[Congressional Record (Bound Edition), Volume 149 (2003), Part 8]
[Senate]
[Pages 10150-10221]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. DOMENICI:
  S. 14. A bill to enhance the energy security of the United States, 
and for other purposes; read the first time.
  Mr. DOMENICI. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 14

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

     SECTION 1. SHORT TITLE.

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

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:
Sec. 1. Short Title.
Sec. 2. Table of Contents.

                          TITLE I--OIL AND GAS

                   Subtitle A--Production Incentives

Sec. 101. Permanent Authority to Operate the Strategic Petroleum 
              Reserve and Other Energy Programs.
Sec. 102. Study on Inventory of Petroleum and Natural Gas Storage.
Sec. 103. Program on Oil and Gas Royalties in Kind.
Sec. 104. Marginal Property Production Incentives.
Sec. 105. Comprehensive Inventory of OCS Oil and Natural Gas Resources.
Sec. 106. Royalty Relief for Deep Water Production.
Sec. 107. Alaska Offshore Royalty Suspension.
Sec. 108. Orphaned, Abandoned, or Idled Wells on Federal Lands.
Sec. 109. Incentives for Natural Gas Production from Deep Wells in the 
              Shallow Waters of the Gulf of Mexico.
Sec. 110. Alternate Energy-Related Uses on the Outer Continental Shelf.
Sec. 111. Coastal Impact Assistance.
Sec. 112. National Energy Resource Database.
Sec. 113. Oil and Gas Lease Acreage Limitation.
Sec. 114. Assessment of Dependence of State of Hawaii on Oil.

                  Subtitle B--Access to Federal Lands

Sec. 121. Office of Federal Energy Permit Coordination.
Sec. 122. Pilot Project to Improve Federal Permit Coordination.
Sec. 123. Federal Onshore Leasing Programs for Oil and Gas.
Sec. 124. Estimates of Oil and Gas Resources Underlying Onshore Federal 
              Lands.
Sec. 125. Split-Estate Federal Oil & Gas Leasing and Development 
              Practices.
Sec. 126. Coordination of Federal Agencies to Establish Priority Energy 
              Transmission Rights-of-way.

                Subtitle C--Alaska Natural Gas Pipeline

Sec. 131. Short Title.
Sec. 132. Definitions.
Sec. 133. Issuance of Certificate of Public Convenience and Necessity.
Sec. 134. Environmental Reviews.
Sec. 135. Pipeline Expansion.
Sec. 136. Federal Coordinator.
Sec. 137. Judicial Review.
Sec. 138. State Jurisdiction over In-State Delivery of Natural Gas.
Sec. 139. Study of Alternative Means of Construction.
Sec. 140. Clarification of ANGTA Status and Authorities.
Sec. 141. Sense of Congress.
Sec. 142. Participation of Small Business Concerns.
Sec. 143. Alaska Pipeline Construction Training Program.
Sec. 144. Loan Guarantee.
Sec. 145. Sense of Congress on Natural Gas Demand.

                             TITLE II--COAL

                Subtitle A--Clean Coal Power Initiative

Sec. 201. Authorization of Appropriations.
Sec. 202. Project Criteria.
Sec. 203. Reports. 
Sec. 204. Clean Coal Centers of Excellence.

                    Subtitle B--Federal Coal Leases

Sec. 211. Repeal of the 160-Acre Limitation for Coal Leases.
Sec. 212. Mining Plans.
Sec. 213. Payment of Advance Royalties Under Coal Leases.
Sec. 214. Elimination of Deadline for Submission of Coal Lease 
              Operation and Reclamation Plan.
Sec. 215. Application of Amendments.

                     Subtitle C--Powder River Basin

Sec. 221. Resolution of Federal Resource Development Conflicts in the 
              Powder River Basin.

                        TITLE III--INDIAN ENERGY

Sec. 301. Short Title.
Sec. 302. Office of Indian Energy Policy and Programs.
Sec. 303. Indian Energy.

                      ``TITLE XXVI--INDIAN ENERGY

``Sec. 2601. Definitions.
``Sec. 2602. Indian Tribal Energy Resource Development.
``Sec. 2603. Indian Tribal Energy Resource Regulation.
``Sec. 2604. Leases, Business Agreements, and Rights-of-way Involving 
              Energy Development or Transmission.
``Sec. 2605. Federal Power Marketing Administrations.
``Sec. 2606. Indian Mineral Development Review.
``Sec. 2607. Wind and Hydropower Feasibility Study.
Sec. 304. Four Corners Transmission Line Project.
Sec. 305. Energy Efficiency in Federally Assisted Housing.
Sec. 306. Consultation with Indian Tribes.

                           TITLE IV--NUCLEAR

                 Subtitle A--Price-Anderson Amendments

Sec. 401. Short Title.
Sec. 402. Extension of Indemnification Authority.
Sec. 403. Maximum Assessment.
Sec. 404. Department of Energy Liability Limit.
Sec. 405. Incidents Outside the United States.
Sec. 406. Reports.
Sec. 407. Inflation Adjustment.
Sec. 408. Treatment of Modular Reactors.
Sec. 409. Applicability.
Sec. 410. Civil Penalties. 

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          Subtitle B--Deployment of Commercial Nuclear Plants

Sec. 421. Short Title.
Sec. 422. Definitions.
Sec. 423. Responsibilities of the Secretary of Energy.
Sec. 424. Limitations.
Sec. 425. Regulations.

      Subtitle C--Advanced Reactor Hydrogen Co-Generation Project

Sec. 431. Project Establishment.
Sec. 432. Project Definition.
Sec. 433. Project Management.
Sec. 434. Project Requirements.
Sec. 435. Authorization of Appropriations.

                   Subtitle D--Miscellaneous Matters

Sec. 441. Uranium Sales and Transfers.
Sec. 442. Decommissioning Pilot Program.

                       TITLE V--RENEWABLE ENERGY

                     Subtitle A--General Provisions

Sec. 501. Assessment of Renewable Energy Resources.
Sec. 502. Renewable Energy Production Incentive.
Sec. 503. Renewable Energy on Federal Lands.
Sec. 504. Federal Purchase Requirement.
Sec. 505. Insular Area Renewable and Energy Efficient Plans.

                 Subtitle B--Hydroelectric Relicensing

Sec. 511. Alternative Conditions and Fishways.

                     Subtitle C--Geothermal Energy

Sec. 521. Competitive Lease Sale Requirements.
Sec. 522. Geothermal Leasing and Permitting on Federal Lands.
Sec. 523. Leasing and Permitting on Federal Lands Withdrawn for 
              Military Purposes.
Sec. 524. Reinstatement of Leases Terminated for Failure to Pay Rent.
Sec. 525. Royalty Reduction and Relief.
Sec. 526. Royalty Exemption for Direct Use of Low Temperature 
              Geothermal Energy Resources.

                       Subtitle D--Biomass Energy

Sec. 531. Definitions.
Sec. 532. Biomass Commercial Utilization Grant Program.
Sec. 533. Improved Biomass Utilization Grant Program.
Sec. 534. Report.

                      TITLE VI--ENERGY EFFICIENCY

                      Subtitle A--Federal Programs

Sec. 601. Energy Management Requirements.
Sec. 602. Energy Use Measurement and Accountability.
Sec. 603. Federal Building Performance Standards.
Sec. 604. Energy Savings Performance Contracts.
Sec. 605. Procurement of Energy Efficient Products.
Sec. 606. Congressional Building Efficiency.
Sec. 607. Increased Federal Use of Recovered Mineral Components in 
              Federally Funded Projects Involving Procurement of Cement 
              or Concrete.
Sec. 608. Utility Energy Service Contracts.
Sec. 609. Study of Energy Efficiency Standards.

                  Subtitle B--State and Local Programs

Sec. 611. Low Income Community Energy Efficiency Pilot Program.
Sec. 612. Energy Efficient Public Buildings.
Sec. 613. Energy Efficient Appliance Rebate Programs.

                     Subtitle C--Consumer Products

Sec. 621. Energy Conservation Standards for Additional Products.
Sec. 622. Energy Labeling.
Sec. 623. Energy Star Program.
Sec. 624. HVAC Maintenance Consumer Education Program.

                       Subtitle D--Public Housing

Sec. 631. Capacity Building for Energy-Efficient, Affordable Housing.
Sec. 632. Increase of CDBG Public Services Cap for Energy Conservation 
              and Efficiency Activities.
Sec. 633. FHA Mortgage Insurance Incentives for Energy Efficient 
              Housing.
Sec. 634. Public Housing Capital Fund.
Sec. 635. Grants for Energy-Conserving Improvements for Assisted 
              Housing.
Sec. 636. North American Development Bank.
Sec. 637. Energy-Efficient Appliances.
Sec. 638. Energy Efficiency Standards.
Sec. 639. Energy Strategy for HUD.

                    TITLE VII--TRANSPORTATION FUELS

                 Subtitle A--Alternative Fuel Programs

Sec. 701. Use of Alternative Fuels by Dual-Fueled Vehicles.
Sec. 702. Fuel Use Credits.
Sec. 703. Neighborhood Electric Vehicles.
Sec. 704. Credits for Medium and Heavy Duty Dedicated Vehicles.
Sec. 705. Alternative Fuel Infrastructure.
Sec. 706. Incremental Cost Allocation.
Sec. 707. Review of Alternative Fuel Programs.
Sec. 708. High Occupancy Vehicle Exception.
Sec. 709. Alternate Compliance and Flexibility.

                  Subtitle B--Automobile Fuel Economy

Sec. 711. Automobile Fuel Economy Standards.
Sec. 712. Dual-Fueled Automobiles.
Sec. 713. Federal Fleet Fuel Economy.
Sec. 714. Railroad Efficiency.
Sec. 715. Reduction of Engine Idling in Heavy-Use Vehicles.

                          TITLE VIII--HYDROGEN

                  Subtitle A--Basic Research Programs

Sec. 801. Short Title.
Sec. 802. Matsunaga Act Amendment.
Sec. 803. Hydrogen Transportation and Fuel Initiative.
Sec. 804. Interagency Task Force and Coordination Plan.
Sec. 805. Review by the National Academies.

                   Subtitle B--Demonstration Programs

Sec. 811. Definitions.
Sec. 812. Hydrogen Vehicle Demonstration Program.
Sec. 813. Stationary Fuel Cell Demonstration Program.
Sec. 814. Hydrogen Demonstration Programs in National Parks.
Sec. 815. International Demonstration Program.
Sec. 816. Tribal Stationary Hybrid Power Demonstration.
Sec. 817. Distributed Generation Pilot Program.

                      Subtitle C--Federal Programs

Sec. 821. Public Education and Training.
Sec. 822. Hydrogen Transition Strategic Planning.
Sec. 823. Minimum Federal Fleet Requirement.
Sec. 824. Stationary Fuel Cell Purchase Requirement.
Sec. 825. Department of Energy Strategy.

                   TITLE IX--RESEARCH AND DEVELOPMENT

Sec. 901. Short Title.
Sec. 902. Goals.
Sec. 903. Definitions.

                     Subtitle A--Energy Efficiency

Sec. 911. Energy Efficiency.
Sec. 912. Next Generation Lighting Initiative.
Sec. 913. National Building Performance Initiative.
Sec. 914. Secondary Electric Vehicle Battery Use Program.
Sec. 915. Energy Efficiency Science Initiative.

       Subtitle B--Distributed Energy and Electric Energy Systems

Sec. 921. Distributed Energy and Electric Energy Systems.
Sec. 922. Hybrid Distributed Power Systems.
Sec. 923. High Power Density Industry Program.
Sec. 924. Micro-Cogeneration Energy Technology.
Sec. 925. Distributed Energy Technology Demonstration Program.
Sec. 926. Office of Electric Transmission and Distribution.
Sec. 927. Electric Transmission and Distribution Programs.

                      Subtitle C--Renewable Energy

Sec. 931. Renewable Energy.
Sec. 932. Bioenergy Programs.
Sec. 933. Biodiesel Engine Testing Program.
Sec. 934. Concentrating Solar Power Research Program.
Sec. 935. Miscellaneous Projects.

                       Subtitle D--Nuclear Energy

Sec. 941. Nuclear Energy.
Sec. 942. Nuclear Energy Research Programs.
Sec. 943. Advanced Fuel Cycle Initiative.
Sec. 944. University Nuclear Science and Engineering Support.
Sec. 945. Security of Nuclear Facilities.
Sec. 946. Alternatives to Industrial Radioactive Sources.

                       Subtitle E--Fossil Energy

Sec. 951. Fossil Energy.
Sec. 952. Oil and Gas Research Programs.
Sec. 953. Research and Development for Coal Mining Technologies.
Sec. 954. Coal and Related Technologies Program.
Sec. 955. Complex Well Technology Testing Facility.

                          Subtitle F--Science

Sec. 961. Science.
Sec. 962. United States Participation in ITER.
Sec. 963. Spallation Neutron Source.
Sec. 964. Support for Science and Energy Facilities and Infrastructure.
Sec. 965. Catalysis Research Program.
Sec. 966. Nanoscale Science and Engineering Research.
Sec. 967. Advanced Scientific Computing for Energy Missions.
Sec. 968. Genomes to Life Program.
Sec. 969. Fission and Fusion Energy Materials Research Program.
Sec. 970. Energy-Water Supply Technologies Program.

                   Subtitle G--Energy and Environment

Sec. 971. United States-Mexico Energy Technology Cooperation.
Sec. 972. Coal Technology Loan.

                         Subtitle H--Management

Sec. 981. Availability of Funds.
Sec. 982. Cost Sharing.
Sec. 983. Merit Review of Proposals.
Sec. 984. External Technical Review of Departmental Programs.

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Sec. 985. Improved Coordination of Technology Transfer Activities.
Sec. 986. Technology Infrastructure Program.
Sec. 987. Small Business Advocacy and Assistance.
Sec. 988. Mobility of Scientific and Technical Personnel.
Sec. 989. National Academy of Sciences Report.
Sec. 990. Outreach.
Sec. 991. Competitive Award of Management Contracts.
Sec. 992. Reprogramming.
Sec. 993. Construction with Other Laws.
Sec. 994. Improved Coordination and Management of Civilian Science and 
              Technology Programs.
Sec. 995. Educational Programs in Science and Mathematics.
Sec. 996. Other Transactions Authority.
Sec. 997. Report on Research and Development Program Evaluation 
              Methodologies.

                    TITLE X--PERSONNEL AND TRAINING

Sec. 1001. Workforce Trends and Traineeship Grants.
Sec. 1002. Research Fellowships in Energy Research.
Sec. 1003. Training Guidelines for Electric Energy Industry Personnel.
Sec. 1004. National Center on Energy Management and Building 
              Technologies.
Sec. 1005. Improved Access to Energy-related Scientific and Technical 
              Careers.
Sec. 1006. National Power Plant Operations Technology and Education 
              Center.
Sec. 1007. Federal Mine Inspectors.

                         TITLE XI--ELECTRICITY

Sec. 1101. Definitions.

                        Subtitle A--Reliability

Sec. 1111. Electric Reliability Standards.

                      Subtitle B--Regional Markets

Sec. 1121. Implementation Date for Proposed Rulemaking for Standard 
              Market Design.
Sec. 1122. Sense of the Congress on Regional Transmission 
              Organizations.
Sec. 1123. Federal Utility Participation in Regional Transmission 
              Organizations.
Sec. 1124. Regional Consideration of Competitive Wholesale Markets.

   Subtitle C--Improving Transmission Access and Protecting Service 
                              Obligations

Sec. 1131. Service Obligation Security and Parity.
Sec. 1132. Open Non-Discriminatory Access.
Sec. 1133. Transmission Infrastructure Investment.

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

Sec. 1141. Net Metering.
Sec. 1142. Smart Metering.
Sec. 1143. Adoption of Additional Standards.
Sec. 1144. Technical Assistance.
Sec. 1145. Cogeneration and Small Power Production Purchase and Sale 
              Requirements.
Sec. 1146. Recovery of Costs.

Subtitle E--Provisions Regarding the Public Utility Holding Company Act 
                                of 1935

Sec. 1151. Definitions.
Sec. 1152. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 1153. Federal Access to Books and Records.
Sec. 1154. State Access to Books and Records.
Sec. 1155. Exemption Authority.
Sec. 1156. Affiliate Transactions.
Sec. 1157. Applicability.
Sec. 1158. Effect on Other Regulations.
Sec. 1159. Enforcement.
Sec. 1160. Savings Provisions.
Sec. 1161. Implementation.
Sec. 1162. Transfer of Resources.
Sec. 1163. Effective Date.
Sec. 1164. Conforming Amendment to the Federal Power Act.

   Subtitle F--Market Transparency, Anti-Manipulation and Enforcement

  Sec. 1171. Market Transparency Rules.
  Sec. 1172. Market Manipulation.
  Sec. 1173. Enforcement.
  Sec. 1174. Refund Effective Date.

                    Subtitle G--Consumer Protections

  Sec. 1181. Consumer Privacy.
  Sec. 1182. Unfair Trade Practices.
  Sec. 1183. Definitions.

                    Subtitle H--Technical Amendments

  Sec. 1191. Technical Amendments.

                           TITLE I--OIL AND GAS

                    Subtitle A--Production Incentives

       SEC. 101. PERMANENT AUTHORITY TO OPERATE THE STRATEGIC 
                   PETROLEUM RESERVE AND OTHER ENERGY PROGRAMS.

       (a) Amendment to Title I of the Energy Policy and 
     Conservation Act.--Title I of the Energy Policy and 
     Conservation Act (42 U.S.C. 6211 et seq.) is amended--
       (1) by striking section 166 (42 U.S.C. 6246) and 
     inserting--


                   ``AUTHORIZATION OF APPROPRIATIONS

       ``Sec. 166. There are authorized to be appropriated to the 
     Secretary such sums as may be necessary to carry out this 
     part and part D, to remain available until expended.'';
       (2) by striking section 186 (42 U.S.C. 6250(e)); and
       (3) by striking part E (42 U.S.C. 6251); relating to the 
     expiration of title I of the Act).
       (b) Amendment to Title II of the Energy Policy and 
     Conservation Act.--Title II of the Energy Policy and 
     Conservation Act (42 U.S.C. 6271 et seq.) is amended--
       (1) by striking section 256(h) (42 U.S.C. 6276(h)) and 
     inserting--
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary such sums as 
     may be necessary to carry out this part, to remain available 
     until expended.'';
       (2) by inserting before section 273 (42 U.S.C. 6283) the 
     following:

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

       (3) by striking section 273(e) (42 U.S.C. 6283(e)); 
     relating to the expiration of summer fill and fuel budgeting 
     programs); and
       (4) by striking part D (42 U.S.C. 6285); relating to the 
     expiration of title II of the Act).
       (c) Technical Amendments.--The table of contents for the 
     Energy Policy and Conservation Act is amended--
       (1) by amending the items relating to part D of title I to 
     read as follows:

              ``PART D--NORTHEAST HOME HEATING OIL RESERVE

``Sec. 181. Establishment.
``Sec. 182. Authority.
``Sec. 183. Conditions for release; plan.
``Sec. 184. Northeast Home Heating Oil Reserve Account.
``Sec. 185. Exemptions.'';
       (2) by amending the items relating to part C of title II to 
     read as follows:

           ``PART C--SUMMER FILL AND FUEL BUDGETING PROGRAMS

``Sec. 273. Summer fill and fuel budgeting programs.''; and
       (3) by striking the items relating to part D of title II.
       (d) Northeast Home Heating Oil.--Section 183(b)(1) of the 
     Energy Policy and Conservation Act (42 U.S.C. 6250(b)(1)) is 
     amended by striking all after ``increases'' through to ``mid-
     October through March'' and inserting ``by more than 60 
     percent over its 5-year rolling average for the months of 
     mid-October through March (considered as a heating season 
     average)''.

     SEC. 102. STUDY ON INVENTORY OF PETROLEUM AND NATURAL GAS 
                   STORAGE.

       (a) Definition.--For purposes of this section ``petroleum'' 
     means crude oil, motor gasoline, jet fuel, distillates and 
     propane.
       (b) Study.--The Secretary of Energy shall conduct a study 
     on petroleum and natural gas storage capacity and operational 
     inventory levels, nationwide and by major geographical 
     regions.
       (c) Contents.--The study shall address--
       (1) historical normal ranges for petroleum and natural gas 
     inventory levels;
       (2) historical and projected storage capacity trends;
       (3) estimated operation inventory levels below which 
     outages, delivery slowdown, rationing, interruptions in 
     service or other indicators of shortage begin to appear;
       (4) explanations for inventory levels dropping below normal 
     ranges; and
       (5) the ability of industry to meet U.S. demand for 
     petroleum and natural gas without shortages or price spikes, 
     when inventory levels are below normal ranges.
       (d) Report to Congress.--Not later than one year from 
     enactment of this Act, the Secretary of Energy shall submit a 
     report to Congress on the results of the study, including 
     findings and any recommendations for preventing future supply 
     shortages.

     SEC. 103. PROGRAM ON OIL AND GAS ROYALTIES IN KIND.

       (a) Applicability of Section.--Notwithstanding any other 
     provision of law, the provisions of this section shall apply 
     to all royalties-in-kind accepted by the Secretary (referred 
     to in this section as ``Secretary'') under any Federal oil or 
     gas lease or permit under section 36 of the Mineral Leasing 
     Act (30 U.S.C. 192), section 27 of the Outer Continental 
     Shelf Lands Act (43 U.S.C. 1353), or any other mineral 
     leasing law beginning on the date of the enactment of this 
     Act through September 30, 2013.
       (b) Terms and Conditions.--All royalty accruing to the 
     United States under any Federal oil or gas lease or permit 
     under the Mineral Leasing Act (30 U.S.C. 181 et seq.) or the 
     Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) 
     shall, on the demand of the Secretary, be paid in oil or gas. 
     If the Secretary makes such a demand, the following 
     provisions apply to such payment:
       (1) Delivery by, or on behalf of, the lessee of the royalty 
     amount and quality due under the lease satisfies the lessee's 
     royalty obligation for the amount delivered, except that 
     transportation and processing reimbursements paid to, or 
     deductions claimed by, the lessee shall be subject to review 
     and audit.
       (2) Royalty production shall be placed in marketable 
     condition by the lessee at no cost to the United States.
       (3) The Secretary may--
       (A) sell or otherwise dispose of any royalty production 
     taken in kind (other than oil or gas transferred under 
     section 27(a)(3) of the Outer Continental Shelf Lands Act (43 
     U.S.C. 1353(a)(3)) for not less than the market price; and
       (B) transport or process (or both) any royalty production 
     taken in kind.

[[Page 10153]]

       (4) The Secretary may, notwithstanding section 3302 of 
     title 31, United States Code, retain and use a portion of the 
     revenues from the sale of oil and gas royalties taken in kind 
     that otherwise would be deposited to miscellaneous receipts, 
     without regard to fiscal year limitation, or may use royalty 
     production, to pay the cost of--
       (A) transporting the royalty production;
       (B) processing the royalty production;
       (C) disposing of the royalty production; or
       (D) any combination of transporting, processing, and 
     disposing of the royalty production.
       (5) The Secretary may not use revenues from the sale of oil 
     and gas royalties taken in kind to pay for personnel, travel, 
     or other administrative costs of the Federal Government.
       (6) Notwithstanding the provisions of paragraph 5, the 
     Secretary may use a portion of the revenues from the sale of 
     oil royalties taken in kind, without fiscal year limitation, 
     to pay transportation costs, salaries, and other 
     administrative costs directly related to filling the 
     Strategic Petroleum Reserve.
       (c) Reimbursement of Cost.--If the lessee, pursuant to an 
     agreement with the United States or as provided in the lease, 
     processes the royalty gas or delivers the royalty oil or gas 
     at a point not on or adjacent to the lease area, the 
     Secretary shall--
       (1) reimburse the lessee for the reasonable costs of 
     transportation (not including gathering) from the lease to 
     the point of delivery or for processing costs; or
       (2) allow the lessee to deduct such transportation or 
     processing costs in reporting and paying royalties in value 
     for other Federal oil and gas leases.
       (d) Benefit to the United States Required.--The Secretary 
     may receive oil or gas royalties in kind only if the 
     Secretary determines that receiving such royalties provides 
     benefits to the United States greater than or equal to those 
     likely to have been received had royalties been taken in 
     value.
       (e) Report to Congress.--
       (1) No later than September 30, 2005, the Secretary shall 
     provide a report to Congress that addresses--
       (A) actions taken to develop businesses processes and 
     automated systems to fully support the royalty-in-kind 
     capability to be used in tandem with the royalty-in-value 
     approach in managing Federal oil and gas revenue; and
       (B) future royalty-in-kind businesses operation plans and 
     objectives.
       (2) For each of the fiscal years 2004 through 2013 in which 
     the United States takes oil or gas royalties in kind from 
     production in any State or from the Outer Continental Shelf, 
     excluding royalties taken in kind and sold to refineries 
     under subsections (h), the Secretary shall provide a report 
     to Congress describing--
       (A) the methodology or methodologies used by the Secretary 
     to determine compliance with subsection (d), including 
     performance standard for comparing amounts received by the 
     United States derived from such royalties in kind to amount 
     likely to have been received had royalties been taken in 
     value;
       (B) an explanation of the evaluation that led the Secretary 
     to take royalties in kind from a lease or group of leases, 
     including the expected revenue effect of taking royalties in 
     kind;
       (C) actual amounts received by the United States derived 
     from taking royalties in kind and cost and savings incurred 
     by the United States associated with taking royalties in 
     kind, including but not limited to administrative savings and 
     any new or increased administrative costs; and
       (D) an evaluation of other relevant public benefits or 
     detriments associated with taking royalties in kind.
       (f) Deduction of Expenses.--
       (1) Before making payments under section 35 of the Mineral 
     Leasing Act (30 U.S.C. 191) or section 8(g) of the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1337(g)) of revenues 
     derived from the sale of royalty production taken in kind 
     from a lease, the Secretary of the Interior shall deduct 
     amounts paid or deducted under subsections (b)(4) and (c), 
     and shall deposit such amounts to miscellaneous receipts.
       (2) If the Secretary allows the lessee to deduct 
     transportation or processing costs under subsection (c), the 
     Secretary may not reduce any payments to recipients of 
     revenues derived from any other Federal oil and gas lease as 
     a consequence of that deduction.
       (g) Consultation with States.--The Secretary shall 
     consult--
       (1) with a State before conducting a royalty in-kind 
     program under this section within the State, and may delegate 
     management of any portion of the Federal royalty in-kind 
     program to such State except as otherwise prohibited by 
     Federal law; and
       (2) annually with any State from which Federal oil or gas 
     royalty is being taken in kind to ensure to the maximum 
     extent practicable that the royalty in-kind program provides 
     revenues to the State greater than or equal to those likely 
     to have been received had royalties been taken in value.
       (h) Provisions for Small Refineries.--
       (1) If the Secretary determines that sufficient supplies of 
     crude oil are not available in the open market to refineries 
     not having their own source of supply for crude oil, the 
     Secretary may grant preference to such refineries in the sale 
     of any royalty oil accruing or reserved to the United States 
     under Federal oil and gas leases issued under any mineral 
     leasing law, for processing or use in such refineries at 
     private sale at not less than the market price.
       (2) In disposing of oil under this subsection, the 
     Secretary may prorate such oil among such refineries in the 
     area in which the oil is produced.
       (i) Disposition to Federal Agencies.--
       (1) Any royalty oil or gas taken by the Secretary in kind 
     from onshore oil and gas leases may be sold at not less than 
     market price to any department or agency of the United 
     States.
       (2) Any royalty oil or gas taken in kind from Federal oil 
     and gas leases on the outer Continental Shelf may be disposed 
     of only under section 27 of the Outer Continental Shelf Lands 
     Act (43 U.S.C. 1353).
       (j) Preference for Federal Low-Income Energy Assistance 
     Programs.--In disposing of royalty oil or gas taken in kind 
     under this section, the Secretary may grant a preference to 
     any person, including any State or Federal agency, for the 
     purpose of providing additional resources to any Federal low-
     income energy assistance program.

     SEC. 104. MARGINAL PROPERTY PRODUCTION INCENTIVES.

       (a) Marginal Property Defined.--Until such time as the 
     Secretary of the Interior issues rules under subsection (e) 
     that prescribe a different definition, for purposes of this 
     section, the term ``marginal property'' means an onshore 
     unit, communitization agreement, or lease not within a unit 
     or communitization agreement that produces on average the 
     combined equivalent of less than 15 barrels of oil per well 
     per day or 90 million British thermal units of gas per well 
     per day calculated based on the average over the three most 
     recent production months, including only those wells that 
     produce more than half the days in the three most recent 
     production months.
       (b) Conditions for Reduction of Royalty Rate.--Until such 
     time as the Secretary of the Interior promulgates rules under 
     subsection (e) that prescribe different thresholds or 
     standards, the Secretary shall reduce the royalty rate on--
       (1) oil production from marginal properties as prescribed 
     in subsection (c) when the spot price of West Texas 
     Intermediate crude oil at Cushing, Oklahoma, is, on average, 
     less than $15 per barrel for 90 consecutive trading days; and
       (2) gas production from marginal properties as prescribed 
     in subsection (c) when the spot price of natural gas 
     delivered at Henry Hub, Louisiana, is, on average, less than 
     $2.00 per million British thermal units for 90 consecutive 
     trading days.
       (c) Reduced Royalty Rate.--
       (1) When a marginal property meets the conditions specified 
     in subsection (b), the royalty rate shall be the lesser of--
       (A) 5 percent; or
       (B) the applicable rate under any other statutory or 
     regulatory royalty relief provision that applies to the 
     affected production.
       (2) The reduced royalty rate under this subsection shall be 
     effective on the first day of the production month following 
     the date on which the applicable price standard prescribed in 
     subsection (b) is met.
       (d) Termination of Reduced Royalty Rate.--A royalty rate 
     prescribed in subsection (d)(1)(A) shall terminate--
       (1) on oil production from a marginal property, on the 
     first day of the production month following the date on 
     which--
       (A) the spot price of West Texas Intermediate crude oil at 
     Cushing, Oklahoma, on average, exceeds $15 per barrel for 90 
     consecutive trading days, or
       (B) the property no longer qualifies as a marginal property 
     under subsection (a); and
       (2) on gas production from a marginal property, on the 
     first day of the production month following the date on which
       (A) the spot price of natural gas delivered at Henry Hub, 
     Louisiana, on average, exceeds $2.00 per million British 
     thermal units for 90 consecutive trading days, or
       (B) the property no longer qualifies as a marginal property 
     under subsection (a).
       (e) Rules Prescribing Different Relief.--
       (1) The Secretary of the Interior, after consultation with 
     the Secretary of Energy, may by rule prescribe different 
     parameters, standards, and requirements for, and a different 
     degree or extent of, royalty relief for marginal properties 
     in lieu of those prescribed in subsections (a) through (d).
       (2) The Secretary of the Interior, after consultation with 
     the Secretary of Energy, and within 1 year after the date of 
     enactment of this Act, shall, by rule--
       (A) prescribe standards and requirements for, and the 
     extent of royalty relief for, marginal properties for oil and 
     gas leases on the outer Continental Shelf; and
       (B) define what constitutes a marginal property on the 
     outer Continental Shelf for purposes of this section.
       (3) In promulgating rules under this subsection, the 
     Secretary of the Interior may consider--
       (A) oil and gas prices and market trends;
       (B) production costs;

[[Page 10154]]

       (C) abandonment costs;
       (D) Federal and State tax provisions and their effects on 
     production economics;
       (E) other royalty relief programs; and
       (F) other relevant matters.
       (f) Savings Provision.--Nothing in this section shall 
     prevent a lessee from receiving royalty relief or a royalty 
     reduction pursuant to any other law or regulation that 
     provides more relief than the amounts provided by this 
     section.

     SEC. 105. COMPREHENSIVE INVENTORY OF OCS OIL AND NATURAL GAS 
                   RESOURCES.

       (a) In General.--The Secretary of the Interior shall 
     conduct an inventory and analysis of oil and natural gas 
     resources beneath all of the waters of the United States 
     Outer Continental Shelf (``OCS''). The inventory and analysis 
     shall--
       (1) use available data on oil and gas resources in areas 
     offshore of Mexico and Canada that will provide information 
     on trends of oil and gas accumulation in areas of the OCS;
       (2) use any available technology, except drilling, but 
     including 3-D seismic technology to obtain accurate resources 
     estimates;
       (3) analyze how resource estimates in OCS areas have 
     changed over time in regards to gathering geological and 
     geophysical data, initial exploration, or full field 
     development, including areas such as the deepwater and 
     subsalt areas in the Gulf of Mexico;
       (4) estimate the effect that understated oil and gas 
     resource inventories have on domestic energy investments; and
       (5) identify and explain how legislative, regulatory, and 
     administrative programs or processes restrict or impede the 
     development of identified resources and the extent that they 
     affect domestic supply, such as moratoria, lease terms and 
     conditions, operational stipulations and requirements, 
     approval delays by the federal government and coastal states, 
     and local zoning restrictions for onshore processing 
     facilities and pipeline landings.
       (b) Reports.--The Secretary of Interior shall submit a 
     report to the Congress on the inventory of estimates and the 
     analysis of restrictions or impediments, together with any 
     recommendations, within six months of the date of enactment 
     of the section. The report shall be publically available and 
     updated at least every five years.

     SEC. 106. ROYALTY RELIEF FOR DEEP WATER PRODUCTION.

       (a) In General.--For all tracts located in water depths of 
     greater than 400 meters in the Western and Central Planning 
     Area of the Gulf of Mexico, including that portion of the 
     Eastern Planning Area of the Gulf of Mexico encompassing 
     whole lease blocks lying west of 87 degrees, 30 minutes West 
     longitude, any oil or gas lease sale under the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) 
     occurring within 5 years after the date of the enactment of 
     this Act shall use the bidding system authorized in section 
     8(a)(1)(H) of the Outer Continental Shelf Lands Act (43 
     U.S.C. 1337(a)(1)(H)), except that the suspension of 
     royalties shall be set at a volume of not less than--
       (1) 5 million barrels of oil equivalent for each lease in 
     water depths of 400 to 800 meters;
       (2) 9 million barrels of oil equivalent for each lease in 
     water depths of 800 to 1,600 meters; and
       (3) 12 million barrels of oil equivalent for each lease in 
     water depths greater than 1,600 meters.

     SEC. 107. ALASKA OFFSHORE ROYALTY SUSPENSION.

       Section 8(a)(3)(B) of the Outer Continental Shelf Lands Act 
     (43 U.S.C. 1337), is amended with the following: add ``and in 
     the Planning Areas offshore Alaska'' after ``West longitude'' 
     and before ``the Secretary''.

     SEC. 108. ORPHANED, ABANDONED OR IDLED WELLS ON FEDERAL 
                   LANDS.

       (a) In General.--The Secretary of the Interior, in 
     cooperation with the Secretary of Agriculture, shall 
     establish a program within 1 year after the date of enactment 
     of this Act to remediate, reclaim, and close orphaned, 
     abandoned, or idled oil and gas wells located on lands 
     administered by the land management agencies within the 
     Department of the Interior and Agriculture. The program 
     shall--
       (1) include a means of ranking orphaned, abandoned, or 
     idled wells sites for priority in remediation, reclamation 
     and closure, based on public health and safety, potential 
     environmental harm, and other land use priorities;
       (2) provide for identification and recovery of the costs of 
     remediation, reclamation and closure from persons or other 
     entities currently providing a bond or other financial 
     assurance required under State or Federal law for an oil or 
     gas well that is orphaned, abandoned or idled; and
       (3) provide for recovery from the persons or entities 
     identified under paragraph (2), or their sureties or 
     guarantors, of the costs of remediation, reclamation, and 
     closure of such wells.
       (b) Cooperation and Consultations.--In carrying out this 
     program, the Secretary of the Interior shall work 
     cooperatively with the Secretary of Agriculture and the 
     States within which the Federal lands are located and consult 
     with the Secretary of Energy and the Interstate Oil and Gas 
     Compact Commission.
       (c) Plan.--Within 1 year after the date of enactment of the 
     section, the Secretary of the Interior, in cooperation with 
     the Secretary of Agriculture, shall prepare a plan for 
     carrying out the program established under subsection (a) and 
     transmit copies of the plan to the Congress.
       (d) Technical Assistance Program for Non-Federal Lands.--
       (1) The Secretary of Energy shall establish a program to 
     provide technical assistance to the various oil and gas 
     producing States to facilitate State efforts over a 10-year 
     period to ensure a practical and economical remedy for 
     environmental problems caused by orphaned or abandoned oil 
     and gas exploration or production well sites on State or 
     private lands.
       (2) The Secretary shall work with the States, through the 
     Interstate Oil and Gas Compact Commission, to assist the 
     States in quantifying and mitigating environmental risks of 
     onshore orphaned abandoned oil or gas wells on State and 
     private lands.
       (3) The program shall include--
       (A) mechanisms to facilitate identification, if possible, 
     of the persons or other entities currently providing a bond 
     or other form of financial assurance required under State or 
     Federal law for an oil or gas well that is orphaned or 
     abandoned;
       (B) criteria for ranking orphaned or abandoned well sites 
     based on factors such as public health and safety, potential 
     environmental harm, and other land use priorities; and
       (C) information and training programs on best practices for 
     remediation of different types of sites.
       (e) Definition.--For purposes of this section, a well is 
     idled if it has been non-operational for 7 years and there is 
     no anticipated beneficial use of the well.
       (f) Authorization.--To carry out this section there is 
     authorized to be appropriated to the Secretary of the 
     Interior $25,000,000 for each of the fiscal years 2004 
     through 2008. Of the amounts authorized, $5,000,000 is 
     authorized for activities under subsection (d).

     SEC. 109. INCENTIVES FOR NATURAL GAS PRODUCTION FROM DEEP 
                   WELLS IN THE SHALLOW WATERS OF THE GULF OF 
                   MEXICO.

       (a) Royalty Incentive Regulations.--Not later than 90 days 
     after enactment, the Secretary of the Interior shall 
     promulgate final regulations providing royalty incentives for 
     natural gas produced from deep wells, as defined by the 
     Secretary, on oil and gas leases issued under the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) and 
     issued prior to January 1, 2001, in shallow waters of the 
     Gulf of Mexico, wholly west of 87 degrees, 30 minutes West 
     longitude that are less than 200 meters deep.
       (b) Royalty Incentive Regulations for Ultra Deep Gas 
     Wells.--
       (1) No later than 90 days after the date of enactment of 
     this Act, in addition to any other regulations that may 
     provide royalty incentives for natural gas produced from deep 
     wells on oil and gas leases issued pursuant to the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), the 
     Secretary of the Interior shall promulgate new regulations 
     granting royalty relief suspension volumes of not less than 
     35 billion cubic feet with respect to the production of 
     natural gas from `ultra deep wells' on leases issued prior to 
     January 1, 2001, in shallow waters less than 200 meters deep 
     located in the Gulf of Mexico wholly west of 87 degrees, 30 
     minutes West longitude. For purposes of this subsection, the 
     term `ultra deep wells' means wells drilled with a perforated 
     interval, the top of which is at least 20,000 feet true 
     vertical depth below the datum at mean sea level.
       (2) The Secretary shall not grant the royalty incentives 
     outlined in this subsection if the average annual NYMEX 
     natural gas price exceeds for one full calendar year the 
     threshold price of $5 per million Btu, adjusted from the year 
     2000 for inflation.
       (3) This subsection shall have no force or effect after the 
     end of the 5-year period beginning on the date of the 
     enactment of this Act.

     SEC. 110. ALTERNATE ENERGY-RELATED USES ON THE OUTER 
                   CONTINENTAL SHELF.

       (a) Amendment to Outer Continental Shelf Lands Act.--
     Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 
     1337) is amended by adding at the end the following new 
     subsection:
       ``(p) Easements or Rights-of-way for Energy and Related 
     Purposes.--
       ``(1) The Secretary may grant an easement or right-of-way 
     on the outer Continental Shelf for activities not otherwise 
     authorized in this Act, the Deepwater Port Act of 1974 (33 
     U.S.C. 1501 et seq.), or the Ocean Thermal Energy Conversion 
     Act of 1980 (42 U.S.C. 9101 et seq.), or other applicable law 
     when such activities--
       ``(A) support exploration, development, or production of 
     oil or natural gas, except that such easements or rights-of-
     way shall not be granted in areas where oil and gas 
     preleasing, leasing and related activities are prohibited by 
     a Congressional moratorium or a withdrawal pursuant to 
     section 12 of this Act;
       ``(B) support transportation of oil or natural gas;
       ``(C) produce or support production, transportation, or 
     transmission of energy from sources other than oil and gas; 
     or

[[Page 10155]]

       ``(D) use facilities currently or previously used for 
     activities authorized under this Act.
       ``(2) The Secretary shall promulgate regulations to ensure 
     that activities authorized under this subsection are 
     conducted in a manner that provides for safety, protection of 
     the environment, conservation of the natural resources of the 
     outer Continental Shelf, appropriate coordination with other 
     Federal agencies, and a fair return to the Federal government 
     for any easement or right-of-way granted under this 
     subsection. Such regulations shall establish procedures for--
       ``(A) public notice and comment on proposals to be 
     permitted pursuant to this subsection;
       ``(B) consultation and review by State and local 
     governments that may be impacted by activities to be 
     permitted pursuant to this subsection;
       ``(C) consideration of the coastal zone management program 
     being developed or administered by an affected coastal State 
     pursuant to section 305 or section 306 of the Coastal Zone 
     Management Act of 1972 (16 U.S.C. 1454, 1455); and
       ``(D) consultation with the Secretary of Defense and other 
     appropriate agencies prior to the issuance of an easement or 
     right-of-way under this subsection concerning issues related 
     to national security and navigational obstruction.
       ``(3) The Secretary shall require the holder of an easement 
     or right-of-way granted under this subsection to furnish a 
     surety bond or other form of security, as prescribed by the 
     Secretary, and to comply with such other requirements as the 
     Secretary may deem necessary to protect the interests of the 
     United States.
       ``(4) This subsection shall not apply to any area within 
     the exterior boundaries of any unit of the National Park 
     System, National Wildlife Refuge System, or National Marine 
     Sanctuary System, or any National Monument.
       ``(5) Nothing in this subsection shall be construed to 
     amend or repeal, expressly by implication, the applicability 
     of any other law, including but not limited to, the Coastal 
     Zone Management Act (16 U.S.C. 1455 et seq.) or the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).''.
       (b) Conforming Amendment.--The text of the heading for 
     section 8 of the Outer Continental Shelf Lands Act is amended 
     to read as follows: ``Leases, Easements, and Rights-of-Way on 
     the Outer Continental Shelf.''.

     SEC. 111. COASTAL IMPACT ASSISTANCE.

       The Outer Continental Shelf Lands Act (43 U.S.C. 1331 et 
     seq.) is amended by adding at the end:

     ``SEC. 32 COASTAL IMPACT ASSISTANCE FAIRNESS PROGRAM.

       ``(a) Definitions.--When used in this section:
       ``(1) The term `coastal political subdivision' means a 
     county, parish, or any equivalent subdivision of a Producing 
     Coastal State in all or part of which subdivision lies within 
     the coastal zone (as defined in section 304(1) of the Coastal 
     Zone Management Act (16 U.S.C. 1453(1))) and within a 
     distance of 200 miles from the geographic center of any 
     leased tract.
       ``(2) The term `coastal population' means the population of 
     all political subdivisions, as determined by the most recent 
     official data of the Census Bureau, contained in whole or in 
     part within the designated coastal boundary of a State as 
     defined in a State's coastal zone management program under 
     the Coastal Zone Management Act (16 U.S.C. 1451 et seq.).
       ``(3) The term `Coastal State' has the same meaning as 
     provided by subsection 304(4) of the Coastal Zone Management 
     Act (16 U.S.C. 1453(4)).
       ``(4) The term `coastline' has the same meaning as the term 
     `coast line' as defined in subsection 2(c) of the Submerged 
     Lands Act (43 U.S.C. 1301(c)).
       ``(5) The term `distance' means the minimum great circle 
     distance, measured in statute miles.
       ``(6) The term `leased tract' means a tract maintained 
     under section 6 or leased under section 8 for the purpose of 
     drilling for, developing, and producing oil and natural gas 
     resources.
       ``(7) The term `Producing Coastal State' means a Coastal 
     State with a coastal seaward boundary within 200 miles from 
     the geographic center of a leased tract other than a leased 
     tract within any area of the Outer Continental Shelf where a 
     moratorium on new leasing was in effect as of January 1, 2002 
     unless the lease was issued prior to the establishment of the 
     moratorium and was in production on January 1, 2002.
       ``(8) The term `qualified Outer Continental Shelf revenues' 
     means all amounts received by the United States from each 
     leased tract or portion of a leased tract lying seaward of 
     the zone defined and governed by section 8(g) of this Act, or 
     lying within such zone but to which section 8(g) does not 
     apply, the geographic center of which lies within a distance 
     of 200 miles from any part of the coastline of any Producing 
     Coastal State, including bonus bids, rents, royalties 
     (including payments for royalties taken in kind and sold), 
     net profit share payments, and related late payment interest. 
     Such term shall only apply to leases issued after January 1, 
     2003 and revenues from existing leases that occurs after 
     January 1, 2003. Such term does not include any revenues from 
     a leased tract or portion of a leased tract that is included 
     within any area of the Outer Continental Shelf where a 
     moratorium on new leasing was in effect as of January 1, 
     2002, unless the lease was issued prior to the establishment 
     of the moratorium and was in production on January 1, 2002.
       ``(9) The term `Secretary' means the Secretary of 
     Interior.''
       ``(b) Authorization.--For fiscal years 2004 through 2009, 
     an amount equal to not more than 12.5 percent of qualified 
     Outer Continental Shelf revenues is authorized to be 
     appropriated for the purposes of this section.
       ``(c) Impact Assistance Payments to States and Political 
     Subdivisions.--The Secretary shall make payments from the 
     amounts available under this section to Producing Coastal 
     States with an approved Coastal Impact Assistance Plan, and 
     to coastal political subdivisions as follows:
       ``(1) Of the amounts appropriated, the allocation for each 
     Producing Coastal State shall be calculated based on the 
     ratio of qualified Outer Continental Shelf revenues generated 
     off the coastline of the Producing Coastal State to the 
     qualified Outer Continental Shelf revenues generated off the 
     coastlines of all Producing Coastal States for each fiscal 
     year. Where there is more than one Producing Coastal State 
     within 200 miles of a leased tract, the amount of each 
     Producing Coastal State's allocation for such leased tract 
     shall be inversely proportional to the distance between the 
     nearest point on the coastline of such State and the 
     geographic center of each leased tract or portion of the 
     leased tract (to the nearest whole mile) that is within 200 
     miles of that coastline, as determined by the Secretary.
       ``(2) Thirty-five percent of each Producing Coastal State's 
     allocable share as determined under paragraph (1) shall be 
     paid directly to the coastal political subdivisions by the 
     Secretary based on the following formula:
       ``(A) Twenty-five percent shall be allocated based on the 
     ratio of such coastal political subdivision's coastal 
     population to the coastal population of all coastal political 
     subdivisions in the Producing Coastal State.
       ``(B) Twenty-five percent shall be allocated based on the 
     ratio of such coastal political subdivision's coastline miles 
     to the coastline miles of a coastal political subdivision in 
     the Producing Coastal State except that for those coastal 
     political subdivisions in the State of Louisiana without a 
     coastline, the coastline for purposes of this element of the 
     formula shall be the average length of the coastline of the 
     remaining coastal subdivisions in the state.
       ``(C) Fifty percent shall be allocated based on the 
     relative distance of such coastal political subdivision from 
     any leased tract used to calculate the Producing Coastal 
     State's allocation using ratios that are inversely 
     proportional to the distance between the point in the coastal 
     political subdivision closest to the geographic center of 
     each leased tract or portion, as determined by the Secretary, 
     except that in the State of Alaska, the funds for this 
     element of the formula shall be divided equally among the two 
     closest coastal political subdivisions. For purposes of the 
     calculations under this subparagraph, a leased tract or 
     portion of a leased tract shall be excluded if the leased 
     tract or portion is located in a geographic area where a 
     moratorium on new leasing was in effect on January 1, 2002, 
     unless the lease was issued prior to the establishment of the 
     moratorium and was in production on January 1, 2002.
       ``(3) Any amount allocated to a Producing Coastal State or 
     coastal political subdivision but not disbursed because of a 
     failure to have an approved Coastal Impact Assistance Plan 
     under this section shall be allocated equally by the 
     Secretary among all other Producing Coastal States in a 
     manner consistent with this subsection except that the 
     Secretary shall hold in escrow such amount until the final 
     resolution of any appeal regarding the disapproval of a plan 
     submitted under this section. The Secretary may waive the 
     provisions of this paragraph and hold a Producing Coastal 
     State's allocable share in escrow if the Secretary determines 
     that such State is making a good faith effort to develop and 
     submit, or update, a Coastal Impact Assistance Plan.
       ``(4) For purposes of this subsection, calculations of 
     payments for fiscal years 2004 through 2006 shall be made 
     using qualified Outer Continental Shelf revenues received in 
     fiscal year 2003, and calculations of payments for fiscal 
     years 2007 through 2009 shall be made using qualified Outer 
     Continental Shelf revenues received in fiscal year 2006.
       ``(d) Coastal Impact Assistance Plan.--
       ``(1) The Governor of each Producing Coastal State shall 
     prepare, and submit to the Secretary, a Coastal Impact 
     Assistance Plan. The Governor shall solicit local input and 
     shall provide for public participation in the development of 
     the plan. The plan shall be submitted to the Secretary by 
     July 1, 2004. Amounts received by Producing Coastal States 
     and coastal political subdivisions may be used only for the 
     purposes specified in the Producing Coastal State's Coastal 
     Impact Assistance Plan.
       ``(2) The Secretary shall approve a plan under paragraph 
     (1) prior to disbursement of

[[Page 10156]]

     amounts under this section. The Secretary shall approve the 
     plan if the Secretary determines that the plan is consistent 
     with the uses set forth in subsection (f) of this section and 
     if the plan contains--
       ``(A) the name of the State agency that will have the 
     authority to represent and act for the State in dealing with 
     the Secretary for purposes of this section;
       ``(B) a program for the implementation of the plan which 
     describes how the amounts provided under this section will be 
     used;
       ``(C) a contact for each political subdivision and 
     description of how coastal political subdivisions will use 
     amounts provided under this section, including a 
     certification by the Governor that such uses are consistent 
     with the requirements of this section;
       ``(D) certification by the Governor that ample opportunity 
     has been accorded for public participation in the development 
     and revision of the plan; and
       ``(E) measures for taking into account other relevant 
     Federal resources and programs.
       ``(3) The Secretary shall approve or disapprove each plan 
     or amendment within 90 days of its submission.
       ``(4) Any amendment to the plan shall be prepared in 
     accordance with the requirements of this subsection and shall 
     be submitted to the Secretary for approval or disapproval.
       ``(e) Authorized Uses.--Producing Coastal States and 
     coastal political subdivisions shall use amounts provided 
     under this section, including any such amounts deposited in a 
     State or coastal political subdivision administered trust 
     fund dedicated to uses consistent with this subsection, in 
     compliance with Federal and State law and only for one or 
     more of the following purposes--
       ``(1) projects and activities for the conservation, 
     protection or restoration of coastal areas including 
     wetlands;
       ``(2) mitigating damage to fish, wildlife or natural 
     resources;
       ``(3) planning assistance and administrative costs of 
     complying with the provisions of this section;
       ``(4) implementation of Federally approved marine, coastal, 
     or comprehensive conservation management plans; and
       ``(5) mitigating impacts of Outer Continental Shelf 
     activities through funding onshore infrastructure and public 
     service needs.
       (f) Compliance With Authorized Uses.--If the Secretary 
     determines that any expenditure made by a Producing Coastal 
     State or coastal political subdivision is not consistent with 
     the uses authorized in subsection (e) of this section, the 
     Secretary shall not disburse any further amounts under this 
     section to that Producing Coastal State or coastal political 
     subdivision until the amounts used for the inconsistent 
     expenditure have been repaid or obligated for authorized 
     uses.

     SEC. 112. NATIONAL ENERGY RESOURCE DATABASE.

       (a) Short Title.--This section may be cited as the 
     ``National Energy Data Preservation Program Act of 2003''.
       (b) Program.--The Secretary of the Interior (in this 
     section, referred to as ``Secretary'') shall carry out a 
     National Energy Data Preservation Program in accordance with 
     this section--
       (1) to archive geologic, geophysical, and engineering data 
     and samples related to energy resources including oil, gas, 
     coal, and geothermal resources;
       (2) to provide a national catalog of such archival 
     material; and
       (3) to provide technical assistance related to the archival 
     material.
       (c) Energy Data Archive System.--
       (1) The Secretary shall establish, as a component of the 
     Program, an energy data archive system, which shall provide 
     for the storage, preservation, and archiving of subsurface, 
     and in limited cases surface, geological, geophysical and 
     engineering data and samples. The Secretary, in consultation 
     with the Association of American State Geologists and 
     interested members of the public, shall develop guidelines 
     relating to the energy data archive system, including the 
     types of data and samples to be preserved.
       (2) The system shall be comprised of State agencies and 
     agencies within the Department of the Interior that maintain 
     geological and geophysical data and samples regarding energy 
     resources and that are designated by the Secretary in 
     accordance with this subsection. The Program shall provide 
     for the storage of data and samples through data repositories 
     operated by such agencies.
       (3) The Secretary may not designate a State agency as a 
     component of the energy data archive system unless it is the 
     agency that acts as the geological survey in the State.
       (4) The energy data archive system shall provide for the 
     archiving of relevant subsurface data and samples obtained 
     during energy exploration and production operations on 
     Federal lands--
       (A) in the most appropriate repository designated under 
     paragraph (2), with preference being given to archiving data 
     in the State in which the data was collected; and
       (B) consistent with all applicable law and requirements 
     relating to confidentiality and proprietary data.
       (5)(A) Subject to the availability of appropriations, the 
     Secretary shall provide financial assistance to a State 
     agency that is designated under paragraph (2) for providing 
     facilities to archive energy material.
       (B) The Secretary, in consultation with the Association of 
     American State Geologists and interested members of the 
     public, shall establish procedures for providing assistance 
     under this paragraph. The procedures shall be designed to 
     ensure that such assistance primarily supports the expansion 
     of data and material archives and the collection and 
     preservation of new data and samples.
       (d) National Catalog.--
       (1) As soon as practicable after the date of the enactment 
     of this section, the Secretary shall develop and maintain, as 
     a component of the Program, a national catalog that 
     identifies
       (A) energy data and samples available in the energy data 
     archive system established under subsection (c);
       (B) the repository for particular material in such system; 
     and
       (C) the means of accessing the material.
       (2) The Secretary shall make the national catalog 
     accessible to the public on the site of the Survey on the 
     World Wide Web, consistent with all applicable requirements 
     related to confidentiality and proprietary data.
       (3) The Secretary may carry out the requirements of this 
     subsection by contract or agreement with appropriate persons.
       (e) Technical Assistance.--
       (1) Subject to the availability of appropriations, as a 
     component of the Program, the Secretary shall provide 
     financial assistance to any State agency designated under 
     subsection (c)(2) to provide technical assistance to enhance 
     understanding, interpretation, and use of materials archived 
     in the energy data archive system established under 
     subsection (c).
       (2) The Secretary, in consultation with the Association of 
     American State Geologists and interested members of the 
     public, shall develop a process, which shall involve the 
     participation of representatives of relevant Federal and 
     State agencies, for the approval of financial assistance to 
     State agencies under this subsection.
       (f) Costs.--
       (1) The Federal share of the cost of an activity carried 
     out with assistance under subsections (c) or (e) shall be no 
     more than 50 percent of the total cost of that activity.
       (2) The Secretary--
       (A) may accept private contributions of property and 
     services for technical assistance and archive activities 
     conducted under this section; and
       (B) may apply the value of such contributions to the non-
     Federal share of the costs of such technical assistance and 
     archive activities.
       (g) Reports.--
       (1) Within one year after the date of the enactment of this 
     Act, the Secretary shall submit an initial report to the 
     Congress setting forth a plan for the implementation of the 
     Program.
       (2) Not later than 90 days after the end of the first 
     fiscal year beginning after the submission of the report 
     under paragraph (1) and after the end of each fiscal year 
     thereafter, the Secretary shall submit a report to the 
     Congress describing the status of the Program and evaluating 
     progress achieved during the preceding fiscal year in 
     developing and carrying out the Program.
       (3) The Secretary shall consult with the Association of 
     American State Geologists and interested members of the 
     public in preparing the reports required by this subsection.
       (h) Definitions.--As used in this section, the term:
       (1) ``Association of American State Geologists'' means the 
     organization of the chief executives of the State geological 
     surveys.
       (2) ``Secretary'' means the Secretary of the Interior 
     acting through the Director of the United States Geological 
     Survey.
       (3) ``Program'' means the National Energy Data Preservation 
     Program carried out under this section.
       (4) ``Survey'' means the United States Geological Survey.
       (i) Maintenance of State Effort.--It is the intent of the 
     Congress that the States not use this section as an 
     opportunity to reduce State resources applied to the 
     activities that are the subject of the Program.
       (j) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary $30,000,000 for each of 
     fiscal years 2003 through 2007 for carrying out this section.

     SEC. 113. OIL AND GAS LEASE ACREAGE LIMITATION.

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

     SEC. 114. ASSESSMENT OF DEPENDENCE OF STATE OF HAWAII ON OIL.

       (a) Assessment. The Secretary of Energy shall assess the 
     economic implication of the dependence of the State of Hawaii 
     on oil as

[[Page 10157]]

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

                  Subtitle B--Access to Federal Lands

     SEC. 121. OFFICE OF FEDERAL ENERGY PERMIT COORDINATION.

       (a) Establishment.--The President shall establish the 
     Office of Federal Energy Permit Coordination (in this 
     section, referred to as ``Office'') within the Executive 
     Office of the President in the same manner and mission as the 
     White House Energy Projects Task Force established by 
     Executive Order 13212.
       (b) Staffing.--The Office shall be staffed by functional 
     experts from relevant federal agencies and departments on a 
     nonreimbursable basis to carry out the mission of this 
     office.
       (c) Reporting.--The Office shall provide an annual report 
     to Congress, detailing the activities put in place to 
     coordinate and expedite Federal decisions on energy projects. 
     The report shall list accomplishments in improving the 
     federal decision making process and shall include any 
     additional recommendations or systemic changes needed to 
     establish a more effective and efficient federal permitting 
     process.

     SEC. 122. PILOT PROJECT TO IMPROVE FEDERAL PERMIT 
                   COORDINATION.

       (a) Creation of Pilot Project.--The Secretary of the 
     Interior (in this section, referred to as ``Secretary'') 
     shall establish a Federal Permit Streamlining Pilot Project. 
     The Secretary shall enter into a Memorandum of Understanding 
     with the Secretary of Agriculture, Administrator of the 
     Environmental Protection Agency, and the Chief of the Corps 
     of Engineers within 90 days after enactment of this Act. The 
     Secretary may also request that the Governors of Wyoming, 
     Montana, Colorado, and New Mexico be signatories to the 
     Memorandum of Understanding.
       (b) Designation of Qualified Staff.--Once the Pilot Project 
     has been established by the Secretary, all Federal signatory 
     parties shall assign an employee on a nonreimbursable basis 
     to each of the field offices identified in section (c), who 
     has expertise in the regulatory issues pertaining to their 
     office, including, as applicable, particular expertise in 
     Endangered Species Act section 7 consultations and the 
     preparation of Biological Opinions, Clean Water Act 404 
     permits, Clean Air Act regulatory matters, planning under the 
     National Forest Management Act, and the preparation of 
     analyses under the National Environmental Policy Act. 
     Assigned staff shall report to the Bureau of Land Management 
     (BLM) Field Managers in the offices to which they are 
     assigned, and shall be responsible for all issues related to 
     the jurisdiction of their home office or agency, and 
     participate as part of the team of employees working on 
     proposed energy projects, planning, and environmental 
     analyses.
       (c) Field Offices.--The following BLM Field Offices shall 
     serve as the Federal Permit Streamlining Pilot Project 
     offices:
       (1) Rawlins, Wyoming;
       (2) Buffalo, Wyoming;
       (3) Miles City, Montana;
       (4) Farmington, New Mexico;
       (5) Carlsbad, New Mexico; and
       (6) Glenwood Springs, Colorado.
       (d) Reports.--The Secretary shall submit a report to the 
     Congress 3 years following the date of enactment of this 
     section, outlining the results of the Pilot Project to date 
     and including a recommendation to the President as to whether 
     the Pilot Project should be implemented nationwide.
       (e) Additional Personnel.--The Secretary shall assign to 
     each of the BLM Field Offices listed in subsection (c) such 
     additional personnel as is necessary to ensure the effective 
     implementation of--
       (1) the Pilot Project; and
       (2) other programs administered by such offices, including 
     inspection and enforcement related to energy development on 
     federal lands, pursuant to the multiple use mandate of the 
     Federal Land Policy and Management Act of 1976 (43 U.S.C. 
     1701 et seq).
       (f) Savings Provision.--Nothing in this section shall 
     affect the operation of any federal or state law or any 
     delegation of authority made by a Secretary or head of an 
     Agency whose employees are participating in the program 
     provided for by this section.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to implement 
     this section.

     SEC. 123. FEDERAL ONSHORE LEASING PROGRAMS FOR OIL AND GAS.

       (a) Timely Action on Leases and Permits.--To ensure timely 
     action on oil and gas leases and applications for permits to 
     drill on lands otherwise available for leasing, the Secretary 
     of the Interior shall--
       (1) ensure expeditious compliance with the requirements of 
     section 102(2)(C) of the National Environmental Policy Act of 
     1969 (42 U.S.C. 4332(2)(C));
       (2) improve consultation and coordination with the States; 
     and
       (3) improve the collection, storage, and retrieval of 
     information related to such leasing activities.
       (b) Improved Enforcement.--The Secretary shall improve 
     inspection and enforcement of oil and gas activities, 
     including enforcement of terms and conditions in permits to 
     drill.
       (c) Authorization of Appropriations.--For each of the 
     fiscal years 2004 through 2007, in addition to amounts 
     otherwise authorized to be appropriated for the purpose of 
     carrying out section 17 of the Mineral Leasing Act (30 U.S.C. 
     226), there are authorized to be appropriated to the 
     Secretary of the Interior--
       (1) $40,000,000 for the purpose of carrying out paragraphs 
     (1) through (3) of subsection (a); and
       (2) $20,000,000 for the purpose of carrying out subsection 
     (b).

     SEC. 124. ESTIMATES OF OIL AND GAS RESOURCES UNDERLYING 
                   ONSHORE FEDERAL LANDS.

       Section 604 of the Energy Act of 2000 (42 U.S.C. 6217) is 
     amended by striking ``(a) In General'' and all thereafter and 
     inserting--
       ``(a) In General.--The Secretary of the Interior, in 
     consultation with the Secretaries of Agriculture and Energy, 
     shall conduct an inventory of all onshore Federal lands and 
     take measures necessary to update and revise this inventory. 
     The inventory shall identify for all federal lands--
       ``(1) the United States Geological Survey estimates of the 
     oil and gas resources underlying these lands;
       ``(2) the extent and nature of any restrictions or 
     impediments to the exploration, production and transportation 
     of such resources, including--
       ``(A) existing land withdrawals and the underlying purpose 
     for each withdrawal;
       ``(B) restrictions or impediments affecting timeliness of 
     granting leases;
       ``(C) post-lease restrictions or impediments such as 
     conditions of approval, applications for permits to drill, 
     applicable environmental permits;
       ``(D) permits or restrictions associated with transporting 
     the resources; and
       ``(E) identification of the authority for each restriction 
     or impediment together with the impact on additional 
     processing or review time and potential remedies; and
       ``(3) the estimates of oil and gas resources not available 
     for exploration and production by virtue of the restrictions 
     identified above.
       ``(b) Reports.--The Secretary shall provide a progress 
     report to the Congress by October 1, 2006 and shall complete 
     the inventory by October 1, 2010.

[[Page 10158]]

       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to implement this section.''.

     SEC. 125. SPLIT-ESTATE FEDERAL OIL & GAS LEASING AND 
                   DEVELOPMENT PRACTICES.

       (a) Review.--In consultation with affected private surface 
     owners, oil and gas industry and other interested parties, 
     the Secretary of the Interior shall undertake a review of the 
     current policies and practices with respect to management of 
     federal subsurface oil and gas development activities and 
     their effects on the privately owned surface. This review 
     shall include--
       (1) a comparison of the rights and responsibilities under 
     existing mineral and land law for the owner of a federal 
     mineral lease, the private surface owners and the Department;
       (2) a comparison of the surface owner consent provisions in 
     section 714 of the Surface Mining Control and Reclamation Act 
     (30 U.S.C. 1304) concerning surface mining of federal coal 
     deposits and the surface owner consent provisions for oil and 
     gas development, including coalbed methane production; and
       (3) recommendations for administrative or legislative 
     action necessary to facilitate reasonable access for federal 
     oil and gas activities while addressing surface owner 
     concerns and minimizing impacts to private surface.
       (b) Report.--The Secretary of the Interior shall report the 
     results of such review to the Congress no later than 180 days 
     after enactment of this section.

     SEC. 126. COORDINATION OF FEDERAL AGENCIES TO ESTABLISH 
                   PRIORITY ENERGY TRANSMISSION RIGHTS-OF-WAY.

       (a) Definitions.--For purposes of this section:
       (1) The term ``utility corridor'' means any linear strip of 
     land across Federal lands of approved width, but limited by 
     technological, environmental, and topographical factors for 
     use by a utility facility.
       (2) The term ``Federal authorization'' means any 
     authorization required under Federal law in order to site a 
     utility facility, including but not limited to such permits, 
     special use authorizations, certifications, opinions, or 
     other approvals as may be required, issued by a Federal 
     agency.
       (3) The term ``Federal lands'' means all lands owned by the 
     United States, except
       (A) lands in the National Park System;
       (B) lands held in trust for an Indian or Indian tribe; and
       (C) lands on the Outer Continental Shelf.
       (4) The term ``Secretary'' means the Secretary of Energy.
       (5) The term ``utility facility'' means any privately, 
     publicly, or cooperatively owned line, facility, or system 
     (A) for the transportation of oil and natural gas, synthetic 
     liquid or gaseous fuels, any refined product produced 
     therefrom, or for transportation of products in support of 
     production, or for storage and terminal facilities in 
     connection therewith; or (B) for the generation, transmission 
     and distribution of electric energy.
       (b) Utility Corridors.--
       (1) No later than 24 months after the date of enactment of 
     this section, the Secretary of the Interior, with respect to 
     public lands, and the Secretary of Agriculture, with respect 
     to National Forest System lands, in consultation with the 
     Secretary, shall--
       (A) designate utility corridors pursuant to section 503 of 
     the Federal Land Policy and Management Act (43 U.S.C. 1763) 
     in the eleven contiguous Western States, as identified in 
     section 103(o) of such Act (43 U.S.C. 1702(o)); and
       (B) incorporate the utility corridors designated under 
     paragraph (A) into the relevant departmental and agency land 
     use and resource management plans or their equivalent.
       (2) The Secretary shall coordinate with the affected 
     Federal agencies to jointly identify potential utility 
     corridors on Federal lands in the other States and jointly 
     develop a schedule for the designation, environmental review 
     and incorporation of such utility corridors into relevant 
     departmental and agency land use and resource management 
     plans or their equivalent.
       (c) Federal Permit Coordination.--The Secretary, in 
     consultation with the Secretary of the Interior, the 
     Secretary of Agriculture, and the Secretary of Defense, shall 
     develop a memorandum of understanding (``MOU'') for the 
     purpose of coordinating all applicable Federal authorizations 
     and environmental reviews related to a proposed or existing 
     utility facility. To the maximum extent practicable under 
     applicable law, the Secretary shall coordinate the process 
     developed in the MOU with any Indian tribes, multi-State 
     entities, and State agencies that are responsible for 
     conducting any separate permitting and environmental reviews 
     of the affected utility facility to ensure timely review and 
     permit decisions. The MOU shall provide for--
       (1) the coordination among affected Federal agencies to 
     ensure that the necessary Federal authorizations are 
     conducted concurrently with applicable State siting processes 
     and are considered within a specific time frame to be 
     identified in the MOU;
       (2) an agreement among the affected Federal agencies to 
     prepare a single environmental review document to be used as 
     the basis for all Federal authorization decisions; and
       (3) a process to expedite applications to construct or 
     modify utility facilities within utility corridors.

                Subtitle C--Alaska Natural Gas Pipeline

     SEC. 131. SHORT TITLE.

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

     SEC. 132. DEFINITIONS.

       In this subtitle, the following definitions apply:
       (1) The term ``Alaska natural gas'' means natural gas 
     derived from the area of the State of Alaska lying north of 
     64 degrees North latitude.
       (2) The term ``Alaska natural gas transportation project'' 
     means any natural gas pipeline system that carries Alaska 
     natural gas to the border between Alaska and Canada 
     (including related facilities subject to the jurisdiction of 
     the Commission) that is authorized under either--
       (A) the Alaska Natural Gas Transportation Act of 1976 (15 
     U.S.C. 719 et seq.); or
       (B) section 133.
       (3) The term ``Alaska natural gas transportation system'' 
     means the Alaska natural gas transportation project 
     authorized under the Alaska Natural Gas Transportation Act of 
     1976 and designated and described in section 2 of the 
     President's decision.
       (4) The term ``Commission'' means the Federal Energy 
     Regulatory Commission.
       (5) The term ``President's decision'' means the decision 
     and report to Congress on the Alaska natural gas 
     transportation system issued by the President on September 
     22, 1977, pursuant to section 7 of the Alaska Natural Gas 
     Transportation Act of 1976 (15 U.S.C. 719(e) and approved by 
     Public Law 95-158 (91 Stat. 1268).

     SEC. 133. ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE AND 
                   NECESSITY.

       (a) Authority of the Commission.--Notwithstanding the 
     provisions of the Alaska Natural Gas Transportation Act of 
     1976 (15 U.S.C. 719 et seq.), the Commission may, pursuant to 
     section 7(c) of the Natural Gas Act (15 U.S.C. 717f(c)), 
     consider and act on an application for the issuance of a 
     certificate of public convenience and necessity authorizing 
     the construction and operation of an Alaska natural gas 
     transportation project other than the Alaska natural gas 
     transportation system.
       (b) Issuance of Certificate.--
       (1) The Commission shall issue a certificate of public 
     convenience and necessity authorizing the construction and 
     operation of an Alaska natural gas transportation project 
     under this section if the applicant has satisfied the 
     requirements of section 7(e) of the Natural Gas Act (15 
     U.S.C. 717f(e)).
       (2) In considering an application under this section, the 
     Commission shall presume that--
       (A) a public need exists to construct and operate the 
     proposed Alaska natural gas transportation project; and
       (B) sufficient downstream capacity will exist to transport 
     the Alaska natural gas moving through such project to markets 
     in the contiguous United States.
       (c) Expedited Approval Process.--The Commission shall issue 
     a final order granting or denying any application for a 
     certificate of public convenience and necessity under section 
     7(c) of the Natural Gas Act (15 U.S.C. 717f(c)) and this 
     section not more than 60 days after the issuance of the final 
     environmental impact statement for that project pursuant to 
     section 134.
       (d) Prohibition on Certain Pipeline Route.--No license, 
     permit, lease, right-of-way, authorization, or other approval 
     required under Federal law for the construction of any 
     pipeline to transport natural gas from lands within the 
     Prudhoe Bay oil and gas lease area may be granted for any 
     pipeline that follows a route that traverses--
       (1) the submerged lands (as defined by the Submerged Lands 
     Act) beneath, or the adjacent shoreline of, the Beaufort Sea; 
     and
       (2) enters Canada at any point north of 68 degrees North 
     latitude.
       (e) Open Season.--Except where an expansion is ordered 
     pursuant to section 135, initial or expansion capacity on any 
     Alaska natural gas transportation project shall be allocated 
     in accordance with procedures to be established by the 
     Commission in regulations governing the conduct of open 
     seasons for such project. Such procedures shall include the 
     criteria for and timing of any open seasons; promote 
     competition in the exploration, development, and production 
     of Alaska natural gas; and, for any open season for capacity 
     beyond the initial capacity, provide the opportunity for the 
     transportation of natural gas other than from the Prudhoe Bay 
     and Point Thompson units. The Commission shall issue such 
     regulations not later than 120 days after the date of 
     enactment of this Act.
       (f) Projects in the Contiguous United States.--Applications 
     for additional or expanded pipeline facilities that may be 
     required to transport Alaska natural gas from Canada to 
     markets in the contiguous United States may be made pursuant 
     to the Natural Gas Act. To the extent such pipeline 
     facilities include the expansion of any facility constructed 
     pursuant to the Alaska Natural Gas Transportation Act of 
     1976, the provisions of that Act shall continue to apply.
       (g) Study of In-State Needs.--The holder of the certificate 
     of public convenience and

[[Page 10159]]

     necessity issued, modified, or amended by the Commission for 
     an Alaska natural gas transportation project shall 
     demonstrate that it has conducted a study of Alaska in-State 
     needs, including tie-in points along the Alaska natural gas 
     transportation project for in-State access.
       (h) Alaska Royalty Gas.--The Commission, upon the request 
     of the State of Alaska and after a hearing, may provide for 
     reasonable access to the Alaska natural gas transportation 
     project for the State of Alaska or its designee for the 
     transportation of the State's royalty gas for local 
     consumption needs within the State; except that the rates of 
     existing shippers of subscribed capacity on such project 
     shall not be increased as a result of such access.
       (i) Regulations.--The Commission may issue regulations to 
     carry out the provisions of this section.

     SEC. 134. ENVIRONMENTAL REVIEWS.

       (a) Compliance With NEPA.--The issuance of a certificate of 
     public convenience and necessity authorizing the construction 
     and operation of any Alaska natural gas transportation 
     project under section 133 shall be treated as a major Federal 
     action significantly affecting the quality of the human 
     environment within the meaning of section 102(2)(c) of the 
     National Environmental Policy Act of 1969 (42 U.S.C. 
     4332(2)(c)).
       (b) Designation of Lead Agency.--The Commission shall be 
     the lead agency for purposes of complying with the National 
     Environmental Policy Act of 1969, and shall be responsible 
     for preparing the statement required by section 102(2)(c) of 
     that Act (42 U.S.C. 4332(2)(c)) with respect to an Alaska 
     natural gas transportation project under section 133. The 
     Commission shall prepare a single environmental statement 
     under this section, which shall consolidate the environmental 
     reviews of all Federal agencies considering any aspect of the 
     project.
       (c) Other Agencies.--All Federal agencies considering 
     aspects of the construction and operation of an Alaska 
     natural gas transportation project under section 133 shall 
     cooperate with the Commission, and shall comply with 
     deadlines established by the Commission in the preparation of 
     the statement under this section. The statement prepared 
     under this section shall be used by all such agencies to 
     satisfy their responsibilities under section 102(2)(c) of the 
     National Environmental Policy Act of 1969 (42 U.S.C. 
     4332(2)(c)) with respect to such project.
       (d) Expedited Process.--The Commission shall issue a draft 
     statement under this section not later than 12 months after 
     the Commission determines the application to be complete and 
     shall issue the final statement not later than 6 months after 
     the Commission issues the draft statement, unless the 
     Commission for good cause finds that additional time is 
     needed.

     SEC. 135. PIPELINE EXPANSION.

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

     SEC. 136. FEDERAL COORDINATOR.

       (a) Establishment.--There is established, as an independent 
     office in the executive branch, the Office of the Federal 
     Coordinator for Alaska Natural Gas Transportation Projects.
       (b) Federal Coordinator.--The Office shall be headed by a 
     Federal Coordinator for Alaska Natural Gas Transportation 
     Projects, who shall
       (1) be appointed by the President, by and with the advice 
     and consent of the Senate;
       (2) for a term equal to the period required to design, 
     permit and construction the project plus one year; and
       (3) be compensated at the rate prescribed for level III of 
     the Executive Schedule (5 U.S.C. 5314).
       (c) Duties.--The Federal Coordinator shall be responsible 
     for--
       (1) coordinating the expeditious discharge of all 
     activities by Federal agencies with respect to an Alaska 
     natural gas transportation project; and
       (2) ensuring the compliance of Federal agencies with the 
     provisions of this subtitle.
       (d) Reviews and Actions of Other Federal Agencies.--
       (1) All reviews conducted and actions taken by any Federal 
     officer or agency relating to an Alaska natural gas 
     transportation project authorized under this section shall be 
     expedited, in a manner consistent with completion of the 
     necessary reviews and approvals by the deadlines set forth in 
     this subtitle.
       (2) No Federal officer or agency shall have the authority 
     to include terms and conditions that are permitted, but not 
     required, by law on any certificate, right-of-way, permit, 
     lease, or other authorization issued to an Alaska natural gas 
     transportation project if the Federal Coordinator determines 
     that the terms and conditions would prevent or impair in any 
     significant respect the expeditious construction and 
     operation, or an expansion, of the project.
       (3) Unless required by law, no Federal officer or agency 
     shall add to, amend, or abrogate any certificate, right-of-
     way, permit, lease, or other authorization issued to an 
     Alaska natural gas transportation project if the Federal 
     Coordinator determines that such action would prevent or 
     impair in any significant respect the expeditious 
     construction and operation of, or an expansion of, the 
     project.
       (4) The Federal Coordinator's authority shall not include 
     the ability to override--
       (A) the implementation or enforcement of regulations issued 
     by the Commission pursuant to Section 133(e); or
       (B) an order by the Commission to expand the project 
     pursuant to Section 135.
       (5) Nothing in this section shall give the Federal 
     Coordinator the authority to impose additional terms, 
     conditions or requirements beyond those imposed by the 
     Commission or any agency with respect to construction and 
     operation, or an expansion of, the project.
       (e) State Coordination.--The Federal Coordinator shall 
     enter into a Joint Surveillance and Monitoring Agreement, 
     approved by the President and the Governor of Alaska, with 
     the State of Alaska similar to that in effect during 
     construction of the Trans-Alaska Oil Pipeline to monitor the 
     construction of the Alaska natural gas transportation 
     project. The Federal Government shall have primary 
     surveillance and monitoring responsibility where the Alaska 
     natural gas transportation project crosses Federal lands and 
     private lands, and the State government shall have primary 
     surveillance and monitoring responsibility where the Alaska 
     natural gas transportation project crosses State lands.
       (f) Transfer of Federal Inspector Functions and 
     Authority.--Upon appointment of the Federal Coordinator by 
     the President, all of the functions and authority of the 
     Office of Federal Inspector of Construction for the Alaska 
     Natural Gas Transportation System vested in the Secretary of 
     Energy pursuant to section 3012(b) of Public Law 102-486 (15 
     U.S.C. 719e(b)), including all functions and authority 
     described and enumerated in the Reorganization Plan No. 1 of 
     1979 (44 Fed. Reg. 33,663), Executive Order No. 12142 of June 
     21, 1979 (44 Fed. Reg. 36,927), and section 5 of the 
     President's decision, shall be transferred to the Federal 
     Coordinator.

     SEC. 137. JUDICIAL REVIEW.

       (a) Exclusive Jurisdiction.--Except for review by the 
     Supreme Court of the United States on writ of certiorari, the 
     United States Court of Appeals for the District of Columbia 
     Circuit shall have original and exclusive jurisdiction to 
     determine--
       (1) the validity of any final order or action (including a 
     failure to act) of any Federal agency or officer under this 
     subtitle;
       (2) the constitutionality of any provision of this 
     subtitle, or any decision made or action taken under this 
     subtitle; or
       (3) the adequacy of any environmental impact statement 
     prepared under the National Environmental Policy Act of 1969 
     with respect to any action under this subtitle.
       (b) Deadline for Filing Claim.--Claims arising under this 
     subtitle may be brought not later than 60 days after the date 
     of the decision or action giving rise to the claim.
       (c) Expedited Consideration.--The United States Court of 
     Appeals for the District of

[[Page 10160]]

     Columbia Circuit shall set any action brought under 
     subsection (a) for expedited consideration, taking into 
     account the national interest of enhancing national energy 
     security by providing access to the significant gas reserves 
     in Alaska needed to meet the anticipated demand for natural 
     gas.
       (d) Amendment to ANGTA.--Section 10(c) of the Alaska 
     Natural Gas Transportation Act of 1976 (15 U.S.C. 719h) is 
     amended by inserting after paragraph (1) the following:
       ``(2) The United States Court of Appeals for the District 
     of Columbia Circuit shall set any action brought under this 
     section for expedited consideration, taking into account the 
     national interest described in section 2.''.

     SEC. 138. STATE JURISDICTION OVER IN-STATE DELIVERY OF 
                   NATURAL GAS.

       (a) Local Distribution.--Any facility receiving natural gas 
     from the Alaska natural gas transportation project for 
     delivery to consumers within the State of Alaska shall be 
     deemed to be a local distribution facility within the meaning 
     of section 1(b) of the Natural Gas Act (15 U.S.C. 717(b)), 
     and therefore not subject to the jurisdiction of the 
     Commission.
       (b) Additional Pipelines.--Nothing in this subtitle, except 
     as provided in section 133(d), shall preclude or affect a 
     future gas pipeline that may be constructed to deliver 
     natural gas to Fairbanks, Anchorage, Matanuska-Susitna 
     Valley, or the Kenai peninsula or Valdez or any other site in 
     the State of Alaska for consumption within or distribution 
     outside the State of Alaska.
       (c) Rate Coordination.--Pursuant to the Natural Gas Act, 
     the Commission shall establish rates for the transportation 
     of natural gas on the Alaska natural gas transportation 
     project. In exercising such authority, the Commission, 
     pursuant to section 17(b) of the Natural Gas Act (15 U.S.C. 
     717p(b)), shall confer with the State of Alaska regarding 
     rates (including rate settlements) applicable to natural gas 
     transported on and delivered from the Alaska natural gas 
     transportation project for use within the State of Alaska.

     SEC. 139. STUDY OF ALTERNATIVE MEANS OF CONSTRUCTION.

       (a) Requirement of Study.--If no application for the 
     issuance of a certificate or amended certificate of public 
     convenience and necessity authorizing the construction and 
     operation of an Alaska natural gas transportation project has 
     been filed with the Commission not later than 18 months after 
     the date of enactment of this Act, the Secretary of Energy 
     shall conduct a study of alternative approaches to the 
     construction and operation of the project.
       (b) Scope of Study.--The study shall consider the 
     feasibility of establishing a Government corporation to 
     construct an Alaska natural gas transportation project, and 
     alternative means of providing Federal financing and 
     ownership (including alternative combinations of Government 
     and private corporate ownership) of the project.
       (c) Consultation.--In conducting the study, the Secretary 
     of Energy shall consult with the Secretary of the Treasury 
     and the Secretary of the Army (acting through the Commanding 
     General of the Corps of Engineers).
       (d) Report.--If the Secretary of Energy is required to 
     conduct a study under subsection (a), the Secretary shall 
     submit a report containing the results of the study, the 
     Secretary's recommendations, and any proposals for 
     legislation to implement the Secretary's recommendations to 
     Congress.

     SEC. 140. CLARIFICATION OF ANGTA STATUS AND AUTHORITIES.

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

     SEC. 141. SENSE OF CONGRESS.

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

     SEC. 142. PARTICIPATION OF SMALL BUSINESS CONCERNS.

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

     SEC. 143. ALASKA PIPELINE CONSTRUCTION TRAINING PROGRAM.

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

     SEC. 144. LOAN GUARANTEES.

       (a) Authority.
       (1) The Secretary may enter agreements with 1 or more 
     holders of a certificate of public convenience and necessity 
     issued under section 133(b) of this Act or section 9 of the 
     Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 
     719g) to issue Federal guarantee instruments with respect to 
     loans and other debt obligations for a qualified 
     infrastructure project.
       (2) Subject to the requirements of this section, the 
     Secretary may also enter into agreements with 1 or more 
     owners of the Canadian portion of a qualified infrastructure 
     project to issue Federal guarantee instruments with respect 
     to loans and other debt obligations for a qualified 
     infrastructure project as though such owner were a holder 
     described in paragraph (1).
       (3) The authority of the Secretary to issue Federal 
     guarantee instruments under this section for a qualified 
     infrastructure project shall expire on the date that is 2 
     years after the date on which the final certificate of public 
     convenience and necessity (including any Canadian 
     certificates of public convenience and necessity) is issued 
     for the project. A final certificate shall be considered to 
     have been issued when all certificates of public convenience 
     and necessity have been issued that are required for the 
     initial transportation of commercially economic quantities of 
     natural gas from Alaska to the continental United States.

[[Page 10161]]

       (b) Conditions.--
       (1) The Secretary may issue a Federal guarantee instrument 
     for a qualified infrastructure project only after a 
     certificate of public convenience and necessity under section 
     133(b) of this Act or an amended certificate under section 9 
     of the Alaska Natural Gas Transportation Act of 1976 (15 
     U.S.C. 719g) has been issued for the project.
       (2) The Secretary may issue a Federal guarantee instrument 
     under this section for a qualified infrastructure project 
     only if the loan or other debt obligation guaranteed by the 
     instrument has been issued by an eligible lender.
       (3) The Secretary shall not require as a condition of 
     issuing a Federal guarantee instrument under this section any 
     contractual commitment or other form of credit support of the 
     sponsors (other than equity contribution commitments and 
     completion guarantees), or any throughput or other guarantee 
     from prospective shippers greater than such guarantees as 
     shall be required by the project owners.
       (c) Limitations on Amounts.--
       (1) The amount of loans and other debt obligations 
     guaranteed under this section for a qualified infrastructure 
     project shall not exceed 80 percent of the total capital 
     costs of the project, including interest during construction.
       (2) The principal amount of loans and other debt 
     obligations guaranteed under this section shall not exceed, 
     in the aggregate, $18,000,000,000, which amount shall be 
     indexed for United States dollar inflation from the date of 
     enactment of this Act, as measured by the Consumer Price 
     Index.
       (d) Loan Terms and Fees.--
       (1) The Secretary may issue Federal guarantee instruments 
     under this section that take into account repayment profiles 
     and grace periods justified by project cash flows and 
     project-specific considerations. The term of any loan 
     guaranteed under this section shall not exceed 30 years.
       (2) An eligible lender may assess and collect from the 
     borrower such other fees and costs associated with the 
     application and origination of the loan or other debt 
     obligation as are reasonable and customary for a project 
     finance transaction in the oil and gas sector.
       (e) Regulations.--The Secretary may issue regulations to 
     carry out this section.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to cover the 
     cost of loan guarantees, as defined by section 502(5) of the 
     Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)). Such 
     sums shall remain available until expended.
       (g) Definitions.--In this section, the following 
     definitions apply:
       (1) The term ``Consumer Price Index'' means the Consumer 
     Price Index for all-urban consumers, United States city 
     average, as published by the Bureau of Labor Statistics, or 
     if such index shall cease to be published, any successor 
     index or reasonable substitute thereof.
       (2) The term ``eligible lender'' means any non-Federal 
     qualified institutional buyer (as defined by section 
     230.144A(a) of title 17, Code of Federal Regulations (or any 
     successor regulation), known as Rule 144A(a) of the 
     Securities and Exchange Commission and issued under the 
     Securities Act of 1933), including
       (A) a qualified retirement plan (as defined in section 
     4974(c) of the Internal Revenue Code of 1986 (26 U.S.C. 
     4974(c)) that is a qualified institutional buyer; and
       (B) a governmental plan (as defined in section 414(d) of 
     the Internal Revenue Code of 1986 (26 U.S.C. 414(d)) that is 
     a qualified institutional buyer.
       (3) The term ``Federal guarantee instrument'' means any 
     guarantee or other pledge by the Secretary to pledge the full 
     faith and credit of the United States to pay all of the 
     principal and interest on any loan or other debt obligation 
     entered into by a holder of a certificate of public 
     convenience and necessity.
       (4) The term ``qualified infrastructure project'' means an 
     Alaskan natural gas transportation project consisting of the 
     design, engineering, finance, construction, and completion of 
     pipelines and related transportation and production systems 
     (including gas treatment plants), and appurtenances thereto, 
     that are used to transport natural gas from the Alaska North 
     Slope to the continental United States.
       (5) The term ``Secretary'' means the Secretary of Energy.

     SEC. 145. SENSE OF CONGRESS ON NATURAL GAS DEMAND.

       It is the sense of Congress that:
       (1) North American demand for natural gas will increase 
     dramatically over the course of the next several decades.
       (2) Both the Alaska Natural Gas Pipeline and the McKenzie 
     Delta Natural Gas project in Canada will be necessary to help 
     meet the increased demand for natural gas in North America.
       (3) Federal and state officials should work together with 
     officials in Canada to ensure both projects can move forward 
     in a mutually beneficial fashion.
       (4) Federal and state officials should acknowledge that the 
     smaller scope, fewer permitting requirements and lower cost 
     of the McKenzie Delta project means it will most likely be 
     completed before the Alaska Natural Gas Pipeline.
       (5) Lower 48 and Canadian natural gas production alone will 
     not be able to meet all domestic demand in the coming 
     decades.
       (6) As a result, natural gas delivered from Alaska's North 
     Slope will not displace or reduce the commercial viability of 
     Canadian natural gas produced from the McKenzie Delta nor 
     production from the Lower 48.

                             TITLE II--COAL

                Subtitle A--Clean Coal Power Initiative

     SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated to the Secretary of 
     Energy (in this subtitle, referred to as ``Secretary'') to 
     carry out the activities authorized by this subtitle 
     $200,000,000 for each of the fiscal years 2003 through 2011, 
     to remain available until expended.

     SEC. 202. PROJECT CRITERIA.

       (a) In General.--The Secretary shall not provide funding 
     under this subtitle for any project that does not advance 
     efficiency, environmental performance, and cost 
     competitiveness well beyond the level of technologies that 
     are in operation or have been demonstrated as of the date of 
     the enactment of this Act.
       (b) Technical Criteria for Gasification.--In allocating the 
     funds made available under section 201, the Secretary shall 
     ensure that at least 80 percent of the funds are used for 
     coal-based gasification technologies or coal-based projects 
     that include gasification combined cycle, gasification fuel 
     cells, gasification co-production, or hybrid gasification/
     combustion. The Secretary shall set technical milestones 
     specifying emissions levels that coal gasification projects 
     must be designed to and reasonably expected to achieve. The 
     milestones shall get more restrictive through the life of the 
     program. The milestones shall be designed to achieve by 2020 
     coal gasification projects able to--
       (1) remove 99 percent of sulfur dioxide;
       (2) emit no more than .05 lbs of NOX per million 
     BTU;
       (3) achieve substantial reductions in mercury emissions; 
     and
       (4) achieve a thermal efficiency of--
       (A) 60 percent for coal of more than 9,000 Btu;
       (B) 59 percent for coal of 7,000 to 9,000 Btu; and
       (C) 57 percent for coal of less than 7,000 Btu.
       (c) Technical Criteria for Other Projects.--For projects 
     not described in subsection (b), the Secretary shall set 
     technical milestones specifying emissions levels that the 
     projects must be designed to and reasonably expected to 
     achieve. The milestones shall get more restrictive through 
     the life of the program. The milestones shall be designed to 
     achieve by 2010 projects able to--
       (1) remove 97 percent of sulfur dioxide;
       (2) emit no more than .08 lbs of NOX per million 
     BTU;
       (3) achieve substantial reductions in mercury emissions; 
     and
       (4) achieve a thermal efficiency of--
       (A) 45 percent for coal of more than 9,000 Btu;
       (B) 44 percent for coal of 7,000 to 9,000 Btu; and
       (C) 42 percent for coal of less than 7,000 Btu.
       (d) Existing Units.--In the case of projects at existing 
     units, in lieu of the thermal efficiency requirements set 
     forth in paragraphs (b)(4) and (c)(4), the projects shall be 
     designed to achieve an overall thermal design efficiency 
     improvement compared to the efficiency of the unit as 
     operated, of not less than--
       (A) 7 percent for coal of more than 9,000 Btu;
       (B) 6 percent for coal of 7,000 to 9,000 Btu; or
       (C) 4 percent for coal of less than 7,000 Btu.
       (e) Permitted Uses.--In allocating funds made available in 
     this section, the Secretary may allocate funds to projects 
     that include, as part of the project, the separation and 
     capture of carbon dioxide.
       (f) Consultation.--Before setting the technical milestones 
     under subsections (b) and (c), the Secretary shall consult 
     with the Administrator of the Environmental Protection Agency 
     and interested entities, including coal producers, industries 
     using coal, organizations to promote coal or advanced coal 
     technologies, environmental organizations, and organizations 
     representing workers.
       (g) Financial Criteria.--The Secretary shall not provide a 
     funding award under this title unless the recipient has 
     documented to the satisfaction of the Secretary that--
       (1) the award recipient is financially viable without the 
     receipt of additional Federal funding;
       (2) the recipient will provide sufficient information to 
     the Secretary for the Secretary to ensure that the award 
     funds are spent efficiently and effectively; and
       (3) a market exists for the technology being demonstrated 
     or applied, as evidenced by statements of interest in writing 
     from potential purchasers of the technology.
       (h) Financial Assistance.--The Secretary shall provide 
     financial assistance to projects that meet the requirements 
     of this section and are likely to--
       (1) achieve overall cost reductions in the utilization of 
     coal to generate useful forms of energy;

[[Page 10162]]

       (2) improve the competitiveness of coal among various forms 
     of energy; and
       (3) demonstrate methods and equipment that are applicable 
     to 25 percent of the electricity generating facilities that 
     use coal as the primary feedstock as of the date of the 
     enactment of this Act.
       (i) Federal Share.--The Federal share of the cost of a coal 
     or related technology project funded by the Secretary shall 
     not exceed 50 percent.
       (j) Applicability.--No technology, or level of emission 
     reduction, shall be treated as adequately demonstrated for 
     purposes of section 111 of the Clean Air Act, achievable for 
     purposes of section 169 of that Act, or achievable in 
     practice for purposes of section 171 of that Act solely by 
     reason of the use of such technology, or the achievement of 
     such emission reduction, by one or more facilities receiving 
     assistance under this title.

     SEC. 203. REPORTS.

       (a) Ten-Year Plan.--By September 30, 2004, the Secretary 
     shall transmit to Congress a report, with respect to section 
     202(a), a 10-year plan containing--
       (1) a detailed assessment of whether the aggregate funding 
     levels provided under section 201 are appropriate funding 
     levels for that program;
       (2) a detailed description of how proposals will be 
     solicited and evaluated, including a list of all activities 
     expected to be undertaken;
       (3) a detailed list of technical milestones for each coal 
     and related technology that will be pursued; and
       (4) a detailed description of how the program will avoid 
     problems enumerated in General Accounting Office reports on 
     the Clean Coal Technology Program, including problems that 
     have resulted in unspent funds and projects that failed 
     either financially or scientifically.
       (b) Technical Milestones.--Not later than 1 year after the 
     date of the enactment of this Act, and once every 2 years 
     thereafter through 2011, the Secretary, in consultation with 
     other appropriate Federal agencies, shall transmit to the 
     Congress, a report describing--
       (1) the technical milestones set forth in section 212 and 
     how those milestones ensure progress toward meeting the 
     requirements of subsections (b) and (c) of section 212; and
       (2) the status of projects funded under this title.

     SEC. 204. CLEAN COAL CENTERS OF EXCELLENCE.

       As part of the program authorized in section 211, the 
     Secretary shall award competitive, merit-based grants to 
     universities for the establishment of Centers of Excellence 
     for Energy Systems of the Future. The Secretary shall provide 
     grants to universities that can show the greatest potential 
     for advancing new clean coal technologies.

                    Subtitle B--Federal Coal Leases

     SEC. 211. REPEAL OF THE 160-ACRE LIMITATION FOR COAL LEASES.

       Section 3 of the Mineral Leasing Act (30 U.S.C. 203) is 
     amended by striking all the text in the first sentence after 
     ``upon'' and inserting the following:

     ``a finding by the Secretary that it (1) would be in the 
     interest of the United States, (2) would not displace a 
     competitive interest in the lands, and (3) would not include 
     lands or deposits that can be developed as part of another 
     potential or existing operation, secure modifications of the 
     original coal lease by including additional coal lands or 
     coal deposits contiguous or cornering to those embraced in 
     such lease, but in no event shall the total area added by 
     such modifications to an existing coal lease exceed 320 
     acres, or add acreage larger than that in the original 
     lease.''.

     SEC. 212. MINING PLANS.

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

     SEC. 213. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.

       Section 7(b) of the Mineral Leasing Act of 1920 (30 U.S.C. 
     207(b)) is amended by striking all after ``Secretary).'' 
     through to ``a lease.'' and inserting:

     ``The aggregate number of years during the period of any 
     lease for which advance royalties may be accepted in lieu of 
     the condition of continued operation shall not exceed twenty. 
     The amount of any production royalty paid for any year shall 
     be reduced (but not below 0) by the amount of any advance 
     royalties paid under such lease to the extent that such 
     advance royalties have not been used to reduce production 
     royalties for a prior year.''.

     SEC. 214. ELIMINATION OF DEADLINE FOR SUBMISSION OF COAL 
                   LEASE OPERATION AND RECLAMATION PLAN.

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

     SEC. 215. APPLICATION OF AMENDMENTS.

       The amendments made by this Act apply with respect to any 
     coal lease issued on or after the date of enactment of this 
     Act, and, with respect to any coal lease issued before the 
     date of enactment of this Act, upon the date of readjustment 
     of the lease as provided for by section 7(a) of the Mineral 
     Leasing Act, or upon request by the lessee, prior to such 
     date.

     SUBTITLE C--POWDER RIVER BASIN SHARED MINERAL ESTATES

     SEC. 221. RESOLUTION OF FEDERAL RESOURCE DEVELOPMENT 
                   CONFLICTS IN THE POWDER RIVER BASIN.

       The Secretary of the Interior shall--
       (1) undertake a review of existing authorities to resolve 
     conflicts between the development of Federal coal and the 
     development of Federal and non-Federal coalbed methane in the 
     Powder River Basin in Wyoming and Montana; and
       (2) not later than 6 months after the enactment of this 
     Act, report to the Congress on alternatives to resolve these 
     conflicts and identification of a preferred alternative with 
     specific legislative language, if any, required to implement 
     the preferred alternative.

                        TITLE III--INDIAN ENERGY

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Indian Tribal Energy 
     Development and Self-Determination Act of 2003''.

     SEC. 302. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS.

       (a) In General.--Title II of the Department of Energy 
     Organization Act (42 U.S.C. 7131 et seq.) is amended by 
     adding at the end the following:


             ``OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS

       ``Sec. 217. (a) Establishment.--There is established within 
     the Department an Office of Indian Energy Policy and Programs 
     (referred to in this section as the `Office'). The Office 
     shall be headed by a Director, who shall be appointed by the 
     Secretary and compensated at a rate equal to that of level IV 
     of the Executive Schedule under section 5315 of title 5, 
     United States Code.
       ``(b) Duties of Director.--The Director shall in accordance 
     with Federal policies promoting Indian self-determination and 
     the purposes of this Act, provide, direct, foster, 
     coordinate, and implement energy planning, education, 
     management, conservation, and delivery programs of the 
     Department that--
       ``(1) promote Indian tribal energy development, efficiency, 
     and use;
       ``(2) reduce or stabilize energy costs;
       ``(3) enhance and strengthen Indian tribal energy and 
     economic infrastructure relating to natural resource 
     development and electrification; and
       ``(4) electrify Indian tribal land and the homes of tribal 
     members.


                ``COMPREHENSIVE INDIAN ENERGY ACTIVITIES

       ``Sec. 218. (a) Indian Energy Education Planning and 
     Management Assistance.--
       ``(1) The Director shall establish programs within the 
     Office of Indian Energy Policy and Programs to assist Indian 
     tribes in meeting energy education, research and development, 
     planning, and management needs.
       ``(2) In carrying out this section, the Director may 
     provide grants, on a competitive basis, to an Indian tribe or 
     tribal consortium for use in carrying out--
       ``(A) energy, energy efficiency, and energy conservation 
     programs;
       ``(B) studies and other activities supporting tribal 
     acquisition of energy supplies, services, and facilities;
       ``(C) planning, construction, development, operation, 
     maintenance, and improvement of tribal electrical generation, 
     transmission, and distribution facilities located on Indian 
     land; and
       ``(D) development, construction, and interconnection of 
     electric power transmission facilities located on Indian land 
     with other electric transmission facilities.
       ``(3)(A) The Director may develop, in consultation with 
     Indian tribes, a formula for providing grants under this 
     section.
       ``(B) In providing a grant under this subsection, the 
     Director shall give priority to an application received from 
     an Indian tribe with inadequate electric service (as 
     determined by the Director).
       ``(4) The Secretary may promulgate such regulations as the 
     Secretary determines are necessary to carry out this 
     subsection.
       ``(5) There is authorized to be appropriated to carry out 
     this section $20,000,000 for each of fiscal years 2004 
     through 2011.
       ``(b) Loan Guarantee Program.--
       ``(1) Subject to paragraph (3), the Secretary may provide 
     loan guarantees (as defined in section 502 of the Federal 
     Credit Reform Act of 1990 (2 U.S.C. 661a)) for not more than 
     90 percent of the unpaid principal and interest due on any 
     loan made to any Indian tribe for energy development.
       ``(2) A loan guaranteed under this subsection shall be made 
     by--
       ``(A) a financial institution subject to examination by the 
     Secretary; or
       ``(B) an Indian tribe, from funds of the Indian tribe.
       ``(3) The aggregate outstanding amount guaranteed by the 
     Secretary at any time under this subsection shall not exceed 
     $2,000,000,000.
       ``(4) The Secretary may promulgate such regulations as the 
     Secretary determines are necessary to carry out this 
     subsection.

[[Page 10163]]

       ``(5) There are authorized to be appropriated such sums as 
     are necessary to carry out this subsection, to remain 
     available until expended.
       ``(6) Not later than 1 year from the date of enactment of 
     this section, the Secretary shall report to the Congress on 
     the financing requirements of Indian tribes for energy 
     development on Indian land.
       ``(c) Indian Energy Preference.--
       ``(1) In purchasing electricity or any other energy product 
     or byproduct, a Federal agency or department may give 
     preference to an energy and resource production enterprise, 
     partnership, consortium, corporation, or other type of 
     business organization the majority of the interest in which 
     is owned and controlled by 1 or more Indian tribes.
       ``(2) In carrying out this subsection, a Federal agency or 
     department shall not--
       ``(A) pay more than the prevailing market price for an 
     energy product or byproduct; and
       ``(B) obtain less than prevailing market terms and 
     conditions.''.
       (b) Conforming Amendments.--
       (1) The table of contents of the Department of Energy 
     Organization Act (42 U.S.C. prec. 7101) is amended--
       (A) in the item relating to section 209, by striking 
     ``Section'' and inserting ``Sec.''; and
       (B) by striking the items relating to sections 213 through 
     216 and inserting the following:
``Sec. 213. Establishment of policy for National Nuclear Security 
              Administration.
``Sec. 214. Establishment of security, counterintelligence, and 
              intelligence policies.
``Sec. 215. Office of Counterintelligence.
``Sec. 216. Office of Intelligence.
``Sec. 217. Office of Indian Energy Policy and Programs.
``Sec. 218. Comprehensive Indian Energy Activities.''.
       (2) Section 5315 of title 5, United States Code, is amended 
     by inserting ``Director, Office of Indian Energy Policy and 
     Programs, Department of Energy.'' after ``Inspector General, 
     Department of Energy.''.

     SEC. 303. INDIAN ENERGY.

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

                       ``TITLE XXVI INDIAN ENERGY

     ``SEC. 2601. DEFINITIONS.

       ``For purposes of this title:
       ``(1) The term `Director' means the Director of the Office 
     of Indian Energy Policy and Programs.
       ``(2) The term `Indian land' means--
       ``(A) any land located within the boundaries of an Indian 
     reservation, pueblo, or rancheria;
       ``(B) any land not located within the boundaries of an 
     Indian reservation, pueblo, or rancheria, the title to which 
     is held--
       ``(i) in trust by the United States for the benefit of an 
     Indian tribe;
       ``(ii) by an Indian tribe, subject to restriction by the 
     United States against alienation; or
       ``(iii) by a dependent Indian community; and ``(C) land 
     conveyed to a Native Corporation under the Alaska Native 
     Claims Settlement Act (43 U.S.C. 1601 et seq.).
       ``(3) The term `Indian reservation' includes--
       ``(A) an Indian reservation in existence in any State or 
     States as of the date of enactment of this paragraph;
       ``(B) a public domain Indian allotment;
       ``(C) a former reservation in the State of Oklahoma;
       ``(D) a parcel of land owned by a Native Corporation under 
     the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et 
     seq.); and
       ``(E) a dependent Indian community located within the 
     borders of the United States, regardless of whether the 
     community is located--
       ``(i) on original or acquired territory of the community; 
     or
       ``(ii) within or outside the boundaries of any particular 
     State.
       ``(4) The term `Indian tribe' has the meaning given the 
     term in section 4 of the Indian Self-Determination and 
     Education Assistance Act (25 U.S.C. 450b).
       ``(5) The term `Native Corporation' has the meaning given 
     the term in section 3 of the Alaska Native Claims Settlement 
     Act (43 U.S.C. 1602).
       ``(6) The term `organization' means a partnership, joint 
     venture, limited liability company, or other unincorporated 
     association or entity that is established to develop Indian 
     energy resources.
       ``(7) The term `Program' means the Indian energy resource 
     development program established under section 2602(a).
       ``(8) The term `Secretary' means the Secretary of the 
     Interior.
       ``(9) The term `tribal consortium' means an organization 
     that consists of 2 or more entities, at least 1 of which is 
     an Indian tribe.
       ``(10) The term `tribal land' means any land or interests 
     in land owned by any Indian tribe, band, nation, pueblo, 
     community, rancheria, colony or other group, title to which 
     is held in trust by the United States or which is subject to 
     a restriction against alienation imposed by the United 
     States.
       ``(11) The term `vertical integration of energy resources' 
     means any project or activity that promotes the location and 
     operation of a facility (including any pipeline, gathering 
     system, transportation system or facility, or electric 
     transmission facility), on or near Indian land to process, 
     refine, generate electricity from, or otherwise develop 
     energy resources on, Indian land.

     ``SEC. 2602. INDIAN TRIBAL ENERGY RESOURCE DEVELOPMENT.

       ``(a) In General.--To assist Indian tribes in the 
     development of energy resources and further the goal of 
     Indian self-determination, the Secretary shall establish and 
     implement an Indian energy resource development program to 
     assist Indian tribes and tribal consortia in achieving the 
     purposes of this title.
       ``(b) Grants and Loans.--In carrying out the Program, the 
     Secretary shall--
       ``(1) provide development grants to Indian tribes and 
     tribal consortia for use in developing or obtaining the 
     managerial and technical capacity needed to develop energy 
     resources on Indian land;
       ``(2) provide grants to Indian tribes and tribal consortia 
     for use in carrying out projects to promote the vertical 
     integration of energy resources, and to process, use, or 
     develop those energy resources, on Indian land; and
       ``(3) provide low-interest loans to Indian tribes and 
     tribal consortia for use in the promotion of energy resource 
     development and vertical integration or energy resources on 
     Indian land.
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section such 
     sums as are necessary for each of fiscal years 2004 through 
     2014.

     ``SEC. 2603. INDIAN TRIBAL ENERGY RESOURCE REGULATION.

       ``(a) Grants.--The Secretary may provide to Indian tribes 
     and tribal consortia, on an annual basis, grants for use in 
     developing, administering, implementing, and enforcing tribal 
     laws (including regulations) governing the development and 
     management of energy resources on Indian land.
       ``(b) Use of Funds.--Funds from a grant provided under this 
     section may be used by an Indian tribe or tribal consortium 
     for--
       ``(1) the development of a tribal energy resource inventory 
     or tribal energy resource on Indian land;
       ``(2) the development of a feasibility study or other 
     report necessary to the development of energy resources on 
     Indian land;
       ``(3) the development and enforcement of tribal laws and 
     the development of technical infrastructure to protect the 
     environment under applicable law; or
       ``(4) the training of employees that--
       ``(A) are engaged in the development of energy resources on 
     Indian land; or
       ``(B) are responsible for protecting the environment.
       ``(c) Other Assistance.--To the maximum extent practicable, 
     the Secretary and the Secretary of Energy shall make 
     available to Indian tribes and tribal consortia scientific 
     and technical data for use in the development and management 
     of energy resources on Indian land.

     ``SEC. 2604. LEASES, BUSINESS AGREEMENTS, AND RIGHTS-OF-WAY 
                   INVOLVING ENERGY DEVELOPMENT OR TRANSMISSION.

       ``(a) Leases and Agreements.--Subject to the provisions of 
     this section--
       ``(1) an Indian tribe may, at its discretion, enter into a 
     lease or business agreement for the purpose of energy 
     development, including a lease or business agreement for--
       ``(A) exploration for, extraction of, processing of, or 
     other development of energy resources on tribal land; and
       ``(B) construction or operation of an electric generation, 
     transmission, or distribution facility located on tribal 
     land; or a facility to process or refine energy resources 
     developed on tribal land; and
       ``(2) a lease or business agreement described in paragraph 
     (1) shall not require the approval of the Secretary under 
     section 2103 of the Revised Statutes (25 U.S.C. 81) or any 
     other provision of law, if--
       ``(A) the lease or business agreement is executed in 
     accordance with a tribal energy resource agreement approved 
     by the Secretary under subsection (e);
       ``(B) the term of the lease or business agreement does not 
     exceed--
       ``(i) 30 years; or
       ``(ii) in the case of a lease for the production of oil and 
     gas resources, 10 years and as long thereafter as oil or gas 
     is produced in paying quantities; and
       ``(C) the Indian tribe has entered into a tribal energy 
     resource agreement with the Secretary, as described in 
     subsection (e), relating to the development of energy 
     resources on tribal land (including an annual trust asset 
     evaluation of the activities of the Indian tribe conducted in 
     accordance with the agreement).
       ``(b) Rights-of-Way for Pipelines or Electric Transmission 
     or Distribution Lines.--An Indian tribe may grant a right-of-
     way over tribal land for a pipeline or an electric 
     transmission or distribution line without specific approval 
     by the Secretary if--
       ``(1) the right-of-way is executed in accordance with a 
     tribal energy resource agreement approved by the Secretary 
     under subsection (e);
       ``(2) the term of the right-of-way does not exceed 30 
     years;

[[Page 10164]]

       ``(3) the pipeline or electric transmission or distribution 
     line serves--
       ``(A) an electric generation, transmission, or distribution 
     facility located on tribal land; or
       ``(B) a facility located on tribal land that processes or 
     refines energy resources developed on tribal land; and
       ``(4) the Indian tribe has entered into a tribal energy 
     resource agreement with the Secretary, as described in 
     subsection (e), relating to the development of energy 
     resources on tribal land (including an annual trust asset 
     evaluation of the activities of the Indian tribe conducted in 
     accordance with the agreement.
       ``(c) Renewals.--A lease or business agreement entered into 
     or a right-of-way granted by an Indian tribe under this 
     section may be renewed at the discretion of the Indian tribe 
     in accordance with this section.
       ``(d) Validity.--No lease, business agreement, or right-of-
     way under this section shall be valid unless the lease, 
     business agreement, or right-of-way is authorized in 
     accordance with tribal energy resource agreements approved by 
     the Secretary under subsection (e).
       ``(e) Tribal Energy Resource Agreements.--
       ``(1) On promulgation of regulations under paragraph (9), 
     an Indian tribe may submit to the Secretary for approval a 
     tribal energy resource agreement governing leases, business 
     agreements, and rights-of-way under this section.
       ``(2)(A) Not later than 180 days after the date on which 
     the Secretary receives a tribal energy resource agreement 
     submitted by an Indian tribe under paragraph (1) (or such 
     later date as may be agreed to by the Secretary and the 
     Indian tribe), the Secretary shall approve or disapprove the 
     tribal energy resource agreement.
       ``(B) The Secretary shall approve a tribal energy resource 
     agreement submitted under paragraph (1) if--
       ``(i) the Secretary determines that the Indian tribe has 
     demonstrated that the Indian tribe has sufficient capacity to 
     regulate the development of energy resources of the Indian 
     tribe; and
       ``(ii) the tribal energy resource agreement includes 
     provisions that, with respect to a lease, business agreement, 
     or right-of-way under this section--
       ``(I) ensure the acquisition of necessary information from 
     the applicant for the lease, business agreement, or right-of-
     way;
       ``(II) address the term of the lease or business agreement 
     or the term of conveyance of the right-of-way;
       ``(III) address amendments and renewals;
       ``(IV) address consideration for the lease, business 
     agreement, or right-of-way;
       ``(III) address amendments and renewals;
       ``(IV) address consideration for the lease, business 
     agreement, or right-of-way;
       ``(V) address technical or other relevant requirements;
       ``(VI) establish requirements for environmental review in 
     accordance with subparagraph (C);
       ``(VII) ensure compliance with all applicable environmental 
     laws;
       ``(VIII) identify final approval authority;
       ``(IX) provide for public notification of final approvals;
       ``(X) establish a process for consultation with any 
     affected States concerning potential off-reservation impacts 
     associated with the lease, business agreement, or right-of-
     way; and
       ``(XI) describe the remedies for breach of the lease, 
     agreement, or right-of-way.
       ``(C) Tribal energy resource agreements submitted under 
     paragraph (1) shall establish, and include provisions to 
     ensure compliance with, an environmental review process that, 
     with respect to a lease, business agreement, or right-of-way 
     under this section, provides for--
       ``(i) the identification and evaluation of all significant 
     environmental impacts (as compared with a no-action 
     alternative), including effects on cultural resources;
       ``(ii) the identification of proposed mitigation;
       ``(iii) a process for ensuring that the public is informed 
     of and has an opportunity to comment on any proposed lease, 
     business agreement, or right-of-way before tribal approval of 
     the lease, business agreement, or right-of-way (or any 
     amendment to or renewal of the lease, business agreement, or 
     right-of-way); and
       ``(iv) sufficient administrative support and technical 
     capability to carry out the environmental review process.
       ``(D) A tribal energy resource agreement negotiated between 
     the Secretary and an Indian tribe in accordance with this 
     subsection shall include--
       ``(i) provisions requiring the Secretary to conduct an 
     annual trust asset evaluation to monitor the performance of 
     the activities of the Indian tribe associated with the 
     development of energy resources on tribal land by the Indian 
     tribe; and
       ``(ii) in the case of a finding by the Secretary of 
     imminent jeopardy to a physical trust asset, provisions 
     authorizing the Secretary to reassume responsibility for 
     activities associated with the development of energy 
     resources on tribal land.
       ``(3) The Secretary shall provide notice and opportunity 
     for public comment on tribal energy resource agreements 
     submitted under paragraph (1).
       ``(4) If the Secretary disapproves a tribal energy resource 
     agreement submitted by an Indian tribe under paragraph (1), 
     the Secretary shall--
       ``(A) notify the Indian tribe in writing of the basis for 
     the disapproval;
       ``(B) identify what changes or other actions are required 
     to address the concerns of the Secretary; and
       ``(C) provide the Indian tribe with an opportunity to 
     revise and resubmit the tribal energy resource agreement.
       ``(5) If an Indian tribe executes a lease or business 
     agreement or grants a right-of-way in accordance with a 
     tribal energy resource agreement approved under this 
     subsection, the Indian tribe shall, in accordance with the 
     process and requirements set forth in the Secretary's 
     regulations adopted pursuant to subsection (e)(9), provide to 
     the Secretary--
       ``(A) a copy of the lease, business agreement, or right-of-
     way document (including all amendments to and renewals of the 
     document); and
       ``(B) in the case of a tribal energy resource agreement or 
     a lease, business agreement, or right-of-way that permits 
     payment to be made directly to the Indian tribe, 
     documentation of those payments sufficient to enable the 
     Secretary to discharge the trust responsibility of the United 
     States as appropriate under applicable law.
       ``(6) The Secretary shall continue to have a trust 
     obligation to ensure that the rights of an Indian tribe are 
     protected in the event of a violation of the terms of any 
     lease, business agreement or right-of-way by any other party 
     to the lease, business agreement, or right-of-way.
       ``(7)(A) The United States shall not be liable for any loss 
     or injury sustained by any party (including an Indian tribe 
     or any member of an Indian tribe) to a lease, business 
     agreement, or right-of-way executed in accordance with tribal 
     energy resource agreements approved under this subsection.
       ``(B) On approval of a tribal energy resource agreement of 
     an Indian tribe under paragraph (1), the Indian tribe shall 
     be stopped from asserting a claim against the United States 
     on the ground that Secretary should not have approved the 
     Tribal energy resource agreement.
       ``(8)(A) In this paragraph, the term `interested party' 
     means any person or entity the interests of which have 
     sustained or will sustain a significant adverse impact as a 
     result of the failure of an Indian tribe to comply with a 
     tribal energy resource agreement of the Indian tribe approved 
     by the Secretary under paragraph (2).
       ``(B) After exhaustion of tribal remedies, and in 
     accordance with the process and requirements set forth in 
     regulations adopted by the Secretary pursuant to subsection 
     (e)(9), an interested party may submit to the Secretary a 
     petition to review compliance of an Indian tribe with a 
     tribal energy resource agreement of the Indian tribe approved 
     under this subsection.
       ``(C) If the Secretary determines that an Indian tribe is 
     not in compliance with a tribal energy resource agreement 
     approved under this subsection, the Secretary shall take such 
     action as is necessary to compel compliance, including--
       ``(i) suspending a lease, business agreement, or right-of-
     way under this section until an Indian tribe is in compliance 
     with the approved tribal energy resource agreement; and
       ``(ii) rescinding approval of the tribal energy resource 
     agreement and reassuming the responsibility for approval of 
     any future leases, business agreements, or rights-of-way 
     associated with an energy pipeline or distribution line 
     described in subsections (a) and (b).
       ``(D) If the Secretary seeks to compel compliance of an 
     Indian tribe with an approved tribal energy resource 
     agreement under subparagraph (C)(ii), the Secretary shall--
       ``(i) make a written determination that describes the 
     manner in which the tribal energy resource agreement has been 
     violated;
       ``(ii) provide the Indian tribe with a written notice of 
     the violation together with the written determination; and
       ``(iii) before taking any action described in subparagraph 
     (C)(ii) or seeking any other remedy, provide the Indian tribe 
     with a hearing and a reasonable opportunity to attain 
     compliance with the tribal energy resource agreement.
       ``(E)(i) An Indian tribe described in subparagraph (D) 
     shall retain all rights to appeal as provided in regulations 
     promulgated by the Secretary.
       ``(ii) The decision of the Secretary with respect to an 
     appeal described in clause (i), after any agency appeal 
     provided for by regulation, shall constitute a final agency 
     action.
       ``(9) Not later than 180 days after the date of enactment 
     of the Indian Tribal Energy Development and Self-
     Determination Act of 2003, the Secretary shall promulgate 
     regulations that implement the provisions of this subsection, 
     including--
       ``(A) criteria to be used in determining the capacity of an 
     Indian tribe described in paragraph (2)(B)(i), including the 
     experience of the Indian tribe in managing natural resources 
     and financial and administrative resources available for use 
     by the Indian tribe in implementing the approved tribal 
     energy resource agreement of the Indian tribe; and

[[Page 10165]]

       ``(B) a process and requirements in accordance with which 
     an Indian tribe may--
       ``(i) voluntarily rescind an approved tribal energy 
     resource agreement approved by the Secretary under this 
     subsection; and
       ``(ii) return to the Secretary the responsibility to 
     approve any future leases, business agreements, and rights-
     of-way described in this subsection.
       ``(f) No Effect on Other Law.--Nothing in this section 
     affects the application of--
       ``(1) any Federal environmental law;
       ``(2) the Surface Mining Control and Reclamation Act of 
     1977 (30 U.S.C. 1201 et seq.); or
       ``(3) except as otherwise provided in this title, the 
     Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et 
     seq.).

     ``SEC. 2605. FEDERAL POWER MARKETING ADMINISTRATIONS.

       ``(a) Definitions.--In this section:
       ``(1) The term `Administrator' means the Administrator of 
     the Bonneville Power Administration and the Administrator of 
     the Western Area Power Administration.
       ``(2) The term `power marketing administration' means--
       ``(A) the Bonneville Power Administration;
       ``(B) the Western Area Power Administration; and
       ``(C) any other power administration the power allocation 
     of which is used by or for the benefit of an Indian tribe 
     located in the service area of the administration.
       ``(b) Encouragement of Indian Tribal Energy Development.--
     Each Administrator shall encourage Indian tribal energy 
     development by taking such actions as are appropriate, 
     including administration of programs of the Bonneville Power 
     Administration and the Western Area Power Administration, in 
     accordance with this section.
       ``(c) Action by the Administrator.--In carrying out this 
     section, and in accordance with existing law--
       ``(1) each Administrator shall consider the unique 
     relationship that exists between the United States and Indian 
     tribes.
       ``(2) power allocations from the Western Area Power 
     Administration to Indian tribes may be used to meet firming 
     and reserve needs of Indian-owned energy projects on Indian 
     land;
       ``(3) the Administrator of the Western Area Power 
     Administration may purchase power from Indian tribes to meet 
     the firming and reserve requirements of the Western Area 
     Power Administration; and
       ``(4) each Administrator shall not pay more than the 
     prevailing market price for an energy product nor obtain less 
     than prevailing market terms and conditions.
       ``(d) Assistance for Transmission System Use.--
       ``(1) An Administrator may provide technical assistance to 
     Indian tribes seeking to use the high-voltage transmission 
     system for delivery of electric power.
       ``(2) The costs of technical assistance provided under 
     paragraph (1) shall be funded by the Secretary of Energy 
     using nonreimbursable funds appropriated for that purpose, or 
     by the applicable Indian tribes.
       ``(e) Power Allocation Study.--Not later than 2 years after 
     the date of enactment of the Indian Tribal Energy Development 
     and Self-Determination Act of 2003, the Secretary of Energy 
     shall submit to the Congress a report that--
       ``(1) describes the use by Indian tribes of Federal power 
     allocations of the Western Area Power Administration (or 
     power sold by the Southwestern Power Administration) and the 
     Bonneville Power Administration to or for the benefit of 
     Indian tribes in service areas of those administrations; and
       ``(2) identifies--
       ``(A) the quantity of power allocated to Indian tribes by 
     the Western Area Power Administration;
       ``(B) the quantity of power sold to Indian tribes by other 
     power marketing administrations; and
       ``(C) barriers that impede tribal access to and use of 
     Federal power, including an assessment of opportunities to 
     remove those barriers and improve the ability of power 
     marketing administrations to facilitate the use of Federal 
     power by Indian tribes.
       ``(f) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $750,000, which 
     shall remain available until expended and shall not be 
     reimbursable.

     ``SEC. 2606. INDIAN MINERAL DEVELOPMENT REVIEW.

       ``(a) In General.--The Secretary shall conduct a review of 
     all activities being conducted under the Indian Mineral 
     Development Act of 1982 (25 U.S.C. 2101 et seq.) as of that 
     date.
       ``(b) Report.--Not later than 1 year after the date of 
     enactment of the Indian Tribal Energy Development and Self-
     Determination Act of 2003, the Secretary shall submit to the 
     Congress a report that includes--
       ``(1) the results of the review;
       ``(2) recommendations to ensure that Indian tribes have the 
     opportunity to develop Indian energy resources; and
       ``(3) an analysis of the barriers to the development of 
     energy resources on Indian land (including legal, fiscal, 
     market, and other barriers), along with recommendations for 
     the removal of those barriers.

     ``SEC. 2607. WIND AND HYDROPOWER FEASIBILITY STUDY.

       ``(a) Study.--The Secretary, in coordination with the 
     Secretary of the Army and the Secretary of the Interior, 
     shall conduct a study of the cost and feasibility of 
     developing a demonstration project that would use wind energy 
     generated by Indian tribes and hydropower generated by the 
     Army Corps of Engineers on the Missouri River to supply 
     firming power to the Western Area Power Administration.
       ``(b) Scope of Study.--The study shall--
       ``(1) determine the feasibility of the blending of wind 
     energy and hydropower generated from the Missouri River dams 
     operated by the Army Corps of Engineers;
       ``(2) review historical purchase requirements and projected 
     purchase requirements for firming and the patterns of 
     availability and use of firming energy;
       ``(3) assess the wind energy resource potential on tribal 
     land and projected cost savings through a blend of wind and 
     hydropower over a 30-year period;
       ``(4) determine seasonal capacity needs and associated 
     transmission upgrades for integration of tribal wind 
     generation; and
       ``(5) include an independent tribal engineer as a study 
     team member.
       ``(c) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary and Secretary of the 
     Army shall submit to Congress a report that describes the 
     results of the study, including--
       ``(1) an analysis of the potential energy cost or benefits 
     to the customers of the Western Area Power Administration 
     through the blend of wind and hydropower;
       ``(2) an evaluation of whether a combined wind and 
     hydropower system can reduce reservoir fluctuation, enhance 
     efficient and reliable energy production, and provide 
     Missouri River management flexibility;
       ``(3) recommendations for a demonstration project that 
     could be carried out by the Western Area Power Administration 
     in partnership with an Indian tribal government or tribal 
     consortium to demonstrate the feasibility and potential of 
     using wind energy produced on Indian land to supply firming 
     energy to the Western Area Power Administration or any other 
     Federal power marketing agency; and
       ``(4) an identification of--
       ``(A) the economic and environmental costs or benefits to 
     be realized through such a Federal-tribal partnership; and
       ``(B) the manner in which such a partnership could 
     contribute to the energy security of the United States.
       ``(d) Funding.--
       ``(1) There is authorized to be appropriated to carry out 
     this section $500,000, to remain available until expended.
       ``(2) Costs incurred by the Secretary in carrying out this 
     section shall be nonreimbursable.''.

     SEC. 304. FOUR CORNERS TRANSMISSION LINE PROJECT.

       The Dine Power Authority, an enterprise of the Navajo 
     Nation, shall be eligible to receive grants and other 
     assistance as authorized by section 302 of this title and 
     section 2602 of the Energy Policy Act of 1992, as amended by 
     this title, for activities associated with the development of 
     a transmission line from the Four Corners Area to southern 
     Nevada, including related power generation opportunities.

     SEC. 305. ENERGY EFFICIENCY IN FEDERALLY ASSISTED HOUSING.

       (a) In General.--The Secretary of Housing and Urban 
     Development shall promote energy conservation in housing that 
     is located on Indian land and assisted with Federal resources 
     through--
       (1) the use of energy-efficient technologies and 
     innovations (including the procurement of energy-efficient 
     refrigerators and other appliances);
       (2) the promotion of shared savings contracts; and
       (3) the use and implementation of such other similar 
     technologies and innovations as the Secretary of Housing and 
     Urban Development considers to be appropriate.
       (b) Amendment.--Section 202(2) of the Native American 
     Housing and Self-Determination Act of 1996 (25 U.S.C. 
     4132(2)) is amended by inserting `improvement to achieve 
     greater energy efficiency,' after `planning,'.

     SEC. 306. CONSULTATION WITH INDIAN TRIBES.

       In carrying out this Act and the amendments made by this 
     Act, the Secretary of Energy and the Secretary shall, as 
     appropriate and to the maximum extent practicable, involve 
     and consult with Indian tribes in a manner that is consistent 
     with the Federal trust and the government-to-government 
     relationships between Indian tribes and the United States.

                       TITLE IV--NUCLEAR MATTERS

               Subtitle A--Price-Anderson Act Amendments

     SEC. 401. SHORT TITLE.

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

     SEC. 402. EXTENSION OF INDEMNIFICATION AUTHORITY.

       (a) Indemnification of Nuclear Regulatory Commission 
     Licensees.--Section 170c. of the Atomic Energy Act of 1954 
     (42 U.S.C. 2210(c)) is amended--
       (1) in the subsection heading, by striking ``Licenses'' and 
     inserting ``Licensees'';
       (2) by striking ``licenses issued between August 30, 1954, 
     and December 31, 2003'' and

[[Page 10166]]

     inserting ``licenses issued after August 30, 1954''; and
       (3) by striking ``With respect to any production or 
     utilization facility for which a construction permit is 
     issued between August 30, 1954, and December 31, 2003, the 
     requirements of this subsection shall apply to any license 
     issued for such facility subsequent to December 31, 2003.''
       (b) Indemnification of Department of Energy Contractors.--
     Section 170d.(1)(A) of the Atomic Energy Act of 1954 (42 
     U.S.C. 2210(d)(1)(A)) is amended by striking ``, until 
     December 31, 2004,''.
       (c) Indemnification of Nonprofit Educational 
     Institutions.--Section 170k.of the Atomic Energy Act of 1954 
     (42 U.S.C. 2210(k)) is amended--
       (1) by striking ``licenses issued between August 30, 1954, 
     and August 1, 2002'' and replacing it with ``licenses issued 
     after August 30, 1954''; and
       (2) by striking ``With respect to any production or 
     utilization facility for which a construction permit is 
     issued between August 30, 1954, and August 1, 2002, the 
     requirements of this subsection shall apply to any license 
     issued for such facility subsequent to August 1, 2002.''

     SEC. 403. MAXIMUM ASSESSMENT.

       Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210) is amended--
       (1) in the second proviso of the third sentence of 
     subsection b.(1)
       (A) by striking ``$63,000,000'' and inserting 
     ``$94,000,000''; and
       (B) by striking ``$10,000,000 in any 1 year'' and inserting 
     ``$15,000,000 in any 1 year (subject to adjustment for 
     inflation under subsection t.)''; and
       (2) in subsection t.(1)
       (A) by inserting ``total and annual'' after ``amount of the 
     maximum'';
       (B) by striking ``the date of the enactment of the Price-
     Anderson Amendments Act of 1988'' and inserting ``July 1, 
     2003''; and
       (C) by striking ``such date of enactment'' and inserting 
     ``July 1, 2003''.

     SEC. 404. DEPARTMENT OF ENERGY LIABILITY LIMIT.

       (a) Indemnification of Department of Energy Contractors.--
     Section 170d. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210(d)) is amended by striking paragraph (2) and inserting 
     the following:
       ``(2) In an agreement of indemnification entered into under 
     paragraph (1), the Secretary--
       ``(A) may require the contractor to provide and maintain 
     financial protection of such a type and in such amounts as 
     the Secretary shall determine to be appropriate to cover 
     public liability arising out of or in connection with the 
     contractual activity; and
       ``(B) shall indemnify the persons indemnified against such 
     liability above the amount of the financial protection 
     required, in the amount of $10,000,000,000 (subject to 
     adjustment for inflation under subsection t.), in the 
     aggregate, for all persons indemnified in connection with the 
     contract and for each nuclear incident, including such legal 
     costs of the contractor as are approved by the Secretary.''.
       (b) Contract Amendments.--Section 170d. of the Atomic 
     Energy Act of 1954 (42 U.S.C. 2210(d)) is further amended by 
     striking paragraph (3) and inserting the following--
       ``(3) All agreements of indemnification under which the 
     Department of Energy (or its predecessor agencies) may be 
     required to indemnify any person under this section shall be 
     deemed to be amended, on the date of enactment of the Price-
     Anderson Amendments Act of 2003, to reflect the amount of 
     indemnity for public liability and any applicable financial 
     protection required of the contractor under this 
     subsection.''.
       (c) Liability Limit.--Section 170e.(1)(B) of the Atomic 
     Energy Act of 1954 (42 U.S.C. 2210(e)(1)(B)) is amended by:
       (1) striking ``the maximum amount of financial protection 
     required under subsection b. or''; and
       (2) striking ``paragraph (3) of subsection d., whichever 
     amount is more'' and inserting ``paragraph (2) of subsection 
     d.''.

     SEC. 405. INCIDENTS OUTSIDE THE UNITED STATES.

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

     SEC. 406. REPORTS.

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

     SEC. 407. INFLATION ADJUSTMENT.

       Section 170t. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210(t)) is amended--
       (1) by redesignating paragraph (2) as paragraph (3); and
       (2) by adding after paragraph (1) the following:
       ``(2) The Secretary shall adjust the amount of 
     indemnification provided under an agreement of 
     indemnification under subsection d. not less than once during 
     each 5-year period following July 1, 2003, in accordance with 
     the aggregate percentage change in the Consumer Price Index 
     since--
       ``(A) that date, in the case of the first adjustment under 
     this paragraph; or
       ``(B) the previous adjustment under this paragraph.''.

     SEC. 408. TREATMENT OF MODULAR REACTORS.

       Section 170 b. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210(b)) is amended by adding at the end the following:
       ``(5)(A) For purposes of this section only, the Commission 
     shall consider a combination of facilities described in 
     subparagraph (B) to be a single facility having a rated 
     capacity of 100,000 electrical kilowatts or more.
       ``(B) A combination of facilities referred to in 
     subparagraph (A) is 2 or more facilities located at a single 
     site, each of which has a rated capacity of 100,000 
     electrical kilowatts or more but not more than 300,000 
     electrical kilowatts, with a combined rated capacity of not 
     more than 1,300,000 electrical kilowatts.''.

     SEC. 409. APPLICABILITY.

         The amendments made by sections 403, 404, and 405 do not 
     apply to a nuclear incident that occurs before the date of 
     the enactment of this Act.

     SEC. 410. CIVIL PENALTIES.

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

              Subtitle B--Deployment of New Nuclear Plants

     SEC. 421. SHORT TITLE.

       This subtitle may be cited as the ``Nuclear Energy Finance 
     Act of 2003.''

     SEC. 422. DEFINITIONS.

       For purposes of this subtitle:
       (1) The term ``advanced reactor design'' means a nuclear 
     reactor that enhances safety, efficiency, proliferation 
     resistance, or waste reduction compared to commercial nuclear 
     reactors in use in the United States on the date of enactment 
     of this Act.
       (2) The term ``eligible project costs'' means all costs 
     incurred by a project developer that are reasonably related 
     to the development and construction of a project under this 
     subtitle, including costs resulting from regulatory or 
     licensing delays.
       (3) The term ``financial assistance'' means a loan 
     guarantee, purchase agreement, or any combination of the 
     foregoing.
       (4) The term ``loan guarantee'' means any guarantee or 
     other pledge by the Secretary to pay all or part of the 
     principal and interest on a loan or other debt obligation 
     issued by a project developer and funded by a lender.
       (5) The term ``project'' means any commercial nuclear power 
     facility for the production of electricity that uses one or 
     more advanced reactor designs.
       (6) The term ``project developer'' means an individual, 
     corporation, partnership, joint venture, trust, or other 
     entity that is primarily liable for payment of a project's 
     eligible costs.
       (7) The term ``purchase agreement'' means a contract to 
     purchase the electric energy produced by a project under this 
     subtitle.
       (8) The term ``Secretary'' means the Secretary of Energy.

     SEC. 423. RESPONSIBILITIES OF THE SECRETARY.

       (a) Financial Assistance.--Subject to the requirements of 
     the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.), 
     the Secretary may, subject to appropriations, make available 
     to project developers for eligible project costs such 
     financial assistance as the Secretary determines is necessary 
     to supplement private-sector financing for projects if he 
     determines that such projects are needed to contribute to 
     energy security, fuel or technology diversity, or clean air 
     attainment goals. The Secretary shall prescribe such terms 
     and conditions for financial assistance as the Secretary 
     deems necessary or appropriate to protect the financial 
     interests of the United States.
       (b) Requirements.--Approval criteria for financial 
     assistance shall include--
       (1) the creditworthiness of the project;
       (2) the extent to which financial assistance would 
     encourage public-private partnerships and attract private-
     sector investment;
       (3) the likelihood that financial assistance would hasten 
     commencement of the project; and,
       (4) any other criteria the Secretary deems necessary or 
     appropriate.

[[Page 10167]]

       (c) Confidentiality.--The Secretary shall protect the 
     confidentiality of any information that is certified by a 
     project developer to be commercially sensitive.
       (d) Full Faith and Credit.--All financial assistance 
     provided by the Secretary under this subtitle shall be 
     general obligations of the United States backed by its full 
     faith and credit.

     SEC. 424. LIMITATIONS.

       (a) Financial Assistance.--The total financial assistance 
     per project provided by this subtitle shall not exceed fifty 
     percent of eligible project costs.
       (b) Generation.--The total electrical generation capacity 
     of all projects provided by this subtitle shall not exceed 
     8,400 megawatts.

     SEC. 425. REGULATIONS.

       Not later than 12 months from the date of enactment of this 
     Act, the Secretary shall issue regulations to implement this 
     subtitle.

                 Subtitle C--Advanced Reactor Hydrogen

                         Co-Generation Project

     SEC. 431. PROJECT ESTABLISHMENT.

       The Secretary is directed to establish an Advanced Reactor 
     Hydrogen Co-Generation Project.

     SEC. 432. PROJECT DEFINITION.

       The project shall conduct the research, development, 
     design, construction, and operation of a hydrogen production 
     co-generation testbed that, relative to the current 
     commercial reactors, enhances safety features, reduces waste 
     production, enhances thermal efficiencies, increases 
     proliferation resistance, and has the potential for improved 
     economics and physical security in reactor siting. This 
     testbed shall be constructed so as to enable research and 
     development on advanced reactors of the type selected and on 
     alternative approaches for reactor-based production of 
     hydrogen.

     SEC. 433. PROJECT MANAGEMENT.

       (a) Management.--The project shall be managed within the 
     Department by the Office of Nuclear Energy Science and 
     Technology.
       (b) Lead Laboratory.--The lead laboratory for the program, 
     providing the site for the reactor construction, shall be the 
     Idaho National Engineering and Environmental Laboratory 
     (``INEEL'').
       (c) Steering Committee.--The Secretary shall establish a 
     national steering committee with membership from the national 
     laboratories, universities, and industry to provide advice to 
     the Secretary and the Director of the Office of Nuclear 
     Energy, Science and Technology on technical and program 
     management aspects of the project.
       (d) Collaboration.--Project activities shall be conducted 
     at INEEL, other national laboratories, universities, domestic 
     industry, and international partners.

     SEC. 434. PROJECT REQUIREMENTS.

       (a) Research and Development.--The project shall include 
     planning, research and development, design, and construction 
     of an advanced, next-generation, nuclear energy system 
     suitable for enabling further research and development on 
     advanced reactor technologies and alternative approaches for 
     reactor-based generation of hydrogen.
       (1) The project shall utilize, where appropriate, extensive 
     reactor test capabilities resident at INEEL.
       (2) The project shall be designed to explore technical, 
     environmental, and economic feasibility of alternative 
     approaches for reactor-based hydrogen production.
       (3) The industrial lead for the project must be a United 
     States-based company.
       (b) International Collaboration.--The Secretary shall seek 
     international cooperation, participation, and financial 
     contribution in this program.
       (1) The project may contract for assistance from 
     specialists or facilities from member countries of the 
     Generation IV International Forum, the Russian Federation, or 
     other international partners where such specialists or 
     facilities provide access to cost-effective and relevant 
     skills or test capabilities.
       (2) International activities shall be coordinated with the 
     Generation IV International Forum.
       (3) The Secretary may combine this project with the 
     Generation IV Nuclear Energy Systems Program.
       (c) Demonstration.--The overall project, which may involve 
     demonstration of selected project objectives in a partner 
     nation, must demonstrate both electricity and hydrogen 
     production and may provide flexibility, where technically and 
     economically feasible in the design and construction, to 
     enable tests of alternative reactor core and cooling 
     configurations.
       (d) Partnerships.--The Secretary shall establish cost-
     shared partnerships with domestic industry or international 
     participants for the research, development, design, 
     construction and operation of the demonstration facility, and 
     preference in determining the final project structure shall 
     be given to an overall project which retains United States 
     leadership while maximizing cost sharing opportunities and 
     minimizing federal funding responsibilities.
       (e) Target Date.--The Secretary shall select technologies 
     and develop the project to provide initial testing of either 
     hydrogen production or electricity generation by 2010 or 
     provide a report to Congress why this date is not feasible.
       (f) Waiver of Construction Timelines.--The Secretary is 
     authorized to conduct the Advanced Reactor Hydrogen Co-
     Generation Project without the constraints of DOE Order 413.3 
     as deemed necessary to meet the specified operational date.
       (g) Competition.--The Secretary may fund up to two teams 
     for up to one year to develop detailed proposals for 
     competitive evaluation and selection of a single proposal and 
     concept for further progress. The Secretary shall define the 
     format of the competitive evaluation of proposals.
       (h) Use of Facilities.--Research facilities in industry, 
     national laboratories, or universities either within the 
     United States or with cooperating international partners may 
     be used to develop the enabling technologies for the 
     demonstration facility. Utilization of domestic university-
     based testbeds shall be encouraged to provide educational 
     opportunities for student development.
       (i) Role of Nuclear Regulatory Commission.--The Secretary 
     shall seek active participation of the Nuclear Regulatory 
     Commission throughout the project to develop risk-based 
     criteria for any future commercial development of a similar 
     reactor architecture.
       (j) Report.--A comprehensive project plan shall be 
     developed no later than April 30, 2004. The project plan 
     shall be updated annually with each annual budget submission.

     SEC. 435. AUTHORIZATION OF APPROPRIATIONS.

       (a) Research, Development and Design Programs.--The 
     following sums are authorized to be appropriated to the 
     Secretary for all activities under this subtitle except for 
     reactor construction:
       (1) For fiscal year 2004, $35,000,000;
       (2) For each of fiscal years 2005-2008, $150,000,000; and
       (3) For fiscal years beyond 2008, such funds as are needed 
     are authorized to be appropriated.
       (b) Reactor Construction.--The following sum is authorized 
     to be appropriated to the Secretary for all project-related 
     construction activities, to be available until expended, 
     $500,000,000.

                   Subtitle D--Miscellaneous Matters

     SEC. 441. URANIUM SALES AND TRANSFERS.

       Section 3112 of the USEC Privatization Act (42 U.S.C. 
     2297h-10) is amended by striking subsections (d) and (e) and 
     inserting the following:
       ``(d)(1)(A) The aggregate annual deliveries of uranium in 
     any form (including natural uranium concentrates, natural 
     uranium hexafluoride, enriched uranium, and depleted uranium) 
     sold or transferred for commercial nuclear power end uses by 
     the United States Government shall not exceed 3,000,000 
     pounds U3O8 equivalent per year through 
     calendar year 2009. Such aggregate annual deliveries shall 
     not exceed 5,000,000 pounds U3O8 
     equivalent per year in calendar years 2010 and 2011. Such 
     aggregate annual deliveries shall not exceed 7,000,000 pounds 
     U3O8 equivalent in calendar year 2012. 
     Such aggregate annual deliveries shall not exceed 10,000,000 
     pounds U3O8 equivalent per year in 
     calendar year 2013 and each year thereafter. Any sales or 
     transfers by the United States Government to commercial end 
     users shall be limited to long-term contracts of no less than 
     3 years duration.
       ``(B) The recovery and extraction of the uranium component 
     from contaminated uranium bearing materials from United 
     States Government sites by commercial entities shall be the 
     preferred method of making uranium available under this 
     subsection. The uranium component contained in such 
     contaminated materials shall be counted against the annual 
     maximum deliveries set forth in this section, provided that 
     uranium is sold to end users.
       ``(C) Sales or transfers of uranium by the United States 
     Government for the following purposes are exempt from the 
     provisions of this paragraph--
       ``(i) sales or transfers provided for under existing law 
     for use by the Tennessee Valley Authority in relation to the 
     Department of Energy's high-enriched uranium or tritium 
     programs;
       ``(ii) sales or transfers to the Department of Energy 
     research reactor sales program;
       ``(iii) the transfer of up to 3,293 metric tons of uranium 
     to the United States Enrichment Corporation to replace 
     uranium that the Secretary transferred, prior to 
     privatization of the United States Enrichment Corporation in 
     July 1998, to the Corporation on or about June 30, 1993, 
     April 20, 1998, and May 18, 1998, and that does not meet 
     commercial specifications;
       ``(iv) the sale or transfer of any uranium for emergency 
     purposes in the event of a disruption in supply to end users 
     in the United States;
       ``(v) the sale or transfer of any uranium in fulfillment of 
     the United States Government's obligations to provide 
     security of supply with respect to implementation of the 
     Russian HEU Agreement; and
       ``(vi) the sale or transfer of any enriched uranium for use 
     in an advanced commercial nuclear power plant in the United 
     States with nonstandard fuel requirements.
       ``(D) The Secretary may transfer or sell enriched uranium 
     to any person for national security purposes, as determined 
     by the Secretary.
       ``(2) Except as provided in subsections (b) and (c), and in 
     paragraph (1)(B), clauses (i)

[[Page 10168]]

     through (iii) of paragraph (1)(C), and paragraph (1)(D) of 
     this subsection, no sale or transfer of uranium in any form 
     shall be made by the United States Government unless--
       ``(A) the President determines that the material is not 
     necessary for national security needs;
       ``(B) the price paid to the Secretary, if the transaction 
     is a sale, will not be less than the fair market value of the 
     material, as determined at the time that such material is 
     contracted for sale;
       ``(C) prior to any sale or transfer, the Secretary solicits 
     the written views of the Department of State and the National 
     Security Council with regard to whether such sale or transfer 
     would have any adverse effect on national security interests 
     of the United States, including interests related to the 
     implementation of the Russian HEU Agreement; and
       ``(D) neither the Department of State nor the National 
     Security Council objects to such sale or transfer.
       The Secretary shall endeavor to determine whether a sale or 
     transfer is permitted under this paragraph within 30 days. 
     The Secretary's determinations pursuant to this paragraph 
     shall be made available to interested members of the public 
     prior to authorizing any such sale or transfer.
       ``(3) Within 1 year after the date of enactment of this 
     subsection and annually thereafter the Secretary shall 
     undertake an assessment for the purpose of reviewing 
     available excess Government uranium inventories, and 
     determining, consistent with the procedures and limitations 
     established in this subsection, the level of inventory to be 
     sold or transferred to end users.
       ``(4) Within 5 years after the date of enactment of this 
     subsection and biennially thereafter the Secretary shall 
     report to the Congress on the implementation of this 
     subsection. The report shall include a discussion of all 
     sales or transfers made by the United States Government, the 
     impact of such sales or transfers on the domestic uranium 
     industry, the spot market uranium price, and the national 
     security interests of the United States, and any steps taken 
     to remediate any adverse impacts of such sales or transfers.
       ``(5) For purposes of this subsection, the term `United 
     States Government' does not include the Tennessee Valley 
     Authority.''.

     SEC. 442. DECOMMISSIONING PILOT PROGRAM.

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

                       TITLE V--RENEWABLE ENERGY

                     Subtitle A--General Provisions

     SEC. 501. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

       (a) Resource Assessment.--Not later than 6 months after the 
     date of enactment of this title, and each year thereafter, 
     the Secretary of Energy shall review the available 
     assessments of renewable energy resources within the United 
     States, including solar, wind, biomass, ocean (tidal and 
     thermal), geothermal, and hydroelectric energy resources, and 
     undertake new assessments as necessary, taking into account 
     changes in market conditions, available technologies, and 
     other relevant factors.
       (b) Contents of Reports.--Not later than 1 year after the 
     date of enactment of this title, and each year thereafter, 
     the Secretary shall publish a report based on the assessment 
     under subsection (a). The report shall contain--
       (1) a detailed inventory describing the available amount 
     and characteristics of the renewable energy resources; and
       (2) such other information as the Secretary believes would 
     be useful in developing such renewable energy resources, 
     including descriptions of surrounding terrain, population and 
     load centers, nearby energy infrastructure, location of 
     energy and water resources, and available estimates of the 
     costs needed to develop each resource, together with an 
     identification of any barriers to providing adequate 
     transmission for remote sources of renewable energy resources 
     to current and emerging markets, recommendations for removing 
     or addressing such barriers, and ways to provide access to 
     the grid that do not unfairly disadvantage renewable or other 
     energy producers.
       (c) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated to the 
     Secretary of Energy $10,000,000 for each of fiscal years 2004 
     through 2008.

     SEC. 502. RENEWABLE ENERGY PRODUCTION INCENTIVE.

       (a) Incentive Payments.--Section 1212(a) of the Energy 
     Policy Act of 1992 (42 U.S.C. 13317(a)) is amended by 
     striking ``and which satisfies'' and all that follows through 
     ``Secretary shall establish.'' and inserting ``. If there are 
     insufficient appropriations to make full payments for 
     electric production from all qualified renewable energy 
     facilities in any given year, the Secretary shall assign 60 
     percent of appropriated funds for that year to facilities 
     that use solar, wind, geothermal, or closed-loop (dedicated 
     energy crops) biomass technologies to generate electricity, 
     and assign the remaining 40 percent to other projects. The 
     Secretary may, after transmitting to the Congress an 
     explanation of the reasons therefor, alter the percentage 
     requirements of the preceding sentence.''.
       (b) Qualified Renewable Energy Facility.--Section 1212(b) 
     of the Energy Policy Act of 1992 (42 U.S.C. 13317(b)) is 
     amended--
       (1) by striking ``a State or any political'' and all that 
     follows through ``nonprofit electrical cooperative'' and 
     inserting ``a not-for-profit electric cooperative, a public 
     utility described in section 115 of the Internal Revenue Code 
     of 1986, a State, Commonwealth, territory, or possession of 
     the United States or the District of Columbia, or a political 
     subdivision thereof, or an Indian tribal government of 
     subdivision thereof,''; and
       (2) by inserting ``landfill gas,'' after ``wind, 
     biomass,''.
       (c) Eligibility Window.--Section 1212(c) of the Energy 
     Policy Act of 1992 (42 U.S.C. 13317(c)) is amended by 
     striking ``during the 10-fiscal year period beginning with 
     the first full fiscal year occurring after the enactment of 
     this section'' and inserting ``after October 1, 2003, and 
     before October 1, 2013''.
       (d) Amount of Payment.--Section 1212(e)(1) of the Energy 
     Policy Act of 1992 (42 U.S.C. 13317(e)(1)) is amended by 
     inserting ``landfill gas,'' after ``wind, biomass,''.
       (e) Sunset.--Section 1212(f) of the Energy Policy Act of 
     1992 (42 U.S.C. 13317(f)) is amended by striking ``the 
     expiration of'' and all that follows through ``of this 
     section'' and inserting ``September 30, 2023''.
       (f) Authorization of Appropriations.--Section 1212(g) of 
     the Energy Policy Act of 1992 (42 U.S.C. 13317(g)) is amended 
     to read as follows:
       ``(g) Authorization of Appropriations.--
       ``(1) In general.--Subject to paragraph (2), there are 
     authorized to be appropriated such sums as may be necessary 
     to carry out this section for fiscal years 2003 through 2023.
       ``(2) Availability of funds.--Funds made available under 
     paragraph (1) shall remain available until expended.''.

     SEC. 503. RENEWABLE ENERGY ON FEDERAL LANDS.

       (a) Report.--Within 24 months after the date of enactment 
     of this Act, the Secretary of the Interior, in cooperation 
     with the Secretary of Agriculture, shall develop and report 
     to the Congress recommendations on opportunities to develop 
     renewable energy on public lands under the jurisdiction of 
     the Secretary of the Interior and National Forest System 
     lands under the jurisdiction of the Secretary of Agriculture. 
     The report shall include--
       (1) 5-year plans developed by the Secretary of the Interior 
     and the Secretary of Agriculture, respectively, for 
     encouraging the development of renewable energy consistent 
     with applicable law and management plans; and
       (2) an analysis of--
       (A) the use of rights-of-way, leases, or other methods to 
     develop renewable energy on such lands;
       (B) the anticipated benefits of grants, loans, tax credits, 
     or other provisions to promote renewable energy development 
     on such lands; and
       (C) any issues that the Secretary of the Interior or the 
     Secretary of Agriculture have encountered in managing 
     renewable energy projects on such lands, or believe are 
     likely to arise in relation to the development of renewable 
     energy on such lands;
       (3) a list, developed in consultation with the Secretary of 
     Energy and the Secretary of Defense, of lands under the 
     jurisdiction of the Department of Energy or Defense that 
     would be suitable for development for renewable energy, and 
     any recommended statutory and regulatory mechanisms for such 
     development; and
       (4) any recommendations pertaining to the issues addressed 
     in the report.
       (b) National Academy of Sciences Study.--
       (1) Not later than 90 days after the date of the enactment 
     of this section, the Secretary of the Interior shall contract 
     with the National Academy of Sciences to--
       (A) study the potential for the development of wind, solar, 
     and ocean (tidal and thermal) energy on the Outer Continental 
     Shelf;
       (B) assess existing Federal authorities for the development 
     of such resources; and
       (C) recommend statutory and regulatory mechanisms for such 
     development.
       (2) The results of the study shall be transmitted to the 
     Congress within 24 months after the date of the enactment of 
     this section.

     SEC. 504. FEDERAL PURCHASE REQUIREMENT.

       (a) Requirement.--The President, acting through the 
     Secretary of Energy, shall seek to ensure that, to the extent 
     economically feasible and technically practicable, of the 
     total amount of electric energy the Federal Government 
     consumes during any fiscal year, the following amounts shall 
     be renewable energy--
       (1) not less than 3 percent in fiscal years 2005 through 
     2007,
       (2) not less than 5 percent in fiscal years 2008 through 
     2010, and

[[Page 10169]]

       (3) not less than 7.5 percent in fiscal year 2011 and each 
     fiscal year thereafter.
       (b) Definition.--For purposes of this section--
       (1) the term ``biomass'' means any solid, nonhazardous, 
     cellulosic material that is derived from--
       (A) any of the following forest-related resources: mill 
     residues, precommercial thinnings, slash, and brush, or 
     nonmerchantable material;
       (B) solid wood waste materials, including waste pallets, 
     crates, dunnage, manufacturing and construction wood wastes 
     (other than pressure-treated, chemically-treated, or painted 
     wood wastes), and landscape or right-of-way tree trimmings, 
     but not including municipal solid waste (garbage), gas 
     derived from the biodegradation of solid waste, or paper that 
     is commonly recycled; or
       (C) agriculture wastes, including orchard tree crops, 
     vineyard, grain, legumes, sugar, and other crop by-products 
     or residues, and livestock waste nutrients; or
       (D) a plant that is grown exclusively as a fuel for the 
     production of electricity.
       (2) the term ``renewable energy'' means electric energy 
     generated from solar, wind, biomass, geothermal, municipal 
     solid waste, or new hydroelectric generation capacity 
     achieved from increased efficiency or additions of new 
     capacity at an existing hydroelectric project.
       (c) Calculation.--For purposes of determining compliance 
     with the requirement of this section, the amount of renewable 
     energy shall be doubled if--
       (1) the renewable energy is produced and used on-site at a 
     Federal facility;
       (2) the renewable energy is produced on Federal lands and 
     used at a Federal facility; or
       (3) the renewable energy is produced on Indian land as 
     defined in Title XXVI of the Energy Policy Act of 1992 (25 
     U.S.C. 3501 et seq.) and used at a Federal facility.
       (d) Report.--Not later than April 15, 2005, and every 2 
     years thereafter, the Secretary of Energy shall provide a 
     report to the Congress on the progress of the Federal 
     Government in meeting the goals established by this section.

     SEC. 505. INSULAR AREA RENEWABLE AND ENERGY EFFICIENCY PLANS.

       The Secretary of Energy shall update the energy surveys, 
     estimates, and assessments for the insular areas of Puerto 
     Rico, the Virgin Islands, Guam, American Samoa, the 
     Commonwealth of the Northern Mariana Islands, the Republic of 
     the Marshall Islands, the Federated States of Micronesia, and 
     the Republic of Palau undertaken pursuant to section 604 of 
     Public Law 96-597 (48 U.S.C. 1492) and revise the 
     comprehensive energy plan for the insular areas to reduce 
     reliance on energy imports and increase use of renewable 
     energy resources and energy efficiency opportunities. The 
     update and revision shall by undertaken in consultation with 
     the Secretary of the Interior and the chief executive officer 
     of each insular area and shall be completed and submitted to 
     Congress and to the chief executive officer of each insular 
     area by December 31, 2005.

                  Subtitle B--Hydroelectric Licensing

     SEC. 511. ALTERNATIVE CONDITIONS AND FISHWAYS.

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

     ``SEC. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS.

       ``(a) Alternative Conditions.--
       ``(1) Whenever any person applies for a license for any 
     project works within any reservation of the United States, 
     and the Secretary of the Department under whose supervision 
     such reservation falls (referred to in this subsection as 
     `the Secretary') deems a condition to such license to be 
     necessary under the first proviso of section 4(e), the 
     license applicant may propose an alternative condition.
       ``(2) Notwithstanding the first proviso of section 4(e), 
     the Secretary shall accept the proposed alternative condition 
     referred to in paragraph (1), and the Commission shall 
     include in the license such alternative condition, if the 
     Secretary determines, based on substantial evidence provided 
     by the license applicant or otherwise available to the 
     Secretary, that such alternative condition--
       ``(A) provides for the adequate protection and utilization 
     of the reservation; and
       ``(B) will either--
       ``(i) cost less to implement; or
       ``(ii) result in improved operation of the project works 
     for electricity production, as compared to the condition 
     initially deemed necessary by the Secretary.
       ``(3) The Secretary concerned shall submit into the public 
     record of the Commission proceeding with any condition under 
     section 4(e) or alternative condition it accepts under this 
     section, a written statement explaining the basis for such 
     condition, and reason for not accepting any alternative 
     condition under this section. The written statement must 
     demonstrate that the Secretary gave equal consideration to 
     the effects of the condition adopted and alternatives not 
     accepted on energy supply, distribution, cost, and use; flood 
     control; navigation; water supply; and air quality (in 
     addition to the preservation of other aspects of 
     environmental quality); based on such information as may be 
     available to the Secretary, including information voluntarily 
     provided in a timely manner by the applicant and others. The 
     Secretary shall also submit, together with the aforementioned 
     written statement, all studies, data, and other factual 
     information available to the Secretary and relevant to the 
     Secretary's decision.
       ``(4) Nothing in this section shall prohibit other 
     interested parties from proposing alternative conditions.
       ``(5) If the Secretary does not accept an applicant's 
     alternative condition under this section, and the Commission 
     finds that the Secretary's condition would be inconsistent 
     with the purposes of this part, or other applicable law, the 
     Commission may refer the dispute to the Commission's Dispute 
     Resolution Service. The Dispute Resolution Service shall 
     consult with the Secretary and the Commission and issue a 
     non-binding advisory within 90 days. The Secretary may accept 
     the Dispute Resolution Service advisory unless the Secretary 
     finds that the recommendation will not adequately protect the 
     reservation. The Secretary shall submit the advisory and the 
     Secretary's final written determination into the record of 
     the Commission's proceeding.
       ``(b) Alternative Prescriptions.--
       (1) Whenever the Secretary of the Interior or the Secretary 
     of Commerce prescribes a fishway under section 18, the 
     license applicant or licensee may propose an alternative to 
     such prescription to construct, maintain, or operate a 
     fishway. The alternative may include a fishway or an 
     alternative to a fishway.
       ``(2) Notwithstanding section 18, the Secretary of the 
     Interior or the Secretary of Commerce, as appropriate, shall 
     accept and prescribe, and the Commission shall require, the 
     proposed alternative referred to in paragraph (1), if the 
     Secretary of the appropriate department determines, based on 
     substantial evidence provided by the licensee or otherwise 
     available to the Secretary, that such alternative--
       ``(A) will be no less protective of the fish resources than 
     the fishway initially prescribed by the Secretary; and
       ``(B) will either--
       ``(i) cost less to implement; or
       ``(ii) result in improved operation of the project works 
     for electricity production, as compared to the fishway 
     initially deemed necessary by the Secretary.
       ``(3) The Secretary concerned shall submit into the public 
     record of the Commission proceeding with any prescription 
     under section 18 or alternative prescription it accepts under 
     this section, a written statement explaining the basis for 
     such prescription, and reason for not accepting any 
     alternative prescription under this section. The written 
     statement must demonstrate that the Secretary gave equal 
     consideration to the effects of the condition adopted and 
     alternatives not accepted on energy supply, distribution, 
     cost, and use; flood control; navigation; water supply; and 
     air quality (in addition to the preservation of other aspects 
     of environmental quality); based on such information as may 
     be available to the Secretary, including information 
     voluntarily provided in a timely manner by the applicant and 
     others. The Secretary shall also submit, together with the 
     aforementioned written statement, all studies, data, and 
     other factual information available to the Secretary and 
     relevant to the Secretary's decision.
       ``(4) Nothing in this section shall prohibit other 
     interested parties from proposing alternative prescriptions.
       ``(5) If the Secretary concerned does not accept an 
     applicant's alternative prescription under this section, and 
     the Commission finds that the Secretary's prescription would 
     be inconsistent with the purposes of this part, or other 
     applicable law, the Commission may refer the dispute to the 
     Commission's Dispute Resolution Service. The Dispute 
     Resolution Service shall consult with the Secretary and the 
     Commission and issue a non-binding advisory within 90 days. 
     The Secretary may accept the Dispute Resolution Service 
     advisory unless the Secretary finds that the recommendation 
     will not adequately protect the fish resources. The Secretary 
     shall submit the advisory and the Secretary's final written 
     determination into the record of the Commission's 
     proceeding.''.

                     Subtitle C--Geothermal Energy

     SEC. 521. COMPETITIVE LEASE SALE REQUIREMENTS.

       (a) In General.--Section 4 of the Geothermal Steam Act of 
     1970 (30 U.S.C. 1003) is

[[Page 10170]]

     amended by striking the text and inserting the following:
       ``(a) Nominations.--The Secretary shall accept nominations 
     at any time from companies and individuals of lands to be 
     leased under this Act.
       ``(b) Competitive Lease Sale Required.--The Secretary shall 
     hold a competitive lease sale at least once every 2 years for 
     lands in a State in which there are nominations pending under 
     subsection (a) where such lands are otherwise available for 
     leasing.
       ``(c) Noncompetitive Leasing.--The Secretary shall make 
     available for a period of 2 years for noncompetitive leasing 
     any tract for which a competitive lease sale is held, but for 
     which the Secretary does not receive any bids in the 
     competitive lease sale.''.
       (b) Pending Lease Applications.--It shall be a priority for 
     the Secretary of the Interior and, with respect to National 
     Forest lands, the Secretary of Agriculture, to ensure timely 
     completion of administrative actions necessary to conduct 
     competitive lease sales for lands with pending applications 
     for geothermal leasing as of the date of enactment of this 
     section where such lands are otherwise available for leasing.

     SEC. 522. GEOTHERMAL LEASING AND PERMITTING ON FEDERAL LANDS.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this section, the Secretary of the Interior 
     and the Secretary of Agriculture shall enter into and submit 
     to the Congress a memorandum of understanding in accordance 
     with this section regarding leasing and permitting for 
     geothermal development of public lands and National Forest 
     System lands under their respective jurisdictions.
       (b) Lease and Permit Applications.--The memorandum of 
     understanding shall--
       (1) identify known geothermal resources areas on lands 
     included in the National Forest System and, when necessary, 
     require review of management plans to consider leasing under 
     the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) as 
     a land use; and
       (2) establish an administrative procedure for processing 
     geothermal lease applications, including lines of authority, 
     steps in application processing, and time limits for 
     application processing.
       (c) Data Retrieval System.--The memorandum of understanding 
     shall establish a joint data retrieval system that is capable 
     of tracking lease and permit applications and providing to 
     the applicant information as to their status within the 
     Departments of the Interior and Agriculture, including an 
     estimate of the time required for administrative action.

     SEC. 523. LEASING AND PERMITTING ON FEDERAL LANDS WITHDRAWN 
                   FOR MILITARY PURPOSES.

       Not later than 1 year after the date of the enactment of 
     this Act, the Secretary of the Interior and the Secretary of 
     Defense, in consultation with interested states, counties, 
     representatives of the geothermal industry, and interested 
     members of the public, shall submit to the Congress a joint 
     report concerning leasing and permitting activities for 
     geothermal energy on Federal lands withdrawn for military 
     purposes. Such report shall--
       (1) describe any differences, including differences in 
     royalty structure and revenue sharing with states and 
     counties, between--
       (A) the implementation of the Geothermal Steam Act of 1970 
     (30 U.S.C. 1001 et seq.) and other applicable Federal law by 
     the Secretary of the Interior; and
       (B) the administration of geothermal leasing under section 
     2689 of title 10, United States Code, by the Secretary of 
     Defense;
       (2) identify procedures for interagency coordination to 
     ensure efficient processing and administration of leases or 
     contracts for geothermal energy on federal lands withdrawn 
     for military purposes, consistent with the defense purposes 
     of such withdrawals; and
       (3) provide recommendations for legislative or 
     administrative actions that could facilitate program 
     administration, including a common royalty structure.

     SEC. 524. REINSTATEMENT OF LEASES TERMINATED FOR FAILURE TO 
                   PAY RENT.

       Section 5(c) of the Geothermal Steam Act of 1970 (30 U.S.C. 
     1004(c)), is amended in the last sentence by inserting ``or 
     was inadvertent,'' after ``reasonable diligence,''.

     SEC. 525. ROYALTY REDUCTION AND RELIEF.

       (a) Rulemaking.--Within one year after the date of 
     enactment of this Act, the Secretary shall promulgate a final 
     regulation providing a methodology for determining the amount 
     or value of the steam for purposes of calculating the royalty 
     due to be paid on such production pursuant to section 5 of 
     the Geothermal Steam Act of 1970 (30 U.S.C. 1004). The final 
     regulation shall provide for a simplified methodology for 
     calculating the royalty. In undertaking the rulemaking, the 
     Secretary shall consider the use of a percent of revenue 
     method and shall ensure that the final rule will result in 
     the same level of royalty revenues as the regulation in 
     effect on the date of enactment of this provision.
       (b) Low Temperature Direct Use.--Notwithstanding the 
     provisions of section 5(a) of the Geothermal Steam Act of 
     1979 (30 U.S.C. 1004(a)), with respect to the direct use of 
     low temperature geothermal resources for purposes other than 
     the generation of electricity, the Secretary shall establish 
     a schedule of fees and collect fees pursuant to such schedule 
     in lieu of royalties based upon the total amount of 
     geothermal resources used. The schedule of fees shall ensure 
     that there is a fair return to the public for the use of the 
     low temperature geothermal resource. With the consent of the 
     lessee, the Secretary may modify the terms of a lease in 
     existence on the date of enactment of this Act in order to 
     reflect the provisions of this subsection.

                       Subtitle D--Biomass Energy

     SEC. 531. DEFINITIONS.

       For the purposes of this subtitle:
       (1) The term ``eligible operation'' means a facility that 
     is located within the boundaries of an eligible community and 
     uses biomass from federal or Indian lands as a raw material 
     to produce electric energy, sensible heat, transportation 
     fuels, or substitutes for petroleum-based products.
       (2) The term ``biomass'' means pre-commercial thinnings of 
     trees and woody plants, or non-merchantable material, from 
     preventative treatments to reduce hazardous fuels, or reduce 
     or contain disease or insect infestations.
       (3) The term ``green ton'' means 2,000 pounds of biomass 
     that has not been mechanically or artificially dried.
       (4) The term ``Secretary'' means--
       (A) with respect to lands within the National Forest 
     System, the Secretary of Agriculture; or
       (B) with respect to Federal lands under the jurisdiction of 
     the Secretary of the Interior and Indian lands, the Secretary 
     of the Interior.
       (5) The term ``eligible community'' means any Indian 
     Reservation, or any county, town, township, municipality, or 
     other similar unit of local government that has a population 
     of not more than 50,000 individuals and is determined by the 
     Secretary to be located in an area near federal of Indian 
     lands which is at significant risk of catastrophic wildfire, 
     disease, or insect infestation or which suffers from disease 
     or insect infestation.
       (6) The term ``Indian tribe'' has the meaning given the 
     term in section 4(e) of the Indian Self-Determination and 
     Education Assistance Act (25 U.S.C. 450b(e)).
       (7) The term ``person'' includes--
       (A) an individual;
       (B) a community;
       (C) an Indian tribe;
       (D) a small business or a corporation that is incorporated 
     in the United States; or
       (E) a nonprofit organization.

     SEC. 532. BIOMASS COMMERCIAL UTILIZATION GRANT PROGRAM.

       (a) In General.--The Secretary may make grants to any 
     person that owns or operates an eligible operation to offset 
     the costs incurred to purchase biomass for use by such 
     eligible operation with priority given to operations using 
     biomass from the highest risk areas.
       (b) Limitation.--No grant provided under this subsection 
     shall be paid at a rate that exceeds $20 per green ton of 
     biomass delivered.
       (c) Records.--Each grant recipient shall keep such records 
     as the Secretary may require to fully and correctly disclose 
     the use of the grant funds and all transactions involved in 
     the purchase of biomass. Upon notice by the Secretary, the 
     grant recipient shall provide the Secretary reasonable access 
     to examine the inventory and records of any eligible 
     operation receiving grant funds.
       (d) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated 
     $12,500,000 each to the Secretary of the Interior and the 
     Secretary of Agriculture for each fiscal year from 2004 
     through 2008, to remain available until expended.

     SEC. 533. IMPROVED BIOMASS UTILIZATION GRANT PROGRAM.

       (a) In General.--The Secretary may make grants to persons 
     in eligible communities to offset the costs of developing or 
     researching proposals to improve the use of biomass or add 
     value to biomass utilization.
       (b) Selection.--Grant recipients shall be selected based on 
     the potential for the proposal to--
       (1) develop affordable thermal or electric energy resources 
     for the benefit of an eligible community;
       (2) provide opportunities for the creation or expansion of 
     small businesses within an eligible community;
       (3) create new job opportunities within an eligible 
     community, and
       (4) reduce the hazardous fuels from the highest risk areas.
       (c) Limitation.--No grant awarded under this subsection 
     shall exceed $500,000.
       (d) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated 
     $12,500,000 each to the Secretary of the Interior and the 
     Secretary of Agriculture for each fiscal year from 2004 
     through 2008, to remain available until expended.

     SEC. 534. REPORT.

       Not later than 3 years after the date of enactment of this 
     subtitle, the Secretary of the Interior and the Secretary of 
     Agriculture shall jointly submit to the Congress a report 
     that describes the interim results of the programs authorized 
     under this subtitle.

[[Page 10171]]



                      TITLE VI--ENERGY EFFICIENCY

                      Subtitle A--Federal Programs

     SEC. 601. ENERGY MANAGEMENT REQUIREMENTS.

       (a) Energy Reduction Goals.--Section 543(a)(1) of the 
     National Energy Conservation Policy Act (42 U.S.C. 
     8253(a)(1)) is amended by striking ``its Federal buildings so 
     that'' and all that follows through the end and inserting 
     ``the Federal buildings of the agency (including each 
     industrial or laboratory facility) so that the energy 
     consumption per gross square foot of the Federal buildings of 
     the agency in fiscal years 2004 through 2013 is reduced, as 
     compared with the energy consumption per gross square foot of 
     the Federal buildings of the agency in fiscal year 2000, by 
     the percentage specified in the following table:

``Fiscal Year                                      Percentage reduction
2004..................................................................2
2005..................................................................4
2006..................................................................6
2007..................................................................8
2008.................................................................10
2009.................................................................12
2010.................................................................14
2011.................................................................16
2012.................................................................18
2013.............................................................20.''.

       (b) Effective Date.--The energy reduction goals and 
     baseline established in paragraph (1) of section 543(a) of 
     the National Energy Conservation Policy Act, as amended by 
     subsection (a) of this section, supersede all previous goals 
     and baselines under such paragraph, and related reporting 
     requirements.
       (c) Review of Energy Performance Requirements.--Section 
     543(a) of the National Energy Conservation Policy Act (42 
     U.S.C. 8253(a)) is further amended by adding at the end the 
     following:
       ``(3) Not later than December 31, 2011, the Secretary shall 
     review the results of the implementation of the energy 
     performance requirement established under paragraph (1) and 
     submit to Congress recommendations concerning energy 
     performance requirements for fiscal years 2014 through 
     2022.''.
       (d) Exclusions.--Section 543(c)(1) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8253(c)(1)) is amended by 
     striking ``An agency may exclude'' and all that follows 
     through the end and inserting--
       ``(A) An agency may exclude, from the energy performance 
     requirement for a fiscal year established under subsection 
     (a) and the energy management requirement established under 
     subsection (b), any Federal building or collection of Federal 
     buildings, if the head of the agency finds that--
       ``(i) compliance with those requirements would be 
     impracticable;
       ``(ii) the agency has completed and submitted all federally 
     required energy management reports;
       ``(iii) the agency has achieved compliance with the energy 
     efficiency requirements of this Act, the Energy Policy Act of 
     1992, Executive Orders, and other Federal law; and
       ``(iv) the agency has implemented all practicable, life-
     cycle cost-effective projects with respect to the Federal 
     building or collection of Federal buildings to be excluded.
       ``(B) A finding of impracticability under subparagraph 
     (A)(i) shall be based on--
       ``(i) the energy intensiveness of activities carried out in 
     the Federal building or collection of Federal buildings; or
       ``(ii) the fact that the Federal building or collection of 
     Federal buildings is used in the performance of a national 
     security function.''.
       (e) Review by Secretary.--Section 543(c)(2) of the National 
     Energy Conservation Policy Act (42 U.S.C. 8253(c)(2)) is 
     amended--
       (1) by striking ``impracticability standards'' and 
     inserting ``standards for exclusion''; and
       (2) by striking ``a finding of impracticability'' and 
     inserting ``the exclusion''.
       (f) Criteria.--Section 543(c) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8253(c)) is further 
     amended by adding at the end the following:
       ``(3) Not later than 180 days after the date of enactment 
     of this paragraph, the Secretary shall issue guidelines that 
     establish criteria for exclusions under paragraph (1).''.
       (g) Retention of Energy Savings.--Section 546 of the 
     National Energy Conservation Policy Act (42 U.S.C. 8256) is 
     amended by adding at the end the following new subsection:
       ``(e) Retention of Energy Savings.--An agency may retain 
     any funds appropriated to that agency for energy 
     expenditures, at buildings subject to the requirements of 
     section 543(a) and (b), that are not made because of energy 
     savings. Except as otherwise provided by law, such funds may 
     be used only for energy efficiency or unconventional and 
     renewable energy resources projects.''.
       (h) Reports.--Section 548(b) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8258(b)) is amended
       (1) in the subsection heading, by inserting ``The President 
     and'' before ``Congress''; and
       (2) by inserting ``President and'' before ``Congress''.
       (i) Conforming Amendment.--Section 550(d) of the National 
     Energy Conservation Policy Act (42 U.S.C. 8258b(d)) is 
     amended in the second sentence by striking ``the 20 percent 
     reduction goal established under section 543(a) of the 
     National Energy Conservation Policy Act (42 U.S.C. 
     8253(a)).'' and inserting ``each of the energy reduction 
     goals established under section 543(a).''.

     SEC. 602. ENERGY USE MEASUREMENT AND ACCOUNTABILITY.

       Section 543 of the National Energy Conservation Policy Act 
     (42 U.S.C. 8253) is further amended by adding at the end the 
     following:
       ``(e) Metering of Energy Use.--
       ``(1) Deadline.--By October 1, 2010, in accordance with 
     guidelines established by the Secretary under paragraph (2), 
     all Federal buildings shall, for the purposes of efficient 
     use of energy and reduction in the cost of electricity used 
     in such buildings, be metered or submetered. Each agency 
     shall use, to the maximum extent practicable, advanced meters 
     or advanced metering devices that provide data at least daily 
     and that measure at least hourly consumption of electricity 
     in the Federal buildings of the agency. Such data shall be 
     incorporated into existing Federal energy tracking systems 
     and made available to Federal facility energy managers.
       ``(2) Guidelines.--
       ``(A) In General.--Not later than 180 days after the date 
     of enactment of this subsection, the Secretary, in 
     consultation with the Department of Defense, the General 
     Services Administration, representatives from the metering 
     industry, utility industry, energy services industry, energy 
     efficiency industry, national laboratories, universities, and 
     Federal facility energy managers, shall establish guidelines 
     for agencies to carry out paragraph (1).
       ``(B) Requirements for Guidelines.--The guidelines shall--
       ``(i) take into consideration
       ``(I) the cost of metering and submetering and the reduced 
     cost of operation and maintenance expected to result from 
     metering and submetering;
       ``(II) the extent to which metering and submetering are 
     expected to result in increased potential for energy 
     management, increased potential for energy savings and energy 
     efficiency improvement, and cost and energy savings due to 
     utility contract aggregation; and
       ``(III) the measurement and verification protocols of the 
     Department of Energy;
       ``(ii) include recommendations concerning the amount of 
     funds and the number of trained personnel necessary to gather 
     and use the metering information to track and reduce energy 
     use;
       ``(iii) establish priorities for types and locations of 
     buildings to be metered and submetered based on cost 
     effectiveness and a schedule of one or more dates, not later 
     than 1 year after the date of issuance of the guidelines, on 
     which the requirements specified in paragraph (1) shall take 
     effect; and
       ``(iv) establish exclusions from the requirements specified 
     in paragraph (1) based on the de minimis quantity of energy 
     use of a Federal building, industrial process, or structure.
       ``(3) Plan.--No later than 6 months after the date 
     guidelines are established under paragraph (2), in a report 
     submitted by the agency under section 548(a), each agency 
     shall submit to the Secretary a plan describing how the 
     agency will implement the requirements of paragraph (1), 
     including--
       ``(A) how the agency will designate personnel primarily 
     responsible for achieving the requirements; and
       ``(B) demonstration by the agency, complete with 
     documentation, of any finding that advanced meters or 
     advanced metering devices, as defined in paragraph (1), are 
     not practicable.''.

     SEC. 603. FEDERAL BUILDING PERFORMANCE STANDARDS.

       Section 305(a) of the Energy Conservation and Production 
     Act (42 U.S.C. 6834(a)) is amended--
       (a) in paragraph (2)(A), by striking ``CABO Model Energy 
     Code, 1992'' and inserting ``the 2000 International Energy 
     Conservation Code''; and
       (b) by adding at the end the following:
       ``(3) Revised Federal Building Energy Efficiency 
     Performance Standards.--
       ``(A) In General.--Not later than 1 year after the date of 
     enactment of this paragraph, the Secretary of Energy shall 
     establish, by rule, revised Federal building energy 
     efficiency performance standards that require that, if cost-
     effective, for new Federal buildings--
       ``(i) such buildings be designed so as to achieve energy 
     consumption levels at least 30 percent below those of the 
     most recent version of the International Energy Conservation 
     Code, as appropriate; and
       ``(ii) sustainable design principles are applied to the 
     siting, design, and construction of all new and replacement 
     buildings.
       ``(B) Additional revisions.--Not later than 1 year after 
     the date of approval of amendments to ASHRAE Standard 90.1 or 
     the 2000 International Energy Conservation Code, the 
     Secretary of Energy shall determine, based on the cost-
     effectiveness of the requirements under the amendments, 
     whether the revised standards established under this 
     paragraph should be updated to reflect the amendments.
       ``(C) Statement on compliance of new buildings.--In the 
     budget request of the Federal agency for each fiscal year and 
     each report submitted by the Federal agency under

[[Page 10172]]

     section 548(a) of the National Energy Conservation Policy Act 
     (42 U.S.C. 8258(a)), the head of each Federal agency shall 
     include--
       ``(i) a list of all new Federal buildings owned, operated, 
     or controlled by the Federal agency; and
       ``(ii) a statement concerning whether the Federal buildings 
     meet or exceed the revised standards established under this 
     paragraph.''.

     SEC. 604. ENERGY SAVINGS PERFORMANCE CONTRACTS.

       (a) Permanent Extension.--Section 801(c) of the National 
     Energy Conservation Policy Act (42 U.S.C. 8287(c)) is 
     repealed.
       (b) Replacement Facilities.--Section 801(a) of the National 
     Energy Conservation Policy Act (42 U.S.C. 8287(a)) is amended 
     by adding at the end the following new paragraph:
       ``(3)(A) In the case of an energy savings contract or 
     energy savings performance contract providing for energy 
     savings through the construction and operation of one or more 
     buildings or facilities to replace one or more existing 
     buildings or facilities, benefits ancillary to the purpose of 
     such contract under paragraph (1) may include savings 
     resulting from reduced life-cycle 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, established through a 
     methodology set forth in the contract.
       ``(B) Notwithstanding paragraph (2)(B), aggregate annual 
     payments by an agency under an energy savings contract or 
     energy savings performance contract referred to in 
     subparagraph (A) may take into account (through the 
     procedures developed pursuant to this section) savings 
     resulting from reduced costs of operation and maintenance as 
     described in that subparagraph.''.
       (c) Energy Savings.--Section 804(2) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8287c(2)) is amended to 
     read as follows:
       ``(2) The term `energy savings' means--
       ``(A) a reduction in the cost of energy or water, from a 
     base cost established through a methodology set forth in the 
     contract, used in an existing federally owned building or 
     buildings or other federally owned facilities as a result 
     of--
       ``(i) the lease or purchase of operating equipment, 
     improvements, altered operation and maintenance, or technical 
     services;
       ``(ii) the increased efficient use of existing energy 
     sources by co-generation or heat recovery, excluding any co-
     generation process for other than a federally owned building 
     or buildings or other federally owned facilities; or
       ``(iii) the increased efficient use of existing water 
     sources; or
       ``(B) in the case of a replacement building or facility 
     described in section 801(a)(3), a reduction in the cost of 
     energy, from a base cost established through a methodology 
     set forth in the contract, that would otherwise be utilized 
     in one or more existing federally owned buildings or other 
     federally owned facilities by reason of the construction and 
     operation of the replacement building or facility.''.
       (d) Energy Savings Contract.--Section 804(3) of the 
     National Energy Conservation Policy Act (42 U.S.C. 8287c(3)) 
     is amended to read as follows:
       ``(3) The terms `energy savings contract' and `energy 
     savings performance contract' mean a contract which provides 
     for--
       ``(A) the performance of services for the design, 
     acquisition, installation, testing, and, where appropriate, 
     operation, maintenance and repair, of an identified energy or 
     water conservation measure or series of measures at one or 
     more locations; or
       ``(B) energy savings through the construction and operation 
     of one or more buildings or facilities to replace one or more 
     existing buildings or facilities. Such contracts shall, with 
     respect to an agency facility that is a public building as 
     such term is defined in section 13(1) of the Public Buildings 
     Act of 1959 (40 U.S.C. 612(1)), be in compliance with the 
     prospectus requirements and procedures of section 7 of the 
     Public Buildings Act of 1959 (40 U.S.C. 606).''.
       (e) Energy or Water Conservation Measure.--Section 804(4) 
     of the National Energy Conservation Policy Act (42 U.S.C. 
     8287c(4)) is amended to read as follows:
       ``(4) The term `energy or water conservation measure' 
     means--
       ``(A) an energy conservation measure, as defined in section 
     551(4) (42 U.S.C. 8259(4)); or
       ``(B) a water conservation measure that improves water 
     efficiency, is life-cycle cost-effective, and involves water 
     conservation, water recycling or reuse, more efficient 
     treatment of wastewater or stormwater, improvements in 
     operation or maintenance efficiencies, retrofit activities, 
     or other related activities, not at a Federal hydroelectric 
     facility.''.
       (f) Pilot Program for Non-building Applications.--
       (1) The Secretary of Defense, and the heads of other 
     interested Federal agencies, are authorized to enter into up 
     to 10 energy savings performance contracts under Title VIII 
     of the National Energy Conservation Policy Act (42 U.S.C. 
     8287 et seq.) for the purpose of achieving energy or water 
     savings, secondary savings, and benefits incidental to those 
     purposes, in non-building applications, provided that the 
     aggregate payments to be made by the Federal government under 
     such contracts shall not exceed $100,000,000.
       (2) The Secretary of Energy, in consultation with the 
     Secretary of Defense and the heads of other interested 
     Federal agencies, shall select projects that demonstrate the 
     applicability and benefits of energy savings performance 
     contracting to a range of non-building applications.
       (3) For the purposes of this subsection:
       (A) The term ``non-building application'' means--
       (i) any class of vehicles, devices, or equipment that is 
     transportable under its own power by land, sea, or air that 
     consumes energy from any fuel source for the purpose of such 
     transportability, or to maintain a controlled environment 
     within such vehicle, device, or equipment; or
       (ii) any Federally owned equipment used to generate 
     electricity or transport water.
       (B) The term ``secondary savings'', means additional energy 
     or cost savings that are a direct consequence of the energy 
     or water savings that result from the financing and 
     implementation of the energy savings performance contract, 
     including, but not limited to, energy or cost savings that 
     result from a reduction in the need for fuel delivery and 
     logistical support, or the increased efficiency in the 
     production of electricity.
       (4) Not later than 3 years after the date of enactment of 
     this section, the Secretary of Energy shall report to the 
     Congress on the progress and results of the projects funded 
     pursuant to this section. Such report shall include a 
     description of projects undertaken; the energy, water and 
     cost savings, secondary savings and other benefits that 
     resulted from such projects; and recommendations on whether 
     the pilot program should be extended, expanded, or authorized 
     permanently as a part of the program authorized under Title 
     VIII of the National Energy Conservation Policy act (42 
     U.S.C. 8287 et seq.).
       (5) Section 546(c)(3) of the National Energy Conservation 
     Policy Act (42 U.S.C. 8256) is amended by striking the word 
     ``facilities'', and inserting the words ``facilities, 
     equipment and vehicles'', in lieu thereof.
       (g) Review.--Within 180 days after the date of the 
     enactment of this section, the Secretary of Energy shall 
     complete a review of the Energy Savings Performance Contract 
     program to identify statutory, regulatory, and administrative 
     obstacles that prevent Federal agencies from fully utilizing 
     the program. In addition, this review shall identify all 
     areas for increasing program flexibility and effectiveness, 
     including audit and measurement verification requirements, 
     accounting for energy use in determining savings, contracting 
     requirements, including the identification of additional 
     qualified contractors, and energy efficiency services 
     covered. The Secretary shall report these findings to the 
     Committee on Energy and Commerce of the House of 
     Representatives and the Committee on Energy and Natural 
     Resources of the Senate, and shall implement identified 
     administrative and regulatory changes to increase program 
     flexibility and effectiveness to the extent that such changes 
     are consistent with statutory authority.

     SEC. 605. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

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

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

       ``(a) Definitions.--In this section:
       ``(1) The term `Energy Star product' means a product that 
     is rated for energy efficiency under an Energy Star program.
       ``(2) The term `Energy Star program' means the program 
     established by section 324A of the Energy Policy and 
     Conservation Act.
       ``(3) The term `executive agency' has the meaning given the 
     term in section 4 of the Office of Federal Procurement Policy 
     Act (41 U.S.C. 403).
       ``(4) The term `FEMP designated product' means a product 
     that is designated under the Federal Energy Management 
     Program of the Department of Energy as being among the 
     highest 25 percent of equivalent products for energy 
     efficiency.
       ``(b) Procurement of Energy Efficient Products.--
       ``(1) Requirement.--To meet the requirements of an 
     executive agency for an energy consuming product, the head of 
     the executive agency shall, except as provided in paragraph 
     (2), procure an Energy Star product or a FEMP designated 
     product.
       ``(2) Exceptions.--The head of an executive agency is not 
     required to procure an Energy Star product or FEMP designated 
     product under paragraph (1) if the head of the executive 
     agency finds in writing that--
       ``(A) an Energy Star product or FEMP designated product is 
     not cost-effective over the life of the product taking energy 
     cost savings into account; or
       ``(B) no Energy Star product or FEMP designated product is 
     reasonably available that meets the functional requirements 
     of the executive agency.
       ``(3) Procurement planning.--The head of an executive 
     agency shall incorporate into the specifications for all 
     procurements involving energy consuming products and systems, 
     including guide specifications, project

[[Page 10173]]

     specifications, and construction, renovation, and services 
     contracts that include provision of energy consuming products 
     and systems, and into the factors for the evaluation of 
     offers received for the procurement, criteria for energy 
     efficiency that are consistent with the criteria used for 
     rating Energy Star products and for rating FEMP designated 
     products.
       ``(c) Listing of Energy Efficient Products in Federal 
     Catalogs.--Energy Star products and FEMP designated products 
     shall be clearly identified and prominently displayed in any 
     inventory or listing of products by the General Services 
     Administration or the Defense Logistics Agency. The General 
     Services Administration or the Defense Logistics Agency shall 
     supply only Energy Star products or FEMP designated products 
     for all product categories covered by the Energy Star program 
     or the Federal Energy Management Program, except in cases 
     where the agency ordering a product specifies in writing that 
     no Energy Star product or FEMP designated product is 
     available to meet the buyer's functional requirements, or 
     that no Energy Star product or FEMP designated product is 
     cost-effective for the intended application over the life of 
     the product, taking energy cost savings into account.
       ``(d) Designation of Electric Motors.--In the case of 
     electric motors of 1 to 500 horsepower, agencies shall select 
     only premium efficient motors that meet a standard designated 
     by the Secretary. The Secretary shall designate such a 
     standard within 120 days after the date of the enactment of 
     this section, after considering the recommendations of 
     associated electric motor manufacturers and energy efficiency 
     groups.
       ``(e) Regulations.--Not later than 180 days after the date 
     of the enactment of this section, the Secretary shall issue 
     guidelines to carry out this section.''.
       (b) Conforming Amendment.--The table of contents in section 
     1(b) of the National Energy Conservation Policy Act (42 
     U.S.C. 8201 note) is amended by inserting after the item 
     relating to the end of the items relating to part 3 of title 
     V the following:

``Sec. 552. Federal procurement of energy efficient products.''.

     SEC. 606. CONGRESSIONAL BUILDING EFFICIENCY.

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

     ``SEC. 553. CONGRESSIONAL BUILDING EFFICIENCY.

       ``(a) In General.--The Architect of the Capitol--
       ``(1) shall develop, update, and implement a cost-effective 
     energy conservation and management plan (referred to in this 
     section as the `plan') for all facilities administered by the 
     Congress (referred to in this section as `congressional 
     buildings') to meet the energy performance requirements for 
     Federal buildings established under section 543(a)(1); and
       ``(2) shall submit the plan to Congress, not later than 180 
     days after the date of enactment of this section.
       ``(b) Plan Requirements.--The plan shall include--
       ``(1) a description of the life-cycle cost analysis used to 
     determine the cost-effectiveness of proposed energy 
     efficiency projects;
       ``(2) a schedule of energy surveys to ensure complete 
     surveys of all congressional buildings every 5 years to 
     determine the cost and payback period of energy and water 
     conservation measures;
       ``(3) a strategy for installation of life-cycle cost-
     effective energy and water conservation measures;
       ``(4) the results of a study of the costs and benefits of 
     installation of submetering in congressional buildings; and
       ``(5) information packages and `how-to' guides for each 
     Member and employing authority of Congress that detail 
     simple, cost-effective methods to save energy and taxpayer 
     dollars in the workplace.
       ``(c) Annual Report.--The Architect shall submit to 
     Congress annually a report on congressional energy management 
     and conservation programs required under this section that 
     describes in detail--
       ``(1) energy expenditures and savings estimates for each 
     facility;
       ``(2) energy management and conservation projects; and
       ``(3) future priorities to ensure compliance with this 
     section.''.
       (b) Table of Contents Amendment.--The table of contents in 
     section 1(b) of the National Energy Conservation Policy Act 
     is amended by adding at the end of the items relating to part 
     3 of title V the following new item:
       ``Sec. 553. Energy and water savings measures in 
     congressional buildings.''.
       (c) Repeal.--Section 310 of the Legislative Branch 
     Appropriations Act, 1999 (40 U.S.C. 166i), is repealed.
       (d) Energy Infrastructure.--The Architect of the Capitol, 
     building on the Master Plan Study completed in July 2000, 
     shall commission a study to evaluate the energy 
     infrastructure of the Capital Complex to determine how the 
     infrastructure could be augmented to become more energy 
     efficient, using unconventional and renewable energy 
     resources, in a way that would enable the Complex to have 
     reliable utility service in the event of power fluctuations, 
     shortages, or outages.
       (e) Authorization.--There are authorized to be appropriated 
     to the Architect of the Capitol to carry out subsection (d), 
     not more than $2,000,000 for fiscal year 2004.

     SEC. 607. INCREASED USE OF RECOVERED MINERAL COMPONENT IN 
                   FEDERALLY FUNDED PROJECTS INVOLVING PROCUREMENT 
                   OF CEMENT OR CONCRETE.

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

     ``SEC. 6005. INCREASED USE OF RECOVERED MINERAL COMPONENT IN 
                   FEDERALLY FUNDED PROJECTS INVOLVING PROCUREMENT 
                   OF CEMENT OR CONCRETE.

       ``(a) Definitions.--In this section:
       ``(1) Agency head.--The term `agency head' means--
       ``(A) the Secretary of Transportation; and
       ``(B) the head of each other Federal agency that on a 
     regular basis procures, or provides Federal funds to pay or 
     assist in paying the cost of procuring, material for cement 
     or concrete projects.
       ``(2) Cement or concrete project.--The term `cement or 
     concrete project' means a project for the construction or 
     maintenance of a highway or other transportation facility or 
     a Federal, State, or local government building or other 
     public facility that--
       ``(A) involves the procurement of cement or concrete; and
       ``(B) is carried out in whole or in part using Federal 
     funds.
       ``(3) Recovered mineral component.--The term `recovered 
     mineral component' means--
       ``(A) ground granulated blast furnace slag;
       ``(B) coal combustion fly ash; and
       ``(C) any other waste material or byproduct recovered or 
     diverted from solid waste that the Administrator, in 
     consultation with an agency head, determines should be 
     treated as recovered mineral component under this section for 
     use in cement or concrete projects paid for, in whole or in 
     part, by the agency head.
       ``(b) Implementation of Requirements.--
       ``(1) In general.--Not later than 1 year after the date of 
     enactment of this section, the Administrator and each agency 
     head shall take such actions as are necessary to implement 
     fully all procurement requirements and incentives in effect 
     as of the date of enactment of this section (including 
     guidelines under section 6002) that provide for the use of 
     cement and concrete incorporating recovered mineral component 
     in cement or concrete projects.
       ``(2) Priority.--In carrying out paragraph (1) an agency 
     head shall give priority to achieving greater use of 
     recovered mineral component in cement or concrete projects 
     for which recovered mineral components historically have not 
     been used or have been used only minimally.
       ``(3) Conformance.--The Administrator and each agency head 
     shall carry out this subsection in accordance with section 
     6002.
       ``(c) Full Implementation Study.--
       ``(1) In general.--The Administrator, in cooperation with 
     the Secretary of Transportation and the Secretary of Energy, 
     shall conduct a study to determine the extent to which 
     current procurement requirements, when fully implemented in 
     accordance with subsection (b), may realize energy savings 
     and environmental benefits attainable with substitution of 
     recovered mineral component in cement used in cement or 
     concrete projects.
       ``(2) Matters to be addressed.--The study shall--
       ``(A) quantify the extent to which recovered mineral 
     components are being substituted for Portland cement, 
     particularly as a result of current procurement requirements, 
     and the energy savings and environmental benefits associated 
     with that substitution;
       ``(B) identify all barriers in procurement requirements to 
     fuller realization of energy savings and environmental 
     benefits, including barriers resulting from exceptions from 
     current law; and
       ``(C) (i) identify potential mechanisms to achieve greater 
     substitution of recovered mineral component in types of 
     cement or concrete projects for which recovered mineral 
     components historically have not been used or have been used 
     only minimally;
       ``(ii) evaluate the feasibility of establishing guidelines 
     or standards for optimized substitution rates of recovered 
     mineral component in those cement or concrete projects; and
       ``(iii) identify any potential environmental or economic 
     effects that may result from greater substitution of 
     recovered mineral component in those cement or concrete 
     projects.
       ``(3) Report.--Not later than 30 months after the date of 
     enactment of this section, the Administrator shall submit to 
     the Committee on Appropriations and Committee on Environment 
     and Public Works of the Senate and the Committee on 
     Appropriations, Committee on Energy and Commerce, and 
     Committee on Transportation and Infrastructure of the House 
     of Representatives a report on the study.
       ``(d) Additional Procurement Requirements.--Unless the 
     study conducted under subsection (c) identifies any effects 
     or other problems described in subsection (c)(2)(C)(iii)

[[Page 10174]]

     that warrant further review or delay, the Administrator and 
     each agency head shall, within 1 year of the release of the 
     report in accordance with subsection (c)(3), take additional 
     actions authorized under this section to establish 
     procurement requirements and incentives that provide for the 
     use of cement and concrete with increased substitution of 
     recovered mineral component in the construction and 
     maintenance of cement or concrete projects, so as to--
       ``(1) realize more fully the energy savings and 
     environmental benefits associated with increased 
     substitution; and
       ``(2) eliminate barriers identified under subsection (c).
       ``(e) Effect of Section.--Nothing in this section affects 
     the requirements of section 6002 (including the guidelines 
     and specifications for implementing those requirements).''.
       (b) Table of Contents Amendment.--The table of contents of 
     the Solid Waste Disposal Act is amended by adding after the 
     item relating to section 6004 the following new item:
``Sec. 6005. Increased use of recovered mineral component in federally 
              funded projects involving procurement of cement or 
              concrete.''.

     SEC. 608. UTILITY ENERGY SERVICE CONTRACTS.

       Section 546(c)(1) of the National Energy Conservation 
     Policy Act (42 U.S.C. 8256(c)) is amended to read as follows:
       ``(1) Agencies are authorized and encouraged to participate 
     in programs, including utility energy services contracts, 
     conducted by gas, water and electric utilities and generally 
     available to customers of such utilities, for the purposes of 
     increased energy efficiency, water conservation or the 
     management of electricity demand.''.

     SEC. 609. STUDY OF ENERGY EFFICIENCY STANDARDS.

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

                  Subtitle B--State and Local Programs

     SEC. 611. LOW INCOME COMMUNITY ENERGY EFFICIENCY PILOT 
                   PROGRAM.

       (a) Grants.--The Secretary of Energy is authorized to make 
     grants to units of local government, private, non-profit 
     community development organizations, and Indian tribe 
     economic development entities to improve energy efficiency, 
     identify and develop alternative, renewable and distributed 
     energy supplies, and increase energy conservation in low 
     income rural and urban communities.
       (b) Purpose of Grants.--The Secretary may make grants on a 
     competitive basis for--
       (1) investments that develop alternative, renewable and 
     distributed energy supplies;
       (2) energy efficiency projects and energy conservation 
     programs;
       (3) studies and other activities that improve energy 
     efficiency in low income rural and urban communities;
       (4) planning and development assistance for increasing the 
     energy efficiency of buildings and facilities; and
       (5) technical and financial assistance to local government 
     and private entities on developing new renewable and 
     distributed sources of power or combined heat and power 
     generation.
       (c) Definition.--For purposes of this section, the term 
     ``Indian tribe'' means any Indian tribe, band, nation, or 
     other organized group or community, including any Alaskan 
     Native village or regional or village corporation as defined 
     in or established pursuant to the Alaska Native Claims 
     Settlement Act (43 U.S.C. 1601 et seq.), which is recognized 
     as eligible for the special programs and services provided by 
     the United States to Indians because of their status as 
     Indians.
       (d) Authorization of Appropriations.--For the purposes of 
     this section there are authorized to be appropriated to the 
     Secretary of Energy $20,000,000 for fiscal year 2004 and each 
     fiscal year thereafter through fiscal year 2006.

     SEC. 612. ENERGY EFFICIENT PUBLIC BUILDINGS.

       (a) Grants.--The Secretary of Energy may make grants to the 
     State agency responsible for developing State energy 
     conservation plans under section 362 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6322), or, if no such agency 
     exists, a State agency designated by the Governor of the 
     State, to assist units of local government in the State in 
     improving the energy efficiency of public buildings and 
     facilities--
       (1) through construction of new energy efficient public 
     buildings that use at least 30 percent less energy than a 
     comparable public building constructed in compliance with 
     standards prescribed in chapter 8 of the 2000 International 
     Energy Conservation Code, or a similar State code intended to 
     achieve substantially equivalent efficiency levels; or
       (2) through renovation of existing public buildings to 
     achieve reductions in energy use of at least 30 percent as 
     compared to the baseline energy use in such buildings prior 
     to renovation, assuming a 3-year, weather-normalized average 
     for calculating such baseline.
       (b) Administration.--State energy offices receiving grants 
     under this section shall--
       (1) maintain such records and evidence of compliance as the 
     Secretary may require; and
       (2) develop and distribute information and materials and 
     conduct programs to provide technical services and assistance 
     to encourage planning, financing, and design of energy 
     efficient public buildings by units of local government.
       (c) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated to the 
     Secretary of Energy such sums as may be necessary for each of 
     fiscal years 2003 through 2012. Not more than 30 percent of 
     appropriated funds shall be used for administration.

     SEC. 613. ENERGY EFFICIENT APPLIANCE REBATE PROGRAMS.

       (a) Definitions.--In this section:
       (1) The term ``eligible State'' means a State that meets 
     the requirements of subsection (b).
       (2) The term ``Energy Star program'' means the program 
     established by section 324A of the Energy Policy and 
     Conservation Act.
       (3) The term ``residential Energy Star product'' means a 
     product for a residence that is rated for energy efficiency 
     under the Energy Star program.
       (4) The term ``State energy office'' means the State agency 
     responsible for developing State energy conservation plans 
     under section 362 of the Energy Policy and Conservation Act 
     (42 U.S.C. 6322).
       (5) The term ``State program'' means a State energy 
     efficient appliance rebate program described in subsection 
     (b)(1).
       (b) Eligible States.--A State shall be eligible to receive 
     an allocation under subsection (c) if the State--
       (1) establishes (or has established) a State energy 
     efficient appliance rebate program to provide rebates to 
     residential consumers for the purchase of residential Energy 
     Star products to replace used appliances of the same type;
       (2) submits an application for the allocation at such time, 
     in such form, and containing such information as the 
     Secretary may require; and
       (3) provides assurances satisfactory to the Secretary that 
     the State will use the allocation to supplement, but not 
     supplant, funds made available to carry out the State 
     program.
       (c) Amount of Allocations.--
       (1) Subject to paragraph (2), for each fiscal year, the 
     Secretary shall allocate to the State energy office of each 
     eligible State to carry out subsection (d) an amount equal to 
     the product obtained by multiplying the amount made available 
     under subsection (f) for the fiscal year by the ratio that 
     the population of the State in the most recent calendar year 
     for which data are available bears to the total population of 
     all eligible States in that calendar year.
       (2) For each fiscal year, the amounts allocated under this 
     subsection shall be adjusted proportionately so that no 
     eligible State is allocated a sum that is less than an amount 
     determined by the Secretary.
       (d) Use of Allocated Funds.--The allocation to a State 
     energy office under subsection (c) may be used to pay up to 
     50 percent of the cost of establishing and carrying out a 
     State program.
       (e) Issuance of Rebates.--Rebates may be provided to 
     residential consumers that meet the requirements of the State 
     program. The amount of a rebate shall be determined by the 
     State energy office, taking into consideration--
       (1) the amount of the allocation to the State energy office 
     under subsection (c);
       (2) the amount of any Federal or State tax incentive 
     available for the purchase of the residential Energy Star 
     product; and
       (3) the difference between the cost of the residential 
     Energy Star product and the cost of an appliance that is not 
     a residential Energy Star product, but is of the same type 
     as, and is the nearest capacity, performance, and other 
     relevant characteristics (as determined by the State energy 
     office) to the residential Energy Star product.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $50,000,000 for 
     each of the fiscal years 2004 through 2008.

                     Subtitle C--Consumer Products

     SEC. 621. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL 
                   PRODUCTS.

       (a) Definitions.--Section 321 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6291) is amended--
       (1) in subparagraph (30)(S), by striking the period and 
     adding at the end the following: ``but does not include any 
     lamps specifically designed to be used for special purpose 
     applications, and also does not include any lamp not 
     described in subparagraph (D) that is excluded by the 
     Secretary, by rule.''; and
       (2) by adding at the end the following:
       ``(32) The term `battery charger' means a device that 
     charges batteries for consumer products.
       ``(33) The term `commercial refrigerator, freezer and 
     refrigerator-freezer' means a refrigerator, freezer or 
     refrigerator-freezer that--

[[Page 10175]]

       ``(A) is not a consumer product regulated under this Act; 
     and
       ``(B) incorporates most components involved in the vapor-
     compression cycle and the refrigerated compartment in a 
     single package.
       ``(34) The term `external power supply' means an external 
     power supply circuit that is used to convert household 
     electric current into either DC current or lower-voltage AC 
     current to operate a consumer product.
       ``(35) The term `illuminated exit sign' means a sign that--
       ``(A) is designed to be permanently fixed in place to 
     identify an exit; and
       ``(B) consists of an electrically powered integral light 
     source that illuminates the legend `EXIT' and any directional 
     indicators and provides contrast between the legend, any 
     directional indicators, and the background.
       ``(36)(A) Except as provided in subparagraph (B), the term 
     `low-voltage dry-type transformer' means a transformer that--
       ``(i) has an input voltage of 600 volts or less;
       ``(ii) is air-cooled;
       ``(iii) does not use oil as a coolant; and
       ``(iv) is rated for operation at a frequency of 60 Hertz.
       ``(B) The term `low-voltage dry-type transformer' does not 
     include--
       ``(i) transformers with multiple voltage taps, with the 
     highest voltage tap equaling at least 20 percent more than 
     the lowest voltage tap;
       ``(ii) transformers, such as those commonly known as drive 
     transformers, rectifier transformers, auto-transformers, 
     Uninterruptible Power System transformers, impedance 
     transformers, harmonic transformers, regulating transformers, 
     sealed and nonventilating transformers, machine tool 
     transformers, welding transformers, grounding transformers, 
     or testing transformers, that are designed to be used in a 
     special purpose application and are unlikely to be used in 
     general purpose applications; or
       ``(iii) any transformer not listed in clause (ii) that is 
     excluded by the Secretary by rule because the transformer is 
     designed for a special application and the application of 
     standards to the transformer would not result in significant 
     energy savings.
       ``(37)(A) Except as provided in subsection (B), the term 
     `distribution transformer' means a transformer that--
       ``(i) has an input voltage of 34.5 kilovolts or less;
       ``(ii) has an output voltage of 600 volts or less; and
       ``(iii) is rated for operation at a frequency of 60 Hertz.
       ``(B) The term `distribution transformer' does not 
     include--
       ``(i) transformers with multiple voltage taps, with the 
     highest voltage tap equaling at least 15 percent more than 
     the lowest voltage tap;
       ``(ii) transformers, such as those commonly known as drive 
     transformers, rectifier transformers, autotransformers, 
     Uninterruptible Power System transformers, impedance 
     transformers, harmonic transformers, regulating transformers, 
     sealed and nonventilating transformers, machine tool 
     transformers, welding transformers, grounding transformers, 
     or testing transformers, that are designed to be used in a 
     special purpose application, and are unlikely to be used in 
     general purpose applications; or
       ``(iii) any transformer not listed in clause (ii) that is 
     excluded by the Secretary by rule because the transformer is 
     designed for a special application, is unlikely to be used in 
     general purpose applications, and the application of 
     standards to the transformer would not result in significant 
     energy savings.
       ``(38) The term `standby mode' means the lowest amount of 
     electric power used by a household appliance when not 
     performing its active functions, as defined on an individual 
     product basis by the Secretary.
       ``(39) The term `torchiere' means a portable electric lamp 
     with a reflector bowl that directs light upward so as to give 
     indirect illumination.
       ``(40) The term `transformer' means a device consisting of 
     two or more coils of insulated wire that transfers 
     alternating current by electromagnetic induction from one 
     coil to another to change the original voltage or current 
     value.
       ``(41) The term `unit heater' means a self-contained fan-
     type heater designed to be installed within the heated space, 
     except that such term does not include a warm air furnace.
       ``(42) The term `traffic signal module' means a standard 8-
     inch (200mm) or 12-inch (300mm) traffic signal indication, 
     consisting of a light source, a lens, and all other parts 
     necessary for operation, that communicates movement messages 
     to drivers through red, amber, and green colors.''
       (b) Test Procedures.--Section 323 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6293) is amended--
       (1) in subsection (b), by adding at the end the following:
       ``(9) Test procedures for illuminated exit signs shall be 
     based on the test method used under Version 2.0 of the Energy 
     Star program of the Environmental Protection Agency for 
     illuminated exit signs.
       ``(10) Test procedures for low voltage dry-type 
     distribution transformers shall be based on the `Standard 
     Test Method for Measuring the Energy Consumption of 
     Distribution Transformers' prescribed by the National 
     Electrical Manufacturers Association (NEMA TP 2 1998). The 
     Secretary may review and revise this test procedure.
       ``(11) Test procedures for traffic signal modules shall be 
     based on the test method used under the Energy Star program 
     of the Environmental Protection Agency for traffic signal 
     modules, as in effect on the date of enactment of this 
     paragraph.
       ``(12) Test procedures for medium base compact fluorescent 
     lamps shall be based on the test methods used under the 
     August 9, 2001 version of the Energy Star program of the 
     Environmental Protection Agency and Department of Energy for 
     compact fluorescent lamps. Covered products shall meet all 
     test requirements for regulated parameters in section 
     325(bb). However, covered products may be marketed prior to 
     completion of lamp life and lumen maintenance at 40% of rated 
     life testing provided manufacturers document engineering 
     predictions and analysis that support expected attainment of 
     lumen maintenance at 40% rated life and lamp life time.''; 
     and
       (2) by adding at the end the following:
       ``(f) Additional Consumer and Commercial Products.--The 
     Secretary shall within 24 months after the date of enactment 
     of this subsection prescribe testing requirements for 
     suspended ceiling fans, refrigerated bottled or canned 
     beverage vending machines, and commercial refrigerators, 
     freezers and refrigerator-freezers. Such testing requirements 
     shall be based on existing test procedures used in industry 
     to the extent practical and reasonable. In the case of 
     suspended ceiling fans, such test procedures shall include 
     efficiency at both maximum output and at an output no more 
     than 50 percent of the maximum output.''.
         (c) New Standards.--Section 325 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6295) is amended by adding at the 
     end the following:
       ``(u) Standby Mode Electric Energy Consumption.--
       ``(1) Initial Rulemaking.--
       ``(A) The Secretary shall, within 18 months after the date 
     of enactment of this subsection, prescribe by notice and 
     comment, definitions of standby mode and test procedures for 
     the standby mode power use of battery chargers and external 
     power supplies. In establishing these test procedures, the 
     Secretary shall consider, among other factors, existing test 
     procedures used for measuring energy consumption in standby 
     mode and assess the current and projected future market for 
     battery chargers and external power supplies. This assessment 
     shall include estimates of the significance of potential 
     energy savings from technical improvements to these products 
     and suggested product classes for standards. Prior to the end 
     of this time period, the Secretary shall hold a scoping 
     workshop to discuss and receive comments on plans for 
     developing energy conservation standards for standby mode 
     energy use for these products.
       ``(B) The Secretary shall, within 3 years after the date of 
     enactment of this subsection, issue a final rule that 
     determines whether energy conservation standards shall be 
     promulgated for battery chargers and external power supplies 
     or classes thereof. For each product class, any such 
     standards shall be set at the lowest level of standby energy 
     use that--
       ``(i) meets the criteria of subsections (o), (p), (q), (r), 
     (s) and (t); and
       ``(ii) will result in significant overall annual energy 
     savings, considering both standby mode and other operating 
     modes.
       ``(2) Designation of Additional Covered Products.--
       ``(A) Not later than 180 days after the date of enactment 
     of this subsection, the Secretary shall publish for public 
     comment and public hearing a notice to determine whether any 
     non-covered products should be designated as covered products 
     for the purpose of instituting a rulemaking under this 
     section to determine whether an energy conservation standard 
     restricting standby mode energy consumption, should be 
     promulgated; except that any restriction on standby mode 
     energy consumption shall be limited to major sources of such 
     consumption.
       ``(B) In making the determinations pursuant to subparagraph 
     (A) of whether to designate new covered products and 
     institute rulemakings, the Secretary shall, among other 
     relevant factors and in addition to the criteria in section 
     322(b), consider--
       ``(i) standby mode power consumption compared to overall 
     product energy consumption; and
       ``(ii) the priority and energy savings potential of 
     standards which may be promulgated under this subsection 
     compared to other required rulemakings under this section and 
     the available resources of the Department to conduct such 
     rulemakings.
       ``(C) Not later than 1 year after the date of enactment of 
     this subsection, the Secretary shall issue a determination of 
     any new covered products for which he intends to institute 
     rulemakings on standby mode pursuant to this section and he 
     shall state the dates by which he intends to initiate those 
     rulemakings.

[[Page 10176]]

       ``(3) Review of standby energy use in covered products.--In 
     determining pursuant to section 323 whether test procedures 
     and energy conservation standards pursuant to this section 
     should be revised, the Secretary shall consider for covered 
     products which are major sources of standby mode energy 
     consumption whether to incorporate standby mode into such 
     test procedures and energy conservation standards, taking 
     into account, among other relevant factors, the criteria for 
     non-covered products in subparagraph (B) of paragraph (2) of 
     this subsection.
       ``(4) Rulemaking.--
       ``(A) Any rulemaking instituted under this subsection or 
     for covered products under this section which restricts 
     standby mode power consumption shall be subject to the 
     criteria and procedures for issuing energy conservation 
     standards set forth in this section and the criteria set 
     forth in subparagraph (B) of paragraph (2) of this 
     subsection.
       ``(B) No standard can be proposed for new covered products 
     or covered products in a standby mode unless the Secretary 
     has promulgated applicable test procedures for each product 
     pursuant to section 323.
       ``(C) The provisions of section 327 shall apply to new 
     covered products which are subject to the rulemakings for 
     standby mode after a final rule has been issued.
       ``(5) Effective date.--Any standard promulgated under this 
     subsection shall be applicable to products manufactured or 
     imported 3 years after the date of promulgation.
       ``(6) Voluntary Programs.--The Secretary and the 
     Administrator shall collaborate and develop programs, 
     including programs pursuant to section 324A (relating to 
     Energy Star Programs) and other voluntary industry agreements 
     or codes of conduct, which are designed to reduce standby 
     mode energy use.
       ``(v) Suspended Ceiling Fans, Vending Machines, and 
     Commercial Refrigerators, Freezers and Refrigerator-
     freezers.--The Secretary shall within 36 months after the 
     date on which testing requirements are prescribed by the 
     Secretary pursuant to section 323(f), prescribe, by rule, 
     energy conservation standards for suspended ceiling fans, 
     refrigerated bottled or canned beverage vending machines, and 
     commercial refrigerators, freezers and refrigerator-freezers. 
     In establishing standards under this subsection, the 
     Secretary shall use the criteria and procedures contained in 
     subsections (l) and (m). Any standard prescribed under this 
     subsection shall apply to products manufactured 3 years after 
     the date of publication of a final rule establishing such 
     standard.
       ``(w) Illuminated Exit Signs.--Illuminated exit signs 
     manufactured on or after January 1, 2005 shall meet the 
     Version 2.0 Energy Star Program performance requirements for 
     illuminated exit signs prescribed by the Environmental 
     Protection Agency.
       ``(x) Torchieres.--Torchieres manufactured on or after 
     January 1, 2005--
       ``(1) shall consume not more than 190 watts of power; and
       ``(2) shall not be capable of operating with lamps that 
     total more than 190 watts.
       ``(y) Distribution Transformers.--The efficiency of low 
     voltage dry-type transformers manufactured on or after 
     January 1, 2005 shall be the Class I Efficiency Levels for 
     distribution transformers specified in Table 4-2 of the 
     `Guide for Determining Energy Efficiency for Distribution 
     Transformers' published by the National Electrical 
     Manufacturers Association (NEMA TP-1-2002).
       ``(z) Traffic signal modules.--Traffic signal modules 
     manufactured on or after January 1, 2006 shall meet the 
     performance requirements used under the Energy Star program 
     of the Environmental Protection Agency for traffic signals, 
     as in effect on the date of enactment of this paragraph, and 
     shall be installed with compatible, electrically-connected 
     signal control interface devices and conflict monitoring 
     systems.
       ``(aa) Unit Heaters.--Unit heaters manufactured on or after 
     the date that is three years after the date of enactment of 
     the Energy Policy Act of 2003 shall be equipped with an 
     intermittent ignition device and shall have either power 
     venting or an automatic flue damper.
       ``(bb) Medium Base Compact Fluorescent Lamps.--Bare lamp 
     and covered lamp (no reflector) medium base compact 
     fluorescent lamps manufactured on or after January 1, 2005 
     shall meet the following requirements prescribed by the 
     August 9, 2001 version of the Energy Star Program 
     Requirements for CFLs, Energy Star Eligibility Criteria, 
     Energy-Efficiency Specification issued by the Environmental 
     Protection Agency and Department of Energy: minimum initial 
     efficacy; lumen maintenance at 1000 hours; lumen maintenance 
     at 40% of rated life; rapid cycle stress test; and lamp life. 
     The Secretary may, by rule, establish requirements for color 
     quality (CRI); power factor; operating frequency; and maximum 
     allowable start time based on the requirements prescribed by 
     the August 9, 2001 version of the Energy Star Program 
     Requirements for CFLs. The Secretary may, by rule, revise 
     these requirements or establish other requirements 
     considering energy savings, cost effectiveness, and consumer 
     satisfaction.
       ``(cc) Effective date.--The provisions of section 327 shall 
     apply--
       ``(1) to products for which standards are to be set 
     pursuant to subsection (v) of this section on the date on 
     which a final rule is issued by the Department of Energy, 
     except that any state or local standards prescribed or 
     enacted for any such product prior to the date on which such 
     final rule is issued shall not be preempted until the 
     standard set pursuant to subsection (v) for that product 
     takes effect; and
       ``(2) to products for which standards are set in 
     subsections (w) through (bb) of this section on the date of 
     enactment of the Energy Policy Act of 2003, except that any 
     state or local standards prescribed or enacted prior to the 
     date of enactment of the Energy Policy Act of 2003 shall not 
     be preempted until the standards set in subsections (w) 
     through (bb) take effect.''.

     SEC. 622. ENERGY LABELING.

       (a) Rulemaking on Effectiveness of Consumer Product 
     Labeling.--Paragraph (2) of section 324(a) of the Energy 
     Policy and Conservation Act (42 U.S.C. 6294(a)(2)) is amended 
     by adding at the end the following:
       ``(F) Not later than 3 months after the date of enactment 
     of this subparagraph, the Commission shall initiate a 
     rulemaking to consider the effectiveness of the current 
     consumer products labeling program in assisting consumers in 
     making purchasing decisions and improving energy efficiency 
     and to consider changes to the labeling rules that would 
     improve the effectiveness of consumer product labels. Such 
     rulemaking shall be completed within 2 years after the date 
     of enactment of this subparagraph.''.
       (b) Rulemaking on Labeling for Additional Products.--
     Section 324(a) of the Energy Policy and Conservation Act (42 
     U.S.C. 6294(a)) is further amended by adding at the end the 
     following:
       ``(5) The Secretary or the Commission, as appropriate, may 
     for covered products referred to in subsections (u) through 
     (aa) of section 325, prescribe, by rule, pursuant to this 
     section, labeling requirements for such products after a test 
     procedure has been set pursuant to section 323. In the case 
     of products to which TP-1 standards under section 325(y) 
     apply, labeling requirements shall be based on the ``Standard 
     for the Labeling of Distribution Transformer Efficiency'' 
     prescribed by the National Electrical Manufacturers 
     Association (NEMA TP-3) as in effect upon the date of 
     enactment of this Act.''.

     SEC. 623. ENERGY STAR PROGRAM.

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

     ``SEC. 324A. ENERGY STAR PROGRAM.

       ``There is established at the Department of Energy and the 
     Environmental Protection Agency a voluntary program to 
     identify and promote energy-efficient products and buildings 
     in order to reduce energy consumption, improve energy 
     security, and reduce pollution through voluntary labeling of 
     or other forms of communication about products and buildings 
     that meet the highest energy efficiency standards. 
     Responsibilities under the program shall be divided between 
     the Department of Energy and the Environmental Protection 
     Agency consistent with the terms of agreements between the 
     two agencies. The Administrator and the Secretary shall--
       ``(1) promote Energy Star compliant technologies as the 
     preferred technologies in the marketplace for achieving 
     energy efficiency and to reduce pollution;
       ``(2) work to enhance public awareness of the Energy Star 
     label, including special outreach to small businesses;
       ``(3) preserve the integrity of the Energy Star label;
       ``(4) solicit the comments of interested parties in 
     establishing a new Energy Star product category, 
     specifications, or criteria, or in revising a product 
     category, and upon adoption of a new or revised product 
     category, specifications, or criteria, publish a notice of 
     any changes in product categories, specifications or criteria 
     along with an explanation of such changes, and, where 
     appropriate, responses to comments submitted by interested 
     parties; and
       ``(5) unless waived or reduced by mutual agreement between 
     the Administrator, the Secretary, and the affected parties, 
     provide not less than 12 months lead time prior to 
     implementation of changes in product categories, 
     specifications, or criteria as may be adopted pursuant to 
     this section.''.
       (b) Table of Contents Amendment. The table of contents of 
     the Energy Policy and Conservation Act is amended by 
     inserting after the item relating to section 324 the 
     following new item:

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

     SEC. 624. HVAC MAINTENANCE CONSUMER EDUCATION PROGRAM.

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

[[Page 10177]]

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

                       Subtitle D--Public Housing

     SEC. 631. CAPACITY BUILDING FOR ENERGY-EFFICIENT, AFFORDABLE 
                   HOUSING.

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

     SEC. 632. INCREASE OF CDBG PUBLIC SERVICES CAP FOR ENERGY 
                   CONSERVATION AND EFFICIENCY ACTIVITIES.

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

       SEC. 633. FHA MORTGAGE INSURANCE INCENTIVES FOR ENERGY 
                   EFFICIENT HOUSING.

       (a) Single Family Housing Mortgage Insurance.--Section 
     203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)) 
     is amended, in the first undesignated and indented paragraph 
     beginning after subparagraph (B)(iii) (relating to solar 
     energy systems)--
       (1) by inserting ``or paragraph (10)'' before the first 
     comma; and
        (2) by striking ``20 percent'' and inserting ``30 
     percent''.
         (b) Multifamily Housing Mortgage Insurance.--Section 
     207(c) of the National Housing Act (12 U.S.C. 1713(c)) is 
     amended, in the second undesignated paragraph beginning after 
     paragraph (3) (relating to solar energy systems and 
     residential energy conservation measures), by striking ``20 
     percent'' and inserting ``30 percent''.
       (c) Cooperative Housing Mortgage Insurance.--Section 213(p) 
     of the National Housing Act (12 U.S.C. 1715e(p)) is amended 
     by striking ``20 per centum'' and inserting ``30 percent''.
       (d) Rehabilitation and Neighborhood Conservation Housing 
     Mortgage Insurance.--Section 220(d)(3)(B)(iii) of the 
     National Housing Act (12 U.S.C. 1715k(d)(3)(B)(iii)) is 
     amended by striking ``20 per centum'' and inserting ``30 
     percent''.
       (e) Low-income Multifamily Housing Mortgage Insurance.--
     Section 221(k) of the National Housing Act (12 U.S.C. 
     1715l(k)) is amended by striking ``20 per centum'' and 
     inserting ``30 percent''.
       (f) Elderly Housing Mortgage Insurance.--The proviso at the 
     end of section 231(c)(2) of the National Housing Act (12 
     U.S.C. 1715v(c)(2)) is amended by striking ``20 per centum'' 
     and inserting ``30 percent''.
         (g) Condominium Housing Mortgage Insurance.--Section 
     234(j) of the National Housing Act (12 U.S.C. 1715y(j)) is 
     amended by striking ``20 per centum'' and inserting ``30 
     percent''.

     SEC. 634. PUBLIC HOUSING CAPITAL FUND.

       Section 9 of the United States Housing Act of 1937 (42 
     U.S.C. 1437g) is amended--
       (a) in subsection (d)(1)--
       (1) in subparagraph (I), by striking ``and'' at the end;
       (2) in subparagraph (J), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following new subparagraphs:
       ``(K) improvement of energy and water-use efficiency by 
     installing fixtures and fittings that conform to the American 
     Society of Mechanical Engineers/American National Standards 
     Institute standards A112.19.2-1998 and A112.18.1-2000, or any 
     revision thereto, applicable at the time of installation, and 
     by increasing energy efficiency and water conservation by 
     such other means as the Secretary determines are appropriate; 
     and
       ``(L) integrated utility management and capital planning to 
     maximize energy conservation and efficiency measures.''; and 
     (b) in subsection (e)(2)(C)
         (1) by striking ``The'' and inserting the following:
       ``(i) In general. The''; and
       (2) by adding at the end the following:
       ``(ii) Third party contracts.--Contracts described in 
     clause (i) may include contracts for equipment conversions to 
     less costly utility sources, projects with resident-paid 
     utilities, and adjustments to frozen base year consumption, 
     including systems repaired to meet applicable building and 
     safety codes and adjustments for occupancy rates increased by 
     rehabilitation.
       ``(iii) Term of contract.--The total term of a contract 
     described in clause (i) shall not exceed 20 years to allow 
     longer payback periods for retrofits, including windows, 
     heating system replacements, wall insulation, site-based 
     generations, advanced energy savings technologies, including 
     renewable energy generation, and other such retrofits.''.

     SEC. 635. GRANTS FOR ENERGY-CONSERVING IMPROVEMENTS FOR 
                   ASSISTED HOUSING.

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

     SEC. 636. NORTH AMERICAN DEVELOPMENT BANK.

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

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

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

     SEC. 637. ENERGY-EFFICIENT APPLIANCES.

       In purchasing appliances, a public housing agency shall 
     purchase energy-efficient appliances that are Energy Star 
     products or FEMP-designated products, as such terms are 
     defined in section 553 of the National Energy Policy and 
     Conservation Act (as amended by this Act), unless the 
     purchase of energy-efficient appliances is not cost-effective 
     to the agency.

     SEC. 638. ENERGY EFFICIENCY STANDARDS.

       Section 109 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12709) is amended--
       (1) in subsection (a)
       (A) in paragraph (1)
       (i) by striking ``1 year after the date of the enactment of 
     the Energy Policy Act of 1992'' and inserting ``September 30, 
     2003'';
       (ii) in subparagraph (A), by striking ``and'' at the end;
       (iii) in subparagraph (B), by striking the period at the 
     end and inserting ``; and''; and
       (iv) by adding at the end the following:
       ``(C) rehabilitation and new construction of public and 
     assisted housing funded by HOPE VI revitalization grants 
     under section 24 of the United States Housing Act of 1937 (42 
     U.S.C. 1437v), where such standards are determined to be cost 
     effective by the Secretary of Housing and Urban 
     Development.''; and
       (B) in paragraph (2), by striking ``Council of American'' 
     and all that follows through ``90.1--1989') and inserting 
     ``2000 International Energy Conservation Code'';
       (2) in subsection (b)--
       (A) by striking ``1 year after the date of the enactment of 
     the Energy Policy Act of 1992'' and inserting ``September 30, 
     2003''; and
       (B) by striking ``CABO'' and all that follows through 
     ``1989'' and inserting ``the 2000 International Energy 
     Conservation Code''; and
       (3) in subsection (c)--
       (A) in the heading, by striking ``MODEL ENERGY CODE'' and 
     inserting ``INTERNATIONAL ENERGY CONSERVATION CODE''; and
       (B) by striking ``CABO'' and all that follows through 
     ``1989'' and inserting ``the 2000 International Energy 
     Conservation Code''.

     SEC. 639. ENERGY STRATEGY FOR HUD.

       The Secretary of Housing and Urban Development shall 
     develop and implement an integrated strategy to reduce 
     utility expenses through cost-effective energy conservation 
     and efficiency measures and energy efficient

[[Page 10178]]

     design and construction of public and assisted housing. The 
     energy strategy shall include the development of energy 
     reduction goals and incentives for public housing agencies. 
     The Secretary shall submit a report to Congress, not later 
     than one year after the date of the enactment of this Act, on 
     the energy strategy and the actions taken by the Department 
     of Housing and Urban Development to monitor the energy usage 
     of public housing agencies and shall submit an update every 
     two years thereafter on progress in implementing the 
     strategy.

                    TITLE VII--TRANSPORTATION FUELS

                 Subtitle A--Alternative Fuel Programs

     SEC. 701. USE OF ALTERNATIVE FUELS BY DUAL-FUELED VEHICLES.

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

     SEC. 702. FUEL USE CREDITS.

       (a) In General.--Section 312 of the Energy Policy Act of 
     1992 (42 U.S.C. 13220) is amended to read as follows:

     ``SEC. 312. FUEL USE CREDITS.

       ``(a) Allocation.--
       ``(1) The Secretary shall allocate one credit under this 
     section to a fleet or covered person for each qualifying 
     volume of alternative fuel or biodiesel purchased for use in 
     an on-road motor vehicle operated by the fleet that weighs 
     more than 8,500 pounds gross vehicle weight rating.
       ``(2) No credits shall be allocated under this section for 
     purchase of an alternative fuel or biodiesel that is required 
     by Federal or State law.
       ``(3) A fleet or covered person seeking a credit under this 
     section shall provide written documentation to the Secretary 
     supporting the allocation of a credit to such fleet or 
     covered person under this section.
       ``(b) Use.--At the request of a fleet or covered person 
     allocated a credit under subsection (a), the Secretary shall, 
     for the year in which the purchase of a qualifying volume is 
     made, treat that purchase as the acquisition of one 
     alternative fueled vehicle the fleet or covered person is 
     required to acquire under this title, title IV, or title V.
       ``(c) Treatment.--A credit provided to a fleet or covered 
     person under this section shall be considered a credit under 
     section 508.
       ``(d) Issuance of Rule.--Not later than 6 months after the 
     date of enactment of this section, the Secretary shall issue 
     a rule establishing procedures for the implementation of this 
     section.
       ``(e) Definitions.--For the purposes of this section--
       ``(1) the term ``biodiesel'' means a diesel fuel substitute 
     produced from non-petroleum renewable resources that meets 
     the registration requirements for fuels and fuel additives 
     established by the Environmental Protection Agency under 
     section 211 of the Clean Air Act; and
       ``(2) the term ``qualifying volume'' means--
       ``(A) in the case of biodiesel, when used as a component of 
     fuel containing at least 20 percent biodiesel by volume, 450 
     gallons, or if the Secretary determines by rule that the 
     average annual alternative fuel use in light duty vehicles by 
     fleets and covered persons exceeds 450 gallons or gallon 
     equivalents, the amount of such average annual alternative 
     fuel use; or
       ``(B) in the case of an alternative fuel, the amount of 
     such fuel determined by the Secretary to have an equivalent 
     energy content to the amount of biodiesel defined as a 
     qualifying volume pursuant to subparagraph (A).''
       (b) Table of Contents Amendment.--The table of contents of 
     the Energy Policy Act of 1992 is amended by adding at the end 
     of the items relating to title III the following new item:

``Sec. 312. Fuel use credits.''

     SEC. 703. NEIGHBORHOOD ELECTRIC VEHICLES.

       Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 
     13211) is amended--
       (1) in paragraph (3), by striking ``or a dual fueled 
     vehicle'' and inserting ``, a dual fueled vehicle, or a 
     neighborhood electric vehicle'';
       (2) by striking ``and'' at the end of paragraph (13);
       (3) by striking the period at the end of paragraph (14) and 
     inserting ``; and''; and
       (4) by adding at the end the following:
       ``(15) the term `neighborhood electric vehicle' means a 
     motor vehicle--
       ``(A) which meets the definition of a low-speed vehicle, as 
     such term is defined in part 571 of title 49, Code of Federal 
     Regulations;
       ``(B) which meets the definition of a zero-emission 
     vehicle, as such term is defined in section 86.1702-99 of 
     title 40, Code of Federal Regulations;
       ``(C) which meets the requirements of Federal Motor Vehicle 
     Safety Standard No. 500; and
       ``(D) which has a top speed of not greater than 25 miles 
     per hour.''.

     SEC. 704. CREDITS FOR MEDIUM AND HEAVY DUTY DEDICATED 
                   VEHICLES.

       Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 
     13258) is amended by adding at the end the following:
       ``(e) Credit for Purchase of Medium and Heavy Duty 
     Dedicated Vehicles.--
       ``(1) Definitions.--In this subsection:
       ``(A) The term `medium duty dedicated vehicle' means a 
     dedicated vehicle that has a gross vehicle weight rating of 
     more than 8,500 pounds but not more than 14,000 pounds.
       ``(B) The term `heavy duty dedicated vehicle' means a 
     dedicated vehicle that has a gross vehicle weight rating of 
     more than 14,000 pounds.
       ``(2) Credits for Medium Duty Vehicles.--The Secretary 
     shall issue 2 full credits to a fleet or covered person under 
     this title, if the fleet or covered person acquires a medium 
     duty dedicated vehicle.
       ``(3) Credits for Heavy Duty Vehicles.--The Secretary shall 
     issue 3 full credits to a fleet or covered person under this 
     title, if the fleet or covered person acquires a heavy duty 
     dedicated vehicle.
       ``(4) Use of Credits.--At the request of a fleet or covered 
     person allocated a credit under this subsection, the 
     Secretary shall, for the year in which the acquisition of the 
     dedicated vehicle is made, treat that credit as the 
     acquisition of 1 alternative fueled vehicle that the fleet or 
     covered person is required to acquire under this title.''.

     SEC. 705. ALTERNATIVE FUEL INFRASTRUCTURE.

       Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 
     13258) is further amended by adding at the end the following:
       ``(f) Credit for Investment in Alternative Fuel 
     Infrastructure.--
       ``(1) Definitions.--In this subsection, the term 
     `qualifying infrastructure' means--
       ``(A) equipment required to refuel or recharge alternative 
     fueled vehicles;
       ``(B) facilities or equipment required to maintain, repair, 
     or operate alternative fueled vehicles;
       ``(C) such other activities the Secretary considers to 
     constitute an appropriate expenditure in support of the 
     operation, maintenance, or further widespread adoption of or 
     utilization of alternative fueled vehicles.
       ``(2) Issuance of Credits.--The Secretary shall issue a 
     credit to a fleet or covered person under this title for 
     investment in qualifying infrastructure if the qualifying 
     infrastructure is open to the general public during regular 
     business hours.
       ``(3) Amount.--For the purposes of credits under this 
     subsection--
       ``(A) 1 credit shall be equal to a minimum investment of 
     $25,000 in cash or equivalent expenditure, as determined by 
     the Secretary; and
       ``(B) except in the case of a Federal or State fleet, no 
     part of the investment may be provided by Federal or State 
     funds.
       ``(4) Use of Credits.--At the request of a fleet or covered 
     person allocated a credit under this subsection, the 
     Secretary shall, for the year in which the investment is 
     made, treat that credit as the acquisition of 1 alternative 
     fueled vehicle that the fleet or covered person is required 
     to acquire under this title.''.

     SEC. 706. INCREMENTAL COST ALLOCATION.

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

     SEC. 707. REVIEW OF ALTERNATIVE FUEL PROGRAMS.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this section, the Secretary shall complete a 
     study to determine the effect that titles III, IV and V of 
     the Energy Policy Act of 1992 (42 U.S.C. 13211 et seq.) have 
     had on the development of alternative fueled vehicle 
     technology, its availability in the market, and the cost of 
     light duty motor vehicles that are alternative fueled 
     vehicles.
       (b) Topics.--As part of such study, the Secretary shall 
     specifically identify--
       (1) the number of alternative fueled vehicles acquired by 
     fleets or covered persons required to acquire alternative 
     fueled vehicles;
       (2) the amount, by type, of alternative fuel actually used 
     in alternative fueled vehicles acquired by fleets or covered 
     persons;
       (3) the amount of petroleum displaced by the use of 
     alternative fuels in alternative fueled vehicles acquired by 
     fleets or covered persons;
       (4) the cost of compliance with vehicle acquisition 
     requirements by fleets or covered persons; and
       (5) the existence of obstacles preventing compliance with 
     vehicle acquisition requirements and increased use of 
     alternative fuel in alternative fueled vehicles acquired by 
     fleets or covered persons.

[[Page 10179]]

       (c) Report.--Upon completion of the study, the Secretary 
     shall submit to the Congress a report that describes the 
     results of the study conducted under this section and 
     includes any recommendations of the Secretary for legislative 
     or administrative changes concerning the alternative fueled 
     vehicle requirements under titles III, IV and V of the Energy 
     Policy Act of 1992 (42 U.S.C. 13211 et seq.). Such study 
     shall be updated on a regular basis as deemed necessary by 
     the Secretary.

     SEC. 708. HIGH OCCUPANCY VEHICLE EXCEPTION.

       Notwithstanding section 102(a)(1) of title 23, United 
     States Code, a State may permit a vehicle with fewer than 2 
     occupants to operate in high occupancy vehicle lanes if such 
     vehicle is a dedicated vehicle (as defined in section 301 of 
     the Energy Policy Act of 1992 (42 U.S.C. 13211)).

     SEC. 709. ALTERNATIVE COMPLIANCE AND FLEXIBILITY.

       (a) Alternative Compliance.--Title V of the Energy Policy 
     Act of 1992 is amended by adding at the end the following:

     ``SEC. 515. ALTERNATIVE COMPLIANCE.

       ``(a) Application for Waiver.--Any covered person subject 
     to the requirements of section 501 and any State subject to 
     the requirement of section 507(o) may petition the Secretary 
     for a waiver of the applicable requirements of section 501 or 
     507(o).
       ``(b) Grant of Waiver.--The Secretary may grant a waiver of 
     the requirements of section 501 or 507(o) upon a showing that 
     the fleet owned, operated, leased, or otherwise controlled by 
     the State or covered person--
       ``(1) will achieve a reduction in its annual consumption of 
     petroleum fuels equal to the reduction in consumption of 
     petroleum that would result from compliance with section 501 
     or 507(o); and
       ``(2) is in compliance with all applicable vehicle emission 
     standards established by the Administrator under the Clean 
     Air Act.
       ``(c) Revocation of Waiver.--The Secretary shall revoke any 
     waiver granted under this section if the State or covered 
     person fails to comply with the requirements of subsection 
     (b).''.
       (b) Credit for Hybrid Vehicles, Dedicated Alternative Fuel 
     Vehicles, and Infrastructure.--Section 507 of the Energy 
     Policy Act of 1992 (42 U.S.C. 13258) (as amended by section 
     705) is amended by adding at the end the following:
       ``(r) Credits for New Qualified Hybrid Motor Vehicles.--
       ``(1) Definitions.--In this subsection:
       ``(A) 2000 model year city fuel efficiency.--The term `2000 
     model year city fuel efficiency', with respect to a motor 
     vehicle, means fuel efficiency determined in accordance with 
     the following tables:
       ``(i) In the case of a passenger automobile:
``If vehicle inertia weightThe 2000 model year city fuel efficiency is:
1,500 or 1,750 lbs.............................................43.7 mpg
2,000 lbs......................................................38.3 mpg
2,250 lbs......................................................34.1 mpg
2,500 lbs......................................................30.7 mpg
2,750 lbs......................................................27.9 mpg
3,000 lbs......................................................25.6 mpg
3,500 lbs......................................................22.0 mpg
4,000 lbs......................................................19.3 mpg
4,500 lbs......................................................17.2 mpg
5,000 lbs......................................................15.5 mpg
5,500 lbs......................................................14.1 mpg
6,000 lbs......................................................12.9 mpg
6,500 lbs......................................................11.9 mpg
7,000 to 8,500 lbs............................................11.1 mpg.

       ``(ii) In the case of a light truck:
``If vehicle inertia weightThe 2000 model year city fuel efficiency is:
1,500 or 1,750 lbs.............................................37.6 mpg
2,000 lbs......................................................33.7 mpg
2,250 lbs......................................................30.6 mpg
2,500 lbs......................................................28.0 mpg
2,750 lbs......................................................25.9 mpg
3,000 lbs......................................................24.1 mpg
3,500 lbs......................................................21.3 mpg
4,000 lbs......................................................19.0 mpg
4,500 lbs......................................................17.3 mpg
5,000 lbs......................................................15.8 mpg
5,500 lbs......................................................14.6 mpg
6,000 lbs......................................................13.6 mpg
6,500 lbs......................................................12.8 mpg
7,000 to 8,500 lbs............................................12.0 mpg.

       ``(B) Administrator.--The term `Administrator' means the 
     Administrator of the Environmental Protection Agency.
       ``(C) Energy storage device.--The term `energy storage 
     device' means an onboard rechargeable energy storage system 
     or similar storage device.
       ``(D) Fuel efficiency.--The term `fuel efficiency' means 
     the percentage increased fuel efficiency specified in table 1 
     in paragraph (2)(C) over the average 2000 model year city 
     fuel efficiency of vehicles in the same weight class.
       ``(E) Maximum available power.--The term `maximum available 
     power', with respect to a new qualified hybrid motor vehicle 
     that is a passenger vehicle or light truck, means the 
     quotient obtained by dividing--
       ``(i) the maximum power available from the electrical 
     storage device of the new qualified hybrid motor vehicle, 
     during a standard 10-second pulse power or equivalent test; 
     by
       ``(ii) the sum of--
       ``(I) the maximum power described in clause (i); and
       ``(II) the net power of the internal combustion or heat 
     engine, as determined in accordance with standards 
     established by the Society of Automobile Engineers.
       ``(F) Motor vehicle.--The term `motor vehicle' has the 
     meaning given the term in section 216 of the Clean Air Act 
     (42 U.S.C. 7550).
       ``(G) New qualified hybrid motor vehicle.--The term `new 
     qualified hybrid motor vehicle' means a motor vehicle that--
       ``(i) draws propulsion energy from both--
       ``(I) an internal combustion engine (or heat engine that 
     uses combustible fuel); and
       ``(II) an energy storage device;
       ``(ii) in the case of a passenger automobile or light 
     truck--
       ``(I) in the case of a 2001 or later model vehicle, 
     receives a certificate of conformity under the Clean Air Act 
     (42 U.S.C. 7401 et seq.) and produces emissions at a level 
     that is at or below the standard established by a qualifying 
     California standard described in section 243(e)(2) of the 
     Clean Air Act (42 U.S.C. 7583(e)(2)) for that make and model 
     year; and
       ``(II) in the case of a 2004 or later model vehicle, is 
     certified by the Administrator as producing emissions at a 
     level that is at or below the level established for Bin 5 
     vehicles in the Tier 2 regulations promulgated by the 
     Administrator under section 202(i) of the Clean Air Act (42 
     U.S.C. 7521(i)) for that make and model year vehicle; and
       ``(iii) employs a vehicle braking system that recovers 
     waste energy to charge an energy storage device.
       ``(H) Vehicle inertia weight class. The term `vehicle 
     inertia weight class' has the meaning given the term in 
     regulations promulgated by the Administrator for purposes of 
     the administration of title II of the Clean Air Act (42 
     U.S.C. 7521 et seq.).
       ``(2) Allocation.--
       ``(A) In general.--The Secretary shall allocate a partial 
     credit to a fleet or covered person under this title if the 
     fleet or person acquires a new qualified hybrid motor vehicle 
     that is eligible to receive a credit under each of the tables 
     in subparagraph (C).
       ``(B) Amount.--The amount of a partial credit allocated 
     under subparagraph (A) for a vehicle described in that 
     subparagraph shall be equal to the sum of--
       ``(i) the partial credits determined under table 1 in 
     subparagraph (C); and
       ``(ii) the partial credits determined under table 2 in 
     subparagraph (C).
       ``(C) Tables.--The tables referred to in subparagraphs (A) 
     and (B) are as follows:


                               ``Table 1

``Partial credit for increased fuel efficiency:       Amount of credit:
At least 125% but less than 150% of 2000 model year city fuel 
  efficiency...................................................0.14.

At least 150% but less than 175% of 2000 model year city fuel 
  efficiency...................................................0.21.

At least 175% but less than 200% of 2000 model year city fuel 
  efficiency...................................................0.28.

At least 200% but less than 225% of 2000 model year city fuel 
  efficiency...................................................0.35.

At least 225% but less than 250% of 2000 model year city fuel 
  efficiency..................................................0.50..


                               ``Table 2

``Partial credit for `Maximum Available Power':       Amount of credit:
At least 5% but less than 10%.................................0.125.

At least 10% but less than 20%................................0.250.

At least 20% but less than 30%................................0.375.

At least 30% or more.........................................0.500..

       ``(D) Use of credits.--At the request of a fleet or covered 
     person allocated a credit under this subsection, the 
     Secretary shall, for the year in which the acquisition of the 
     qualified hybrid motor vehicle is made, treat that credit as 
     the acquisition of 1 alternative fueled vehicle that the 
     fleet or covered person is required to acquire under this 
     title.
       ``(3) Regulations.--The Secretary shall promulgate 
     regulations under which any Federal fleet that acquires a new 
     qualified hybrid motor vehicle will receive partial credits 
     determined under the tables contained in paragraph (2)(C) for 
     purposes of meeting the requirements of section 303.
       ``(s) Credit for Substantial Contribution Towards Use of 
     Dedicated Vehicles in Noncovered Fleets.--
       ``(1) Definitions.--In this subsection:
       ``(A) Dedicated vehicle.--The term `dedicated vehicle' 
     includes--
       ``(i) a light, medium, or heavy duty vehicle; and
       ``(ii) a neighborhood electric vehicle.
       ``(B) Medium or heavy duty vehicle.--The term `medium or 
     heavy duty vehicle' includes a vehicle that--
       ``(i) operates solely on alternative fuel; and
       ``(ii) (I) in the case of a medium duty vehicle, has a 
     gross vehicle weight rating of more than 8,500 pounds but not 
     more than 14,000 pounds; or
       ``(II) in the case of a heavy duty vehicle, has a gross 
     vehicle weight rating of more than 14,000 pounds.
       ``(C) Substantial contribution.--The term `substantial 
     contribution' (equal to 1 full credit) means not less than 
     $15,000 in cash or in kind services, as determined by the 
     Secretary.

[[Page 10180]]

       ``(2) Issuance of credits.--The Secretary shall issue a 
     credit to a fleet or covered person under this title if the 
     fleet or person makes a substantial contribution toward the 
     acquisition and use of dedicated vehicles by a person that 
     owns, operates, leases, or otherwise controls a fleet that is 
     not covered by this title.
       ``(3) Multiple credits for medium and heavy duty dedicated 
     vehicles.--The Secretary shall issue 2 full credits to a 
     fleet or covered person under this title if the fleet or 
     person acquires a medium or heavy duty dedicated vehicle.
       ``(4) Use of credits.--At the request of a fleet or covered 
     person allocated a credit under this subsection, the 
     Secretary shall, for the year in which the acquisition of the 
     dedicated vehicle is made, treat that credit as the 
     acquisition of 1 alternative fueled vehicle that the fleet or 
     covered person is required to acquire under this title.
       ``(5) Limitation.--Per vehicle credits acquired under this 
     subsection shall not exceed the per vehicle credits allowed 
     under this section to a fleet for qualifying vehicles in each 
     of the weight categories (light, medium, or heavy duty).
       ``(t) Credit for Substantial Investment in Alternative Fuel 
     Infrastructure.--
       ``(1) Definitions.--In this section, the term `qualifying 
     infrastructure' means--
       ``(A) equipment required to refuel or recharge alternative 
     fueled vehicles;
       ``(B) facilities or equipment required to maintain, repair, 
     or operate alternative fueled vehicles;
       ``(C) training programs, educational materials, or other 
     activities necessary to provide information regarding the 
     operation, maintenance, or benefits associated with 
     alternative fueled vehicles; and
       ``(D) such other activities the Secretary considers to 
     constitute an appropriate expenditure in support of the 
     operation, maintenance, or further widespread adoption of or 
     utilization of alternative fueled vehicles.
       ``(2) Issuance of credits.--The Secretary shall issue a 
     credit to a fleet or covered person under this title for 
     investment in qualifying infrastructure if the qualifying 
     infrastructure is open to the general public during regular 
     business hours.
       ``(3) Amount.--For the purposes of credits under this 
     subsection--
       ``(A) 1 credit shall be equal to a minimum investment of 
     $25,000 in cash or in kind services, as determined by the 
     Secretary; and
       ``(B) except in the case of a Federal or State fleet, no 
     part of the investment may be provided by Federal or State 
     funds.
       ``(4) Use of credits.--At the request of a fleet or covered 
     person allocated a credit under this subsection, the 
     Secretary shall, for the year in which the investment is 
     made, treat that credit as the acquisition of 1 alternative 
     fueled vehicle that the fleet or covered person is required 
     to acquire under this title.''.
       (c) Lease Condensate Fuels.--Section 301 of the Energy 
     Policy Act of 1992 (42 U.S.C. 13211) is amended--
       (1) in paragraph (2), by inserting ``mixtures containing 50 
     percent or more by volume of lease condensate or fuels 
     extracted from lease condensate;'' after ``liquified 
     petroleum gas; '';
       (2) in paragraph (15), by inserting ``mixtures containing 
     50 percent or more by volume of lease condensate or fuels 
     extracted from lease condensate; '' after ``liquified 
     petroleum gas; ''; and
       (3) by adding at the end the following:
       ``(16) the term `lease condensate' means a mixture, 
     primarily of pentanes and heavier hydrocarbons, which is 
     recovered as a liquid from natural gas in lease separation 
     facilities.''.

                  Subtitle B--Automobile Fuel Economy

     SEC. 711. AUTOMOBILE FUEL ECONOMY STANDARDS.

       (a) Title 49 Amendment.--Section 32902(f) of title 49, 
     United States Code, is amended to read as follows:
       ``(f) Considerations.--When deciding maximum feasible 
     average fuel economy under this section, the Secretary of 
     Transportation shall consider the following matters:
       ``(1) technological feasibility;
       ``(2) economic practicability;
       ``(3) the effect of other motor vehicle standards of the 
     Government on fuel economy;
       ``(4) the need of the United States to conserve energy;
       ``(5) the effects of fuel economy standards on motor 
     vehicle and passenger safety; and
       ``(6) the effects of compliance with average fuel economy 
     standards on levels of employment in the United States.''.
       (b) Clarification of Authority.--Section 32902(b) of title 
     49, United States Code, is amended by inserting before the 
     period at the end the following: ``or such other number as 
     the Secretary prescribes under subsection (c)''.
       (c) Environmental Assessment.--When issuing final 
     regulations setting forth increased average fuel economy 
     standards under section 32902(a) or section 32902(c) of title 
     49, United States Code, the Secretary of Transportation shall 
     also issue an environmental assessment of the effects of the 
     increased standards on the environment under the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
       (d) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated to the 
     Secretary of Transportation $5,000,000 for each of fiscal 
     years 2004 through 2008.

     SEC. 712. DUAL-FUELED AUTOMOBILES.

       (a) Manufacturing Incentives.--Section 32905 of title 49, 
     United States Code, is amended--
       (1) in subsections (b) and (d), by striking ``1993-2004'' 
     and inserting ``1993-2008'';
       (2) in subsection (f), by striking ``2001'' and inserting 
     ``2005''.
       (3) in subsection (f)(1), by striking ``2004'' and 
     inserting ``2008'';
       (4) in subsection (g), by striking ``September 30, 2000'' 
     and inserting ``September 30, 2004''.
       (b) Maximum Fuel Economy Increase.--Subsection (a)(1) of 
     section 32906 of title 49, United States Code, is amended--
       (1) in subparagraph (A), by striking ``the model years 
     1993-2004'' and inserting ``model years 1993-2008''; and
       (2) in subparagraph (B), by striking ``the model years 
     2005-2008'' and inserting ``model years 2009-2012''.

     SEC. 713. FEDERAL FLEET FUEL ECONOMY.

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

     ``Sec. 32917. Standards for executive agency automobiles.

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

     SEC. 714. RAILROAD EFFICIENCY.

       (a) Establishment.--The Secretary of Energy, in cooperation 
     with the Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency, shall establish a cost-
     shared, public-private research partnership to develop and 
     demonstrate railroad locomotive technologies that increase 
     fuel economy, reduce emissions, and lower costs of operation. 
     Such partnership shall involve the Federal Government, 
     railroad carriers, locomotive manufacturers and equipment 
     suppliers, and the Association of American Railroads.
       (b) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated to the 
     Secretary of Energy $25,000,000 for fiscal year 2004, 
     $35,000,000 for fiscal year 2005, and $50,000,000 for fiscal 
     year 2006.

     SEC. 715. REDUCTION OF ENGINE IDLING IN HEAVY-DUTY VEHICLES.

       (a) Identification.--Not later than 180 days after the date 
     of enactment of this section, the Secretary of Energy, in 
     consultation with the Secretary of Transportation and the 
     Administrator of the Environmental Protection Agency, shall 
     commence a study to analyze the potential fuel savings and 
     emissions reductions resulting from use of idling reduction 
     technologies as they are applied to heavy-duty vehicles. Upon 
     completion of the study, the Secretary of Energy shall, by 
     rule, certify those idling reduction technologies with the 
     greatest economic or technical feasibility and the greatest 
     potential for fuel savings and emissions reductions, and 
     publish a list of such certified technologies in the Federal 
     Register.
       (b) Vehicle Weight Exemption.--Section 127(a) of Title 23, 
     United States Code, is amended by adding at the end the 
     following:
       ``In order to promote reduction of fuel use and emissions 
     due to engine idling, the maximum gross vehicle weight limit 
     and the axle weight limit for any motor vehicle equipped with 
     an idling reduction technology certified by the U.S. 
     Department of Energy will be increased by an amount necessary 
     to compensate for the additional weight of the idling 
     reduction system, provided that the weight increase shall be 
     no greater than 400 pounds.''
       (c) Definitions.--For the purposes of this section:

[[Page 10181]]

       (1) The term ``idling reduction technology'' means a device 
     or system of devices utilized to reduce long-duration idling 
     of a vehicle.
       (2) The term ``heavy-duty vehicle'' means a vehicle that 
     has a gross vehicle weight rating greater than 8,500 pounds 
     and is powered by a diesel engine.
       (3) The term ``long-duration idling'' means the operation 
     of a main drive engine, for a period greater than 30 
     consecutive minutes, where the main drive engine is not 
     engaged in gear. Such term does not apply to routine 
     stoppages associated with traffic movement or congestion.

                          TITLE VIII--HYDROGEN

                  Subtitle A--Basic Research Programs

     SEC. 801. SHORT TITLE.

       This subtitle may be cited as the ``George E. Brown, Jr. 
     and Robert S. Walker Hydrogen Future Act of 2003''.

     SEC. 802. MATSUNAGA ACT AMENDMENT.

       The Spark M. Matsunaga Hydrogen Research, Development, and 
     Demonstration Act of 1990 (42 U.S.C. 12401 et seq.) is 
     amended by striking sections 102 through 109 and inserting 
     the following:

     ``SEC. 102. DEFINITIONS.

       In this Act--
       ``(a) the term `advisory committee' means the Hydrogen and 
     Fuel Cell Technical Advisory Committee established under 
     section 107.
       ``(b) the term `Department' means the Department of Energy.
       ``(c) the term `fuel cell' means a device that directly 
     converts the chemical energy of a fuel into electricity by an 
     electrochemical process.
       ``(d) the term `infrastructure' means the equipment, 
     systems, or facilities used to produce, distribute, deliver, 
     or store hydrogen.
       ``(e) the term `Secretary' means the Secretary of Energy.

     ``SEC. 103. HYDROGEN RESEARCH AND DEVELOPMENT.

       (a) In General.--The Secretary shall conduct a research and 
     development program on technologies related to the 
     production, distribution, storage, and use of hydrogen 
     energy, fuel cells, and related infrastructure.
       (b) Goal.--The goal of such program shall be to enable the 
     safe, economic, and environmentally sound use of hydrogen 
     energy, fuel cells, and related infrastructure for 
     transportation, commercial, industrial, residential, and 
     electric power generation applications.
       (c) Focus.--In carrying out activities under this section, 
     the Secretary shall focus on critical technical issues 
     including, but not limited to--
       ``(1) the production of hydrogen from diverse energy 
     sources, with emphasis on cost-effective production from 
     renewable energy sources;
       ``(2) the delivery of hydrogen, including safe delivery in 
     fueling stations and use of existing hydrogen pipelines;
       ``(3) the storage of hydrogen, including storage of 
     hydrogen in surface transportation;
       ``(4) fuel cell technologies for transportation, stationary 
     and portable applications, with emphasis on cost-reduction of 
     fuel cell stacks; and
       ``(5) the use of hydrogen energy and fuel cells, including 
     use in--
       ``(A) isolated villages, islands, and areas in which other 
     energy sources are not available or are very expensive; and
       ``(B) foreign markets, particularly where an energy 
     infrastructure is not well developed.
       ``(d) Codes and Standards.--The Secretary shall facilitate 
     the development of domestic and international codes and 
     standards and seek to resolve other critical regulatory and 
     technical barriers preventing the introduction of hydrogen 
     energy and fuel cells into the marketplace.
       ``(e) Solicitation.--The Secretary shall carry out the 
     research and development activities authorized under this 
     section through solicitation of proposals, and evaluation 
     using competitive merit review.
       ``(f) Cost Sharing. The Secretary shall require a 
     commitment from non-Federal sources of at least 20 percent of 
     the cost of proposed research and development projects. The 
     Secretary may reduce or eliminate the cost sharing 
     requirement--
       ``(1) if the Secretary determines that the research and 
     development is of a basic or fundamental nature, or
       ``(2) for technical analyses, outreach activities, and 
     educational programs that the Secretary does not expect to 
     result in a marketable product.

     ``SEC. 104. DEMONSTRATION PROGRAMS.

       ``(a) Requirement.--In conjunction with activities 
     conducted under section 103, the Secretary shall conduct 
     demonstrations of hydrogen energy and fuel cell technologies 
     in order to evaluate the commercial potential of such 
     technologies.
       ``(b) Solicitation.--The Secretary shall carry out the 
     demonstrations authorized under this section through 
     solicitation of proposals, and evaluation using competitive 
     merit review.
       ``(c) Cost Sharing.--The Secretary shall require a 
     commitment from non-Federal sources of at least 50 percent of 
     the costs directly relating to a demonstration project under 
     this section. The Secretary may reduce such non-Federal 
     requirement if the Secretary determines that the reduction is 
     appropriate considering the technological risks involved in 
     the project.

     ``SEC. 105. TECHNOLOGY TRANSFER.

       ``The Secretary shall conduct programs to--
       ``(a) transfer critical hydrogen energy and fuel cell 
     technologies to the private sector in order to promote wider 
     understanding of such technologies and wider use of research 
     progress under this Act;
       ``(b) to accelerate wider application of hydrogen energy 
     and fuel cell technologies in foreign countries in order to 
     increase the global market for the technologies and foster 
     global development without harmful environmental effects;
       ``(c) foster the exchange of generic, nonproprietary 
     information and technology developed pursuant to this Act, 
     among industry, academia, and the Federal agencies; and
       ``(d) inventory and assess the technical and commercial 
     viability of technologies related to production, 
     distribution, storage, and use of hydrogen energy and fuel 
     cells.

     ``SEC. 106. COORDINATION AND CONSULTATION.

       ``The Secretary shall have overall management 
     responsibility for carrying out programs under this Act. In 
     carrying out such programs, the Secretary--
       ``(a) shall establish a central point for the coordination 
     of all hydrogen energy and fuel cell research, development, 
     and demonstration activities of the Department;
       ``(b) in carrying out the Secretary's authorities pursuant 
     to this Act, shall consult with other Federal agencies as 
     appropriate, and may obtain the assistance of any Federal 
     agency, on a reimbursable basis or otherwise and with the 
     consent of such agency;
       ``(c) shall attempt to ensure that activities under this 
     Act do not unnecessarily duplicate any available research and 
     development results or displace or compete with privately 
     funded hydrogen and fuel cell energy activities.

     ``SEC. 107. ADVISORY COMMITTEE.

       ``(a) Establishment.--There is hereby established the 
     Hydrogen and Fuel Cell Technical Advisory Committee, to 
     advise the Secretary on the programs under this Act.
       ``(b) Membership.--The advisory committee shall be 
     comprised of not fewer than 12 nor more than 25 members 
     appointed by the Secretary based on their technical and other 
     qualifications from domestic industry, automakers, 
     universities, professional societies, Federal laboratories, 
     financial institutions, and environmental and other 
     organizations as the Secretary deems appropriate. The 
     advisory committee shall have a chairperson, who shall be 
     elected by the members from among their number.
       ``(c) Terms.--Members of the advisory committee shall be 
     appointed for terms of 3 years, with each term to begin not 
     later than 3 months after the date of enactment of the Energy 
     Policy Act of 2003, except that one-third of the members 
     first appointed shall serve for 1 year, and one-third of the 
     members first appointed shall serve for 2 years, as 
     designated by the Secretary at the time of appointment.
       ``(d) Review.--The advisory committee shall review and make 
     any necessary recommendations to the Secretary on--
       ``(1) implementation and conduct of programs under this 
     Act;
       ``(2) economic, technological, and environmental 
     consequences of the deployment of technologies related to 
     production, distribution, storage, and use of hydrogen 
     energy, and fuel cells;
       ``(3) means for resolving barriers to implementing hydrogen 
     and fuel cell technologies; and
       ``(4) the coordination plan and any updates thereto 
     prepared by the Secretary pursuant to section 108.
       ``(e) Response.--The Secretary shall consider any 
     recommendations made by the advisory committee, and shall 
     provide a response to the advisory committee within 30 days 
     after receipt of such recommendations. Such response shall 
     either describe the implementation of the advisory 
     committee's recommendations or provide an explanation of the 
     reasons that any such recommendations will not be 
     implemented.
       ``(f) Support.--The Secretary shall provide such staff, 
     funds and other support as may be necessary to enable the 
     advisory committee to carry out its functions. In carrying 
     out activities pursuant to this section, the advisory 
     committee may also obtain the assistance of any Federal 
     agency, on a reimbursable basis or otherwise and with the 
     consent of such agency.

     ``SEC. 108. COORDINATION PLAN.

       ``(a) Plan.--The Secretary, in consultation with other 
     Federal agencies, shall prepare and maintain on an ongoing 
     basis a comprehensive plan for activities under this Act.
       ``(b) Development.--In developing such plan, the Secretary 
     shall--
       ``(1) consider the guidance of the National Hydrogen Energy 
     Roadmap published by the Department in November 2002 and any 
     updates thereto;
       ``(2) consult with the advisory committee;
       ``(3) consult with interested parties from domestic 
     industry, automakers, universities, professional societies, 
     Federal laboratories, financial institutions, and 
     environmental and other organizations as the Secretary deems 
     appropriate.

[[Page 10182]]

       ``(c) Contents.--At a minimum, the plan shall provide--
       ``(1) an assessment of the effectiveness of the programs 
     authorized under this Act, including a summary of 
     recommendations of the advisory committee for improvements in 
     such programs;
       ``(2) a description of proposed research, development, and 
     demonstration activities planned by the Department for the 
     next five years;
       ``(3) a description of the role Federal laboratories, 
     institutions of higher education, small businesses, and other 
     private sector firms are expected to play in such programs;
       ``(4) cost and performance milestones that will be used to 
     evaluate the programs for the next five years; and
       ``(5) any significant technical, regulatory, and other 
     hurdles that stand in the way of achieving such cost and 
     performance milestones, and how the programs will address 
     those hurdles; and
       ``(6) to the extent practicable, an analysis of Federal, 
     State, local, and private sector hydrogen research, 
     development, and demonstration activities to identify areas 
     for increased intergovernmental and private-public sector 
     collaboration.
       ``(d) Report.--Not later than January 1, 2005, and 
     biennially thereafter, the Secretary shall transmit to 
     Congress the comprehensive plan developed for the programs 
     authorized under this Act, or any updates thereto.

     ``SEC. 109. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out the 
     purposes of this Act--
       ``(1) such sums as may be necessary for fiscal years 1992 
     through 2003;
       ``(2) $105,000,000 for fiscal year 2004;
       ``(3) $150,000,000 for fiscal year 2005;
       ``(4) $175,000,000 for fiscal year 2006;
       ``(5) $200,000,000 for fiscal year 2007; and
       ``(6) $225,000,000 for fiscal year 2008.''.

     SEC. 803. HYDROGEN TRANSPORTATION AND FUEL INITIATIVE.

       (a) Vehicle Technologies.--The Secretary shall carry out a 
     research, development, demonstration, and commercial 
     application program on advanced hydrogen-powered vehicle 
     technologies. Such program shall address--
       (1) engine and emission control systems;
       (2) energy storage, electric propulsion, and hybrid 
     systems;
       (3) automotive materials;
       (4) hydrogen-carrier fuels; and
       (5) other advanced vehicle technologies.
       (b) Hydrogen Fuel Initiative.--In coordination with the 
     program authorized in subsection (a), the Secretary of 
     Energy, in partnership with the private sector, shall conduct 
     a research, development, demonstration and commercial 
     application program designed to enable the rapid and 
     coordinated introduction of hydrogen-fueled vehicles and 
     associated infrastructure into commerce. Such program shall 
     address--
       (1) production of hydrogen from diverse energy resources, 
     including--
       (A) renewable energy resources;
       (B) fossil fuels, in conjunction with carbon capture and 
     sequestration;
       (C) hydrogen-carrier fuels; and
       (D) nuclear energy;
       (2) delivery of hydrogen or hydrogen-carrier fuels, 
     including--
       (A) transmission by pipeline and other distribution 
     methods; and
       (B) safe, convenient, and economic refueling of vehicles, 
     either at central refueling stations or through distributed 
     on-site generation;
       (3) storage of hydrogen or hydrogen-carrier fuels, 
     including development of materials for safe and economic 
     storage in gaseous, liquid or solid forms at refueling 
     facilities or onboard vehicles; and
       (4) development of advanced vehicle technologies, such as 
     efficient fuel cells and direct hydrogen combustion engines, 
     and related component technologies such as advanced materials 
     and control systems; and
       (5) development of necessary codes, standards, and safety 
     practices to accompany the production, distribution, storage 
     and use of hydrogen or hydrogen-carrier fuels in 
     transportation.
       (c) Matsunaga Act.--In carrying out programs and projects 
     under subsections (a) and (b), the Secretary shall ensure 
     that such programs and projects are consistent with, and do 
     not unnecessarily duplicate, activities carried out under the 
     programs authorized under the Spark M. Matsunaga Hydrogen 
     Research, Development, and Demonstration Act of 1990 (42 
     U.S.C. 12401 et seq.).
       (d) Advisory Committee.--The Hydrogen and Fuel Cell 
     Technical Advisory Committee authorized under section 107 of 
     the Spark M. Matsunaga Hydrogen Research, Development, and 
     Demonstration Act of 1990 (42 U.S.C. 12408), as amended in 
     this title, shall also advise the Secretary on the programs 
     and activities carried out under this section.
       (e) Solicitation.--The Secretary shall carry out the 
     programs authorized under this section through solicitation 
     of proposals, and evaluation using competitive merit review.
       (f) Cost Sharing.--The Secretary shall require a commitment 
     from non-Federal sources of at least 50 percent of the costs 
     directly relating to a demonstration project under this 
     section. The Secretary may reduce such non-Federal 
     requirement if the Secretary determines that the reduction is 
     appropriate considering the technological risks involved in 
     the project.
       (g) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated to the 
     Secretary--
       (1) for activities pursuant to subsection (a), to remain 
     available until expended--
       (A) $100,000,000 for each of fiscal years 2004 and 2005;
       (B) $110,000,000 for each of fiscal years 2006 and 2007; 
     and
       (C) $120,000,000 for fiscal year 2008; and
       (2) for activities pursuant to subsection (b), to remain 
     available until expended--
       (A) $125,000,000 for fiscal year 2004;
       (B) $150,000,000 for fiscal year 2005;
       (C) $175,000,000 for fiscal year 2006;
       (D) $200,000,000 for each of fiscal years 2007 and 2008.

     SEC. 804. INTERAGENCY TASK FORCE AND COORDINATION PLAN.

       (a) Establishment.--Not later than 120 days after the date 
     of enactment of this Act, the Secretary shall establish an 
     interagency task force to coordinate Federal hydrogen and 
     fuel cell energy activities.
       (b) Composition.--The task force shall be chaired by a 
     designee of the Secretary, and shall include representatives 
     of--
       (1) the Office of Science and Technology Policy;
       (2) the Department of Transportation;
       (3) the Department of Defense;
       (4) the Department of Commerce (including the National 
     Institute for Standards and Technology);
       (5) the Environmental Protection Agency;
       (6) the National Aeronautics and Space Administration;
       (7) the Department of State; and
       (8) other Federal agencies as the Director considers 
     appropriate.
       (c) Coordination Plan.--The task force shall prepare a 
     comprehensive coordination plan for Federal hydrogen and fuel 
     cell energy activities, which shall include a summary of such 
     activities.
       (d) Report.--Not later than one year after it is 
     established, the task force shall report to Congress on the 
     coordination plan in subsection (c) and on the interagency 
     coordination of Federal hydrogen and fuel cell energy 
     activities.

     SEC. 805. REVIEW BY THE NATIONAL ACADEMIES.

       Not later than two years after the date of enactment of 
     this Act, and every four years thereafter, the Secretary 
     shall enter into a contract with the National Academies. Such 
     contract shall require the National Academies to perform a 
     review of the progress made through Federal hydrogen and fuel 
     cell energy programs and activities, including the need for 
     modified or additional programs, and to report to the 
     Congress on the results of such review. There are authorized 
     to be appropriated to the Secretary such sums as may be 
     necessary to carry out the requirements of this section.

                   Subtitle B--Demonstration Programs

     SEC. 811. DEFINITIONS.

       For the purposes of this subtitle and subtitle C--
       (a) the term ``fuel cell'' means a device that directly 
     converts the chemical energy of a fuel into electricity by an 
     electrochemical process.
       (b) the term ``hydrogen-carrier fuel'' means any 
     hydrocarbon fuel that is capable of being thermochemically 
     processed or otherwise reformed to produce hydrogen;
       (c) the term ``infrastructure'' means the equipment, 
     systems, or facilities used to produce, distribute, deliver, 
     or store hydrogen or hydrogen-carrier fuels.
       (d) 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)).
       (b) the term ``Secretary'' means the Secretary of Energy;

     SEC. 812. HYDROGEN VEHICLE DEMONSTRATION PROGRAM.

       (a) In General.--The Secretary shall establish a program 
     for demonstration and commercial application of hydrogen-
     powered vehicles and associated hydrogen fueling 
     infrastructure in a variety of transportation-related 
     applications, including--
       (1) fuel cell vehicles in light-duty vehicle fleets;
       (2) heavy-duty fuel cell on-road and off-road vehicles, 
     including mass transit buses;
       (3) use of hydrogen-powered vehicles and hydrogen fueling 
     infrastructure (including multiple hydrogen refueling 
     stations) along major transportation routes or in entire 
     regions; and
       (4) other similar projects as the Secretary may deem 
     necessary to contribute to the rapid demonstration and 
     deployment of hydrogen-based technologies in widespread use 
     for transportation.
       (b) Eligibility.--Federal, State, tribal, and local 
     governments, academic and other non-profit organizations, 
     private entities, and consortia of these entities shall be 
     eligible for these projects.
       (c) Selection.--In selecting projects under this section, 
     the Secretary shall--
       (1) consult with Federal, State, local and private fleet 
     managers to identify potential projects where hydrogen-
     powered vehicles may be placed into service;
       (2) identify not less than 10 sites at which to carry out 
     projects under this program, 2 of which must be based at 
     Federal facilities;

[[Page 10183]]

       (3) select projects based on the following factors--
       (A) geographic diversity;
       (B) a diverse set of operating environments, duty cycles, 
     and likely weather conditions;
       (C) the interest and capability of the participating 
     agencies, entities, or fleets;
       (D) the availability and appropriateness of potential sites 
     for refueling infrastructure and for maintenance of the 
     vehicle fleet;
       (E) the existence of traffic congestion in the area 
     expected to be served by the hydrogen-powered vehicles;
       (F) proximity to non-attainment areas as defined in section 
     171 of the Clean Air Act (42 U.S.C. 7501); and
       (G) such other criteria as the Secretary determines to be 
     appropriate in order to carry out the purposes of the 
     program.
       (d) Infrastructure.--In funding projects under this 
     section, the Secretary shall also support the installation of 
     refueling infrastructure at sites necessary for success of 
     the project, giving preference to those infrastructure 
     projects that include co-production of both--
       (1) hydrogen for use in transportation; and
       (2) electricity that can be consumed on site.
       (e) Operation and Maintenance Period.--Vehicles purchased 
     for projects under this section shall be operated and 
     maintained by the participating agencies or entities in 
     regular duty cycles for a period of not less than 12 months.
       (f) Training and Technical Support.--In funding proposals 
     under this section, the Secretary shall also provide funding 
     for training and technical support as may be necessary to 
     assure the success of such projects, including training and 
     technical support in--
       (1) the installation, operation, and maintenance of fueling 
     infrastructure;
       (2) the operation and maintenance of fuel cell vehicles; 
     and
       (3) data collection necessary to monitor project 
     performance.
       (g) Cost-sharing.--Except as otherwise provided, the 
     Secretary shall require a commitment from non-Federal sources 
     of at least 50 percent of the costs directly relating to a 
     demonstration project under this section. The Secretary may 
     reduce such non-Federal requirement if the Secretary 
     determines that the reduction is appropriate considering the 
     technological risks involved in the project.
       (h) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated to the 
     Secretary $50,000,000 for each of fiscal years 2006 through 
     2010, to remain available until expended.

     SEC. 813. STATIONARY FUEL CELL DEMONSTRATION PROGRAM.

       (a) In General.--The Secretary shall establish a program 
     for demonstration and commercial application of hydrogen fuel 
     cells in stationary applications, including--
       (1) fuel cells for use in residential and commercial 
     buildings;
       (2) portable fuel cells, including auxiliary power units in 
     trucks;
       (3) small form and micro fuel cells of 20 watts or less;
       (4) distributed generation systems with fuel cells using 
     renewable energy; and
       (5) other similar projects as the Secretary may deem 
     necessary to contribute to the rapid demonstration and 
     deployment of hydrogen-based technologies in widespread use.
       (b) Competitive Evaluation.--Proposals submitted in 
     response to solicitations issued pursuant to this section 
     shall be evaluated on a competitive basis using peer review. 
     The Secretary is not required to make an award under this 
     section in the absence of a meritorious proposal.
       (c) Preference.--The Secretary shall give preference, in 
     making an award under this section, to proposals that--
       (1) are submitted jointly from consortia that include two 
     or more participants from institutions of higher education, 
     industry, State, tribal, or local governments, and Federal 
     laboratories; and
       (2) that reflect proven experience and capability with 
     technologies relevant to the projects proposed.
       (d) Training and Technical Support.--In funding proposals 
     under this section, the Secretary shall also provide funding 
     for training and technical support as may be necessary to 
     assure the success of such projects, including training and 
     technical support in the installation, operation, and 
     maintenance of fuel cells and the collection of data to 
     monitor project performance.
       (e) Cost-Sharing.--Except as otherwise provided, the 
     Secretary shall require a commitment from non-Federal sources 
     of at least 50 percent of the costs directly relating to a 
     demonstration project under this section. The Secretary may 
     reduce such non-Federal requirement if the Secretary 
     determines that the reduction is appropriate considering the 
     technological risks involved in the project.
       (f) Authorization of Appropriations.-- For the purposes of 
     this section, there are authorized to be appropriated to the 
     Secretary $50,000,000 for each of fiscal years 2006 through 
     2010, to remain available until expended.

     SEC. 814. HYDROGEN DEMONSTRATION PROGRAMS IN NATIONAL PARKS.

       (a) Study.--Not later than 1 year after the date of 
     enactment of this section, the Secretary of the Interior and 
     the Secretary of Energy shall jointly study and report to 
     Congress on--
       (1) the energy needs and uses at National Parks; and
       (2) the potential for fuel cell and other hydrogen-based 
     technologies to meet such energy needs in--
       (A) stationary applications, including power generation, 
     combined heat and power for buildings and campsites, and 
     standby and backup power systems; and
       (B) transportation-related applications, including support 
     vehicles, passenger vehicles and heavy-duty trucks and buses.
       (b) Pilot Projects.--Based on the results of the study 
     conducted under subsection (a), the Secretary of the Interior 
     shall fund not fewer than 3 pilot projects in national parks 
     to provide for demonstration of fuel cells or other hydrogen-
     based technologies in those applications where the greatest 
     potential for such use in National Parks has been identified. 
     Such pilot projects shall be geographically distributed 
     throughout the United States.
       (c) Definition.--For the purpose of this section, the term 
     ``National Parks'' means those areas of land and water now or 
     hereafter administered by the Secretary of the Interior 
     through the National Park Service for park, monument, 
     historic, parkway, recreational, or other purposes.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of the Interior 
     $1,000,000 for fiscal year 2004, and $15,000,000 for fiscal 
     year 2005, to remain available until expended.

     SEC. 815. INTERNATIONAL DEMONSTRATION PROGRAM.

       (a) In General.--The Secretary, in consultation with the 
     Administrator of the U.S. Agency for International 
     Development, shall conduct demonstrations of fuel cells and 
     associated hydrogen fueling infrastructure in countries other 
     than the United States, particularly in areas where an energy 
     infrastructure is not already well developed.
       (b) Eligible Technologies.--The program may demonstrate--
       (1) fuel cell vehicles in light-duty vehicle fleets;
       (2) heavy-duty fuel cell on-road and off-road vehicles;
       (3) stationary fuel cells in residential and commercial 
     buildings; or
       (4) portable fuel cells, including auxiliary power units in 
     trucks.
       (c) Participants.--
       (1) Eligibility.--Foreign nations, non-profit 
     organizations, and private companies shall be eligible for 
     these pilot projects.
       (2) Cooperation.--Eligible entities may perform the 
     projects in cooperation with United States non-profit 
     organizations and private companies.
       (3) Cost-sharing.--The Secretary may require a commitment 
     from participating private companies and from participating 
     foreign countries.
       (d) Authorization of Appropriations.--For activities 
     conducted under this section, there are authorized to be 
     appropriated to the Secretary $25,000,000 for each of fiscal 
     years 2006 through 2010, to remain available until expended.

     SEC. 816. TRIBAL STATIONARY HYBRID POWER DEMONSTRATION.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary, in cooperation with 
     Indian tribes, shall develop and transmit to Congress a 
     strategy for a demonstration and commercial application 
     program to develop hybrid distributed power systems on Indian 
     lands that combine--
       (1) one renewable electric power generating technology of 2 
     megawatts or less located near the site of electric energy 
     use; and
       (2) fuel cell power generation suitable for use in 
     distributed power systems.
       (b) Definition.--For the purposes of this section, the 
     terms ``Indian tribe'' and ``Indian land'' have the meaning 
     given such terms under Title XXVI of the Energy Policy Act of 
     1992 (25 U.S.C. 3501 et seq.), as amended by this Act.
       (c) Authorization of Appropriations.--For activities under 
     this section, there are authorized to be appropriated to the 
     Secretary of Energy $1,000,000 for fiscal year 2005, and 
     $5,000,000 for each of fiscal years 2006 through 2008.

     SEC. 817. DISTRIBUTED GENERATION PILOT PROGRAM.

       (a) Establishment.--The Secretary shall support a 
     demonstration program to develop, deploy, and commercialize 
     distributed generation systems to significantly reduce the 
     cost of producing hydrogen from renewable energy for use in 
     fuel cells. Such program shall provide the necessary 
     infrastructure to test these distributed generation 
     technologies at pilot scales in a real-world environment.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Energy, to remain 
     available until expended, for the purposes of carrying out 
     this section:
       (1) $10,000,000 for fiscal year 2004;
       (2) $15,000,000 for fiscal year 2005; and
       (3) $20,000,000 for each of fiscal years 2006 through 2008.

                      Subtitle C--Federal Programs

     SEC. 821. PUBLIC EDUCATION AND TRAINING.

       (a) Education.--The Secretary shall conduct a public 
     education program designed to

[[Page 10184]]

     increase public interest in and acceptance of hydrogen energy 
     and fuel cell technologies.
       (b) Training.--The Secretary shall conduct a program to 
     promote university-based training in critical skills for 
     research in, production of, and use of hydrogen energy and 
     fuel cell technologies. Such program may include research 
     fellowships at institutions of higher education, centers of 
     excellence in critical technologies, internships in industry, 
     and such other measures as the Secretary deems appropriate.
       (c) Authorization of Appropriations.--For activities 
     pursuant to this section, there are authorized to be 
     appropriated to the Secretary $7,000,000 for each of fiscal 
     years 2004 through 2008.

     SEC. 822. HYDROGEN TRANSITION STRATEGIC PLANNING.

       (a) In General.--Not later than September 30, 2004, the 
     head of each federal agency with annual outlays of greater 
     than $20,000,000 shall submit to the Director of the Office 
     of Management and Budget and to the Congress a hydrogen 
     transition strategic plan containing a comprehensive 
     assessment of how the transition to a hydrogen-based economy 
     could to assist the mission, operation and regulatory program 
     of the agency.
       (b) Contents.--At a minimum, each plan shall contain--
       (1) a description of areas within the agency's control 
     where using hydrogen and/or fuel cells could benefit the 
     operation of the agency, assist in the implementation of its 
     regulatory functions or enhance the agency's mission; and
       (2) a description of any agency management practices, 
     procurement policies, regulations, policies, or guidelines 
     that may inhibit the agency's transition to use of fuel cells 
     and hydrogen as an energy source;
       (c) Duration and Revision.--The strategic plan shall cover 
     a period of not less than the five years following the fiscal 
     year in which it is submitted, and shall be updated and 
     revised at least every three years.

     SEC. 823. MINIMUM FEDERAL FLEET REQUIREMENT.

       (a) Section 303(b) of the Energy Policy Act of 1992 (42 
     U.S.C. 13212(b)) is amended by adding at the end the 
     following:
       ``(4) Hydrogen Vehicles.--
       ``(A) Of the number of vehicles acquired under paragraph 
     (1)(D) by a Federal fleet of 100 or more vehicles, not less 
     than--
       (i) 5 percent in fiscal years 2006 and 2007;
       (ii) 10 percent in fiscal years 2008 and 2009;
       (iii) 15 percent in fiscal years 2010 and 2011; and
       (iv) 20 percent in fiscal years 2012 and thereafter,
     shall be hydrogen-powered vehicles that meet standards for 
     performance, reliability, cost, and maintenance established 
     by the Secretary.
       ``(B) The Secretary may establish a lesser percentage, or 
     waive the requirement under subparagraph (A) for any fiscal 
     year entirely, if hydrogen-powered vehicles meeting the 
     standards set by the Secretary pursuant to subparagraph (A) 
     are not available at a purchase price that is less than 150 
     percent of the purchase price of other comparable alternative 
     fueled vehicles.
       ``(C) The Secretary may by rule, delay the implementation 
     of the requirements under subparagraph (A) in the event that 
     the Secretary determines that hydrogen-powered vehicles are 
     not commercially or economically available, or that fuel for 
     such vehicles is not commercially or economically available.
       ``(D) The Secretary, in consultation with the Administrator 
     of General Services, may for reasons of refueling 
     infrastructure use and cost optimization, elect to allocate 
     the acquisitions necessary to achieve the requirements in 
     subparagraph (A) to certain Federal fleets in lieu of 
     requiring each Federal fleet to achieve the requirements in 
     subparagraph (A).''.
       (b) Refueling.--Section 304 of the Energy Policy Act of 
     1992 (42 U.S.C. 13213) is amended--
       (1) by redesignating subsection (b) as subsection (c);
       (2) in the second sentence of subsection (a), by striking 
     ``If publicly'' and inserting the following:
       ``(b) Commercial Arrangements.--
       ``(1) In General.--If publicly''; and
       (3) in subsection (b) (as designated by paragraph (2)), by 
     adding at the end the following:
       ``(2) Mandatory arrangements.--
       ``(A) In general.--In a case in which publicly available 
     fueling facilities are not convenient or accessible to the 
     locations of 2 or more Federal fleets for which hydrogen-
     powered vehicles are required to be purchased under section 
     303(b)(4), the Federal agency for which the Federal fleets 
     are maintained (or the Federal agencies for which the Federal 
     fleets are maintained, acting jointly under a memorandum of 
     agreement providing for cost sharing) shall enter into a 
     commercial arrangement as provided in paragraph (1).
       ``(B) Sunset.--Subparagraph (A) ceases to be effective at 
     the end of fiscal year 2013.''.

     SEC. 824. STATIONARY FUEL CELL PURCHASE REQUIREMENT.

       (a) Requirement.--The President, acting through the 
     Secretary of Energy, shall seek to ensure that, to the extent 
     economically practicable and technically feasible, of the 
     total amount of electric energy the Federal Government 
     consumes during any fiscal year, the following amounts shall 
     be generated by fuel cells--
       (1) not less than 1 percent in fiscal years 2006 through 
     2008;
       (2) not less than 2 percent in fiscal years 2009 and 2010; 
     and
       (3) not less than 3 percent in fiscal year 2011 and each 
     fiscal year thereafter.
       (b) Compliance.--In complying with the requirements of 
     subsection (a), Federal agencies are encouraged to--
       (1) use innovative purchasing practices;
       (2) use fuel cells at the site of electricity usage and in 
     combined heat and power applications; and
       (3) use fuel cells in stand alone power functions, such as 
     but not limited to battery power and backup power.
       (c) Definitions.-- For purposes of this section--
       (1) the term ``fuel cells'' means an integrated system 
     comprised of a fuel cell stack assembly and balance of plant 
     components that converts a fuel into electricity using an 
     electrochemical means.
       (2) the term ``electrical energy'' includes on and off grid 
     power, including premium power applications, standby power 
     applications and electricity generation.
       (d) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated to the 
     Secretary of Energy $30,000,000 for fiscal years 2004, 
     $70,000,000 for fiscal year 2005, and $100,000,000 for each 
     of fiscal years 2006 and thereafter.

     SEC. 825. DEPARTMENT OF ENERGY STRATEGY.

       Not later than 1 year after the date of enactment of this 
     Act, the Secretary shall publish and transmit to Congress a 
     plan identifying critical technologies, enabling strategies 
     and applications, technical targets, and associated 
     timeframes that support the commercialization of hydrogen-
     fueled fuel cell vehicles.

                   TITLE IX--RESEARCH AND DEVELOPMENT

     SEC. 901. SHORT TITLE.

       This Title may be cited as the ``Energy Research, 
     Development, Demonstration, and Commercial Application Act of 
     2003''.

     SEC. 902. GOALS.

       (a) In General.--In order to achieve the purposes of this 
     title, the Secretary shall conduct a balanced set of programs 
     of energy research, development, demonstration, and 
     commercial application, focused on--
       (1) increasing the efficiency of all energy intensive 
     sectors through conservation and improved technologies,
       (2) promoting diversity of energy supply,
       (3) decreasing the nation's dependence on foreign energy 
     supplies,
       (4) improving United States energy security, and
       (5) decreasing the environmental impact of energy-related 
     activities.
       (b) Goals.--The Secretary shall publish measurable cost and 
     performance-based goals with each annual budget submission in 
     at least the following areas:
       (1) energy efficiency for buildings, energy-consuming 
     industries, and vehicles;
       (2) electric energy generation (including distributed 
     generation), transmission, and storage;
       (3) renewable energy technologies including wind power, 
     photovoltaics, solar thermal systems, geothermal energy, 
     hydrogen-fueled systems, biomass-based systems, biofuels, and 
     hydropower;
       (4) fossil energy including power generation, onshore and 
     offshore oil and gas resource recovery, and transportation; 
     and
       (5) nuclear energy including programs for existing and 
     advanced reactors, and education of future specialists.
       (c) Public Comment.--The Secretary shall provide mechanisms 
     for input on the annually published goals from industry, 
     university, and other public sources.
       (d) Effect of Goals.--Nothing in subsection (a) or the 
     annually published goals creates any new authority for any 
     Federal agency, or may be used by a Federal agency to support 
     the establishment of regulatory standards or regulatory 
     requirements.

     SEC. 903. DEFINITIONS.

       For purposes of this title:
       (1) The term ``Department'' means the Department of Energy.
       (2) The term ``departmental mission'' means any of the 
     functions vested in the Secretary of Energy by the Department 
     of Energy Organization Act (42 U.S.C. 7101 et seq.) or other 
     law.
       (3) The term ``institution of higher education'' has the 
     meaning given that term in section 101(a) of the Higher 
     Education Act of 1965 (20 U.S.C. 1001(a)).
       (4) The term ``National Laboratory'' means any of the 
     following laboratories owned by the Department:
       (A) Ames Laboratory.
       (B) Argonne National Laboratory.
       (C) Brookhaven National Laboratory.
       (D) Fermi National Accelerator Laboratory.
       (E) Idaho National Engineering and Environmental 
     Laboratory.
       (F) Lawrence Berkeley National Laboratory.
       (G) Lawrence Livermore National Laboratory.

[[Page 10185]]

       (H) Los Alamos National Laboratory.
       (I) National Energy Technology Laboratory.
       (J) National Renewable Energy Laboratory.
       (K) Oak Ridge National Laboratory.
       (L) Pacific Northwest National Laboratory.
       (M) Princeton Plasma Physics Laboratory.
       (N) Sandia National Laboratories.
       (O) Stanford Linear Accelerator Center.
       (P) Thomas Jefferson National Accelerator Facility.
       (5) The term ``nonmilitary energy laboratory'' means the 
     laboratories listed in (4) with the exclusion of (4)(G), 
     (4)(H), and (4)(N).
       (6) The term ``Secretary'' means the Secretary of Energy.
       (7) The term ``single-purpose research facility'' means any 
     of the primarily single-purpose entities owned by the 
     Department or any other organization of the Department 
     designated by the Secretary.

                     Subtitle A--Energy Efficiency

     SEC. 911. ENERGY EFFICIENCY.

       (a) In General.--The following sums are authorized to be 
     appropriated to the Secretary for energy efficiency and 
     conservation research, development, demonstration, and 
     commercial application activities, including activities 
     authorized under this subtitle:
       (1) for fiscal year 2004, $616,000,000;
       (2) for fiscal year 2005, $695,000,000;
       (3) for fiscal year 2006, $772,000,000;
       (4) for fiscal year 2007, $865,000,000; and
       (5) for fiscal year 2008, $920,000,000.
       (b) Allocations.--From amounts authorized under subsection 
     (a), the following sums are authorized:
       (1) For activities under section 912--
       (A) for fiscal year 2004, $20,000,000; and
       (B) for fiscal year 2005, $30,000,000.
       (2) For activities under section 914--
       (A) for fiscal year 2004, $4,000,000; and
       (B) for each of fiscal years 2005 through 2008, $7,000,000.
       (3) For activities under section 915--
       (A) for fiscal year 2004, $20,000,000;
       (B) for fiscal year 2005, $25,000,000;
       (C) for fiscal year 2006, $30,000,000;
       (D) for fiscal year 2007, $35,000,000; and
       (E) for fiscal year 2008, $40,000,000.
       (c) Extended Authorization.--There are authorized to be 
     appropriated to the Secretary for activities under section 
     912, $50,000,000 for each of fiscal years 2006 through 2013.
       (d) None of the funds authorized to be appropriated under 
     this section may be used for--
       (1) the promulgation and implementation of energy 
     efficiency regulations;
       (2) the Weatherization Assistance Program under part A of 
     title IV of the Energy Conservation and Production Act;
       (3) the State Energy Program under part D of title III of 
     the Energy Policy and Conservation Act; or
       (4) the Federal Energy Management Program under part 3 of 
     title V of the National Energy Conservation Policy Act.

     SEC. 912. NEXT GENERATION LIGHTING INITIATIVE.

       (a) In General.--The Secretary shall carry out a Next 
     Generation Lighting Initiative in accordance with this 
     section to support research, development, demonstration, and 
     commercial application activities related to advanced solid-
     state lighting technologies based on white light emitting 
     diodes.
       (b) Objectives.--The objectives of the initiative shall be 
     to develop advanced solid-state organic and inorganic 
     lighting technologies based on white light emitting diodes 
     that, compared to incandescent and fluorescent lighting 
     technologies, are longer lasting; more energy-efficient; 
     cost-competitive and have less environmental impact.
       (c) Industry Alliance.--The Secretary shall, within 3 
     months from the date of enactment of this section, 
     competitively select an Industry Alliance to represent 
     participants who are private, for-profit firms which, as a 
     group, are broadly representative of United States solid 
     state lighting research, development, infrastructure, and 
     manufacturing expertise as a whole.
       (d) Research.--
       (1) The Secretary shall carry out the research activities 
     of the Next Generation Lighting Initiative through 
     competitively awarded grants to researchers, including 
     Industry Alliance participants, national laboratories and 
     institutions of higher education.
       (2) The Secretary shall annually solicit from the Industry 
     Alliance--
       (A) comments to identify solid-state lighting technology 
     needs;
       (B) assessment of the progress of the Initiative's research 
     activities; and
       (C) assistance in annually updating solid-state lighting 
     technology roadmaps.
       (3) The information and roadmaps under (2) shall be 
     available to the public.
       (e) Development, Demonstration, and Commercial 
     Application.--The Secretary shall carry out a development, 
     demonstration, and commercial application program for the 
     Next Generation Lighting Initiative through competitively 
     selected awards. The Secretary may give preference to 
     participants of the Industry Alliance selected pursuant to 
     subsection (c).
       (f) Cost Sharing.--The Secretary shall require cost sharing 
     according to 42 U.S.C. 13542.
       (g) Intellectual Property.--The Secretary may require, in 
     accordance with the authorities provided in 35 U.S.C. 
     202(a)(ii), 42 U.S.C. 2182 and 42 U.S.C. 5908, that for any 
     new invention from subsection (d)--
       (1) that the Industry Alliance members who are active 
     participants in research, development and demonstration 
     activities related to the advanced solid-state lighting 
     technologies that are the subject of this legislation shall 
     be granted first option to negotiate with the invention 
     owner, at least in the field of solid-state lighting, non-
     exclusive licenses and royalties on terms that are reasonable 
     under the circumstances;
       (2) that the invention owner must offer to negotiate 
     licenses with the Industry Alliance participants cited in 
     (1), in good faith, for at least 1 year after U.S. patents 
     are issued on any such new invention; and
       (3) such other terms as the Secretary determines are 
     required to promote accelerated commercialization of 
     inventions made under the Initiative.
       (h) National Academy Review.--The Secretary shall enter 
     into an arrangement with the National Academy of Sciences to 
     conduct periodic reviews of the Next Generation Lighting 
     Initiative.
       (i) Definitions.--As used in this section:
       (1) The term ``advanced solid-state lighting'' means a 
     semiconducting device package and delivery system that 
     produces white light using externally applied voltage.
       (2) The term ``research'' includes basic research on the 
     technologies, materials and manufacturing processes required 
     for white light emitting diodes.
       (3) The term ``Industry Alliance'' means an entity selected 
     by the Secretary under subsection (c).
       (4) The term ``white light emitting diode'' means a 
     semiconducting package, utilizing either organic or inorganic 
     materials, that produces white light using externally applied 
     voltage.

     SEC. 913. NATIONAL BUILDING PERFORMANCE INITIATIVE.

       (a) Interagency Group.--Not later than 90 days after the 
     date of enactment of this Act, the Director of the Office of 
     Science and Technology Policy shall establish an interagency 
     group to develop, in coordination with the advisory committee 
     established under subsection (e), a National Building 
     Performance Initiative (in this section referred to as the 
     ``Initiative''). The interagency group shall be co-chaired by 
     appropriate officials of the Department and the Department of 
     Commerce, who shall jointly arrange for the provision of 
     necessary administrative support to the group.
       (b) Integration of Efforts.--The Initiative shall integrate 
     Federal, State, and voluntary private sector efforts to 
     reduce the costs of construction, operation, maintenance, and 
     renovation of commercial, industrial, institutional, and 
     residential buildings.
       (c) Plan.--Not later than 1 year after the date of 
     enactment of this Act, the interagency group shall submit to 
     Congress a plan for carrying out the appropriate Federal role 
     in the Initiative. The plan shall include--
       (1) research, development, demonstration, and commercial 
     application of systems and materials for new construction and 
     retrofit relating to the building envelope and building 
     system components; and
       (2) the collection, analysis, and dissemination of research 
     results and other pertinent information on enhancing building 
     performance to industry, government entities, and the public.
       (d) Department of Energy Role.--Within the Federal portion 
     of the Initiative, the Department shall be the lead agency 
     for all aspects of building performance related to use and 
     conservation of energy.
       (e) Advisory Committee.--The Director of the Office of 
     Science and Technology Policy shall establish an advisory 
     committee to--
       (1) analyze and provide recommendations on potential 
     private sector roles and participation in the Initiative; and
       (2) review and provide recommendations on the plan 
     described in subsection (c).
       (f) Construction.--Nothing in this section provides any 
     Federal agency with new authority to regulate building 
     performance.

     SEC. 914. SECONDARY ELECTRIC VEHICLE BATTERY USE PROGRAM.

       (a) Definitions.--For purposes of this section:
       (1) The term ``battery'' means an energy storage device 
     that previously has been used to provide motive power in a 
     vehicle powered in whole or in part by electricity.
       (2) The term ``associated equipment'' means equipment 
     located where the batteries will be used that is necessary to 
     enable the use of the energy stored in the batteries.
       (b) Program.--The Secretary shall establish and conduct a 
     research, development, demonstration, and commercial 
     application program for the secondary use of batteries. Such 
     program shall be--
       (1) designed to demonstrate the use of batteries in 
     secondary applications, including utility and commercial 
     power storage and power quality;
       (2) structured to evaluate the performance, including 
     useful service life and costs, of such batteries in field 
     operations, and the

[[Page 10186]]

     necessary supporting infrastructure, including reuse and 
     disposal of batteries; and
       (3) coordinated with ongoing secondary battery use programs 
     at the National Laboratories and in industry.
       (c) Solicitation.--Not later than 180 days after the date 
     of the enactment of this Act, the Secretary shall solicit 
     proposals to demonstrate the secondary use of batteries and 
     associated equipment and supporting infrastructure in 
     geographic locations throughout the United States. The 
     Secretary may make additional solicitations for proposals if 
     the Secretary determines that such solicitations are 
     necessary to carry out this section.
       (d) Selection of Proposals.--
       (1) The Secretary shall, not later than 90 days after the 
     closing date established by the Secretary for receipt of 
     proposals under subsection (c), select up to 5 proposals 
     which may receive financial assistance under this section 
     once the Department is in receipt of appropriated funds.
       (2) In selecting proposals, the Secretary shall consider 
     diversity of battery type, geographic and climatic diversity, 
     and life-cycle environmental effects of the approaches.
       (3) No one project selected under this section shall 
     receive more than 25 percent of the funds authorized for this 
     Program.
       (4) The Secretary shall consider the extent of involvement 
     of State or local government and other persons in each 
     demonstration project to optimize use of federal resources.
       (5) The Secretary may consider such other criteria as the 
     Secretary considers appropriate.
       (e) Conditions.--The Secretary shall require that--
       (1) relevant information be provided to the Department, the 
     users of the batteries, the proposers, and the battery 
     manufacturers; and
       (2) the proposer provide at least 50 percent of the costs 
     associated with the proposal.

     SEC. 915. ENERGY EFFICIENCY SCIENCE INITIATIVE.

       (a) Establishment.--The Secretary shall establish an Energy 
     Efficiency Science Initiative to be managed by the Assistant 
     Secretary in the Department with responsibility for energy 
     conservation under section 203(a)(9) of the Department of 
     Energy Organization Act (42 U.S.C. 7133(a)(9)), in 
     consultation with the Director of the Office of Science, for 
     grants to be competitively awarded and subject to peer review 
     for research relating to energy efficiency.
       (b) Report.--The Secretary shall submit to the Congress, 
     along with the President's annual budget request under 
     section 1105(a) of title 31, United States Code, a report on 
     the activities of the Energy Efficiency Science Initiative, 
     including a description of the process used to award the 
     funds and an explanation of how the research relates to 
     energy efficiency.

       Subtitle B--Distributed Energy and Electric Energy Systems

     SEC. 921. DISTRIBUTED ENERGY AND ELECTRIC ENERGY SYSTEMS.

       (a) In General.--
       (1) The following sums are authorized to be appropriated to 
     the Secretary for distributed energy and electric energy 
     systems activities, including activities authorized under 
     this subtitle:
       (A) for fiscal year 2004, $190,000,000;
       (B) for fiscal year 2005, $200,000,000;
       (C) for fiscal year 2006, $220,000,000;
       (D) for fiscal year 2007, $240,000,000; and
       (E) for fiscal year 2008, $260,000,000.
       (2) For the Initiative in subsection 927(e), there are 
     authorized to be appropriated--
       (A) for fiscal year 2004, $15,000,000;
       (B) for fiscal year 2005, $20,000,000;
       (C) for fiscal year 2006, $30,000,000;
       (D) for fiscal year 2007, $35,000,000; and
       (E) for fiscal year 2008, $40,000,000.
       (b) Micro-Cogeneration Energy Technology.--From amounts 
     authorized under subsection (a), $20,000,000 for each of 
     fiscal years 2004 and 2005 shall be available for activities 
     under section 924.

     SEC. 922. HYBRID DISTRIBUTED POWER SYSTEMS.

       Not later than 1 year after the date of enactment of this 
     Act, the Secretary shall develop and transmit to the Congress 
     a strategy for a comprehensive research, development, 
     demonstration, and commercial application program to develop 
     hybrid distributed power systems that combine--
       (1) one or more renewable electric power generation 
     technologies of 10 megawatts or less located near the site of 
     electric energy use; and
       (2) nonintermittent electric power generation technologies 
     suitable for use in a distributed power system.

     SEC. 923. HIGH POWER DENSITY INDUSTRY PROGRAM.

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

     SEC. 924. MICRO-COGENERATION ENERGY TECHNOLOGY.

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

     SEC. 925. DISTRIBUTED ENERGY TECHNOLOGY DEMONSTRATION 
                   PROGRAM.

       The Secretary, within the sums authorized under section 
     921(a)(1), may provide financial assistance to coordinating 
     consortia of interdisciplinary participants for 
     demonstrations designed to accelerate the utilization of 
     distributed energy technologies, such as fuel cells, 
     microturbines, reciprocating engines, thermally activated 
     technologies, and combined heat and power systems, in highly 
     energy intensive commercial applications.

     SEC. 926. OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION.

       (a) Creation of an Office of Electric Transmission and 
     Distribution.--Title II of the Department of Energy 
     Organization Act is amended by inserting the following after 
     section 217 (42 U.S.C. 7144d):


           ``OFFICE OF ELECTRIC TRANSMISSION AND DISTRIBUTION

       ``Sec. 218. (a) There is established within the Department 
     an Office of Electric Transmission and Distribution. This 
     Office shall be headed by a Director, who shall be appointed 
     by the Secretary. The Director shall be compensated at the 
     annual rate prescribed for level IV of the Executive Schedule 
     under section 5315 of title 5, United States Code.
       ``(b) The Director shall--
       ``(1) coordinate and develop a comprehensive, multi-year 
     strategy to improve the Nation's electricity transmission and 
     distribution;
       ``(2) ensure that the recommendations of the Secretary's 
     National Transmission Grid Study are implemented;
       ``(3) carry out the research, development, and 
     demonstration functions;
       ``(4) grant authorizations for electricity import and 
     export;
       ``(5) perform other electricity transmission and 
     distribution-related functions assigned by the Secretary; and
       ``(6) develop programs for workforce training in power and 
     transmission engineering.''.
       (b) Conforming Amendments.--
       (1) The table of contents of the Department of Energy Act 
     is amended by inserting after the item relating to section 
     217 the following new item:

``218. Office of Electric Transmission and Distribution.''.

       (2) Section 5315 of title 5, United States Code, is amended 
     by inserting ``Director, Office of Electric Transmission and 
     Distribution, Department of Energy.'' after ``Inspector 
     General, Department of Energy.''.

     SECTION 927. ELECTRIC TRANSMISSION AND DISTRIBUTION PROGRAMS.

       (a) Demonstration Program.--The Secretary, acting through 
     the Director of the Office of Electric Transmission and 
     Distribution, shall establish a comprehensive research, 
     development, and demonstration program to ensure the 
     reliability, efficiency, and environmental integrity of 
     electrical transmission and distribution systems. This 
     program shall include--
       (1) advanced energy and energy storage technologies, 
     materials, and systems, giving priority to new transmission 
     technologies, including composite conductor materials and 
     other technologies that enhance reliability, operational 
     flexibility, or power-carrying capability;
       (2) advanced grid reliability and efficiency technology 
     development;
       (3) technologies contributing to significant load 
     reductions;
       (4) advanced metering, load management, and control 
     technologies;
       (5) technologies to enhance existing grid components;
       (6) the development and use of high-temperature 
     superconductors to--
       (A) enhance the reliability, operational flexibility, or 
     power-carrying capability of electric transmission or 
     distribution systems; or
       (B) increase the efficiency of electric energy generation, 
     transmission, distribution, or storage systems;
       (7) integration of power systems, including systems to 
     deliver high-quality electric power, electric power 
     reliability, and combined heat and power;
       (8) supply of electricity to the power grid by small scale, 
     distributed and residential-based power generators;
       (9) the development and use of advanced grid design, 
     operation and planning tools;
       (10) any other infrastructure technologies, as appropriate; 
     and
       (11) technology transfer and education.
       (b) Program Plan.--Not later than 1 year after the date of 
     the enactment of this legislation, the Secretary, in 
     consultation with other appropriate Federal agencies, shall 
     prepare and transmit to Congress a 5-year program plan to 
     guide activities under this section. In preparing the program 
     plan, the Secretary shall consult with utilities, energy 
     services providers, manufacturers, institutions of higher 
     education, other appropriate State and local agencies, 
     environmental organizations, professional and technical 
     societies, and any other persons the Secretary considers 
     appropriate.

[[Page 10187]]

       (c) Implementation.--The Secretary shall consider 
     implementing this program using a consortium of industry, 
     university and national laboratory participants.
       (d) Report.--Not later than 2 years after the transmittal 
     of the plan under subsection (b), the Secretary shall 
     transmit a report to Congress describing the progress made 
     under this section and identifying any additional resources 
     needed to continue the development and commercial application 
     of transmission and distribution infrastructure technologies.
       (e) Power Delivery Research Initiative.--The Secretary 
     shall establish a research, development and demonstration 
     initiative specifically focused on power delivery utilizing 
     components incorporating high temperature superconductivity.
       (1) Goals of this Initiative shall be to--
       (A) establish world-class facilities to develop high 
     temperature superconductivity power applications in 
     partnership with manufacturers and utilities;
       (B) provide technical leadership for establishing 
     reliability for high temperature superconductivity power 
     applications including suitable modeling and analysis;
       (C) facilitate commercial transition toward direct current 
     power transmission, storage, and use for high power systems 
     utilizing high temperature superconductivity; and
       (D) facilitate the integration of very low impedance high 
     temperature superconducting wires and cables in existing 
     electric networks to improve system performance, power flow 
     control and reliability.
       (2) The Initiative shall include--
       (A) feasibility analysis, planning, research, and design to 
     construct demonstrations of superconducting links in high 
     power, direct current and controllable alternating current 
     transmission systems;
       (B) public-private partnerships to demonstrate deployment 
     of high temperature superconducting cable into testbeds 
     simulating a realistic transmission grid and under varying 
     transmission conditions, including actual grid insertions; 
     and
       (C) testbeds developed in cooperation with national 
     laboratories, industries, and universities to demonstrate 
     these technologies, prepare the technologies for commercial 
     introduction, and address cost or performance roadblocks to 
     successful commercial use.
       (g) Transmission and Distribution Grid Planning and 
     Operations Initiative.--The Secretary shall establish a 
     research, development and demonstration initiative 
     specifically focused on tools needed to plan, operate and 
     expand the transmission and distribution grids in the 
     presence of competitive market mechanisms for energy, load 
     demand, customer response and ancillary services. Goals of 
     this Initiative shall be to:
       (1) develop and utilize a geographically distributed 
     Center, consisting of research universities and national 
     laboratories, with expertise and facilities to develop the 
     underlying theory and software for power system application, 
     and to assure commercial development in partnership with 
     software vendors and utilities;
       (2) provide technical leadership in engineering and 
     economic analysis for reliability and efficiency of power 
     systems planning and operations in the presence of 
     competitive markets for electricity;
       (3) model, simulate and experiment with new market 
     mechanisms and operating practices to understand and optimize 
     such new methods before actual use; and
       (4) provide technical support and technology transfer to 
     electric utilities and other participants in the domestic 
     electric industry and marketplace.

                      Subtitle C--Renewable Energy

     SEC. 931. RENEWABLE ENERGY.

       (a) In General.--The following sums are authorized to be 
     appropriated to the Secretary for renewable energy research, 
     development, demonstration, and commercial application 
     activities, including activities authorized under this 
     subtitle:
       (1) for fiscal year 2004, $480,000,000;
       (2) for fiscal year 2005, $550,000,000;
       (3) for fiscal year 2006, $610,000,000;
       (4) for fiscal year 2007, $659,000,000; and
       (5) for fiscal year 2008, $710,000,000.
       (b) Bioenergy.--From the amounts authorized under 
     subsection (a), the following sums are authorized to be 
     appropriated to carry out section 932:
       (1) for fiscal year 2004, $135,425,000;
       (2) for fiscal year 2005, $155,600,000;
       (3) for fiscal year 2006, $167,650,000;
       (4) for fiscal year 2007, $180,000,000; and
       (5) for fiscal year 2008, $192,000,000.
       (c) Biodiesel Engine Testing.--From amounts authorized 
     under subsection (a), $5,000,000 is authorized to be 
     appropriated in each of fiscal years 2004 and 2008 to carry 
     out section 933.
       (d) Concentrating Solar Power.--From amounts authorized 
     under subsection (a), the following sums are authorized to be 
     appropriated to carry out section 934:
       (1) for fiscal year 2004, $20,000,000;
       (2) for fiscal year 2005, $40,000,000; and
       (2) for each of fiscal years 2006, 2007 and 2008, 
     $50,000,000.
       (e) Limits on Use of Funds.--
       (1) None of the funds authorized to be appropriated under 
     this section may be used for Renewable Support and 
     Implementation.
       (2) Of the funds authorized under subsection (b), not less 
     than $5,000,000 for each fiscal year shall be made available 
     for grants to Historically Black Colleges and Universities, 
     Tribal Colleges, and Hispanic-Serving Institutions.
       (f) Consultation.-- In carrying out this section, the 
     Secretary, in consultation with the Secretary of Agriculture, 
     shall demonstrate the use of advanced wind power technology, 
     including combined use with coal gasification; biomass; 
     geothermal energy systems; and other renewable energy 
     technologies to assist in delivering electricity to rural and 
     remote locations.

     SEC. 932. BIOENERGY PROGRAMS.

       (a) In General.--The Secretary shall conduct a program of 
     research, development, demonstration, and commercial 
     application for bioenergy, including--
       (1) biopower energy systems;
       (2) biofuels;
       (3) bioproducts;
       (4) integrated biorefineries that may produce biopower, 
     biofuels and bioproducts;
       (5) cross-cutting research and development in feedstocks; 
     and
       (6) economic analysis.
       (b) Biofuels and Bioproducts.--The goals of the biofuels 
     and bioproducts programs shall be to develop, in partnership 
     with industry--
       (1) advanced biochemical and thermo-chemical conversion 
     technologies capable of making fuels from cellulosic 
     feedstocks that are price-competitive with gasoline or diesel 
     in either internal combustion engines or fuel cell-powered 
     vehicles; and
       (2) advanced biotechnology processes capable of making 
     biofuels and bioproducts with emphasis on development of 
     biorefinery technologies using enzyme-based processing 
     systems.
       (c) Definition.--For purposes of (b), the term ``cellulosic 
     feedstock'' means any portion of a crop not normally used in 
     food production or any non-food crop grown for the purpose of 
     producing biomass feedstock.

     SEC. 933. BIODIESEL ENGINE TESTING PROGRAM.

       (a) In General.--Not later that 180 days after enactment of 
     this Act, the Secretary shall initiate a partnership with 
     diesel engine, diesel fuel injection system, and diesel 
     vehicle manufacturers and diesel and biodiesel fuel providers 
     to include biodiesel testing in advanced diesel engine and 
     fuel system technology.
       (b) Scope.--The study shall provide for testing to 
     determine the impact of biodiesel on current and future 
     emission control technologies, with emphasis on
       (1) the impact of biodiesel on emissions warranty, in-use 
     liability, and anti-tampering provisions;
       (2) the impact of long-term use of biodiesel on engine 
     operations;
       (3) the options for optimizing these technologies for both 
     emissions and performance when switching between biodiesel 
     and diesel fuel; and
       (4) the impact of using biodiesel in these fueling systems 
     and engines when used as a blend with 2006 Environmental 
     Protection Agency-mandated diesel fuel containing a maximum 
     of 15-parts-per-million sulfur content.
       (c) Report.--Not later than 2 years after the date of 
     enactment, the Secretary shall provide an interim report to 
     Congress on the findings of this study, including a 
     comprehensive analysis of impacts from biodiesel on engine 
     operation for both existing and expected future diesel 
     technologies, and recommendations for ensuring optimal 
     emissions reductions and engine performance with biodiesel.
       (d) Definition.--For purposes of this section, the term 
     ``biodiesel'' means a diesel fuel substitute produced from 
     non-petroleum renewable resources that meets the registration 
     requirements for fuels and fuel additives established by the 
     Environmental Protection Agency under section 211 of the 
     Clean Air Act (42 U.S.C. 7545) and that meets the American 
     Society for Testing and Materials D6751-02a ``Standard 
     Specification for Biodiesel Fuel (B100) Blend Stock for 
     Distillate Fuels.''

     SEC. 934 CONCENTRATING SOLAR POWER RESEARCH PROGRAM.

       (a) In General.--The Secretary shall conduct a program of 
     research and development to evaluate the potential of 
     concentrating solar power for hydrogen production, including 
     co-generation approaches for both hydrogen and electricity. 
     Such program shall take advantage of existing facilities to 
     the extent possible and shall include--
       (1) development of optimized technologies that are common 
     to both electricity and hydrogen production;
       (2) evaluation of thermo-chemical cycles for hydrogen 
     production at the temperatures attainable with concentrating 
     solar power;
       (3) evaluation of materials issues for the thermo-chemical 
     cycles in (2);
       (4) system architectures and economics studies; and
       (5) coordination with activities in the Advanced Reactor 
     Hydrogen Co-generation Project on high temperature materials, 
     thermo-chemical cycle and economic issues.
       (b) Assessment.--In carrying out the program under this 
     section, the Secretary is directed to assess conflicting 
     guidance on the economic potential of concentrating solar 
     power for electricity production received

[[Page 10188]]

     from the National Research Council report entitled 
     ``Renewable Power Pathways: A Review of the U.S. Department 
     of Energy's Renewable Energy Programs'' in 2000 and 
     subsequent DOE-funded reviews of that report and provide an 
     assessment of the potential impact of this technology before, 
     or concurrent with, submission of the fiscal year 2006 
     budget.
       (c) Report.--Not later than 5 years after the date of 
     enactment of this section, the Secretary shall provide a 
     report to Congress on the economic and technical potential 
     for electricity or hydrogen production, with or without co-
     generation, with concentrating solar power, including the 
     economic and technical feasibility of potential construction 
     of a pilot demonstration facility suitable for commercial 
     production of electricity and/or hydrogen from concentrating 
     solar power.

     SEC. 935. MISCELLANEOUS PROJECTS.

       The Secretary shall conduct research, development, 
     demonstration, and commercial application programs for--
       (1) ocean energy, including wave energy;
       (2) the combined use of renewable energy technologies with 
     one another and with other energy technologies, including the 
     combined use of wind power and coal gasification 
     technologies; and
       (3) renewable energy technologies for cogeneration of 
     hydrogen and electricity.

                       Subtitle D--Nuclear Energy

     SEC. 941. NUCLEAR ENERGY.

       (a) Core Programs.--The following sums are authorized to be 
     appropriated to the Secretary for nuclear energy research, 
     development, demonstration, and commercial application 
     activities, including activities authorized under this 
     subtitle, other than those described in subsection (b):
       (1) for fiscal year 2004, $273,000,000;
       (2) for fiscal year 2005, $305,000,000;
       (3) for fiscal year 2006, $330,000,000;
       (4) for fiscal year 2007, $355,000,000; and
       (5) for fiscal year 2008, $495,000,000.
       (b) Nuclear Infrastructure Support.--The following sums are 
     authorized to be appropriated to the Secretary for activities 
     under section 942(f):
       (1) for fiscal year 2004, $125,000,000;
       (2) for fiscal year 2005, $130,000,000;
       (3) for fiscal year 2006, $135,000,000;
       (4) for fiscal year 2007, $140,000,000; and
       (5) for fiscal year 2008, $145,000,000.
       (c) Allocations.--From amounts authorized under subsection 
     (a), the following sums are authorized:
       (1) For activities under section 943--
       (A) for fiscal year 2004, $140,000,000;
       (B) for fiscal year 2005, $145,000,000;
       (C) for fiscal year 2006, $150,000,000;
       (D) for fiscal year 2007, $155,000,000; and
       (E) for fiscal year 2008, $275,000,000.
       (2) For activities under section 944--
       (A) for fiscal year 2004, $33,000,000;
       (B) for fiscal year 2005, $37,900,000;
       (C) for fiscal year 2006, $43,600,000;
       (D) for fiscal year 2007, $50,100,000; and
       (E) for fiscal year 2008, $56,000,000.
       (3) For activities under section 946, for each of fiscal 
     years 2004 through 2008, $6,000,000.
       (d) None of the funds authorized under this section may be 
     used for decommissioning the Fast Flux Test Facility.

     SEC. 942. NUCLEAR ENERGY RESEARCH PROGRAMS.

       (a) Nuclear Energy Research Initiative.--The Secretary 
     shall carry out a Nuclear Energy Research Initiative for 
     research and development related to nuclear energy.
       (b) Nuclear Energy Plant Optimization Program.--The 
     Secretary shall carry out a Nuclear Energy Plant Optimization 
     Program to support research and development activities 
     addressing reliability, availability, productivity, component 
     aging, safety and security of existing nuclear power plants.
       (c) Nuclear Power 2010 Program.--The Secretary shall carry 
     out a Nuclear Power 2010 Program, consistent with 
     recommendations in the October 2001 report entitled ``A 
     Roadmap to Deploy New Nuclear Power Plants in the United 
     States by 2010'' issued by the Nuclear Energy Research 
     Advisory Committee of the Department. The Program shall 
     include--
       (1) utilization of the expertise and capabilities of 
     industry, universities, and National Laboratories in 
     evaluation of advanced nuclear fuel cycles and fuels testing;
       (2) consideration of a variety of reactor designs suitable 
     for both developed and developing nations;
       (3) participation of international collaborators in 
     research, development, and design efforts as appropriate; and
       (4) encouragement for university and industry 
     participation.
       (d) Generation IV Nuclear Energy Systems Initiative.--The 
     Secretary shall carry out a Generation IV Nuclear Energy 
     Systems Initiative to develop an overall technology plan and 
     to support research and development necessary to make an 
     informed technical decision about the most promising 
     candidates for eventual commercial application. The 
     Initiative shall examine advanced proliferation-resistant and 
     passively safe reactor designs, including designs that--
       (1) are economically competitive with other electric power 
     generation plants;
       (2) have higher efficiency, lower cost, and improved safety 
     compared to reactors in operation on the date of enactment of 
     this Act;
       (3) use fuels that are proliferation resistant and have 
     substantially reduced production of high-level waste per unit 
     of output; and
       (4) use improved instrumentation.
       (e) Reactor Production of Hydrogen.--The Secretary shall 
     carry out research to examine designs for high-temperature 
     reactors capable of producing large-scale quantities of 
     hydrogen using thermo-chemical processes.
       (f) Nuclear Infrastructure Support.--The Secretary shall 
     develop and implement a strategy for the facilities of the 
     Office of Nuclear Energy, Science, and Technology and shall 
     transmit a report containing the strategy along with the 
     President's budget request to the Congress for fiscal year 
     2006. Such strategy shall provide a cost-effective means 
     for--
       (1) maintaining existing facilities and infrastructure, as 
     needed;
       (2) closing unneeded facilities;
       (3) making facility upgrades and modifications; and
       (4) building new facilities.

     SEC. 943. ADVANCED FUEL CYCLE INITIATIVE.

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

     SEC. 944. UNIVERSITY NUCLEAR SCIENCE AND ENGINEERING SUPPORT.

       (a) Establishment.--The Secretary shall support a program 
     to invest in human resources and infrastructure in the 
     nuclear sciences and engineering and related fields 
     (including health physics and nuclear and radiochemistry), 
     consistent with departmental missions related to civilian 
     nuclear research and development.
       (b) Duties.--In carrying out the program under this 
     section, the Secretary shall establish fellowship and faculty 
     assistance programs, as well as provide support for 
     fundamental research and encourage collaborative research 
     among industry, national laboratories, and universities 
     through the Nuclear Energy Research Initiative. The Secretary 
     is encouraged to support activities addressing the entire 
     fuel cycle through involvement of both the Offices of Nuclear 
     Energy, Science and Technology and Civilian Radioactive Waste 
     Management. The Secretary shall support communication and 
     outreach related to nuclear science, engineering and nuclear 
     waste management.
       (c) Maintaining University Research and Training Reactors 
     and Associated Infrastructure.--Activities under this section 
     may include--
       (1) converting research reactors currently using high-
     enrichment fuels to low-enrichment fuels, upgrading 
     operational instrumentation, and sharing of reactors among 
     institutions of higher education;
       (2) providing technical assistance, in collaboration with 
     the United States nuclear industry, in relicensing and 
     upgrading training reactors as part of a student training 
     program; and
       (3) providing funding for reactor improvements as part of a 
     focused effort that emphasizes research, training, and 
     education.
       (d) University National Laboratory Interactions.--The 
     Secretary shall develop sabbatical fellowship and visiting 
     scientist programs to encourage sharing of personnel between 
     national laboratories and universities.
       (e) Operating and Maintenance Costs.--Funding for a 
     research project provided under this section may be used to 
     offset a portion of the operating and maintenance costs of a 
     research reactor at an institution of higher education used 
     in the research project.

     SEC. 945. SECURITY OF NUCLEAR FACILITIES.

       The Secretary, through the Director of the Office of 
     Nuclear Energy, Science and Technology shall conduct a 
     research and development program on cost-effective 
     technologies for increasing the safety of nuclear facilities 
     from natural phenomena and the security of nuclear facilities 
     from deliberate attacks.

     SEC. 946. ALTERNATIVES TO INDUSTRIAL RADIOACTIVE SOURCES.

       (a) Survey.--Not later than August 1, 2004, the Secretary 
     shall provide to the Congress results of a survey of 
     industrial applications of large radioactive sources. The 
     survey shall--
       (1) consider well-logging sources as one class of 
     industrial sources;

[[Page 10189]]

       (2) include information on current domestic and 
     international Department, Department of Defense, State 
     Department and commercial programs to manage and dispose of 
     radioactive sources; and
       (3) discuss available disposal options for currently 
     deployed or future sources and, if deficiencies are noted for 
     either deployed or future sources, recommend legislative 
     options that Congress may consider to remedy identified 
     deficiencies.
       (b) Plan.--In conjunction with the survey in subsection 
     (a), the Secretary shall establish a research and development 
     program to develop alternatives to such sources that reduce 
     safety, environmental, or proliferation risks to either 
     workers using the sources or the public. Miniaturized 
     particle accelerators for well-logging or other industrial 
     applications and portable accelerators for production of 
     short-lived radioactive materials at an industrial site shall 
     be considered as part of the research and development 
     efforts. Details of the program plan shall be provided to the 
     Congress by August 1, 2004.

                       Subtitle E--Fossil Energy

     SEC. 951. FOSSIL ENERGY.

       (a) In General.--The following sums are authorized to be 
     appropriated to the Secretary for fossil energy research, 
     development, demonstration, and commercial application 
     activities, including activities authorized under this 
     subtitle:
       (1) for fiscal year 2004, $523,000,000;
       (2) for fiscal year 2005, $542,000,000;
       (3) for fiscal year 2006, $558,000,000;
       (4) for fiscal year 2007, $585,000,000; and
       (5) for fiscal year 2008, $600,000,000.
       (b) Allocations.--From amounts authorized under subsection 
     (a), the following sums are authorized:
       (1) For activities under section 952(b)(2), $28,000,000 for 
     each of the fiscal years 2004 through 2008.
       (2) For activities under section 953--
       (A) for fiscal year 2004, $12,000,000;
       (B) for fiscal year 2005, $15,000,000; and
       (C) for each of fiscal years 2006 through 2008, 
     $20,000,000.
       (3) For activities under section 954, to remain available 
     until expended,--
       (A) for fiscal year 2004, $200,000,000;
       (B) for fiscal year 2005, $210,000,000; and
       (C) for fiscal year 2006, $220,500,000.
       (4) For the Office of Arctic Energy under section 3197 of 
     the Floyd D. Spence National Defense Authorization Act for 
     Fiscal Year 2001 (Public Law 106-398), $25,000,000 for each 
     of fiscal years 2004 through 2008.
       (c) Extended Authorization.--There are authorized to be 
     appropriated to the Secretary for the Office of Arctic Energy 
     under section 3197 of the Floyd D. Spence National Defense 
     Authorization Act for Fiscal Year 2001 (Public Law 106-398), 
     $25,000,000 for each of fiscal years 2009 through 2012.
       (d) Limits on Use of Funds.--
       (1) None of the funds authorized under this section may be 
     used for Fossil Energy Environmental Restoration or Import/
     Export Authorization.
       (2) Of the funds authorized under subsection (b)(2), not 
     less than 20 percent of the funds appropriated for each 
     fiscal year shall be dedicated to research and development 
     carried out at institutions of higher education.

     SEC. 952. OIL AND GAS RESEARCH PROGRAMS.

       (a) Oil and Gas Research.--The Secretary shall conduct a 
     program of research, development, demonstration, and 
     commercial application on oil and gas, including--
       (1) exploration and production;
       (2) gas hydrates;
       (3) reservoir life and extension;
       (4) transportation and distribution infrastructure;
       (5) ultraclean fuels;
       (6) heavy oil and oil shale; and
       (7) related environmental research.
       (b) Fuel Cells.--
       (1) The Secretary shall conduct a program of research, 
     development, demonstration, and commercial application on 
     fuel cells for low-cost, high-efficiency, fuel-flexible, 
     modular power systems.
       (2) The demonstrations shall include fuel cell proton 
     exchange membrane technology for commercial, residential, and 
     transportation applications, and distributed generation 
     systems, utilizing improved manufacturing production and 
     processes.
       (c) Natural Gas and Oil Deposits Report.--Not later than 2 
     years after the date of the enactment of this Act, and every 
     2 years thereafter, the Secretary of the Interior, in 
     consultation with other appropriate Federal agencies, shall 
     transmit a report to the Congress of the latest estimates of 
     natural gas and oil reserves, reserves growth, and 
     undiscovered resources in Federal and State waters off the 
     coast of Louisiana and Texas.
       (d) Integrated Clean Power and Energy Research.--
       (1) The Secretary shall establish a national center or 
     consortium of excellence in clean energy and power 
     generation, utilizing the resources of the existing Clean 
     Power and Energy Research Consortium, to address the nation's 
     critical dependence on energy and the need to reduce 
     emissions.
       (2) The center or consortium will conduct a program of 
     research, development, demonstration and commercial 
     application on integrating the following six focus areas:
       (A) efficiency and reliability of gas turbines for power 
     generation;
       (B) reduction in emissions from power generation;
       (C) promotion of energy conservation issues;
       (D) effectively utilizing alternative fuels and renewable 
     energy;
       (E) development of advanced materials technology for oil 
     and gas exploration and utilization in harsh environments; 
     and
       (F) education on energy and power generation issues.

     SEC. 953. RESEARCH AND DEVELOPMENT FOR COAL MINING 
                   TECHNOLOGIES.

       (a) Establishment.--The Secretary shall carry out a program 
     of research and development on coal mining technologies. The 
     Secretary shall cooperate with appropriate Federal agencies, 
     coal producers, trade associations, equipment manufacturers, 
     institutions of higher education with mining engineering 
     departments, and other relevant entities.
       (b) Program.--The research and development activities 
     carried out under this section shall--
       (1) be guided by the mining research and development 
     priorities identified by the Mining Industry of the Future 
     Program and in the recommendations from relevant reports of 
     the National Academy of Sciences on mining technologies;
       (2) include activities exploring minimization of 
     contaminants in mined coal that contribute to environmental 
     concerns including development and demonstration of 
     electromagnetic wave imaging ahead of mining operations;
       (3) develop and demonstrate coal bed electromagnetic wave 
     imaging and radar techniques for horizontal drilling in order 
     to increase methane recovery efficiency, prevent spoilage of 
     domestic coal reserves and minimize water disposal associated 
     with methane extraction; and
       (4) expand mining research capabilities at institutions of 
     higher education.

     SEC. 954. COAL AND RELATED TECHNOLOGIES PROGRAM.

       (a) In General.--In addition to the program authorized 
     under Title II of this Act, the Secretary of Energy shall 
     conduct a program of technology research, development and 
     demonstration and commercial application for coal and power 
     systems, including programs to facilitate production and 
     generation of coal-based power through--
       (1) innovations for existing plants;
       (2) integrated gasification combined cycle;
       (3) advanced combustion systems;
       (4) turbines for synthesis gas derived from coal;
       (5) carbon capture and sequestration research and 
     development;
       (6) coal-derived transportation fuels and chemicals;
       (7) solid fuels and feedstocks; and (8) advanced coal-
     related research.
       (B) Cost and Performance Goals.--In carrying out programs 
     authorized by this section, the Secretary shall identify cost 
     and performance goals for coal-based technologies that would 
     permit the continued cost-competitive use of coal for 
     electricity generation, as chemical feedstocks, and as 
     transportation fuel in 2007, 2015, and the years after 2020. 
     In establishing such cost and performance goals, the 
     Secretary shall--
       (1) consider activities and studies undertaken to date by 
     industry in cooperation with the Department of Energy in 
     support of such assessment;
       (2) consult with interested entities, including coal 
     producers, industries using coal, organizations to promote 
     coal and advanced coal technologies, environmental 
     organizations and organizations representing workers;
       (3) not later than 120 days after the date of enactment of 
     this section, publish in the Federal Register proposed draft 
     cost and performance goals for public comments; and
       (4) not later than 180 days after the date of enactment of 
     this section and every four years thereafter, submit to 
     Congress a report describing final cost and performance goals 
     for such technologies that includes a list of technical 
     milestones as well as an explanation of how programs 
     authorized in this section will not duplicate the activities 
     authorized under the Clean Coal Power Initiative authorized 
     under Title II of this Act.

     SEC. 955. COMPLEX WELL TECHNOLOGY TESTING FACILITY.

       The Secretary of Energy, in coordination with industry 
     leaders in extended research drilling technology, shall 
     establish a Complex Well Technology Testing Facility at the 
     Rocky Mountain Oilfield Testing Center to increase the range 
     of extended drilling technologies.

                          Subtitle F--Science

     SEC. 961. SCIENCE.

       (a) In General.--The following sums are authorized to be 
     appropriated to the Secretary for research, development, 
     demonstration, and commercial application activities of the 
     Office of Science, including activities authorized under this 
     subtitle, including the amounts authorized under the 
     amendment made by section 967(c)(2)(D), and including basic 
     energy sciences, advanced scientific and computing research, 
     biological and environmental research, fusion energy 
     sciences, high energy physics, nuclear physics, and research 
     analysis and infrastructure support:

[[Page 10190]]

       (1) for fiscal year 2004, $3,785,000,000;
       (2) for fiscal year 2005, $4,153,000,000;
       (3) for fiscal year 2006, $4,586,000,000
       (4) for fiscal year 2007, $5,000,000,000; and
       (5) for fiscal year 2008, $5,400,000,000.
       (b) Allocations.--From amounts authorized under subsection 
     (a), the following sums are authorized:
       (1) For activities of the Fusion Energy Sciences Program, 
     including activities under section 962--
       (A) for fiscal year 2004, $335,000,000;
       (B) for fiscal year 2005, $349,000,000;
       (C) for fiscal year 2006, $362,000,000;
       (D) for fiscal year 2007, $377,000,000; and
       (E) for fiscal year 2008, $393,000,000.
       (2) For the Spallation Neutron Source--
       (A) for construction in fiscal year 2004, $124,600,000;
       (B) for construction in fiscal year 2005, $79,800,000; and
       (C) for completion of construction in fiscal year 2006, 
     $41,100,000; and
       (D) for other project costs (including research and 
     development necessary to complete the project, preoperations 
     costs, and capital equipment related to construction), 
     $103,279,000 for the period encompassing fiscal years 2003 
     through 2006, to remain available until expended through 
     September 30, 2006.
       (3) For Catalysis Research activities under section 965--
       (A) for fiscal year 2004, $33,000,000;
       (B) for fiscal year 2005, $35,000,000;
       (C) for fiscal year 2006, $36,500,000;
       (D) for fiscal year 2007, $38,200,000; and
       (E) for fiscal year 2008, $40,100,000.
       (4) For Nanoscale Science and Engineering Research 
     activities under section 966--
       (A) for fiscal year 2004, $270,000,000;
       (B) for fiscal year 2005, $290,000,000;
       (C) for fiscal year 2006, $310,000,000;
       (D) for fiscal year 2007, $330,000,000; and
       (E) for fiscal year 2008, $375,000,000.
       (5) For activities under subsection 966(c), from the 
     amounts authorized under subparagraph (4)--
       (A) for fiscal year 2004, $135,000,000;
       (B) for fiscal year 2005, $150,000,000;
       (C) for fiscal year 2006, $120,000,000;
       (D) for fiscal year 2007, $100,000,000; and
       (E) for fiscal year 2008, $125,000,000.
       (6) For activities in the Genomes to Life Program under 
     section 968--
       (A) for fiscal year 2004, $100,000,000;
       (B) for fiscal year 2005, $170,000,000;
       (C) for fiscal year 2006, $325,000,000;
       (D) for fiscal year 2007, $415,000,000; and
       (E) for fiscal year 2008, $455,000,000.
       (7) For construction and ancillary equipment of the Genomes 
     to Life User Facilities under section 968(d), of funds 
     authorized under (6)--
       (A) for fiscal year 2004, $16,000,000;
       (B) for fiscal year 2005, $70,000,000;
       (C) for fiscal year 2006, $175,000,000;
       (D) for fiscal year 2007, $215,000,000; and
       (E) for fiscal year 2008, $205,000,000.
       (8) For activities in the Water Supply Technologies Program 
     under section 970, $30,000,000 for each of fiscal years 2004 
     through 2008.
       (c) In addition to the funds authorized under subsection 
     (b)(1), the following sums are authorized for construction 
     costs associated with the ITER project under section 962--
       (1) for fiscal year 2006, $55,000,000;
       (2) for fiscal year 2007, $95,000,000; and
       (3) for fiscal year 2008, $115,000,000.

     SEC. 962. UNITED STATES PARTICIPATION IN ITER.

       (a) Participation.--
       (1) The Secretary of Energy is authorized to undertake full 
     scientific and technological cooperation in the International 
     Thermonuclear Experimental Reactor project (referred to in 
     this title as ``ITER'').
       (2) In the event that ITER fails to go forward within a 
     reasonable period of time, the Secretary shall send to 
     Congress a plan, including costs and schedules, for 
     implementing the domestic burning plasma experiment known as 
     the Fusion Ignition Research Experiment. Such a plan shall be 
     developed with full consultation with the Fusion Energy 
     Sciences Advisory Committee and be reviewed by the National 
     Research Council.
       (3) It is the intent of Congress that such sums shall be 
     largely for work performed in the United States and that such 
     work contributes the maximum amount possible to the U.S. 
     scientific and technological base.
       (b) Planning.--
       (1) Not later than 180 days of the date of enactment of 
     this act, the Secretary shall present to Congress a plan, 
     with proposed cost estimates, budgets and potential 
     international partners, for the implementation of the goals 
     of this section. The plan shall ensure that--
       (A) existing fusion research facilities are more fully 
     utilized;
       (B) fusion science, technology, theory, advanced 
     computation, modeling and simulation are strengthened;
       (C) new magnetic and inertial fusion research facilities 
     are selected based on scientific innovation, cost 
     effectiveness, and their potential to advance the goal of 
     practical fusion energy at the earliest date possible, and 
     those that are selected are funded at a cost-effective rate;
       (D) communication of scientific results and methods between 
     the fusion energy science community and the broader 
     scientific and technology communities is improved;
       (E) inertial confinement fusion facilities are utilized to 
     the extent practicable for the purpose of inertial fusion 
     energy research and development; and
       (F) attractive alternative inertial and magnetic fusion 
     energy approaches are more fully explored.
       (2) Such plan shall also address the status of and, to the 
     degree possible, costs and schedules for--
       (A) in coordination with the program in section 969, the 
     design and implementation of international or national 
     facilities for the testing of fusion materials; and
       (B) the design and implementation of international or 
     national facilities for the testing and development of key 
     fusion technologies.

     SEC. 963. SPALLATION NEUTRON SOURCE.

       (a) Definition.--For the purposes of this section, the term 
     ``Spallation Neutron Source'' means Department Project 9909E 
     09334, Oak Ridge National Laboratory, Oak Ridge, Tennessee.
       (b) Report.--The Secretary shall report on the Spallation 
     Neutron Source as part of the Department's annual budget 
     submission, including a description of the achievement of 
     milestones, a comparison of actual costs to estimated costs, 
     and any changes in estimated project costs or schedule.
       (c) Authorization of Appropriations.--The total amount 
     obligated by the Department, including prior year 
     appropriations, for the Spallation Neutron Source may not 
     exceed--
       (1) $1,192,700,000 for costs of construction;
       (2) $219,000,000 for other project costs; and
       (3) $1,411,700,000 for total project cost.

     SEC. 964. SUPPORT FOR SCIENCE AND ENERGY FACILITIES AND 
                   INFRASTRUCTURE.

       (a) Facility and Infrastructure Policy.--The Secretary 
     shall develop and implement a strategy for facilities and 
     infrastructure supported primarily from the Office of 
     Science, the Office of Energy Efficiency and Renewable 
     Energy, the Office of Fossil Energy, or the Office of Nuclear 
     Energy, Science and Technology Programs at all national 
     laboratories and single-purpose research facilities. Such 
     strategy shall provide cost-effective means for--
       (1) maintaining existing facilities and infrastructure, as 
     needed;
       (2) closing unneeded facilities;
       (3) making facility modifications; and
       (4) building new facilities.
       (b) Report.--
       (1) The Secretary shall prepare and transmit, along with 
     the President's budget request to the Congress for fiscal 
     year 2006, a report containing the strategy developed under 
     subsection (a).
       (2) For each national laboratory and single-purpose 
     research facility, for the facilities primarily used for 
     science and energy research, such report shall contain--
       (A) the current priority list of proposed facilities and 
     infrastructure projects, including cost and schedule 
     requirements;
       (B) a current ten-year plan that demonstrates the 
     reconfiguration of its facilities and infrastructure to meet 
     its missions and to address its long-term operational costs 
     and return on investment;
       (C) the total current budget for all facilities and 
     infrastructure funding; and
       (D) the current status of each facility and infrastructure 
     project compared to the original baseline cost, schedule, and 
     scope.

     SEC. 965. CATALYSIS RESEARCH PROGRAM.

       (A) Establishment.--The Secretary, through the Office of 
     Science, shall support a program of research and development 
     in catalysis science consistent with the Department's 
     statutory authorities related to research and development. 
     The program shall include efforts to--
       (1) enable catalyst design using combinations of 
     experimental and mechanistic methodologies coupled with 
     computational modeling of catalytic reactions at the 
     molecular level;
       (2) develop techniques for high throughput synthesis, 
     assay, and characterization at nanometer and sub-nanometer 
     scales in situ under actual operating conditions,
       (3) synthesize catalysts with specific site architectures;
       (4) conduct research on the use of precious metals for 
     catalysis; and
       (5) translate molecular understanding to the design of 
     catalytic compounds.
       (b) Duties of the Office of Science.--In carrying out this 
     program, the Director of the Office of Science shall--
       (1) support both individual investigators and 
     multidisciplinary teams of investigators to pioneer new 
     approaches in catalytic design;
       (2) develop, plan, construct, acquire, share, or operate 
     special equipment or facilities for the use of investigators 
     in collaboration with national user facilities such as 
     nanoscience and engineering centers;
       (3) support technology transfer activities to benefit 
     industry and other users of catalysis science and 
     engineering; and
       (4) coordinate research and development activities with 
     industry and other federal agencies.
       (c) Triennial Assessment.--The National Academy of Sciences 
     shall review the catalysis program every three years to 
     report on

[[Page 10191]]

     gains made in the fundamental science of catalysis and its 
     progress towards developing new fuels for energy production 
     and material fabrication processes.

     SEC. 966. NANOSCALE SCIENCE AND ENGINEERING RESEARCH.

       (a) Establishment.--The Secretary, acting through the 
     Office of Science, shall support a program of research, 
     development, demonstration, and commercial application in 
     nanoscience and nanoengineering. The program shall include 
     efforts to further the understanding of the chemistry, 
     physics, materials science, and engineering of phenomena on 
     the scale of nanometers and to apply this knowledge to the 
     Department's mission areas.
       (b) Duties of the Office of Science.--In carrying out the 
     program under this section, the Office of Science shall--
       (1) support both individual investigators and teams of 
     investigators, including multidisciplinary teams;
       (2) carry out activities under subsection (c);
       (3) support technology transfer activities to benefit 
     industry and other users of nanoscience and nanoengineering; 
     and
       (4) coordinate research and development activities with 
     other DOE programs, industry and other Federal agencies.
       (c) Nanoscience and Nanoengineering Research Centers and 
     Major Instrumentation.--
       (1) The Secretary shall carry out projects to develop, 
     plan, construct, acquire, operate, or support special 
     equipment, instrumentation, or facilities for investigators 
     conducting research and development in nanoscience and 
     nanoengineering.
       (2) Projects under paragraph (1) may include the 
     measurement of properties at the scale of nanometers, 
     manipulation at such scales, and the integration of 
     technologies based on nanoscience or nanoengineering into 
     bulk materials or other technologies.
       (3) Facilities under paragraph (1) may include electron 
     microcharacterization facilities, microlithography 
     facilities, scanning probe facilities, and related 
     instrumentation.
       (4) The Secretary shall encourage collaborations among DOE 
     programs, institutions of higher education, laboratories, and 
     industry at facilities under this subsection.

     SEC. 967. ADVANCED SCIENTIFIC COMPUTING FOR ENERGY MISSIONS.

       (a) In General.--The Secretary, acting through the Office 
     of Science, shall support a program to advance the Nation's 
     computing capability across a diverse set of grand challenge, 
     computationally based, science problems related to 
     departmental missions.
       (b) Duties of the Office of Science.--In carrying out the 
     program under this section, the Office of Science shall--
       (1) advance basic science through computation by developing 
     software to solve grand challenge science problems on new 
     generations of computing platforms in collaboration with 
     other DOE program offices;
       (2) enhance the foundations for scientific computing by 
     developing the basic mathematical and computing systems 
     software needed to take full advantage of the computing 
     capabilities of computers with peak speeds of 100 teraflops 
     or more, some of which may be unique to the scientific 
     problem of interest;
       (3) enhance national collaboratory and networking 
     capabilities by developing software to integrate 
     geographically separated researchers into effective research 
     teams and to facilitate access to and movement and analysis 
     of large (petabyte) data sets;
       (4) maintain a robust scientific computing hardware 
     infrastructure to ensure that the computing resources needed 
     to address departmental missions are available; and
       (5) explore new computing approaches and technologies that 
     promise to advance scientific computing including 
     developments in quantum computing.
       (c) High-Performance Computing Act of 1991 Amendments.--The 
     High-Performance Computing Act of 1991 is amended--
       (1) in section 4 (15 U.S.C. 5503)--
       (A) in paragraph (3) by striking ``means'' and inserting 
     ``and `networking and information technology' mean'', and by 
     striking ``(including vector supercomputers and large scale 
     parallel systems)''; and
       (B) in paragraph (4), by striking ``packet switched''.
       (2) in section 203 (15 U.S.C. 5523)--
       (A) in subsection (a), by striking all after ``As part of 
     the'' and inserting--
       ``Networking and Information Technology Research and 
     Development Program, the Secretary of Energy shall conduct 
     basic and applied research in networking and information 
     technology, with emphasis on supporting fundamental research 
     in the physical sciences and engineering, and energy 
     applications; providing supercomputer access and advanced 
     communication capabilities and facilities to scientific 
     researchers; and developing tools for distributed scientific 
     collaboration.'';
       (B) in subsection (b), by striking ``Program'' and 
     inserting ``Networking and Information Technology Research 
     and Development Program''; and
       (C) by amending subsection (e) to read as follows:
       ``(e) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary of Energy to 
     carry out the Networking and Information Technology Research 
     and Development Program such sums as may be necessary for 
     fiscal years 2004 through 2008.''.
       (d) Coordination.--The Secretary shall ensure that the 
     program under this section is integrated and consistent 
     with--
       (1) the Accelerated Strategic Computing Initiative of the 
     National Nuclear Security Administration; and
       (2) other national efforts related to advanced scientific 
     computing for science and engineering.

     SEC. 968. GENOMES TO LIFE PROGRAM.

       (a) Establishment.--The Secretary shall carry out a program 
     of research, development, demonstration, and commercial 
     application, to be known as the Genomes to Life Program, in 
     systems biology and proteomics consistent with the 
     Department's statutory authorities.
       (b) Planning.--
       (1) The Secretary shall prepare a program plan describing 
     how knowledge and capabilities would be developed by the 
     program and applied to Department missions relating to energy 
     security, environmental cleanup, and national security.
       (2) The program plan will be developed in consultation with 
     other relevant Department technology programs.
       (3) The program plan shall focus science and technology on 
     long-term goals, including--
       (A) contributing to U.S. independence from foreign energy 
     sources, including production of hydrogen;
       (B) converting carbon dioxide to organic carbon;
       (C) advancing environmental cleanup;
       (D) providing the science and technology for new 
     biotechnology industries; and
       (E) improving national security and combating bioterrorism.
       (4) The program plan shall establish specific short-term 
     goals and update these goals with the Secretary's annual 
     budget submission.
       (c) Program Execution.--In carrying out the program under 
     this Act, the Secretary shall
       (1) support individual investigators and multidisciplinary 
     teams of investigators;
       (2) subject to subsection (d), develop, plan, construct, 
     acquire, or operate special equipment or facilities for the 
     use of investigators conducting research, development, 
     demonstration, or commercial application in systems biology 
     and proteomics;
       (3) support technology transfer activities to benefit 
     industry and other users of systems biology and proteomics; 
     and
       (4) coordinate activities by the Department with industry 
     and other federal agencies.
       (d) Genomes to Life User Facilities and Ancillary 
     Equipment.--
       (1) Within the funds authorized to be appropriated pursuant 
     to this Act, the amounts specified under section 961(b)(7) 
     shall, subject to appropriations, be available for projects 
     to develop, plan, construct, acquire, or operate special 
     equipment, instrumentation, or facilities for investigators 
     conducting research, development, demonstration, and 
     commercial application in systems biology and proteomics and 
     associated biological disciplines.
       (2) Projects under paragraph (1) may include--
       (A) the identification and characterization of multiprotein 
     complexes;
       (B) characterization of gene regulatory networks;
       (C) characterization of the functional repertoire of 
     complex microbial communities in their natural environments 
     at the molecular level; and
       (D) development of computational methods and capabilities 
     to advance understanding of complex biological systems and 
     predict their behavior.
       (3) Facilities under paragraph (1) may include facilities, 
     equipment, or instrumentation for--
       (A) the production and characterization of proteins;
       (B) whole proteome analysis;
       (C) characterization and imaging of molecular machines; and
       (D) analysis and modeling of cellular systems.
       (4) The Secretary shall encourage collaborations among 
     universities, laboratories and industry at facilities under 
     this subsection. All facilities under this subsection shall 
     have a specific mission of technology transfer to other 
     institutions.

     SEC. 969. FISSION AND FUSION ENERGY MATERIALS RESEARCH 
                   PROGRAM.

       In the President's fiscal year 2006 budget request, the 
     Secretary shall establish a research and development program 
     on material science issues presented by advanced fission 
     reactors and the Department's fusion energy program. The 
     program shall develop a catalog of material properties 
     required for these applications, develop theoretical models 
     for materials possessing the required properties, benchmark 
     models against existing data, and develop a roadmap to guide 
     further research and development in this area.

     SEC. 970. ENERGY-WATER SUPPLY TECHNOLOGIES PROGRAM.

       (a) Establishment.--There is established within the Office 
     of Science, Office of Biological and Environmental Research, 
     the

[[Page 10192]]

      ``Energy-Water Supply Technologies Program,'' to study 
     energy-related issues associated with water resources and 
     municipal waterworks and to study water supply issues related 
     to energy production.
       (b) Definitions.--
       (1) The term ``Foundation'' means the American Water Works 
     Association Research Foundation.
       (2) The term ``Indian tribe'' has the meaning given the 
     term in section 4 of the Indian Self-Determination and 
     Education Assistance Act (25 U.S.C. 450b).
       (3) The term ``Program'' means the Water Supply 
     Technologies Program established by section 970(a).
       (c) Program Areas.-- The program shall conduct research and 
     development, including--
       (1) arsenic removal under subsection (d);
       (2) desalination research program under subsection (e);
       (3) the water and energy sustainability program under 
     subsection (f); and
       (4) other energy-intensive water supply and treatment 
     technologies and other technologies selected by the 
     Secretary.
       (d) Arsenic Removal Program.--
       (1) As soon as practicable after the date of enactment of 
     this Act, the Secretary shall enter into a contract with the 
     Foundation to utilize the facilities, institutions and 
     relationships established in the ``Consolidated 
     Appropriations Resolution, 2003'' as described in Senate 
     Report 107-220 that will carry out a research program to 
     develop and demonstrate innovative arsenic removal 
     technologies.
       (2) In carrying out the arsenic removal program, the 
     Foundation shall, to the maximum extent practicable, conduct 
     research on means of--
       (A) reducing energy costs incurred in using arsenic removal 
     technologies;
       (B) minimizing materials, operating, and maintenance costs 
     incurred in using arsenic removal technologies; and
       (C) minimizing any quantities of waste (especially 
     hazardous waste) that result from use of arsenic removal 
     technologies.
       (3) The Foundation shall carry out peer-reviewed research 
     and demonstration projects to develop and demonstrate water 
     purification technologies.
       (4) In carrying out the arsenic removal program--
       (A) demonstration projects will be implemented with 
     municipal water system partners to demonstrate the 
     applicability of innovative arsenic removal technologies in 
     areas with different water chemistries representative of 
     areas across the United States with arsenic levels near or 
     exceeding EPA guidelines; and
       (B) not less than 40 percent of the funds of the Department 
     used for demonstration projects under the arsenic removal 
     program shall be expended on projects focused on needs of and 
     in partnership with rural communities or Indian tribes.
       (5) The Foundation shall develop evaluations of cost 
     effectiveness of arsenic removal technologies used in the 
     program and an education, training, and technology transfer 
     component for the program.
       (6) The Secretary shall consult with the Administrator of 
     the Environmental Protection Agency to ensure that activities 
     under the arsenic removal program are coordinated with 
     appropriate programs of the Environmental Protection Agency 
     and other federal agencies, state programs and academia.
       (7) Not later than 1 year after the date of commencement of 
     the arsenic removal program, and annually thereafter, the 
     Secretary shall submit to Congress a report on the results of 
     the arsenic removal program.
       (e) Desalination Program.--
       (1) The Secretary, in cooperation with the Commissioner of 
     Reclamation, shall carry out a desalination research program 
     in accordance with the desalination technology progress plan 
     developed in Title II of the Energy and Water Development 
     Appropriations Act, 2002 (115 Stat. 498), and described in 
     Senate Report 107-39 under the heading ``WATER AND RELATED 
     RESOURCES'' in the ``BUREAU OF RECLAMATION'' section.
       (2) The desalination program shall--
       (A) draw on the national laboratory partnership established 
     with the Bureau of Reclamation to develop the January 2003 
     national Desalination and Water Purification Technology 
     Roadmap for next-generation desalination technology;
       (B) focus on research relating to, and development and 
     demonstration of, technologies that are appropriate for use 
     in desalinating brackish groundwater, wastewater and other 
     saline water supplies; disposal of residual brine or salt; 
     and
       (C) consider the use of renewable energy sources.
       (3) Under the desalination program, funds made available 
     may be used for construction projects, including completion 
     of the National Desalination Research Center for brackish 
     groundwater and ongoing facility operational costs.
       (4) The Secretary and the Commissioner of Reclamation shall 
     jointly establish a steering committee for the desalination 
     program. The steering committee shall be jointly chaired by 1 
     representative from this Program and 1 representative from 
     the Bureau of Reclamation.
       (f) Water and Energy Sustainability Program.--
       (1) The Secretary shall carry out a research program to 
     develop understanding and technologies to assist in ensuring 
     that sufficient quantities of water are available to meet 
     present and future requirements.
       (2) Under this program and in collaboration with other 
     programs within the Department including those within the 
     Offices of Fossil Energy and Energy Efficiency and Renewable 
     Energy, the Secretary of the Interior, Army Corps of 
     Engineers, Environmental Protection Agency, Department of 
     Commerce, Department of Defense, state agencies, non-
     governmental agencies and academia, the Secretary shall 
     assess the current state of knowledge and program activities 
     concerning--
       (A) future water resources needed to support energy 
     production within the United States including but not limited 
     to the water needs for hydropower and thermo-electric power 
     generation;
       (B) future energy resources needed to support development 
     of water purification and treatment including desalination 
     and long-distance water conveyance;
       (C) reuse and treatment of water produced as a by-product 
     of oil and gas extraction;
       (D) use of impaired and non-traditional water supplies for 
     energy production and other uses; and
       (E) technologies to reduce water use in energy production.
       (3) In addition to the assessments in (2), the Secretary 
     shall--
       (A) develop a research plan defining the scientific and 
     technology development needs and activities required to 
     support long-term water needs and planning for energy 
     sustainability, use of impaired water for energy production 
     and other uses, and reduction of water use in energy 
     production;
       (B) carry out the research plan required under (A) 
     including development of numerical models, decision analysis 
     tools, economic analysis tools, databases, planning 
     methodologies and strategies;
       (C) implement at least three planning demonstration 
     projects using the models, tools and planning approaches 
     developed under subparagraph (B) and assess the viability of 
     these tools at the scale of river basins with at least one 
     demonstration involving an international border; and
       (D) transfer these tools to other federal agencies, state 
     agencies, non-profit organizations, industry and academia for 
     use in their energy and water sustainability efforts.
       (4) Not later than 1 year after the date of enactment of 
     this Act, the Secretary shall submit to Congress a report on 
     the water and energy sustainability program that describes 
     the research elements described under paragraph (2), and 
     makes recommendations for a management structure that 
     optimizes use of Federal resources and programs.
       (g) Cost Sharing.--
       (1) Research projects under this section shall not require 
     cost-sharing.
       (2) Each demonstration project carried out under the 
     Program shall be carried out on a cost-shared basis, as 
     determined by the Secretary.
       (3) With respect to a demonstration project, the Secretary 
     may accept in-kind contributions, and waive the cost-sharing 
     requirement in appropriate circumstances.

                   Subtitle G--Energy and Environment

     SEC. 971. UNITED STATES-MEXICO ENERGY TECHNOLOGY COOPERATION.

       (a) Program.--The Secretary shall establish a research, 
     development, demonstration, and commercial application 
     program to be carried out in collaboration with entities in 
     Mexico and the United States to promote energy efficient, 
     environmentally sound economic development along the United 
     States-Mexico border which minimizes public health risks from 
     industrial activities in the border region.
       (b) Program Management.--The program under subsection (a) 
     shall be managed by the Department of Energy Carlsbad 
     Environmental Management Field Office.
       (c) Technology Transfer.--In carrying out projects and 
     activities under this section, the Secretary shall assess the 
     applicability of technology developed under the Environmental 
     Management Science Program of the Department.
       (d) Intellectual Property.--In carrying out this section, 
     the Secretary shall comply with the requirements of any 
     agreement entered into between the United States and Mexico 
     regarding intellectual property protection.
       (e) Authorization of Appropriations.--The following sums 
     are authorized to be appropriated to the Secretary to carry 
     out activities under this section:
       (1) For each of fiscal years 2004 and 2005, $5,000,000; and
       (2) For each of fiscal years 2006, 2007, and 2008, 
     $6,000,000.

     SEC. 972. COAL TECHNOLOGY LOAN.

       There are authorized to be appropriated to the Secretary 
     $125,000,000 to provide a loan to the owner of the 
     experimental plant constructed under United States Department 
     of Energy cooperative agreement number DE-FC-22-91PC90544 on 
     such terms and conditions as the Secretary determines, 
     including interest rates and upfront payments.

[[Page 10193]]



                         Subtitle H--Management

     SEC. 981. AVAILABILITY OF FUNDS.

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

     SEC. 982. COST SHARING.

       (a) Research and Development.--Except as otherwise provided 
     in this title, for research and development programs carried 
     out under this title, the Secretary shall require a 
     commitment from non-Federal sources of at least 20 percent of 
     the cost of the project. Cost sharing is not required for 
     research and development of a basic or fundamental nature.
       (b) Demonstration and Commercial Application.--Except as 
     otherwise provided in this subtitle, the Secretary shall 
     require at least 50 percent of the costs directly and 
     specifically related to any demonstration or commercial 
     application project under this subtitle to be provided from 
     non-Federal sources. The Secretary may reduce the non-Federal 
     requirement under this subsection if the Secretary determines 
     that the reduction is necessary and appropriate considering 
     the technological risks involved in the project and is 
     necessary to meet the objectives of this title.
       (c) Calculation of Amount.--In calculating the amount of 
     the non-Federal commitment under subsection (a) or (b), the 
     Secretary may include personnel, services, equipment, and 
     other resources.

     SEC. 983. MERIT REVIEW OF PROPOSALS.

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

     SEC. 984. EXTERNAL TECHNICAL REVIEW OF DEPARTMENTAL PROGRAMS.

       (a) National Energy Research and Development Advisory 
     Boards.--
       (1) The Secretary shall establish one or more advisory 
     boards to review Department research, development, 
     demonstration, and commercial application programs in energy 
     efficiency, renewable energy, nuclear energy, and fossil 
     energy.
       (2) The Secretary may designate an existing advisory board 
     within the Department to fulfill the responsibilities of an 
     advisory board under this subsection, and may enter into 
     appropriate arrangements with the National Academy of 
     Sciences to establish such an advisory board.
       (b) Utilization of Existing Committees.--The Secretary 
     shall continue to use the scientific program advisory 
     committees chartered under the Federal Advisory Committee Act 
     by the Office of Science to oversee research and development 
     programs under that Office.
       (c) Membership.--Each advisory board under this section 
     shall consist of persons with appropriate expertise 
     representing a diverse range of interests.
       (d) Meetings and Purposes.--Each advisory board under this 
     section shall meet at least semi-annually to review and 
     advise on the progress made by the respective research, 
     development, demonstration, and commercial application 
     program or programs. The advisory board shall also review the 
     measurable cost and performance-based goals for such programs 
     as established under section 902, and the progress on meeting 
     such goals.
       (e) Periodic Reviews and Assessments.--The Secretary shall 
     enter into appropriate arrangements with the National Academy 
     of Sciences to conduct periodic reviews and assessments of 
     the programs authorized by this title, the measurable cost 
     and performance-based goals for such programs as established 
     under section 902, if any, and the progress on meeting such 
     goals. Such reviews and assessments shall be conducted every 
     5 years, or more often as the Secretary considers necessary, 
     and the Secretary shall transmit to the Congress reports 
     containing the results of all such reviews and assessments.

     SEC. 985. IMPROVED COORDINATION OF TECHNOLOGY TRANSFER 
                   ACTIVITIES.

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

     SEC. 986. TECHNOLOGY INFRASTRUCTURE PROGRAM.

       (a) Establishment.--The Secretary shall establish a 
     Technology Infrastructure Program in accordance with this 
     section.
       (b) Purpose.--The purpose of the Technology Infrastructure 
     Program shall be to improve the ability of National 
     Laboratories and single-purpose research facilities to 
     support departmental missions by--
       (1) stimulating the development of technology clusters that 
     can support departmental missions at the National 
     Laboratories or single-purpose research facilities;
       (2) improving the ability of National Laboratories and 
     single-purpose research facilities to leverage and benefit 
     from commercial research, technology, products, processes, 
     and services; and
       (3) encouraging the exchange of scientific and 
     technological expertise between National Laboratories or 
     single-purpose research facilities and entities that can 
     support departmental missions at the National Laboratories or 
     single-purpose research facilities, such as institutions of 
     higher education; technology-related business concerns; 
     nonprofit institutions; and agencies of State, tribal, or 
     local governments.
       (c) Projects.--The Secretary shall authorize the Director 
     of each National Laboratory or single-purpose research 
     facility to implement the Technology Infrastructure Program 
     at such National Laboratory or facility through projects that 
     meet the requirements of subsections (d) and (e).
       (d) Program Requirements.--Each project funded under this 
     section shall meet the following requirements:
       (1) Each project shall include at least one of each of the 
     following entities: a business; an institution of higher 
     education; a nonprofit institution; and an agency of a State, 
     local, or tribal government.
       (2) Not less than 50 percent of the costs of each project 
     funded under this section shall be provided from non-Federal 
     sources. The calculation of costs paid by the non-Federal 
     sources to a project shall include cash, personnel, services, 
     equipment, and other resources expended on the project after 
     start of the project. Independent research and development 
     expenses of Government contractors that qualify for 
     reimbursement under section 3109205 0918(e) of the Federal 
     Acquisition Regulations issued pursuant to section 25(c)(1) 
     of the Office of Federal Procurement Policy Act (41 U.S.C. 
     421(c)(1)) may be credited towards costs paid by non-Federal 
     sources to a project, if the expenses meet the other 
     requirements of this section.
       (3) All projects under this section shall be competitively 
     selected using procedures determined by the Secretary.
       (4) Any participant that receives funds under this section 
     may use generally accepted accounting principles for 
     maintaining accounts, books, and records relating to the 
     project.
       (5) No Federal funds shall be made available under this 
     section for construction or any project for more than 5 
     years.
       (e) Selection Criteria.--
       (1) The Secretary shall allocate funds under this section 
     only if the Director of the National Laboratory or single-
     purpose research facility managing the project determines 
     that the project is likely to improve the ability of the 
     National Laboratory or single-purpose research facility to 
     achieve technical success in meeting departmental missions.
       (2) The Secretary shall consider the following criteria in 
     selecting a project to receive Federal funds--
       (A) the potential of the project to promote the development 
     of a commercially sustainable technology cluster following 
     the period of Department investment, which will derive most 
     of the demand for its products or services from the private 
     sector, and which will support departmental missions at the 
     participating National Laboratory or single-purpose research 
     facility;
       (B) the potential of the project to promote the use of 
     commercial research, technology, products, processes, and 
     services by the participating National Laboratory or single-
     purpose research facility to achieve its mission or the 
     commercial development of technological innovations made at 
     the participating National Laboratory or single-purpose 
     research facility;
       (C) the extent to which the project involves a wide variety 
     and number of institutions of higher education, nonprofit 
     institutions, and technology-related business concerns that 
     can support the missions of the participating National 
     Laboratory or single-purpose research facility and that will 
     make substantive contributions to achieving the goals of the 
     project;
       (D) the extent to which the project focuses on promoting 
     the development of technology-related business concerns that 
     are

[[Page 10194]]

     small businesses or involves such small businesses 
     substantively in the project; and
       (E) such other criteria as the Secretary determines to be 
     appropriate.
       (f) Allocation.--In allocating funds for projects approved 
     under this section, the Secretary shall provide--
       (1) the Federal share of the project costs; and
       (2) additional funds to the National Laboratory or single-
     purpose research facility managing the project to permit the 
     National Laboratory or single-purpose research facility to 
     carry out activities relating to the project, and to 
     coordinate such activities with the project.
       (g) Report to Congress.--Not later than July 1, 2006, the 
     Secretary shall report to Congress on whether the Technology 
     Infrastructure Program should be continued and, if so, how 
     the program should be managed.
       (h) Definitions.--In this section:
       (1) The term ``technology cluster'' means a concentration 
     of technology-related business concerns, institutions of 
     higher education, or nonprofit institutions, that reinforce 
     each other's performance in the areas of technology 
     development through formal or informal relationships.
       (2) The term ``technology-related business concern'' means 
     a for-profit corporation, company, association, firm, 
     partnership, or small business concern that conducts 
     scientific or engineering research; develops new 
     technologies; manufactures products based on new 
     technologies; or performs technological services.
       (i) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary for activities under this 
     section $10,000,000 for each of fiscal years 2004, 2005, and 
     2006.

     SEC. 987. SMALL BUSINESS ADVOCACY AND ASSISTANCE.

       (a) Small Business Advocate.--The Secretary shall require 
     the Director of each National Laboratory, and may require the 
     Director of a single-purpose research facility, to designate 
     a small business advocate to--
       (1) increase the participation of small business concerns, 
     including socially and economically disadvantaged small 
     business concerns, in procurement, collaborative research, 
     technology licensing, and technology transfer activities 
     conducted by the National Laboratory or single-purpose 
     research facility;
       (2) report to the Director of the National Laboratory or 
     single-purpose research facility on the actual participation 
     of small business concerns in procurement and collaborative 
     research along with recommendations, if appropriate, on how 
     to improve participation;
       (3) make available to small businesses training, mentoring, 
     and information on how to participate in procurement and 
     collaborative research activities;
       (4) increase the awareness inside the National Laboratory 
     or single-purpose research facility of the capabilities and 
     opportunities presented by small business concerns; and
       (5) establish guidelines for the program under subsection 
     (b) and report on the effectiveness of such program to the 
     Director of the National Laboratory or single-purpose 
     research facility.
       (b) Establishment of Small Business Assistance Program.--
     The Secretary shall require the Director of each National 
     Laboratory, and may require the Director of a single-purpose 
     research facility, to establish a program to provide small 
     business concerns--
       (1) assistance directed at making them more effective and 
     efficient subcontractors or suppliers to the National 
     Laboratory or single-purpose research facility; or
       (2) general technical assistance, the cost of which shall 
     not exceed $10,000 per instance of assistance, to improve the 
     small business concern's products or services.
       (c) Use of Funds.--None of the funds expended under 
     subsection (b) may be used for direct grants to the small 
     business concerns.
       (d) Definitions.--In this section:
       (1) The term ``small business concern'' has the meaning 
     given such term in section 3 of the Small Business Act (15 
     U.S.C. 632).
       (2) The term ``socially and economically disadvantaged 
     small business concerns'' has the meaning given such term in 
     section 8(a)(4) of the Small Business Act (15 U.S.C. 
     637(a)(4)).
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary for activities under this 
     section $5,000,000 for each of fiscal years 2004 through 
     2008.

     SEC. 988. MOBILITY OF SCIENTIFIC AND TECHNICAL PERSONNEL.

       Not later than 2 years after the date of enactment of this 
     section, the Secretary shall transmit a report to the 
     Congress identifying any policies or procedures of a 
     contractor operating a National Laboratory or single-purpose 
     research facility that create disincentives to the temporary 
     transfer of scientific and technical personnel among the 
     contractor-operated National Laboratories or contractor-
     operated single-purpose research facilities and provide 
     suggestions for improving inter-laboratory exchange of 
     scientific and technical personnel.

     SEC. 989. NATIONAL ACADEMY OF SCIENCES REPORT.

       Not later than 90 days after the date of enactment of this 
     Act, the Secretary shall enter into an arrangement with the 
     National Academy of Sciences for the Academy to--
       (1) conduct a study on--
       (A) the obstacles to accelerating the research, 
     development, demonstration, and commercial application cycle 
     for energy technology; and
       (B) the adequacy of Department policies and procedures for, 
     and oversight of, technology transfer-related disputes 
     between contractors of the Department and the private sector; 
     and
       (2) report to the Congress on recommendations developed as 
     a result of the study.

     SEC. 990. OUTREACH.

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

     SEC. 991. COMPETITIVE AWARD OF MANAGEMENT CONTRACTS.

       None of the funds authorized to be appropriated to the 
     Secretary by this title may be used to award a management and 
     operating contract for a nonmilitary energy laboratory of the 
     Department unless such contract is competitively awarded or 
     the Secretary grants, on a case-by-case basis, a waiver to 
     allow for such a deviation. The Secretary may not delegate 
     the authority to grant such a waiver and shall submit to the 
     Congress a report notifying the Congress of the waiver and 
     setting forth the reasons for the waiver at least 60 days 
     prior to the date of the award of such a contract.

     SEC. 992. REPROGRAMMING.

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

     SEC. 993. CONSTRUCTION WITH OTHER LAWS.

       Except as otherwise provided in this title, the Secretary 
     shall carry out the research, development, demonstration, and 
     commercial application programs, projects, and activities 
     authorized by this title in accordance with the applicable 
     provisions of the Atomic Energy Act of 1954 (42 U.S.C. et 
     seq.), the Federal Nonnuclear Research and Development Act of 
     1974 (42 U.S.C. 5901 et seq.), the Energy Policy Act of 1992 
     (42 U.S.C. 13201 et seq.), the Stevenson-Wydler Technology 
     Innovation Act of 1980 (15 U.S.C. 3701 et seq.), chapter 18 
     of title 35, United States Code (commonly referred to as the 
     Bayh-Dole Act), and any other Act under which the Secretary 
     is authorized to carry out such activities.

     SEC. 994. IMPROVED COORDINATION AND MANAGEMENT OF CIVILIAN 
                   SCIENCE AND TECHNOLOGY PROGRAMS.

       (a) Effective Top-level Coordination of Research and 
     Development Programs.--Section 202(b) of the Department of 
     Energy Organization Act (42 U.S.C. 7132(b)) is amended to 
     read as follows:
       ``(b)(1) There shall be in the Department an Under 
     Secretary for Energy and Science, who shall be appointed by 
     the President, by and with the advice and consent of the 
     Senate. The Under Secretary shall be compensated at the rate 
     provided for at level III of the Executive Schedule under 
     section 5314 of title 5, United States Code.
       ``(2) The Under Secretary for Energy and Science shall be 
     appointed from among persons who--
       ``(A) have extensive background in scientific or 
     engineering fields; and
       ``(B) are well qualified to manage the civilian research 
     and development programs of the Department of Energy.
       ``(3) The Under Secretary for Energy and Science shall--
       ``(A) serve as the Science and Technology Advisor to the 
     Secretary;
       ``(B) monitor the Department's research and development 
     programs in order to advise the Secretary with respect to any 
     undesirable duplication or gaps in such programs;
       ``(C) advise the Secretary with respect to the well-being 
     and management of the multipurpose laboratories under the 
     jurisdiction of the Department;

[[Page 10195]]

       ``(D) advise the Secretary with respect to education and 
     training activities required for effective short- and long-
     term basic and applied research activities of the Department;
       ``(E) advise the Secretary with respect to grants and other 
     forms of financial assistance required for effective short- 
     and long-term basic and applied research activities of the 
     Department; and
       ``(F) exercise authority and responsibility over Assistant 
     Secretaries carrying out energy research and development and 
     energy technology functions under sections 203 and 209, as 
     well as other elements of the Department assigned by the 
     Secretary.''.
       (b) Reconfiguration of Position of Director of the Office 
     of Science.--
       (1) Section 209 of the Department of Energy Organization 
     Act (41 U.S.C. 7139) is amended to read as follows:


                          ``OFFICE OF SCIENCE

       ``Sec. 209. (a) There shall be within the Department an 
     Office of Science, to be headed by an Assistant Secretary for 
     Science, who shall be appointed by the President, by and with 
     the advice and consent of the Senate, and who shall be 
     compensated at the rate provided for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code.
       ``(b) The Assistant Secretary for Science shall be in 
     addition to the Assistant Secretaries provided for under 
     section 203 of this Act.
       ``(c) It shall be the duty and responsibility of the 
     Assistant Secretary for Science to carry out the fundamental 
     science and engineering research functions of the Department, 
     including the responsibility for policy and management of 
     such research, as well as other functions vested in the 
     Secretary which he may assign to the Assistant Secretary.''.
       (2) Notwithstanding section 3345(b)(1) of title 5, United 
     States Code, the President may designate the Director of the 
     Office of Science immediately prior to the effective date of 
     this Act to act in the office of the Assistant Secretary of 
     Energy for Science until the office is filled as provided in 
     section 209 of the Department of Energy Organization Act, as 
     amended by paragraph (1). While so acting, such person shall 
     receive compensation at the rate provided by this Act for the 
     office of Assistant Secretary for Science.
       (c) Additional Assistant Secretary Position to Enable 
     Improved Management of Nuclear Energy Issues.--
       (1) Section 203(a) of the Department of Energy Organization 
     Act (42 U.S.C. 7133(a)) is amended by striking ``There shall 
     be in the Department six Assistant Secretaries'' and 
     inserting ``Except as provided in section 209, there shall be 
     in the Department seven Assistant Secretaries''.
       (2) It is the sense of the Congress that the leadership for 
     departmental missions in nuclear energy should be at the 
     Assistant Secretary level.
       (d) Technical and Conforming Amendments.--
       (1) Section 202 of the Department of Energy Organization 
     Act (42 U.S.C. 7132) is further amended by adding the 
     following at the end:
       ``(d) There shall be in the Department an Under Secretary, 
     who shall be appointed by the President, by and with the 
     advice and consent of the Senate, and who shall perform such 
     functions and duties as the Secretary shall prescribe, 
     consistent with this section. The Under Secretary shall be 
     compensated at the rate provided for level III of the 
     Executive Schedule under section 5314 of title 5, United 
     States Code.
       ``(e) There shall be in the Department a General Counsel, 
     who shall be appointed by the President, by and with the 
     advice and consent of the Senate, and who shall perform such 
     functions and duties as the Secretary shall prescribe. The 
     General Counsel shall be compensated at the rate provided for 
     level IV of the Executive Schedule under section 5315 of 
     title 5, United States Code.''.
       (2) Section 5314 of title 5, United States Code, is amended 
     by striking ``Under Secretaries of Energy (2)'' and inserting 
     ``Under Secretaries of Energy (3)''.
       (3) Section 5315 of title 5, United States Code, is amended 
     by--
       (A) striking ``Director, Office of Science, Department of 
     Energy.''; and
       (B) striking ``Assistant Secretaries of Energy (6)'' and 
     inserting ``Assistant Secretaries of Energy (8)''.
       (4) The table of contents for the Department of Energy 
     Organization Act (42 U.S.C. 7101 note) is amended--
       (A) by striking ``Section 209'' and inserting ``Sec. 209'';
       (B) by striking ``213.'' and inserting ``Sec. 213.'';
       (C) by striking ``214.'' and inserting ``Sec. 214.'';
       (D) by striking ``215.'' and inserting ``Sec. 215.''; and
       (E) by striking ``216.'' and inserting ``Sec. 216.''.

     SEC. 995. EDUCATIONAL PROGRAMS IN SCIENCE AND MATHEMATICS

       (a) Section 3165a of the Department of Energy Science 
     Education Enhancement Act (42 U.S.C. 7381a) is amended by 
     adding at the end:
       ``(14) Support competitive events for students, under 
     supervision of teachers, designed to encourage student 
     interest and knowledge in science and mathematics.''
       (b) Section 3169 of the Department of Energy Science 
     Education Enhancement Act (42 U.S.C. 7381e), as redesignated 
     by this Act, is amended by inserting before the period: ``; 
     and $40,000,000 for each of fiscal years 2004 through 2008.''

     SEC. 996. OTHER TRANSACTIONS AUTHORITY.

       Section 646 of the Department of Energy Organization Act 
     (42 U.S.C. 7256) is amended by adding at the end the 
     following:
       ``(g)(1) In addition to other authorities granted to the 
     Secretary under law, the Secretary may enter into other 
     transactions on such terms as the Secretary may deem 
     appropriate in furtherance of research, development, or 
     demonstration functions vested in the Secretary. Such other 
     transactions shall not be subject to the provisions of 
     section 9 of the Federal Nonnuclear Energy Research and 
     Development Act of 1974 (42 U.S.C. 5908).
       ``(2)(A) The Secretary shall ensure that
       ``(i) to the maximum extent the Secretary determines 
     practicable, no transaction entered into under paragraph (1) 
     provides for research, development, or demonstration that 
     duplicates research, development, or demonstration being 
     conducted under existing projects carried out by the 
     Department; and
       ``(ii) To the extent the Secretary determines practicable, 
     the funds provided by the Government under a transaction 
     authorized by paragraph (1) do not exceed the total amount 
     provided by other parties to the transaction.
       ``(iii) To the extent the Secretary determines practicable, 
     competitive, merit-based selection procedures shall be used 
     when entering into transactions under paragraph (1).
       ``(B) A transaction authorized by paragraph (1) may be used 
     for a research, development, or demonstration project only if 
     the Secretary determines the use of a standard contract, 
     grant, or cooperative agreement for the project is not 
     feasible or appropriate.
       ``(3)(A) The Secretary shall protect from disclosure, 
     including disclosure under section 552 of title 5, United 
     States Code, for up to 5 years after the date the information 
     is received by the Secretary--
       ``(i) a proposal, proposal abstract, and supporting 
     documents submitted to the Department in a competitive or 
     noncompetitive process having the potential for resulting in 
     an award to the party submitting the information entering 
     into a transaction under paragraph (1); and
       ``(ii) a business plan and technical information relating 
     to a transaction authorized by paragraph (1) submitted to the 
     Department as confidential business information.
       ``(B) The Secretary may protect from disclosure, for up to 
     5 years after the information was developed, any information 
     developed pursuant to a transaction under paragraph (1) which 
     developed information is of a character that it would be 
     protected from disclosure under section 552(b)(4) of title 5, 
     United States Code, if obtained from a person other than a 
     Federal agency.
       ``(4) Not later than 90 days after the date of enactment of 
     this section, the Secretary shall prescribe guidelines for 
     using other transactions authorized by the amendment under 
     subsection (a). Such guidelines shall be published in the 
     Federal Register for public comment under rulemaking 
     procedures of the Department.
       ``(5) The authority of the Secretary under this subsection 
     may be delegated only to an officer of the Department who is 
     appointed by the President by and with the advice and consent 
     of the Senate and may not be delegated to any other 
     person.''.

     SEC. 997. REPORT ON RESEARCH AND DEVELOPMENT PROGRAM 
                   EVALUATION METHODOLOGIES.

       Not later than 180 days after the date of enactment of this 
     Act, the Secretary shall enter into appropriate arrangements 
     with the National Academy of Sciences to investigate and 
     report on the scientific and technical merits of any 
     evaluation methodology currently in use or proposed for use 
     in relation to the scientific and technical programs of the 
     Department by the Secretary or other Federal official. Not 
     later than 6 months after receiving the report of the 
     National Academy, the Secretary shall submit such report to 
     Congress, along with any other views or plans of the 
     Secretary with respect to the future use of such evaluation 
     methodology.

                    TITLE X--PERSONNEL AND TRAINING

     SEC. 1001. WORKFORCE TRENDS AND TRAINEESHIP GRANTS.

       (a) Workforce Trends.--
       (1) The Secretary of Energy (in this title referred to as 
     the ``Secretary''), in consultation with the Secretary of 
     Labor and utilizing statistical data collected by the 
     Secretary of Labor, shall monitor trends in the workforce of 
     skilled technical personnel supporting energy technology 
     industries, including renewable energy industries, companies 
     developing and commercializing devices to increase energy 
     efficiency, the oil and gas industry, the nuclear power 
     industry, the coal industry, and other industrial sectors as 
     the Secretary may deem appropriate.
       (2) The Secretary shall report to the Congress whenever the 
     Secretary determines that significant national shortfalls of 
     skilled

[[Page 10196]]

     technical personnel in one or more energy industry segments 
     are forecast or have occurred.
       (b) Traineeship Grants for Skilled Technical Personnel.--
     The Secretary, in consultation with the Secretary of Labor, 
     may establish grant programs in the appropriate offices of 
     the Department of Energy to enhance training of skilled 
     technical personnel for which a shortfall is determined under 
     subsection (a).
       (c) Definition.--For purposes of this section, the term 
     ``skilled technical personnel'' means journey and apprentice 
     level workers who are enrolled in or have completed a State 
     or federally recognized apprenticeship program and other 
     skilled workers in energy technology industries.
       (d) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated to the 
     Secretary $20,000,000 for each of fiscal years 2004 through 
     2008, to remain available until expended.

     SEC. 1002. RESEARCH FELLOWSHIPS IN ENERGY RESEARCH.

       (a) Postdoctoral Fellowships.--The Secretary shall 
     establish a program of fellowships to encourage outstanding 
     young scientists and engineers to pursue postdoctoral 
     research appointments in energy research and development at 
     institutions of higher education of their choice.
       (b) Distinguished Senior Research Fellowships.--The 
     Secretary shall establish a program of fellowships to allow 
     outstanding senior researchers in energy research and 
     development and their research groups to explore research and 
     development topics of their choosing for a fixed period of 
     time. Awards under this program shall be made on the basis of 
     past scientific or technical accomplishment and promise for 
     continued accomplishment during the period of support, which 
     shall not be less than 3 years.
       (c) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated to the 
     Secretary $40,000,000 for each of fiscal years 2004 through 
     2008, to remain available until expended.

     SEC. 1003. TRAINING GUIDELINES FOR ELECTRIC ENERGY INDUSTRY 
                   PERSONNEL.

       The Secretary of Labor, in consultation with the Secretary 
     of Energy and jointly with the electric industry and 
     recognized employee representatives, shall develop model 
     personnel training guidelines to support electric system 
     reliability and safety. The training guidelines shall, at a 
     minimum--
       (1) include training requirements for workers engaged in 
     the construction, operation, inspection, and maintenance of 
     electric generation, transmission, and distribution, 
     including competency and certification requirements, and 
     assessment requirements that include initial and ongoing 
     evaluation of workers, recertification assessment procedures, 
     and methods for examining or testing the qualification of 
     individuals performing covered tasks; and
       (2) consolidate existing training guidelines on the 
     construction, operation, maintenance, and inspection of 
     electric generation, transmission, and distribution 
     facilities, such as those established by the National 
     Electric Safety Code and other industry consensus standards.

     SEC. 1004. NATIONAL CENTER ON ENERGY MANAGEMENT AND BUILDING 
                   TECHNOLOGIES.

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

     SEC. 1005. IMPROVED ACCESS TO ENERGY-RELATED SCIENTIFIC AND 
                   TECHNICAL CAREERS.

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

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

       ``(a) Definitions. In this section:
       ``(1) Hispanic-Serving Institution.--The term `Hispanic-
     serving institution' has the meaning given that term in 
     section 502(a) of the Higher Education Act of 1965 (20 U.S.C. 
     1101a(a)).
       ``(2) Historically Black College or University.--The term 
     `historically Black college or university' has the meaning 
     given the term `part B institution' in section 322 of the 
     Higher Education Act of 1965 (20 U.S.C. 1061).
       ``(3) National Laboratory.--The term `National Laboratory' 
     has the meaning given that term in section 903(5) of the 
     Energy Policy Act of 2003.
       ``(4) Science Facility.--The term `science facility' has 
     the meaning given the term `single-purpose research facility' 
     in section 903(8) of the Energy Policy Act of 2003.
       ``(5) Tribal College.--The term `tribal college' has the 
     meaning given the term `tribally controlled college or 
     university' in section 2(a) of the Tribally Controlled 
     College or University Assistance Act of 1978 (25 U.S.C. 
     1801(a)).
       ``(b) Education Partnership.--The Secretary shall direct 
     the Director of each National Laboratory, and may direct the 
     head of any science facility, to increase the participation 
     of historically Black colleges or universities, Hispanic-
     serving institutions, or tribal colleges in activities that 
     increase the capacity of the historically Black colleges or 
     universities, Hispanic-serving institutions, or tribal 
     colleges to train personnel in science or engineering.
       ``(c) Activities.--An activity under subsection (b) may 
     include--
       ``(1) collaborative research;
       ``(2) equipment transfer;
       ``(3) training activities conducted at a National 
     Laboratory or science facility; and
       ``(4) mentoring activities conducted at a National 
     Laboratory or science facility.
       ``(d) Report.--Not later than 2 years after the date of 
     enactment of this section, the Secretary shall submit to the 
     Congress a report on the activities carried out under this 
     section.''.

     SEC. 1006. NATIONAL POWER PLANT OPERATIONS TECHNOLOGY AND 
                   EDUCATION CENTER.

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

     SEC. 1007. FEDERAL MINE INSPECTORS.

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

                         TITLE XI--ELECTRICITY

     SEC. 1101. DEFINITIONS.

       (a) Electric Utility.--Section 3(22) of the Federal Power 
     Act (16 U.S.C. 796(22)) is amended to read as follows:
       ``(22) `electric utility' means any person or Federal or 
     State agency (including any municipality) that sells electric 
     energy; such term includes the Tennessee Valley Authority and 
     each Federal power marketing agency;''.
       (b) Transmitting Utility.--Section 3(23) of the Federal 
     Power Act (16 U.S.C. 796(23)) is amended to read as follows:
       ``(23) `transmitting utility' means an entity, including 
     any entity described in section 201(f), that owns or operates 
     facilities used for the transmission of electric energy--
       ``(A) in interstate commerce; or
       ``(B) for the sale of electric energy at wholesale;''.
       (c) Additional Definitions.--At the end of section (3) of 
     the Federal Power Act, add the following:
       ``(26) `unregulated transmitting utility' means an entity 
     that--
       ``(A) owns or operates facilities used for the transmission 
     of electric energy in interstate commerce, and
       ``(B) is an entity described in section 201(f) or a rural 
     electric cooperative with financing from the Rural Utilities 
     Service.
       ``(27) `distribution utility' means an electric utility 
     that does not own or operate transmission facilities or an 
     unregulated

[[Page 10197]]

     transmitting utility that provides 90 percent of the electric 
     energy it transmits to customers at retail.''
       (d) For the purposes of this title, the term ``the 
     Commission'' means the Federal Energy Regulatory Commission.

                        Subtitle A--Reliability

     SEC. 1111. ELECTRIC RELIABILITY STANDARDS.

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


                         ``ELECTRIC RELIABILITY

       ``Sec. 215. (a) For the purposes of this section:
       ``(1) The term `bulk-power system' means--
       ``(A) facilities and control systems necessary for 
     operating an interconnected electric energy transmission 
     network (or any portion thereof); and
       ``(B) electric energy from generation facilities needed to 
     maintain transmission system reliability.
       The term does not include facilities used in the local 
     distribution of electric energy.
       ``(2) The terms `Electric Reliability Organization' and 
     `ERO' mean the organization certified by the Commission under 
     subsection (c), the purpose of which is to establish and 
     enforce reliability standards for the bulk-power system, 
     subject to Commission review.
       ``(3) The term `reliability standard' means a requirement, 
     approved by the Commission under this section, to provide for 
     reliable operation of the bulk-power system. The term 
     includes requirements for the operation of existing bulk-
     power system components and the design of planned additions 
     or modifications to such components to the extent necessary 
     to provide for reliable operation of the bulk-power system, 
     but the term does not include any requirement to enlarge such 
     components or to construct new transmission capacity or 
     generation capacity.
       ``(4) The term `reliable operation' means operating the 
     components of the bulk-power system within equipment and 
     electric system thermal, voltage, and stability limits so 
     that instability, uncontrolled separation, or cascading 
     failures of such system will not occur as a result of a 
     sudden disturbance or unanticipated failure of system 
     components.
       ``(5) The term `Interconnection' means a geographic area in 
     which the operation of bulk-power system components is 
     synchronized such that the failure of one or more of such 
     components may adversely affect the ability of the operators 
     of other components within the system to maintain reliable 
     operation of the portion of the system within their control.
       ``(6) The term `transmission organization' means an RTO or 
     other transmission organization finally approved by the 
     Commission for the operation of transmission facilities.
       ``(7) The term `regional entity' means an entity having 
     enforcement authority pursuant to subsection (e)(4).
       ``(b) The Commission shall have jurisdiction, within the 
     United States, over the ERO certified by the Commission under 
     subsection (c), any regional entities, and all users, owners 
     and operators of the bulk-power system, including the 
     entities described in section 201(f), for purposes of 
     approving reliability standards established under this 
     section and enforcing compliance with this section. All 
     users, owners and operators of the bulk-power system shall 
     comply with reliability standards that take effect under this 
     section. The Commission shall issue a final rule to implement 
     the requirements of this section not later than 180 days 
     after the date of enactment of this section.
       ``(c) Following the issuance of a Commission rule under 
     subsection (b), any person may submit an application to the 
     Commission for certification as the Electric Reliability 
     Organization. The Commission may certify one such ERO if the 
     Commission determines that such ERO--
       ``(1) has the ability to develop and enforce, subject to 
     subsection (d)(2), reliability standards that provide for an 
     adequate level of reliability of the bulk-power system; and
       ``(2) has established rules that--
       ``(A) assure its independence of the users and owners and 
     operators of the bulk-power system, while assuring fair 
     stakeholder representation in the selection of its directors 
     and balanced decisionmaking in any ERO committee or 
     subordinate organizational structure;
       ``(B) allocate equitably reasonable dues, fees, and other 
     charges among end users for all activities under this 
     section;
       ``(C) provide fair and impartial procedures for enforcement 
     of reliability standards through the imposition of penalties 
     in accordance with subsection (e) (including limitations on 
     activities, functions, or operations, or other appropriate 
     sanctions);
       ``(D) provide for reasonable notice and opportunity for 
     public comment, due process, openness, and balance of 
     interests in developing reliability standards and otherwise 
     exercising its duties; and
       ``(E) provide for taking, after certification, appropriate 
     steps to gain recognition in Canada and Mexico.
       ``(d)(1) The ERO shall file each reliability standard or 
     modification to a reliability standard that it proposes to be 
     made effective under this section with the Commission.
       ``(2) The Commission may approve by rule or order a 
     proposed reliability standard or modification to a 
     reliability standard if it determines that the standard is 
     just, reasonable, not unduly discriminatory or preferential, 
     and in the public interest. The Commission shall give due 
     weight to the technical expertise of the ERO with respect to 
     the content of a proposed standard or modification to a 
     reliability standard and to the technical expertise of a 
     regional entity organized on an Interconnection-wide basis 
     with respect to a reliability standard to be applicable 
     within that Interconnection, but shall not defer with respect 
     to the effect of a standard on competition. A proposed 
     standard or modification shall take effect upon approval by 
     the Commission.
       ``(3) The ERO shall rebuttably presume that a proposal from 
     a regional entity organized on an Interconnection-wide basis 
     for a reliability standard or modification to a reliability 
     standard to be applicable on an Interconnection-wide basis is 
     just, reasonable, and not unduly discriminatory or 
     preferential, and in the public interest.
       ``(4) The Commission shall remand to the ERO for further 
     consideration a proposed reliability standard or a 
     modification to a reliability standard that the Commission 
     disapproves in whole or in part.
       ``(5) The Commission, upon its own motion or upon 
     complaint, may order the ERO to submit to the Commission a 
     proposed reliability standard or a modification to a 
     reliability standard that addresses a specific matter if the 
     Commission considers such a new or modified reliability 
     standard appropriate to carry out this section.
       ``(6) The final rule adopted under subsection (b) shall 
     include fair processes for the identification and timely 
     resolution of any conflict between a reliability standard and 
     any function, rule, order, tariff, rate schedule, or 
     agreement accepted, approved, or ordered by the Commission 
     applicable to a transmission organization. Such transmission 
     organization shall continue to comply with such function, 
     rule, order, tariff, rate schedule or agreement accepted, 
     approved, or ordered by the Commission until--
       ``(A) the Commission finds a conflict exists between a 
     reliability standard and any such provision;
       ``(B) the Commission orders a change to such provision 
     pursuant to section 206 of this part; and
       ``(C) the ordered change becomes effective under this part.

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

[[Page 10198]]

       ``(B) the regional entity otherwise satisfies the 
     provisions of subsection (c)(1) and (2); and
       ``(C) the agreement promotes effective and efficient 
     administration of bulk-power system reliability.
       The Commission may modify such delegation. The ERO and the 
     Commission shall rebuttably presume that a proposal for 
     delegation to a regional entity organized on an 
     Interconnection-wide basis promotes effective and efficient 
     administration of bulk-power system reliability and should be 
     approved. Such regulation may provide that the Commission may 
     assign the ERO's authority to enforce reliability standards 
     under paragraph (1) directly to a regional entity consistent 
     with the requirements of this paragraph.
       ``(5) The Commission may take such action as is necessary 
     or appropriate against the ERO or a regional entity to ensure 
     compliance with a reliability standard or any Commission 
     order affecting the ERO or a regional entity.
       ``(6) Any penalty imposed under this section shall bear a 
     reasonable relation to the seriousness of the violation and 
     shall take into consideration the efforts of such user, 
     owner, or operator to remedy the violation in a timely 
     manner.
       ``(f) The ERO shall file with the Commission for approval 
     any proposed rule or proposed rule change, accompanied by an 
     explanation of its basis and purpose. The Commission, upon 
     its own motion or complaint, may propose a change to the 
     rules of the ERO. A proposed rule or proposed rule change 
     shall take effect upon a finding by the Commission, after 
     notice and opportunity for comment, that the change is just, 
     reasonable, not unduly discriminatory or preferential, is in 
     the public interest, and satisfies the requirements of 
     subsection (c).
       ``(g) The ERO shall conduct periodic assessments of the 
     reliability and adequacy of the bulk-power system in North 
     America.
       ``(h) The President is urged to negotiate international 
     agreements with the governments of Canada and Mexico to 
     provide for effective compliance with reliability standards 
     and the effectiveness of the ERO in the United States and 
     Canada or Mexico.
       ``(i)(1) The ERO shall have authority to develop and 
     enforce compliance with reliability standards for only the 
     bulk-power system.
       ``(2) This section does not authorize the ERO or the 
     Commission to order the construction of additional generation 
     or transmission capacity or to set and enforce compliance 
     with standards for adequacy or safety of electric facilities 
     or services.
       ``(3) Nothing in this section shall be construed to preempt 
     any authority of any State to take action to ensure the 
     safety, adequacy, and reliability of electric service within 
     that State, as long as such action is not inconsistent with 
     any reliability standard.
       ``(4) Within 90 days of the application of the ERO or other 
     affected party, and after notice and opportunity for comment, 
     the Commission shall issue a final order determining whether 
     a State action is inconsistent with a reliability standard, 
     taking into consideration any recommendation of the ERO.
       ``(5) The Commission, after consultation with the ERO, may 
     stay the effectiveness of any State action, pending the 
     Commission's issuance of a final order.
       ``(j) The Commission shall establish a regional advisory 
     body on the petition of at least two-thirds of the States 
     within a region that have more than one-half of their 
     electric load served within the region. A regional advisory 
     body shall be composed of one member from each participating 
     State in the region, appointed by the Governor of each State, 
     and may include representatives of agencies, States, and 
     provinces outside the United States. A regional advisory body 
     may provide advice to the ERO, a regional entity, or the 
     Commission regarding the governance of an existing or 
     proposed regional entity within the same region, whether a 
     standard proposed to apply within the region is just, 
     reasonable, not unduly discriminatory or preferential, and in 
     the public interest, whether fees proposed to be assessed 
     within the region are just, reasonable, not unduly 
     discriminatory or preferential, and in the public interest 
     and any other responsibilities requested by the Commission. 
     The Commission may give deference to the advice of any such 
     regional advisory body if that body is organized on an 
     Interconnection-wide basis.
       ``(k) The provisions of this section do not apply to Alaska 
     or Hawaii.''.

                      Subtitle B--Regional Markets

     SEC. 1121. IMPLEMENTATION DATE FOR PROPOSED RULEMAKING ON 
                   STANDARD MARKET DESIGN.

       The Commission's proposed rulemaking entitled ``Remedying 
     Undue Discrimination through Open Access Transmission Service 
     and Standard Electricity Market Design'' (Docket No. RM01-12-
     000) is remanded to the Commission for reconsideration. No 
     final rule pursuant to the proposed rulemaking, including any 
     rule or order of general applicability within the scope of 
     the proposed rulemaking, may be issued before July 1, 2005. 
     Any final rule issued by the Commission pursuant to the 
     proposed rulemaking, including any rule or order of general 
     applicability within the scope of the proposed rulemaking, 
     shall be proceeded by a notice of proposed rulemaking issued 
     after the date of enactment of this Act and an opportunity 
     for public comment.

     SEC. 1122. SENSE OF THE CONGRESS ON REGIONAL TRANSMISSION 
                   ORGANIZATIONS.

       It is the sense of Congress that, in order to promote fair, 
     open access to electric transmission service, benefit retail 
     consumers, facilitate wholesale competition, improve 
     efficiencies in transmission grid management, promote grid 
     reliability, remove opportunities for unduly discriminatory 
     or preferential transmission practices, and provide for the 
     efficient development of transmission infrastructure needed 
     to meet the growing demands of competitive wholesale power 
     markets, all transmitting utilities in interstate commerce 
     should voluntarily become members of independently 
     administered Regional Transmission Organizations (``RTO'') 
     that have operational or functional control of facilities 
     used for the transmission of electric energy in interstate 
     commerce and do not own or control generation facilities used 
     to supply electric energy for sale at wholesale.

     SEC. 1123. FEDERAL UTILITY PARTICIPATION IN REGIONAL 
                   TRANSMISSION ORGANIZATIONS.

       (a) Definitions.--For purposes of this section:
       (1) The term ``appropriate Federal regulatory authority'' 
     means--
       (A) with respect to a Federal power marketing agency, the 
     Secretary of Energy, except that the Secretary may designate 
     the Administrator of a Federal power marketing agency to act 
     as the appropriate Federal regulatory authority with respect 
     to the transmission system of that Federal power marketing 
     agency; and
       (B) with respect to the Tennessee Valley Authority, the 
     Board of Directors of the Tennessee Valley Authority.
       (2) The term ``Federal utility'' means a Federal power 
     marketing agency or the Tennessee Valley Authority.
       (3) The term ``transmission system'' means electric 
     transmission facilities owned, leased, or contracted for by 
     the United States and operated by a Federal utility.
       (b) Transfer.--
       (1) The appropriate Federal regulatory authority is 
     authorized to enter into a contract, agreement or other 
     arrangement transferring control and use of all or part of 
     the Federal utility's transmission system to a Regional 
     Transmission Organization (``RTO''). Such contract, agreement 
     or arrangement shall be voluntary and include--
       (A) performance standards for operation and use of the 
     transmission system that the head of the Federal utility 
     determines necessary or appropriate, including standards that 
     assure recovery of all the Federal utility's costs and 
     expenses related to the transmission facilities that are the 
     subject of the contract, agreement or other arrangement, 
     consistency with existing contracts and third-party financing 
     arrangements, and consistency with said Federal utility's 
     statutory authorities, obligations, and limitations;
       (B) provisions for monitoring and oversight by the Federal 
     utility of the RTO fulfillment of the terms and conditions of 
     the contract, agreement or other arrangement, including a 
     provision that may provide for the resolution of disputes 
     through arbitration or other means with the RTO or with other 
     participants, notwithstanding the obligations and limitations 
     of any other law regarding arbitration; and
       (C) a provision that allows the Federal utility to withdraw 
     from the RTO and terminate the contract, agreement or other 
     arrangement in accordance with its terms.
       (2) Neither this section, actions taken pursuant to it, nor 
     any other transaction of a Federal utility using an RTO shall 
     serve to confer upon the Commission jurisdiction or authority 
     over the Federal utility's electric generation assets, 
     electric capacity or energy that the Federal utility is 
     authorized by law to market, or the Federal utility's power 
     sales activities.
       (c) Existing Statutory and Other Obligations.--
       (1) Any statutory provision requiring or authorizing a 
     Federal utility to transmit electric power, or to construct, 
     operate or maintain its transmission system shall not be 
     construed to prohibit a transfer of control and use of its 
     transmission system pursuant to, and subject to all 
     requirements of subsection (b).
       (2) This subsection shall not be construed to--
       (A) suspend, or exempt any Federal utility from any 
     provision of existing Federal law, including but not limited 
     to any requirement or direction relating to the use of the 
     Federal utility's transmission system, environmental 
     protection, fish and wildlife protection, flood control, 
     navigation, water delivery, or recreation; or
       (B) authorize abrogation of any contract or treaty 
     obligation.

     SEC. 1124. REGIONAL CONSIDERATION OF COMPETITIVE WHOLESALE 
                   MARKETS.

       (a) State Regulatory Commissions.--Not later than 90 days 
     after the date of enactment of this Act, the Commission shall 
     convene regional discussions with State regulatory 
     commissions, as defined in section

[[Page 10199]]

     3(21) of the Federal Power Act. The regional discussions 
     should address whether wholesale electric markets in each 
     region are working effectively to provide reliable service to 
     electric consumers in the region at the lowest reasonable 
     cost. Priority should be given to discussions in regions that 
     do not have, as of the date of enactment of this Act, a 
     Regional Transmission Organization ``(RTO''). The regional 
     discussions shall consider--
       (1) the need for an RTO or other organizations in the 
     region to provide non-discriminatory transmission access and 
     generation interconnection;
       (2) a process for regional planning of transmission 
     facilities with State regulatory authority participation and 
     for consideration of multi-state projects;
       (3) a means for ensuring that costs for all electric 
     consumers, as defined in section 3(5) of the Public Utility 
     Regulatory Policies Act of 1978 (16 U.S.C. 2602(5)), and 
     buyers of wholesale energy or capacity are reasonable and 
     economically efficient;
       (4) a means for ensuring that all electric consumers, as 
     defined in section 3(5) of the Public Utility Regulatory 
     Policies Act of 1978 (16 U.S.C. 2602(5)), within the region 
     maintain their ability to use the existing transmission 
     system without incurring unreasonable additional costs in 
     order to expand the transmission system for new customers;
       (5) whether the integrated transmission and electric power 
     supply system can and should be operated in a manner that 
     schedules and economically prioritizes all available electric 
     generation resources, so as to minimize the costs of electric 
     energy to all consumers (``economic dispatch'') and 
     maintaining system reliability;
       (6) a means to provide transparent price signals to ensure 
     efficient expansion of the electric system and efficiently 
     manage transmission congestion;
       (7) eliminating in a reasonable manner, consistent with 
     applicable State and Federal law, multiple, cumulative 
     charges for transmission service across successive locations 
     within a region (``pancaked rates'');
       (8) resolution of seams issues with neighboring regions and 
     inter-regional coordination;
       (9) a means of providing information electronically to 
     potential users of the transmission system;
       (10) implementation of a market monitor for the region with 
     State regulatory authority and Commission oversight and 
     establishment of rules and procedures that ensure that State 
     regulatory authorities are provided access to market 
     information and that provides for expedited consideration by 
     the Commission of any complaints concerning exercise of 
     market power and the operation of wholesale markets;
       (11) a process by which to phase-in any proposed RTO or 
     other organization designated to provide non-discriminatory 
     transmission access so as to best meet the needs of a region, 
     and, if relevant, shall take into account the special 
     circumstances that may be found in the Western 
     Interconnection related to the existence of transmission 
     congestion, the existence of significant hydroelectric 
     capacity, the participation of unregulated transmitting 
     utilities, and the distances between generation and load; 
     and,
       (12) a timetable to meet the objectives of this section.
       (b) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Commission shall report to 
     Congress on the progress made in addressing the issues in 
     subsection (a) of this section in discussions with the 
     States.
       (c) Savings.--Nothing in this section shall affect any 
     discussions between the Commission and State or other retail 
     regulatory authorities that are on-going prior to enactment 
     of this Act.

   Subtitle C--Improving Transmission Access and Protecting Service 
                              Obligations

     SEC. 1131. SERVICE OBLIGATION SECURITY AND PARITY.

       The Federal Power Act (16 U.S.C. 824e) is amended by adding 
     the following:
       ``Sec. 220. (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, markets the output of 
     federal 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 or service agreements for firm 
     transmission service, holds firm transmission rights for 
     delivery of the output of such generation facilities or such 
     purchased energy to meet such service obligation, is entitled 
     to use such firm transmission rights, or equivalent financial 
     transmission rights, in order to deliver such output or 
     purchased energy, or the output of other generating 
     facilities or purchased energy to the extent deliverable 
     using such rights, to meet its service obligation.
       ``(2) To the extent that all or a portion of the service 
     obligation covered by such firm transmission rights is 
     transferred to another load-serving entity, the successor 
     load-serving entity shall be entitled to use the firm 
     transmission rights associated with the transferred service 
     obligation. Subsequent transfers to another load-serving 
     entity, or back to the original load-serving entity, shall be 
     entitled to the same rights.
       ``(3) The Commission shall exercise its authority under 
     this Act in a manner that facilitates the planning and 
     expansion of transmission facilities to meet the reasonable 
     needs of load-serving entities to satisfy their service 
     obligations.
       ``(b) Nothing in this section shall affect any methodology 
     for the allocation of transmission rights by a Commission-
     approved entity that, prior to the date of enactment of this 
     section, has been authorized by the Commission to allocate 
     transmission rights.
       ``(c) Nothing in this Act shall relieve a load-serving 
     entity from any obligation under State or local law to build 
     transmission or distribution facilities adequate to meet its 
     service obligations.''
       ``(d) Nothing in this section shall provide a basis for 
     abrogating any contract or service agreement for firm 
     transmission service or rights in effect as of the date of 
     the enactment of this subsection.
       ``(e) 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 (including an entity described 
     in section 201(f) or a rural cooperative) that has a service 
     obligation to end-users or a distribution utility.
       ``(3) The term `service obligation' means a requirement 
     applicable to, or the exercise of authority granted to, an 
     electric utility (including an entity described in section 
     201(f) or a rural cooperative) under Federal, State or local 
     law or under long-term contracts to provide electric service 
     to end-users or to a distribution utility.''
       ``(f) Nothing in the section shall apply to an entity 
     located in an area referred to in section 212(k)(2)(A).''

     SEC. 1132. OPEN NON-DISCRIMINATORY ACCESS.

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


          ``OPEN ACCESS BY UNREGULATED TRANSMITTING UTILITIES

       ``Sec. 211A. (a) Subject to section 212(h), the Commission 
     may, by rule or order, require an unregulated transmitting 
     utility to provide transmission services--
       ``(1) at rates that are comparable to those that the 
     unregulated transmitting utility charges itself; and
       ``(2) on terms and conditions (not relating to rates) that 
     are comparable to those under which such unregulated 
     transmitting utility provides transmission services to itself 
     and that are not unduly discriminatory or preferential.
       ``(b) The Commission shall exempt from any rule or order 
     under this subsection any unregulated transmitting utility 
     that--
       ``(1) is a distribution utility that sells no more than 
     4,000,000 megawatt hours of electricity per year; or
       ``(2) does not own or operate any transmission facilities 
     that are necessary for operating an interconnected 
     transmission system (or any portion thereof); or
       ``(3) meets other criteria the Commission determines to be 
     in the public interest.
       ``(c) Whenever the Commission, after a hearing held upon a 
     complaint, finds any exemption granted pursuant to subsection 
     (b) adversely affects the reliable and efficient operation of 
     an interconnected transmission system, it may revoke the 
     exemption.
       ``(d) The rate changing procedures applicable to public 
     utilities under subsections (c) and (d) of section 205 are 
     applicable to unregulated transmitting utilities for purposes 
     of this section.
       ``(e) In exercising its authority under paragraph (1) of 
     subsection (a), the Commission may remand transmission rates 
     to an unregulated transmitting utility for review and 
     revision where necessary to meet the requirements of 
     subsection (a).
       ``(f) The provision of transmission services under 
     subsection (a) does not preclude a request for transmission 
     services under section 211.
       ``(g) The Commission may not require a State or 
     municipality to take action under this section that 
     constitutes a private business use for purposes of section 
     141 of the Internal Revenue Code of 1986 (26 U.S.C. 141).
       ``(h) Nothing in this Act authorizes the Commission to 
     require an unregulated transmitting utility to transfer 
     control or operational control of its transmitting facilities 
     to an RTO or any other Commission-approved organization 
     designated to provide non-discriminatory transmission 
     access.''.

     SEC. 1133. TRANSMISSION INFRASTRUCTURE INVESTMENT.

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


             ``SUSTAINABLE TRANSMISSION NETWORKS RULEMAKING

       ``Sec. 221. Within six months of enactment of this section, 
     the Commission shall issue a final rule establishing 
     transmission pricing policies applicable to all public 
     utilities and policies for the allocation of costs associated 
     with the expansion, modification or upgrade of existing 
     interstate transmission facilities and for the 
     interconnection of new transmission facilities for utilities 
     and facilities

[[Page 10200]]

     which are not included within a Commission approved RTO. 
     Consistent with section 205 of this Act, such rule shall, to 
     the maximum extent practicable:
       ``(1) promote capital investment in the economically 
     efficient transmission systems;
       ``(2) encourage the construction of transmission and 
     generation facilities in a manner which provides the lowest 
     overall risk and cost to consumers;
       ``(3) encourage improved operation of transmission 
     facilities and deployment of transmission technologies 
     designed to increase capacity and efficiency of existing 
     networks;
       ``(4) ensure that the costs of any transmission expansion 
     or interconnection be allocated in such a way that all users 
     of the affected transmission system bear the appropriate 
     share of costs; and
       ``(5) ensure that parties who pay for facilities necessary 
     for transmission expansion or interconnection receive 
     appropriate compensation for those facilities.''.

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

     SEC. 1141. NET METERING.

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

     SEC. 1142. SMART METERING.

       (a) In General.--Section 111(d) of the Public Utilities 
     Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is 
     amended by adding at the end the following:
       ``(12) Time-based metering and communications.
       ``(A) Each electric utility shall offer each of its 
     customer classes, and provide individual customers upon 
     customer request, a time-based rate schedule under which the 
     rate charged by the electric utility varies during different 
     time periods and reflects the variance in the costs of 
     generating and purchasing electricity at the wholesale level. 
     The time-based rate schedule shall enable the electric 
     consumer to manage energy use and cost through advanced 
     metering and communications technology.
       ``(B) The types of time-based rate schedules that may be 
     offered under the schedule referred to in subparagraph (A) 
     include, among others--
       ``(i) time-of-use pricing whereby electricity prices are 
     set for a specific time period on an advance or forward 
     basis, typically not changing more often than twice a year. 
     Prices paid for energy consumed during these periods shall be 
     pre-established and known to consumers in advance of such 
     consumption, allowing them to vary their demand and usage in 
     response to such prices and manage their energy costs by 
     shifting usage to a lower cost period or reducing their 
     consumption overall;
       ``(ii) critical peak pricing whereby time-of-use prices are 
     in effect except for certain peak days, when prices may 
     reflect the costs of generating and purchasing electricity at 
     the wholesale level and when consumers may receive additional 
     discounts for reducing peak period energy consumption; and
       ``(iii) real-time pricing whereby electricity prices are 
     set for a specific time period on an advanced or forward 
     basis and may change as often as hourly.
       ``(C) Each electric utility subject to subparagraph (A) 
     shall provide each customer requesting a time-based rate with 
     a time-based meter capable of enabling the utility and 
     customer to offer and receive such rate, respectively.
       ``(D) For purposes of implementing this paragraph, any 
     reference contained in this section to the date of enactment 
     of the Public Utility Regulatory Policies Act of 1978 shall 
     be deemed to be a reference to the date of enactment of this 
     paragraph.
       ``(E) In a State that permits third-party marketers to sell 
     electric energy to retail electric consumers, such consumers 
     shall be entitled to receive that same time-based metering 
     and communications device and service as a retail electric 
     consumer of the electric utility.
       ``(F) Notwithstanding subsections (b) and (c) of section 
     112, each State regulatory authority shall, not later than 
     twelve (12) months after enactment of this paragraph conduct 
     an investigation in accordance with section 115(i) and issue 
     a decision whether it is appropriate to implement the 
     standards set out in subparagraphs (A) and (C).''.
       (b) State Investigation of Demand Response and Time-based 
     Metering.--Section 115 of the Public Utilities Regulatory 
     Policies Act of 1978 (16 U.S.C. 2625) is amended by adding 
     the at the end the following:
       ``(k) Time-based Metering and Communications.--Each State 
     regulatory authority shall conduct an investigation and issue 
     a decision whether or not it is appropriate for electric 
     utilities to provide and install time-based meters and 
     communications devices for each of their customers which 
     enable such customers to participate in time-based pricing 
     rate schedules and other demand response programs.''.
       (c) Federal Assistance on Demand Response.--Section 132(a) 
     of the Public Utility Regulatory Polices Act of 1978 (16 
     U.S.C. 2642(a)) is amended by striking ``and'' at the end of 
     paragraph (3), striking the period at the end of paragraph 
     (4) and inserting ``; and'', and by adding the following at 
     the end thereof:
       ``(5) technologies, techniques and rate-making methods 
     related to advanced metering and communications and the use 
     of these technologies, techniques and methods in demand 
     response programs.''.
       (d) Federal Guidance.--Section 132 of the Public Utility 
     Regulatory Policies Act of 1978 (16 U.S.C. 2643) is amended 
     by adding the following at the end thereof:

[[Page 10201]]

       ``(d) Demand Response.--The Secretary shall be responsible 
     for--
       ``(1) educating consumers on the availability, advantages 
     and benefits of advanced metering and communications 
     technologies, including the funding of demonstration or pilot 
     projects;
       ``(2) working with States, utilities, other energy 
     providers and advanced metering and communications experts to 
     identify and address barriers to the adoption of demand 
     response programs; and
       ``(3) not later than 180 days after the date of enactment 
     of the Energy Policy Act of 2003, providing the Congress with 
     a report that identifies and quantifies the national benefits 
     of demand response and makes a recommendation on achieving 
     specific levels of such benefits by January 1, 2005.''.
       (e) Demand Response and Regional Coordination.--
       (1) It is the policy of the United States to encourage 
     States to coordinate, on a regional basis, State energy 
     policies to provide reliable and affordable demand response 
     services to the public.
       (2) The Secretary of Energy shall provide technical 
     assistance to States and regional organizations formed by two 
     or more States to assist them in--
       (A) identifying the areas with the greatest demand response 
     potential;
       (B) identifying and resolving problems in transmission and 
     distribution networks, including through the use of demand 
     response; and
       (C) developing plans and programs to use demand response to 
     respond to peak demand or emergency needs.
       (3) Not later than 1 year after the date of enactment of 
     this Act, the Commission shall prepare and publish an annual 
     report, by appropriate region, that assesses demand response 
     resources, including those available from all consumer 
     classes, and which identifies and reviews--
       (A) saturation and penetration rate of advanced meters and 
     communications technologies, devices and systems;
       (B) existing demand response programs and time-based rate 
     programs;
       (C) the annual resource contribution of demand resources;
       (D) the potential for demand response as a quantifiable, 
     reliable resource for regional planning purposes; and
       (E) steps taken to ensure that, in regional transmission 
     planning and operations, demand resources are provided 
     equitable treatment as a quantifiable, reliable resource 
     relative to the resource obligations of any load-serving 
     entity, transmission provider, or transmitting party.
       (f) Federal Encouragement of Demand Response Devices.--It 
     is the policy of the United States that time-based pricing 
     and other forms of demand response, whereby electricity 
     customers are provided with electricity price signals and the 
     ability to benefit by responding to them, shall be encouraged 
     and the deployment of such technology and devices that enable 
     electricity customers to participate in such pricing and 
     demand response systems shall be facilitated.

     SEC. 1143. ADOPTION OF ADDITIONAL STANDARDS.

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

     SEC. 1144. TECHNICAL ASSISTANCE.

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

     SEC. 1145. COGENERATION AND SMALL POWER PRODUCTION PURCHASE 
                   AND SALE REQUIREMENTS.

       (a) Termination of Mandatory Purchase and Sale 
     Requirements.--Section 210 of the Public Utility Regulatory 
     Policies Act of 1978 (16 U.S.C. 824a-3) is amended by adding 
     at the end the following:
       ``(m) Termination of Mandatory Purchase and Sale 
     Requirements.-
       ``(1) Obligation to purchase.--After the date of enactment 
     of this subsection, no electric utility shall be required to 
     enter into a new contract or obligation to purchase electric 
     energy from a qualifying cogeneration facility or a 
     qualifying small power production facility under this section 
     if the Commission finds that the qualifying cogeneration 
     facility or qualifying small power production facility has 
     access to an independently administered, auction-based day 
     ahead and real time wholesale market for the sale of electric 
     energy.
       ``(2) Obligation to sell.--After the date of enactment of 
     this subsection, no electric utility shall be required to 
     enter into a new contract or obligation to sell electric 
     energy to a qualifying cogeneration facility or a qualifying 
     small power production facility under this section if 
     competing retail electric suppliers are able to provide 
     electric energy to the qualifying cogeneration facility or 
     qualifying small power production facility.
       ``(3) No effect on existing rights and remedies.--Nothing 
     in this subsection affects the rights or remedies of any 
     party under any contract or obligation, in effect on the date 
     of enactment of this subsection, to purchase electric energy 
     or capacity from or to sell electric energy or capacity to a 
     facility under this Act (including the right to recover costs 
     of purchasing electric energy or capacity).
       ``(4) Recovery of costs.--``(A) Regulation.--The Commission 
     shall promulgate such regulations as are necessary to ensure 
     that an electric utility that purchases electric energy or 
     capacity from a qualifying cogeneration facility or 
     qualifying small power production facility in accordance with 
     any legally enforceable obligation entered into or imposed 
     under this section before the date of enactment of this 
     subsection recovers all prudently incurred costs associated 
     with the purchase.
       ``(B) Enforcement.--A regulation under subparagraph (A) 
     shall be enforceable in accordance with the provisions of law 
     applicable to enforcement of regulations under the Federal 
     Power Act (16 U.S.C. 791a et seq.).''.
       (b) Elimination of Ownership Limitations.--Section 3 of the 
     Federal Power Act (16 U.S.C. 796) is amended
       (1) by striking paragraph (17)(C) and inserting the 
     following:
       ``(C) 'qualifying small power production facility' means a 
     small power production facility that the Commission 
     determines, by rule, meets such requirements (including 
     requirements respecting minimum size, fuel use, and fuel 
     efficiency) as the Commission may, by rule, prescribe;''; and
       (2) by striking paragraph (18)(B) and inserting the 
     following:
       ``(B) `qualifying cogeneration facility' means a 
     cogeneration facility that the Commission determines, by 
     rule, meets such requirements (including requirements 
     respecting minimum size, fuel use, and fuel efficiency) as 
     the Commission may, by rule, prescribe;''.

     SEC. 1146. RECOVERY OF COSTS.

       (a) Regulation.--To ensure recovery by any electric utility 
     that purchases electricity or capacity from a qualifying 
     facility pursuant to any legally enforceable obligation 
     entered into or imposed under section 210 of the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 824a-3) 
     before the date of enactment of this Act of all costs 
     associated with the purchases, the Commission shall 
     promulgate and enforce such regulations as are required to 
     ensure that no utility shall be required directly or 
     indirectly to absorb the costs associated with the purchases.
       (b) Treatment.--A regulation under subsection (a) shall be 
     treated as a rule enforceable under the Federal Power Act (16 
     U.S.C. 791a et seq.).

Subtitle E--Provisions Regarding the Public Utility Holding Company Act 
                                of 1935

     SEC. 1151. DEFINITIONS.

       For the purposes of this subtitle:
       (1) The term ``affiliate'' of a company means any company 5 
     percent or more of the outstanding voting securities of which 
     are owned, controlled, or held with power to vote, directly 
     or indirectly, by such company.
       (2) The term ``associate company'' of a company means any 
     company in the same holding company system with such company.
       (3) The term ``Commission'' means the Federal Energy 
     Regulatory Commission.
       (4) The term ``company'' means a corporation, partnership, 
     association, joint stock company, business trust, or any 
     organized group of persons, whether incorporated or not, or a 
     receiver, trustee, or other liquidating agent of any of the 
     foregoing.
       (5) The term ``electric utility company'' means any company 
     that owns or operates

[[Page 10202]]

     facilities used for the generation, transmission, or 
     distribution of electric energy for sale.
       (6) The terms ``exempt wholesale generator'' and ``foreign 
     utility company'' have the same meanings as in sections 32 
     and 33, respectively, of the Public Utility Holding Company 
     Act of 1935 (15 U.S.C. 79z-5, 79z-5b), as those sections 
     existed on the day before the effective date of this 
     subtitle.
       (7) The term ``gas utility company'' means any company that 
     owns or operates facilities used for distribution at retail 
     (other than the distribution only in enclosed portable 
     containers or distribution to tenants or employees of the 
     company operating such facilities for their own use and not 
     for resale) of natural or manufactured gas for heat, light, 
     or power.

                (8) the term ``holding company'' means--

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

     SEC. 1152. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT 
                   OF 1935.

       The Public Utility Holding Company Act of 1935 (15 U.S.C. 
     79a et seq.) is repealed, effective 12 months after the date 
     of enactment of this Act.

     SEC. 1153. FEDERAL ACCESS TO BOOKS AND RECORDS.

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

     SEC. 1154. STATE ACCESS TO BOOKS AND RECORDS.

       (a) In General.--Upon the written request of a State 
     commission having jurisdiction to regulate a public utility 
     company in a holding company system, and subject to such 
     terms and conditions as may be necessary and appropriate to 
     safeguard against unwarranted disclosure to the public of any 
     trade secrets or sensitive commercial information, a holding 
     company or any associate company or affiliate thereof, 
     wherever located, shall produce for inspection books, 
     accounts, memoranda, and other records that--
       (1) have been identified in reasonable detail in a 
     proceeding before the State commission;
       (2) the State commission determines are relevant to costs 
     incurred by such public utility company; and (3) are 
     necessary for the effective discharge of the responsibilities 
     of the State commission with respect to such proceeding.
       (b) Effect on State Law.--Nothing in this section shall 
     preempt applicable State law concerning the provision of 
     books, accounts, memoranda, or other records, or in any way 
     limit the rights of any State to obtain books, accounts, 
     memoranda, or other records, under Federal law, contract, or 
     otherwise.
       (c) Court Jurisdiction.--Any United States district court 
     located in the State in which the State commission referred 
     to in subsection (a) is located shall have jurisdiction to 
     enforce compliance with this section.

     SEC. 1155. EXEMPTION AUTHORITY.

       (a) Rulemaking.--Not later than 90 days after the date of 
     enactment of this title, the Commission shall promulgate a 
     final rule to exempt from the requirements of section 203 any 
     person that is a holding company, solely with respect to one 
     or more--
       (1) qualifying facilities under the Public Utility 
     Regulatory Policies Act of 1978;
       (2) exempt wholesale generators; or
       (3) foreign utility companies.
       (b) Other Authority.--If, upon application or upon its own 
     motion, the Commission finds that the books, accounts, 
     memoranda, and other records of any person are not relevant 
     to the jurisdictional rates of a public utility company or 
     natural gas company, or if the Commission finds that any 
     class of transactions is not relevant to the jurisdictional 
     rates of a public utility company, the Commission shall 
     exempt such person or transaction from the requirements of 
     section 203.

     SEC. 1156. AFFILIATE TRANSACTIONS.

       Nothing in this subtitle shall preclude the Commission or a 
     State commission from exercising its jurisdiction under 
     otherwise applicable law to determine whether a public 
     utility company, public utility, or natural gas company may 
     recover in rates any costs of an activity performed by an 
     associate company, or any costs of goods or services acquired 
     by such public utility company, public utility, or natural 
     gas company from an associate company.

     SEC. 1157. APPLICABILITY.

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

     SEC. 1158. EFFECT ON OTHER REGULATIONS.

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

     SEC. 1159. ENFORCEMENT.

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

     SEC. 1160. SAVINGS PROVISIONS.

       (a) In General.--Nothing in this subtitle prohibits a 
     person from engaging in or continuing to engage in activities 
     or transactions in which it is legally engaged or authorized 
     to engage on the date of enactment of this Act, if that 
     person continues to comply with the terms of any such 
     authorization, whether by rule or by order.

[[Page 10203]]

       (b) Effect on Other Commission Authority.--Nothing in this 
     subtitle limits the authority of the Commission under the 
     Federal Power Act (16 U.S.C. 791a and following) (including 
     section 301 of that Act) or the Natural Gas Act (15 U.S.C. 
     717 and following) (including section 8 of that Act).

     SEC. 1161. IMPLEMENTATION.

       Not later than 12 months after the date of enactment of 
     this title, the Commission shall--
       (1) promulgate such regulations as may be necessary or 
     appropriate to implement this subtitle; and
       (2) submit to Congress detailed recommendations on 
     technical and conforming amendments to Federal law necessary 
     to carry out this subtitle and the amendments made by this 
     subtitle.

     SEC. 1162. TRANSFER OF RESOURCES.

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

     SEC. 1163. EFFECTIVE DATE.

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

     SEC. 1164. CONFORMING AMENDMENT TO THE FEDERAL POWER ACT.

       Section 318 of the Federal Power Act (16 U.S.C. 825q) is 
     repealed.

   Subtitle F--Market Transparency, Anti-Manipulation and Enforcement

     SEC. 1171. MARKET TRANSPARENCY RULES.

       Part II of the Federal Power Act is amended by adding:


                      ``MARKET TRANSPARENCY RULES

       ``Sec. 222. (a) Not later than 180 days after the date of 
     enactment of this section, the Commission shall issue rules 
     establishing an electronic information system to provide the 
     Commission and the public with access to such information as 
     is necessary or appropriate to facilitate price transparency 
     and participation in markets subject to the Commission's 
     jurisdiction. Such systems shall provide information about 
     the availability and market price of wholesale electric 
     energy and transmission services to the Commission, State 
     commissions, buyers and sellers of wholesale electric energy, 
     users of transmission services, and the public. The 
     Commission shall have authority to obtain such information 
     from any electric and transmitting utility, including any 
     entity described in section 201(f).
       ``(b) The Commission shall exempt from disclosure 
     information it determines would, if disclosed, be detrimental 
     to the operation of an effective market or jeopardize system 
     security. This section shall not apply to an entity described 
     in section 212(k)(2)(B) with respect to transactions for the 
     purchase or sale of wholesale electric energy and 
     transmission services within the area described in section 
     212(k)(2)(A).''.

     SEC. 1172. MARKET MANIPULATION.

       Part II of the Federal Power Act is amended by the 
     following:


               ``PROHIBITION ON FILING FALSE INFORMATION

       ``Sec. 223. It shall be a violation of this Act for any 
     person or any other entity (including entities described in 
     section 201(f)) willfully and knowingly to report any 
     information relating to the price of electricity sold at 
     wholesale, which information the person or any other entity 
     knew to be false at the time of the reporting, to any 
     governmental entity with the intent to manipulate the data 
     being compiled by such governmental entity.


                  ``PROHIBITION ON ROUND TRIP TRADING

       ``Sec. 224. (a) It shall be a violation of this Act for any 
     person or any other entity (including entities described in 
     section 201(f)) willfully and knowingly to enter into any 
     contract or other arrangement to execute a `round-trip trade' 
     for the purchase or sale of electric energy at wholesale.
       ``(b) For the purposes of this section, the term 'round 
     trip trade' means a transaction, or combination of 
     transactions, in which a person or any other entity--
       ``(1) enters into a contract or other arrangement to 
     purchase from, or sell to, any other person or other entity 
     electric energy at wholesale;
       ``(2) simultaneously with entering into the contract or 
     arrangement described in paragraph (1), arranges a 
     financially offsetting trade with such other person or entity 
     for the same such electric energy, at the same location, 
     price, quantity and terms so that, collectively, the purchase 
     and sale transactions in themselves result in no financial 
     gain or loss; and ``(3) enters into the contract or 
     arrangement with the intent to deceptively affect reported 
     revenues, trading volumes, or prices.''.

     SEC. 1173. ENFORCEMENT.

       (a) Complaints.--Section 306 of the Federal Power Act (16 
     U.S.C. 825e) is amended by
       (1) inserting ``electric utility (including entities 
     described in section 201(f) and rural cooperative 
     entities),'' after ``Any person,''; and
       (2) inserting ``transmitting utility,'' after ``licensee'' 
     each place it appears.
       (b) Investigations.--Section 307(a) of the Federal Power 
     Act (16 U.S.C. 825f(a)) is amended by inserting ``or 
     transmitting utility'' after ``any person'' in the first 
     sentence.
       (c) Review Of Commission Orders.--Section 313(a) of the 
     Federal Power Act (16 U.S.C. 8251) is amended by inserting 
     ``electric utility,'' after ``Any person,'' in the first 
     sentence.
       (d) Criminal Penalties.--Section 316 of the Federal Power 
     Act (16 U.S.C. 825o) is amended--
       (1) in subsection (a), by striking ``$5,000'' and inserting 
     ``$1,000,000'', and by striking ``two years'' and inserting 
     ``five years'';
       (2) in subsection (b), by striking ``$500'' and inserting 
     ``$25,000''; and (3) by striking subsection (c).
       (e) Civil Penalties.--Section 316A of the Federal Power Act 
     (16 U.S.C. 825o-1) is amended
       (1) in subsections (a) and (b), by striking ``section 211, 
     212, 213, or 214'' each place it appears and inserting ``Part 
     II''; and
       (2) in subsection (b), by striking ``$10,000'' and 
     inserting ``$1,000,000''.
       (f) General Penalties.--Section 21 of the Natural Gas Act 
     (15 U.S.C. 717t) is amended--
       (1) in subsection (a), by striking ``$5,000'' and inserting 
     ``$1,000,000'', and by striking ``two years'' and inserting 
     ``five years'; and
       (2) in subsection (b), by striking ``$500'' and inserting 
     ``$50,000''.

     SEC. 1174. REFUND EFFECTIVE DATE.

       Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b)) 
     is amended by (1) striking ``the date 60 days after the 
     filing of such complaint nor later than 5 months after the 
     expiration of such 60-day period'' in the second sentence and 
     inserting ``the date of the filing of such complaint nor 
     later than 5 months after the filing of such complaint'';
       (2) striking ``60 days after'' in the third sentence and 
     inserting ``of'';
       (3) striking ``expiration of such 60-day period'' in the 
     third sentence and inserting ``publication date''; and
       (4) striking the fifth sentence and inserting: ``If no 
     final decision is rendered by the conclusion of the 180-day 
     period commencing upon initiation of a proceeding pursuant to 
     this section, the Commission shall state the reasons why it 
     has failed to do so and shall state its best estimate as to 
     when it reasonably expects to make such decision.''.

                    Subtitle G--Consumer Protections

     SEC. 1181. CONSUMER PRIVACY.

       The Federal Trade Commission shall issue rules protecting 
     the privacy of electric consumers from the disclosure of 
     consumer information in connection with the sale or delivery 
     of electric energy to a retail electric consumer. If the 
     Federal Trade Commission determines that a State's 
     regulations provide equivalent or greater protection than the 
     provisions of this section, such State regulations shall 
     apply in that State in lieu of the regulations issued by the 
     Commission under this section.

     SEC. 1182. UNFAIR TRADE PRACTICES.

       (a) Slamming.--The Federal Trade Commission shall issue 
     rules prohibiting the change of selection of an electric 
     utility except with the informed consent of the electric 
     consumer or if determined by the appropriate State regulatory 
     authority to be necessary to prevent loss of service.
       (b) Cramming.--The Federal Trade Commission shall issue 
     rules prohibiting the sale of goods and services to an 
     electric consumer unless expressly authorized by law or the 
     electric consumer.
       (c) State Authority.--If the Federal Trade Commission 
     determines that a State's regulations provide equivalent or 
     greater protection than the provisions of this section, such 
     State regulations shall apply in that State in lieu of the 
     regulations issued by the Commission under this section.

     SEC. 1183. DEFINITIONS.

       For purposes of this subtitle--
       (1) ``State regulatory authority `` has the meaning given 
     that term in section 3(21) of the Federal Power Act (16 
     U.S.C. 796(21)).
       (2) ``electric consumer'' and ``electric utility'' have the 
     meanings given those terms in section 3 of the Public Utility 
     Regulatory Policies Act of 1978 (16 U.S.C. 2602).

                    Subtitle H--Technical Amendments

     SEC. 1191. TECHNICAL AMENDMENTS.

       (a) Section 211(c) of the Federal Power Act (16 U.S.C. 
     824j(c)) is amended by--
       (1) striking ``(2)';
       (2) striking ``(A)'' and inserting ``(1)'''
       (3) striking ``(B)'' and inserting ``(2)''; and
       (4) striking ``termination of modification'' and inserting 
     ``termination or modification''.
       (b) Section 211(d)(1) of the Federal Power Act (16 U.S.C. 
     824j(d)) is amended by striking ``electric utility'' the 
     second time it appears and inserting ``transmitting 
     utility''.
       (c) Section 315 of the Federal Power Act (16 U.S.C. 825n) 
     is amended by striking ``subsection'' and inserting 
     ``section''.
                                 ______
                                 
      By Mr. ENZI (for himself, Mr. Dorgan, Mr. Baucus, Mr. Dayton, Mr. 
        Bingaman, Mr. Chafee, Mr. Craig, Mr. Johnson, and Mrs. Murray):
  S. 950. A bill to allow travel between the United States and Cuba; to 
the Committee on Foreign Relations.
  Mr. ENZI. Mr. President, today I offer a bill that will make a very 
small change in our Cuba policy. It deals only with travel provisions 
to Cuba.
  I have been watching Cuba since the 1960s. I went to George 
Washington University, and I was there at the time

[[Page 10204]]

of the Cuban missile crisis. I have had the opportunity to watch what 
has happened with Cuba throughout the years. I am reminded of something 
my dad used to say, which was that if you keep on doing what you always 
have been doing, you are going to wind up getting what you already got. 
That is kind of the situation with Cuba. We have been trying the same 
thing for over 40 years, and it hasn't worked.
  I am suggesting just a small change to maybe get a few more people in 
there to increase conversation with people who understand the way the 
United States works and the way Cuba works and how they ought to drift 
more rapidly toward where we are.
  In recent weeks, as we shared the joy of the Iraqi people as they 
were liberated from the ruthless regime of Saddam Hussein, we also felt 
the pain of those in Cuba who had dared to speak out in a vain but 
valiant effort to demand those same freedoms for themselves. As they 
did, 75 Cuban citizens were arrested and received harsh sentences--some 
for more than 20 years--all for the crime of yearning to be free. Once 
again, Castro has shown himself to be his own worst enemy when it comes 
to Cuba's image overseas, and so, when faced with an outcry from around 
the world about his actions, he quickly tried to blame the United 
States for his own actions. It was a hard sell at best, and, given the 
reactions we've seen from all sides of this issue, I don't think anyone 
is buying it.
  Still, Castro's cruelty might tempt us to tighten the already strong 
restrictions on the relations between our two countries, but I hope we 
will not do that. If we increase the diplomatic pressure on the Cuban 
government that is now emanating from every corner of the world, we 
might be successful in bringing about a better way of life for the 
Cuban people.
  If, however, we stop Cuban-Americans from bringing financial 
assistance to their families in Cuba, and end the people to people 
exchanges that have been so successful, and stop the sale of 
agricultural and medicinal products to Cuba, we will not be hurting the 
Cuban government nearly as badly as we will be hurting the Cuban people 
by diminishing their faith and trust in the United States and reducing 
the strength of the ties that bind the people of our two countries.
  If we allow more and freer travel to Cuba, if we increase trade and 
dialogue, we take away Castro's ability to blame the hardships of the 
Cuban people on the United States. In a very real sense, the better we 
try to make things for the Cuban people, the more we will reduce the 
level and the tone of the rhetoric used against us by Fidel Castro.
  I have often heard it said that it is foolish to do the same thing 
over and over again and expect different results. In a way, that is 
what we are doing in Cuba. We are continuing to try to exert pressure 
from our side and, as we do, we are giving Castro a scapegoat to blame 
for the poor living conditions in his country in the process. It's time 
for a different policy, one that goes further than embargoes and 
replaces a restrictive and confusing travel policy with a new one that 
will more effectively help us to achieve our goals in that country.
  Today, Senators Dorgan, Baucus, and Bingaman and I are introducing 
the Freedom to Travel to Cuba Act.
  Our bill is very straightfoward. It states that the President shall 
not prohibit, either directly or indirectly, travel to or from Cuba by 
United States citizens or transactions incident to such travel.
  In 1958 the Supreme Court affirmed our Constitutional right to 
travel, but the U.S. government then prohibited Americans from spending 
money in Cuba. We simply said, okay, you have a right to travel, but 
try traveling without spending a dime.
  Most of us know that certain people can and do continue to travel to 
Cuba. Cuban Americans can apply for a license to travel for 
humanitarian reasons to visit ailing family members and such, but not 
always conveniently.
  The way I got involved in this whole process was a Cuban American 
from Jackson, WY, who had been in Cuba visiting his family, doing his 
one visit a year. As he left and was on the plane coming back to 
Wyoming, one of his parents died. He could not go back there for a 
year. That is not a good situation for any family.
  Educational groups can apply for licenses to travel for scholarly 
reasons, for educational opportunities and conferences. Members of the 
U.S. Government can travel for fact-finding reasons, but for the 
average American, that process is too complicated.
  Even with the proper licenses, the regulations on where you can go 
and whom you can talk to are confusing, misleading, and frustrating. 
Each year the Office of Foreign Assets Control levies fines on 
travelers who followed the law to the best of their ability. Fines and 
punishments were imposed without guidelines and seemingly at the whim 
of a nameless bureaucrat.
  I must ask my colleagues, why are we continuing to support a policy 
that was basically implemented 40 years ago? Why are we supporting a 
policy that has had little effect on the Government we oppose? Why do 
we not improve our policy so that it will improve conditions for the 
Cuban people and their image of the United States?
  The bill we are introducing today makes real change in our policy 
toward Cuba that will lead to a real change for the people of Cuba. 
What better way to let the Cuban people know of our concern for their 
plight than for them to hear it from their friends and their extended 
family in the United States, or let them hear it from the American 
people who will go there?
  The people of this country are our best ambassadors, and we should 
let them show the people of Cuba what we as a nation are all about. One 
thing we should not do is to play into Castro's hand by enacting 
stricter and more stringent regulations and create a situation where 
the United States is easy to blame for the problems in Cuba. Unilateral 
sanctions will not improve human rights for Cuban citizens. The rest of 
the world is not doing what we are doing. Cuba is being supplied by the 
rest of the world with everything they need.
  Open dialog and exchange of ideas and commerce can move a country 
toward democracy. What better way to share the rewards of democracy 
than through people-to-people exchanges? We cannot stop that program. 
If the United States Government continues on its current course to put 
an economic stranglehold on the Cuban Government, the people of Cuba 
will suffer. Unilateral sanctions stop not just the flow of goods but 
the flow of ideas. Ideas of freedom and democracy are the keys to 
change in any nation.
  Some may ask why we want to increase dialog right now, why open the 
door to Cuba when Castro is behaving so poorly? No one is denying that 
the actions of Castro and his government are deplorable, as is his 
refusal to provide basic human rights to his people. But if we truly 
believe Castro is a dictator with no good intentions, how can we say we 
should wait for him to behave before we engage? He controls the entire 
media in Cuba. The entire message that is coming out, unless we have 
people interacting, is his message. Keeping the door closed and 
hollering at Castro on the other side does not do anything.
  Mr. DORGAN. Mr. President, this morning, my colleague from Wyoming, 
Senator Enzi, has introduced a piece of legislation I am an original 
cosponsor of. I want to make a point about the legislation.
  The legislation deals with the freedom of the American people to 
travel in the country of Cuba. I want to talk about that just for a 
moment. I support that legislation. The legislation has nothing to do 
with supporting Fidel Castro. We do not support Fidel Castro. It has 
nothing to do with making life easier for Fidel Castro. This issue is 
not about Fidel Castro; it is about the American people.
  Ninety miles off our shores sits a country ruled by communists, a 
communist government run by Fidel Castro. We have a communist 
government in the country of China, with 1.3 billion people half way 
around the globe. We have a communist government in the country of 
Vietnam. I have visited both.
  In both of those countries, we have an American Chamber of Commerce.

[[Page 10205]]

They are doing business in those countries. We have engaged in trade 
and tourism. People travel there. People do business there. Why? 
Because our country thinks engagement is the right way to move these 
communist countries in the right direction toward greater personal 
freedom and greater liberty for the people of China and Vietnam.
  But Cuba is 90 miles off the coast of Florida, and we are told that 
Cuba is different. Instead of engagement being constructive for Cuba, 
we are told a 40-year embargo, which has not worked, should be 
retained. That embargo includes not only an embargo on trade with Cuba, 
but it also includes a restriction on the American people's ability to 
travel to Cuba. And the restriction is so absurd and so byzantine, here 
is what it has provoked.
  I had a hearing on this about a year and a half ago. We have people 
down in the Treasury Department who are spending their days, with 
taxpayers' money, tracking Americans who have traveled to Cuba, so they 
can levy a civil fine on those Americans.
  Let me tell you of one: A retired school teacher in Illinois. She is 
a cyclist, loves to bicycle. She answered an ad in a cycling magazine 
and signed up for a 10-day cycling trip in Cuba. This retired school 
teacher--I hope she won't mind me saying, a little, old, retired 
schoolteacher--from Illinois, bicycles in Cuba for 10 days with a 
cycling group, organized by a Canadian cycling company, and she gets 
back to this country only to receive in the mail a notice by the U.S. 
Treasury Department that she has been fined $9,600 for traveling in 
Cuba.
  She would not be fined for traveling in China, a communist country. 
She would not be fined for traveling in Vietnam, a communist country. 
But she is fined for traveling in Cuba.
  Or do you want one better? How about the guy whose dad died, who was 
a Cuban citizen who came to this country, and the last thing he wanted 
was for his ashes to be taken back to Cuba and spread on Cuban soil. So 
his son did that. But guess what? That son gets caught in the net of 
the U.S. Treasury Department, because at a time when we are worried 
about terrorism, we have people down at the Treasury Department who are 
chasing retired school teachers and sons of deceased American citizens 
who used to live in Cuba who want to take their parents' ashes back to 
Cuba.
  We have people down there spending the taxpayers' dollars and their 
time, their effort, and energy to see if we can't levy a civil fine 
against Americans who travel in Cuba. My colleague, Senator Enzi, has 
introduced legislation, with myself and others, to say it is not 
hurting Fidel Castro by limiting the freedom and choice of the American 
people to travel in Cuba. Cuba and the Cuban people would be much 
better off with additional travel by Americans and expanded trade. The 
same circumstances that lead people to believe that engagement with 
China and Vietnam is helpful ought to understand that it would be 
helpful with Cuba as well.
  I have been to Cuba. I have visited with the dissidents. Frankly, 
they believe the embargo is counterproductive, and they believe lifting 
the embargo and the travel restrictions would be helpful to their 
cause.
  Fidel Castro is a Communist and a dictator. What he has done in 
recent weeks is appalling to me. He has thrown people in jail, 
dissidents, for what they have said and what they think. He has 
executed several people in recent weeks who attempted to allow others 
to escape. Shame on him. But it makes no sense for us to continue a 
policy that is counterproductive.
  Again, talk to the dissidents in Cuba and they will tell you that 
allowing people to travel to Cuba and allowing our family farmers to 
sell grain to Cuba is constructive.
  We are finally for the first time able to sell some products into the 
Cuban marketplace because I and then former Senator John Ashcroft, now 
Attorney General, offered legislation that opened that embargo of 40 
years that did not work, and for the first time in 40 years, 22 train 
carloads of dried peas left North Dakota to go to the Cuban market, 
purchased by the Cubans.
  Our farmers for the first time in 42 years sold some food to Cuba. 
That makes good sense. We should never use food as a weapon. Travel is 
the same circumstance. Limiting the freedom of the American people 
makes no sense to me.
  The Enzi bill, which I am proud to cosponsor, moves in the direction 
of eliminating that limitation on travel by the American people.
  Mr. BAUCUS. Madam President, I rise today to offer legislation, along 
with my colleagues Senator Enzi and Senator Dorgan, that would end the 
restrictions placed on travel to Cuba.
  I understand our colleagues in the House will introduce companion 
legislation in the coming weeks. I look forward to working with my 
colleagues in both chambers, and on both sides of the aisle, as we move 
forward.
  With this legislation, we are undertaking a serious cause. Repeal of 
the travel ban is long overdue.
  There are numerous reasons to introduce this legislation, but I want 
to focus today on just two: first, the current situation in Cuba; and 
second, our troubled economy here at home.
  Introduction of this legislation comes at a crucial time in U.S.-Cuba 
relations. Last month, nearly 80 Cuban dissidents were arrested. All of 
them have been sentenced to an average of almost 20 years in prison.
  Democratic governments around the world, as well as human rights 
organizations and others, including myself and my colleagues in the 
Senate and House Cuba Working Groups, have harshly criticized the 
Castro regime for these appalling acts of repression. Yet, throughout 
all of this, the Castro regime has remained defiant and undaunted.
  Why? In my view it is because Castro wants the embargo to continue. 
Observers have noted an emerging pattern: every time we get close to 
more open relations, Castro shuts the process down with some repressive 
act, designed to have a chilling effect on U.S.-Cuban relations.
  Castro fears an end to the embargo. He knows the day the embargo 
falls is the day he runs out of excuses. Without the embargo, Castro 
would have no one to blame for the failing Cuban economy.
  Nor would his way of governing be able to survive the influx of 
Americans and democratic ideas that would flood his island if the 
embargo were lifted.
  Now, some Cuba watchers have predicted that the dissident arrests and 
the resulting decline of U.S.-Cuba relations are a death knell to the 
engagement debate in Washington.
  I strongly disagree. And I think now, more than ever, a genuine, 
honest debate about the merits of the embargo is needed.
  Some people seem to think tightening the embargo is a rational 
response to the Castro regime. I guess if you think an embargo can hurt 
Castro without hurting the Cuban people, then tightening the embargo 
might make some sense.
  But it does not work that way. The embargo actually hurts the Cuban 
people much more than it hurts Castro.
  This is why many Cuban dissidents, including Oswaldo Paya, the 
founder of the Varela Project, oppose our embargo and support 
engagement.
  Indeed, after 43 years, it ought to be clear to everyone that the 
embargo has failed to weaken Castro. A better approach is to reach out 
to the Cuban people. Ending the travel ban is the first and best way to 
do this.
  If Castro fears contact between the Cuban people and the American 
people, the rational American response is to send more Americans, not 
fewer.
  Of course, ending the travel ban would have benefits not only for the 
Cuban people, but also for Americans. Ending the travel ban would have 
an immediate and direct economic impact, beyond even the immediate 
travel sector.
  Most importantly for my home state of Montana, ending the travel ban 
would help farmers and ranchers.
  Americans are currently allowed to sell food and medicine to Cuba on 
a cash basis. But there is a lot of red tape thrown in their way. And 
without

[[Page 10206]]

the ability to travel to Cuba and develop the business contacts, the 
full potential of these sales is not realized.
  In fact, one study has suggested that lifting the travel ban could 
result in an additional quarter billion dollars of agricultural sales, 
and create thousands of new jobs.
  Ending the travel ban would bring benefits to both Cubans and to 
Americans. And that, after all, is what this debate should be about. 
Supporters of the embargo are so focused on hurting Castro that they 
actually strengthen him--at the expense of the Cuban people, and at the 
expense of our own economy.
  I hope my colleagues will join me in co-sponsoring this important 
legislation. I believe it is the best way to show that we truly care 
about the Cuban people
  And indeed, if we truly care about democracy, then let us send Cuba 
exactly that. Let us travel to Cuba and show them democracy in action.
  I yield the floor.
  Mr. DAYTON. I commend my colleague from Wyoming and his leadership in 
relationship to Cuba, which is of strong interest to businesses and 
farmers in my home State of Minnesota. I ask unanimous consent to be 
added as a cosponsor to his legislation. I look forward to working with 
him as part of his caucus to further those relationships. I again 
commend the Senator for his leadership in this important area and look 
forward to working with him.
                                 ______
                                 
      By Mr. WARNER (for himself, Mr. Dayton, and Ms. Collins):
  S. 951. A bill to amend the Internal Revenue Code of 1986 to allow 
medicare beneficiaries a refundable credit against income tax for the 
purchase of outpatient prescription drugs; to the Committee on Finance.
  Mr. WARNER. Mr. President, I rise today to introduce this morning a 
bill on which my distinguished colleagues from Minnesota and Maine and 
I have collaborated. That is the Older Americans Prescription Drug Tax 
Relief Act. I will speak a minute or two on it, then should the Senator 
from Minnesota desire to speak to this, I will yield to the Senator and 
then resume the balance of my statement.
  By way of introduction, all Members of this body have heard the 
tragic stories about older Americans who must choose between paying for 
their groceries and paying for their medicines. Many older Americans 
are forced into this choice because, unbelievably, the Medicare program 
still lacks an outpatient prescription drug benefit. America's seniors 
deserve much better.
  Our President, the House of Representatives, and every single Member 
of this Senate, all 100 Members, share the common goal of enacting a 
comprehensive Medicare prescription drug benefit. Over the years, we 
worked diligently to achieve those goals but have yet not reached what 
I would consider, and I think others would consider, success. We have 
all worked in support of this vitally important goal, but, again, 
success has alluded us. Unfortunately, we have not been able to reach a 
consensus.
  I hope this bill might be a new initiative that would merit the 
attention of my colleagues, and that it might provide a basis for that 
consensus. As we here in the Nation's Capital debate how best to add a 
Medicare prescription drug benefit and continue to debate the specifics 
of such benefits such as premiums, co-pays, deductibles, formula-
ries, and whether to run the program through the existing Medicare 
system or through a public-private partnership, our seniors continue to 
suffer. Medicare beneficiaries have waited far too long for Congress to 
provide some sort of relief for their prescription drug costs.
  I remain committed, as are my distinguished colleagues from Minnesota 
and Maine, to working with our colleagues on creating a comprehensive 
prescription drug benefit in the Medicare program. I believe we must 
act now, however, to provide some relief at this point in time. We 
cannot defer this decision any longer. The Warner-Dayton-Collins 
proposal will provide real relief to Medicare beneficiaries. The 
legislation is simple and can be described in three points.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. DAYTON. Mr. President, I thank the senior Senator from Virginia, 
a leader on this measure. I will be brief because I am scheduled to 
meet in my office in just a few moments with the nominee for the new 
superintendent of the Air Force Academy, which is a matter on which the 
Senator from Virginia has also exhibited great leadership on behalf of 
this country.
  I am very proud to join with Senator Warner in sponsoring this 
legislation. I agree and associate myself with everything the Senator 
has said regarding this matter.
  I came to the Senate a little over 2 years ago, believing the most 
urgent matter facing our country in the area of social legislation was 
to provide prescription drug coverage for all of our elderly. I have 
been dismayed at our inability--all of us--to reach necessary 
agreements so such legislation could be enacted.
  I could not agree more with the Senator from Virginia that this is 
something I hope our colleagues will consider. If there is a better 
approach that we can all agree on this year, then so be it. But in the 
absence of that, as there has been that failure during the last 2 
years, I hope our colleagues will look at this as a very feeling 
alternative. Even if long-term legislation is enacted, I believe it 
will be at least a year or two before that is available to our senior 
citizens, before that program is set up. This is an approach that could 
be implemented very swiftly, could be available almost immediately, and 
could provide, on an interim basis if not a long-term basis, the 
financial assistance our elderly citizens desperately need.
  I thank the senior Senator from Virginia. I am proud to associate 
myself with this legislation.
  I yield the floor.
  Mr. WARNER. I thank my distinguished colleague for responding. I wish 
to emphasize a very important point the Senator from Minnesota made.
  This may not be the final resolution of this complex set of issues. 
But given the desperate circumstances of so many who have to make the 
choice between food and drugs, I think it is a very carefully crafted 
interim step that could be enacted into law and later quickly 
superseded should that hoped-for event occur in the future of a more 
comprehensive piece of legislation.
  I think the emphasis on that is very important.
  I would say, all of us here in the Senate benefit greatly by 
professional staff. On my staff, Chris Yianilos really worked 
diligently to bring this legislation into being and he collaborated 
with a distinguished member of your staff, Mr. Bob Hall. I also thank 
Priscilla Hanley, who worked with Senator Collins on the legislation.
  The first is that the Warner-Dayton-Collins bill provides Medicare 
beneficiaries with a refundable--I repeat--a refundable tax credit of 
50 cents on every dollar of out-of-pocket prescription drug costs. 
Whether you actually pay income taxes or not, you are eligible to get 
the benefit of this tax credit.
  The benefit is capped at $500 for the expenses of an individual 
senior. Married seniors would be eligible for a credit up to $1,000. 
The cap is based on a recent study by the Kaiser Family Foundation that 
estimates that the average senior's out-of-pocket prescription drug 
costs is almost $1,000. Thus the proposal will cover 50 percent of the 
out-of-pocket drug costs for the average senior.
  To take advantage of this refundable tax credit, Medicare 
beneficiaries will not have to worry about whether their drug is 
covered under some formulary. In addition, there are no premiums, no 
deductibles. Medicare beneficiaries will simply take their 
prescriptions, get them filled, and then apply for their refundable tax 
credit.
  Second, in recognition that a generous but necessary refundable tax 
credit such as this can be costly, we have imposed a responsible income 
phase-out on older Americans who can benefit from this tax credit. The 
phase-out level begins for individuals who

[[Page 10207]]

earn $75,000 per year. Married Medicare beneficiaries begin to phase-
out of the benefit at $150,000 a year. This cost containment mechanism 
will affect less than 10 percent of all Medicare beneficiaries but 
allows us to responsibly provide a refundable tax credit that will 
cover about 50 percent of the average Medicare beneficiary's out-of-
pocket drug costs.
  Again 90 percent of all Medicare beneficiaries will not be affected 
by the phase-out. In other words, they are beneath the phase-out caps. 
Only those individuals who are blessed with a larger income among 
America's seniors, who can afford in large measure to pay for their 
prescription drugs, will be phased-out.
  Third, the legislation will sunset once a comprehensive Medicare 
prescription drug benefit is signed into law. Again, as my colleague 
from Minnesota mentioned, and others, this is an interim proposal. 
Therefore, it can be superseded by a more comprehensive bill.
  We wholeheartedly agree this legislation is not a substitute for a 
comprehensive prescription drug Medicare benefit, and we will continue 
to work with the President and our colleagues from both sides of the 
aisle in the Senate who support a more comprehensive piece of 
legislation. But as I stated earlier, America's seniors cannot wait any 
longer for relief, and this proposal provides a real benefit to 
America's seniors.
  I am pleased to be joined by Senator Dayton and Senator Collins in 
introducing the Older Americans Prescription Drug Tax Relief Act. I 
urge my colleagues to give this matter consideration and, hopefully, it 
can be enacted into law.
  Let us do something. Let us open the door and talk to the Cuban 
people.
  Travel and other policies that deal with Cuba will continue to be a 
top priority for those of us in the newly formed Senate Cuba Working 
Group. The working group members have expressed their support for 
changes in our policies toward Cuba, and we will continue to be a part 
of the dialogue. I do encourage all of my colleagues to join us in that 
effort.
  I encourage all of my colleagues to take a look at this bill that has 
been introduced today. I know there are people looking at it. I expect 
a lot more cosponsors on it. This is the most reasonable provision 
dealing with Cuba that has been presented during the 6 years I have 
been here. We have tried some bigger bites at the apple. They have not 
worked. So we are moving back to the travel restrictions, a bill that 
is very limited. It allows one to travel and to have those things that 
are necessary for travel. For instance, the right to take baggage to 
Cuba cannot be cut off. That is another way the law can be subverted. 
So it is a very straightforward travel policy that will get Americans 
into Cuba to talk to Cubans to promote the ideas we believe in. I ask 
my colleagues to join me in this effort.
                                 ______
                                 
      By Mr. CORZINE:
  S. 952. A bill to amend title XVIII of the Social Security Act to 
reduce the work hours and increase the supervision of resident-
physicians to ensure the safety of patients and resident-physicians 
themselves; to the Committee on Finance.
  Mr. CORZINE. Mr. President, I rise today to reintroduce my 
legislation, the Patient and Physician Safety and Protection Act of 
2003, to limit medical resident work hours to 80 hours a week and to 
provide real protections for patients and resident physicians who are 
negatively affected by excessive work hours. I feel strongly that as 
Congress begins to consider proposals to reduce medical malpractice 
premiums and improve quality of care, we must consider the role that 
excessive work hours play in exacerbating medical liability problems 
and reducing quality of care.
  It is very troubling that hospitals across the Nation are requiring 
young doctors to work 36 hour shifts and as many as 120 hours a week in 
order to complete their residency programs. These long hours lead to a 
deterioration of cognitive function similar to the effects of blood 
alcohol levels of 0.1 percent. This is a level of cognitive impairment 
that would make these doctors unsafe to drive--yet these physicians are 
not only allowed but in fact are required to care for patients and 
perform procedures on patients under these conditions.
  The Patient and Physician Safety and Protection Act of 2003 will 
limit medical resident work hours to 80 hours a week. Not 40 hours or 
60 hours. 80 hours a week. It is hard to argue that this standard is 
excessively strict. In fact, it is unconscionable that we now have 
resident physicians, or any physicians for that matter, caring for very 
sick patients 120 hours a week and 36 hours straight with fewer than 10 
hours between shifts. This is an outrageous violation of a patient's 
right to quality care.
  In addition to limiting work hours to 80 hours a week, my bill limits 
the length of any one shift to 24 consecutive hours, while allowing for 
up to three hours of patient transition time, and limits the length of 
an emergency room shift to 12 hours. The bill also ensures that 
residents have at least one out of seven days off and ``on-call'' 
shifts no more often that every third night.
  Since I first introduced the Patient and Physician Safety and 
Protection Act in the 107th Congress, the medical community and the 
Accreditation Council for Graduate Medical Education, ACGME, 
specifically have taken critical steps to address the problem of 
excessive work hours. The ACGME's recommendations to reduce resident 
work hours are commendable. If appropriately enforced, these new work 
hour guidelines will go a long way toward reducing the number of hours 
that residents must work, thereby improving the health of our Nation's 
medical residents and ensuring the safety of the patients.
  Despite the medical community's best intentions to reduce work hours, 
however, I am very concerned that the ACGME's policy lacks the 
enforcement mechanisms that are essential to ensure compliance with the 
new work hour rules. Too many hospitals failed to comply with previous 
work hour requirements mandated by the ACGME because there was 
insufficient oversight and enforcement. While the new policy 
establishes more stringent work hours reductions, it fails to create 
effective enforcement and oversight tools. These rules are meaningless 
without enforcement.
  That is why Federal legislation is necessary. The Patient and 
Physician Safety and Protection Act of 2003 not only recognizes the 
problem of excessive work hours, but also creates strong enforcement 
mechanisms. The bill also provides funding support to teaching 
hospitals to implement new work hour standards. Without enforcement and 
financial support efforts to reduce work hours are not likely to be 
successful.
  Finally, my legislation provides meaningful enforcement mechanisms 
that will protect the identity of resident physicians who file 
complaints about work hour violations. The ACGME's guidelines do not 
contain any whistleblower protections for residents that seek to report 
program violations. Without this important protection, residents will 
be reluctant to report these violations, which in turn will weaken 
enforcement.
  My legislation also makes compliance with these work hour 
requirements a condition of Medicare participation. Each year, Congress 
provides $8 billion to teaching hospitals to train new physicians. 
While Congress must continue to vigorously support adequate funding so 
that teaching hospitals are able to carry out this important public 
service, these hospitals must also make a commitment to ensuring safe 
working conditions for these physicians and providing the highest 
quality of care to the patients they treat.
  In closing I would like to read a quote from an Orthopedic Surgery 
Resident from Northern California, which I think illustrates why we 
need this legislation.
  I quote, ``I was operating post-call after being up for over 36 hours 
and was holding retractors. I literally fell asleep standing up and 
nearly face-

[[Page 10208]]

planted into the wound. My upper arm hit the side of the gurney, and I 
caught myself before I fell to the floor. I nearly put my face in the 
open wound, which would have contaminated the entire field and could 
have resulted in an infection for the patient.''
  This is a very serious problem that must be addressed before medical 
errors like this occur. I hope every member of the Senate will consider 
this legislation and the potential it has to reduce medical errors, 
improve patient care, and create a safer working environment for the 
backbone of our Nation's health system.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 952

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Patient and Physician Safety 
     and Protection Act of 2003''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) The Federal Government, through the medicare program, 
     pays approximately $8,000,000,000 per year solely to train 
     resident-physicians in the United States, and as a result, 
     has an interest in assuring the safety of patients treated by 
     resident-physicians and the safety of resident-physicians 
     themselves.
       (2) Resident-physicians spend as much as 30 to 40 percent 
     of their time performing activities not related to the 
     educational mission of training competent physicians.
       (3) The excessive numbers of hours worked by resident-
     physicians is inherently dangerous for patient care and for 
     the lives of resident-physicians.
       (4) The scientific literature has consistently demonstrated 
     that the sleep deprivation of the magnitude seen in residency 
     training programs leads to cognitive impairment.
       (5) A substantial body of research indicates that excessive 
     hours worked by resident-physicians lead to higher rates of 
     medical error, motor vehicle accidents, depression, and 
     pregnancy complications.
       (6) The medical community has not adequately addressed the 
     issue of excessive resident-physician work hours.
       (7) The Federal Government has regulated the work hours of 
     other industries when the safety of employees or the public 
     is at risk.
       (8) The Institute of Medicine has found that as many as 
     98,000 deaths occur annually due to medical errors and has 
     suggested that 1 necessary approach to reducing errors in 
     hospitals is reducing the fatigue of resident-physicians.

     SEC. 3. REVISION OF MEDICARE HOSPITAL CONDITIONS OF 
                   PARTICIPATION REGARDING WORKING HOURS OF 
                   MEDICAL RESIDENTS, INTERNS, AND FELLOWS.

       (a) In General.--Section 1866 of the Social Security Act 
     (42 U.S.C. 1395cc) is amended--
       (1) in subsection (a)(1)--
       (A) by striking ``and'' at the end of subparagraph (R);
       (B) by striking the period at the end of subparagraph (S) 
     and inserting ``, and''; and
       (C) by inserting after subparagraph (S) the following new 
     subparagraph:
       ``(T) in the case of a hospital that uses the services of 
     postgraduate trainees (as defined in subsection (j)(4)), to 
     meet the requirements of subsection (j).''; and
       (2) by adding at the end the following new subsection:
       ``(j)(1)(A) In order that the working conditions and 
     working hours of postgraduate trainees promote the provision 
     of quality medical care in hospitals, as a condition of 
     participation under this title, each hospital shall establish 
     the following limits on working hours for postgraduate 
     trainees:
       ``(i) Subject to subparagraphs (B) and (C), postgraduate 
     trainees may work no more than a total of 24 hours per shift.
       ``(ii) Subject to subparagraph (C), postgraduate trainees 
     may work no more than a total of 80 hours per week.
       ``(iii) Subject to subparagraph (C), postgraduate 
     trainees--
       ``(I) shall have at least 10 hours between scheduled 
     shifts;
       ``(II) shall have at least 1 full day out of every 7 days 
     off and 1 full weekend off per month;
       ``(III) subject to subparagraph (B), who are assigned to 
     patient care responsibilities in an emergency department 
     shall work no more than 12 continuous hours in that 
     department;
       ``(IV) shall not be scheduled to be on call in the hospital 
     more often than every third night; and
       ``(V) shall not engage in work outside of the educational 
     program that interferes with the ability of the postgraduate 
     trainee to achieve the goals and objectives of the program or 
     that, in combination with the program working hours, exceeds 
     80 hours per week.
       ``(B)(i) Subject to clause (ii), the Secretary shall 
     promulgate such regulations as may be necessary to ensure 
     quality of care is maintained during the transfer of direct 
     patient care from 1 postgraduate trainee to another at the 
     end of each shift.
       ``(ii) Such regulations shall ensure that, except in the 
     case of individual patient emergencies, the period in which a 
     postgraduate trainee is providing for the transfer of direct 
     patient care (as referred to in clause (i)) does not extend 
     such trainee's shift by more than 3 hours beyond the 24-hour 
     period referred to in subparagraph (A)(i) or the 12-hour 
     period referred to in subparagraph (A)(iii)(III), as the case 
     may be.
       ``(C) The work hour limitations under subparagraph (A) and 
     requirements of subparagraph (B) shall not apply to a 
     hospital during a state of emergency declared by the 
     Secretary that applies with respect to that hospital.
       ``(2) The Secretary shall promulgate such regulations as 
     may be necessary to monitor and supervise postgraduate 
     trainees assigned patient care responsibilities as part of an 
     approved medical training program, as well as to assure 
     quality patient care.
       ``(3) Each hospital shall inform postgraduate trainees of--
       ``(A) their rights under this subsection, including methods 
     to enforce such rights (including so-called whistle-blower 
     protections); and
       ``(B) the effects of their acute and chronic sleep 
     deprivation both on themselves and on their patients.
       ``(4) For purposes of this subsection, the term 
     `postgraduate trainee' means a postgraduate medical resident, 
     intern, or fellow.''.
       (b) Designation.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this subsection referred to as the ``Secretary'') shall 
     designate an individual within the Department of Health and 
     Human Services to handle all complaints of violations that 
     arise from a postgraduate trainee (as defined in paragraph 
     (4) of section 1886(j) of the Social Security Act, as added 
     by subsection (a)) who reports that the hospital operating 
     the medical residency training program for which the trainee 
     is enrolled is in violation of the requirements of such 
     section.
       (2) Grievance rights.--A postgraduate trainee may file a 
     complaint with the Secretary concerning a violation of the 
     requirements under such section 1886(j). Such a complaint may 
     be filed anonymously. The Secretary may conduct an 
     investigation and take such corrective action with respect to 
     such a violation.
       (3) Enforcement.--
       (A) Civil money penalty enforcement.--Subject to 
     subparagraph (B), any hospital that violates the requirements 
     under such section 1886(j) is subject to a civil money 
     penalty not to exceed $100,000 for each medical residency 
     training program operated by the hospital in any 6-month 
     period. The provisions of section 1128A of the Social 
     Security Act (other than subsections (a) and (b)) shall apply 
     to civil money penalties under this paragraph in the same 
     manner as they apply to a penalty or proceeding under section 
     1128A(a) of such Act.
       (B) Corrective action plan.--The Secretary shall establish 
     procedures for providing a hospital that is subject to a 
     civil monetary penalty under subparagraph (A) with an 
     opportunity to avoid such penalty by submitting an 
     appropriate corrective action plan to the Secretary.
       (4) Disclosure of violations and annual reports.--The 
     individual designated under paragraph (1) shall--
       (A) provide for annual anonymous surveys of postgraduate 
     trainees to determine compliance with the requirements under 
     such section 1886(j) and for the disclosure of the results of 
     such surveys to the public on a medical residency training 
     program specific basis;
       (B) based on such surveys, conduct appropriate on-site 
     investigations;
       (C) provide for disclosure to the public of violations of 
     and compliance with, on a hospital and medical residency 
     training program specific basis, such requirements; and
       (D) make an annual report to Congress on the compliance of 
     hospitals with such requirements, including providing a list 
     of hospitals found to be in violation of such requirements.
       (c) Whistleblower Protections.--
       (1) In general.--A hospital covered by the requirements of 
     section 1866(j) of the Social Security Act, as added by 
     subsection (a), shall not penalize, discriminate, or 
     retaliate in any manner against an employee with respect to 
     compensation, terms, conditions, or privileges of employment, 
     who in good faith (as defined in paragraph (2)), individually 
     or in conjunction with another person or persons--
       (A) reports a violation or suspected violation of such 
     requirements to a public regulatory agency, a private 
     accreditation body, or management personnel of the hospital;
       (B) initiates, cooperates, or otherwise participates in an 
     investigation or proceeding brought by a regulatory agency or 
     private accreditation body concerning matters covered by such 
     requirements;

[[Page 10209]]

       (C) informs or discusses with other employees, with a 
     representative of the employees, with patients or patient 
     representatives, or with the public, violations or suspected 
     violations of such requirements; or
       (D) otherwise avails himself or herself of the rights set 
     forth in such section or this subsection.
       (2) Good faith defined.--For purposes of this subsection, 
     an employee is deemed to act ``in good faith'' if the 
     employee reasonably believes--
       (A) that the information reported or disclosed is true; and
       (B) that a violation has occurred or may occur.
       (d) Effective Date.--The amendments made by subsection (a) 
     shall take effect on the first July 1 that begins at least 1 
     year after the date of enactment of this Act.

     SEC. 4. ADDITIONAL FUNDING FOR HOSPITAL COSTS.

       There are hereby appropriated to the Secretary of Health 
     and Human Services such amounts as may be required to provide 
     for additional payments to hospitals for their reasonable 
     additional, incremental costs incurred in order to comply 
     with the requirements imposed by this Act (and the amendments 
     made by this Act).
                                 ______
                                 
      By Mr. SHELBY (for himself, Mr. Miller, Mr. Lott, Ms. Landrieu, 
        Mr. Sessions, Mr. Cochran, and Mr. Chambliss):
  S. 954. A bill to amend the Federal Power Act to provide for the 
protection of electric utility customers and enhance the stability of 
wholesale electric markets through the clarification of State 
regulatory jurisdiction; to the Committee on Energy and Natural 
Resources.
  Mr. SHELBY. Mr. President, on July 31, 2002, the Federal Energy 
Regulatory Commission, FERC, issued a notice of proposed rulemaking to 
create a one-size-fits-all template for electric markets referred to as 
``standard market design,'' SMD.
  The SMD rule would bring about numerous sweeping changes, the degree 
and consequences of which are still being assessed. The proposed rule 
would require customers to pay for transmission facility upgrades 
caused by new generators, even if the customer does not need or use the 
power from those generators.
  FERC's proposal would also usurp State authority to obligate 
utilities to serve customers, set generation reserve margins, centrally 
control generation dispatch, and set rates for retail transmission 
service. FERC's proposed rulemaking will effectively eliminate a 
State's ability to make decisions on issues specific to their State. 
Such sweeping changes to the energy industry should only be made after 
careful consideration of all potential consequences. After hearing 
these concerns, FERC promised a white paper to speak to the many 
concerns of myself and many others.
  On April 28, the Federal Energy Regulatory Commission released its 
long-awaited white paper on Wholesale Power Markets and Standard Market 
Design. I and others had hoped that the release of that paper would 
signal a shift in the approach that the Commission has been taking with 
respect to the ``federalization'' of electricity regulation and 
markets. Disappointingly, despite some modest changes in approach, the 
Commission and Chairman Pat Wood have decided to move away from a 
partnership with the States toward Federal domination of the 
electricity system and electricity regulation.
  In the document, the Commission reasserts its authority to regulate 
the terms and conditions of retail transmission, mandates the formation 
of Regional Transmission Organizations, and limits State authority to 
protect existing native load customers from the loss of transmission 
rights. The paper promises more ``technical conferences'' and 
consultation with the States, but does not change the premise upon 
which the Commission's Standard Market Design, ``SMD'', Notice of 
Proposed Rulemaking rests--that the States and regions serve only as 
adjuncts to the Commission as it devises new wholesale market rules 
that directly impinge upon retail markets.
  In light of the Commission's white paper and the Senate's intention 
of quickly addressing energy policy, my colleagues and I present 
legislation today to ensure the concerns of my constituents and the 
constituents of my colleagues are addressed. This crucial legislation 
will ensure that States maintain their jurisdiction over retail 
utilities, that native load customers can be assured of reliability of 
service, that customers are not forced to socialize the cost of new 
transmission developed in their area but intended for other regions, 
and finally the legislation will prohibit the FERC from implementing 
its current SMD rule nor any rule that is of similar substance.
                                 ______
                                 
      By Mr. FEINGOLD (for himself, Mr. Jeffords, Mr. Dayton, and Mr. 
        Leahy):
  S. 956. A bill to amend the Elementary and Secondary Education Act of 
1965 to permit States and local educational agencies to decide the 
frequency of using high quality assessments to measure and increase 
student academic achievement, to permit States and local educational 
agencies to obtain a waiver of certain testing requirements, and for 
other purposes; to the Committee on Health, Education, Labor, and 
Pensions.
  Mr. FEINGOLD. Mr. President, as millions of public school students 
and teachers around the country prepare to complete their first school 
year under the No Child Left Behind Act, NCLB, I am introducing a bill 
that would help to return a measure of local control that was taken 
from school districts and States by its enactment last year.
  I am pleased to be joined in this effort by Senators Jeffords, 
Dayton, and Leahy.
  I have heard a lot of concern from my constituents about various 
aspects of the President's education bill. Following the enactment of 
the bill last year, the drumbeat of concern has continued to 
reverberate throughout my State, and has gotten even louder, as 
students, teachers, parents, administrators, school counselors and 
social workers, and others are learning first-hand about the effect of 
the NCLB.
  I strongly support maintaining local control over decisions affecting 
our children's day-to-day classroom experiences. I also believe that 
the Federal Government has an important role to play in supporting our 
State educational agencies and local school districts as they carry out 
their most important responsibility--the education of our children.
  I voted against the President's education bill in large part because 
of the new annual testing mandate for students in grades 3-8. While I 
agree that there should be a strong accountability system in place to 
ensure that public school students are making progress, I strongly 
oppose over-testing students in our public schools. I agree that some 
tests are needed to ensure that our children are keeping pace, but 
taking time to test students has to take a back seat to taking the time 
to teach students in the first place.
  I have heard a lot about these new annual tests from the people of 
Wisconsin, and their response has been almost universally negative. My 
constituents are concerned about this additional layer of testing for 
many reasons, including the cost of developing and implementing these 
tests, the loss of teaching time every year to prepare for and take the 
tests, and the extra pressure that the tests will place on students, 
teachers, schools, and school districts.
  I share my constituents' concerns about this new Federal mandate. I 
find it interesting that proponents of the NCLB say that it will return 
more control to the States and local school districts. In my view, 
however, this massive new Federal testing mandate runs counter to the 
idea of local control.
  Many States and local school districts around the country, including 
Wisconsin, already have comprehensive testing programs in place. The 
Federal Government should leave decisions about the frequency of using 
high quality assessments to measure and increase student academic 
achievement up to the States and local school districts that bear the 
responsibility for educating our children. Every State and every school 
district is different. A uniform testing policy may not be the best 
approach.
  I have heard from many education professionals in my State that this 
new

[[Page 10210]]

testing requirement is a waste of money and a waste of time. These 
people are dedicated professionals who are committed to educating 
Wisconsin's children, and they don't oppose testing. I think we can all 
agree that testing has its place. What they oppose is the magnitude of 
testing that is required by this law.
  Beginning in the 2005-2006 school year, the NCLB will pile more tests 
on our Nation's public school students. And of course, when those tests 
are piled on students, they burden our teachers as well, because 
teachers must spend more and more time preparing students to take these 
exams.
  This kind of teaching, sometimes called ``teaching to the test,'' is 
becoming more and more prevalent in our schools as testing has become 
increasingly common. The dedicated teachers in our classrooms will now 
be constrained by teaching to yet more tests, instead of being able to 
use their own judgment about what subject areas the class needs to 
spend extra time studying. This additional testing time could also 
reduce the opportunity for teachers to create and implement innovative 
learning experiences for their students.
  Teachers in my State are concerned about the amount of time that they 
will have to spend preparing their students to take the tests and 
administering the tests. They are concerned that these additional tests 
will disrupt the flow of education in their classrooms. One teacher 
said the preparation for the tests Wisconsin already requires in grades 
3, 4, 8, and 10 can take up to a month, and the administration of the 
test takes another week. That is five weeks out of the school year. And 
now the Federal Government is requiring teachers to take a huge chunk 
out of instruction time each year in grades 3-8. In my view, and in the 
view of the people of my state, this time can be better spent on 
regular classroom instruction.
  The legislation that I am introducing today, the Student Testing 
Flexibility Act of 2003, would give States and local school districts 
that have demonstrated academic success the flexibility to apply to 
waive the new annual testing requirements in the NCLB. States and 
school districts with waivers would still be required to administer 
high quality tests to students in, at a minimum, reading or language 
arts and mathematics at least once in grades 3-5, 6-9, and 10-12 as 
required under the law.
  This bill would allow States and school districts that meet the same 
specific accountability criteria outlined for school-level excellence 
under the State Academic Achievement Award Program to apply to the 
Secretary of Education for a waiver from the new annual reading or 
language arts and mathematics tests for students in grades 3-8. The 
waiver would be for a period of three years and would be renewable, so 
long as the state or school district meets the criteria.
  To qualify for the waiver, the State or school district must have 
significantly closed the achievement gap among a number of subgroups of 
students as required under Title I, or must have exceeded their 
adequate yearly progress, AYP, goals for two or more consecutive years. 
The bill would require the Secretary to grant waivers to states or 
school districts that meet these criteria and apply for the waiver. 
Individual districts in states that have waivers would not be required 
to apply for a separate waiver.
  The Federal Government should not impose an additional layer of 
testing on states that are succeeding in meeting or exceeding their AYP 
goals or on closing the achievement gap. Instead, we should allow those 
States that have demonstrated academic success to use their share of 
Federal testing money to help those schools that need it the most.
  The bill I am introducing today would do just that by allowing states 
with waivers to retain their share of the Federal funding appropriated 
to develop and implement the new annual tests. These important dollars 
would be used for activities that these States deem appropriate for 
improving student achievement at individual public elementary and 
secondary schools that have failed to make AYP.
  I am pleased that this legislation is supported by the American 
Association of School Administrators, the National PTA, the National 
Association of Elementary School Principals, the National Association 
of Secondary School Principals, the School Social Work Association of 
America, the Wisconsin Department of Public Instruction, the Wisconsin 
Education Association Council, the Wisconsin Association of School 
Boards, the Milwaukee Teachers' Education Association, and the 
Wisconsin School Administrators Alliance, which includes the 
Association of Wisconsin School Administrators, the Wisconsin 
Association of School District Administrators, the Wisconsin 
Association of School Business Officials, and the Wisconsin Council for 
Administrators of Special Services.
  While this bill focuses on the over-testing of students in our public 
schools, I would like to note that my constituents have raised a number 
of other concerns about the NCLB that I hope will be addressed by 
Congress. My constituents are concerned about, among other things, the 
new AYP requirements, the effect that the Act will have on rural school 
districts, and about finding the funding necessary to implement all of 
these provisions of this new law. I share these concerns.
  I regret that, for the second year in a row, the President's budget 
request did not fully fund NCLB requirements and failed to provide any 
funding to crucial programs such as rural education and school 
counseling. If we are to truly leave no child behind, we must provide 
adequate funding for programs such as Title I, special education and 
professional development in order to ensure that all students have the 
means to succeed. To do less sets up some of our most vulnerable 
students for failure.
  I hope that my bill, the Student Testing Flexibility Act, will help 
to focus attention on the perhaps unintended consequences of the 
ongoing implementation of the President's education bill for states, 
school districts, and individual schools, teachers, and students.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 956

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Student Testing Flexibility 
     Act of 2003''.

     SEC. 2. FINDINGS.

       Congress finds that--
       (1) State and local governments bear the majority of the 
     cost and responsibility of educating public elementary school 
     and secondary school students;
       (2) State and local governments often struggle to find 
     adequate funding to provide basic educational services;
       (3) the Federal Government has not provided its full share 
     of funding for numerous federally mandated elementary and 
     secondary education programs;
       (4) underfunded Federal education mandates increase 
     existing financial pressures on States and local educational 
     agencies;
       (5) the cost to States and local educational agencies to 
     implement the annual student academic assessments required 
     under section 1111(b)(3)(C)(vii) of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 
     6311(b)(3)(C)(vii)) remains uncertain;
       (6) public elementary school and secondary school students 
     take numerous tests each year, from classroom quizzes and 
     exams to standardized and other tests required by the Federal 
     Government, State educational agencies, or local educational 
     agencies;
       (7) multiple measures of student academic achievement 
     provide a more accurate picture of a student's strengths and 
     weaknesses than does a single score on a high-stakes test; 
     and
       (8) the frequency of the use of high quality assessments as 
     a tool to measure and increase student achievement should be 
     decided by State educational agencies and local educational 
     agencies.

     SEC. 3. WAIVER AUTHORITY.

       Section 1111(b)(3) of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6311(b)(3)) is amended by 
     adding at the end the following:
       ``(E) Waiver authority.--
       ``(i) States.--Upon application by a State educational 
     agency, the Secretary shall waive the requirements of 
     subparagraph (C)(vii) for a State if the State educational 
     agency demonstrates that the State--

       ``(I) significantly closed the achievement gap among the 
     groups of students described in paragraph (2)(C)(v); or

[[Page 10211]]

       ``(II) exceeded the State's adequate yearly progress, 
     consistent with paragraph (2), for 2 or more consecutive 
     years.

       ``(ii) Local educational agencies.--Upon application of a 
     local educational agency located in a State that does not 
     receive a waiver under clause (i), the Secretary shall waive 
     the application of the requirements of subparagraph (C)(vii) 
     for the local educational agency if the local educational 
     agency demonstrates that the local educational agency--

       ``(I) significantly closed the achievement gap among the 
     groups of students described in paragraph (2)(C)(v); or
       ``(II) exceeded the local educational agency's adequate 
     yearly progress, consistent with paragraph (2), for 2 or more 
     consecutive years.

       ``(iii) Period of waiver.--A waiver under clause (i) or 
     (ii) shall be for a period of 3 years and may be renewed for 
     subsequent 3-year periods.
       ``(iv) Utilization of certain federal funds.--

       ``(I) Permissive uses.--Subject to subclause (II), a State 
     or local educational agency granted a waiver under clause (i) 
     or (ii) shall use funds, that are awarded to the State or 
     local educational agency, respectively, under this Act for 
     the development and implementation of annual assessments 
     under subparagraph (C)(vii), to carry out educational 
     activities that the State educational agency or local 
     educational agency, respectively, determines will improve the 
     academic achievement of students attending public elementary 
     schools and secondary schools in the State or local 
     educational agency, respectively, that fail to make adequate 
     yearly progress (as defined in paragraph (2)(C)).
       ``(II) Nonpermissive use of funds.--A State or local 
     educational agency granted a waiver under clause (i) or (ii) 
     shall not use funds, that are awarded to the State or local 
     educational agency, respectively, under this Act for the 
     development and implementation of annual assessments under 
     subparagraph (C)(vii), to pay a student's cost of tuition, 
     room, board, or fees at a private school.''.

                                 ______
                                 
      By Mrs. BOXER:
  S. 957. A bill to amend title 49, United States Code, to improve the 
training requirements for and require the certification of cabin crew 
members, and for other purposes; to the Committee on Commerce, Science, 
and Transportation.
  Mrs. BOXER. Mr. President, I am pleased to introduce the ``Flight 
Attendant Certification Act.''
  Since September 11, flight attendants have become a last line of 
defense against terrorist attacks. As we all know, the terrorists 
hijacked four commercial jets--all of which were heading to California. 
That day forever changed air travel in this country, and in turn 
forever changed the security functions of flight attendants.
  No one can forget that it was a flight attendant who discovered that 
Richard Reid was trying to ignite a bomb on his shoe. If not for the 
aware flight attendant, the bomb could have gone off over the Atlantic 
and all the passengers and crew would have been lost.
  Today, I can say with certainty that air travel is more secure than 
it was a year and a half ago. But that does not mean that more should 
not be done. We must continue to take the appropriate steps to ensure 
that we are doing everything in our power to prevent terrorist attacks 
and protect the American people. That is why I am proud to offer this 
legislation.
  This bill would make American air travel safer by requiring that 
flight attendants be certified by the Federal Aviation Administration, 
FAA. Currently, flight attendants are not required to receive formal 
certification even though they have the responsibility for safety, 
security, and emergency response.
  In addition, the legislation would close the growing gap in the 
quality and content of training programs between airlines by creating a 
single training standard across the industry. This bill would require 
uniform training standards and establish a central approval process for 
certification of flight attendants at the FAA.
  The FAA already recognizes the training of other airline personnel by 
issuing certification to pilots, mechanics, air-traffic controllers and 
others. Flight attendants deserve the same recognition and 
certification.
                                 ______
                                 
      By Mr. KOHL (for himself, Mr. Reid, Mr. Nelson of Florida, Mr. 
        Rockefeller, Mrs. Lincoln, Ms. Landrieu, Mr. Bingaman, Mr. 
        Miller, and Mr. Breaux):
  S. 958. A bill to amend titles XVIII and XIX of the Social Security 
Act to prevent abuse of recipients of long-term care services under the 
Medicare and Medicaid programs; to the Committee on Finance.
  Mr. KOHL. Mr. President, I rise today to reintroduce the Patient 
Abuse Prevention Act, which will go a long way in protecting patients 
in long-term care from abuse and neglect. This legislation will 
establish a National Registry of abusive long-term care workers and 
require criminal background checks for potential employees. It is 
necessary so we can ensure that people with violent and abusive 
backgrounds cannot find work in nursing homes and home health and prey 
on our elderly relatives. After many years of refinement so that the 
background checks will run smoothly, and with the strong support of 
both patient advocates and the American Association of Homes and 
Services for the Aging, I sincerely hope that this is the year when we 
will finally take action and enact these common-sense protections.
  There is absolutely no excuse for abuse or neglect of the elderly and 
disabled at the hands of those who are supposed to care for them. Our 
parents and grandparents made our country what it is today, and they 
deserve to live with dignity and the highest quality care.
  Unfortunately, this is not always the case. We know that the majority 
of caregivers are dedicated, professional, and do their best under 
difficult circumstances. But it only takes a few abusive staff to cast 
a dark shadow over what should be a healing environment.
  Current State and national safeguards are inadequate to screen out 
abusive workers. All States are required to maintain registries of 
abusive nurse aides. But nurse aides are not the only workers involved 
in abuse, and other workers are not tracked at all. Even worse, there 
is no system to coordinate information about abusive nurse aides 
between States. A known abuser in Iowa would have little trouble moving 
to Wisconsin and continuing to work with patients there.
  In addition, there is no Federal requirement that long-term care 
facilities conduct criminal background checks on prospective employees. 
People with violent criminal backgrounds--people who have already been 
convicted of murder, rape, and assault--could easily get a job in a 
nursing home or other health care setting without their past ever being 
discovered.
  Our legislation will go a long way toward solving this problem. 
First, it will create a National Registry of abusive long-term care 
employees. States will be required to submit information from their 
current State registries to the National Registry. Facilities will be 
required to check the National Registry before hiring a prospective 
worker. Any worker with a substantiated finding of patient abuse will 
be prohibited from working in long-term care.
  Second, the bill provides a second line of defense to protect 
patients from violent criminals. If the National Registry does not 
contain information about a prospective worker, the facility is then 
required to initiate an FBI background check. Any conviction for 
patient abuse or a relevant violent crime would bar that applicant from 
working with patients.
  A disturbing number of cases have been reported where workers with 
criminal backgrounds have been cleared to work in direct patient care, 
and have subsequently abused patients in their care. Unfortunately, 
these news reports have tragically become commonplace over the years. 
In 1997, the Milwaukee Journal-Sentinel ran a series of articles 
describing this problem, including a Green Bay employee who was 
convicted of sexually assaulting a disabled woman, an Oshkosh employee 
who physically and emotionally abused nursing home residents, and a 
Milwaukee employee who charged more than $2,000 on a home health 
client's credit card. All had prior criminal convictions. A 1999 Bergen 
Record study of home health workers found that in nearly every county, 
criminals

[[Page 10212]]

were working in the homes of the elderly and infirm. Many aides had 
committed offenses against patients in their care, but they were still 
listed as certified and eligible for work in State records. Most 
recently, the Chicago Sun-Times ran an article on November 1, 2002, in 
which a home care aide beat his disabled client to death with a hammer. 
That caregiver had previously been convicted of shooting a man in the 
face.
  In 1998, at my request, the Senate Special Committee on Aging held a 
hearing that focused on how easy it is for known abusers to find work 
in long-term care and continue to prey on patients. At that hearing, 
the HHS Inspector General presented a report which found that, in the 
two States they studied, between 5 to 10 percent of employees currently 
working in nursing homes had serious criminal convictions in their 
past. They also found that among aides who had abused patients, 15 to 
20 percent of them had at least one conviction in their past.
  In 1998, I offered an amendment which became law that allowed long-
term care providers to voluntarily use the FBI system for background 
checks. So far, 7 percent of those checks have come back with criminal 
convictions, including rape and kidnapping.
  And on July 30, 2001, the House Government Reform Committee's Special 
Investigations Division of the Minority staff issued a report which 
found that in the past two years, over 30 percent of nursing homes in 
the U.S. were cited for a physical, sexual, or verbal abuse violation 
that had the potential to harm residents. Even more striking, the 
report found that nearly 10 percent of nursing homes had violations 
that caused actual harm to residents.
  Let me say again that despite this evidence, I know that the vast 
majority of caregivers in nursing homes and home health care do an 
excellent job and have their patients' best interests at heart. But 
clearly, a national background check system is a critical tool that all 
long-term care providers should have--after all, they don't want 
abusive caregivers working for them any more than families do. I am 
pleased that the nursing home industry has worked with me over the 
years to refine this legislation, and I greatly appreciate their 
continued support of the bill. This bill reflects their input and will 
help ensure a smooth transition to an efficient, accurate background 
check system. This is a common-sense, cost-effective step we can and 
should take to protect patients by helping long-term care providers 
thoroughly screen potential caregivers.
  I realize that this legislation will not solve all instances of 
abuse. We still need to do more to stop abuse from occurring in the 
first place. But this bill will ensure that those who have already 
abused an elderly or disabled patient, and those who have committed 
violent crimes against people in the past, are kept away from 
vulnerable patients.
  I want to repeat again that I strongly believe that most long-term 
care providers and their staff work hard to deliver the highest quality 
care. However, it is imperative that Congress act immediately to get 
rid of those that don't.
  This bill is the product of collaboration and input from the health 
care industry, patient and employee advocates--who all have the same 
goal I do: protecting patients in long-term care. I look forward to 
continuing to work with my colleagues, the Administration, and the 
health care industry in this effort. Protecting our nation's seniors 
and disabled deserves our full attention.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 958

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Patient Abuse Prevention 
     Act''.

     SEC. 2. ESTABLISHMENT OF PROGRAM TO PREVENT ABUSE OF NURSING 
                   FACILITY RESIDENTS.

       (a) Screening of Skilled Nursing Facility and Nursing 
     Facility Employee Applicants.--
       (1) Medicare program.--Section 1819(b) of the Social 
     Security Act (42 U.S.C. 1395i-3(b)) is amended by adding at 
     the end the following:
       ``(8) Screening of skilled nursing facility workers.--
       ``(A) Background checks on applicants.--Subject to 
     subparagraph (B)(ii), before hiring a skilled nursing 
     facility worker, a skilled nursing facility shall--
       ``(i) give the worker written notice that the facility is 
     required to perform background checks with respect to 
     applicants;
       ``(ii) require, as a condition of employment, that such 
     worker--

       ``(I) provide a written statement disclosing any conviction 
     for a relevant crime or finding of patient or resident abuse;
       ``(II) provide a statement signed by the worker authorizing 
     the facility to request the search and exchange of criminal 
     records;
       ``(III) provide in person to the facility a copy of the 
     worker's fingerprints or thumb print, depending upon 
     available technology; and
       ``(IV) provide any other identification information the 
     Secretary may specify in regulation;

       ``(iii) initiate a check of the data collection system 
     established under section 1128E in accordance with 
     regulations promulgated by the Secretary to determine whether 
     such system contains any disqualifying information with 
     respect to such worker; and
       ``(iv) if that system does not contain any such 
     disqualifying information--

       ``(I) request through the appropriate State agency that the 
     State initiate a State and national criminal background check 
     on such worker in accordance with the provisions of 
     subsection (e)(6); and
       ``(II) submit to such State agency the information 
     described in subclauses (II) through (IV) of clause (ii) not 
     more than 7 days (excluding Saturdays, Sundays, and legal 
     public holidays under section 6103(a) of title 5, United 
     States Code) after completion of the check against the system 
     initiated under clause (iii).

       ``(B) Prohibition on hiring of abusive workers.--
       ``(i) In general.--A skilled nursing facility may not 
     knowingly employ any skilled nursing facility worker who has 
     any conviction for a relevant crime or with respect to whom a 
     finding of patient or resident abuse has been made.
       ``(ii) Provisional employment.--After complying with the 
     requirements of clauses (i), (ii), and (iii) of subparagraph 
     (A), a skilled nursing facility may provide for a provisional 
     period of employment for a skilled nursing facility worker 
     pending completion of the check against the data collection 
     system described under subparagraph (A)(iii) and the 
     background check described under subparagraph (A)(iv). Such 
     facility shall maintain direct supervision of the covered 
     individual during the worker's provisional period of 
     employment.
       ``(C) Reporting requirements.--A skilled nursing facility 
     shall report to the State any instance in which the facility 
     determines that a skilled nursing facility worker has 
     committed an act of resident neglect or abuse or 
     misappropriation of resident property in the course of 
     employment by the facility.
       ``(D) Use of information.--
       ``(i) In general.--A skilled nursing facility that obtains 
     information about a skilled nursing facility worker pursuant 
     to clauses (iii) and (iv) of subparagraph (A) may use such 
     information only for the purpose of determining the 
     suitability of the worker for employment.
       ``(ii) Immunity from liability.--A skilled nursing facility 
     that, in denying employment for an applicant (including 
     during the period described in subparagraph (B)(ii)), 
     reasonably relies upon information about such applicant 
     provided by the State pursuant to subsection (e)(6) or 
     section 1128E shall not be liable in any action brought by 
     such applicant based on the employment determination 
     resulting from the information.
       ``(iii) Criminal penalty.--Whoever knowingly violates the 
     provisions of clause (i) shall be fined in accordance with 
     title 18, United States Code, imprisoned for not more than 2 
     years, or both.
       ``(E) Civil penalty.--
       ``(i) In general.--A skilled nursing facility that violates 
     the provisions of this paragraph shall be subject to a civil 
     penalty in an amount not to exceed--

       ``(I) for the first such violation, $2,000; and
       ``(II) for the second and each subsequent violation within 
     any 5-year period, $5,000.

       ``(ii) Knowing retention of worker.--In addition to any 
     civil penalty under clause (i), a skilled nursing facility 
     that--

       ``(I) knowingly continues to employ a skilled nursing 
     facility worker in violation of subparagraph (A) or (B); or
       ``(II) knowingly fails to report a skilled nursing facility 
     worker under subparagraph (C),

     shall be subject to a civil penalty in an amount not to 
     exceed $5,000 for the first such violation, and $10,000 for 
     the second and each subsequent violation within any 5-year 
     period.

[[Page 10213]]

       ``(F) Definitions.--In this paragraph:
       ``(i) Conviction for a relevant crime.--The term 
     `conviction for a relevant crime' means any Federal or State 
     criminal conviction for--

       ``(I) any offense described in paragraphs (1) through (4) 
     of section 1128(a); and
       ``(II) such other types of offenses as the Secretary may 
     specify in regulations, taking into account the severity and 
     relevance of such offenses, and after consultation with 
     representatives of long-term care providers, representatives 
     of long-term care employees, consumer advocates, and 
     appropriate Federal and State officials.

       ``(ii) Disqualifying information.--The term `disqualifying 
     information' means information about a conviction for a 
     relevant crime or a finding of patient or resident abuse.
       ``(iii) Finding of patient or resident abuse.--The term 
     `finding of patient or resident abuse' means any 
     substantiated finding by a State agency under subsection 
     (g)(1)(C) or a Federal agency that a skilled nursing facility 
     worker has committed--

       ``(I) an act of patient or resident abuse or neglect or a 
     misappropriation of patient or resident property; or
       ``(II) such other types of acts as the Secretary may 
     specify in regulations.

       ``(iv) Skilled nursing facility worker.--The term `skilled 
     nursing facility worker' means any individual (other than a 
     volunteer) that has access to a patient of a skilled nursing 
     facility under an employment or other contract, or both, with 
     such facility. Such term includes individuals who are 
     licensed or certified by the State to provide such services, 
     and nonlicensed individuals providing such services, as 
     defined by the Secretary, including nurse assistants, nurse 
     aides, home health aides, and personal care workers and 
     attendants.''.
       (2) Medicaid program.--Section 1919(b) of the Social 
     Security Act (42 U.S.C. 1396r(b)) is amended by adding at the 
     end the following new paragraph:
       ``(8) Screening of nursing facility workers.--
       ``(A) Background checks on applicants.--Subject to 
     subparagraph (B)(ii), before hiring a nursing facility 
     worker, a nursing facility shall--
       ``(i) give the worker written notice that the facility is 
     required to perform background checks with respect to 
     applicants;
       ``(ii) require, as a condition of employment, that such 
     worker--

       ``(I) provide a written statement disclosing any conviction 
     for a relevant crime or finding of patient or resident abuse;
       ``(II) provide a statement signed by the worker authorizing 
     the facility to request the search and exchange of criminal 
     records;
       ``(III) provide in person to the facility a copy of the 
     worker's fingerprints or thumb print, depending upon 
     available technology; and
       ``(IV) provide any other identification information the 
     Secretary may specify in regulation;

       ``(iii) initiate a check of the data collection system 
     established under section 1128E in accordance with 
     regulations promulgated by the Secretary to determine whether 
     such system contains any disqualifying information with 
     respect to such worker; and
       ``(iv) if that system does not contain any such 
     disqualifying information--

       ``(I) request through the appropriate State agency that the 
     State initiate a State and national criminal background check 
     on such worker in accordance with the provisions of 
     subsection (e)(8); and
       ``(II) submit to such State agency the information 
     described in subclauses (II) through (IV) of clause (ii) not 
     more than 7 days (excluding Saturdays, Sundays, and legal 
     public holidays under section 6103(a) of title 5, United 
     States Code) after completion of the check against the system 
     initiated under clause (iii).

       ``(B) Prohibition on hiring of abusive workers.--
       ``(i) In general.--A nursing facility may not knowingly 
     employ any nursing facility worker who has any conviction for 
     a relevant crime or with respect to whom a finding of patient 
     or resident abuse has been made.
       ``(ii) Provisional employment.--After complying with the 
     requirements of clauses (i), (ii), and (iii) of subparagraph 
     (A), a nursing facility may provide for a provisional period 
     of employment for a nursing facility worker pending 
     completion of the check against the data collection system 
     described under subparagraph (A)(iii) and the background 
     check described under subparagraph (A)(iv). Such facility 
     shall maintain direct supervision of the worker during the 
     worker's provisional period of employment.
       ``(C) Reporting requirements.--A nursing facility shall 
     report to the State any instance in which the facility 
     determines that a nursing facility worker has committed an 
     act of resident neglect or abuse or misappropriation of 
     resident property in the course of employment by the 
     facility.
       ``(D) Use of information.--
       ``(i) In general.--A nursing facility that obtains 
     information about a nursing facility worker pursuant to 
     clauses (iii) and (iv) of subparagraph (A) may use such 
     information only for the purpose of determining the 
     suitability of the worker for employment.
       ``(ii) Immunity from liability.--A nursing facility that, 
     in denying employment for an applicant (including during the 
     period described in subparagraph (B)(ii)), reasonably relies 
     upon information about such applicant provided by the State 
     pursuant to subsection (e)(8) or section 1128E shall not be 
     liable in any action brought by such applicant based on the 
     employment determination resulting from the information.
       ``(iii) Criminal penalty.--Whoever knowingly violates the 
     provisions of clause (i) shall be fined in accordance with 
     title 18, United States Code, imprisoned for not more than 2 
     years, or both.
       ``(E) Civil penalty.--
       ``(i) In general.--A nursing facility that violates the 
     provisions of this paragraph shall be subject to a civil 
     penalty in an amount not to exceed--

       ``(I) for the first such violation, $2,000; and
       ``(II) for the second and each subsequent violation within 
     any 5-year period, $5,000.

       ``(ii) Knowing retention of worker.--In addition to any 
     civil penalty under clause (i), a nursing facility that--

       ``(I) knowingly continues to employ a nursing facility 
     worker in violation of subparagraph (A) or (B); or

       ``(II) knowingly fails to report a nursing facility worker 
     under subparagraph (C),

     shall be subject to a civil penalty in an amount not to 
     exceed $5,000 for the first such violation, and $10,000 for 
     the second and each subsequent violation within any 5-year 
     period.
       ``(F) Definitions.--In this paragraph:
       ``(i) Conviction for a relevant crime.--The term 
     `conviction for a relevant crime' means any Federal or State 
     criminal conviction for--

       ``(I) any offense described in paragraphs (1) through (4) 
     of section 1128(a); and
       ``(II) such other types of offenses as the Secretary may 
     specify in regulations, taking into account the severity and 
     relevance of such offenses, and after consultation with 
     representatives of long-term care providers, representatives 
     of long-term care employees, consumer advocates, and 
     appropriate Federal and State officials.

       ``(ii) Disqualifying information.--The term `disqualifying 
     information' means information about a conviction for a 
     relevant crime or a finding of patient or resident abuse.
       ``(iii) Finding of patient or resident abuse.--The term 
     `finding of patient or resident abuse' means any 
     substantiated finding by a State agency under subsection 
     (g)(1)(C) or a Federal agency that a nursing facility worker 
     has committed--

       ``(I) an act of patient or resident abuse or neglect or a 
     misappropriation of patient or resident property; or
       ``(II) such other types of acts as the Secretary may 
     specify in regulations.

       ``(iv) Nursing facility worker.--The term `nursing facility 
     worker' means any individual (other than a volunteer) that 
     has access to a patient of a nursing facility under an 
     employment or other contract, or both, with such facility. 
     Such term includes individuals who are licensed or certified 
     by the State to provide such services, and nonlicensed 
     individuals providing such services, as defined by the 
     Secretary, including nurse assistants, nurse aides, home 
     health aides, and personal care workers and attendants.''.
       (3) Federal responsibilities.--
       (A) Development of standard federal and state background 
     check form.--The Secretary of Health and Human Services, in 
     consultation with the Attorney General and representatives of 
     appropriate State agencies, shall develop a model form that 
     an applicant for employment at a nursing facility may 
     complete and Federal and State agencies may use to conduct 
     the criminal background checks required under sections 
     1819(b)(8) and 1919(b)(8) of the Social Security Act (42 
     U.S.C. 1395i-3(b), 1396r(b)) (as added by this section).
       (B) Periodic evaluation.--The Secretary of Health and Human 
     Services, in consultation with the Attorney General, 
     periodically shall evaluate the background check system 
     imposed under sections 1819(b)(8) and 1919(b)(8) of the 
     Social Security Act (42 U.S.C. 1395i-3(b), 1396r(b)) (as 
     added by this section) and shall implement changes, as 
     necessary, based on available technology, to make the 
     background check system more efficient and able to provide a 
     more immediate response to long-term care providers using the 
     system.
       (4) No preemption of stricter state laws.--Nothing in 
     section 1819(b)(8) or 1919(b)(8) of the Social Security Act 
     (42 U.S.C. 1395i-3(b)(8), 1396r(b)(8)) (as so added) shall be 
     construed to supersede any provision of State law that--
       (A) specifies a relevant crime for purposes of prohibiting 
     the employment of an individual at a long-term care facility 
     (as defined in section 1128E(g)(6) of the Social Security Act 
     (as added by section 3(f) of this Act) that is not included 
     in the list of such crimes specified in such sections or in 
     regulations promulgated by the Secretary of Health and Human 
     Services to carry out such sections; or
       (B) requires a long-term care facility (as so defined) to 
     conduct a background check prior to employing an individual 
     in an employment position that is not included in the

[[Page 10214]]

     positions for which a background check is required under such 
     sections.
       (5) Technical amendments.--Effective as if included in the 
     enactment of section 941 of the Medicare, Medicaid, and SCHIP 
     Benefits Improvement and Protection Act of 2000 (114 Stat. 
     2763A-585), as enacted into law by section 1(a)(6) of Public 
     Law 106-554, sections 1819(b) and 1919(b) of the Social 
     Security Act (42 U.S.C. 1395i-3(b), 1396r(b)), as amended by 
     such section 941 (as so enacted into law) are each amended by 
     redesignating the paragraph (8) added by such section as 
     paragraph (9).
       (b) Federal and State Requirements Concerning Background 
     Checks.--
       (1) Medicare.--Section 1819(e) of the Social Security Act 
     (42 U.S.C. 1395i-3(e)) is amended by adding at the end the 
     following:
       ``(6) Federal and state requirements concerning criminal 
     background checks on skilled nursing facility employees.--
       ``(A) In general.--Upon receipt of a request by a skilled 
     nursing facility pursuant to subsection (b)(8) that is 
     accompanied by the information described in subclauses (II) 
     through (IV) of subsection (b)(8)(A)(ii), a State, after 
     checking appropriate State records and finding no 
     disqualifying information (as defined in subsection 
     (b)(8)(F)(ii)), shall immediately submit such request and 
     information to the Attorney General and shall request the 
     Attorney General to conduct a search and exchange of records 
     with respect to the individual as described in subparagraph 
     (B).
       ``(B) Search and exchange of records by attorney general.--
     Upon receipt of a submission pursuant to subparagraph (A), 
     the Attorney General shall direct a search of the records of 
     the Federal Bureau of Investigation for any criminal history 
     records corresponding to the fingerprints and other positive 
     identification information submitted. The Attorney General 
     shall provide any corresponding information resulting from 
     the search to the State.
       ``(C) State reporting of information to skilled nursing 
     facility.--Upon receipt of the information provided by the 
     Attorney General pursuant to subparagraph (B), the State 
     shall--
       ``(i) review the information to determine whether the 
     individual has any conviction for a relevant crime (as 
     defined in subsection (b)(8)(F)(i));
       ``(ii) immediately report to the skilled nursing facility 
     in writing the results of such review; and
       ``(iii) in the case of an individual with a conviction for 
     a relevant crime, report the existence of such conviction of 
     such individual to the database established under section 
     1128E.
       ``(D) Fees for performance of criminal background checks.--
       ``(i) Authority to charge fees.--

       ``(I) Attorney general.--The Attorney General may charge a 
     fee to any State requesting a search and exchange of records 
     pursuant to this paragraph and subsection (b)(8) for 
     conducting the search and providing the records. The amount 
     of such fee shall not exceed the lesser of the actual cost of 
     such activities or $50. Such fees shall be available to the 
     Attorney General, or, in the Attorney General's discretion, 
     to the Federal Bureau of Investigation until expended.
       ``(II) State.--A State may charge a skilled nursing 
     facility a fee for initiating the criminal background check 
     under this paragraph and subsection (b)(8), including fees 
     charged by the Attorney General, and for performing the 
     review and report required by subparagraph (C). The amount of 
     such fee shall not exceed the actual cost of such activities.

       ``(ii) Prohibition on charging applicants or employees.--An 
     entity may not impose on an applicant for employment or an 
     employee any charges relating to the performance of a 
     background check under this paragraph.
       ``(E) Regulations.--
       ``(i) In general.--In addition to the Secretary's authority 
     to promulgate regulations under this title, the Attorney 
     General, in consultation with the Secretary, may promulgate 
     such regulations as are necessary to carry out the Attorney 
     General's responsibilities under this paragraph and 
     subsection (b)(9), including regulations regarding the 
     security confidentiality, accuracy, use, destruction, and 
     dissemination of information, audits and recordkeeping, and 
     the imposition of fees.
       ``(ii) Appeal procedures.--The Attorney General, in 
     consultation with the Secretary, shall promulgate such 
     regulations as are necessary to establish procedures by which 
     an applicant or employee may appeal or dispute the accuracy 
     of the information obtained in a background check conducted 
     under this paragraph. Appeals shall be limited to instances 
     in which an applicant or employee is incorrectly identified 
     as the subject of the background check, or when information 
     about the applicant or employee has not been updated to 
     reflect changes in the applicant's or employee's criminal 
     record.
       ``(F) Report.--Not later than 2 years after the date of 
     enactment of this paragraph, the Attorney General shall 
     submit a report to Congress on--
       ``(i) the number of requests for searches and exchanges of 
     records made under this section;
       ``(ii) the disposition of such requests; and
       ``(iii) the cost of responding to such requests.''.
       (2) Medicaid.--Section 1919(e) of the Social Security Act 
     (42 U.S.C. 1396r(e)) is amended by adding at the end the 
     following:
       ``(8) Federal and state requirements concerning criminal 
     background checks on nursing facility employees.--
       ``(A) In general.--Upon receipt of a request by a nursing 
     facility pursuant to subsection (b)(8) that is accompanied by 
     the information described in subclauses (II) through (IV) of 
     subsection (b)(8)(A)(ii), a State, after checking appropriate 
     State records and finding no disqualifying information (as 
     defined in subsection (b)(8)(F)(ii)), shall immediately 
     submit such request and information to the Attorney General 
     and shall request the Attorney General to conduct a search 
     and exchange of records with respect to the individual as 
     described in subparagraph (B).
       ``(B) Search and exchange of records by attorney general.--
     Upon receipt of a submission pursuant to subparagraph (A), 
     the Attorney General shall direct a search of the records of 
     the Federal Bureau of Investigation for any criminal history 
     records corresponding to the fingerprints and other positive 
     identification information submitted. The Attorney General 
     shall provide any corresponding information resulting from 
     the search to the State.
       ``(C) State reporting of information to nursing facility.--
     Upon receipt of the information provided by the Attorney 
     General pursuant to subparagraph (B), the State shall--
       ``(i) review the information to determine whether the 
     individual has any conviction for a relevant crime (as 
     defined in subsection (b)(8)(F)(i));
       ``(ii) immediately report to the nursing facility in 
     writing the results of such review; and
       ``(iii) in the case of an individual with a conviction for 
     a relevant crime, report the existence of such conviction of 
     such individual to the database established under section 
     1128E.
       ``(D) Fees for performance of criminal background checks.--
       ``(i) Authority to charge fees.--

       ``(I) Attorney general.--The Attorney General may charge a 
     fee to any State requesting a search and exchange of records 
     pursuant to this paragraph and subsection (b)(8) for 
     conducting the search and providing the records. The amount 
     of such fee shall not exceed the lesser of the actual cost of 
     such activities or $50. Such fees shall be available to the 
     Attorney General, or, in the Attorney General's discretion, 
     to the Federal Bureau of Investigation, until expended.
       ``(II) State.--A State may charge a nursing facility a fee 
     for initiating the criminal background check under this 
     paragraph and subsection (b)(8), including fees charged by 
     the Attorney General, and for performing the review and 
     report required by subparagraph (C). The amount of such fee 
     shall not exceed the actual cost of such activities.

       ``(ii) Prohibition on charging applicants or employees.--An 
     entity may not impose on an applicant for employment or an 
     employee any charges relating to the performance of a 
     background check under this paragraph.
       ``(E) Regulations.--
       ``(i) In general.--In addition to the Secretary's authority 
     to promulgate regulations under this title, the Attorney 
     General, in consultation with the Secretary, may promulgate 
     such regulations as are necessary to carry out the Attorney 
     General's responsibilities under this paragraph and 
     subsection (b)(8), including regulations regarding the 
     security, confidentiality, accuracy, use, destruction, and 
     dissemination of information, audits and recordkeeping, and 
     the imposition of fees.
       ``(ii) Appeal procedures.--The Attorney General, in 
     consultation with the Secretary, shall promulgate such 
     regulations as are necessary to establish procedures by which 
     an applicant or employee may appeal or dispute the accuracy 
     of the information obtained in a background check conducted 
     under this paragraph. Appeals shall be limited to instances 
     in which an applicant or employee is incorrectly identified 
     as the subject of the background check, or when information 
     about the applicant or employee has not been updated to 
     reflect changes in the applicant's or employee's criminal 
     record.
       ``(F) Report.--Not later than 2 years after the date of 
     enactment of this paragraph, the Attorney General shall 
     submit a report to Congress on--
       ``(i) the number of requests for searches and exchanges of 
     records made under this section;
       ``(ii) the disposition of such requests; and
       ``(iii) the cost of responding to such requests.''.
       (c) Application to Other Entities Providing Home Health or 
     Long-Term Care Services.--
       (1) Medicare.--Part D of title XVIII of the Social Security 
     Act (42 U.S.C. 1395x et seq.) is amended by adding at the end 
     the following:

[[Page 10215]]




 ``APPLICATION OF SKILLED NURSING FACILITY PREVENTIVE ABUSE PROVISIONS 
 TO ANY PROVIDER OF SERVICES OR OTHER ENTITY PROVIDING HOME HEALTH OR 
                        LONG-TERM CARE SERVICES

       ``Sec. 1897. (a) In General.--The requirements of 
     subsections (b)(8) and (e)(6) of section 1819 shall apply to 
     any provider of services or any other entity that is eligible 
     to be paid under this title for providing home health 
     services, hospice care (including routine home care and other 
     services included in hospice care under this title), or long-
     term care services to an individual entitled to benefits 
     under part A or enrolled under part B, including an 
     individual provided with a Medicare+Choice plan offered by a 
     Medicare+Choice organization under part C (in this section 
     referred to as a `medicare beneficiary').
       ``(b) Supervision of Provisional Employees.--
       ``(1) In general.--With respect to an entity that provides 
     home health services, such entity shall be considered to have 
     satisfied the requirements of section 1819(b)(8)(B)(ii) or 
     1919(b)(8)(B)(ii) if the entity meets such requirements for 
     supervision of provisional employees of the entity as the 
     Secretary shall, by regulation, specify in accordance with 
     paragraph (2).
       ``(2) Requirements.--The regulations required under 
     paragraph (1) shall provide the following:
       ``(A) Supervision of a provisional employee shall consist 
     of ongoing, good faith, verifiable efforts by the supervisor 
     of the provisional employee to conduct monitoring and 
     oversight activities to ensure the safety of a medicare 
     beneficiary.
       ``(B) For purposes of subparagraph (A), monitoring and 
     oversight activities may include (but are not limited to) the 
     following:
       ``(i) Follow-up telephone calls to the medicare 
     beneficiary.
       ``(ii) Unannounced visits to the medicare beneficiary's 
     home while the provisional employee is serving the medicare 
     beneficiary.
       ``(iii) To the extent practicable, limiting the provisional 
     employee's duties to serving only those medicare 
     beneficiaries in a home or setting where another family 
     member or resident of the home or setting of the medicare 
     beneficiary is present.''.
       (2) Medicaid.--Section 1902(a) of the Social Security Act 
     (42 U.S.C. 1396a) is amended--
       (A) in paragraph (64), by striking ``and'' at the end;
       (B) in paragraph (65), by striking the period and inserting 
     ``; and''; and
       (C) by inserting after paragraph (65) the following:
       ``(66) provide that any entity that is eligible to be paid 
     under the State plan for providing home health services, 
     hospice care (including routine home care and other services 
     included in hospice care under title XVIII), or long-term 
     care services for which medical assistance is available under 
     the State plan to individuals requiring long-term care 
     complies with the requirements of subsections (b)(8) and 
     (e)(8) of section 1919 and section 1897(b) (in the same 
     manner as such section applies to a medicare beneficiary).''.
       (3) Expansion of State Nurse Aide Registry.--
       (A) Medicare.--Section 1819 of the Social Security Act (42 
     U.S.C. 1395i-3) is amended--
       (i) in subsection (e)(2)--

       (I) in the paragraph heading, by striking ``Nurse aide 
     registry'' and inserting ``Employee registry'';
       (II) in subparagraph (A)--

       (aa) by striking ``By not later than January 1, 1989, the'' 
     and inserting ``The'';
       (bb) by striking ``a registry of all individuals'' and 
     inserting ``a registry of (i) all individuals''; and
       (cc) by inserting before the period the following: ``, (ii) 
     all other skilled nursing facility employees with respect to 
     whom the State has made a finding described in subparagraph 
     (B), and (iii) any employee of any provider of services or 
     any other entity that is eligible to be paid under this title 
     for providing home health services, hospice care (including 
     routine home care and other services included in hospice care 
     under this title), or long-term care services and with 
     respect to whom the entity has reported to the State a 
     finding of patient neglect or abuse or a misappropriation of 
     patient property''; and

       (III) in subparagraph (C), by striking ``a nurse aide'' and 
     inserting ``an individual''; and

       (ii) in subsection (g)(1)--

       (I) by striking the first sentence of subparagraph (C) and 
     inserting the following: ``The State shall provide, through 
     the agency responsible for surveys and certification of 
     skilled nursing facilities under this subsection, for a 
     process for the receipt and timely review and investigation 
     of allegations of neglect and abuse and misappropriation of 
     resident property by a nurse aide or a skilled nursing 
     facility employee of a resident in a skilled nursing 
     facility, by another individual used by the facility in 
     providing services to such a resident, or by an individual 
     described in subsection (e)(2)(A)(iii).'';
       (II) in the fourth sentence of subparagraph (C), by 
     inserting ``or described in subsection (e)(2)(A)(iii)'' after 
     ``used by the facility'';
       (III) in subparagraph (D)--

       (aa) in the subparagraph heading, by striking ``nurse 
     aide'';
       (bb) in clause (i), in the matter preceding subclause (I), 
     by striking ``a nurse aide'' and inserting ``an individual''; 
     and
       (cc) in clause (i)(I), by striking ``nurse aide'' and 
     inserting ``individual''.
       (B) Medicaid.--Section 1919 of the Social Security Act (42 
     U.S.C. 1396r) is amended--
       (i) in subsection (e)(2)--

       (I) in the paragraph heading, by striking ``Nurse aide 
     registry'' and inserting ``Employee registry'';
       (II) in subparagraph (A)--

       (aa) by striking ``By not later than January 1, 1989, the'' 
     and inserting ``The'';
       (bb) by striking ``a registry of all individuals'' and 
     inserting ``a registry of (i) all individuals''; and
       (cc) by inserting before the period the following: ``, (ii) 
     all other nursing facility employees with respect to whom the 
     State has made a finding described in subparagraph (B), and 
     (iii) any employee of an entity that is eligible to be paid 
     under the State plan for providing home health services, 
     hospice care (including routine home care and other services 
     included in hospice care under title XVIII), or long-term 
     care services and with respect to whom the entity has 
     reported to the State a finding of patient neglect or abuse 
     or a misappropriation of patient property''; and

       (III) in subparagraph (C), by striking ``a nurse aide'' and 
     inserting ``an individual''; and

       (ii) in subsection (g)(1)--

       (I) by striking the first sentence of subparagraph (C) and 
     inserting the following: ``The State shall provide, through 
     the agency responsible for surveys and certification of 
     nursing facilities under this subsection, for a process for 
     the receipt and timely review and investigation of 
     allegations of neglect and abuse and misappropriation of 
     resident property by a nurse aide or a nursing facility 
     employee of a resident in a nursing facility, by another 
     individual used by the facility in providing services to such 
     a resident, or by an individual described in subsection 
     (e)(2)(A)(iii).''; and
       (II) in the fourth sentence of subparagraph (C), by 
     inserting ``or described in subsection (e)(2)(A)(iii)'' after 
     ``used by the facility''; and
       (III) in subparagraph (D)--

       (aa) in the subparagraph heading, by striking ``nurse 
     aide''; and
       (bb) in clause (i), in the matter preceding subclause (I), 
     by striking ``a nurse aide'' and inserting ``an individual''; 
     and
       (cc) in clause (i)(I), by striking ``nurse aide'' and 
     inserting ``individual''.
       (d) Reimbursement of Costs for Background Checks.--The 
     Secretary of Health and Human Services shall reimburse 
     nursing facilities, skilled nursing facilities, and other 
     entities for costs incurred by the facilities and entities in 
     order to comply with the requirements imposed under sections 
     1819(b)(8) and 1919(b)(8) of such Act (42 U.S.C. 1395i-
     3(b)(8), 1396r(b)(8)), as added by this section.

     SEC. 3. INCLUSION OF ABUSIVE WORKERS IN THE DATABASE 
                   ESTABLISHED AS PART OF NATIONAL HEALTH CARE 
                   FRAUD AND ABUSE DATA COLLECTION PROGRAM.

       (a) Inclusion of Abusive Acts Within a Long-Term Care 
     Facility or Provider.--Section 1128E(g)(1)(A) of the Social 
     Security Act (42 U.S.C. 1320a-7e(g)(1)(A)) is amended--
       (1) by redesignating clause (v) as clause (vi); and
       (2) by inserting after clause (iv), the following:
       ``(v) A finding of abuse or neglect of a patient or a 
     resident of a long-term care facility, or misappropriation of 
     such a patient's or resident's property.''.
       (b) Coverage of Long-Term Care Facility or Provider 
     Employees.--Section 1128E(g)(2) of the Social Security Act 
     (42 U.S.C. 1320a-7e(g)(2)) is amended by inserting ``, and 
     includes any individual of a long-term care facility or 
     provider (other than any volunteer) that has access to a 
     patient or resident of such a facility under an employment or 
     other contract, or both, with the facility or provider 
     (including individuals who are licensed or certified by the 
     State to provide services at the facility or through the 
     provider, and nonlicensed individuals, as defined by the 
     Secretary, providing services at the facility or through the 
     provider, including nurse assistants, nurse aides, home 
     health aides, individuals who provide home care, and personal 
     care workers and attendants)'' before the period.
       (c) Reporting by Long-Term Care Facilities or Providers.--
       (1) In general.--Section 1128E(b)(1) of the Social Security 
     Act (42 U.S.C. 1320a-7e(b)(1)) is amended by striking ``and 
     health plan'' and inserting ``, health plan, and long-term 
     care facility or provider''.
       (2) Correction of information.--Section 1128E(c)(2) of the 
     Social Security Act (42 U.S.C. 1320a-7e(c)(2)) is amended by 
     striking ``and health plan'' and inserting ``, health plan, 
     and long-term care facility or provider''.
       (d) Access to Reported Information.--Section 1128E(d)(1) of 
     the Social Security Act (42 U.S.C. 1320a-7e(d)(1)) is amended 
     by striking ``and health plans'' and inserting ``, health 
     plans, and long-term care facilities or providers''.

[[Page 10216]]

       (e) Mandatory Check of Database by Long-Term Care 
     Facilities or Providers.--Section 1128E(d) of the Social 
     Security Act (42 U.S.C. 1320a-7e(d)) is amended by adding at 
     the end the following:
       ``(3) Mandatory check of database by long-term care 
     facilities or providers.--A long-term care facility or 
     provider shall check the database maintained under this 
     section prior to hiring under an employment or other 
     contract, or both, any individual as an employee of such a 
     facility or provider who will have access to a patient or 
     resident of the facility or provider (including individuals 
     who are licensed or certified by the State to provide 
     services at the facility or through the provider, and 
     nonlicensed individuals, as defined by the Secretary, that 
     will provide services at the facility or through the 
     provider, including nurse assistants, nurse aides, home 
     health aides, individuals who provide home care, and personal 
     care workers and attendants).''.
       (f) Definition of Long-Term Care Facility or Provider.--
     Section 1128E(g) of the Social Security Act (42 U.S.C. 1320a-
     7e(g)) is amended by adding at the end the following:
       ``(6) Long-term care facility or provider.--The term `long-
     term care facility or provider' means a skilled nursing 
     facility (as defined in section 1819(a)), a nursing facility 
     (as defined in section 1919(a)), a home health agency, a 
     provider of hospice care (as defined in section 1861(dd)(1)), 
     a long-term care 
     hospital (as described in section 1886(d)(1)(B)(iv)), an 
     intermediate care facility for the mentally retarded (as 
     defined in section 1905(d)), or any other facility or entity 
     that provides, or is a provider of, long-term care services, 
     home health services, or hospice care (including routine home 
     care and other services included in hospice care under title 
     XVIII), and receives payment for such services under the 
     medicare program under title XVIII or the medicaid program 
     under title XIX.''.
       (g) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out the amendments made by this 
     section, $10,200,000 for fiscal year 2003.

     SEC. 4. PREVENTION AND TRAINING DEMONSTRATION PROJECT.

       (a) Establishment.--The Secretary of Health and Human 
     Services shall establish a demonstration program to provide 
     grants to develop information on best practices in patient 
     abuse prevention training (including behavior training and 
     interventions) for managers and staff of hospital and health 
     care facilities.
       (b) Eligibility.--To be eligible to receive a grant under 
     subsection (a), an entity shall be a public or private 
     nonprofit entity and prepare and submit to the Secretary of 
     Health and Human Services an application at such time, in 
     such manner, and containing such information as the Secretary 
     may require.
       (c) Use of Funds.--Amounts received under a grant under 
     this section shall be used to--
       (1) examine ways to improve collaboration between State 
     health care survey and provider certification agencies, long-
     term care ombudsman programs, the long-term care industry, 
     and local community members;
       (2) examine patient care issues relating to regulatory 
     oversight, community involvement, and facility staffing and 
     management with a focus on staff training, staff stress 
     management, and staff supervision;
       (3) examine the use of patient abuse prevention training 
     programs by long-term care entities, including the training 
     program developed by the National Association of Attorneys 
     General, and the extent to which such programs are used; and
       (4) identify and disseminate best practices for preventing 
     and reducing patient abuse.
       (d) Authorization of Appropriations.--There is authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.

     SEC. 5. EFFECTIVE DATE.

       This Act and the amendments made by the Act shall take 
     effect on the date that is 6 months after the effective date 
     of final regulations promulgated to carry out this Act and 
     such amendments.
                                 ______
                                 
      By Mr. INHOFE (for himself, Mr. Kyl, Mr. Burns, Mr. Thomas, and 
        Mr. Grassley):
  S. 959. A bill to limit the age restrictions imposed by the 
Administrator of the Federal Aviation Administration for the issuance 
or renewal of certain airman certificates, and for other purposes; to 
the Committee on Commerce, Science, and Transportation.
  Mr. INHOFE. Mr. President, as the Senate's only commercially licensed 
pilot, I rise today, along with my colleagues, Senator Kyl, Senator 
Burns, Senator Thomas and Senator Grassley, to introduce a bill that 
will help end age discrimination among airline pilots.
  This bill will abolish the Federal Aviation Administration's, FAA, 
Age 60 Rule--the regulation that for 43 years has forced the retirement 
of airline pilots the day they turn 60--and replace it with a rational 
plan that raises the retirement age to 63 immediately and then 
incrementally increases the age limit to 65.
  Most nations have abolished mandatory age 60 retirement rules. The 
United States is one of only two countries in the Joint Aviation 
Authorities that requires its commercial pilots to retire at the age of 
60. Some countries, including Canada, Australia, and New Zealand have 
no upper age limit at all.
  The Age 60 Rule has no basis in science or safety and never did. FAA 
data shows that pilots over age 60 are as safe as, and in some cases 
safer than, their younger colleagues. In 1981, the National Institute 
of Aging stated that ``the Age 60 Rule appears indefensible on medical 
grounds'' and ``there is no convincing medical evidence to support age 
60, or any other specific age, for mandatory pilot retirement.''
  This bill will allow our most experienced pilots--demonstrably 
healthy, and fit for duty--to retain their jobs, a step that will 
benefit pilots, the financially burdened airlines, and most 
importantly, passengers. Now, more than ever before, we need to keep 
our best pilots flying.
  Again, there is no scientific justification for requiring pilots to 
retire at age 60. Our pilots, our airlines, and our passengers deserve 
our consideration. I urge the rest of my colleagues to support this 
important legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 959

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

     SECTION 1. LIMITATION ON AGE RESTRICTIONS.

       Section 44703 of title 49, United States Code, is amended 
     by adding at the end the following:
       ``(k) Limitation on Age Restrictions.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, the Administrator may not, solely by reason of a 
     person's age, if such person is 65 years of age or younger--
       ``(A) refuse to issue to, or renew for, such person an 
     airman certificate for the operation of aircraft engaged in 
     operations under part 121 or part 135 of title 14, Code of 
     Federal Regulations; or
       ``(B) require an air carrier to terminate the employment 
     of, or refuse to employ, such person as a pilot on such an 
     aircraft owned or operated by the air carrier.
       ``(2) Applicability.--Paragraph (1) shall only apply to 
     persons who have not reached the age of 64 as of the date of 
     enactment of this subsection.''.
                                 ______
                                 
      By Mr. AKAKA:
  S. 960. A bill to amend the reclamation Wastewater and Groundwater 
Study and Facilities Act to authorize certain projects in the State of 
Hawaii and to amend the Hawaii Water Resources Act of 2000 to modify 
the water resources study; to the Committee on Energy and Natural 
Resources.
  Mr. AKAKA. Mr. President, I rise today to introduce legislation to 
authorize three important water reclamation projects in the State of 
Hawaii. In addition, this bill increases the amount authorized for the 
Federal share of the activities under P.L. 106-566, the Hawaii Water 
Resources Act of 2000.
  The Hawaii Water Resources Act of 2000 was an important first step in 
addressing Hawaii's irrigation and water delivery systems. It allowed 
the Bureau of Reclamation to survey irrigation and water delivery 
systems in Hawaii. It also instructed the Bureau to identify new 
opportunities for reclamation and reuse of water and wastewater for 
agriculture and non-agricultural purposes. In addition, the Act 
included Hawaii in the Bureau of Reclamation's wastewater reclamation 
program and extended drought relief programs to Hawaii. While this was 
an important beginning, more needs to be done, particularly since the 
Honolulu Board of Water Supply predicts that even with improved 
conservation methods, the island of Oahu will run out of potable water 
by 2018. This means that the use rate exceeds the recharge rate and 
Oahu residents and visitors will be ``mining'' for water. Even more 
disconcerting is the fact that Oahu will run out of fresh water by 
2018. It is vitally important for the State of Hawaii to begin working 
on water reclamation projects.
  This legislation authorizes three water reclamation projects. The 
first

[[Page 10217]]

project, in Honolulu, will provide reliable potable water through 
resource diversification to meet existing and future demands, 
particularly in the Ewa area of Oahu where water demands are outpacing 
the availability of drinking water. The second project, in North Kona, 
will address the issue of effluent being discharged into a temporary 
disposal sump from the Kealakehe Wastewater Treatment Plant. The third 
project, in Lahaina, will reduce the use of potable water by extending 
the County of Maui's main recycled water pipeline. The legislation also 
authorizes an additional $1.7 million for the Bureau of Reclamation to 
complete its study of Hawaii's irrigation and water delivery systems. 
This is a challenging task as the Bureau is reviewing the water systems 
in the State.
  I urge my colleagues to support this legislation which is vital to 
the people of Hawaii.
                                 ______
                                 
      By Ms. MURKOWSKI:
  S. 961. A bill to expand the scope of the HUBzone program to include 
difficult development areas; to the Committee on Small Business and 
Entrepreneurship.
  Ms. MURKOWSKI. Mr. President, I rise today to introduce legislation 
to correct an inequity in the HUBzone contracting program administered 
by the Small Business Administration, SBA. This bill amends the 
criteria by which areas are designated as HUBzone under the Small 
Business Act by adding a new category designated as ``Difficult 
Development Areas.'' These ``Difficult Development Areas'' are already 
recognized by the Internal Revenue Service and the Department of 
Housing and Urban Development. For reasons I will explain, the 
businesses and people in the community of Ketchikan, AK have been 
wrongly denied participation in the HUBzone program. This bill will 
take care of that problem.
  The current HUBzone qualifications have two tiers. The first is that 
the county in which a business seeking to participate in the program 
must not be located in a Metropolitan Statistical Area, MSA. The second 
level has three separate criteria. If an area meets any one of the 
second level criteria, it qualifies as a HUBzone area. One of the 
criteria simply relates to whether a business is located in an Indian 
Reservation. The other two are correlated to the characteristics of the 
resident population.
  The first of the characteristics is that the area is not located in a 
metropolitan statistical area at the time of the most recent census. 
the second criterion is that the unemployment rate in the area is not 
less than 140 percent of the statewide average unemployment. In the 
case of Ketchikan, the community is not located in a metropolitan 
statistical area. In February of this year the Alaska statewide 
unemployment rate was 7.1 percent--almost 2 percent higher than the 
national average. But Ketchikan's preliminary unemployment rate for 
February is 11 percent and the reviewed rate for January was 11.9 
percent. The Ketchikan figure currently exceeds the requirement. In 
June of 2002 the rate was 8.6 percent in the Ketchikan Gateway Borough 
in comparison to 7.4 percent statewide at that same time. But because 
of the timing of the compiling of the information by the Census Bureau, 
Ketchikan has been denied participation in the program although it 
routinely exceeds the statewide rate. The anomaly is that for a few 
short months in the summer Ketchikan does not exceed 140 percent of the 
statewide average due to the influx of workers from the area related to 
the tourism industry.
  The SBA has the best intentions and understands the problems. 
However, the SBA has stated to me that nothing short of a legislative 
change can fix the problem. Part of the problem as I understand it is 
that the SBA's current use of the median income and unemployment rate 
criteria makes the assumption that the populations are relatively 
immobile. Further, the SBA criterion assumes that the area in question 
has a fully developed labor market. The criteria assume a community 
model more closely aligned to the traditional urban areas.
  In Alaska, our largest community, Anchorage is rightfully not 
considered a HUBzone area. But the SBA's criteria based on the use of 
the Census Bureau statistics fails to accurately reflect the true 
unemployment and labor market in one place in particular in Alaska--
Ketchikan. The program now uses a Qualified Census Tract.
  Ketchikan is a small coastal community that was highly dependent on 
the timber industry which has been shut down as a result of changes in 
Federal policies and activities of the U.S. Forest Service. As a 
result, the population has become highly dependent on the tourism 
industry. Further, the labor pool is highly transient and leaves to 
collect unemployment after the summer tourist season is over.
  The Census Bureau data taken when the summer population is higher and 
more fully employed does not reflect the reality of the area. As a 
result the Ketchikan Gateway Borough is not considered a HUBzone. There 
is a dry-dock and ship repair facility located in Ketchikan that could 
provide year round employment. But it cannot compete for government 
vessel repair contracts offered by the U.S. Coast Guard and the NOAA 
that have been set aside for HUBzone. These vessels operate in Alaska 
and could be better repaired near where they operate. Now they must 
leave the State and perhaps be out of service longer.
  The bill adds a fourth area to qualify as a HUBzone. The Deptartment 
of Housing and Urban Development already has a program that recognizes 
not only the Qualified Census Tracts but also denotes a ``Non-
metropolitan Difficult Development Area.'' The amendment simply adds 
this Difficult Development Area. Many of these areas already qualify as 
HUBzones under the prior three criteria. I have asked the SBA to advise 
me how much this would expand their program but in reality I expect the 
addition to be only a minor expansion of the HUBzone program. However 
small the change is, the change will be significant to the people and 
businesses located in Ketchikan, AK.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 961

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

     SECTION 1. EXPANSION OF HUBZONE PROGRAM.

       Section 3(p)(4)(B)(ii) of the Small Business Act (15 U.S.C. 
     632(p)(4)(B)(ii)) is amended--
       (1) in subclause (I), by striking ``or'' at the end;
       (2) in subclause (II), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding after subclause (II) the following:

       ``(III) there is located a difficult development area, as 
     designated by the Secretary of Housing and Urban Development 
     in accordance with section 42(d)(5)(C)(iii) of the Internal 
     Revenue Code of 1986.''.

                                 ______
                                 
      By Mrs. LINCOLN (for herself, Mr. Rockefeller, Mr. Bingaman, and 
        Mr. Breaux):
  S. 962. A bill to amend the Internal Revenue Code of 1986 to 
accelerate the increase in the child tax credit and to expand 
refundability of such credit, and for other purposes; to the Committee 
on Finance.
  Mr. ROCKEFELLER. Mr. President, I am pleased to cosponsor legislation 
being introduced today that will dramatically improve the child tax 
credit. I thank my friend and colleague, Senator Lincoln, for her hard 
work on behalf of our Nation's working families.
  In the 6 years since the child tax credit was first enacted, it has 
provided important tax relief to families across the country. Income 
taxes can be particularly burdensome to moderate income families who 
are facing increased costs for food, housing, medicine, education, and 
other basic needs for their children. Indeed, almost half of the 
benefits of this credit are enjoyed by families with taxable income 
under $50,000 per year. This is important in States like mine; in West 
Virginia, almost 80 percent of the taxpayers have annual incomes below 
$50,000.
  While the current child tax credit is excellent--it could be even 
better. The $600 credit, which is available only for children under the 
age of 17, does not

[[Page 10218]]

truly recognize the costs that face many families raising children. 
Moreover, many working families do not have enough income to qualify 
for the credit. Make no mistake, I am talking about hard-working 
parents who go to their jobs every day and take their responsibilities 
to their children very seriously. These parents are paying payroll 
taxes, but cannot provide for some of the basic needs of their 
children. The legislation introduced today would improve the law so 
that a greater portion of the child tax credit could be refunded to 
these admirable parents.
  Specifically, this legislation includes two important improvements to 
the current child tax credit that will benefit all families who claim 
the credit. First, the legislation would increase the amount of the tax 
credit from $600 to $1,000 immediately. Second, the bill increases the 
age of children who are eligible for the credit from 16 to 18. We know 
that 17- and 18-year-old children are facing enormous educational 
expenses in order to attend college or technical school. We ought to 
help parents pay for this education by allowing them to continue to 
receive the child tax credit until their child is a legal adult. The 
bill also includes two important improvements to the eligibility 
criteria for the refundable credit. By lowering the income threshold 
for the refundable credit and increasing the percentage of income 
eligible for the refundable credit, we can ensure that more of the 
families most in need of assistance can benefit from this credit.
  The child tax credit is one of the most important ways that Congress 
can demonstrate its support for America's families. And I hope that my 
colleagues will support this legislation which would dramatically 
improve the child tax credit.
                                 ______
                                 
      By Ms. STABENOW (for herself and Mr. Levin):
  S. 963. A bill to require the Commandant of the Coast Guard to convey 
the United States Coast Guard Cutter Bramble, upon its decommissioning, 
to the Port Huron Museum of Arts and History, Port Huron, Michigan, for 
use for education and historical display, and for other purposes; to 
the Committee on Commerce, Science, and Transportation.
  Ms. STABENOW. Mr. President, I rise today to speak on behalf of a 
bill I am introducing to turn the historic United States Coast Guard 
Cutter Bramble, into a floating maritime museum in Port Huron, MI, 
after she is decommissioned later this year.
  Once you hear the history of the Bramble, I am sure you will all 
agree that not only should she be preserved, but the Port Huron Museum 
of Arts and History will be able to provide the ideal home.
  The Bramble has been part of many important missions since it was 
first launched on October 23, 1943.
  But--along with her sister ships, Spar and Storis--the Bramble is 
best known for being part of the first mission by United States vessels 
to steam from the Pacific Ocean to the Atlantic Ocean via the Northwest 
Passage. Upon completing this mission, Bramble and her sister ships 
went on to become the first to circumnavigate the North American 
continent--a dream of sailors for more than 400 years.
  The Bramble set out on this historic mission from Miami, Florida, on 
May 24, 1957. Steaming through the Panama Canal to the Pacific Ocean, 
the Bramble then headed to Seattle.
  On July 1, 1957, the Bramble left Seattle and headed toward the 
Atlantic Ocean via the Bering Straights and the Arctic Ocean. Sixty-
four days and 4,500 miles later, the Bramble and her sister ships 
reached the Atlantic and on December 2, 1957, she tied up again in 
Miami--completing the first circumnavigation of the North American 
continent.
  For that reason alone, the Bramble would be worth saving as a museum 
of maritime history.
  But over her 60 year history, the Bramble has seized tons of illegal 
drugs, saved hundreds of lives in search and rescue missions, helped 
train maritime police in 10 Caribbean nations, maintained buoys and 
other aids to navigation, performed icebreaking duties in the Great 
Lakes and been the recipient of numerous awards, service ribbons and 
commendations.
  The Bramble also has a long history with Michigan and Port Huron and 
that is why I believe my State would make an excellent home once this 
historic ship is retired.
  The Bramble first came to Detroit, MI, in 1962, where she performed 
search and rescue, icebreaking, law enforcement and navigation missions 
throughout the Great Lakes.
  Since 1975, the Bramble's homeport has been Port Huron. And that is 
where I think she should stay after she is decommissioned.
  The Coast Guard motto is Semper Paratus--or Always Ready.
  For 60 years the Bramble has been there--always ready to serve our 
country in waters close to home and far away.
  And I believe that as a museum of maritime history, she can continue 
serving us for years to come--still Semper Paratus--still Always Ready.
  I ask unanimous consent that the text of this legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 963

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

     SECTION 1. CONVEYANCE OF DECOMMISSIONED COAST GUARD CUTTER 
                   BRAMBLE.

       (a) In General.--Upon the scheduled decommissioning of the 
     United States Coast Guard Cutter BRAMBLE (WLB 406), the 
     Commandant of the Coast Guard shall convey all right, title, 
     and interest of the United States in and to that vessel to 
     the Port Huron Museum of Arts and History, a nonprofit 
     corporation organized under the laws of the State of 
     Michigan, located in Port Huron, Michigan, without 
     consideration, if--
       (1) the Museum agrees--
       (A) to use the vessel for purposes of education and 
     historical display;
       (B) not to use the vessel for commercial transportation 
     purposes;
       (C) to make the vessel available to the United States if 
     needed for use by the Commandant in time of war or a national 
     emergency; and
       (D) to hold the United States harmless for any claims 
     arising from exposure to hazardous materials, including 
     asbestos and polychlorinated biphenyls (PCBs), after 
     conveyance of the vessel under this subsection, except for 
     claims arising from the use by the United States under 
     subparagraph (C);
       (2) the Museum has funds available, in the form of cash, 
     liquid assets, or a written loan commitment, in the amount of 
     at least $700,000 that the Museum agrees to commit to operate 
     and maintain the vessel in good working condition; and
       (3) the Museum agrees to any other conditions the 
     Commandant considers appropriate.
       (b) Maintenance of Vessel.--Prior to conveyance of the 
     vessel under this section, the Commandant shall, to the 
     extent practicable, and subject to other Coast Guard mission 
     requirements, maintain the integrity of the vessel and its 
     equipment until the delivery to the Museum.
       (c) Delivery.--If a conveyance of the United States Coast 
     Guard Cutter BRAMBLE is made under this section, the 
     Commandant shall deliver the vessel at the place where the 
     vessel is located, in its present condition, and without cost 
     to the United States.
       (d) Conveyance Not a Distribution in Commerce.--The 
     conveyance of the vessel under this section shall not be 
     considered a distribution in commerce for purposes of section 
     6(e) of the Toxic Substances Control Act (15 U.S.C. 2605(e)).
       (e) Other Excess Equipment.--The Commandant may convey to 
     the Museum any excess equipment or parts from other 
     decommissioned Coast Guard vessels for use to enhance the 
     operability and function of the United States Coast Guard 
     Cutter BRAMBLE as an historical display.
                                 ______
                                 
      By Mr. LOTT (for himself and Mr. Rockefeller):
  S. 964. A bill to reauthorize the essential air service program under 
chapter 471 of title 49, United States Code, and for other purposes; to 
the Committee on Commerce, Science, and Transportation.
  Mr. LOTT. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 964

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Community and Rural 
     Air Service Revitalization Act of 2003''.

[[Page 10219]]



     SEC. 2. REAUTHORIZATION OF ESSENTIAL AIR SERVICE PROGRAM.

       Section 41742(a) of title 49, United States Code, is 
     amended to read as follows:
       ``(a) In General.--There are authorized to be appropriated 
     to the Secretary of Transportation to carry out the essential 
     air service under this subchapter, $113,000,000 for each of 
     fiscal years 2004 through 2007, $50,000,000 of which for each 
     such year shall be derived from amounts received by the 
     Federal Aviation Administration credited to the account 
     established under section 45303 of this title or otherwise 
     provided to the Administration.''.

     SEC. 3. INCENTIVE PROGRAM.

       (a) In General.--Chapter 417 of title 49, United States 
     Code, is amended by adding at the end the following:

              ``SUBCHAPTER IV--MARKETING INCENTIVE PROGRAM

``Sec. 41781. Purpose.
``Sec. 41782. Marketing program.
``Sec. 41783. State marketing assistance.
``Sec. 41784. Definitions.
``Sec. 41785. Authorization of appropriations.

     ``Sec.  41781. Purposes

       ``The purposes of this subchapter are--
       ``(1) to enable essential air service communities to 
     increase boardings and the level of passenger usage of 
     airport facilities at an eligible place by providing 
     technical, financial, and other marketing assistance to such 
     communities and to States;
       ``(2) to reduce subsidy costs under subchapter II of this 
     chapter as a consequence of such increased usage; and
       ``(3) to provide such communities with opportunities to 
     obtain, retain, and improve transportation services.

     ``Sec.  41782. Marketing program

       ``(a) In General.--The Secretary of Transportation shall 
     establish a marketing incentive program for eligible 
     essential air service communities receiving assistance under 
     subchapter II under which the airport sponsor in such a 
     community may receive a grant of not more than $50,000 to 
     develop and implement a marketing plan to increase passenger 
     boardings and the level of passenger usage of its airport 
     facilities.
       ``(b) Matching Requirement; Success Bonuses----
       ``(1) In general.--Except as provided in paragraphs (2) and 
     (3), not less than 25 percent of the publicly financed costs 
     associated with the marketing plan shall come from non-
     Federal sources. For purposes of this paragraph--
       ``(A) the non-Federal portion of the publicly financed 
     costs may be derived from contributions in kind; and
       ``(B) State or local matching contributions may not be 
     derived, directly or indirectly, from Federal funds, but the 
     use by a state or local government of proceeds from the sale 
     of bonds to provide the matching contribution is not 
     considered to be a contribution derived directly or 
     indirectly from Federal funds, without regard to the Federal 
     income tax treatment of interest paid on those bonds or the 
     Federal income tax treatment of those bonds.
       ``(2) Bonus for 25-percent increase in usage.--Except as 
     provided in paragraph (3), if, after any 12-month period 
     during which a marketing plan has been in effect, the 
     Secretary determines that the marketing plan has increased 
     average monthly boardings, or the level of passenger usage, 
     at the airport facilities at the eligible place, by 25 
     percent or more, then only 10 percent of the publicly 
     financed costs associated with the marketing plan shall be 
     required to come from non-Federal sources for the following 
     12-month period.
       ``(3) Bonus for 50-percent increase in usage.--If, after 
     any 12-month period during which a marketing plan has been in 
     effect, the Secretary determines that the marketing plan has 
     increased average monthly boardings, or the level of 
     passenger usage, at the airport facilities at the eligible 
     place, by 50 percent or more, then no portion of the publicly 
     financed costs associated with the marketing plan shall be 
     required to come from non-Federal sources for the following 
     12-month period.

     ``Sec.  41783. State marketing assistance

       The Secretary of Transportation may provide up to $50,000 
     in technical assistance to any State within which an eligible 
     essential air service community is located for the purpose of 
     assisting the State and such communities to develop methods 
     to increase boardings in such communities. At least 10 
     percent of the costs of the activity with which the 
     assistance is associated shall come from non-Federal sources, 
     including contributions in kind.

     ``Sec.  41784. Definitions

       ``In this subchapter:
       ``(1) Eligible place.--The term `eligible place' has the 
     meaning given that term in section 41731(a)(1).
       ``(2) Eligible essential air service community.--The term 
     `eligible essential air service community' means an eligible 
     place that--
       ``(A) submits an application to the Secretary in such form, 
     at such time, and containing such information as the 
     Secretary may require, including a detailed marketing plan, 
     or specifications for the development of such a plan, to 
     increase average boardings, or the level of passenger usage, 
     at its airport facilities; and
       ``(B) provides assurances, satisfactory to the Secretary, 
     that it is able to meet the non-Federal funding requirements 
     of section 41782(b)(1).
       ``(3) Passenger boardings.--The term `passenger boardings' 
     has the meaning given that term by section 47102(10).
       ``(4) Sponsor.--The term `sponsor' has the meaning given 
     that term in section 47102(19).

     ``Sec.  41785. Authorization of appropriations

       ``There are authorized to be appropriated to the Secretary 
     of Transportation $12,000,000 for each of fiscal years 2004 
     through 2007, not more than $200,000 per year of which may be 
     used for administrative costs.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     417 of such title is amended by inserting after the item 
     relating to section 41767 the following:

              ``SUBCHAPTER IV--MARKETING INCENTIVE PROGRAM

``41781. Purpose.
``41782. Marketing program.
``41783. State marketing assistance.
``41784. Definitions.
``41785. Authorization of appropriations.''.

     SEC. 4. PILOT PROGRAMS.

       (a) In General.--Subchapter II of chapter 417 of title 49, 
     United States Code, is amended by adding at the end the 
     following:

     ``Sec.  41745. Other pilot programs

       ``(a) In General.--If the entire amount authorized to be 
     appropriated to the Secretary of Transportation by section 
     41785 is appropriated for fiscal years 2004 through 2007, the 
     Secretary of Transportation shall establish pilot programs 
     that meet the requirements of this section for improving 
     service to communities receiving essential air service 
     assistance under this subchapter or consortia of such 
     communities.
       ``(b) Programs Authorized.--
       ``(1) Community flexibility.--The Secretary shall establish 
     a pilot program for not more than 10 communities or consortia 
     of communities under which the airport sponsor of an airport 
     serving the community or consortium may elect to forego any 
     essential air service assistance under preceding sections of 
     this subchapter for a 10-year period in exchange for a grant 
     from the Secretary equal in value to twice the annual 
     essential air service assistance received for the most 
     recently ended calendar year. Under the program, and 
     notwithstanding any provision of law to the contrary, the 
     Secretary shall make a grant to each participating sponsor 
     for use by the recipient for any project that--
       ``(A) is eligible for assistance under chapter 471;
       ``(B) is located on the airport property; or
       ``(C) will improve airport facilities in a way that would 
     make such facilities more usable for general aviation.
       ``(2) Equipment changes.--
       ``(A) In General.--The Secretary shall establish a pilot 
     program for not more than 10 communities or consortia of 
     communities under which, upon receiving a petition from the 
     sponsor of the airport serving the community or consortium, 
     the Secretary shall authorize and request the essential air 
     service provider for that community or consortium to use 
     smaller equipment to provide the service and to consider 
     increasing the frequency of service using such smaller 
     equipment. Before granting any such petition, the Secretary 
     shall determine that passenger safety would not be 
     compromised by the use of such smaller equipment.
       ``(B) Alternative services.--For any 3 aiport sponsors 
     participating in the program established under subparagraph 
     (A), the Secretary may establish a pilot program under 
     which--
       ``(i) the Secretary provides 100 percent Federal funding 
     for reasonable levels of alternative transportation services 
     from the eligible place to the nearest hub airport or small 
     hub airport;
       ``(ii) the Secretary will authorize the sponsor to use its 
     essential air service subsidy funds provided under preceding 
     sections of this subchapter for any airport-related project 
     that would improve airport facilities; and
       ``(iii) the sponsor may make an irrevocable election to 
     terminate its participation in the pilot program established 
     under this paragraph after 1 year.
       ``(3) Cost-sharing.--The Secretary shall establish a pilot 
     program under which the sponsors of airports serving a 
     community or consortium of communities share the cost of 
     providing air transportation service greater than the basic 
     essential air service provided under this subchapter.
       ``(4) EAS local participation program.--
       ``(A) In general.--The Secretary of Transportation shall 
     establish a pilot program under which designated essential 
     air service communities located in proximity to hub airports 
     are required to assume 10 percent of their essential air 
     service subsidy costs for a 3-year period.
       ``(B) Designation of communities.--
       ``(i) In general.--The Secretary may not designate any 
     community under this paragraph unless it is located within 
     100 miles by

[[Page 10220]]

     road of a hub airport and is not located in a noncontiguous 
     State. In making the designation, the Secretary may take into 
     consideration the total traveltime between a community and 
     the nearest hub airport, taking into account terrain, 
     traffic, weather, road conditions, and other relevant 
     factors.
       ``(ii) One community per state.--The Secretary may not 
     designate--

       ``(I) more than 1 community per State under this paragraph; 
     or
       ``(II) a community in a State in which another community 
     that is eligible to participate in the essential air service 
     program has elected not to participate in the essential air 
     service program.

       ``(C) Appeal of designation.--A community may appeal its 
     designation under this section. The Secretary may withdraw 
     the designation of a community under this paragraph based 
     on--
       ``(i) the airport sponsor's ability to pay; or
       ``(ii) the relative lack of financial resources in a 
     community, based on a comparison of the median income of the 
     community with other communities in the State.
       ``(D) Non-federal share.--
       ``(i) Non-federal amounts.--For purposes of this section, 
     the non-Federal portion of the essential air service subsidy 
     may be derived from contributions in kind, or through 
     reduction in the amount of the essential air service subsidy 
     through reduction of air carrier costs, increased ridership, 
     pre-purchase of tickets, or other means. The Secretary shall 
     provide assistance to designated communities in identifying 
     potential means of reducing the amount of the subsidy without 
     adversely affecting air transportation service to the 
     community.
       ``(ii) Application with other matching requirements.--This 
     section shall apply to the Federal share of essential air 
     service provided this subchapter, after the application of 
     any other non-Federal share matching requirements imposed by 
     law.
       ``(E) Eligibility for other programs not affected.--Nothing 
     in this paragraph affects the eligibility of a community or 
     consortium of communities, an airport sponsor, or any other 
     person to participate in any program authorized by this 
     subchapter. A community designated under this paragraph may 
     participate in any program (including pilot programs) 
     authorized by this subchapter for which it is otherwise 
     eligible--
       ``(i) without regard to any limitation on the number of 
     communities that may participate in that program; and
       ``(ii) without reducing the number of other communities 
     that may participate in that program.
       ``(F) Secretary to report to congress on impact.--The 
     Secretary shall transmit a report to the Senate Committee on 
     Commerce, Science, and Transportation and the House of 
     Representatives Committee on Transportation and 
     Infrastructure on--
       ``(i) the economic condition of communities designated 
     under this paragraph before their designation;
       ``(ii) the impact of designation under this paragraph on 
     such communities at the end of each of the 3 years following 
     their designation; and
       ``(iii) the impact of designation on air traffic patterns 
     affecting air transportation to and from communities 
     designated under this paragraph.
       ``(c) Code-sharing.--Under the pilot program established 
     under subsection (a), the Secretary is authorized to require 
     air carriers providing service to participating communities 
     and major air carriers (as defined in section 41716(a)(2)) 
     serving large hub airports (as defined in section 
     41731(a)(3)) to participate in multiple code-share 
     arrangements consistent with normal industry practice 
     whenever and wherever the Secretary determines that such 
     multiple code-sharing arrangements would improve air 
     transportation services. The Secretary may not require air 
     carriers to participate in such arrangements under this 
     subsection for more than 10 such communities.
       ``(d) Track Service.--The Secretary shall require essential 
     air service providers to track changes in service, including 
     on-time arrivals and departures.
       ``(e) Administrative Provisions.--In order to participate 
     in a pilot program established under this section, the 
     airport sponsor for a community or consortium of communities 
     shall submit an application to the Secretary in such form, at 
     such time, and containing such information as the Secretary 
     may require.''.
       (b) Conforming Amendment.--The chapter analysis for chapter 
     417 of such title is amended by inserting after the item 
     relating to section 41744 the following:

``41745. Other pilot programs''.

     SEC. 5. EAS PROGRAM AUTHORITY CHANGES.

       (a) Rate Renegotiation.--If the Secretary of Transportation 
     determines that essential air service providers are 
     experiencing significantly increased costs of providing 
     service under subchapter II of chapter 417 of title 49, 
     United States Code, the Secretary of Transportation may 
     increase the rates of compensation payable under that 
     subchapter within 30 days after the date of enactment of this 
     Act without regard to any agreements or requirements relating 
     to the renegotiation of contracts. For purposes of this 
     subsection, the term ``significantly increased costs'' means 
     an average monthly cost increase of 10 percent or more.
       (b) Returned Funds.--Notwithstanding any provision of law 
     to the contrary, any funds made available under subchapter II 
     of chapter 417 of title 49, United States Code, that are 
     returned to the Secretary by an airport sponsor because of 
     decreased subsidy needs for essential air service under that 
     subchapter shall remain available to the Secretary and may be 
     used by the Secretary under that subchapter to increase the 
     frequency of flights at that airport.
       (c) Small Community Air Service Development Pilot 
     Program.--Section 41743(h) of such title is amended by 
     striking ``an airport'' and inserting ``each airport''.
                                  ____

  Mr. ROCKEFELLER. Mr. President, the continuing economic crisis facing 
the U.S. airline industry also imperils the future of hundreds of small 
and rural communities across our country as air carriers drastically 
reduce service to small and rural communities. While small and rural 
communities have long had to cope with limited and unreliable service, 
these problems have been exacerbated by the weakened financial 
condition of most major U.S. airlines.
  Faced with declining revenues brought on by the Nation's economic 
downturn, the events of September 11, 2001 and the war in Iraq most 
carriers have substantially reduced or eliminated service to many 
communities. In the last month, United Air Lines, US Airways and 
Continental Airlines announced significant service cuts to West 
Virginia.
  Last month, this Congress provided $3.5 billion in direct and 
indirect benefits to the Nation's airlines. I strongly supported this 
package because our economy requires a strong and vibrant airline 
industry. In my own aviation relief package, I had provided resources 
to the airlines to continue to provide air service to small and rural 
communities. Even in the best of times, these communities face a 
difficult time maintaining and developing new air service options. 
Today, their challenge is preventing the complete loss of air service. 
In these difficult economic and uncertain times, I strongly believe 
that the Federal Government must continue to assist our most vulnerable 
communities stay connected to the Nation's aviation network--a network 
paid for by all Americans.
  The reduction or elimination of air service had a devastating effect 
on the economy of a community. Having adequate air service is not just 
a matter of convenience, but a matter of economic survival. Without 
access to reliable air service, no business is willing to locate their 
operations in these areas of the country no matter how attractive the 
quality of life. Airports are economic engines that attract critical 
new development opportunities and jobs.
  West Virginia has been able to attract firms from around the world 
because corporate executives know they can visit their operations with 
ease. Rural and small town America must continue to be adequately 
linked to the Nation's air transportation network if its people and 
businesses are to compete economically with larger urban areas in this 
country and around the world.
  In the Aviation Investment and Reform Act for the 21st Century, we 
began to address the need to improve air service in small and rural 
communities. I, along with many of my colleagues, supported the 
creation of the Small Community Air Service Development Pilot Program, 
a competitive grant program to provide communities with the resources 
they needed to attract new air service to their communities. The 
program is an enormous success. Over 180 communities applied for 40 
grants in the first year funds were available. The Department of 
Transportation has announced the next round of funding.
  In West Virginia, Charleston received money under the program and has 
used it to successfully attract a new service connection to Houston, an 
important gateway to the markets of Latin America. This program gave 
local communities the ability and flexibility to meet local air 
transportation needs.
  The Aviation Investment and Revitalization Vision Act, cosponsored by 
myself and Senator Lott, reauthorizes

[[Page 10221]]

the expands the successful Small Community Air Service Development 
Program. The bill authorizes the participation of 120 communities over 
3 years.
  Many of our most isolated and vulnerable communities whose only 
service is through the Essential Air Service Program have indicated 
that they would like to develop innovative and flexible programs that 
communities who received Small Community Air Service Development grants 
to improve the quality of their air service.
  It is for this reason that I, along with Senator Lott, have 
introduced the Small Community and Rural Air Service Revitalization Act 
of 2003. The legislation reauthorizes the Department of 
Transportation's Essential Air Service, EAS, program and creates a 
series of pilot programs for EAS communities to participate to 
stimulate passenger demand for air service in their communities.
  Under the bill, communities are given the option on continuing their 
EAS as is or they may apply to participate in new incentive programs to 
help them develop new and innovative solutions to increasing local 
demand for air service. The EAS Marketing and Community Flexibility 
Programs would provide communities new resources and tools to implement 
locally developed plans to improve their air service. By providing 
communities the ability to design their own air service proposals, a 
community has the ability to develop a plan that meets it locally 
determined needs, improves air service choices, and gives the community 
a greater stake in the EAS program.
  Specifically, these new EAS pilot programs include authorization for 
the use of smaller planes to decrease cost or increase frequency, 
communities to cost-share for service above base EAS subsidy level, 
alternative service at up to 3 EAS points if a community applies, an 
opt out of the EAS program with a one-time infusion of funding to 
assist in transition out of the program, and DOT to mandate multiple 
code-sharing arrangements for EAS providers.
  A pilot program added at the request of Senator Lott would allow DOT 
to require a cost-share for up to 10 communities within 100 miles of a 
hub. I have significant reservations about forcing communities to pay 
for a service the Federal Government promised them.
  In addition, the communities that participate in EAS are small and 
isolated and have lower than average per captia incomes than urban or 
suburban communities. Cash-strapped communities will have to provide 
anywhere between $50,000 and $120,000 in local funds to continue their 
EAS service. I worked with Senator Lott to make sure DOT considers a 
variety of relevant factors when selecting communities, to provide 
communities appeal rights, and to make sure they have access to all 
other pro-active pilot programs. I will monitor DOT's implementation of 
this pilot program closely.
  Small and rural communities are the first to bear the brunt of bad 
economic times and the last to see the benefits of good times. The 
general economic downturn and the dire straits of the aviation industry 
have placed exceptional burdens on air service to our most isolated 
communities. The Federal Government must provide additional resources 
and tools for small communities to help themselves attract adequate air 
service. The Federal Government must make sure that our most vulnerable 
towns and cities are linked to the rest of the Nation. My legislation 
builds on existing programs and strengthens them. If these bills are 
enacted, our constituents will have the tools and resources necessary 
to attract air service, related economic development, and most 
importantly expand their connections to the national and global 
economy.

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