribution, cost, and use, air 
     quality, flood control, navigation, and drinking, irrigation, 
     and recreation water supply (including information 
     voluntarily provided in a timely manner by the applicant and 
     any other person).
       ``(4) Procedure.--Not later than 1 year after the date of 
     enactment of this subsection, each Secretary concerned shall, 
     by regulation, establish a procedure to expeditiously any 
     resolve conflict arising under this subsection.''.

     SEC. 302. RELICENSING STUDY.

       (a) Definition of New Licensing Condition.--In this 
     section, the term ``new license condition'' means any 
     condition imposed under--
       (1) section 4(e) of the Federal Power Act (16 U.S.C. 
     797(e));
       (2) section 10(a) of the Federal Power Act (16 U.S.C. 
     803(a));
       (2) section 10(e) of the Federal Power Act (16 U.S.C. 
     803(e));
       (3) section 10(j) of the Federal Power Act (16 U.S.C. 
     803(j));
       (4) section 18 of the Federal Power Act (16 U.S.C. 811); or
       (5) section 401(d) of the Clean Water Act (33 U.S.C. 
     1341(d)).
       (b) Study.--The Federal Energy Regulatory Commission shall, 
     jointly with the Secretary of Commerce, the Secretary of the 
     Interior, and the Secretary of Agriculture, conduct a study 
     of all new licenses issued for existing projects under 
     section 15 of the Federal Power Act (16 U.S.C. 808) since 
     January 1, 1994.
       (c) Scope.--The study shall analyze--
       (1) the length of time the Commission has taken to issue 
     each new license for an existing project;
       (2) the additional cost to the licensee attributable to new 
     license conditions;
       (3) the change in generating capacity attributable to new 
     license conditions;
       (4) the environmental benefits achieved by new license 
     conditions;
       (5) significant unmitigated environmental damage of the 
     project and costs to mitigate such damage; and
       (6) litigation arising from the issuance or failure to 
     issue new licenses for existing projects under section 15 of 
     the Federal Power Act or the imposition or failure to impose 
     new license conditions.
       (d) Consultation.--The Commission shall give interested 
     persons and licensees an opportunity to submit information 
     and views in writing.
       (e) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Commission shall submit to the 
     Committee on Energy and Natural Resources of the United 
     States Senate and the Committee on Energy and Commerce of the 
     House of Representatives a report that describes findings 
     made as a result of the study.

     SEC. 302. DATA COLLECTION PROCEDURES.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Federal Energy Regulatory 
     Commission, the Secretary of the Interior, the Secretary of 
     Commerce, and the Secretary of Agriculture shall jointly 
     develop procedures for ensuring complete and accurate data 
     concerning the time and cost to parties in the hydroelectric 
     licensing process under part I of the Federal Power Act (16 
     U.S.C. 791 et seq.).
       (b) Publication of Data.--Data described in subsection (a) 
     shall be published regularly, but not less frequently than 
     every 3 years.
                                  ____

  SA 3276. Mr. WYDEN (for himself, Ms. Cantwell, and Mr. Durbin) 
submitted an amendment intended to be proposed to amendment SA 2917 
proposed by Mr. Daschle (for himself and Mr. Bingaman) to the bill (S. 
517) to authorize funding the Department of Energy to enhance its 
mission areas through technology transfer and partnerships for fiscal 
years 2002 through 2006, and for other purposes; which was ordered to 
lie on the table; as follows:

       At the appropriate place, insert:
       ``Notwithstanding any other provision of this Act, the 
     conditions to be considered by the Commission shall when 
     considering a proposed disposition, consolidation, 
     acquisition or control also include the following: employee 
     protective arrangements, defined as a provision that may be 
     necessary for (i) the preservation of rights, privileges, and 
     benefits (including continuation of pension rights and 
     benefits) under existing collective bargaining agreements or 
     otherwise; (ii) the continuation of collective bargaining 
     rights; (iii) the protection of individual employees against 
     a worsening of their positions related to employment; (iv) 
     assurances of employment to employees of acquired companies; 
     (v) assurances of priority of reemployment of employees whose 
     employment is ended or who are laid off; and (vi) paid 
     training or retraining programs, that the Commission 
     concludes will fairly and equitably protect the interests of 
     employees affected by the proposed transaction; and''.
                                  ____

  SA 3277. Ms. COLLINS (for herself, Mrs. Murray, Ms. Cantwell, Mr. 
Jeffords, and Ms. Snowe) submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

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

     ``SEC. 1348. RESEARCH ON ABRUPT CLIMATE CHANGE.

       ``(a) Definition.--The term `abrupt climate change' means a 
     change in climate that occurs so rapidly or unexpectedly that 
     human or natural systems have difficulty adapting to it.
       ``(b) The Secretary of Commerce, through the National 
     Oceanic and Atmospheric Administration, shall carry out a 
     program of scientific research on abrupt climate change 
     designed to:
       ``(1) develop a global array of terrestrial and 
     oceanographic indicators of paleoclimate in order to 
     sufficiently identify and describe past instances of abrupt 
     climate change
       ``(2) improve understanding of thresholds and 
     nonlinearities in geophysical systems related to the 
     mechanisms of abrupt climate change
       ``(3) incorporate these mechanisms into advanced 
     geophysical models of climate change
       ``(4) test the output of these models against an improved 
     global array of records of past abrupt climate changes.
       ``(c) There are authorized to be appropriated to the 
     Secretary of Commerce $10,000,000 in each of the fiscal years 
     2002 through 2008, and such sums as may be necessary for 
     fiscal years after year 2008, to carry out the research 
     program required under this section.''
                                  ____

  SA 3278. Mr. SCHUMER submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 188, line 15, after ``States'' insert ``, except 
     New York and California''.
                                  ____

  SA 3279. Mr. SCHUMER submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 205, line 9 insert the following:

     SEC. 820. ALTERNATIVE FUEL VEHICLE ACCELERATION ACT.

       (a) Definitions.--In this section:
       (1) Alternative fuel vehicle.--The term ``alternative fuel 
     vehicle'' means a motor vehicle that is powered in whole or 
     in part by electricity (including electricity supplied by a 
     fuel cell), liquefied natural gas, compressed natural gas, 
     liquefied petroleum gas, hydrogen, methanol or ethanol at no 
     less than 85 percent by volume, or propane. Vehicles designed 
     to operate solely on gasoline or diesel derived from fossil 
     fuels, and vehicles that the Secretary determines by rule do 
     not yield substantial environmental benefits over vehicles 
     operating solely on gasoline or diesel derived from fossil 
     fuels shall not be considered alternative fuel vehicles.
       (2) Alternative fuel vehicle intermodal project.--The term 
     ``alternative fuel vehicle intermodal project'' means a 
     project that uses alternative fuel vehicles in an intermodal 
     application to demonstrate the transportation of people, 
     goods, or services by use of alternative fuel vehicles only.
       (3) Intermodal application.--The term ``intermodal 
     application'' means transportation activities that are 
     conducted so that people or goods or services are transported 
     by, and then from, one form of alternative fuel vehicle to a 
     second or more alternative fuel vehicle without the need for 
     conveyance by a conventional mode of transportation. The term 
     ``conventional mode of transportation'' means a form of 
     transportation that

[[Page 5260]]

     derives power or energy only through an internal combustion 
     engine fueled by gasoline or diesel fuel.
       (b) Pilot Program.--
       (1) Establishment.--The Secretary shall establish a 
     competitive grant pilot program to provide not more than 15 
     grants to State governments, local governments, or 
     metropolitan transportation authorities to carry out 
     alternative fuel vehicle intermodal projects.
       (2) Grant purposes.--Grants under this section may be used 
     for the acquisition of alternative fuel vehicles, 
     infrastructure necessary to directly support a project funded 
     by the grant including fueling and other support equipment, 
     and operation and maintenance of vehicles, infrastructure, 
     and equipment acquired as part of a project funded by the 
     grant.
       (3) Applications.--
       (a) Requirements.--The Secretary shall issue requirements 
     for applying for grants under the pilot program. At a 
     minimum, the Secretary shall require that the applications be 
     submitted by the head of a State or local government or a 
     metropolitan transportation authority, or any combination 
     thereof, and shall include a description of the alternative 
     fuel vehicle intermodal project proposed in the application, 
     an estimate of the ridership or degree of use of the project, 
     an estimate of the air pollution emissions reduced and fossil 
     fuel displaced as a result of the project, a plan to collect 
     and disseminate environmental data over the life of the 
     project, a description of how the project will be sustainable 
     without federal assistance after the completion of the grant, 
     a complete description of the costs of each project including 
     acquisition, construction, operation, and maintenance costs 
     over the expected life of the project, and a description of 
     which costs of the project will be supported by federal 
     assistance and which by assistance from non-federal partners. 
     An applicant may carry out a project under partnership with 
     public and private entities.
       (4) Selection criteria.--In evaluating applications, the 
     Secretary shall consider each applicant's previous experience 
     with similar projects and shall give priority consideration 
     to applications that are most likely to maximize protection 
     of the environment and demonstrate the greatest commitment on 
     the part of the applicant to ensure funding for the project 
     and to ensure that the project will be maintained or expanded 
     after federal assistance has been completed.
       (5) Pilot project requirements.--The Secretary shall not 
     provide more than $20,000,000 or 50 percent of the project 
     cost to any applicant. The Secretary shall not fund any 
     applicant for more than five years. The Secretary shall seek 
     to the maximum extent practicable to achieve deployment of 
     alternative fuel vehicles through the pilot program and shall 
     ensure a broad geographic distribution of project sites. 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.
       (6) Schedule.--Not later than 365 days after enactment of 
     this Act, the Secretary shall publish a request for 
     applications to undertake projects under the pilot program. 
     Applications shall be due within 365 days of the publication 
     of the notice. Not later than 180 days after the date by 
     which applications for grants are due, the Secretary shall 
     select by competitive peer review all applications for 
     projects to be awarded a grant under the pilot program.
       (c) Training Program.--
       (1) Establishment.--The Secretary shall establish an 
     alternative fuel vehicle operation and maintenance training 
     program to provide grants to accredited academic institutions 
     to develop curricula and to conduct training which support 
     the objectives of the pilot program.
       (2) Grant purposes.--Grants under this paragraph may be 
     used for the development or revision of alternative fuel 
     vehicle training materials, the instruction of personnel who 
     will teach courses related to alternative fuel vehicles and 
     supporting infrastructure, or the development of offering of 
     courses or academic programs for students engaged in the 
     study of alternative fuel vehicles as part of secondary or 
     collegiate education programs, including vocational and 
     technical programs.
       (3) Applications.--The Secretary shall initiate the 
     training program on a timely basis to support the 
     implementation of the projects. Grant applications may be 
     submitted by accredited academic institutions, consortia of 
     such institutions, or accredited academic institutions in 
     partnership with one or more private entities.
       (4) Selection criteria.--In evaluating applications for the 
     training programs, the Secretary shall consider each 
     applicant's previous experience in providing alternative fuel 
     vehicle training and shall give priority consideration to 
     applicants that involve post-secondary education institutions 
     that have existing automotive training programs, have 
     demonstrated expertise in working with students and in-
     service technicians in providing training, provide a 
     nationwide network for training and training materials which 
     will achieve nationwide deployment of curricula, and have the 
     capability of offering competency-based training offered by 
     experienced instructors with real-world shop facilities on a 
     nationwide basis.
       (d) Reports to Congress.--
       (1) Initial report.--Not later than 60 days after the date 
     grants are awarded under this section, the Secretary shall 
     transmit to the Committee on Science of the House of 
     Representatives and the Committee on Energy and Natural 
     Resources of the Senate a report containing an identification 
     of the grant recipients and a description of the projects to 
     be funded, an identification of other applicants that 
     submitted applications for the pilot program, and a 
     description of 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.
       (2) Evaluation.--Not later than 3 years after the selection 
     of projects under this Act, and annually thereafter until the 
     pilot program ends, the Secretary shall transmit to the 
     Committee on Science of the House of Representatives and the 
     Committee on Energy and Natural Resources of the Senate a 
     report containing an evaluation of the effectiveness of the 
     pilot program, including an assessment of the benefits to the 
     environment derived from the projects included in the pilot 
     program as well as an estimate of potential benefits to the 
     environment to be derived from widespread application of 
     alternative fuel vehicles.
       (3) Joint study and reports.--The Secretary of Energy, the 
     Secretary of Transportation and the Administrator of the 
     Environmental Protection Agency, or their designees, shall 
     undertake a study to consider, and recommend, the 
     establishment of a collaborative program utilizing the 
     resources of the Departments of Energy, Transportation and 
     the Environmental Protection Agency, to demonstrate the use 
     of alternative fuels for personal and public transportation 
     in intermodal applications. Such study shall also consider 
     and make a recommendation as to whether authority to conduct 
     the pilot program should be transferred to the Secretary of 
     Transportation in order to more fully utilize the resources 
     of the Department of Transportation in assuring that the 
     objectives of demonstrating intermodal activities with 
     alternative fuel vehicles are more fully achieved.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary $200,000,000 to carry out 
     this program, to remain available until expended. Of the 
     amount appropriated, no less than three percent shall be 
     directed to accomplishing the goals of the training program.
                                  ____

  SA 3280. Mr. SCHUMER (for himself and Mrs. Feinstein) submitted an 
amendment intended to be proposed to amendment SA 2917 proposed by Mr. 
Daschle (for himself and Mr. Bingaman) to the bill (S. 517) to 
authorize funding the Department of Energy to enhance its mission areas 
through technology transfer and partnerships for fiscal years 2002 
through 2006, and for other purposes; which was ordered to lie on the 
table; follows:

       Beginning on page 186, strike line 9 and all that follows 
     through page 205, line 8, and insert the following:

     SEC. 819. RENEWABLE CONTENT OF MOTOR VEHICLE FUEL.

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

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

       ``(ii) Inclusion.--The term `renewable fuel' includes 
     cellulosic biomass ethanol and biodiesel (as defined in 
     section 312(f) of the Energy Policy Act of 1992 (42 U.S.C. 
     13220(f)).
       ``(2) Renewable fuel program.--

[[Page 5261]]

       ``(A) In general.--Not later than one year from enactment 
     of this provision, the Administrator shall promulgate 
     regulations ensuring that gasoline sold or dispensed to 
     consumers in Petroleum Administration for Defense Districts 
     II and III, on an annual average basis, contains the 
     applicable volume of renewable fuel as specified in 
     subparagraph (B). Regardless of the date of promulgation, 
     such regulations shall contain compliance provisions for 
     refiners, blenders, and importers, as appropriate, to ensure 
     that the requirements of this section are met, but shall not 
     restrict where renewables can be used, or impose any per-
     gallon obligation for the use of renewables. If the 
     Administrator does not promulgate such regulations, the 
     applicable volume shall be 1,620,000,000 gallons in 2004.
       ``(B) Applicable volume.--
       (i) Calendar years 2004 through 2012.--For the purpose of 
     subparagraph (A), the applicable volume for any of calendar 
     years 2004 through 2012 shall be determined in accordance 
     with the following table:

                  Applicable volume of renewable fuel

``Calendar year:                               (In billions of gallons)
    2004............................................................2.3

    2005............................................................2.6

    2006............................................................2.9

    2007............................................................3.2

    2008............................................................3.5

    2009............................................................3.9

    2010............................................................4.3

    2011............................................................4.7

    2012...........................................................5.0.
       ``(ii) Calendar year 2013 and thereafter.--For the purpose 
     of subparagraph (A), the applicable volume for calendar year 
     2013 and each calendar year thereafter shall be equal to the 
     product obtained by multiplying--

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

       ``(aa) 5.0 billion gallons of renewable fuels; bears to
       ``(bb) the number of gallons of gasoline sold or introduced 
     into commerce in calendar year 2012.
       ``(3) Applicable percentages.--Not later than October 31 of 
     each calendar year, through 2011, the Administrator of the 
     Energy Information Administration shall provide the 
     Administrator an estimate of the volumes of gasoline sales in 
     the United States for the coming calendar year. Based on such 
     estimates, the Administrator shall by November 30 of each 
     calendar year, through 2011, determine and publish in the 
     Federal Register, the renewable fuel obligation, on a volume 
     percentage of gasoline basis, applicable to refiners, 
     blenders, and importers, as appropriate, for the coming 
     calendar year, to ensure that the requirements of paragraph 
     (2) are met. For each calendar year, the Administrator shall 
     establish a single applicable percentage that applies to all 
     parties, and make provision to avoid redundant obligations.
       ``(4) Cellulosic biomass ethanol.--For the purpose of 
     paragraph (2), 1 gallon of cellulosic biomass ethanol shall 
     be considered to be the equivalent of 1.5 gallon of renewable 
     fuel.
       ``(5) Credit program.--
       ``(A) In general.--A person that refines, blends, or 
     imports gasoline may satisfy the requirements of paragraph 
     (2) through the submission to the Administrator of credits--
       ``(i) issued to the person under subparagraph (C);
       ``(ii) obtained by purchase or other transfer under 
     subparagraph (E) or (F); or
       ``(iii) borrowed under subparagraph (G).
       ``(B) Reporting.--For calendar year 2004 and each calendar 
     year thereafter, each person that refines, blends, or imports 
     gasoline shall submit to the Administrator, not later than 
     February 15 of the following calendar year, a report that 
     includes--
       ``(i) the volume of renewable fuel blended into gasoline;
       ``(ii) the credits issued to the person under subparagraph 
     (C);
       ``(iii) the credits used under subparagraph (D);
       ``(iv) the credits sold or transferred under subparagraph 
     (E); and
       ``(v) the credits borrowed under subparagraph (G).
       ``(C) Issuance and tracking of credits.--
       ``(i) Program.--The Administrator shall establish a program 
     to issue, monitor the sale or transfer of, and track credits.
       ``(ii) Number of credits.--The Administrator shall issue to 
     a person that refines, blends, or imports gasoline--

       ``(I) 1 credit for each gallon of renewable fuel that is 
     blended into gasoline sold or introduced into commerce; and
       ``(II) an additional \1/2\ credit for each gallon of 
     cellulosic biomass ethanol that is blended into gasoline sold 
     or introduced into commerce.

       ``(iii) Reporting.--The Administrator shall require 
     reporting on the price at which credits are sold or 
     transferred.
       ``(D) Use of credits.--
       ``(i) In general.--A credit may be counted toward 
     compliance with the requirements of paragraph (2) only once.
       ``(ii) Applicable years.--A credit shall be valid to show 
     compliance for the calendar year in which the credit was 
     generated or the next calendar year.
       ``(E) Sale or transfer of credits.--A person that receives 
     credits under subparagraph (C) may sell or transfer all or a 
     portion of the credits to another person, for purpose of 
     complying with the requirements of paragraph (2).
       ``(F) Phase-in of credit trading program.--
       ``(i) Annual report for first 3 years.--Not later than 
     March 1 of each of calendar years 2005, 2006, and 2007, the 
     Administrator shall publish a report containing--

       ``(I) the volumes of renewable fuels blended into gasoline;
       ``(II) the credits received and used by each person that 
     refines, blends, or imports gasoline; and
       ``(III) the unfulfilled requirement under paragraph (2), if 
     any, for each person described in subclause (II).

       ``(ii) Limitation.--The Administrator shall ensure that the 
     number of credits available in the market for any calendar 
     year is not greater than the sum of--

       ``(I) the number of actual gallons of renewable fuel 
     blended into gasoline in that calendar year; and
       ``(II) a number that is 0.5 times the number of actual 
     gallons of cellulosic biomass ethanol blended into gasoline 
     in that calendar year.

       ``(G) Borrowing of credits.--For calendar year 2007 and for 
     each calendar year thereafter, a person that refines, blends, 
     or imports gasoline and that has reason to believe that the 
     person will not have sufficient credits in a given calendar 
     year to comply with the requirements of paragraph (2) may--
       ``(i) submit a plan to the Administrator demonstrating 
     that, in the calendar year following the year in which the 
     person does not have sufficient credits, the person will--

       ``(I) achieve compliance with the requirements of paragraph 
     (2); and
       ``(II) purchase or be eligible to receive additional 
     credits that, when taken into account, will enable the person 
     to be in compliance with the requirements of paragraph (2) 
     for both calendar years; and

       ``(ii) upon approval of the plan by the Administrator, 
     implement the plan.
       ``(6) 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 1 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 deny a State petition 
     for a waiver of the requirement of paragraph (2) within 30 
     days after the date on which the petition is received.
       ``(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.''.
       (b) Penalties and Enforcement.--Section 211(d) of the Clean 
     Air Act (42 U.S.C. 7545(d)) is amended--
       (1) in paragraph (1)--
       (A) in the first sentence, by striking ``or (n)'' each 
     place it appears and inserting ``(n) or (o)''; and
       (B) in the second sentence, by striking ``or (m)'' and 
     inserting ``(m), or (o)''; and
       (2) in the first sentence of paragraph (2), by striking 
     ``and (n)'' each place it appears and inserting ``(n), and 
     (o)''.
       (c) Exclusion From Ethanol Waiver.--Section 211(h) of the 
     Clean Air Act (42 U.S.C. 7545(h)) is amended--
       (1) by redesignating paragraph (5) as paragraph (6); and
       (2) by inserting after paragraph (4) the following:
     ``(5) Exclusion from ethanol waiver.--
       ``(A) Promulgation of regulations.--Upon notification, 
     accompanied by supporting documentation, from the Governor of 
     a State that the Reid vapor pressure limitation established 
     by paragraph (4) will increase emissions that contribute to 
     air pollution in any area in the State, the Administrator 
     shall, by regulation, apply, in lieu of the Reid vapor 
     pressure limitation established by paragraph (4), the Reid 
     vapor pressure limitation established by paragraph (1) to all 
     fuel blends containing gasoline and 10 percent denatured 
     anhydrous ethanol that

[[Page 5262]]

     are sold, offered for sale, dispensed, supplied, offered for 
     supply, transported or introduced into commerce in the area 
     during the high ozone season.
       ``(B) Deadline for promulgation.--The Administrator shall 
     promulgate regulations under subparagraph (A) not later than 
     90 days after the date of receipt of a notification from a 
     Governor under that subparagraph.
       ``(C) Effective date.--
       ``(i) In general.--With respect to an area in a State for 
     which the Governor submits a notification under subparagraph 
     (A), the regulations under that subparagraph shall take 
     effect on the later of--

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

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

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

       ``(aa) shall extend the effective date of the regulations 
     under clause (i) with respect to the area for not more than 1 
     year; and
       ``(bb) may renew the extension under item (aa) for 2 
     additional periods, each of which shall not exceed 1 year.

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

       (d) Survey of Renewable Fuel Market.--
       (1) Survey and report.--Not later than December 1, 2005, 
     and annually thereafter, the Administrator shall--
       (A) conduct, with respect to each conventional gasoline use 
     area and each reformulated gasoline use area in each State, a 
     survey to determine the market shares of--
       (i) conventional gasoline containing ethanol;
       (ii) reformulated gasoline containing ethanol;
       (iii) conventional gasoline containing renewable fuel; and
       (iv) reformulated gasoline containing renewable fuel; and
       (B) submit to Congress, and make publicly available, a 
     report on the results of the survey under subparagraph (A).
       (2) Recordkeeping and reporting requirements.--The 
     Administrator may require any refiner, blender, or importer 
     to keep such records and make such reports as are necessary 
     to ensure that the survey conducted under paragraph (1) is 
     accurate. The Administrator shall rely, to the extent 
     practicable, on existing reporting and recordkeeping 
     requirements to avoid duplicative requirements.
       (3) Applicable law.--Activities carried out under this 
     subsection shall be conducted in a manner designed to protect 
     confidentiality of individual responses.
       (e) Sense of the Senate.--It is the sense of the Senate 
     that the Secretary of Transportation and the Secretary of the 
     Treasury should--
       (1) advise Congress on the elimination of the adverse 
     effects that the production and use of renewable fuel, under 
     the amendments made by this section, in Petroleum 
     Administration for Defense Districts II and III may cause; 
     and
       (2) ensure that any adverse effects on the Highway Trust 
     Fund allocations to the States located in Petroleum 
     Administration for Defense Districts II and III are minimal.
                                  ____

  SA 3281. Mr. SCHUMER submitted an amendment intended to be proposed 
to amendment SA 517 proposed by Mrs. Clinton to the amendment SA 358 
proposed by Mr. Jeffords (for himself and Mr. Kennedy) to the bill (S. 
1) to extend programs and activities under the Elementary and Secondary 
Education Act of 1965; which was ordered to lie on the table; as 
follows:

       At the appropriate place add the following:

     SECTION 1. USE OF NATIONAL GUARD BY THE STATES FOR SECURITY 
                   FOR NUCLEAR FACILITIES.

       (a) Availability of Appropriations.--Appropriations for the 
     National Guard are available for the payment of the pay and 
     allowances and other expenses of members and units of the 
     National Guard, not in Federal service, that are providing 
     security with respect to nuclear facilities in a State 
     pursuant to orders of the Governor or other appropriate 
     authority of the State.
       (b) Relief Under Soldiers' and Sailors' Civil Relief Act of 
     1940.--Section 101(1) of the Soldiers' and Sailors' Civil 
     Relief Act of 1940 (50 U.S.C. App. 511(1)) is amended--
       (1) in the first sentence--
       (A) by striking ``and all'' and inserting ``all''; and
       (B) by inserting before the period the following: ``, and 
     all members of the National Guard on duty described in the 
     following sentence''; and
       (2) in the second sentence, by inserting before the period 
     the following: ``, and, in the case of a member of the 
     National Guard, shall include duty, not in Federal service, 
     for the provision of security with respect to nuclear 
     facilities in a State pursuant to orders of the Governor or 
     other appropriate authority of the State''.
                                  ____

  SA 3282. Mr. GRAMM submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       Beginning on page 188, strike line 10 and all that follows 
     through page 190, line 11, and insert the following:
       ``(2) Renewable fuel program.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of this subsection, the Administrator shall 
     promulgate regulations ensuring that gasoline sold or 
     dispensed to consumers in the United States in any of 
     calendar years 2004 through 2012, on an annual average basis, 
     contains the applicable volume of renewable fuel as specified 
     in subparagraph (B). Regardless of the date of promulgation, 
     the regulations shall contain compliance provisions for 
     refiners, blenders, distributors and importers, as 
     appropriate, to ensure that the requirements of this section 
     are met, but shall not restrict where renewables can be used, 
     or impose any per-gallon obligation for the use of 
     renewables. If the Administrator does not promulgate such 
     regulations, the applicable percentage, on a volume 
     percentage of gasoline basis, shall be 1.62 in 2004.
       ``(B) Applicable volume.--For the purpose of subparagraph 
     (A), the applicable volume for any of calendar years 2004 
     through 2012 shall be determined in accordance with the 
     following table:

                  Applicable volume of renewable fuel

``Calendar year:                               (In billions of gallons)
    2004............................................................2.3

    2005............................................................2.6

    2006............................................................2.9

    2007............................................................3.2

    2008............................................................3.5

    2009............................................................3.9

    2010............................................................4.3

    2011............................................................4.7

5.0.''............................................................
                                  ____

  SA 3283. Mr. GRAMM submitted an amendment intended to be proposed by 
him to the bill S. 517, to authorize funding the Department of Energy 
to enhance its mission areas through technology transfer and 
partnerships for fiscal year 2002 through 2006, and for other purposes; 
which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC.   . PHASEOUT OF TAX SUBSIDIES FOR ETHANOL FUEL AS MARKET 
                   SHARE OF SUCH FUEL INCREASES.

       (a) In General.--Not later than December 15 of 2002, and 
     each subsequent calendar year, the Secretary of the Treasury 
     shall determine the percentage increase (if any) of the 
     ethanol fuel market share for the preceding calendar year 
     over the highest ethanol fuel market share for any preceding 
     calendar year and shall, notwithstanding any provision of the 
     Internal Revenue Code of 1986, reduce by the same percentage 
     the ethanol fuel subsidies under sections 40, 4041, 4081, and 
     4091 of such Code beginning on January 1 of the subsequent 
     calendar year.
       (b) Ethanol Fuel Market Share.--For purposes of this 
     section, the ethanol fuel market share for any calendar year 
     shall be determined from data of the Energy Information 
     Administration of the Department of Energy.
       (c) Ethanol Fuel.--For purposes of this section, the term 
     ``ethanol fuel'' means any fuel the alcohol in which is 
     ethanol.
                                  ____

  SA 3284. Mrs. LINCOLN submitted an amendment intended to be proposed 
to amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 216, after line 13, add the following:

[[Page 5263]]



     SEC. __. LANDFILL GAS.

       (a) Credit for Producing Landfill Gas Fuel.--
       (1) In general.--Section 29, as amended by this Act, is 
     amended by adding at the end the following new subsection:
       ``(i) Extension for Facilities Producing Landfill Gas.--
       ``(1) In general.--In the case of a facility for producing 
     qualified fuel that is landfill gas which is placed in 
     service during the 3-year period beginning on the date of 
     enactment of this subsection, this section shall apply to 
     fuel produced at such facility during the 10-year period 
     beginning on the date such facility is placed in service.
       ``(2) Modification of inflation adjustment factor.--In the 
     case of fuel sold by a facility described in paragraph (1), 
     the dollar amount applicable under subsection (a)(1) shall be 
     $3 as adjusted by subsection (b)(2) on the date of the 
     enactment of this subsection. In the case of fuels sold after 
     2002, subparagraph (B) of subsection (d)(2) shall be applied 
     by substituting `2002' for `1979'.''.
       (2) Additional definition.--Section 29(d) is amended by 
     adding at the end the following new paragraph:
       ``(9) Landfill gas facility.--A facility for producing 
     qualified fuel that is landfill gas, placed in service 
     before, on, or after the date of the enactment of this 
     paragraph, includes all wells, pipes, and other gas 
     collection equipment installed as part of the facility over 
     the life of the landfill, including any modifications or 
     expansions thereof, after the facility is first placed in 
     service.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to fuel sold after the date of the enactment of 
     this Act.
       (b) Credit for Production of Electricity Extended To 
     Production From Landfill Gas Fuel.--
       (1) In general.--Section 45(c)(1) (defining qualified 
     energy resources), as amended by this Act, is amended by 
     striking ``and'' at the end of subparagraph (F), by striking 
     the period at the end of subparagraph (G) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(H) landfill gas.''.
       (2) Qualified facility.--Section 45(c)(3) (relating to 
     qualified facility), as amended by this Act, is amended by 
     adding at the end the following new subparagraph:
       ``(G) Landfill gas facility.--
       ``(i) In general.--In the case of a facility using gas 
     derived from the biodegradation of municipal solid waste to 
     produce electricity, the term `qualified facility' means any 
     facility owned by the taxpayer which is originally placed in 
     service by the taxpayer during the 3-year period beginning on 
     the date of the enactment of this subparagraph.
       ``(ii) Modification of inflation adjustment factor.--In the 
     case of electricity sold by a facility described in clause 
     (i), the amount applicable under subsection (a)(1) shall be 
     1.5 cents as adjusted by subsection (b)(2) on the date of the 
     enactment of this subparagraph. In the case of electricity 
     sold after 2002, subparagraph (B) of subsection (d)(2) shall 
     be applied by substituting `2002' for `1992'.
       ``(iii) Coordination with section 29.--The term `qualified 
     energy resources' shall not include any landfill gas the 
     production of which is claimed as a credit under section 29 
     for the taxable year or any prior taxable year.''
       (3) Effective date.--The amendments made by this subsection 
     shall apply to electricity sold after the date of the 
     enactment of this Act.
                                  ____

  SA 3285. Mr. HARKIN submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 185, between lines 8 and 9, insert the following:

     SEC. 8__. FEDERAL FUEL CELL VEHICLE FLEET PILOT PROGRAM.

       (a) Definitions.--In this section:
       (1) Fuel cell vehicle.--The term ``fuel cell vehicle'' 
     means a vehicle that derives all, or a significant part, of 
     its propulsion energy from 1 or more fuel cells.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (b) Program.--The Secretary shall establish a cost-shared 
     program to purchase, operate, and evaluate fuel cell vehicles 
     in integrated service in Federal fleets to demonstrate the 
     viability of fuel cell vehicles in commercial use in a range 
     of climates, duty cycles, and operating environments.
       (c) Cooperative Agreements.--In carrying out the program, 
     the Secretary may enter into cooperative agreements with 
     Federal agencies and manufacturers of fuel cell vehicles.
       (d) Components.--The program shall include the following 
     components:
       (1) Selection of pilot fleet sites.--
       (A) In general.--The Secretary shall--
       (i) consult with fleet managers of Federal agencies to 
     identify potential fleet sites; and
       (ii) select 4 or more Federal fleet sites at which to carry 
     out the program.
       (B) Criteria.--The criteria for selecting fleet sites shall 
     include--
       (i) geographic diversity;
       (ii) a wide range of climates, duty cycles, and operating 
     environments;
       (iii) the interest and capability of the participating 
     agencies;
       (iv) the appropriateness of a site for refueling 
     infrastructure and for maintaining the fuel cell vehicles; 
     and
       (v) such other criteria as the Secretary determines to be 
     necessary to the success of the program.
       (2) Fueling infrastructure.--
       (A) In general.--The Secretary shall support the 
     installation of the necessary refueling infrastructure at the 
     fleet sites.
       (B) Integration.--Whenever feasible, the fueling 
     infrastructure--
       (i) shall be integrated with stationary fuel cells at the 
     fleet sites; and
       (ii) shall be available for use by Federal, State, and 
     local agencies and by the public.
       (3) Purchase of fuel cell vehicles.--The Secretary, in 
     consultation with the participating agencies, shall purchase 
     fuel cell vehicles for the program by competitive bid.
       (4) Operation and maintenance period.--The fuel cell 
     vehicles shall be operated and maintained by the 
     participating agencies in regular duty cycles for a period of 
     not less than 24 months.
       (5) Data collection, analysis, and dissemination.--
       (A) Agreements.--The Secretary shall enter into agreements 
     with participating agencies and private sector entities 
     providing for the collection of proprietary and 
     nonproprietary information with the program.
       (B) Public availability.--The Secretary shall make 
     available to all interested persons technical nonproprietary 
     information collected under an agreement under subparagraph 
     (A) and analyses of collected information.
       (C) Proprietary information.--The Secretary shall not 
     disclose to the public any proprietary information or 
     analyses collected under an agreement under subparagraph (A).
       (6) Training and technical support.--The Secretary shall 
     provide such training and technical support as fleet managers 
     and fuel cell vehicle operators require to assure the success 
     of the program, including training and technical support in--
       (A) the installation, operation, and maintenance of fueling 
     infrastructure;
       (B) the operation and maintenance of fuel cell vehicles; 
     and
       (C) data collection.
       (e) Coordination.--The Secretary shall ensure coordination 
     of the program with other Federal fuel cell demonstration 
     programs to improve efficiency, share infrastructure, and 
     avoid duplication of effort.
       (f) Cost-Sharing.--
       (1) Non Federal.--The Secretary shall require a commitment 
     from participating private-sector companies or other non-
     Federal sources of at least 50% of the cost of the program.
       (2) Federal Agencies.--The Secretary may require a 
     commitment from participating Federal agencies based on the 
     avoided costs for purchase, operation, and maintenance of 
     traditional vehicles and refueling infrastructure.
       (g) Reports.--
       (1) Annual reports.--Not later than 2 years after the date 
     of enactment of this Act, and annually thereafter, the 
     Secretary shall submit to Congress a report that--
       (A) provides an update on the progress of fleet siting and 
     operation;
       (B) provides a summary of data collected under subsection 
     (d)(5);
       (C) assesses the results of the program; and
       (D) recommends any modifications in the program that may be 
     necessary to achieve the purposes of this section.
       (2) Recommendation.--Not later than January 1, 2007, the 
     Secretary shall submit to Congress a report with 
     recommendations for expanding the program to at least 10,000 
     fuel cell vehicles available for commercial purchase.
       (h) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section--
       (1) $15,000,000 for fiscal year 2003;
       (2) $75,000,000 for fiscal year 2004;
       (3) $100,000,000 for fiscal year 2005;
       (4) $90,000,000 for fiscal year 2006;
       (5) $60,000,000 for fiscal year 2007; and
       (6) $10,000,000 for fiscal year 2008.

     SEC. 8__. STUDY OF FUEL CELL USE IN FEDERAL BUILDINGS.

       (a) Definitions.--In this section:
       (1) Federally funded building.--In this section, the term 
     ``federally funded building'' means a building--
       (A)(i) that is owned by the Federal Government; or
       (ii) of which more than 20 percent of the cost of 
     construction is paid with Federal funds; and
       (B) the design of which is begun after the date of 
     enactment of this Act.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (b) Study.--
       (1) In general.--The Secretary shall conduct a study of how 
     to encourage the appropriate use of fuel cells in federally 
     funded buildings.

[[Page 5264]]

       (2) Requirements.--In conducting the study, the Secretary 
     shall--
       (A) quantify and determine how to increase the public 
     benefit from fuel cells in federally funded buildings based 
     on the ability of fuels cells to--
       (i) improve building energy efficiency;
       (ii) operate independent of the electric transmission grid 
     and function as emergency generators required for support of 
     fire and life-safety systems;
       (iii)(I) provide high-reliability and high-quality power 
     for critical loads; and
       (II) serve as uninterruptible power systems required for 
     computer operations;
       (iv) provide operating flexibility;
       (v) reduce demand for power from and load on the electric 
     transmission and distribution grid through distributed 
     generation;
       (vi) provide--

       (I) heat and power for use in buildings; and
       (II) hydrogen or oxygen for various uses;

       (vii) function in hybrid configurations with renewable 
     power sources; and
       (viii) reduce air and noise pollution;
       (B) quantify the price of fuel cells, including the 
     potential effects of large Federal purchases on the price of 
     fuel cells;
       (C) ascertain appropriate annual targets for the use of 
     fuel cells in federally funded buildings, starting in fiscal 
     year 2005;
       (D) identify any modifications needed in--
       (i) building specifications;
       (ii) building design;
       (iii) building codes;
       (iv) construction practices; and
       (v) building operations; and
       (E) identify and evaluate financial and nonfinancial 
     incentives to advance the goals specified in subparagraph 
     (A).
       (c) Report.--
       (1) Initial report.--Not later than 18 months after the 
     date of enactment of this Act, the Secretary shall submit to 
     Congress a report on the results of the study that includes 
     recommendations to Congress and the States for programs to 
     maximize the use of fuel cells in buildings.
       (2) Review.--Not later than 18 months after the date of 
     submission of the report under paragraph (1), the Secretary 
     shall--
       (A) review the conclusions and implementation of the 
     recommendations; and
       (B) submit to Congress a report on any modifications 
     necessitated by technical and policy developments.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.
                                  ____

  SA 3286. Mr. BAUCUS (for himself, Mr. Grassley, Mr. Rockefeller, Mr. 
Hatch, Mr. Thomas, Mr. Hagel, and Mrs. Carnahan) submitted an amendment 
intended to be proposed to amendment SA 2917 proposed by Mr. Daschle 
(for himself and Mr. Bingaman) to the bill (S. 517) to authorize 
funding the Department of Energy to enhance its mission areas through 
technology transfer and partnerships for fiscal years 2002 through 
2006, and for other purposes; which was ordered to lie on the table; as 
follows:

       At the end add the following:

                   DIVISION H--ENERGY TAX INCENTIVES

     SEC. 1900. SHORT TITLE; ETC.

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

Sec. 1900. Short title; etc.

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

Sec. 1901. 3-year extension of credit for producing electricity from 
              wind and poultry waste.
Sec. 1902. Credit for electricity produced from biomass.
Sec. 1903. Credit for electricity produced from swine and bovine waste 
              nutrients, geothermal energy, and solar energy.
Sec. 1904. Treatment of persons not able to use entire credit.

          TITLE XX--ALTERNATIVE VEHICLES AND FUELS INCENTIVES

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

        TITLE XXI--CONSERVATION AND ENERGY EFFICIENCY PROVISIONS

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

                   TITLE XXII--CLEAN COAL INCENTIVES

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

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

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

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

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

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

                  TITLE XXIII--OIL AND GAS PROVISIONS

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

         TITLE XXIV--ELECTRIC UTILITY RESTRUCTURING PROVISIONS

Sec. 2401. Ongoing study and reports regarding tax issues resulting 
              from future restructuring decisions.
Sec. 2402. Modifications to special rules for nuclear decommissioning 
              costs.
Sec. 2403. Treatment of certain income of cooperatives.

                    TITLE XXV--ADDITIONAL PROVISIONS

Sec. 2501. Extension of accelerated depreciation and wage credit 
              benefits on Indian reservations.
Sec. 2502. Study of effectiveness of certain provisions by GAO.

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

     SEC. 1901. 3-YEAR EXTENSION OF CREDIT FOR PRODUCING 
                   ELECTRICITY FROM WIND AND POULTRY WASTE.

       (a) In General.--Subparagraphs (A) and (C) of section 
     45(c)(3) (relating to qualified facility), as amended by 
     section 603(a) of the Job Creation and Worker Assistance Act 
     of 2002, are each amended by striking ``January 1, 2004'' and 
     inserting ``January 1, 2007''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to electricity sold after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.

     SEC. 1902. CREDIT FOR ELECTRICITY PRODUCED FROM BIOMASS.

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

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

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

       ``(I) the 10-year period referred to in subsection (a) 
     shall be treated as beginning no

[[Page 5265]]

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

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

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

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

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

       (a) Expansion of Qualified Energy Resources.--
       (1) In general.--Section 45(c)(1) (defining qualified 
     energy resources), as amended by this Act, is amended by 
     striking ``and'' at the end of subparagraph (C), by striking 
     the period at the end of subparagraph (D) and inserting a 
     comma, and by adding at the end the following new 
     subparagraphs:
       ``(E) swine and bovine waste nutrients,
       ``(F) geothermal energy, and
       ``(G) solar energy.''.
       (2) Definitions.--Section 45(c) (relating to definitions 
     and special rules), as amended by this Act, is amended by 
     redesignating paragraph (6) as paragraph (8) and by inserting 
     after paragraph (5) the following new paragraphs:
       ``(6) Swine and bovine waste nutrients.--The term `swine 
     and bovine waste nutrients' means swine and bovine manure and 
     litter, including bedding material for the disposition of 
     manure.
       ``(7) Geothermal energy.--The term `geothermal energy' 
     means energy derived from a geothermal deposit (within the 
     meaning of section 613(e)(2)).''.
       (b) Extension and Modification of Placed-In-Service 
     Rules.--Section 45(c)(3) (relating to qualified facility), as 
     amended by this Act, is amended by adding at the end the 
     following new subparagraphs:
       ``(E) Swine and bovine waste nutrients facility.--In the 
     case of a facility using swine and bovine waste nutrients to 
     produce electricity, the term `qualified facility' means any 
     facility owned by the taxpayer which is originally placed in 
     service after the date of the enactment of this subparagraph 
     and before January 1, 2007.
       ``(F) Geothermal or solar energy facility.--
       ``(i) In general.--In the case of a facility using 
     geothermal or solar energy to produce electricity, the term 
     `qualified facility' means any facility owned by the taxpayer 
     which is originally placed in service after the date of the 
     enactment of this clause and before January 1, 2007.
       ``(ii) Special rule.--In the case of any facility described 
     in clause (i), the 5-year period beginning on the date the 
     facility was originally placed in service shall be 
     substituted for the 10-year period in subsection 
     (a)(2)(A)(ii).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to electricity sold after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.

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

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

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

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

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

       ``(B) Transfer of credit.--
       ``(i) In general.--A person described in subparagraph 
     (A)(ii) may transfer any credit to which subparagraph (A)(i) 
     applies through an assignment to any other person not 
     described in subparagraph (A)(ii). Such transfer may be 
     revoked only with the consent of the Secretary.
       ``(ii) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to ensure that any credit described 
     in clause (i) is claimed once and not reassigned by such 
     other person.
       ``(iii) Transfer proceeds treated as arising from essential 
     government function.--Any proceeds derived by a person 
     described in subclause (III), (IV), or (V) of subparagraph 
     (A)(ii) from the transfer of any credit under clause (i) 
     shall be treated as arising from the exercise of an essential 
     government function.
       ``(C) Use of credit as an offset.--Notwithstanding any 
     other provision of law, in the case of a person described in 
     subclause (I), (II), or (V) of subparagraph (A)(ii), any 
     credit to which subparagraph (A)(i) applies may be applied by 
     such person, to the extent provided by the Secretary of 
     Agriculture, as a prepayment of any loan, debt, or other 
     obligation the entity has incurred under subchapter I of 
     chapter 31 of title 7 of the Rural Electrification Act of 
     1936 (7 U.S.C. 901 et seq.), as in effect on the date of the 
     enactment of the Energy Tax Incentives Act of 2002.
       ``(D) Credit not income.--Any transfer under subparagraph 
     (B) or use under subparagraph (C) of any credit to which 
     subparagraph (A)(i) applies shall not be treated as income 
     for purposes of section 501(c)(12).
       ``(E) Treatment of unrelated persons.--For purposes of 
     subsection (a)(2)(B), sales among and between persons 
     described in subparagraph (A)(ii) shall be treated as sales 
     between unrelated parties.''.

[[Page 5266]]

       (b) Credits Not Reduced by Tax-Exempt Bonds or Certain 
     Other Subsidies.--Section 45(b)(3) (relating to credit 
     reduced for grants, tax-exempt bonds, subsidized energy 
     financing, and other credits) is amended--
       (1) by striking clause (ii),
       (2) by redesignating clauses (iii) and (iv) as clauses (ii) 
     and (iii),
       (3) by inserting ``(other than any loan, debt, or other 
     obligation incurred under subchapter I of chapter 31 of title 
     7 of the Rural Electrification Act of 1936 (7 U.S.C. 901 et 
     seq.), as in effect on the date of the enactment of the 
     Energy Tax Incentives Act of 2002)'' after ``project'' in 
     clause (ii) (as so redesignated),
       (4) by adding at the end the following new sentence: ``This 
     paragraph shall not apply with respect to any facility 
     described in subsection (c)(3)(B)(i)(II).'', and
       (5) by striking ``tax-exempt bonds,'' in the heading and 
     inserting ``certain''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to electricity sold after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.

       TITLE XX--ALTERNATIVE MOTOR VEHICLES AND FUELS INCENTIVES

     SEC. 2001. ALTERNATIVE MOTOR VEHICLE CREDIT.

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

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

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of--
       ``(1) the new qualified fuel cell motor vehicle credit 
     determined under subsection (b),
       ``(2) the new qualified hybrid motor vehicle credit 
     determined under subsection (c), and
       ``(3) the new qualified alternative fuel motor vehicle 
     credit determined under subsection (d).
       ``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     qualified fuel cell motor vehicle credit determined under 
     this subsection with respect to a new qualified fuel cell 
     motor vehicle placed in service by the taxpayer during the 
     taxable year is--
       ``(A) $4,000, if such vehicle has a gross vehicle weight 
     rating of not more than 8,500 pounds,
       ``(B) $10,000, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(C) $20,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $40,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(2) Increase for fuel efficiency.--
       ``(A) In general.--The amount determined under paragraph 
     (1)(A) with respect to a new qualified fuel cell motor 
     vehicle which is a passenger automobile or light truck shall 
     be increased by--
       ``(i) $1,000, if such vehicle achieves at least 150 percent 
     but less than 175 percent of the 2000 model year city fuel 
     economy,
       ``(ii) $1,500, if such vehicle achieves at least 175 
     percent but less than 200 percent of the 2000 model year city 
     fuel economy,
       ``(iii) $2,000, if such vehicle achieves at least 200 
     percent but less than 225 percent of the 2000 model year city 
     fuel economy,
       ``(iv) $2,500, if such vehicle achieves at least 225 
     percent but less than 250 percent of the 2000 model year city 
     fuel economy,
       ``(v) $3,000, if such vehicle achieves at least 250 percent 
     but less than 275 percent of the 2000 model year city fuel 
     economy,
       ``(vi) $3,500, if such vehicle achieves at least 275 
     percent but less than 300 percent of the 2000 model year city 
     fuel economy, and
       ``(vii) $4,000, if such vehicle achieves at least 300 
     percent of the 2000 model year city fuel economy.
       ``(B) 2000 model year city fuel economy.--For purposes of 
     subparagraph (A), the 2000 model year city fuel economy with 
     respect to a vehicle shall be determined in accordance with 
     the following tables:
       ``(i) In the case of a passenger automobile:

``If vehicle inertia weight clThe 2000 model year city fuel economy is:
1,500 or 1,750 lbs............................................43.7 mpg 
2,000 lbs.....................................................38.3 mpg 
2,250 lbs.....................................................34.1 mpg 
2,500 lbs.....................................................30.7 mpg 
2,750 lbs.....................................................27.9 mpg 
3,000 lbs.....................................................25.6 mpg 
3,500 lbs.....................................................22.0 mpg 
4,000 lbs.....................................................19.3 mpg 
4,500 lbs.....................................................17.2 mpg 
5,000 lbs.....................................................15.5 mpg 
5,500 lbs.....................................................14.1 mpg 
6,000 lbs.....................................................12.9 mpg 
6,500 lbs.....................................................11.9 mpg 
7,000 to 8,500 lbs............................................11.1 mpg.

       ``(ii) In the case of a light truck:

``If vehicle inertia weight clThe 2000 model year city fuel economy is:
1,500 or 1,750 lbs............................................37.6 mpg 
2,000 lbs.....................................................33.7 mpg 
2,250 lbs.....................................................30.6 mpg 
2,500 lbs.....................................................28.0 mpg 
2,750 lbs.....................................................25.9 mpg 
3,000 lbs.....................................................24.1 mpg 
3,500 lbs.....................................................21.3 mpg 
4,000 lbs.....................................................19.0 mpg 
4,500 lbs.....................................................17.3 mpg 
5,000 lbs.....................................................15.8 mpg 
5,500 lbs.....................................................14.6 mpg 
6,000 lbs.....................................................13.6 mpg 
6,500 lbs.....................................................12.8 mpg 
7,000 to 8,500 lbs............................................12.0 mpg.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[[Page 5267]]

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

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

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

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

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

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

``If the model year is:                 The increased credit amount is:
  2002......................................................$3,500 ....

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

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

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

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

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

``If the model year is:                 The increased credit amount is:
  2002......................................................$9,000 ....

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

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

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

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

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

``If the model year is:                 The increased credit amount is:
  2002.....................................................$14,000 ....

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

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

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

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

       ``(D) Definitions.--
       ``(i) Applicable heavy duty hybrid motor vehicle.--For 
     purposes of subparagraph (C), the term `applicable heavy duty 
     hybrid motor vehicle' means a heavy duty hybrid motor vehicle 
     which is powered by an internal combustion or heat engine 
     which is certified as meeting the emission standards set in 
     the regulations prescribed by the Administrator of the 
     Environmental Protection Agency for 2007 and later model year 
     diesel heavy duty engines, or for 2008 and later model year 
     ottocycle heavy duty engines, as applicable.
       ``(ii) Heavy duty hybrid motor vehicle.--For purposes of 
     this paragraph, the term `heavy duty hybrid motor vehicle' 
     means a new qualified hybrid motor vehicle which has a gross 
     vehicle weight rating of more than 10,000 pounds and draws 
     propulsion energy from both of the following onboard sources 
     of stored energy:

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

       ``(iii) Maximum available power.--

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

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

[[Page 5268]]

     means any motor vehicle described in subparagraph (C) or (D) 
     of paragraph (3), which--
       ``(i) is certified by the manufacturer as being able to 
     perform efficiently in normal operation on a combination of 
     an alternative fuel and a petroleum-based fuel,
       ``(ii) either--

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

       ``(iii) the original use of which commences with the 
     taxpayer,
       ``(iv) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(v) which is made by a manufacturer.
       ``(C) 75/25 mixed-fuel vehicle.--For purposes of this 
     subsection, the term `75/25 mixed-fuel vehicle' means a 
     mixed-fuel vehicle which operates using at least 75 percent 
     alternative fuel and not more than 25 percent petroleum-based 
     fuel.
       ``(D) 90/10 mixed-fuel vehicle.--For purposes of this 
     subsection, the term `90/10 mixed-fuel vehicle' means a 
     mixed-fuel vehicle which operates using at least 90 percent 
     alternative fuel and not more than 10 percent petroleum-based 
     fuel.
       ``(e) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, and 30, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(f) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Consumable fuel.--The term `consumable fuel' means 
     any solid, liquid, or gaseous matter which releases energy 
     when consumed by an auxiliary power unit.
       ``(2) Motor vehicle.--The term `motor vehicle' has the 
     meaning given such term by section 30(c)(2).
       ``(3) City fuel economy.--The city fuel economy with 
     respect to any vehicle shall be measured in a manner which is 
     substantially similar to the manner city fuel economy is 
     measured in accordance with procedures under part 600 of 
     subchapter Q of chapter I of title 40, Code of Federal 
     Regulations, as in effect on the date of the enactment of 
     this section.
       ``(4) Other terms.--The terms `automobile', `passenger 
     automobile', `light truck', and `manufacturer' have the 
     meanings given such terms in regulations prescribed by the 
     Administrator of the Environmental Protection Agency for 
     purposes of the administration of title II of the Clean Air 
     Act (42 U.S.C. 7521 et seq.).
       ``(5)  Reduction in basis.--For purposes of this subtitle, 
     the basis of any property for which a credit is allowable 
     under subsection (a) shall be reduced by the amount of such 
     credit so allowed (determined without regard to subsection 
     (e)).
       ``(6) No double benefit.--The amount of any deduction or 
     other credit allowable under this chapter--
       ``(A) for any incremental cost taken into account in 
     computing the amount of the credit determined under 
     subsection (d) shall be reduced by the amount of such credit 
     attributable to such cost, and
       ``(B) with respect to a vehicle described under subsection 
     (b) or (c), shall be reduced by the amount of credit allowed 
     under subsection (a) for such vehicle for the taxable year.
       ``(7) Property used by tax-exempt entities.--In the case of 
     a credit amount which is allowable with respect to a motor 
     vehicle which is acquired by an entity exempt from tax under 
     this chapter, the person which sells or leases such vehicle 
     to the entity shall be treated as the taxpayer with respect 
     to the vehicle for purposes of this section and the credit 
     shall be allowed to such person, but only if the person 
     clearly discloses to the entity at the time of any sale or 
     lease the specific amount of any credit otherwise allowable 
     to the entity under this section.
       ``(8) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit (including 
     recapture in the case of a lease period of less than the 
     economic life of a vehicle).
       ``(9) Property used outside united states, etc., not 
     qualified.--No credit shall be allowed under subsection (a) 
     with respect to any property referred to in section 50(b) or 
     with respect to the portion of the cost of any property taken 
     into account under section 179.
       ``(10) Election to not take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects to not have this section apply to such vehicle.
       ``(11) Carryback and carryforward allowed.--
       ``(A) In general.--If the credit amount allowable under 
     subsection (a) for a taxable year exceeds the amount of the 
     limitation under subsection (e) for such taxable year (in 
     this paragraph referred to as the `unused credit year'), such 
     excess shall be allowed as a credit carryback for each of the 
     3 taxable years beginning after September 30, 2002, which 
     precede the unused credit year and a credit carryforward for 
     each of the 20 taxable years which succeed the unused credit 
     year.
       ``(B) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryback and credit 
     carryforward under subparagraph (A).
       ``(12) Interaction with air quality and motor vehicle 
     safety standards.--Unless otherwise provided in this section, 
     a motor vehicle shall not be considered eligible for a credit 
     under this section unless such vehicle is in compliance 
     with--
       ``(A) the applicable provisions of the Clean Air Act for 
     the applicable make and model year of the vehicle (or 
     applicable air quality provisions of State law in the case of 
     a State which has adopted such provision under a waiver under 
     section 209(b) of the Clean Air Act), and
       ``(B) the motor vehicle safety provisions of sections 30101 
     through 30169 of title 49, United States Code.
       ``(g) Regulations.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall promulgate such regulations as necessary to 
     carry out the provisions of this section.
       ``(2) Coordination in prescription of certain 
     regulations.--The Secretary of the Treasury, in coordination 
     with the Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency, shall prescribe such 
     regulations as necessary to determine whether a motor vehicle 
     meets the requirements to be eligible for a credit under this 
     section.
       ``(h) Termination.--This section shall not apply to any 
     property purchased after--
       ``(1) in the case of a new qualified fuel cell motor 
     vehicle (as described in subsection (b)), December 31, 2011, 
     and
       ``(2) in the case of any other property, December 31, 
     2006.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a) is amended by striking ``and'' at the 
     end of paragraph (27), by striking the period at the end of 
     paragraph (28) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(29) to the extent provided in section 30B(f)(5).''.
       (2) Section 55(c)(2) is amended by inserting ``30B(e),'' 
     after ``30(b)(3)''.
       (3) Section 6501(m) is amended by inserting ``30B(f)(10),'' 
     after ``30(d)(4),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 30A the following new item:

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

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

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

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

       ``(C) In the case of a vehicle with a gross vehicle weight 
     rating exceeding 8,500 but not exceeding 14,000 pounds, 
     $10,000.
       ``(D) In the case of a vehicle with a gross vehicle weight 
     rating exceeding 14,000 but not exceeding 26,000 pounds, 
     $20,000.
       ``(E) In the case of a vehicle with a gross vehicle weight 
     rating exceeding 26,000 pounds, $40,000.'', and
       (B) by redesignating paragraph (3) as paragraph (2).
       (3) Conforming amendments.--
       (A) Section 53(d)(1)(B)(iii) is amended by striking 
     ``section 30(b)(3)(B)'' and inserting ``section 
     30(b)(2)(B)''.
       (3) Section 55(c)(2), as amended by this Act, is amended by 
     striking ``30(b)(3)'' and inserting ``30(b)(2)''.

[[Page 5269]]

       (b) Qualified Battery Electric Vehicle.--
       (1) In general.--Section 30(c)(1)(A) (defining qualified 
     electric vehicle) is amended to read as follows:
       ``(A) which is--
       ``(i) operated solely by use of a battery or battery pack, 
     or
       ``(ii) powered primarily through the use of an electric 
     battery or battery pack using a flywheel or capacitor which 
     stores energy produced by an electric motor through 
     regenerative braking to assist in vehicle operation,''.
       (2) Leased vehicles.--Section 30(c)(1)(C) is amended by 
     inserting ``or lease'' after ``use''.
       (3) Conforming amendments.--
       (A) Subsections (a), (b)(2), and (c) of section 30 are each 
     amended by inserting ``battery'' after ``qualified'' each 
     place it appears.
       (B) The heading of subsection (c) of section 30 is amended 
     by inserting ``Battery'' after ``Qualified''.
       (C) The heading of section 30 is amended by inserting 
     ``BATTERY'' after ``QUALIFIED''.
       (D) The item relating to section 30 in the table of 
     sections for subpart B of part IV of subchapter A of chapter 
     1 is amended by inserting ``battery'' after ``qualified''.
       (E) Section 179A(c)(3) is amended by inserting ``battery'' 
     before ``electric''.
       (F) The heading of paragraph (3) of section 179A(c) is 
     amended by inserting ``battery'' before ``electric''.
       (c) Additional Special Rules.--Section 30(d) (relating to 
     special rules) is amended by adding at the end the following 
     new paragraphs:
       ``(5) No double benefit.--The amount of any deduction or 
     other credit allowable under this chapter for any cost taken 
     into account in computing the amount of the credit determined 
     under subsection (a) shall be reduced by the amount of such 
     credit attributable to such cost.
       ``(6) Property used by tax-exempt entities.--In the case of 
     a credit amount which is allowable with respect to a vehicle 
     which is acquired by an entity exempt from tax under this 
     chapter, the person which sells or leases such vehicle to the 
     entity shall be treated as the taxpayer with respect to the 
     vehicle for purposes of this section and the credit shall be 
     allowed to such person, but only if the person clearly 
     discloses to the entity at the time of any sale or lease the 
     specific amount of any credit otherwise allowable to the 
     entity under this section.
       ``(7) Carryback and carryforward allowed.--
       ``(A) In general.--If the credit amount allowable under 
     subsection (a) for a taxable year exceeds the amount of the 
     limitation under subsection (b)(2) for such taxable year (in 
     this paragraph referred to as the `unused credit year'), such 
     excess shall be allowed as a credit carryback for each of the 
     3 taxable years beginning after September 30, 2002, which 
     precede the unused credit year and a credit carryforward for 
     each of the 20 taxable years which succeed the unused credit 
     year.
       ``(B) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryback and credit 
     carryforward under subparagraph (A).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after September 30, 
     2002, in taxable years ending after such date.

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

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

     ``SEC. 30C. CLEAN-FUEL VEHICLE REFUELING PROPERTY CREDIT.

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 50 percent of the amount paid or incurred 
     by the taxpayer during the taxable year for the installation 
     of qualified clean-fuel vehicle refueling property.
       ``(b) Limitation.--The credit allowed under subsection 
     (a)--
       ``(1) with respect to any retail clean-fuel vehicle 
     refueling property, shall not exceed $30,000, and
       ``(2) with respect to any residential clean-fuel vehicle 
     refueling property, shall not exceed $1,000.
       ``(c) Year Credit Allowed.--The credit allowed under 
     subsection (a) shall be allowed in the taxable year in which 
     the qualified clean-fuel vehicle refueling property is placed 
     in service by the taxpayer.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified clean-fuel vehicle refueling property.--The 
     term `qualified clean-fuel vehicle refueling property' has 
     the same meaning given such term by section 179A(d).
       ``(2) Residential clean-fuel vehicle refueling property.--
     The term `residential clean-fuel vehicle refueling property' 
     means qualified clean-fuel vehicle refueling property which 
     is installed on property which is used as the principal 
     residence (within the meaning of section 121) of the 
     taxpayer.
       ``(3) Retail clean-fuel vehicle refueling property.--The 
     term `retail clean-fuel vehicle refueling property' means 
     qualified clean-fuel vehicle refueling property which is 
     installed on property (other than property described in 
     paragraph (2)) used in a trade or business of the taxpayer.
       ``(e) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, 30, and 30B, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(f) Basis Reduction.--For purposes of this title, the 
     basis of any property shall be reduced by the portion of the 
     cost of such property taken into account under subsection 
     (a).
       ``(g) No Double Benefit.--No deduction shall be allowed 
     under section 179A with respect to any property with respect 
     to which a credit is allowed under subsection (a).
       ``(h) Refueling Property Installed for Tax-Exempt 
     Entities.--In the case of qualified clean-fuel vehicle 
     refueling property installed on property owned or used by an 
     entity exempt from tax under this chapter, the person which 
     installs such refueling property for the entity shall be 
     treated as the taxpayer with respect to the refueling 
     property for purposes of this section (and such refueling 
     property shall be treated as retail clean-fuel vehicle 
     refueling property) and the credit shall be allowed to such 
     person, but only if the person clearly discloses to the 
     entity in any installation contract the specific amount of 
     the credit allowable under this section.
       ``(i) Carryforward Allowed.--
       ``(1) In general.--If the credit amount allowable under 
     subsection (a) for a taxable year exceeds the amount of the 
     limitation under subsection (e) for such taxable year 
     (referred to as the `unused credit year' in this subsection), 
     such excess shall be allowed as a credit carryforward for 
     each of the 20 taxable years following the unused credit 
     year.
       ``(2) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryforward under 
     paragraph (1).
       ``(j) Special Rules.--Rules similar to the rules of 
     paragraphs (4) and (5) of section 179A(e) shall apply.
       ``(k) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(l) Termination.--This section shall not apply to any 
     property placed in service after December 31, 2006.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (28), by striking 
     the period at the end of paragraph (29) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(30) to the extent provided in section 30C(f).''.
       (2) Section 55(c)(2), as amended by this Act, is amended by 
     inserting ``30C(e),'' after ``30B(e)''.
       (3) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 30B the 
     following new item:

``Sec. 30C. Clean-fuel vehicle refueling property credit.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after September 30, 
     2002, in taxable years ending after such date.

     SEC. 2004. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS 
                   MOTOR VEHICLE FUEL.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits) is amended 
     by inserting after section 40 the following new section:

     ``SEC. 40A. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS 
                   MOTOR VEHICLE FUEL.

       ``(a) General Rule.--For purposes of section 38, the 
     alternative fuel retail sales credit for any taxable year is 
     the applicable amount for each gasoline gallon equivalent of 
     alternative fuel sold at retail by the taxpayer during such 
     year as a fuel to propel any qualified motor vehicle.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Applicable amount.--The term `applicable amount' 
     means the amount determined in accordance with the following 
     table:

``In the case of any taxable year ending in--The applicable amount is--
2002 and 2003.................................................30 cents 
2004..........................................................40 cents 
2005 and 2006.................................................50 cents.

       ``(2) Alternative fuel.--The term `alternative fuel' means 
     compressed natural gas, liquefied natural gas, liquefied 
     petroleum gas, hydrogen, and any liquid at least 85 percent 
     of the volume of which consists of methanol or ethanol.
       ``(3) Gasoline gallon equivalent.--The term `gasoline 
     gallon equivalent' means, with respect to any alternative 
     fuel, the amount (determined by the Secretary) of such fuel 
     having a Btu content of 114,000.
       ``(4) Qualified motor vehicle.--The term `qualified motor 
     vehicle' means any motor vehicle (as defined in section 
     30(c)(2)) which meets any applicable Federal or State 
     emissions standards with respect to each fuel by

[[Page 5270]]

     which such vehicle is designed to be propelled.
       ``(5) Sold at retail.--
       ``(A) In general.--The term `sold at retail' means the 
     sale, for a purpose other than resale, after manufacture, 
     production, or importation.
       ``(B) Use treated as sale.--If any person uses alternative 
     fuel (including any use after importation) as a fuel to 
     propel any qualified alternative fuel motor vehicle (as 
     defined in section 30B(d)(4)) before such fuel is sold at 
     retail, then such use shall be treated in the same manner as 
     if such fuel were sold at retail as a fuel to propel such a 
     vehicle by such person.
       ``(c) No Double Benefit.--The amount of any deduction or 
     other credit allowable under this chapter for any fuel taken 
     into account in computing the amount of the credit determined 
     under subsection (a) shall be reduced by the amount of such 
     credit attributable to such fuel.
       ``(d) Pass-Thru in the Case of Estates and Trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(e) Termination.--This section shall not apply to any 
     fuel sold at retail after December 31, 2006.''.
       (b) Credit Treated as Business Credit.--Section 38(b) 
     (relating to current year business credit) is amended by 
     striking ``plus'' at the end of paragraph (14), by striking 
     the period at the end of paragraph (15) and inserting ``, 
     plus'', and by adding at the end the following new paragraph:
       ``(16) the alternative fuel retail sales credit determined 
     under section 40A(a).''.
       (c) Transitional Rule.--Section 39(d) (relating to 
     transitional rules) is amended by adding at the end the 
     following new paragraph:
       ``(11) No carryback of section 40a credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the alternative fuel 
     retail sales credit determined under section 40A(a) may be 
     carried back to a taxable year ending before January 1, 
     2002.''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 is amended by 
     inserting after the item relating to section 40 the following 
     new item:

``Sec. 40A. Credit for retail sale of alternative fuels as motor 
              vehicle fuel.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to fuel sold at retail after September 30, 2002, 
     in taxable years ending after such date.

     SEC. 2005. SMALL ETHANOL PRODUCER CREDIT.

       (a) Allocation of Alcohol Fuels Credit to Patrons of a 
     Cooperative.--Section 40(g) (relating to alcohol used as 
     fuel) is amended by adding at the end the following new 
     paragraph:
       ``(6) Allocation of small ethanol producer credit to 
     patrons of cooperative.--
       ``(A) Election to allocate.--
       ``(i) In general.--In the case of a cooperative 
     organization described in section 1381(a), any portion of the 
     credit determined under subsection (a)(3) for the taxable 
     year may, at the election of the organization, be apportioned 
     pro rata among patrons of the organization on the basis of 
     the quantity or value of business done with or for such 
     patrons for the taxable year.
       ``(ii) Form and effect of election.--An election under 
     clause (i) for any taxable year shall be made on a timely 
     filed return for such year. Such election, once made, shall 
     be irrevocable for such taxable year.
       ``(B) Treatment of organizations and patrons.--The amount 
     of the credit apportioned to patrons under subparagraph (A)--
       ``(i) shall not be included in the amount determined under 
     subsection (a) with respect to the organization for the 
     taxable year,
       ``(ii) shall be included in the amount determined under 
     subsection (a) for the taxable year of each patron for which 
     the patronage dividends for the taxable year described in 
     subparagraph (A) are included in gross income, and
       ``(iii) shall be included in gross income of such patrons 
     for the taxable year in the manner and to the extent provided 
     in section 87.
       ``(C) Special rules for decrease in credits for taxable 
     year.--If the amount of the credit of a cooperative 
     organization determined under subsection (a)(3) for a taxable 
     year is less than the amount of such credit shown on the 
     return of the cooperative organization for such year, an 
     amount equal to the excess of--
       ``(i) such reduction, over
       ``(ii) the amount not apportioned to such patrons under 
     subparagraph (A) for the taxable year,

     shall be treated as an increase in tax imposed by this 
     chapter on the organization. Such increase shall not be 
     treated as tax imposed by this chapter for purposes of 
     determining the amount of any credit under this chapter or 
     for purposes of section 55.''.
       (b) Improvements to Small Ethanol Producer Credit.--
       (1) Definition of small ethanol producer.--Section 40(g) 
     (relating to definitions and special rules for eligible small 
     ethanol producer credit) is amended by striking 
     ``30,000,000'' each place it appears and inserting 
     ``60,000,000''.
       (2) Small ethanol producer credit not a passive activity 
     credit.--Clause (i) of section 469(d)(2)(A) is amended by 
     striking ``subpart D'' and inserting ``subpart D, other than 
     section 40(a)(3),''.
       (3) Allowing credit against entire regular tax and minimum 
     tax.--
       (A) In general.--Subsection (c) of section 38 (relating to 
     limitation based on amount of tax), as amended by section 
     301(b) of the Job Creation and Worker Assistance Act of 2002, 
     is amended by redesignating paragraph (4) as paragraph (5) 
     and by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) Special rules for small ethanol producer credit.--
       ``(A) In general.--In the case of the small ethanol 
     producer credit--
       ``(i) this section and section 39 shall be applied 
     separately with respect to the credit, and
       ``(ii) in applying paragraph (1) to the credit--

       ``(I) the amounts in subparagraphs (A) and (B) thereof 
     shall be treated as being zero, and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the small 
     ethanol producer credit).

       ``(B) Small ethanol producer credit.--For purposes of this 
     subsection, the term `small ethanol producer credit' means 
     the credit allowable under subsection (a) by reason of 
     section 40(a)(3).''.
       (B) Conforming amendments.--Subclause (II) of section 
     38(c)(2)(A)(ii), as amended by section 301(b)(2) of the Job 
     Creation and Worker Assistance Act of 2002, and subclause 
     (II) of section 38(c)(3)(A)(ii), as added by section 
     301(b)(1) of such Act, are each amended by inserting ``or the 
     small ethanol producer credit'' after ``employee credit''.
       (4) Small ethanol producer credit not added back to income 
     under section 87.--Section 87 (relating to income inclusion 
     of alcohol fuel credit) is amended to read as follows:

     ``SEC. 87. ALCOHOL FUEL CREDIT.

       ``Gross income includes an amount equal to the sum of--
       ``(1) the amount of the alcohol mixture credit determined 
     with respect to the taxpayer for the taxable year under 
     section 40(a)(1), and
       ``(2) the alcohol credit determined with respect to the 
     taxpayer for the taxable year under section 40(a)(2).''.
       (c) Conforming Amendment.--Section 1388 (relating to 
     definitions and special rules for cooperative organizations) 
     is amended by adding at the end the following new subsection:
       ``(k) Cross Reference.--For provisions relating to the 
     apportionment of the alcohol fuels credit between cooperative 
     organizations and their patrons, see section 40(g)(6).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 2006. ALL ALCOHOL FUELS TAXES TRANSFERRED TO HIGHWAY 
                   TRUST FUND.

       (a) In General.--Section 9503(b)(4) (relating to certain 
     taxes not transferred to Highway Trust Fund) is amended--
       (1) by adding ``or'' at the end of subparagraph (C),
       (2) by striking the comma at the end of subparagraph 
     (D)(iii) and inserting a period, and
       (3) by striking subparagraphs (E) and (F).
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxes imposed after September 30, 2003.

     SEC. 2007. INCREASED FLEXIBILITY IN ALCOHOL FUELS TAX CREDIT.

       (a) Alcohol Fuels Credit May Be Transferred.--Section 40 
     (relating to alcohol used as fuel) is amended by adding at 
     the end the following new subsection:
       ``(i) Credit May Be Transferred.--
       ``(1) In general.--A taxpayer may transfer any credit 
     allowable under paragraph (1) or (2) of subsection (a) with 
     respect to alcohol used in the production of ethyl tertiary 
     butyl ether through an assignment to a qualified assignee. 
     Such transfer may be revoked only with the consent of the 
     Secretary.
       ``(2) Qualified assignee.--For purposes of this subsection, 
     the term `qualified assignee' means any person who--
       ``(A) is liable for taxes imposed under section 4081,
       ``(B) is required to register under section 4101, and
       ``(C) obtains a certificate from the taxpayer described in 
     paragraph (1) which identifies the amount of alcohol used in 
     such production.
       ``(3) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to insure that any credit described 
     in paragraph (1) is claimed once and not reassigned by a 
     qualified assignee.''.
       (b) Alcohol Fuels Credit May Be Taken Against Motor Fuels 
     Tax Liability.--
       (1) In general.--Subpart C of part III of subchapter A of 
     chapter 32 (relating to special provisions applicable to 
     petroleum products) is amended by adding at the end the 
     following new section:

[[Page 5271]]



     ``SEC. 4104. CREDIT AGAINST MOTOR FUELS TAXES.

       ``(a) Election To Use Credit Against Motor Fuels Taxes.--
     There is hereby allowed as a credit against the taxes imposed 
     by section 4081, any credit allowed under paragraph (1) or 
     (2) of section 40(a) with respect to alcohol used in the 
     production of ethyl tertiary butyl ether to the extent--
       ``(1) such credit is not claimed by the taxpayer or the 
     qualified assignee under section 40(i) as a credit under 
     section 40, and
       ``(2) the taxpayer or qualified assignee elects to claim 
     such credit under this section.
       ``(b) Election Irrevocable.--Any election under subsection 
     (a) shall be irrevocable.
       ``(c) Required Statement.--Any return claiming a credit 
     pursuant to an election under this section shall be 
     accompanied by a statement that the credit was not, and will 
     not, be claimed on an income tax return.
       ``(d) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to avoid the claiming of double 
     benefits and to prescribe the taxable periods with respect to 
     which the credit may be claimed.''.
       (2) Conforming amendment.--Section 40(c) is amended by 
     striking ``or section 4091(c)'' and inserting ``section 
     4091(c), or section 4104''.
       (3) Clerical amendment.--The table of sections for subpart 
     C of part III of subchapter A of chapter 32 is amended by 
     adding at the end the following new item:

``Sec. 4104. Credit against motor fuels taxes.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on and after the date of the enactment of 
     this Act.

     SEC. 2008. INCENTIVES FOR BIODIESEL.

       (a) Credit for Biodiesel Used as a Fuel.--
       (1) In general.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits), as amended 
     by this Act, is amended by inserting after section 40A the 
     following new section:

     ``SEC. 40B. BIODIESEL USED AS FUEL.

       ``(a) General Rule.--For purposes of section 38, the 
     biodiesel fuels credit determined under this section for the 
     taxable year is an amount equal to the biodiesel mixture 
     credit.
       ``(b) Definition of Biodiesel Mixture Credit.--For purposes 
     of this section--
       ``(1) Biodiesel mixture credit.--
       ``(A) In general.--The biodiesel mixture credit of any 
     taxpayer for any taxable year is the sum of the products of 
     the biodiesel mixture rate for each qualified biodiesel 
     mixture and the number of gallons of such mixture of the 
     taxpayer for the taxable year.
       ``(B) Biodiesel mixture rate.--For purposes of subparagraph 
     (A), the biodiesel mixture rate for each qualified biodiesel 
     mixture shall be 1 cent for each whole percentage point (not 
     exceeding 20 percentage points) of biodiesel in such mixture.
       ``(2) Qualified biodiesel mixture.--
       ``(A) In general.--The term `qualified biodiesel mixture' 
     means a mixture of diesel and biodiesel which--
       ``(i) is sold by the taxpayer producing such mixture to any 
     person for use as a fuel, or
       ``(ii) is used as a fuel by the taxpayer producing such 
     mixture.
       ``(B) Sale or use must be in trade or business, etc.--
     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 (A) 
     is in a trade or business of the taxpayer, and
       ``(ii) for the taxable year in which such sale or use 
     occurs.
       ``(C) Casual off-farm production not eligible.--No credit 
     shall be allowed under this section with respect to any 
     casual off-farm production of a qualified biodiesel mixture.
       ``(c) Coordination With Exemption From Excise Tax.--The 
     amount of the credit determined under this section with 
     respect to any biodiesel shall, under regulations prescribed 
     by the Secretary, be properly reduced to take into account 
     any benefit provided with respect to such biodiesel solely by 
     reason of the application of section 4041(n) or section 
     4081(f).
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Biodiesel defined.--
       ``(A) In general.--The term `biodiesel' means the monoalkyl 
     esters of long chain fatty acids derived from virgin 
     vegetable oils for use in compressional-ignition (diesel) 
     engines. Such term shall include esters derived from 
     vegetable oils from corn, soybeans, sunflower seeds, 
     cottonseeds, canola, crambe, rapeseeds, safflowers, 
     flaxseeds, rice bran, and mustard seeds.
       ``(B) Registration requirements.--Such term shall only 
     include a biodiesel which meets--
       ``(i) the registration requirements for fuels and fuel 
     additives established by the Environmental Protection Agency 
     under section 211 of the Clean Air Act (42 U.S.C. 7545), and
       ``(ii) the requirements of the American Society of Testing 
     and Materials D6751.
       ``(2) Biodiesel mixture not used as a fuel, etc.--
       ``(A) Imposition of tax.--If--
       ``(i) any credit was determined under this section with 
     respect to biodiesel 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 biodiesel mixture rate applicable under 
     subsection (b)(1)(B) and the number of gallons of the 
     mixture.
       ``(B) Applicable laws.--All provisions of law, including 
     penalties, shall, insofar as applicable and not inconsistent 
     with this section, apply in respect of any tax imposed under 
     subparagraph (A) as if such tax were imposed by section 4081 
     and not by this chapter.
       ``(3) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(e) Election To Have Biodiesel Fuels Credit Not Apply.--
       ``(1) In general.--A taxpayer may elect to have this 
     section not apply for any taxable year.
       ``(2) Time for making election.--An election under 
     paragraph (1) for any taxable year may be made (or revoked) 
     at any time before the expiration of the 3-year period 
     beginning on the last date prescribed by law for filing the 
     return for such taxable year (determined without regard to 
     extensions).
       ``(3) Manner of making election.--An election under 
     paragraph (1) (or revocation thereof) shall be made in such 
     manner as the Secretary may by regulations prescribe.''.
       ``(f) Termination.--This section shall not apply to any 
     fuel sold after December 31, 2005.''.
       (2) Credit treated as part of general business credit.--
     Section 38(b), as amended by this Act, is amended by striking 
     ``plus'' at the end of paragraph (15), by striking the period 
     at the end of paragraph (16) and inserting ``, plus'', and by 
     adding at the end the following new paragraph:
       ``(17) the biodiesel fuels credit determined under section 
     40B(a).''.
       (3) Conforming amendments.--
       (A) Section 39(d), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(12) No carryback of biodiesel fuels credit before 
     january 1, 2003.--No portion of the unused business credit 
     for any taxable year which is attributable to the biodiesel 
     fuels credit determined under section 40B may be carried back 
     to a taxable year beginning before January 1, 2003.''.
       (B) Section 196(c) is amended by striking ``and'' at the 
     end of paragraph (9), by striking the period at the end of 
     paragraph (10), and by adding at the end the following new 
     paragraph:
       ``(11) the biodiesel fuels credit determined under section 
     40B(a).''.
       (C) Section 6501(m), as amended by this Act, is amended by 
     inserting ``40B(e),'' after ``40(f),''.
       (D) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by adding after the item relating to section 40A the 
     following new item:

``Sec. 40B. Biodiesel used as fuel.''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2002.
       (b) Reduction of Motor Fuel Excise Taxes on Biodiesel 
     Mixtures.--
       (1) In general.--Section 4081 (relating to manufacturers 
     tax on petroleum products) is amended by adding at the end 
     the following new subsection:
       ``(f) Biodiesel Mixtures.--Under regulations prescribed by 
     the Secretary--
       ``(1) In general.--In the case of the removal or entry of a 
     qualified biodiesel mixture, the rate of tax under subsection 
     (a) shall be the otherwise applicable rate reduced by the 
     biodiesel mixture rate (if any) applicable to the mixture.
       ``(2) Tax prior to mixing.--
       ``(A) In general.--In the case of the removal or entry of 
     diesel fuel for use in producing at the time of such removal 
     or entry a qualified biodiesel mixture, the rate of tax under 
     subsection (a) shall be the rate determined under 
     subparagraph (B).
       ``(B) Determination of rate.--For purposes of subparagraph 
     (A), the rate determined under this subparagraph is the rate 
     determined under paragraph (1), divided by a percentage equal 
     to 100 percent minus the percentage of biodiesel which will 
     be in the mixture.
       ``(3) Definitions.--For purposes of this subsection, any 
     term used in this subsection which is also used in section 
     40B shall have the meaning given such term by section 40B.
       ``(4) Certain rules to apply.--Rules similar to the rules 
     of paragraphs (6) and (7) of subsection (c) shall apply for 
     purposes of this subsection.''.
       (2) Conforming amendments.--
       (A) Section 4041 is amended by adding at the end the 
     following new subsection:
       ``(n) Biodiesel Mixtures.--Under regulations prescribed by 
     the Secretary, in the case of the sale or use of a qualified 
     biodiesel mixture (as defined in section 40B(b)(2)), the 
     rates under paragraphs (1) and (2) of subsection (a) shall be 
     the otherwise applicable rates, reduced by any applicable 
     biodiesel

[[Page 5272]]

     mixture rate (as defined in section 40B(b)(1)(B)).''.
       (B) Section 6427 is amended by redesignating subsection (p) 
     as subsection (q) and by inserting after subsection (o) the 
     following new subsection:
       ``(p) Biodiesel Mixtures.--Except as provided in subsection 
     (k), if any diesel fuel on which tax was imposed by section 
     4081 at a rate not determined under section 4081(f) is used 
     by any person in producing a qualified biodiesel mixture (as 
     defined in section 40B(b)(2)) which is sold or used in such 
     person's trade or business, the Secretary shall pay (without 
     interest) to such person an amount equal to the per gallon 
     applicable biodiesel mixture rate (as defined in section 
     40B(b)(1)(B)) with respect to such fuel.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to any fuel sold after December 31, 2002, and 
     before January 1, 2006.
       (c) Highway Trust Fund Held Harmless.--There are hereby 
     transferred (from time to time) from the funds of the 
     Commodity Credit Corporation amounts determined by the 
     Secretary of the Treasury to be equivalent to the reductions 
     that would occur (but for this subsection) in the receipts of 
     the Highway Trust Fund by reason of the amendments made by 
     this section.

        TITLE XXI--CONSERVATION AND ENERGY EFFICIENCY PROVISIONS

     SEC. 2101. CREDIT FOR CONSTRUCTION OF NEW ENERGY EFFICIENT 
                   HOME.

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

     ``SEC. 45G. NEW ENERGY EFFICIENT HOME CREDIT.

       ``(a) In General.--For purposes of section 38, in the case 
     of an eligible contractor, the credit determined under this 
     section for the taxable year is an amount equal to the 
     aggregate adjusted bases of all energy efficient property 
     installed in a qualifying new home during construction of 
     such home.
       ``(b) Limitations.--
       ``(1) Maximum credit.--
       ``(A) In general.--The credit allowed by this section with 
     respect to a qualifying new home shall not exceed--
       ``(i) in the case of a 30-percent home, $1,250, and
       ``(ii) in the case of a 50-percent home, $2,000.
       ``(B) 30- or 50-percent home.--For purposes of subparagraph 
     (A)--
       ``(i) 30-percent home.--The term `30-percent home' means a 
     qualifying new home which is certified to have a projected 
     level of annual heating and cooling energy consumption, 
     measured in terms of average annual energy cost to the 
     homeowner, which is at least 30 percent less than the annual 
     level of heating and cooling energy consumption of a 
     reference qualifying new home constructed in accordance with 
     the standards of chapter 4 of the 2000 International Energy 
     Conservation Code.
       ``(ii) 50-percent home.--The term `50-percent home' means a 
     qualifying new home which is certified to have a projected 
     level of annual heating and cooling energy consumption, 
     measured in terms of average annual energy cost to the 
     homeowner, which is at least 50 percent less than such annual 
     level of heating and cooling energy consumption.
       ``(C) Prior credit amounts on same home taken into 
     account.--If a credit was allowed under subsection (a) with 
     respect to a qualifying new home in 1 or more prior taxable 
     years, the amount of the credit otherwise allowable for the 
     taxable year with respect to that home shall not exceed the 
     amount under clause (i) or (ii) of subparagraph (A) (as the 
     case may be), reduced by the sum of the credits allowed under 
     subsection (a) with respect to the home for all prior taxable 
     years.
       ``(2) Coordination with rehabilitation and energy 
     credits.--For purposes of this section--
       ``(A) the basis of any property referred to in subsection 
     (a) shall be reduced by that portion of the basis of any 
     property which is attributable to the rehabilitation credit 
     (as determined under section 47(a)) or to the energy 
     percentage of energy property (as determined under section 
     48(a)), and
       ``(B) expenditures taken into account under either section 
     47 or 48(a) shall not be taken into account under this 
     section.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Eligible contractor.--The term `eligible contractor' 
     means the person who constructed the qualifying new home, or 
     in the case of a manufactured home which conforms to Federal 
     Manufactured Home Construction and Safety Standards (24 
     C.F.R. 3280), the manufactured home producer of such home.
       ``(2) Energy efficient property.--The term `energy 
     efficient property' means any energy efficient building 
     envelope component, and any energy efficient heating or 
     cooling equipment which can, individually or in combination 
     with other components, meet the requirements of this section.
       ``(3) Qualifying new home.--The term `qualifying new home' 
     means a dwelling--
       ``(A) located in the United States,
       ``(B) the construction of which is substantially completed 
     after the date of the enactment of this section, and
       ``(C) the first use of which after construction is as a 
     principal residence (within the meaning of section 121).
       ``(4) Construction.--The term `construction' includes 
     reconstruction and rehabilitation.
       ``(5) Building envelope component.--The term `building 
     envelope component' means--
       ``(A) any insulation material or system which is 
     specifically and primarily designed to reduce the heat loss 
     or gain of a qualifying new home when installed in or on such 
     home, and
       ``(B) exterior windows (including skylights) and doors.
       ``(6) Manufactured home included.--The term `qualifying new 
     home' includes a manufactured home conforming to Federal 
     Manufactured Home Construction and Safety Standards (24 
     C.F.R. 3280).
       ``(d) Certification.--
       ``(1) Method of certification.--
       ``(A) In general.--A certification described in subsection 
     (b)(1)(B) shall be determined either by a component-based 
     method or a performance-based method.
       ``(B) Component-based method.--A component-based method is 
     a method which uses the applicable technical energy 
     efficiency specifications or ratings (including product 
     labeling requirements) for the energy efficient building 
     envelope component or energy efficient heating or cooling 
     equipment. The Secretary shall, in consultation with the 
     Administrator of the Environmental Protection Agency, develop 
     prescriptive component-based packages that are equivalent in 
     energy performance to properties that qualify under 
     subparagraph (C).
       ``(C) Performance-based method.--
       ``(i) In general.--A performance-based method is a method 
     which calculates projected energy usage and cost reductions 
     in the qualifying new home in relation to a reference 
     qualifying new home--

       ``(I) heated by the same energy source and heating system 
     type, and
       ``(II) constructed in accordance with the standards of 
     chapter 4 of the 2000 International Energy Conservation Code.

       ``(ii) Computer software.--Computer software shall be used 
     in support of a performance-based method certification under 
     clause (i). Such software shall meet procedures and methods 
     for calculating energy and cost savings in regulations 
     promulgated by the Secretary of Energy. Such regulations on 
     the specifications for software and verification protocols 
     shall be based on the 2001 California Residential Alternative 
     Calculation Method Approval Manual.
       ``(2) Provider.--A certification described in subsection 
     (b)(1)(B) shall be provided by--
       ``(A) in the case of a component-based method, a local 
     building regulatory authority, a utility, a manufactured home 
     production inspection primary inspection agency (IPIA), or a 
     home energy rating organization, or
       ``(B) in the case of a performance-based method, an 
     individual recognized by an organization designated by the 
     Secretary for such purposes.
       ``(3) Form.--
       ``(A) In general.--A certification described in subsection 
     (b)(1)(B) shall be made in writing in a manner that specifies 
     in readily verifiable fashion the energy efficient building 
     envelope components and energy efficient heating or cooling 
     equipment installed and their respective rated energy 
     efficiency performance, and in the case of a performance-
     based method, accompanied by a written analysis documenting 
     the proper application of a permissible energy performance 
     calculation method to the specific circumstances of such 
     qualifying new home.
       ``(B) Form provided to buyer.--A form documenting the 
     energy efficient building envelope components and energy 
     efficient heating or cooling equipment installed and their 
     rated energy efficiency performance shall be provided to the 
     buyer of the qualifying new home. The form shall include 
     labeled R-value for insulation products, NFRC-labeled U-
     factor and Solar Heat Gain Coefficient for windows, 
     skylights, and doors, labeled AFUE ratings for furnaces and 
     boilers, labeled HSPF ratings for electric heat pumps, and 
     labeled SEER ratings for air conditioners.
       ``(C) Ratings label affixed in dwelling.--A permanent label 
     documenting the ratings in subparagraph (B) shall be affixed 
     to the front of the electrical distribution panel of the 
     qualifying new home, or shall be otherwise permanently 
     displayed in a readily inspectable location in such home.
       ``(4) Regulations.--
       ``(A) In general.--In prescribing regulations under this 
     subsection for performance-based certification methods, the 
     Secretary, after examining the requirements for energy 
     consultants and home energy ratings providers specified by 
     the Mortgage Industry National Accreditation Procedures for 
     Home Energy Rating Systems, shall prescribe procedures for 
     calculating annual energy usage and cost reductions for 
     heating and cooling and for the reporting of the results. 
     Such regulations shall--
       ``(i) provide that any calculation procedures be fuel 
     neutral such that the same energy efficiency measures allow a 
     qualifying

[[Page 5273]]

     new home to be eligible for the credit under this section 
     regardless of whether such home uses a gas or oil furnace or 
     boiler or an electric heat pump, and
       ``(ii) require that any computer software allow for the 
     printing of the Federal tax forms necessary for the credit 
     under this section and for the printing of forms for 
     disclosure to the homebuyer.
       ``(B) Providers.--For purposes of paragraph (2)(B), the 
     Secretary shall establish requirements for the designation of 
     individuals based on the requirements for energy consultants 
     and home energy raters specified by the Mortgage Industry 
     National Accreditation Procedures for Home Energy Rating 
     Systems.
       ``(e) Termination.--Subsection (a) shall apply to 
     qualifying new homes purchased during the period beginning on 
     the date of the enactment of this section and ending on 
     December 31, 2007.''.
       (b) Credit Made Part of General Business Credit.--
     Subsection (b) of section 38 (relating to current year 
     business credit), as amended by this Act, is amended by 
     striking ``plus'' at the end of paragraph (16), by striking 
     the period at the end of paragraph (17) and inserting ``, 
     plus'', and by adding at the end the following new paragraph:
       ``(18) the new energy efficient home credit determined 
     under section 45G(a).''.
       (c) Denial of Double Benefit.--Section 280C (relating to 
     certain expenses for which credits are allowable) is amended 
     by adding at the end the following new subsection:
       ``(d) New Energy Efficient Home Expenses.--No deduction 
     shall be allowed for that portion of expenses for a 
     qualifying new home otherwise allowable as a deduction for 
     the taxable year which is equal to the amount of the credit 
     determined for such taxable year under section 45G(a).''.
       (d) Limitation on Carryback.--Subsection (d) of section 39, 
     as amended by this Act, is amended by adding at the end the 
     following new paragraph:
       ``(13) No carryback of new energy efficient home credit 
     before effective date.--No portion of the unused business 
     credit for any taxable year which is attributable to the 
     credit determined under section 45G may be carried back to 
     any taxable year ending on or before the date of the 
     enactment of section 45G.''.
       (e) Deduction for Certain Unused Business Credits.--
     Subsection (c) of section 196, as amended by this Act, is 
     amended by striking ``and'' at the end of paragraph (10), by 
     striking the period at the end of paragraph (11) and 
     inserting ``, and'', and by adding after paragraph (11) the 
     following new paragraph:
       ``(12) the new energy efficient home credit determined 
     under section 45G(a).''.
       (f) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45G. New energy efficient home credit.''.

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

     SEC. 2102. CREDIT FOR ENERGY EFFICIENT APPLIANCES.

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

     ``SEC. 45H. ENERGY EFFICIENT APPLIANCE CREDIT.

       ``(a) General Rule.--For purposes of section 38, the energy 
     efficient appliance credit determined under this section for 
     the taxable year is an amount equal to the applicable amount 
     determined under subsection (b) with respect to the eligible 
     production of qualified energy efficient appliances produced 
     by the taxpayer during the calendar year ending with or 
     within the taxable year.
       ``(b) Applicable Amount; Eligible Production.--For purposes 
     of subsection (a)--
       ``(1) Applicable amount.--The applicable amount is--
       ``(A) $50, in the case of--
       ``(i) a clothes washer which is manufactured with at least 
     a 1.26 MEF, or
       ``(ii) a refrigerator which consumes at least 10 percent 
     less kWh per year than the energy conservation standards for 
     refrigerators promulgated by the Department of Energy 
     effective July 1, 2001, and
       ``(B) $100, in the case of--
       ``(i) a clothes washer which is manufactured with at least 
     a 1.42 MEF (at least 1.5 MEF for washers produced after 
     2004), or
       ``(ii) a refrigerator which consumes at least 15 percent 
     less kWh per year than such energy conservation standards.
       ``(2) Eligible production.--
       ``(A) In general.--The eligible production of each category 
     of qualified energy efficient appliances is the excess of--
       ``(i) the number of appliances in such category which are 
     produced by the taxpayer during such calendar year, over
       ``(ii) the average number of appliances in such category 
     which were produced by the taxpayer during calendar years 
     1999, 2000, and 2001.
       ``(B) Categories.--For purposes of subparagraph (A), the 
     categories are--
       ``(i) clothes washers described in paragraph (1)(A)(i),
       ``(ii) clothes washers described in paragraph (1)(B)(i),
       ``(iii) refrigerators described in paragraph (1)(A)(ii), 
     and
       ``(iv) refrigerators described in paragraph (1)(B)(ii).
       ``(c) Limitation on Maximum Credit.--
       ``(1) In general.--The maximum amount of credit allowed 
     under subsection (a) with respect to a taxpayer for all 
     taxable years shall be--
       ``(A) $30,000,000 with respect to the credit determined 
     under subsection (b)(1)(A), and
       ``(B) $30,000,000 with respect to the credit determined 
     under subsection (b)(1)(B).
       ``(2) Limitation based on gross receipts.--The credit 
     allowed under subsection (a) with respect to a taxpayer for 
     the taxable year shall not exceed an amount equal to 2 
     percent of the average annual gross receipts of the taxpayer 
     for the 3 taxable years preceding the taxable year in which 
     the credit is determined.
       ``(3) Gross receipts.--For purposes of this subsection, the 
     rules of paragraphs (2) and (3) of section 448(c) shall 
     apply.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified energy efficient appliance.--The term 
     `qualified energy efficient appliance' means--
       ``(A) a clothes washer described in subparagraph (A)(i) or 
     (B)(i) of subsection (b)(1), or
       ``(B) a refrigerator described in subparagraph (A)(ii) or 
     (B)(ii) of subsection (b)(1).
       ``(2) Clothes washer.--The term `clothes washer' means a 
     residential clothes washer, including a residential style 
     coin operated washer.
       ``(3) Refrigerator.--The term `refrigerator' means an 
     automatic defrost refrigerator-freezer which has an internal 
     volume of at least 16.5 cubic feet.
       ``(4) MEF.--The term `MEF' means Modified Energy Factor (as 
     determined by the Secretary of Energy).
       ``(e) Special Rules.--
       ``(1) In general.--Rules similar to the rules of 
     subsections (c), (d), and (e) of section 52 shall apply for 
     purposes of this section.
       ``(2) Aggregation rules.--All persons treated as a single 
     employer under subsection (a) or (b) of section 52 or 
     subsection (m) or (o) of section 414 shall be treated as 1 
     person for purposes of subsection (a).
       ``(f) Verification.--The taxpayer shall submit such 
     information or certification as the Secretary, in 
     consultation with the Secretary of Energy, determines 
     necessary to claim the credit amount under subsection (a).
       ``(g) Termination.--This section shall not apply--
       ``(1) with respect to refrigerators described in subsection 
     (b)(1)(A)(ii) produced after December 31, 2004, and
       ``(2) with respect to all other qualified energy efficient 
     appliances produced after December 31, 2006.''.
       (b) Limitation on Carryback.--Section 39(d) (relating to 
     transition rules), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(14) No carryback of energy efficient appliance credit 
     before effective date.--No portion of the unused business 
     credit for any taxable year which is attributable to the 
     energy efficient appliance credit determined under section 
     45H may be carried to a taxable year ending before January 1, 
     2003.''.
       (c) Conforming Amendment.--Section 38(b) (relating to 
     general business credit), as amended by this Act, is amended 
     by striking ``plus'' at the end of paragraph (17), by 
     striking the period at the end of paragraph (18) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(19) the energy efficient appliance credit determined 
     under section 45H(a).''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45H. Energy efficient appliance credit.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2002, 
     in taxable years ending after such date.

     SEC. 2103. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

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

     ``SEC. 25C. RESIDENTIAL ENERGY EFFICIENT PROPERTY.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to the sum 
     of--
       ``(1) 15 percent of the qualified photovoltaic property 
     expenditures made by the taxpayer during such year,
       ``(2) 15 percent of the qualified solar water heating 
     property expenditures made by the taxpayer during such year,
       ``(3) 30 percent of the qualified fuel cell property 
     expenditures made by the taxpayer during such year,

[[Page 5274]]

       ``(4) 30 percent of the qualified wind energy property 
     expenditures made by the taxpayer during such year, and
       ``(5) the sum of the qualified Tier 2 energy efficient 
     building property expenditures made by the taxpayer during 
     such year.
       ``(b) Limitations.--
       ``(1) Maximum credit.--The credit allowed under subsection 
     (a) shall not exceed--
       ``(A) $2,000 for property described in subsection (d)(1),
       ``(B) $2,000 for property described in subsection (d)(2),
       ``(C) $1,000 for each kilowatt of capacity of property 
     described in subsection (d)(4),
       ``(D) $2,000 for property described in subsection (d)(5), 
     and
       ``(E) for property described in subsection (d)(6)--
       ``(i) $75 for each electric heat pump water heater,
       ``(ii) $250 for each electric heat pump,
       ``(iii) $500 for each natural gas heat pump,
       ``(iv) $250 for each central air conditioner,
       ``(v) $75 for each natural gas water heater, and
       ``(vi) $250 for each geothermal heat pump.
       ``(2) Safety certifications.--No credit shall be allowed 
     under this section for an item of property unless--
       ``(A) in the case of solar water heating property, such 
     property is certified for performance and safety by the non-
     profit Solar Rating Certification Corporation or a comparable 
     entity endorsed by the government of the State in which such 
     property is installed,
       ``(B) in the case of a photovoltaic property, a fuel cell 
     property, or a wind energy property, such property meets 
     appropriate fire and electric code requirements, and
       ``(C) in the case of property described in subsection 
     (d)(6), such property meets the performance and quality 
     standards, and the certification requirements (if any), 
     which--
       ``(i) have been prescribed by the Secretary by regulations 
     (after consultation with the Secretary of Energy or the 
     Administrator of the Environmental Protection Agency, as 
     appropriate),
       ``(ii) in the case of the energy efficiency ratio (EER)--

       ``(I) require measurements to be based on published data 
     which is tested by manufacturers at 95 degrees Fahrenheit, 
     and
       ``(II) do not require ratings to be based on certified data 
     of the Air Conditioning and Refrigeration Institute, and

       ``(iii) are in effect at the time of the acquisition of the 
     property.
       ``(c) Carryforward of Unused Credit.--If the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by section 26(a) for such taxable year reduced by the sum of 
     the credits allowable under this subpart (other than this 
     section and section 25D), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified solar water heating property expenditure.--
     The term `qualified solar water heating property expenditure' 
     means an expenditure for property to heat water for use in a 
     dwelling unit located in the United States and used as a 
     residence by the taxpayer if at least half of the energy used 
     by such property for such purpose is derived from the sun.
       ``(2) Qualified photovoltaic property expenditure.--The 
     term `qualified photovoltaic property expenditure' means an 
     expenditure for property that uses solar energy to generate 
     electricity for use in such a dwelling unit.
       ``(3) Solar panels.--No expenditure relating to a solar 
     panel or other property installed as a roof (or portion 
     thereof) shall fail to be treated as property described in 
     paragraph (1) or (2) solely because it constitutes a 
     structural component of the structure on which it is 
     installed.
       ``(4) Qualified fuel cell property expenditure.--The term 
     `qualified fuel cell property expenditure' means an 
     expenditure for qualified fuel cell property (as defined in 
     section 48(a)(4)) installed on or in connection with such a 
     dwelling unit.
       ``(5) Qualified wind energy property expenditure.--The term 
     `qualified wind energy property expenditure' means an 
     expenditure for property which uses wind energy to generate 
     electricity for use in such a dwelling unit.
       ``(6) Qualified tier 2 energy efficient building property 
     expenditure.--
       ``(A) In general.--The term `qualified Tier 2 energy 
     efficient building property expenditure' means an expenditure 
     for any Tier 2 energy efficient building property.
       ``(B) Tier 2 energy efficient building property.--The term 
     `Tier 2 energy efficient building property' means--
       ``(i) an electric heat pump water heater which yields an 
     energy factor of at least 1.7 in the standard Department of 
     Energy test procedure,
       ``(ii) an electric heat pump which has a heating seasonal 
     performance factor (HSPF) of at least 9, a seasonal energy 
     efficiency ratio (SEER) of at least 15, and an energy 
     efficiency ratio (EER) of at least 12.5,
       ``(iii) a natural gas heat pump which has a coefficient of 
     performance of at least 1.25 for heating and of at least 0.70 
     for cooling,
       ``(iv) a central air conditioner which has a seasonal 
     energy efficiency ratio (SEER) of at least 15 and an energy 
     efficiency ratio (EER) of at least 12.5,
       ``(v) a natural gas water heater which has an energy factor 
     of at least 0.80 in the standard Department of Energy test 
     procedure, and
       ``(vi) a geothermal heat pump which has an energy 
     efficiency ratio (EER) of at least 21.
       ``(7) Labor costs.--Expenditures for labor costs properly 
     allocable to the onsite preparation, assembly, or original 
     installation of the property described in paragraph (1), (2), 
     (4), (5), or (6) and for piping or wiring to interconnect 
     such property to the dwelling unit shall be taken into 
     account for purposes of this section.
       ``(8) Swimming pools, etc., used as storage medium.--
     Expenditures which are properly allocable to a swimming pool, 
     hot tub, or any other energy storage medium which has a 
     function other than the function of such storage shall not be 
     taken into account for purposes of this section.
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Dollar amounts in case of joint occupancy.--In the 
     case of any dwelling unit which is jointly occupied and used 
     during any calendar year as a residence by 2 or more 
     individuals the following shall apply:
       ``(A) The amount of the credit allowable, under subsection 
     (a) by reason of expenditures (as the case may be) made 
     during such calendar year by any of such individuals with 
     respect to such dwelling unit shall be determined by treating 
     all of such individuals as 1 taxpayer whose taxable year is 
     such calendar year.
       ``(B) There shall be allowable, with respect to such 
     expenditures to each of such individuals, a credit under 
     subsection (a) for the taxable year in which such calendar 
     year ends in an amount which bears the same ratio to the 
     amount determined under subparagraph (A) as the amount of 
     such expenditures made by such individual during such 
     calendar year bears to the aggregate of such expenditures 
     made by all of such individuals during such calendar year.
       ``(2) Tenant-stockholder in cooperative housing 
     corporation.--In the case of an individual who is a tenant-
     stockholder (as defined in section 216) in a cooperative 
     housing corporation (as defined in such section), such 
     individual shall be treated as having made his tenant-
     stockholder's proportionate share (as defined in section 
     216(b)(3)) of any expenditures of such corporation.
       ``(3) Condominiums.--
       ``(A) In general.--In the case of an individual who is a 
     member of a condominium management association with respect 
     to a condominium which the individual owns, such individual 
     shall be treated as having made the individual's 
     proportionate share of any expenditures of such association.
       ``(B) Condominium management association.--For purposes of 
     this paragraph, the term `condominium management association' 
     means an organization which meets the requirements of 
     paragraph (1) of section 528(c) (other than subparagraph (E) 
     thereof) with respect to a condominium project substantially 
     all of the units of which are used as residences.
       ``(4) Allocation in certain cases.--If less than 80 percent 
     of the use of an item is for nonbusiness purposes, only that 
     portion of the expenditures for such item which is properly 
     allocable to use for nonbusiness purposes shall be taken into 
     account.
       ``(5) When expenditure made; amount of expenditure.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     an expenditure with respect to an item shall be treated as 
     made when the original installation of the item is completed.
       ``(B) Expenditures part of building construction.--In the 
     case of an expenditure in connection with the construction or 
     reconstruction of a structure, such expenditure shall be 
     treated as made when the original use of the constructed or 
     reconstructed structure by the taxpayer begins.
       ``(C) Amount.--The amount of any expenditure shall be the 
     cost thereof.
       ``(6) Property financed by subsidized energy financing.--
     For purposes of determining the amount of expenditures made 
     by any individual with respect to any dwelling unit, there 
     shall not be taken in to account expenditures which are made 
     from subsidized energy financing (as defined in section 
     48(a)(5)(C)).
       ``(f) Basis Adjustments.--For purposes of this subtitle, if 
     a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this subsection) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(g) Termination.--The credit allowed under this section 
     shall not apply to expenditures after December 31, 2007.''.
       (b) Credit Allowed Against Regular Tax and Alternative 
     Minimum Tax.--
       (1) In general.--Section 25C(b), as added by subsection 
     (a), is amended by adding at the end the following new 
     paragraph:
       ``(3) Limitation based on amount of tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--

[[Page 5275]]

       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section and section 25D) and section 27 for 
     the taxable year.''.
       (2) Conforming amendments.--
       (A) Section 25C(c), as added by subsection (a), is amended 
     by striking ``section 26(a) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section and section 25D)'' and inserting 
     ``subsection (b)(3)''.
       (B) Section 23(b)(4)(B) is amended by inserting ``and 
     section 25C'' after ``this section''.
       (C) Section 24(b)(3)(B) is amended by striking ``23 and 
     25B'' and inserting ``23, 25B, and 25C''.
       (D) Section 25(e)(1)(C) is amended by inserting ``25C,'' 
     after ``25B,''.
       (E) Section 25B(g)(2) is amended by striking ``section 23'' 
     and inserting ``sections 23 and 25C''.
       (F) Section 26(a)(1) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25C''.
       (G) Section 904(h) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25C''.
       (H) Section 1400C(d) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25C''.
       (c) Additional Conforming Amendments.--
       (1) Section 23(c), as in effect for taxable years beginning 
     before January 1, 2004, is amended by striking ``section 
     1400C'' and inserting ``sections 25C and 1400C''.
       (2) Section 25(e)(1)(C), as in effect for taxable years 
     beginning before January 1, 2004, is amended by inserting ``, 
     25C,'' after ``sections 23''.
       (3) Subsection (a) of section 1016, as amended by this Act, 
     is amended by striking ``and'' at the end of paragraph (29), 
     by striking the period at the end of paragraph (30) and 
     inserting ``, and'', and by adding at the end the following 
     new paragraph:
       ``(31) to the extent provided in section 25C(f), in the 
     case of amounts with respect to which a credit has been 
     allowed under section 25C.''.
       (4) Section 1400C(d), as in effect for taxable years 
     beginning before January 1, 2004, is amended by inserting 
     ``and section 25C'' after ``this section''.
       (5) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 25B the following new item:

``Sec. 25C. Residential energy efficient property.''.
       (d) Effective Dates.--
       (1) In general.--Except as provided by paragraph (2), the 
     amendments made by this section shall apply to expenditures 
     after December 31, 2002, in taxable years ending after such 
     date.
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall apply to taxable years beginning after December 31, 
     2003.

     SEC. 2104. CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL 
                   CELLS.

       (a) In General.--Subparagraph (A) of section 48(a)(3) 
     (defining energy property) is amended by striking ``or'' at 
     the end of clause (i), by adding ``or'' at the end of clause 
     (ii), and by inserting after clause (ii) the following new 
     clause:
       ``(iii) qualified fuel cell property,''.
       (b) Qualified Fuel Cell Property.--Subsection (a) of 
     section 48 is amended by redesignating paragraphs (4) and (5) 
     as paragraphs (5) and (6), respectively, and by inserting 
     after paragraph (3) the following new paragraph:
       ``(4) Qualified fuel cell property.--For purposes of this 
     subsection--
       ``(A) In general.--The term `qualified fuel cell property' 
     means a fuel cell power plant which--
       ``(i) generates at least 1 kilowatt of electricity using an 
     electrochemical process, and
       ``(ii) has an electricity-only generation efficiency 
     greater than 30 percent.
       ``(B) Limitation.--In the case of qualified fuel cell 
     property placed in service during the taxable year, the 
     credit determined under paragraph (1) for such year with 
     respect to such property shall not exceed an amount equal to 
     the lesser of--
       ``(i) 30 percent of the basis of such property, or
       ``(ii) $1,000 for each kilowatt of capacity of such 
     property.
       ``(C) Fuel cell power plant.--The term `fuel cell power 
     plant' means an integrated system comprised of a fuel cell 
     stack assembly and associated balance of plant components 
     that converts a fuel into electricity using electrochemical 
     means.
       ``(D) Termination.--Such term shall not include any 
     property placed in service after December 31, 2007.''.
       (c) Limitation.--Section 48(a)(2)(A) (relating to energy 
     percentage) is amended to read as follows:
       ``(A) In general.--The energy percentage is--
       ``(i) in the case of qualified fuel cell property, 30 
     percent, and
       ``(ii) in the case of any other energy property, 10 
     percent.''.
       (d) Conforming Amendments.--
       (A) Section 29(b)(3)(A)(i)(III) is amended by striking 
     ``section 48(a)(4)(C)'' and inserting ``section 
     48(a)(5)(C)''.
       (B) Section 48(a)(1) is amended by inserting ``except as 
     provided in paragraph (4)(B),'' before ``the energy''.
       (e) Effective Date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2002, under rules similar to the rules of section 48(m) of 
     the Internal Revenue Code of 1986 (as in effect on the day 
     before the date of the enactment of the Revenue 
     Reconciliation Act of 1990).

     SEC. 2105. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

       (a) In General.--Part VI of subchapter B of chapter 1 is 
     amended by inserting after section 179A the following new 
     section:

     ``SEC. 179B. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

       ``(a) In General.--There shall be allowed as a deduction 
     for the taxable year an amount equal to the energy efficient 
     commercial building property expenditures made by a taxpayer 
     for the taxable year.
       ``(b) Maximum Amount of Deduction.--The amount of energy 
     efficient commercial building property expenditures taken 
     into account under subsection (a) shall not exceed an amount 
     equal to the product of--
       ``(1) $2.25, and
       ``(2) the square footage of the building with respect to 
     which the expenditures are made.
       ``(c) Year Deduction Allowed.--The deduction under 
     subsection (a) shall be allowed in the taxable year in which 
     the construction of the building is completed.
       ``(d) Energy Efficient Commercial Building Property 
     Expenditures.--For purposes of this section--
       ``(1) In general.--The term `energy efficient commercial 
     building property expenditures' means an amount paid or 
     incurred for energy efficient commercial building property 
     installed on or in connection with new construction or 
     reconstruction of property--
       ``(A) for which depreciation is allowable under section 
     167,
       ``(B) which is located in the United States, and
       ``(C) the construction or erection of which is completed by 
     the taxpayer.
     Such property includes all residential rental property, 
     including low-rise multifamily structures and single family 
     housing property which is not within the scope of Standard 
     90.1-1999 (described in paragraph (2)). Such term includes 
     expenditures for labor costs properly allocable to the onsite 
     preparation, assembly, or original installation of the 
     property.
       ``(2) Energy efficient commercial building property.--For 
     purposes of paragraph (1)--
       ``(A) In general.--The term `energy efficient commercial 
     building property' means any property which reduces total 
     annual energy and power costs with respect to the lighting, 
     heating, cooling, ventilation, and hot water supply systems 
     of the building by 50 percent or more in comparison to a 
     reference building which meets the requirements of Standard 
     90.1-1999 of the American Society of Heating, Refrigerating, 
     and Air Conditioning Engineers and the Illuminating 
     Engineering Society of North America using methods of 
     calculation under subparagraph (B) and certified by qualified 
     professionals as provided under paragraph (5).
       ``(B) Methods of calculation.--The Secretary, in 
     consultation with the Secretary of Energy, shall promulgate 
     regulations which describe in detail methods for calculating 
     and verifying energy and power consumption and cost, taking 
     into consideration the provisions of the 2001 California 
     Nonresidential Alternative Calculation Method Approval 
     Manual. These regulations shall meet the following 
     requirements:
       ``(i) In calculating tradeoffs and energy performance, the 
     regulations shall prescribe the costs per unit of energy and 
     power, such as kilowatt hour, kilowatt, gallon of fuel oil, 
     and cubic foot or Btu of natural gas, which may be dependent 
     on time of usage.
       ``(ii) The calculational methodology shall require that 
     compliance be demonstrated for a whole building. If some 
     systems of the building, such as lighting, are designed later 
     than other systems of the building, the method shall provide 
     that either--

       ``(I) the expenses taken into account under paragraph (1) 
     shall not occur until the date designs for all energy-using 
     systems of the building are completed,
       ``(II) the energy performance of all systems and components 
     not yet designed shall be assumed to comply minimally with 
     the requirements of such Standard 90.1-1999, or
       ``(III) the expenses taken into account under paragraph (1) 
     shall be a fraction of such expenses based on the performance 
     of less than all energy-using systems in accordance with 
     clause (iii).

       ``(iii) The expenditures in connection with the design of 
     subsystems in the building, such as the envelope, the 
     heating, ventilation, air conditioning and water heating 
     system, and the lighting system shall be allocated to the 
     appropriate building subsystem based on system-specific 
     energy cost savings targets in regulations promulgated by the 
     Secretary of Energy which are equivalent, using the 
     calculation methodology, to the whole building requirement of 
     50 percent savings.

[[Page 5276]]

       ``(iv) The calculational methods under this subparagraph 
     need not comply fully with section 11 of such Standard 90.1-
     1999.
       ``(v) The calculational methods shall be fuel neutral, such 
     that the same energy efficiency features shall qualify a 
     building for the deduction under this subsection regardless 
     of whether the heating source is a gas or oil furnace or an 
     electric heat pump.
       ``(vi) The calculational methods shall provide appropriate 
     calculated energy savings for design methods and technologies 
     not otherwise credited in either such Standard 90.1-1999 or 
     in the 2001 California Nonresidential Alternative Calculation 
     Method Approval Manual, including the following:

       ``(I) Natural ventilation.
       ``(II) Evaporative cooling.
       ``(III) Automatic lighting controls such as occupancy 
     sensors, photocells, and timeclocks.
       ``(IV) Daylighting.
       ``(V) Designs utilizing semi-conditioned spaces that 
     maintain adequate comfort conditions without air conditioning 
     or without heating.
       ``(VI) Improved fan system efficiency, including reductions 
     in static pressure.
       ``(VII) Advanced unloading mechanisms for mechanical 
     cooling, such as multiple or variable speed compressors.
       ``(VIII) The calculational methods may take into account 
     the extent of commissioning in the building, and allow the 
     taxpayer to take into account measured performance that 
     exceeds typical performance.

       ``(C) Computer software.--
       ``(i) In general.--Any calculation under this paragraph 
     shall be prepared by qualified computer software.
       ``(ii) Qualified computer software.--For purposes of this 
     subparagraph, the term `qualified computer software' means 
     software--

       ``(I) for which the software designer has certified that 
     the software meets all procedures and detailed methods for 
     calculating energy and power consumption and costs as 
     required by the Secretary,
       ``(II) which provides such forms as required to be filed by 
     the Secretary in connection with energy efficiency of 
     property and the deduction allowed under this subsection, and
       ``(III) which provides a notice form which summarizes the 
     energy efficiency features of the building and its projected 
     annual energy costs.

       ``(3) Allocation of deduction for public property.--In the 
     case of energy efficient commercial building property 
     installed on or in public property, the Secretary shall 
     promulgate a regulation to allow the allocation of the 
     deduction to the person primarily responsible for designing 
     the property in lieu of the public entity which is the owner 
     of such property. Such person shall be treated as the 
     taxpayer for purposes of this subsection.
       ``(4) Notice to owner.--The qualified individual shall 
     provide an explanation to the owner of the building regarding 
     the energy efficiency features of the building and its 
     projected annual energy costs as provided in the notice under 
     paragraph (2)(C)(ii)(III).
       ``(5) Certification.--
       ``(A) In general.--Except as provided in this paragraph, 
     the Secretary shall prescribe procedures for the inspection 
     and testing for compliance of buildings that are comparable, 
     given the difference between commercial and residential 
     buildings, to the requirements in the Mortgage Industry 
     National Accreditation Procedures for Home Energy Rating 
     Systems.
       ``(B) Qualified individuals.--Individuals qualified to 
     determine compliance shall be only those individuals who are 
     recognized by an organization certified by the Secretary for 
     such purposes. The Secretary may qualify a Home Ratings 
     Systems Organization, a local building code agency, a State 
     or local energy office, a utility, or any other organization 
     which meets the requirements prescribed under this section.
       ``(C) Proficiency of qualified individuals.--The Secretary 
     shall consult with nonprofit organizations and State agencies 
     with expertise in energy efficiency calculations and 
     inspections to develop proficiency tests and training 
     programs to qualify individuals to determine compliance.
       ``(e) Basis Reduction.--For purposes of this subtitle, if a 
     deduction is allowed under this section with respect to any 
     energy efficient commercial building property, the basis of 
     such property shall be reduced by the amount of the deduction 
     so allowed.
       ``(f) Regulations.--The Secretary shall promulgate such 
     regulations as necessary to take into account new 
     technologies regarding energy efficiency and renewable energy 
     for purposes of determining energy efficiency and savings 
     under this section.
       ``(g) Termination.--This section shall not apply with 
     respect to any energy efficient commercial building property 
     expenditures in connection with property--
       ``(1) the plans for which are not certified under 
     subsection (d)(5) on or before December 31, 2007, and
       ``(2) the construction of which is not completed on or 
     before December 31, 2009.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (30), by striking 
     the period at the end of paragraph (31) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(32) to the extent provided in section 179B(e).''.
       (2) Section 1245(a) is amended by inserting ``179B,'' after 
     ``179A,'' both places it appears in paragraphs (2)(C) and 
     (3)(C).
       (3) Section 1250(b)(3) is amended by inserting before the 
     period at the end of the first sentence ``or by section 
     179B''.
       (4) Section 263(a)(1) is amended by striking ``or'' at the 
     end of subparagraph (G), by striking the period at the end of 
     subparagraph (H) and inserting ``, or'', and by inserting 
     after subparagraph (H) the following new subparagraph:
       ``(I) expenditures for which a deduction is allowed under 
     section 179B.''.
       (5) Section 312(k)(3)(B) is amended by striking ``or 179A'' 
     each place it appears in the heading and text and inserting 
     ``, 179A, or 179B''.
       (c) Clerical Amendment.--The table of sections for part VI 
     of subchapter B of chapter 1 is amended by inserting after 
     section 179A the following new item:

``Sec. 179B. Energy efficient commercial buildings deduction.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after September 30, 
     2002.

     SEC. 2106. ALLOWANCE OF DEDUCTION FOR QUALIFIED NEW OR 
                   RETROFITTED ENERGY MANAGEMENT DEVICES.

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

     ``SEC. 179C. DEDUCTION FOR QUALIFIED NEW OR RETROFITTED 
                   ENERGY MANAGEMENT DEVICES.

       ``(a) Allowance of Deduction.--In the case of a taxpayer 
     who is a supplier of electric energy or natural gas or a 
     provider of electric energy or natural gas services, there 
     shall be allowed as a deduction an amount equal to the cost 
     of each qualified energy management device placed in service 
     during the taxable year.
       ``(b) Maximum Deduction.--The deduction allowed by this 
     section with respect to each qualified energy management 
     device shall not exceed $30.
       ``(c) Qualified Energy Management Device.--The term 
     `qualified energy management device' means any tangible 
     property to which section 168 applies if such property is a 
     meter or metering device--
       ``(1) which is acquired and used by the taxpayer to enable 
     consumers to manage their purchase or use of electricity or 
     natural gas in response to energy price and usage signals, 
     and
       ``(2) which permits reading of energy price and usage 
     signals on at least a daily basis.
       ``(d) Property Used Outside the United States Not 
     Qualified.--No deduction shall be allowed under subsection 
     (a) with respect to property which is used predominantly 
     outside the United States or with respect to the portion of 
     the cost of any property taken into account under section 
     179.
       ``(e) Basis Reduction.--
       ``(1) In general.--For purposes of this title, the basis of 
     any property shall be reduced by the amount of the deduction 
     with respect to such property which is allowed by subsection 
     (a).
       ``(2) Ordinary income recapture.--For purposes of section 
     1245, the amount of the deduction allowable under subsection 
     (a) with respect to any property that is of a character 
     subject to the allowance for depreciation shall be treated as 
     a deduction allowed for depreciation under section 167.''.
       (b) Conforming Amendments.--
       (1) Section 263(a)(1), as amended by this Act, is amended 
     by striking ``or'' at the end of subparagraph (H), by 
     striking the period at the end of subparagraph (I) and 
     inserting ``, or'', and by inserting after subparagraph (I) 
     the following new subparagraph:
       ``(J) expenditures for which a deduction is allowed under 
     section 179C.''.
       (2) Section 312(k)(3)(B), as amended by this Act, is 
     amended by striking ``or 179B'' each place it appears in the 
     heading and text and inserting ``, 179B, or 179C''.
       (3) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (31), by striking 
     the period at the end of paragraph (32) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(33) to the extent provided in section 179C(e)(1).''.
       (4) Section 1245(a), as amended by this Act, is amended by 
     inserting ``179C,'' after ``179B,'' both places it appears in 
     paragraphs (2)(C) and (3)(C).
       (5) The table of contents for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 179B the 
     following new item:

``Sec. 179C. Deduction for qualified new or retrofitted energy 
              management devices.''.

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

[[Page 5277]]



     SEC. 2107. THREE-YEAR APPLICABLE RECOVERY PERIOD FOR 
                   DEPRECIATION OF QUALIFIED ENERGY MANAGEMENT 
                   DEVICES.

       (a) In General.--Subparagraph (A) of section 168(e)(3) 
     (relating to classification of property) is amended by 
     striking ``and'' at the end of clause (ii), by striking the 
     period at the end of clause (iii) and inserting ``, and'', 
     and by adding at the end the following new clause:
       ``(iv) any qualified energy management device.''.
       (b) Definition of Qualified Energy Management Device.--
     Section 168(i) (relating to definitions and special rules) is 
     amended by inserting at the end the following new paragraph:
       ``(15) Qualified energy management device.--The term 
     `qualified energy management device' means any qualified 
     energy management device as defined in section 179C(c) which 
     is placed in service by a taxpayer who is a supplier of 
     electric energy or natural gas or a provider of electric 
     energy or natural gas services.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 2108. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM 
                   PROPERTY.

       (a) In General.--Subparagraph (A) of section 48(a)(3) 
     (defining energy property), as amended by this Act, is 
     amended by striking ``or'' at the end of clause (ii), by 
     adding ``or'' at the end of clause (iii), and by inserting 
     after clause (iii) the following new clause:
       ``(iv) combined heat and power system property,''.
       (b) Combined Heat and Power System Property.--Subsection 
     (a) of section 48, as amended by this Act, is amended by 
     redesignating paragraphs (5) and (6) as paragraphs (6) and 
     (7), respectively, and by inserting after paragraph (4) the 
     following new paragraph:
       ``(5) Combined heat and power system property.--For 
     purposes of this subsection--
       ``(A) Combined heat and power system property.--The term 
     `combined heat and power system property' means property 
     comprising a system--
       ``(i) which uses the same energy source for the 
     simultaneous or sequential generation of electrical power, 
     mechanical shaft power, or both, in combination with the 
     generation of steam or other forms of useful thermal energy 
     (including heating and cooling applications),
       ``(ii) which has an electrical capacity of more than 50 
     kilowatts or a mechanical energy capacity of more than 67 
     horsepower or an equivalent combination of electrical and 
     mechanical energy capacities,
       ``(iii) which produces--

       ``(I) at least 20 percent of its total useful energy in the 
     form of thermal energy, and
       ``(II) at least 20 percent of its total useful energy in 
     the form of electrical or mechanical power (or combination 
     thereof),

       ``(iv) the energy efficiency percentage of which exceeds 60 
     percent (70 percent in the case of a system with an 
     electrical capacity in excess of 50 megawatts or a mechanical 
     energy capacity in excess of 67,000 horsepower, or an 
     equivalent combination of electrical and mechanical energy 
     capacities), and
       ``(v) which is placed in service after December 31, 2002, 
     and before January 1, 2007.
       ``(B) Special rules.--
       ``(i) Energy efficiency percentage.--For purposes of 
     subparagraph (A)(iv), the energy efficiency percentage of a 
     system is the fraction--

       ``(I) the numerator of which is the total useful 
     electrical, thermal, and mechanical power produced by the 
     system at normal operating rates, and expected to be consumed 
     in its normal application, and
       ``(II) the denominator of which is the lower heating value 
     of the primary fuel source for the system.

       ``(ii) Determinations made on btu basis.--The energy 
     efficiency percentage and the percentages under subparagraph 
     (A)(iii) shall be determined on a Btu basis.
       ``(iii) Input and output property not included.--The term 
     `combined heat and power system property' does not include 
     property used to transport the energy source to the facility 
     or to distribute energy produced by the facility.
       ``(iv) Public utility property.--

       ``(I) Accounting rule for public utility property.--If the 
     combined heat and power system property is public utility 
     property (as defined in section 168(i)(10)), the taxpayer may 
     only claim the credit under the subsection if, with respect 
     to such property, the taxpayer uses a normalization method of 
     accounting.
       ``(II) Certain exception not to apply.--The matter 
     following paragraph (3)(D) shall not apply to combined heat 
     and power system property.

       ``(C) Extension of depreciation recovery period.--If a 
     taxpayer is allowed credit under this section for combined 
     heat and power system property and such property would (but 
     for this subparagraph) have a class life of 15 years or less 
     under section 168, such property shall be treated as having a 
     22-year class life for purposes of section 168.''.
       (c) No Carryback of Energy Credit Before Effective Date.--
     Subsection (d) of section 39, as amended by this Act, is 
     amended by adding at the end the following new paragraph:
       ``(15) No carryback of energy credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the energy credit with 
     respect to property described in section 48(a)(5) may be 
     carried back to a taxable year ending before January 1, 
     2003.''.
       (d) Conforming Amendments.--
       (A) Section 25C(e)(6), as added by this Act, is amended by 
     striking ``section 48(a)(5)(C)'' and inserting ``section 
     48(a)(6)(C)''.
       (B) Section 29(b)(3)(A)(i)(III), as amended by this Act, is 
     amended by striking ``section 48(a)(5)(C)'' and inserting 
     ``section 48(a)(6)(C)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2002, in taxable years ending after such date.

     SEC. 2109. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS TO 
                   EXISTING HOMES.

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

     ``SEC. 25D. ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to 10 
     percent of the amount paid or incurred by the taxpayer for 
     qualified energy efficiency improvements installed during 
     such taxable year.
       ``(b) Limitations.--
       ``(1) Maximum credit.--The credit allowed by this section 
     with respect to a dwelling shall not exceed $300.
       ``(2) Prior credit amounts for taxpayer on same dwelling 
     taken into account.--If a credit was allowed to the taxpayer 
     under subsection (a) with respect to a dwelling in 1 or more 
     prior taxable years, the amount of the credit otherwise 
     allowable for the taxable year with respect to that dwelling 
     shall not exceed the amount of $300 reduced by the sum of the 
     credits allowed under subsection (a) to the taxpayer with 
     respect to the dwelling for all prior taxable years.
       ``(c) Carryforward of Unused Credit.--If the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by section 26(a) for such taxable year reduced by the sum of 
     the credits allowable under this subpart (other than this 
     section) for any taxable year, such excess shall be carried 
     to the succeeding taxable year and added to the credit 
     allowable under subsection (a) for such succeeding taxable 
     year.
       ``(d) Qualified Energy Efficiency Improvements.--For 
     purposes of this section, the term `qualified energy 
     efficiency improvements' means any energy efficient building 
     envelope component which is certified to meet or exceed the 
     prescriptive criteria for such component in the 2000 
     International Energy Conservation Code, any energy efficient 
     building envelope component which is described in subsection 
     (f)(4)(B) and is certified by the Energy Star program managed 
     jointly by the Environmental Protection Agency and the 
     Department of Energy, or any combination of energy efficiency 
     measures which are certified as achieving at least a 30 
     percent reduction in heating and cooling energy usage for the 
     dwelling (as measured in terms of energy cost to the 
     taxpayer), if--
       ``(1) such component or combination of measures is 
     installed in or on a dwelling--
       ``(A) located in the United States, and
       ``(B) owned and used by the taxpayer as the taxpayer's 
     principal residence (within the meaning of section 121),
       ``(2) the original use of such component or combination of 
     measures commences with the taxpayer, and
       ``(3) such component or combination of measures reasonably 
     can be expected to remain in use for at least 5 years.
       ``(e) Certification.--
       ``(1) Methods of certification.--
       ``(A) Component-based method.--The certification described 
     in subsection (d) for any component described in such 
     subsection shall be determined on the basis of applicable 
     energy efficiency ratings (including product labeling 
     requirements) for affected building envelope components.
       ``(B) Performance-based method.--
       ``(i) In general.--The certification described in 
     subsection (d) for any combination of measures described in 
     such subsection shall be--

       ``(I) determined by comparing the projected heating and 
     cooling energy usage for the dwelling to such usage for such 
     dwelling in its original condition, and
       ``(II) accompanied by a written analysis documenting the 
     proper application of a permissible energy performance 
     calculation method to the specific circumstances of such 
     dwelling.

       ``(ii) Computer software.--Computer software shall be used 
     in support of a performance-based method certification under 
     clause (i). Such software shall meet procedures and methods 
     for calculating energy and cost savings in regulations 
     promulgated by the Secretary of Energy. Such regulations on 
     the

[[Page 5278]]

     specifications for software and verification protocols shall 
     be based on the 2001 California Residential Alternative 
     Calculation Method Approval Manual.
       ``(2) Provider.--A certification described in subsection 
     (d) shall be provided by--
       ``(A) in the case of the method described in paragraph 
     (1)(A), by a third party, such as a local building regulatory 
     authority, a utility, a manufactured home production 
     inspection primary inspection agency (IPIA), or a home energy 
     rating organization, or
       ``(B) in the case of the method described in paragraph 
     (1)(B), an individual recognized by an organization 
     designated by the Secretary for such purposes.
       ``(3) Form.--A certification described in subsection (d) 
     shall be made in writing on forms which specify in readily 
     inspectable fashion the energy efficient components and other 
     measures and their respective efficiency ratings, and which 
     include a permanent label affixed to the electrical 
     distribution panel of the dwelling.
       ``(4) Regulations.--
       ``(A) In general.--In prescribing regulations under this 
     subsection for certification methods described in paragraph 
     (1)(B), the Secretary, after examining the requirements for 
     energy consultants and home energy ratings providers 
     specified by the Mortgage Industry National Accreditation 
     Procedures for Home Energy Rating Systems, shall prescribe 
     procedures for calculating annual energy usage and cost 
     reductions for heating and cooling and for the reporting of 
     the results. Such regulations shall--
       ``(i) provide that any calculation procedures be fuel 
     neutral such that the same energy efficiency measures allow a 
     dwelling to be eligible for the credit under this section 
     regardless of whether such dwelling uses a gas or oil furnace 
     or boiler or an electric heat pump, and
       ``(ii) require that any computer software allow for the 
     printing of the Federal tax forms necessary for the credit 
     under this section and for the printing of forms for 
     disclosure to the owner of the dwelling.
       ``(B) Providers.--For purposes of paragraph (2)(B), the 
     Secretary shall establish requirements for the designation of 
     individuals based on the requirements for energy consultants 
     and home energy raters specified by the Mortgage Industry 
     National Accreditation Procedures for Home Energy Rating 
     Systems.
       ``(f) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Dollar amounts in case of joint occupancy.--In the 
     case of any dwelling unit which is jointly occupied and used 
     during any calendar year as a residence by 2 or more 
     individuals the following shall apply:
       ``(A) The amount of the credit allowable under subsection 
     (a) by reason of expenditures for the qualified energy 
     efficiency improvements made during such calendar year by any 
     of such individuals with respect to such dwelling unit shall 
     be determined by treating all of such individuals as 1 
     taxpayer whose taxable year is such calendar year.
       ``(B) There shall be allowable, with respect to such 
     expenditures to each of such individuals, a credit under 
     subsection (a) for the taxable year in which such calendar 
     year ends in an amount which bears the same ratio to the 
     amount determined under subparagraph (A) as the amount of 
     such expenditures made by such individual during such 
     calendar year bears to the aggregate of such expenditures 
     made by all of such individuals during such calendar year.
       ``(2) Tenant-stockholder in cooperative housing 
     corporation.--In the case of an individual who is a tenant-
     stockholder (as defined in section 216) in a cooperative 
     housing corporation (as defined in such section), such 
     individual shall be treated as having paid his tenant-
     stockholder's proportionate share (as defined in section 
     216(b)(3)) of the cost of qualified energy efficiency 
     improvements made by such corporation.
       ``(3) Condominiums.--
       ``(A) In general.--In the case of an individual who is a 
     member of a condominium management association with respect 
     to a condominium which the individual owns, such individual 
     shall be treated as having paid the individual's 
     proportionate share of the cost of qualified energy 
     efficiency improvements made by such association.
       ``(B) Condominium management association.--For purposes of 
     this paragraph, the term `condominium management association' 
     means an organization which meets the requirements of 
     paragraph (1) of section 528(c) (other than subparagraph (E) 
     thereof) with respect to a condominium project substantially 
     all of the units of which are used as residences.
       ``(4) Building envelope component.--The term `building 
     envelope component' means--
       ``(A) insulation material or system which is specifically 
     and primarily designed to reduce the heat loss or gain or a 
     dwelling when installed in or on such dwelling,
       ``(B) exterior windows (including skylights), and
       ``(C) exterior doors.
       ``(5) Manufactured homes included.--For purposes of this 
     section, the term `dwelling' includes a manufactured home 
     which conforms to Federal Manufactured Home Construction and 
     Safety Standards (24 C.F.R. 3280).
       ``(g) Basis Adjustment.--For purposes of this subtitle, if 
     a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this subsection) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(h) Application of Section.--Subsection (a) shall apply 
     to qualified energy efficiency improvements installed during 
     the period beginning on the date of the enactment of this 
     section and ending on December 31, 2006.''.
       (b) Credit Allowed Against Regular Tax and Alternative 
     Minimum Tax.--
       (1) In general.--Section 25D(b), as added by subsection 
     (a), is amended by adding at the end the following new 
     paragraph:
       ``(3) Limitation based on amount of tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section) and section 27 for the taxable 
     year.''.
       (2) Conforming amendments.--
       (A) Section 25D(c), as added by subsection (a), is amended 
     by striking ``section 26(a) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section)'' and inserting ``subsection (b)(3)''.
       (B) Section 23(b)(4)(B), as amended by this Act, is amended 
     by striking ``section 25C'' and inserting ``sections 25C and 
     25D''.
       (C) Section 24(b)(3)(B), as amended by this Act, is amended 
     by striking ``and 25C'' and inserting ``25C, and 25D''.
       (D) Section 25(e)(1)(C), as amended by this Act, is amended 
     by inserting ``25D,'' after ``25C,''.
       (E) Section 25B(g)(2), as amended by this Act, is amended 
     by striking ``23 and 25C'' and inserting ``23, 25C, and 
     25D''.
       (F) Section 26(a)(1), as amended by this Act, is amended by 
     striking ``and 25C'' and inserting ``25C, and 25D''.
       (G) Section 904(h), as amended by this Act, is amended by 
     striking ``and 25C'' and inserting ``25C, and 25D''.
       (H) Section 1400C(d), as amended by this Act, is amended by 
     striking ``and 25C'' and inserting ``25C, and 25D''.
       (c) Additional Conforming Amendments.--
       (1) Section 23(c), as in effect for taxable years beginning 
     before January 1, 2004, and as amended by this Act, is 
     amended by inserting ``, 25D,'' after ``sections 25C''.
       (2) Section 25(e)(1)(C), as in effect for taxable years 
     beginning before January 1, 2004, and as amended by this Act, 
     is amended by inserting ``25D,'' after ``25C,''.
       (3) Subsection (a) of section 1016, as amended by this Act, 
     is amended by striking ``and'' at the end of paragraph (32), 
     by striking the period at the end of paragraph (33) and 
     inserting ``; and'', and by adding at the end the following 
     new paragraph:
       ``(34) to the extent provided in section 25D(f), in the 
     case of amounts with respect to which a credit has been 
     allowed under section 25D.''.
       (4) Section 1400C(d), as in effect for taxable years 
     beginning before January 1, 2004, and as amended by this Act, 
     is amended by striking ``section 25C'' and inserting 
     ``sections 25C and 25D''.
       (5) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 25C the 
     following new item:

``Sec. 25D. Energy efficiency improvements to existing homes.''.
       (d) Effective Dates.--
       (1) In general.--Except as provided by paragraph (2), the 
     amendments made by this section shall apply to expenditures 
     after December 31, 2002, in taxable years ending after such 
     date.
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall apply to taxable years beginning after December 31, 
     2003.

                   TITLE XXII--CLEAN COAL INCENTIVES

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

     SEC. 2201. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL 
                   TECHNOLOGY UNIT.

       (a) Credit for Production From a Qualifying Clean Coal 
     Technology Unit.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits), as amended 
     by this Act, is amended by adding at the end the following 
     new section:

     ``SEC. 45I. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN 
                   COAL TECHNOLOGY UNIT.

       ``(a) General Rule.--For purposes of section 38, the 
     qualifying clean coal technology production credit of any 
     taxpayer for any taxable year is equal to the product of--
       ``(1) the applicable amount of clean coal technology 
     production credit, multiplied by
       ``(2) the applicable percentage of the kilowatt hours of 
     electricity produced by the taxpayer during such taxable year 
     at a qualifying clean coal technology unit, but only if such 
     production occurs during the 10-year period beginning on the 
     date the unit was returned to service after becoming a 
     qualifying clean coal technology unit.

[[Page 5279]]

       ``(b) Applicable Amount.--
       ``(1) In general.--For purposes of this section, the 
     applicable amount of clean coal technology production credit 
     is equal to $0.0034.
       ``(2) Inflation adjustment.--For calendar years after 2003, 
     the applicable amount of clean coal technology production 
     credit shall be adjusted by multiplying such amount by the 
     inflation adjustment factor for the calendar year in which 
     the amount is applied. If any amount as increased under the 
     preceding sentence is not a multiple of 0.01 cent, such 
     amount shall be rounded to the nearest multiple of 0.01 cent.
       ``(c) Applicable Percentage.--For purposes of this section, 
     with respect to any qualifying clean coal technology unit, 
     the applicable percentage is the percentage equal to the 
     ratio which the portion of the national megawatt capacity 
     limitation allocated to the taxpayer with respect to such 
     unit under subsection (e) bears to the total megawatt 
     capacity of such unit.
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Qualifying clean coal technology unit.--The term 
     `qualifying clean coal technology unit' means a clean coal 
     technology unit of the taxpayer which--
       ``(A) on the date of the enactment of this section was a 
     coal-based electricity generating steam generator-turbine 
     unit which was not a clean coal technology unit,
       ``(B) has a nameplate capacity rating of not more than 
     300,000 kilowatts,
       ``(C) becomes a clean coal technology unit as the result of 
     the retrofitting, repowering, or replacement of the unit with 
     clean coal technology during the 10-year period beginning on 
     the date of the enactment of this section,
       ``(D) is not receiving nor is scheduled to receive funding 
     under the Clean Coal Technology Program, the Power Plant 
     Improvement Initiative, or the Clean Coal Power Initiative 
     administered by the Secretary of Energy, and
       ``(E) receives an allocation of a portion of the national 
     megawatt capacity limitation under subsection (e).
       ``(2) Clean coal technology unit.--The term `clean coal 
     technology unit' means a unit which--
       ``(A) uses clean coal technology, including advanced 
     pulverized coal or atmospheric fluidized bed combustion, 
     pressurized fluidized bed combustion, integrated gasification 
     combined cycle, or any other technology for the production of 
     electricity,
       ``(B) uses coal to produce 75 percent or more of its 
     thermal output as electricity,
       ``(C) has a design net heat rate of at least 500 less than 
     that of such unit as described in paragraph (1)(A),
       ``(D) has a maximum design net heat rate of not more than 
     9,500, and
       ``(E) meets the pollution control requirements of paragraph 
     (3).
       ``(3) Pollution control requirements.--
       ``(A) In general.--A unit meets the requirements of this 
     paragraph if--
       ``(i) its emissions of sulfur dioxide, nitrogen oxide, or 
     particulates meet the lower of the emission levels for each 
     such emission specified in--

       ``(I) subparagraph (B), or
       ``(II) the new source performance standards of the Clean 
     Air Act (42 U.S.C. 7411) which are in effect for the category 
     of source at the time of the retrofitting, repowering, or 
     replacement of the unit, and

       ``(ii) its emissions do not exceed any relevant emission 
     level specified by regulation pursuant to the hazardous air 
     pollutant requirements of the Clean Air Act (42 U.S.C. 7412) 
     in effect at the time of the retrofitting, repowering, or 
     replacement.
       ``(B) Specific levels.--The levels specified in this 
     subparagraph are--
       ``(i) in the case of sulfur dioxide emissions, 50 percent 
     of the sulfur dioxide emission levels specified in the new 
     source performance standards of the Clean Air Act (42 U.S.C. 
     7411) in effect on the date of the enactment of this section 
     for the category of source,
       ``(ii) in the case of nitrogen oxide emissions--

       ``(I) 0.1 pound per million Btu of heat input if the unit 
     is not a cyclone-fired boiler, and
       ``(II) if the unit is a cyclone-fired boiler, 15 percent of 
     the uncontrolled nitrogen oxide emissions from such boilers, 
     and

       ``(iii) in the case of particulate emissions, 0.02 pound 
     per million Btu of heat input.
       ``(4) Design net heat rate.--The design net heat rate with 
     respect to any unit, measured in Btu per kilowatt hour 
     (HHV)--
       ``(A) shall be based on the design annual heat input to and 
     the design annual net electrical output from such unit 
     (determined without regard to such unit's co-generation of 
     steam),
       ``(B) shall be adjusted for the heat content of the design 
     coal to be used by the unit if it is less than 12,000 Btu per 
     pound according to the following formula:
     Design net heat rate = Unit net heat rate X [l- {((12,000-
     design coal heat content, Btu per pound)/1,000) X 0.013}], 
     and
       ``(C) shall be corrected for the site reference conditions 
     of--
       ``(i) elevation above sea level of 500 feet,
       ``(ii) air pressure of 14.4 pounds per square inch absolute 
     (psia),
       ``(iii) temperature, dry bulb of 63 deg.F,
       ``(iv) temperature, wet bulb of 54 deg.F, and
       ``(v) relative humidity of 55 percent.
       ``(5) HHV.--The term `HHV' means higher heating value.
       ``(6) Application of certain rules.--The rules of 
     paragraphs (3), (4), and (5) of section 45(d) shall apply.
       ``(7) Inflation adjustment factor.--
       ``(A) In general.--The term `inflation adjustment factor' 
     means, with respect to a calendar year, a fraction the 
     numerator of which is the GDP implicit price deflator for the 
     preceding calendar year and the denominator of which is the 
     GDP implicit price deflator for the calendar year 2002.
       ``(B) GDP implicit price deflator.--The term `GDP implicit 
     price deflator' means the most recent revision of the 
     implicit price deflator for the gross domestic product as 
     computed by the Department of Commerce before March 15 of the 
     calendar year.
       ``(8) Noncompliance with pollution laws.--For purposes of 
     this section, a unit which is not in compliance with the 
     applicable State and Federal pollution prevention, control, 
     and permit requirements for any period of time shall not be 
     considered to be a qualifying clean coal technology unit 
     during such period.
       ``(e) National Limitation on the Aggregate Capacity of 
     Qualifying Clean Coal Technology Units.--
       ``(1) In general.--For purposes of subsection (d)(1)(E), 
     the national megawatt capacity limitation for qualifying 
     clean coal technology units is 4,000 megawatts.
       ``(2) Allocation of limitation.--The Secretary shall 
     allocate the national megawatt capacity limitation for 
     qualifying clean coal technology units in such manner as the 
     Secretary may prescribe under the regulations under paragraph 
     (3).
       ``(3) Regulations.--Not later than 6 months after the date 
     of the enactment of this section, the Secretary shall 
     prescribe such regulations as may be necessary or 
     appropriate--
       ``(A) to carry out the purposes of this subsection,
       ``(B) to limit the capacity of any qualifying clean coal 
     technology unit to which this section applies so that the 
     combined megawatt capacity allocated to all such units under 
     this subsection when all such units are placed in service 
     during the 10-year period described in subsection (d)(1)(C), 
     does not exceed 4,000 megawatts,
       ``(C) to provide a certification process under which the 
     Secretary, in consultation with the Secretary of Energy, 
     shall approve and allocate the national megawatt capacity 
     limitation--
       ``(i) to encourage that units with the highest thermal 
     efficiencies, when adjusted for the heat content of the 
     design coal and site reference conditions described in 
     subsection (d)(4)(C), and environmental performance be placed 
     in service as soon as possible,
       ``(ii) to allocate capacity to taxpayers that have a 
     definite and credible plan for placing into commercial 
     operation a qualifying clean coal technology unit, 
     including--

       ``(I) a site,
       ``(II) contractual commitments for procurement and 
     construction or, in the case of regulated utilities, the 
     agreement of the State utility commission,
       ``(III) filings for all necessary preconstruction 
     approvals,
       ``(IV) a demonstrated record of having successfully 
     completed comparable projects on a timely basis, and
       ``(V) such other factors that the Secretary determines are 
     appropriate,

       ``(D) to allocate the national megawatt capacity limitation 
     to a portion of the capacity of a qualifying clean coal 
     technology unit if the Secretary determines that such an 
     allocation would maximize the amount of efficient production 
     encouraged with the available tax credits,
       ``(E) to set progress requirements and conditional 
     approvals so that capacity allocations for clean coal 
     technology units that become unlikely to meet the necessary 
     conditions for qualifying can be reallocated by the Secretary 
     to other clean coal technology units, and
       ``(F) to provide taxpayers with opportunities to correct 
     administrative errors and omissions with respect to 
     allocations and record keeping within a reasonable period 
     after discovery, taking into account the availability of 
     regulations and other administrative guidance from the 
     Secretary.''.
       (b) Credit Treated as Business Credit.--Section 38(b), as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (18), by striking the period at the end of 
     paragraph (19) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(20) the qualifying clean coal technology production 
     credit determined under section 45I(a).''.
       (c) Transitional Rule.--Section 39(d) (relating to 
     transitional rules), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(16) No carryback of section 45i credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the qualifying clean 
     coal technology production credit determined under section 
     45I may be carried back to a taxable year ending on or before 
     the date of the enactment of section 45I.''.

[[Page 5280]]

       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45I. Credit for production from a qualifying clean coal 
              technology unit.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to production after the date of the enactment of 
     this Act, in taxable years ending after such date.

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

     SEC. 2211. CREDIT FOR INVESTMENT IN QUALIFYING ADVANCED CLEAN 
                   COAL TECHNOLOGY.

       (a) Allowance of Qualifying Advanced Clean Coal Technology 
     Unit Credit.--Section 46 (relating to amount of credit) is 
     amended by striking ``and'' at the end of paragraph (2), by 
     striking the period at the end of paragraph (3) and inserting 
     ``, and'', and by adding at the end the following new 
     paragraph:
       ``(4) the qualifying advanced clean coal technology unit 
     credit.''.
       (b) Amount of Qualifying Advanced Clean Coal Technology 
     Unit Credit.--Subpart E of part IV of subchapter A of chapter 
     1 (relating to rules for computing investment credit) is 
     amended by inserting after section 48 the following new 
     section:

     ``SEC. 48A. QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY UNIT 
                   CREDIT.

       ``(a) In General.--For purposes of section 46, the 
     qualifying advanced clean coal technology unit credit for any 
     taxable year is an amount equal to 10 percent of the 
     applicable percentage of the qualified investment in a 
     qualifying advanced clean coal technology unit for such 
     taxable year.
       ``(b) Qualifying Advanced Clean Coal Technology Unit.--
       ``(1) In general.--For purposes of subsection (a), the term 
     `qualifying advanced clean coal technology unit' means an 
     advanced clean coal technology unit of the taxpayer--
       ``(A)(i)(I) in the case of a unit first placed in service 
     after the date of the enactment of this section, the original 
     use of which commences with the taxpayer, or
       ``(II) in the case of the retrofitting or repowering of a 
     unit first placed in service before such date of enactment, 
     the retrofitting or repowering of which is completed by the 
     taxpayer after such date, or
       ``(ii) which is acquired through purchase (as defined by 
     section 179(d)(2)),
       ``(B) which is depreciable under section 167,
       ``(C) which has a useful life of not less than 4 years,
       ``(D) which is located in the United States,
       ``(E) which is not receiving nor is scheduled to receive 
     funding under the Clean Coal Technology Program, the Power 
     Plant Improvement Initiative, or the Clean Coal Power 
     Initiative administered by the Secretary of Energy,
       ``(F) which is not a qualifying clean coal technology unit, 
     and
       ``(G) which receives an allocation of a portion of the 
     national megawatt capacity limitation under subsection (f).
       ``(2) Special rule for sale-leasebacks.--For purposes of 
     subparagraph (A) of paragraph (1), in the case of a unit 
     which--
       ``(A) is originally placed in service by a person, and
       ``(B) is sold and leased back by such person, or is leased 
     to such person, within 3 months after the date such unit was 
     originally placed in service, for a period of not less than 
     12 years,

     such unit shall be treated as originally placed in service 
     not earlier than the date on which such unit is used under 
     the leaseback (or lease) referred to in subparagraph (B). The 
     preceding sentence shall not apply to any property if the 
     lessee and lessor of such property make an election under 
     this sentence. Such an election, once made, may be revoked 
     only with the consent of the Secretary.
       ``(3) Noncompliance with pollution laws.--For purposes of 
     this subsection, a unit which is not in compliance with the 
     applicable State and Federal pollution prevention, control, 
     and permit requirements for any period of time shall not be 
     considered to be a qualifying advanced clean coal technology 
     unit during such period.
       ``(c) Applicable Percentage.--For purposes of this section, 
     with respect to any qualifying advanced clean coal technology 
     unit, the applicable percentage is the percentage equal to 
     the ratio which the portion of the national megawatt capacity 
     limitation allocated to the taxpayer with respect to such 
     unit under subsection (f) bears to the total megawatt 
     capacity of such unit.
       ``(d) Advanced Clean Coal Technology Unit.--For purposes of 
     this section--
       ``(1) In general.--The term `advanced clean coal technology 
     unit' means a new, retrofit, or repowering unit of the 
     taxpayer which--
       ``(A) is--
       ``(i) an eligible advanced pulverized coal or atmospheric 
     fluidized bed combustion technology unit,
       ``(ii) an eligible pressurized fluidized bed combustion 
     technology unit,
       ``(iii) an eligible integrated gasification combined cycle 
     technology unit, or
       ``(iv) an eligible other technology unit, and
       ``(B) meets the carbon emission rate requirements of 
     paragraph (6).
       ``(2) Eligible advanced pulverized coal or atmospheric 
     fluidized bed combustion technology unit.--The term `eligible 
     advanced pulverized coal or atmospheric fluidized bed 
     combustion technology unit' means a clean coal technology 
     unit using advanced pulverized coal or atmospheric fluidized 
     bed combustion technology which--
       ``(A) is placed in service after the date of the enactment 
     of this section and before January 1, 2013, and
       ``(B) has a design net heat rate of not more than 8,350 
     (8,750 in the case of units placed in service before 2009).
       ``(3) Eligible pressurized fluidized bed combustion 
     technology unit.--The term `eligible pressurized fluidized 
     bed combustion technology unit' means a clean coal technology 
     unit using pressurized fluidized bed combustion technology 
     which--
       ``(A) is placed in service after the date of the enactment 
     of this section and before January 1, 2017, and
       ``(B) has a design net heat rate of not more than 7,720 
     (8,750 in the case of units placed in service before 2009, 
     and 8,350 in the case of units placed in service after 2008 
     and before 2013).
       ``(4) Eligible integrated gasification combined cycle 
     technology unit.--The term `eligible integrated gasification 
     combined cycle technology unit' means a clean coal technology 
     unit using integrated gasification combined cycle technology, 
     with or without fuel or chemical co-production, which--
       ``(A) is placed in service after the date of the enactment 
     of this section and before January 1, 2017,
       ``(B) has a design net heat rate of not more than 7,720 
     (8,750 in the case of units placed in service before 2009, 
     and 8,350 in the case of units placed in service after 2008 
     and before 2013), and
       ``(C) has a net thermal efficiency (HHV) using coal with 
     fuel or chemical co-production of not less than 43.9 percent 
     (39 percent in the case of units placed in service before 
     2009, and 40.9 percent in the case of units placed in service 
     after 2008 and before 2013).
       ``(5) Eligible other technology unit.--The term `eligible 
     other technology unit' means a clean coal technology unit 
     using any other technology for the production of electricity 
     which is placed in service after the date of the enactment of 
     this section and before January 1, 2017.
       ``(6) Carbon emission rate requirements.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a unit meets the requirements of this paragraph if--
       ``(i) in the case of a unit using design coal with a heat 
     content of not more than 9,000 Btu per pound, the carbon 
     emission rate is less than 0.60 pound of carbon per kilowatt 
     hour, and
       ``(ii) in the case of a unit using design coal with a heat 
     content of more than 9,000 Btu per pound, the carbon emission 
     rate is less than 0.54 pound of carbon per kilowatt hour.
       ``(B) Eligible other technology unit.--In the case of an 
     eligible other technology unit, subparagraph (A) shall be 
     applied by substituting `0.51' and `0.459' for `0.60' and 
     `0.54', respectively.
       ``(e) General Definitions.--Any term used in this section 
     which is also used in section 45I shall have the meaning 
     given such term in section 45I.
       ``(f) National Limitation on the Aggregate Capacity of 
     Advanced Clean Coal Technology Units.--
       ``(1) In general.--For purposes of subsection (b)(1)(G), 
     the national megawatt capacity limitation is--
       ``(A) for qualifying advanced clean coal technology units 
     using advanced pulverized coal or atmospheric fluidized bed 
     combustion technology, not more than 1,000 megawatts (not 
     more than 500 megawatts in the case of units placed in 
     service before 2009),
       ``(B) for such units using pressurized fluidized bed 
     combustion technology, not more than 500 megawatts (not more 
     than 250 megawatts in the case of units placed in service 
     before 2009),
       ``(C) for such units using integrated gasification combined 
     cycle technology, with or without fuel or chemical co-
     production, not more than 2,000 megawatts (not more than 
     1,000 megawatts in the case of units placed in service before 
     2009 and not more than 1,500 megawatts in the case of units 
     placed in service after 2008 and before 2013), and
       ``(D) for such units using other technology for the 
     production of electricity, not more than 500 megawatts (not 
     more than 250 megawatts in the case of units placed in 
     service before 2009).
       ``(2) Allocation of limitation.--The Secretary shall 
     allocate the national megawatt capacity limitation for 
     qualifying advanced clean coal technology units in such 
     manner as the Secretary may prescribe under the regulations 
     under paragraph (3).
       ``(3) Regulations.--Not later than 6 months after the date 
     of the enactment of this section, the Secretary shall 
     prescribe such regulations as may be necessary or 
     appropriate--
       ``(A) to carry out the purposes of this subsection and 
     section 45J,

[[Page 5281]]

       ``(B) to limit the capacity of any qualifying advanced 
     clean coal technology unit to which this section applies so 
     that the combined megawatt capacity of all such units to 
     which this section applies does not exceed 4,000 megawatts,
       ``(C) to provide a certification process described in 
     section 45I(e)(3)(C),
       ``(D) to carry out the purposes described in subparagraphs 
     (D), (E), and (F) of section 45I(e)(3), and
       ``(E) to reallocate capacity which is not allocated to any 
     technology described in subparagraphs (A) through (D) of 
     paragraph (1) because an insufficient number of qualifying 
     units request an allocation for such technology, to another 
     technology described in such subparagraphs in order to 
     maximize the amount of energy efficient production encouraged 
     with the available tax credits.
       ``(4) Selection criteria.--For purposes of paragraph 
     (3)(C), the selection criteria for allocating the national 
     megawatt capacity limitation to qualifying advanced clean 
     coal technology units--
       ``(A) shall be established by the Secretary of Energy as 
     part of a competitive solicitation,
       ``(B) shall include primary criteria of minimum design net 
     heat rate, maximum design thermal efficiency, environmental 
     performance, and lowest cost to the Government, and
       ``(C) shall include supplemental criteria as determined 
     appropriate by the Secretary of Energy.
       ``(g) Qualified Investment.--For purposes of subsection 
     (a), the term `qualified investment' means, with respect to 
     any taxable year, the basis of a qualifying advanced clean 
     coal technology unit placed in service by the taxpayer during 
     such taxable year (in the case of a unit described in 
     subsection (b)(1)(A)(i)(II), only that portion of the basis 
     of such unit which is properly attributable to the 
     retrofitting or repowering of such unit).
       ``(h) Qualified Progress Expenditures.--
       ``(1) Increase in qualified investment.--In the case of a 
     taxpayer who has made an election under paragraph (5), the 
     amount of the qualified investment of such taxpayer for the 
     taxable year (determined under subsection (g) without regard 
     to this subsection) shall be increased by an amount equal to 
     the aggregate of each qualified progress expenditure for the 
     taxable year with respect to progress expenditure property.
       ``(2) Progress expenditure property defined.--For purposes 
     of this subsection, the term `progress expenditure property' 
     means any property being constructed by or for the taxpayer 
     and which it is reasonable to believe will qualify as a 
     qualifying advanced clean coal technology unit which is being 
     constructed by or for the taxpayer when it is placed in 
     service.
       ``(3) Qualified progress expenditures defined.--For 
     purposes of this subsection--
       ``(A) Self-constructed property.--In the case of any self-
     constructed property, the term `qualified progress 
     expenditures' means the amount which, for purposes of this 
     subpart, is properly chargeable (during such taxable year) to 
     capital account with respect to such property.
       ``(B) Nonself-constructed property.--In the case of 
     nonself-constructed property, the term `qualified progress 
     expenditures' means the amount paid during the taxable year 
     to another person for the construction of such property.
       ``(4) Other definitions.--For purposes of this subsection--
       ``(A) Self-constructed property.--The term `self-
     constructed property' means property for which it is 
     reasonable to believe that more than half of the construction 
     expenditures will be made directly by the taxpayer.
       ``(B) Nonself-constructed property.--The term `nonself-
     constructed property' means property which is not self-
     constructed property.
       ``(C) Construction, etc.--The term `construction' includes 
     reconstruction and erection, and the term `constructed' 
     includes reconstructed and erected.
       ``(D) Only construction of qualifying advanced clean coal 
     technology unit to be taken into account.--Construction shall 
     be taken into account only if, for purposes of this subpart, 
     expenditures therefor are properly chargeable to capital 
     account with respect to the property.
       ``(5) Election.--An election under this subsection may be 
     made at such time and in such manner as the Secretary may by 
     regulations prescribe. Such an election shall apply to the 
     taxable year for which made and to all subsequent taxable 
     years. Such an election, once made, may not be revoked except 
     with the consent of the Secretary.
       ``(i) Coordination With Other Credits.--This section shall 
     not apply to any property with respect to which the 
     rehabilitation credit under section 47 or the energy credit 
     under section 48 is allowed unless the taxpayer elects to 
     waive the application of such credit to such property.''.
       (c) Recapture.--Section 50(a) (relating to other special 
     rules) is amended by adding at the end the following new 
     paragraph:
       ``(6) Special rules relating to qualifying advanced clean 
     coal technology unit.--For purposes of applying this 
     subsection in the case of any credit allowable by reason of 
     section 48A, the following shall apply:
       ``(A) General rule.--In lieu of the amount of the increase 
     in tax under paragraph (1), the increase in tax shall be an 
     amount equal to the investment tax credit allowed under 
     section 38 for all prior taxable years with respect to a 
     qualifying advanced clean coal technology unit (as defined by 
     section 48A(b)(1)) multiplied by a fraction whose numerator 
     is the number of years remaining to fully depreciate under 
     this title the qualifying advanced clean coal technology unit 
     disposed of, and whose denominator is the total number of 
     years over which such unit would otherwise have been subject 
     to depreciation. For purposes of the preceding sentence, the 
     year of disposition of the qualifying advanced clean coal 
     technology unit shall be treated as a year of remaining 
     depreciation.
       ``(B) Property ceases to qualify for progress 
     expenditures.--Rules similar to the rules of paragraph (2) 
     shall apply in the case of qualified progress expenditures 
     for a qualifying advanced clean coal technology unit under 
     section 48A, except that the amount of the increase in tax 
     under subparagraph (A) of this paragraph shall be substituted 
     for the amount described in such paragraph (2).
       ``(C) Application of paragraph.--This paragraph shall be 
     applied separately with respect to the credit allowed under 
     section 38 regarding a qualifying advanced clean coal 
     technology unit.''.
       (d) Transitional Rule.--Section 39(d) (relating to 
     transitional rules), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(17) No carryback of section 48a credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the qualifying advanced 
     clean coal technology unit credit determined under section 
     48A may be carried back to a taxable year ending on or before 
     the date of the enactment of section 48A.''.
       (e) Technical Amendments.--
       (1) Section 49(a)(1)(C) is amended by striking ``and'' at 
     the end of clause (ii), by striking the period at the end of 
     clause (iii) and inserting ``, and'', and by adding at the 
     end the following new clause:
       ``(iv) the portion of the basis of any qualifying advanced 
     clean coal technology unit attributable to any qualified 
     investment (as defined by section 48A(g)).''.
       (2) Section 50(a)(4) is amended by striking ``and (2)'' and 
     inserting ``(2), and (6)''.
       (3) Section 50(c) is amended by adding at the end the 
     following new paragraph:
       ``(6) Nonapplication.--Paragraphs (1) and (2) shall not 
     apply to any qualifying advanced clean coal technology unit 
     credit under section 48A.''.
       (4) The table of sections for subpart E of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 48 the following new item:

``Sec. 48A. Qualifying advanced clean coal technology unit credit.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to periods after the date of the enactment of 
     this Act, under rules similar to the rules of section 48(m) 
     of the Internal Revenue Code of 1986 (as in effect on the day 
     before the date of the enactment of the Revenue 
     Reconciliation Act of 1990).

     SEC. 2212. CREDIT FOR PRODUCTION FROM A QUALIFYING ADVANCED 
                   CLEAN COAL TECHNOLOGY UNIT.

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

     ``SEC. 45J. CREDIT FOR PRODUCTION FROM A QUALIFYING ADVANCED 
                   CLEAN COAL TECHNOLOGY UNIT.

       ``(a) General Rule.--For purposes of section 38, the 
     qualifying advanced clean coal technology production credit 
     of any taxpayer for any taxable year is equal to--
       ``(1) the applicable amount of advanced clean coal 
     technology production credit, multiplied by
       ``(2) the applicable percentage (as determined under 
     section 48A(c)) of the sum of--
       ``(A) the kilowatt hours of electricity, plus
       ``(B) each 3,413 Btu of fuels or chemicals,
     produced by the taxpayer during such taxable year at a 
     qualifying advanced clean coal technology unit during the 10-
     year period beginning on the date the unit was originally 
     placed in service (or returned to service after becoming a 
     qualifying advanced clean coal technology unit).
       ``(b) Applicable Amount.--For purposes of this section, the 
     applicable amount of advanced clean coal technology 
     production credit with respect to production from a 
     qualifying advanced clean coal technology unit shall be 
     determined as follows:
       ``(1) Where the qualifying advanced clean coal technology 
     unit is producing electricity only:
       ``(A) In the case of a unit originally placed in service 
     before 2009, if--
       

[[Page 5282]]



------------------------------------------------------------------------
                                     The applicable amount is:
         ``The design net ----------------------------------------------
          heat rate is:      For 1st 5 years of      For 2d 5 years of
                                such service            such service
------------------------------------------------------------------------
 
        Not more than              $.0060                  $.0038
        More than 8,400            $.0025                  $.0010
         but not more
         than 8,550.
        More than 8,550            $.0010                 $.0010.
         but less than
         8,750.
------------------------------------------------------------------------

       ``(B) In the case of a unit originally placed in service 
     after 2008 and before 2013, if--
       

------------------------------------------------------------------------
                                     The applicable amount is:
         ``The design net ----------------------------------------------
          heat rate is:      For 1st 5 years of      For 2d 5 years of
                                such service            such service
------------------------------------------------------------------------
 
        Not more than              $.0105                  $.0090
        More than 7,770            $.0085                  $.0068
         but not more
         than 8,125.
        More than 8,125            $.0075                 $.0055.
         but less than
         8,350.
------------------------------------------------------------------------

       ``(C) In the case of a unit originally placed in service 
     after 2012 and before 2017, if--
       

------------------------------------------------------------------------
                                     The applicable amount is:
         ``The design net ----------------------------------------------
          heat rate is:      For 1st 5 years of      For 2d 5 years of
                                such service            such service
------------------------------------------------------------------------
 
        Not more than              $.0140                  $.0115
        More than 7,380            $.0120                 $.0090.
         but not more
         than 7,720.
------------------------------------------------------------------------

       ``(2) Where the qualifying advanced clean coal technology 
     unit is producing fuel or chemicals:
       ``(A) In the case of a unit originally placed in service 
     before 2009, if--
       

------------------------------------------------------------------------
        ``The unit design            The applicable amount is:
           net thermal    ----------------------------------------------
         efficiency (HHV)    For 1st 5 years of      For 2d 5 years of
               is:              such service            such service
------------------------------------------------------------------------
 
        Not less than              $.0060                  $.0038
        Less than 40.6             $.0025                  $.0010
         but not less
         than 40 percent.
        Less than 40 but           $.0010                 $.0010.
         not less than 39
         percent.
------------------------------------------------------------------------

       ``(B) In the case of a unit originally placed in service 
     after 2008 and before 2013, if--
       

------------------------------------------------------------------------
        ``The unit design            The applicable amount is:
           net thermal    ----------------------------------------------
         efficiency (HHV)    For 1st 5 years of      For 2d 5 years of
               is:              such service            such service
------------------------------------------------------------------------
 
        Not less than              $.0105                  $.0090
        Less than 43.6             $.0085                  $.0068
         but not less
         than 42 percent.
        Less than 42 but           $.0075                 $.0055.
         not less than
         40.9 percent.
------------------------------------------------------------------------

       ``(C) In the case of a unit originally placed in service 
     after 2012 and before 2017, if--
       

------------------------------------------------------------------------
        ``The unit design            The applicable amount is:
           net thermal    ----------------------------------------------
         efficiency (HHV)    For 1st 5 years of      For 2d 5 years of
               is:              such service            such service
------------------------------------------------------------------------
 
        Not less than              $.0140                  $.0115
        Less than 44.2             $.0120                 $.0090.
         but not less
         than 43.9
         percent.
------------------------------------------------------------------------


[[Page 5283]]

       ``(c) Inflation Adjustment.--For calendar years after 2003, 
     each amount in paragraphs (1) and (2) of subsection (b) shall 
     be adjusted by multiplying such amount by the inflation 
     adjustment factor for the calendar year in which the amount 
     is applied. If any amount as increased under the preceding 
     sentence is not a multiple of 0.01 cent, such amount shall be 
     rounded to the nearest multiple of 0.01 cent.
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) In general.--Any term used in this section which is 
     also used in section 45I or 48A shall have the meaning given 
     such term in such section.
       ``(2) Applicable rules.--The rules of paragraphs (3), (4), 
     and (5) of section 45(d) shall apply.''.
       (b) Credit Treated as Business Credit.--Section 38(b), as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (19), by striking the period at the end of 
     paragraph (20) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(21) the qualifying advanced clean coal technology 
     production credit determined under section 45J(a).''.
       (c) Transitional Rule.--Section 39(d) (relating to 
     transitional rules), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(18) No carryback of section 45j credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the qualifying advanced 
     clean coal technology production credit determined under 
     section 45J may be carried back to a taxable year ending on 
     or before the date of the enactment of section 45J.''.
       (d) Denial of Double Benefit.--Section 29(d) (relating to 
     other definitions and special rules) is amended by adding at 
     the end the following new paragraph:
       ``(9) Denial of double benefit.--This section shall not 
     apply with respect to any qualified fuel the production of 
     which may be taken into account for purposes of determining 
     the credit under section 45J.''.
       (e) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45J. Credit for production from a qualifying advanced clean coal 
              technology unit.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to production after the date of the enactment of 
     this Act, in taxable years ending after such date.

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

     SEC. 2221. TREATMENT OF PERSONS NOT ABLE TO USE ENTIRE 
                   CREDIT.

       (a) In General.--Section 45I, as added by this Act, is 
     amended by adding at the end the following new subsection:
       ``(f) Treatment of Person Not Able To Use Entire Credit.--
       ``(1) Allowance of credits.--
       ``(A) In general.--Any credit allowable under this section, 
     section 45J, or section 48A with respect to a facility owned 
     by a person described in subparagraph (B) may be transferred 
     or used as provided in this subsection, and the determination 
     as to whether the credit is allowable shall be made without 
     regard to the tax-exempt status of the person.
       ``(B) Persons described.--A person is described in this 
     subparagraph if the person is--
       ``(i) an organization described in section 501(c)(12)(C) 
     and exempt from tax under section 501(a),
       ``(ii) an organization described in section 1381(a)(2)(C),
       ``(iii) a public utility (as defined in section 
     136(c)(2)(B)),
       ``(iv) any State or political subdivision thereof, the 
     District of Columbia, or any agency or instrumentality of any 
     of the foregoing,
       ``(v) any Indian tribal government (within the meaning of 
     section 7871) or any agency or instrumentality thereof, or
       ``(vi) the Tennessee Valley Authority.
       ``(2) Transfer of credit.--
       ``(A) In general.--A person described in clause (i), (ii), 
     (iii), (iv), or (v) of paragraph (1)(B) may transfer any 
     credit to which paragraph (1)(A) applies through an 
     assignment to any other person not described in paragraph 
     (1)(B). Such transfer may be revoked only with the consent of 
     the Secretary.
       ``(B) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to insure that any credit described 
     in subparagraph (A) is claimed once and not reassigned by 
     such other person.
       ``(C) Transfer proceeds treated as arising from essential 
     government function.--Any proceeds derived by a person 
     described in clause (iii), (iv), or (v) of paragraph (1)(B) 
     from the transfer of any credit under subparagraph (A) shall 
     be treated as arising from the exercise of an essential 
     government function.
       ``(3) Use of credit as an offset.--Notwithstanding any 
     other provision of law, in the case of a person described in 
     clause (i), (ii), or (v) of paragraph (1)(B), any credit to 
     which paragraph (1)(A) applies may be applied by such person, 
     to the extent provided by the Secretary of Agriculture, as a 
     prepayment of any loan, debt, or other obligation the entity 
     has incurred under subchapter I of chapter 31 of title 7 of 
     the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.), 
     as in effect on the date of the enactment of this section.
       ``(4) Use by tva.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, in the case of a person described in paragraph 
     (1)(B)(vi), any credit to which paragraph (1)(A) applies may 
     be applied as a credit against the payments required to be 
     made in any fiscal year under section 15d(e) of the Tennessee 
     Valley Authority Act of 1933 (16 U.S.C. 831n-4(e)) as an 
     annual return on the appropriations investment and an annual 
     repayment sum.
       ``(B) Treatment of credits.--The aggregate amount of 
     credits described in paragraph (1)(A) with respect to such 
     person shall be treated in the same manner and to the same 
     extent as if such credits were a payment in cash and shall be 
     applied first against the annual return on the appropriations 
     investment.
       ``(C) Credit carryover.--With respect to any fiscal year, 
     if the aggregate amount of credits described paragraph (1)(A) 
     with respect to such person exceeds the aggregate amount of 
     payment obligations described in subparagraph (A), the excess 
     amount shall remain available for application as credits 
     against the amounts of such payment obligations in succeeding 
     fiscal years in the same manner as described in this 
     paragraph.
       ``(5) Credit not income.--Any transfer under paragraph (2) 
     or use under paragraph (3) of any credit to which paragraph 
     (1)(A) applies shall not be treated as income for purposes of 
     section 501(c)(12).
       ``(6) Treatment of unrelated persons.--For purposes of this 
     subsection, sales among and between persons described in 
     clauses (i), (ii), (iii), (iv), and (v) of paragraph (1)(A) 
     shall be treated as sales between unrelated parties.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to production after the date of the enactment of 
     this Act, in taxable years ending after such date.

                  TITLE XXIII--OIL AND GAS PROVISIONS

     SEC. 2301. OIL AND GAS FROM MARGINAL WELLS.

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

     ``SEC. 45K. CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL 
                   WELLS.

       ``(a) General Rule.--For purposes of section 38, the 
     marginal well production credit for any taxable year is an 
     amount equal to the product of--
       ``(1) the credit amount, and
       ``(2) the qualified credit oil production and the qualified 
     natural gas production which is attributable to the taxpayer.
       ``(b) Credit Amount.--For purposes of this section--
       ``(1) In general.--The credit amount is--
       ``(A) $3 per barrel of qualified crude oil production, and
       ``(B) 50 cents per 1,000 cubic feet of qualified natural 
     gas production.
       ``(2) Reduction as oil and gas prices increase.--
       ``(A) In general.--The $3 and 50 cents amounts under 
     paragraph (1) shall each be reduced (but not below zero) by 
     an amount which bears the same ratio to such amount 
     (determined without regard to this paragraph) as--
       ``(i) the excess (if any) of the applicable reference price 
     over $15 ($1.67 for qualified natural gas production), bears 
     to
       ``(ii) $3 ($0.33 for qualified natural gas production).
     The applicable reference price for a taxable year is the 
     reference price of the calendar year preceding the calendar 
     year in which the taxable year begins.
       ``(B) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year after 2002, each of the 
     dollar amounts contained in subparagraph (A) shall be 
     increased to an amount equal to such dollar amount multiplied 
     by the inflation adjustment factor for such calendar year 
     (determined under section 43(b)(3)(B) by substituting `2001' 
     for `1990').
       ``(C) Reference price.--For purposes of this paragraph, the 
     term `reference price' means, with respect to any calendar 
     year--
       ``(i) in the case of qualified crude oil production, the 
     reference price determined under section 29(d)(2)(C), and
       ``(ii) in the case of qualified natural gas production, the 
     Secretary's estimate of the annual average wellhead price per 
     1,000 cubic feet for all domestic natural gas.
       ``(c) Qualified Crude Oil and Natural Gas Production.--For 
     purposes of this section--
       ``(1) In general.--The terms `qualified crude oil 
     production' and `qualified natural gas production' mean 
     domestic crude oil or natural gas which is produced from a 
     qualified marginal well.
       ``(2) Limitation on amount of production which may 
     qualify.--
       ``(A) In general.--Crude oil or natural gas produced during 
     any taxable year from any well shall not be treated as 
     qualified crude oil production or qualified natural gas 
     production to the extent production from the well during the 
     taxable year exceeds 1,095 barrels or barrel equivalents.

[[Page 5284]]

       ``(B) Proportionate reductions.--
       ``(i) Short taxable years.--In the case of a short taxable 
     year, the limitations under this paragraph shall be 
     proportionately reduced to reflect the ratio which the number 
     of days in such taxable year bears to 365.
       ``(ii) Wells not in production entire year.--In the case of 
     a well which is not capable of production during each day of 
     a taxable year, the limitations under this paragraph 
     applicable to the well shall be proportionately reduced to 
     reflect the ratio which the number of days of production 
     bears to the total number of days in the taxable year.
       ``(3) Definitions.--
       ``(A) Qualified marginal well.--The term `qualified 
     marginal well' means a domestic well--
       ``(i) the production from which during the taxable year is 
     treated as marginal production under section 613A(c)(6), or
       ``(ii) which, during the taxable year--

       ``(I) has average daily production of not more than 25 
     barrel equivalents, and
       ``(II) produces water at a rate not less than 95 percent of 
     total well effluent.

       ``(B) Crude oil, etc.--The terms `crude oil', `natural 
     gas', `domestic', and `barrel' have the meanings given such 
     terms by section 613A(e).
       ``(C) Barrel equivalent.--The term `barrel equivalent' 
     means, with respect to natural gas, a conversation ratio of 
     6,000 cubic feet of natural gas to 1 barrel of crude oil.
       ``(d) Other Rules.--
       ``(1) Production attributable to the taxpayer.--In the case 
     of a qualified marginal well in which there is more than one 
     owner of operating interests in the well and the crude oil or 
     natural gas production exceeds the limitation under 
     subsection (c)(2), qualifying crude oil production or 
     qualifying natural gas production attributable to the 
     taxpayer shall be determined on the basis of the ratio which 
     taxpayer's revenue interest in the production bears to the 
     aggregate of the revenue interests of all operating interest 
     owners in the production.
       ``(2) Operating interest required.--Any credit under this 
     section may be claimed only on production which is 
     attributable to the holder of an operating interest.
       ``(3) Production from nonconventional sources excluded.--In 
     the case of production from a qualified marginal well which 
     is eligible for the credit allowed under section 29 for the 
     taxable year, no credit shall be allowable under this section 
     unless the taxpayer elects not to claim the credit under 
     section 29 with respect to the well.
       ``(4) Noncompliance with pollution laws.--For purposes of 
     subsection (c)(3)(A), a marginal well which is not in 
     compliance with the applicable State and Federal pollution 
     prevention, control, and permit requirements for any period 
     of time shall not be considered to be a qualified marginal 
     well during such period.''.
       (b) Credit Treated as Business Credit.--Section 38(b), as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (20), by striking the period at the end of 
     paragraph (21) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(22) the marginal oil and gas well production credit 
     determined under section 45K(a).''.
       (c) No Carryback of Marginal Oil and Gas Well Production 
     Credit Before Effective Date.--Subsection (d) of section 39, 
     as amended by this Act, is amended by adding at the end the 
     following new paragraph:
       ``(19) No carryback of marginal oil and gas well production 
     credit before effective date.--No portion of the unused 
     business credit for any taxable year which is attributable to 
     the marginal oil and gas well production credit determined 
     under section 45K may be carried back to a taxable year 
     ending on or before the date of the enactment of section 
     45K.''.
       (d) Coordination With Section 29.--Section 29(a) is amended 
     by striking ``There'' and inserting ``At the election of the 
     taxpayer, there''.
       (e) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45K. Credit for producing oil and gas from marginal wells.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to production in taxable years beginning after 
     the date of the enactment of this Act.

     SEC. 2302. NATURAL GAS GATHERING LINES TREATED AS 7-YEAR 
                   PROPERTY.

       (a) In General.--Subparagraph (C) of section 168(e)(3) 
     (relating to classification of certain property) is amended 
     by striking ``and'' at the end of clause (i), by 
     redesignating clause (ii) as clause (iii), and by inserting 
     after clause (i) the following new clause:
       ``(ii) any natural gas gathering line, and''.
       (b) Natural Gas Gathering Line.--Subsection (i) of section 
     168, as amended by this Act, is amended by adding at the end 
     the following new paragraph:
       ``(16) Natural gas gathering line.--The term `natural gas 
     gathering line' means--
       ``(A) the pipe, equipment, and appurtenances determined to 
     be a gathering line by the Federal Energy Regulatory 
     Commission, or
       ``(B) the pipe, equipment, and appurtenances used to 
     deliver natural gas from the wellhead or a commonpoint to the 
     point at which such gas first reaches--
       ``(i) a gas processing plant,
       ``(ii) an interconnection with a transmission pipeline 
     certificated by the Federal Energy Regulatory Commission as 
     an interstate transmission pipeline,
       ``(iii) an interconnection with an intrastate transmission 
     pipeline, or
       ``(iv) a direct interconnection with a local distribution 
     company, a gas storage facility, or an industrial 
     consumer.''.
       (c) Alternative System.--The table contained in section 
     168(g)(3)(B) is amended by inserting after the item relating 
     to subparagraph (C)(i) the following new item:

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

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

     SEC. 2303. EXPENSING OF CAPITAL COSTS INCURRED IN COMPLYING 
                   WITH ENVIRONMENTAL PROTECTION AGENCY SULFUR 
                   REGULATIONS.

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

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

       ``(a) Treatment as Expense.--
       ``(1) In general.--A small business refiner may elect to 
     treat any qualified capital costs as an expense which is not 
     chargeable to capital account. Any qualified cost which is so 
     treated shall be allowed as a deduction for the taxable year 
     in which the cost is paid or incurred.
       ``(2) Limitation.--
       ``(A) In general.--The aggregate costs which may be taken 
     into account under this subsection for any taxable year may 
     not exceed the applicable percentage of the qualified capital 
     costs paid or incurred for the taxable year.
       ``(B) Applicable percentage.--For purposes of subparagraph 
     (A)--
       ``(i) In general.--Except as provided in clause (ii), the 
     applicable percentage is 75 percent.
       ``(ii) Reduced percentage.--In the case of a small business 
     refiner with average daily refinery runs for the period 
     described in subsection (b)(2) in excess of 155,000 barrels, 
     the percentage described in clause (i) shall be reduced (not 
     below zero) by the product of such percentage (before the 
     application of this clause) and the ratio of such excess to 
     50,000 barrels.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Qualified capital costs.--The term `qualified capital 
     costs' means any costs which--
       ``(A) are otherwise chargeable to capital account, and
       ``(B) are paid or incurred for the purpose of complying 
     with the Highway Diesel Fuel Sulfur Control Requirement of 
     the Environmental Protection Agency, as in effect on the date 
     of the enactment of this section, with respect to a facility 
     placed in service by the taxpayer before such date.
       ``(2) Small business refiner.--The term `small business 
     refiner' means, with respect to any taxable year, a refiner 
     of crude oil, which, within the refinery operations of the 
     business, employs not more than 1,500 employees on any day 
     during such taxable year and whose average daily refinery run 
     for the 1-year period ending on the date of the enactment of 
     this section did not exceed 205,000 barrels.
       ``(c) Coordination With Other Provisions.--Section 280B 
     shall not apply to amounts which are treated as expenses 
     under this section.
       ``(d) Basis Reduction.--For purposes of this title, the 
     basis of any property shall be reduced by the portion of the 
     cost of such property taken into account under subsection 
     (a).
       ``(e) Controlled Groups.--For purposes of this section, all 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 shall be treated as a single 
     employer.''.
       (b) Conforming Amendments.--
       (1) Section 263(a)(1), as amended by this Act, is amended 
     by striking ``or'' at the end of subparagraph (I), by 
     striking the period at the end of subparagraph (J) and 
     inserting ``, or'', and by inserting after subparagraph (J) 
     the following new subparagraph:
       ``(K) expenditures for which a deduction is allowed under 
     section 179D.''.
       (2) Section 263A(c)(3) is amended by inserting ``179C,'' 
     after ``section''.
       (3) Section 312(k)(3)(B), as amended by this Act, is 
     amended by striking ``or 179C'' each place it appears in the 
     heading and text and inserting ``, 179C, or 179D''.
       (4) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (33), by striking 
     the period at the end of paragraph (34) and inserting ``, 
     and'', and by adding at the end the following new paragraph:

[[Page 5285]]

       ``(35) to the extent provided in section 179D(d).''.
       (5) Section 1245(a), as amended by this Act, is amended by 
     inserting ``179D,'' after ``179C,'' both places it appears in 
     paragraphs (2)(C) and (3)(C).
       (6) The table of sections for part VI of subchapter B of 
     chapter 1, as amended by this Act, is amended by inserting 
     after section 179C the following new item:

``Sec. 179D. Deduction for capital costs incurred in complying with 
              Environmental Protection Agency sulfur regulations.''.

       (c) Effective Date.--The amendment made by this section 
     shall apply to expenses paid or incurred after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 2304. ENVIRONMENTAL TAX CREDIT.

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

     ``SEC. 45L. ENVIRONMENTAL TAX CREDIT.

       ``(a) In General.--For purposes of section 38, the amount 
     of the environmental tax credit determined under this section 
     with respect to any small business refiner for any taxable 
     year is an amount equal to 5 cents for every gallon of 15 
     parts per million or less sulfur diesel produced at a 
     facility by such small business refiner during such taxable 
     year.
       ``(b) Maximum Credit.--
       ``(1) In general.--For any small business refiner, the 
     aggregate amount determined under subsection (a) for any 
     taxable year with respect to any facility shall not exceed 
     the applicable percentage of the qualified capital costs paid 
     or incurred by such small business refiner with respect to 
     such facility during the applicable period, reduced by the 
     credit allowed under subsection (a) for any preceding year.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1)--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the applicable percentage is 25 percent.
       ``(B) Reduced percentage.--The percentage described in 
     subparagraph (A) shall be reduced in the same manner as under 
     section 179D(a)(2)(B)(ii).
       ``(c) Definitions.--For purposes of this section--
       ``(1) In general.--The terms `small business refiner' and 
     `qualified capital costs' have the same meaning as given in 
     section 179D.
       ``(2) Applicable period.--The term `applicable period' 
     means, with respect to any facility, the period beginning on 
     the day after the date which is 1 year after the date of the 
     enactment of this section and ending with the date which is 1 
     year after the date on which the taxpayer must comply with 
     the applicable EPA regulations with respect to such facility.
       ``(3) Applicable epa regulations.--The term `applicable EPA 
     regulations' means the Highway Diesel Fuel Sulfur Control 
     Requirements of the Environmental Protection Agency, as in 
     effect on the date of the enactment of this section.
       ``(d) Certification.--
       ``(1) Required.--Not later than the date which is 30 months 
     after the first day of the first taxable year in which the 
     environmental tax credit is allowed with respect to qualified 
     capital costs paid or incurred with respect to a facility, 
     the small business refiner shall obtain a certification from 
     the Secretary, in consultation with the Administrator of the 
     Environmental Protection Agency, that the taxpayer's 
     qualified capital costs with respect to such facility will 
     result in compliance with the applicable EPA regulations.
       ``(2) Contents of application.--An application for 
     certification shall include relevant information regarding 
     unit capacities and operating characteristics sufficient for 
     the Secretary, in consultation with the Administrator of the 
     Environmental Protection Agency, to determine that such 
     qualified capital costs are necessary for compliance with the 
     applicable EPA regulations.
       ``(3) Review period.--Any application shall be reviewed and 
     notice of certification, if applicable, shall be made within 
     60 days of receipt of such application. In the event the 
     Secretary does not notify the taxpayer of the results of such 
     certification within such period, the taxpayer may presume 
     the certification to be issued until so notified.
       ``(4) Statute of limitations.--With respect to the credit 
     allowed under this section--
       ``(A) the statutory period for the assessment of any 
     deficiency attributable to such credit shall not expire 
     before the end of the 3-year period ending on the date that 
     the review period described in paragraph (3) ends, and
       ``(B) such deficiency may be assessed before the expiration 
     of such 3-year period notwithstanding the provisions of any 
     other law or rule of law which would otherwise prevent such 
     assessment.
       ``(e) Controlled Groups.--For purposes of this section, all 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 shall be treated as a single 
     employer.
       ``(f) Cooperative Organizations.--
       ``(1) Apportionment of credit.--In the case of a 
     cooperative organization described in section 1381(a), any 
     portion of the credit determined under subsection (a) of this 
     section, for the taxable year may, at the election of the 
     organization, be apportioned among patrons eligible to share 
     in patronage dividends on the basis of the quantity or value 
     of business done with or for such patrons for the taxable 
     year. Such an election shall be irrevocable for such taxable 
     year.
       ``(2) Treatment of organizations and patrons.--
       ``(A) Organizations.--The amount of the credit not 
     apportioned to patrons pursuant to paragraph (1) shall be 
     included in the amount determined under subsection (a) for 
     the taxable year of the organization.
       ``(B) Patrons.--The amount of the credit apportioned to 
     patrons pursuant to paragraph (1) shall be included in the 
     amount determined under subsection (a) for the first taxable 
     year of each patron ending on or after the last day of the 
     payment period (as defined in section 1382(d)) for the 
     taxable year of the organization or, if earlier, for the 
     taxable year of each patron ending on or after the date on 
     which the patron receives notice from the cooperative of the 
     apportionment.''.
       (b) Credit Made Part of General Business Credit.--
     Subsection (b) of section 38 (relating to general business 
     credit), as amended by this Act, is amended by striking 
     ``plus'' at the end of paragraph (21), by striking the period 
     at the end of paragraph (22) and inserting ``, plus'', and by 
     adding at the end the following new paragraph:
       ``(23) in the case of a small business refiner, the 
     environmental tax credit determined under section 45L(a).''.
       (c) Denial of Double Benefit.--Section 280C (relating to 
     certain expenses for which credits are allowable), as amended 
     by this Act, is amended by adding after subsection (d) the 
     following new subsection:
       ``(e) Environmental Tax Credit.--No deduction shall be 
     allowed for that portion of the expenses otherwise allowable 
     as a deduction for the taxable year which is equal to the 
     amount of the credit determined for the taxable year under 
     section 45L(a).''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45L. Environmental tax credit.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to expenses paid or incurred after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 2305. DETERMINATION OF SMALL REFINER EXCEPTION TO OIL 
                   DEPLETION DEDUCTION.

       (a) In General.--Paragraph (4) of section 613A(d) (relating 
     to certain refiners excluded) is amended to read as follows:
       ``(4) Certain refiners excluded.--If the taxpayer or 1 or 
     more related persons engages in the refining of crude oil, 
     subsection (c) shall not apply to the taxpayer for a taxable 
     year if the average daily refinery runs of the taxpayer and 
     such persons for the taxable year exceed 60,000 barrels. For 
     purposes of this paragraph, the average daily refinery runs 
     for any taxable year shall be determined by dividing the 
     aggregate refinery runs for the taxable year by the number of 
     days in the taxable year.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2002.

     SEC. 2306. MARGINAL PRODUCTION INCOME LIMIT EXTENSION.

       Section 613A(c)(6)(H) (relating to temporary suspension of 
     taxable income limit with respect to marginal production), as 
     amended by section 607(a) of the Job Creation and Worker 
     Assistance Act of 2002, is amended by striking ``2004'' and 
     inserting ``2007''.

     SEC. 2307. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL 
                   EXPENDITURES.

       (a) In General.--Part VI of subchapter B of chapter 1, as 
     amended by this Act, is amended by adding at the end the 
     following new section:

     ``SEC. 199. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL 
                   EXPENDITURES FOR DOMESTIC OIL AND GAS WELLS.

       ``A taxpayer shall be entitled to an amortization deduction 
     with respect to any geological and geophysical expenses 
     incurred in connection with the exploration for, or 
     development of, oil or gas within the United States (as 
     defined in section 638) based on a period of 24 months 
     beginning with the month in which such expenses were 
     incurred.''.
       (b) Clerical Amendment.--The table of sections for part VI 
     of subchapter B of chapter 1, as amended by this Act, is 
     amended by adding at the end the following new item:

``Sec. 199. Amortization of geological and geophysical expenditures for 
              domestic oil and gas wells.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to costs paid or incurred in taxable years 
     beginning after December 31, 2002.

     SEC. 2308. AMORTIZATION OF DELAY RENTAL PAYMENTS.

       (a) In General.--Part VI of subchapter B of chapter 1, as 
     amended by this Act, is

[[Page 5286]]

     amended by adding at the end the following new section:

     ``SEC. 199A. AMORTIZATION OF DELAY RENTAL PAYMENTS FOR 
                   DOMESTIC OIL AND GAS WELLS.

       ``(a) In General.--A taxpayer shall be entitled to an 
     amortization deduction with respect to any delay rental 
     payments incurred in connection with the development of oil 
     or gas within the United States (as defined in section 638) 
     based on a period of 24 months beginning with the month in 
     which such payments were incurred.''.
       ``(b) Delay Rental Payments.--For purposes of this section, 
     the term `delay rental payment' means an amount paid for the 
     privilege of deferring development of an oil or gas well 
     under an oil or gas lease.''.
       (b) Clerical Amendment.--The table of sections for part VI 
     of subchapter B of chapter 1, as amended by this Act, is 
     amended by adding at the end the following new item:

``Sec. 199A. Amortization of delay rental payments for domestic oil and 
              gas wells.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after December 31, 2002.

     SEC. 2309. STUDY OF COAL BED METHANE.

       (a) In General.--The Secretary of the Treasury shall study 
     the effect of section 29 of the Internal Revenue Code of 1986 
     on the production of coal bed methane. Such study shall be 
     made in conjunction with the study to be undertaken by the 
     Secretary of the Interior on the effects of coal bed methane 
     production on surface and water resources, as provided in 
     section 607 of the Energy Policy Act of 2002.
       (b) Contents of Study.--The study under subsection (a) 
     shall estimate the total amount of credits under section 29 
     of the Internal Revenue Code of 1986 claimed annually and in 
     the aggregate which are related to the production of coal bed 
     methane since the date of the enactment of such section 29. 
     Such study shall report the annual value of such credits 
     allowable for coal bed methane compared to the average annual 
     wellhead price of natural gas (per thousand cubic feet of 
     natural gas). Such study shall also estimate the incremental 
     increase in production of coal bed methane that has resulted 
     from the enactment of such section 29, and the cost to the 
     Federal Government, in terms of the net tax benefits claimed, 
     per thousand cubic feet of incremental coal bed methane 
     produced annually and in the aggregate since such enactment.

     SEC. 2310. EXTENSION AND MODIFICATION OF CREDIT FOR PRODUCING 
                   FUEL FROM A NONCONVENTIONAL SOURCE.

       (a) In General.--Section 29 is amended by adding at the end 
     the following new subsection:
       ``(h) Extension for Other Facilities.--
       ``(1) Oil and gas.--In the case of a well or facility for 
     producing qualified fuels described in subparagraph (A) or 
     (B) of subsection (c)(1) which was drilled or placed in 
     service after the date of the enactment of this subsection 
     and before January 1, 2005, notwithstanding subsection (f), 
     this section shall apply with respect to such fuels produced 
     at such well or facility not later than the close of the 3-
     year period beginning on the date that such well is drilled 
     or such facility is placed in service.
       ``(2) Facilities producing refined coal.--
       ``(A) In general.--In the case of a facility described in 
     subparagraph (C) for producing refined coal which was placed 
     in service after the date of the enactment of this subsection 
     and before January 1, 2007, this section shall apply with 
     respect to fuel produced at such facility not later than the 
     close of the 5-year period beginning on the date such 
     facility is placed in service.
       ``(B) Refined coal.--For purposes of this paragraph, the 
     term `refined coal' means a fuel which is a liquid, gaseous, 
     or solid synthetic fuel produced from coal (including 
     lignite) or high carbon fly ash, including such fuel used as 
     a feedstock.
       ``(C) Covered facilities.--
       ``(i) In general.--A facility is described in this 
     subparagraph if such facility produces refined coal using a 
     technology that results in--

       ``(I) a qualified emission reduction, and
       ``(II) a qualified enhanced value.

       ``(ii) Qualified emission reduction.--For purposes of this 
     subparagraph, the term `qualified emission reduction' means a 
     reduction of at least 20 percent of the emissions of sulfur 
     dioxide and nitrogen oxide released when burning the refined 
     coal (excluding any dilution caused by materials combined or 
     added during the production process), as compared to the 
     emissions released when burning the feedstock coal or 
     comparable coal predominantly available in the marketplace as 
     of January 1, 2002.
       ``(iii) Qualified enhanced value.--For purposes of this 
     subparagraph, the term `qualified enhanced value' means an 
     increase of at least 50 percent in the market value of the 
     refined coal (excluding any increase caused by materials 
     combined or added during the production process), as compared 
     to the value of the feedstock coal.
       ``(iv) Qualifying advanced clean coal technology facilities 
     excluded.--A facility described in this subparagraph shall 
     not include a qualifying advanced clean coal technology 
     facility (as defined in section 48A(b)).
       ``(3) Wells producing viscous oil.--
       ``(A) In general.--In the case of a well for producing 
     viscous oil which was placed in service after the date of the 
     enactment of this subsection and before January 1, 2005, this 
     section shall apply with respect to fuel produced at such 
     well not later than the close of the 3-year period beginning 
     on the date such well is placed in service.
       ``(B) Viscous oil.--The term ``viscous oil' means heavy 
     oil, as defined in section 613A(c)(6), except that--
       ``(i) `22 degrees' shall be substituted for `20 degrees' in 
     applying subparagraph (F) thereof, and
       ``(ii) in all cases, the oil gravity shall be measured from 
     the initial well-head samples, drill cuttings, or down hole 
     samples.
       ``(C) Waiver of unrelated person requirement.--In the case 
     of viscous oil, the requirement under subsection (a)(1)(B)(i) 
     of a sale to an unrelated person shall not apply to any sale 
     to the extent that the viscous oil is not consumed in the 
     immediate vicinity of the wellhead.
       ``(4) Coalmine methane gas.--
       ``(A) In general.--This section shall apply to coalmine 
     methane gas--
       ``(i) captured or extracted by the taxpayer after the date 
     of the enactment of this subsection and before January 1, 
     2005, and
       ``(ii) utilized as a fuel source or sold by or on behalf of 
     the taxpayer to an unrelated person after the date of the 
     enactment of this subsection and before January 1, 2005.
       ``(B) Coalmine methane gas.--For purposes of this 
     paragraph, the term `coalmine methane gas' means any methane 
     gas which is--
       ``(i) liberated during qualified coal mining operations, or
       ``(ii) extracted up to 5 years in advance of qualified coal 
     mining operations as part of a specific plan to mine a coal 
     deposit.
       ``(C) Special rule for advanced extraction.--In the case of 
     coalmine methane gas which is captured in advance of 
     qualified coal mining operations, the credit under subsection 
     (a) shall be allowed only after the date the coal extraction 
     occurs in the immediate area where the coalmine methane gas 
     was removed.
       ``(D) Noncompliance with pollution laws.--For purposes of 
     subparagraphs (B) and (C), coal mining operations which are 
     not in compliance with the applicable State and Federal 
     pollution prevention, control, and permit requirements for 
     any period of time shall not be considered to be qualified 
     coal mining operations during such period.
       ``(5) Credit amount.--In determining the amount of credit 
     allowable under this section solely by reason of this 
     subsection, the dollar amount applicable under subsection 
     (a)(1) shall be $3 (without regard to subsection (b)(2)).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to fuel sold after the date of the enactment of 
     this Act.

     SEC. 2311. NATURAL GAS DISTRIBUTION LINES TREATED AS 15-YEAR 
                   PROPERTY.

       (a) In General.--Subparagraph (E) of section 168(e)(3) 
     (relating to classification of certain property) is amended 
     by striking ``and'' at the end of clause (ii), by striking 
     the period at the end of clause (iii) and by inserting ``, 
     and'', and by adding at the end the following new clause:
       ``(iv) any natural gas distribution line.''.
       (b) Alternative System.--The table contained in section 
     168(g)(3)(B), as amended by this Act, is amended by adding 
     after the item relating to subparagraph (E)(iii) the 
     following new item:

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

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

         TITLE XXIV--ELECTRIC UTILITY RESTRUCTURING PROVISIONS

     SEC. 2401. ONGOING STUDY AND REPORTS REGARDING TAX ISSUES 
                   RESULTING FROM FUTURE RESTRUCTURING DECISIONS.

       (a) Ongoing Study.--The Secretary of the Treasury, after 
     consultation with the Federal Energy Regulatory Commission, 
     shall undertake an ongoing study of Federal tax issues 
     resulting from non-tax decisions on the restructuring of the 
     electric industry. In particular, the study shall focus on 
     the effect on tax-exempt bonding authority of public power 
     entities and on corporate restructuring which results from 
     the restructuring of the electric industry.
       (b) Regulatory Relief.--In connection with the study 
     described in subsection (a), the Secretary of the Treasury 
     should exercise the Secretary's authority, as appropriate, to 
     modify or suspend regulations that may impede an electric 
     utility company's ability to reorganize its capital stock 
     structure to respond to a competitive marketplace.
       (c) Reports.--The Secretary of the Treasury shall report to 
     the Committee on Finance of the Senate and the Committee on 
     Ways and Means of the House of Representatives not later than 
     December 31, 2002, regarding Federal tax issues identified 
     under the study described in subsection (a), and at least 
     annually thereafter, regarding such issues identified since 
     the preceding report.

[[Page 5287]]

     Such reports shall also include such legislative 
     recommendations regarding changes to the private business use 
     rules under subpart A of part IV of subchapter B of chapter 1 
     of the Internal Revenue Code of 1986 as the Secretary of the 
     Treasury deems necessary. The reports shall continue until 
     such time as the Federal Energy Regulatory Commission has 
     completed the restructuring of the electric industry.

     SEC. 2402. MODIFICATIONS TO SPECIAL RULES FOR NUCLEAR 
                   DECOMMISSIONING COSTS.

       (a) Repeal of Limitation on Deposits Into Fund Based on 
     Cost of Service; Contributions After Funding Period.--
     Subsection (b) of section 468A is amended to read as follows:
       ``(b) Limitation on Amounts Paid Into Fund.--The amount 
     which a taxpayer may pay into the Fund for any taxable year 
     shall not exceed the ruling amount applicable to such taxable 
     year.''.
       (b) Clarification of Treatment of Fund Transfers.--
     Subsection (e) of section 468A is amended by adding at the 
     end the following new paragraph:
       ``(8) Treatment of fund transfers.--If, in connection with 
     the transfer of the taxpayer's interest in a nuclear power 
     plant, the taxpayer transfers the Fund with respect to such 
     power plant to the transferee of such interest and the 
     transferee elects to continue the application of this section 
     to such Fund--
       ``(A) the transfer of such Fund shall not cause such Fund 
     to be disqualified from the application of this section, and
       ``(B) no amount shall be treated as distributed from such 
     Fund, or be includible in gross income, by reason of such 
     transfer.''.
       (c) Deduction for Nuclear Decommissioning Costs When 
     Paid.--Paragraph (2) of section 468A(c) is amended to read as 
     follows:
       ``(2) Deduction of nuclear decommissioning costs.--In 
     addition to any deduction under subsection (a), nuclear 
     decommissioning costs paid or incurred by the taxpayer during 
     any taxable year shall constitute ordinary and necessary 
     expenses in carrying on a trade or business under section 
     162.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2002.

     SEC. 2403. TREATMENT OF CERTAIN INCOME OF COOPERATIVES.

       (a) Income From Open Access and Nuclear Decommissioning 
     Transactions.--
       (1) In general.--Subparagraph (C) of section 501(c)(12) is 
     amended by striking ``or'' at the end of clause (i), by 
     striking clause (ii), and by adding at the end the following 
     new clauses:
       ``(ii) from any open access transaction (other than income 
     received or accrued directly or indirectly from a member),
       ``(iii) from any nuclear decommissioning transaction,
       ``(iv) from any asset exchange or conversion transaction, 
     or
       ``(v) from the prepayment of any loan, debt, or obligation 
     made, insured, or guaranteed under the Rural Electrification 
     Act of 1936.''.
       (2) Definitions and special rules.--Paragraph (12) of 
     section 501(c) is amended by adding at the end the following 
     new subparagraphs:
       ``(E) For purposes of subparagraph (C)(ii)--
       ``(i) The term `open access transaction' means any 
     transaction meeting the open access requirements of any of 
     the following subclauses with respect to a mutual or 
     cooperative electric company:

       ``(I) The provision or sale of transmission service or 
     ancillary services meets the open access requirements of this 
     subclause only if such services are provided on a 
     nondiscriminatory open access basis pursuant to an open 
     access transmission tariff filed with and approved by FERC, 
     including an acceptable reciprocity tariff, or under a 
     regional transmission organization agreement approved by 
     FERC.
       ``(II) The provision or sale of electric energy 
     distribution services or ancillary services meets the open 
     access requirements of this subclause only if such services 
     are provided on a nondiscriminatory open access basis to end-
     users served by distribution facilities owned by the mutual 
     or cooperative electric company (or its members).
       ``(III) The delivery or sale of electric energy generated 
     by a generation facility meets the open access requirements 
     of this subclause only if such facility is directly connected 
     to distribution facilities owned by the mutual or cooperative 
     electric company (or its members) which owns the generation 
     facility, and such distribution facilities meet the open 
     access requirements of subclause (II).

       ``(ii) Clause (i)(I) shall apply in the case of a 
     voluntarily filed tariff only if the mutual or cooperative 
     electric company files a report with FERC within 90 days 
     after the date of the enactment of this subparagraph relating 
     to whether or not such company will join a regional 
     transmission organization.
       ``(iii) A mutual or cooperative electric company shall be 
     treated as meeting the open access requirements of clause 
     (i)(I) if a regional transmission organization controls the 
     transmission facilities.
       ``(iv) References to FERC in this subparagraph shall be 
     treated as including references to the Public Utility 
     Commission of Texas with respect to any ERCOT utility (as 
     defined in section 212(k)(2)(B) of the Federal Power Act (16 
     U.S.C. 824k(k)(2)(B))) or references to the Rural Utilities 
     Service with respect to any other facility not subject to 
     FERC jurisdiction.
       ``(v) For purposes of this subparagraph--

       ``(I) The term `transmission facility' means an electric 
     output facility (other than a generation facility) that 
     operates at an electric voltage of 69 kV or greater. To the 
     extent provided in regulations, such term includes any output 
     facility that FERC determines is a transmission facility 
     under standards applied by FERC under the Federal Power Act 
     (as in effect on the date of the enactment of the Energy Tax 
     Incentives Act of 2002).
       ``(II) The term `regional transmission organization' 
     includes an independent system operator.
       ``(III) The term `FERC' means the Federal Energy Regulatory 
     Commission.

       ``(F) The term `nuclear decommissioning transaction' 
     means--
       ``(i) any transfer into a trust, fund, or instrument 
     established to pay any nuclear decommissioning costs if the 
     transfer is in connection with the transfer of the mutual or 
     cooperative electric company's interest in a nuclear power 
     plant or nuclear power plant unit,
       ``(ii) any distribution from any trust, fund, or instrument 
     established to pay any nuclear decommissioning costs, or
       ``(iii) any earnings from any trust, fund, or instrument 
     established to pay any nuclear decommissioning costs.
       ``(G) The term `asset exchange or conversion transaction' 
     means any voluntary exchange or involuntary conversion of any 
     property related to generating, transmitting, distributing, 
     or selling electric energy by a mutual or cooperative 
     electric company, the gain from which qualifies for deferred 
     recognition under section 1031 or 1033, but only if the 
     replacement property acquired by such company pursuant to 
     such section constitutes property which is used, or to be 
     used, for--
       ``(i) generating, transmitting, distributing, or selling 
     electric energy, or
       ``(ii) producing, transmitting, distributing, or selling 
     natural gas.''.
       (b) Treatment of Income From Load Loss Transactions.--
     Paragraph (12) of section 501(c), as amended by subsection 
     (a)(2), is amended by adding after subparagraph (G) the 
     following new subparagraph:
       ``(H)(i) In the case of a mutual or cooperative electric 
     company described in this paragraph or an organization 
     described in section 1381(a)(2)(C), income received or 
     accrued from a load loss transaction shall be treated as an 
     amount collected from members for the sole purpose of meeting 
     losses and expenses.
       ``(ii) For purposes of clause (i), the term `load loss 
     transaction' means any wholesale or retail sale of electric 
     energy (other than to members) to the extent that the 
     aggregate sales during the recovery period does not exceed 
     the load loss mitigation sales limit for such period.
       ``(iii) For purposes of clause (ii), the load loss 
     mitigation sales limit for the recovery period is the sum of 
     the annual load losses for each year of such period.
       ``(iv) For purposes of clause (iii), a mutual or 
     cooperative electric company's annual load loss for each year 
     of the recovery period is the amount (if any) by which--
       ``(I) the megawatt hours of electric energy sold during 
     such year to members of such electric company are less than
       ``(II) the megawatt hours of electric energy sold during 
     the base year to such members.
       ``(v) For purposes of clause (iv)(II), the term `base year' 
     means--
       ``(I) the calendar year preceding the start-up year, or
       ``(II) at the election of the electric company, the second 
     or third calendar years preceding the start-up year.
       ``(vi) For purposes of this subparagraph, the recovery 
     period is the 7-year period beginning with the start-up year.
       ``(vii) For purposes of this subparagraph, the start-up 
     year is the calendar year which includes the date of the 
     enactment of this subparagraph or, if later, at the election 
     of the mutual or cooperative electric company--
       ``(I) the first year that such electric company offers 
     nondiscriminatory open access, or
       ``(II) the first year in which at least 10 percent of such 
     electric company's sales are not to members of such electric 
     company.
       ``(viii) A company shall not fail to be treated as a mutual 
     or cooperative company for purposes of this paragraph or as a 
     corporation operating on a cooperative basis for purposes of 
     section 1381(a)(2)(C) by reason of the treatment under clause 
     (i).
       ``(ix) In the case of a mutual or cooperative electric 
     company, income from any open access transaction received, or 
     accrued, indirectly from a member shall be treated as an 
     amount collected from members for the sole purpose of meeting 
     losses and expenses.''.
       (c) Exception From Unrelated Business Taxable Income.--
     Subsection (b) of section 512 (relating to modifications) is 
     amended by adding at the end the following new paragraph:

[[Page 5288]]

       ``(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 describ-
ed 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.

                    TITLE XXV--ADDITIONAL PROVISIONS

     SEC. 2501. EXTENSION OF ACCELERATED DEPRECIATION AND WAGE 
                   CREDIT BENEFITS ON INDIAN RESERVATIONS.

       (a) Special Recovery Period for Property on Indian 
     Reservations.--Section 168(j)(8) (relating to termination), 
     as amended by section 613(b) of the Job Creation and Worker 
     Assistance Act of 2002, is amended by striking ``2004'' and 
     inserting ``2005''.
       (b) Indian Employment Credit.--Section 45A(f) (relating to 
     termination), as amended by section 613(a) of the Job 
     Creation and Worker Assistance Act of 2002, is amended by 
     striking ``2004'' and inserting ``2005''.

     SEC. 2502. STUDY OF EFFECTIVENESS OF CERTAIN PROVISIONS BY 
                   GAO.

       (a) Study.--The Comptroller General of the United States 
     shall undertake an ongoing analysis of--
       (1) the effectiveness of the alternative motor vehicles and 
     fuel incentives provisions under title II and the 
     conservation and energy efficiency provisions under title 
     III, and
       (2) the recipients of the tax benefits contained in such 
     provisions, including an identification of such recipients by 
     income and other appropriate measurements.
     Such analysis shall quantify the effectiveness of such 
     provisions by examining and comparing the Federal 
     Government's forgone revenue to the aggregate amount of 
     energy actually conserved and tangible environmental benefits 
     gained as a result of such provisions.
       (b) Reports.--The Comptroller General of the United States 
     shall report the analysis required under subsection (a) to 
     Congress not later than December 31, 2002, and annually 
     thereafter.
                                  ____

  SA 3827. Mr. GREGG submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 486, between lines 10 and 11, insert the following:
       (E) National forest system land.--The Secretary of 
     Agriculture consider the use of National Forest System land 
     as sites to demonstrate the feasibility of monitoring 
     programs developed under paragraph (1).
                                  ____

  SA 3288. Mr. GREGG submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 532, between lines 7 and 8, insert the following:

     SEC. 1385. AIR QUALITY FORECASTS AND WARNINGS BY NOAA.

       (a) Requirement for Forecasts and Warnings.--The Secretary 
     of Commerce shall require the Administrator of the National 
     Oceanic and Atmospheric Administration to issue air quality 
     forecasts and air quality warnings as a mission of that 
     agency.
       (b) Regional Warnings.--In carrying out subsection (a), the 
     Secretary of Commerce shall establish within the National 
     Oceanic and Atmospheric Administration a program to provide 
     region-oriented forecasts and warnings regarding air quality 
     for each of the following regions of the United States:
       (1) The Northeast, composed of Maine, New Hampshire, 
     Vermont, Massachusetts, Rhode Island, Connecticut, New York, 
     New Jersey, Pennsylvania, Maryland, Delaware, and West 
     Virginia.
       (2) The Southeast, composed of Virginia, North Carolina, 
     South Carolina, Georgia, Alabama, and Florida.
       (3) The South, composed of Tennessee, Mississippi, 
     Louisiana, Arkansas, Oklahoma, and Texas.
       (4) The Midwest, composed of Minnesota, Wisconsin, Iowa, 
     Missouri, Illinois, Kentucky, Indiana, Ohio, and Michigan.
       (5) The High Plains, composed of North Dakota, South 
     Dakota, Nebraska, and Kansas.
       (6) The Northwest, composed of Washington, Oregon, Idaho, 
     Montana, and Wyoming.
       (7) The Southwest, composed of California, Nevada, Utah, 
     Colorado, Arizona, and New Mexico.
       (8) Alaska.
       (9) Hawaii.
       (c) Priority Area.--The Secretary shall give the highest 
     priority under the program to providing forecasts and 
     warnings regarding air quality within the New England area of 
     the Northeast.
       (d) Authorization of Appropriations.--In addition to the 
     amounts authorized to be appropriated in section 1384, there 
     are authorized to be appropriated to the Department of 
     Commerce $5,000,000 for each of fiscal years 2002 through 
     2005 specifically for carrying out the program required under 
     subsection (b) for the Northeast in accordance with the 
     priority established under subsection (c). In addition, there 
     are authorized to be appropriated such sums as may be 
     necessary under this section.
                                  ____

  SA 3289. Mr. GREGG submitted an amendment intended to be proposed to 
amendment SA 2917 proposed by Mr. Daschle (for himself and Mr. 
Bingaman) to the bill (S. 517) to authorize funding the Department of 
Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 510, between lines 4 and 5, insert the following:

     SEC. 1348. NEW ENGLAND AIR QUALITY STUDY.

       (a) Requirement for Study.--The Secretary of Commerce shall 
     carry out a study of the quality of the air within the New 
     England region of the United States.
       (b) Purposes.--In carrying out the study, the Secretary 
     shall--
       (1) determine and assess the effects of transcontinental 
     air flow on the quality of the air in and around the New 
     England region;
       (2) determine and assess the effects of naturally occurring 
     emissions on the quality of the air in the New England 
     region, including the quality of the air in selected 
     localities within the region; and
       (3) determine, analyze, and quantify the production of 
     ozone and fine particulate pollution through chemical 
     reactions in the atmosphere within the New England region.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Department of Commerce to carry out 
     the study under this section $3,000,000 for each of fiscal 
     years 2002 through 2006.
                                  ____

  SA 3290. Mr. HATCH submitted an amendment intended to be proposed by 
him to the bill S. 517, to authorize funding the Department of Energy 
to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       At the end of Title V of the amendment, add the following 
     section:

     SEC. 514. CLARIFICATION OF CERTAIN REGULATORY AUTHORITY 
                   REGARDING URANIUM AND THORIUM.

       The Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.) is 
     amended by inserting before the period at the end of section 
     276(a): ``, nor shall any such provision be construed to 
     prohibit or otherwise restrict the authority of any state to 
     regulate, on the basis of radiological hazard, uranium or 
     thorium mill tailings, regardless of origin, that the 
     Commission has determined are outside the statutory authority 
     of the Commission or that the Commission has exempted from 
     regulation by rule''.
                                  ____

  SA 3291. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through technology transfer and 
partnerships for fiscal years 2002 through 2006, and for other 
purposes; which was ordered to lie on the table; as follows:

       On page 144, line 11, strike `` in subparagraph 
     (B)(i)(II)'' and insert ``in subparagraphs (B)(i)(II) and 
     (C)''.
       On page 146, between lines 9 and 10, insert the following:
       ``(C) Exemption for certain padds.--During calendar years 
     2003 through 2005, subparagraphs (A) and (B) shall not apply 
     to any refiner, blender, or importer located in Petroleum 
     Administration for Defense District I or Petroleum 
     Administration for Defense District V.''.
                                  ____

  SA 3292. Mrs. FEINSTEIN submitted an amendment intended to be 
proposed to amendment SA 2917 proposed by Mr. Daschle (for himself and 
Mr. Bingaman) to the bill (S. 517) to authorize funding the Department 
of Energy to enhance its mission areas through

[[Page 5289]]

technology transfer and partnerships for fiscal years 2002 through 
2006, and for other purposes; which was ordered to lie on the table as 
follows:

       On page 146, between lines 9 and 10, insert the following:
       ``(C) Exemption for certain padds.--During calendar years 
     2003 through 2005, subparagraphs (A) and (B) shall not apply 
     to any refiner, blender, or importer located in Petroleum 
     Administration for Defense District I or Petroleum 
     Administration for Defense District V.''.

                          ____________________