[House Report 105-727]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-727
_______________________________________________________________________


 
            ENERGY CONSERVATION REAUTHORIZATION ACT OF 1998

                                _______
                                

 September 17, 1998.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 4017]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Commerce, to whom was referred the bill 
(H.R. 4017) to extend certain programs under the Energy Policy 
and Conservation Act and the Energy Conservation and Production 
Act, and for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     5
Background and Need for Legislation..............................     5
Hearings.........................................................    10
Committee Consideration..........................................    11
Roll Call Votes..................................................    11
Committee Oversight Findings.....................................    11
Committee on Government Reform and Oversight.....................    11
New Budget Authority, Entitlement Authority, and Tax Expenditures    11
Committee Cost Estimate..........................................    11
Congressional Budget Office Estimate.............................    11
Federal Mandates Statement.......................................    15
Advisory Committee Statement.....................................    15
Constitutional Authority Statement...............................    15
Applicability to Legislative Branch..............................    15
Section-by-Section Analysis of the Legislation...................    15
Changes in Existing Law Made by the Bill, as Reported............    20
Additional Views.................................................    35

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Energy Conservation Reauthorization 
Act of 1998''.

SEC. 2. ENERGY POLICY AND CONSERVATION ACT AMENDMENTS.

  (a) Interagency Working Groups.--Section 256(h) of the Energy Policy 
and Conservation Act (42 U.S.C. 6276(h)) is amended to read as follows:
  ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for fiscal years 1999 through 2003 such 
sums as may be necessary to carry out subsections (d) and (e), to be 
divided equitably between the interagency working subgroups based on 
program requirements.''.
  (b) State Energy Conservation Program.--Section 365(f) of the Energy 
Policy and Conservation Act (42 U.S.C. 6325(f)) is amended to read as 
follows:
  ``(f) For the purpose of carrying out this part, there are authorized 
to be appropriated for fiscal years 1999 through 2003 such sums as may 
be necessary.''.
  (c) Schools and Hospitals.--Section 397 the Energy Policy and 
Conservation Act (42 U.S.C. 6371f) is amended to read as follows:
                   ``authorization of appropriations
  ``Sec. 397. For the purpose of carrying out this part, there are 
authorized to be appropriated for fiscal years 1999 through 2003 such 
sums as may be necessary.''.

SEC. 3. ENERGY CONSERVATION AND PRODUCTION ACT AMENDMENT.

  Section 422 of the Energy Conservation and Production Act (42 U.S.C. 
6872) is amended to read as follows:
                   ``authorization of appropriations
  ``Sec. 422. For the purpose of carrying out the weatherization 
program under this part, there are authorized to be appropriated for 
fiscal years 1999 through 2003 such sums as may be necessary.''.

SEC. 4. ENERGY SAVINGS PERFORMANCE CONTRACTS.

  (a) Sunset.--Section 801(c) of the National Energy Conservation 
Policy Act (42 U.S.C. 8287(c)) is amended by striking ``five years 
after'' and all that follows through ``subsection (b)'' and inserting 
``on October 1, 2003''.
  (b) Definition.--Section 804(1) of the National Energy Conservation 
Policy Act (42 U.S.C. 8287c(1)) is amended to read as follows:
          ``(1) The term `Federal agency' means each authority of the 
        Government of the United States, whether or not it is within or 
        subject to review by another agency.''.

SEC. 5. TECHNICAL AMENDMENTS.

  (a) Energy Policy and Conservation Act.--The Energy Policy and 
Conservation Act is amended--
          (1) in the table of contents--
                  (A) by striking ``Sec. 301.'' and all that follows 
                through ``Reports to Congress.'.'';
                  (B) by striking ``efficiency'' and inserting 
                ``conservation'' in the item relating to section 325;
                  (C) by striking ``and private labelers'' in the item 
                relating to section 326;
                  (D) by striking the items relating to part E of title 
                III;
                  (E) by inserting after the items relating to part I 
                of title III the following:

           ``Part J--Encouraging the Use of Alternative Fuels

``Sec. 400AA. Alternative fuel use by light duty Federal vehicles.
``Sec. 400BB. Alternative fuels truck commercial application program.
``Sec. 400CC. Alternative fuels bus program.
``Sec. 400DD. Interagency Commission on Alternative Motor Fuels.
``Sec. 400EE. Studies and reports.'';
                  (F) by inserting ``Environmental'' after ``Energy 
                Supply and'' in the item relating to section 505; and
                  (G) by striking the item relating to section 527;
          (2) in section 321(1) (42 U.S.C. 6291(1))--
                  (A) by striking ``section 501(1) of the Motor Vehicle 
                Information and Cost Savings Act'' and inserting 
                ``section 32901(a)(3) of title 49, United States 
                Code''; and
                  (B) by striking the second period at the end thereof;
          (3) in section 322(b)(2)(A) (42 U.S.C. 6292(b)(2)(A)) by 
        inserting close quotation marks after ``type of product'';
          (4) in section 324(a)(2)(C)(ii) (42 U.S.C. 6294(a)(2)(C)(ii)) 
        by striking ``section 325(j)'' and inserting ``section 
        325(i)'';
          (5) in section 325 (42 U.S.C. 6295)--
                  (A) by striking ``paragraphs'' in subsection 
                (e)(4)(A) and inserting ``paragraph''; and
                  (B) by striking ``Ballasts;'' in the heading of 
                subsection (g) and inserting ``Ballasts'';
          (6) in section 336(c)(2) (42 U.S.C. 6306(c)(2)) by striking 
        ``section 325(k)'' and inserting ``section 325(n)'';
          (7) in section 345(c) (42 U.S.C. 6316(c)) by inserting 
        ``standard'' after ``meets the applicable'';
          (8) in section 362 (42 U.S.C. 6322)--
                  (A) by inserting ``of'' after ``of the 
                implementation'' in subsection (a)(1); and
                  (B) by striking ``subsection (g)'' and inserting 
                ``subsection (f)(2)'' in subsection (d)(12);
          (9) in section 391(2)(B) (42 U.S.C. 6371(2)(B)) by striking 
        the period at the end and inserting a semicolon;
          (10) in section 394(a) (42 U.S.C. 6371c(a))--
                  (A) by striking the commas at the end of paragraphs 
                (1), (3), and (5) and inserting semicolons;
                  (B) by striking the period at the end of paragraph 
                (2) and inserting a semicolon; and
                  (C) by striking the colon at the end of paragraph (6) 
                and inserting a semicolon;
          (11) in section 400 (42 U.S.C. 6371i) by striking ``(a)'';
          (12) in section 400D(a) (42 U.S.C. 6372c(a)) by striking the 
        commas at the end of paragraphs (1), (2), and (3) and inserting 
        semicolons;
          (13) in section 400I(b) (42 U.S.C. 6372h(b)) by striking 
        ``Secretary shall,'' and inserting ``Secretary shall'';
          (14) in section 400AA (42 U.S.C. 6374) by redesignating 
        subsection (i) as subsection (h);
          (15) in section 503 (42 U.S.C. 6383)--
                  (A) by striking ``with repect to'' and inserting 
                ``with respect to'' in subsection (b); and
                  (B) by striking ``controlling'' and inserting ``, 
                controlling,'' in subsection (c)(1); and
          (16) in section 552(d)(5)(A) (42 U.S.C. 6422(d)(5)(A)) by 
        striking ``notion'' and inserting ``motion''.
  (b) Energy Conservation and Production Act.--The Energy Conservation 
and Production Act is amended--
          (1) in the table of contents--
                  (A) by striking ``rules and regulations'' and 
                inserting ``regulations and rulings'' in the item 
                relating to section 106; and
                  (B) by striking the item relating to section 207 and 
                inserting the following:

``Sec. 207. State utility regulatory assistance.
``Sec. 208. Authorization of appropriations.''; and

          (2) in section 202 (42 U.S.C. 6802) by striking ``(b) 
        Definitions.--''.
  (c) National Energy Conservation Policy Act.--The National Energy 
Conservation Policy Act is amended--
          (1) in the table of contents--
                  (A) by striking ``, installation, and financing'' and 
                inserting ``and installation'' in the item relating to 
                section 216;
                  (B) by striking ``Ratings'' and inserting ``Rating 
                Guidelines'' in the item relating to part 6 of title 
                II;
                  (C) by striking the item relating to section 304; and
                  (D) by striking ``goals'' and inserting 
                ``requirements'' in the item relating to section 543;
          (2) in section 216(d)(1)(C) (42 U.S.C. 8217(d)(1)(C)) by 
        striking ``explictly'' and inserting ``explicitly'';
          (3) in section 251(b)(1) (42 U.S.C. 8231(b)(1))--
                  (A) by striking ``National Housing Act to projects'' 
                and inserting ``National Housing Act) to projects''; 
                and
                  (B) by striking ``accure'' and inserting ``accrue'';
          (4) in section 266 (42 U.S.C. 8235e) by striking ``(17 
        U.S.C.'' and inserting ``(15 U.S.C.''; and
          (5) in section 551(8) (42 U.S.C. 8259(8)) by striking 
        ``goethermal'' and inserting ``geothermal''.

SEC. 6. MATERIALS ALLOCATION AUTHORITY EXTENSION.

  Section 104(b) of the Energy Policy and Conservation Act is amended 
by striking ``(1) The authority'' and all that follows through ``(2)''.

SEC. 7. BIODIESEL FUEL USE CREDITS.

  (a) Amendment.--Title III of the Energy Policy Act of 1992 (42 U.S.C. 
13211-13219) is amended by adding at the end the following new section:

``SEC. 312. BIODIESEL FUEL USE CREDITS.

  ``(a) Allocation of Credits.--
          ``(1) In general.--The Secretary shall allocate one credit 
        under this section to a fleet or covered person for each 
        qualifying volume of the biodiesel component of fuel containing 
        at least 20 percent biodiesel by volume purchased after the 
        date of the enactment of this section for use by the fleet or 
        covered person in vehicles owned or operated by the fleet or 
        covered person that weigh more than 8,500 pounds gross vehicle 
        weight rating.
          ``(2) Exceptions.--No credits shall be allocated under 
        paragraph (1) for a purchase of biodiesel--
                  ``(A) for use in alternative fueled vehicles; or
                  ``(B) that is required by Federal or State law.
          ``(3) Authority to modify percentage.--The Secretary may, by 
        rule, lower the 20 percent biodiesel volume requirement in 
        paragraph (1) for reasons related to cold start, safety, or 
        vehicle function considerations.
          ``(4) Documentation.--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 paragraph (1).
  ``(b) Use of Credits.--
          ``(1) In general.--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.
          ``(2) Limitation.--Credits allocated under subsection (a) may 
        not be used to satisfy more than 50 percent of the alternative 
        fueled vehicle requirements of a fleet or covered person under 
        this title, title IV, and title V. This paragraph shall not 
        apply to a fleet or covered person that is a biodiesel 
        alternative fuel provider described in section 501(a)(2)(A).
  ``(c) Credit Not a Section 508 Credit.--A credit under this section 
shall not be considered a credit under section 508.
  ``(d) Issuance of Rule.--The Secretary shall, before January 1, 1999, 
issue a rule establishing procedures for the implementation of this 
section.
  ``(e) Collection of Data.--The Secretary shall collect such data as 
are required to make a determination described in subsection (f)(2)(B).
  ``(f) Definitions.--For purposes of this section--
          ``(1) the term `biodiesel' means a diesel fuel substitute 
        produced from nonpetroleum renewable resources that meets the 
        registration requirements for fuels and fuel additives 
        established by the Environmental Protection Agency under 
        section 211 of the Clean Air Act; and
          ``(2) the term `qualifying volume' means--
                  ``(A) 450 gallons; or
                  ``(B) 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.''.
  (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. Biodiesel fuel use credits.''.

                          Purpose and Summary

    The purpose of H.R. 4017 is to extend energy conservation 
and export promotion programs authorized by the Energy Policy 
and Conservation Act and the Energy Conservation and Production 
Act, expand use of energy savings performance contracts 
authorized by the National Energy Conservation Policy Act, 
restore the authority of the President to allocate energy 
materials and equipment under the Defense Production Act of 
1950 under certain circumstances to maximize domestic energy 
supplies, promote the use of biodiesel fuel, and make technical 
corrections.

                  Background and Need for Legislation

    The Energy Policy and Conservation Act (EPCA) was enacted 
in 1975 in response to the oil embargo of 1973-74. The purpose 
of EPCA was to improve U.S. energy security by establishing the 
Strategic Petroleum Reserve, authorizing the International 
Energy Program, providing for increased energy efficiency of 
automobiles, encouraging greater appliance energy efficiency, 
authorizing various energy conservation programs, and by other 
means. The Energy Conservation and Production Act (ECPA) was 
enacted in 1976 to improve U.S. energy security by amending the 
Federal Energy Administration Act, providing an incentive for 
domestic energy production, establishing an electric utility 
rate design initiative, developing energy conservation 
standards for new buildings, providing for energy conservation 
assistance for existing buildings and industrial plants, and 
other means. The National Energy Conservation Policy Act 
(NECPA) was enacted in 1978 to improve U.S. energy security by 
promoting energy conservation and other means. The Energy 
Policy Act (EPAct) was enacted in 1992 to improve U.S. energy 
security through a broad range of programs, including energy 
conservation and alternative fueled vehicle programs.

                         Conservation Programs

    Title III of EPCA authorizes the State Energy Conservation 
Program (SECP) and the Institutional Conservation Program 
(ICP), which were consolidated by the Department of Energy 
(DOE) into the State Energy Program (SEP). The SEP provides 
grants and technical assistance to States, U.S. territories, 
and the District of Columbia to develop and implement State 
energy plans that promote energy efficiency. SEP is a block 
grant program, giving States broad discretion to shape programs 
but requiring States to provide matching funds of at least 20 
percent. States, territories, and the District develop and 
implement comprehensive plans for achieving specific energy 
goals appropriate to their particular needs. The ICP provides 
grants on a matching basis to States to upgrade the energy 
efficiency of schools and hospitals. Grants are awarded on a 
matching basis directly to eligible schools and hospitals. 
Early in its history, SECP concentrated its resources on five 
mandatory measures, including promoting car pools, enacting 
right-on-red legislation, and implementing lighting and thermal 
efficiency standards for non-Federal public buildings. The SEP 
program now provides greater flexibility and has increasingly 
focused on optional measures as these mandatory measures were 
implemented. Authorization for the SECP and ICP expired at the 
end of Fiscal Year 1993.
    Section 422 of ECPA authorizes the Weatherization 
Assistance Program. The primary purpose of the weatherization 
assistance program is to increase energy conservation by 
reducing the burden of energy costs to low-income families, 
particularly the elderly, persons with disabilities, and 
families with children. Grant awards are provided to all 
States, the District of Columbia, and, under certain 
circumstances, to Indian tribal organizations. The governor of 
each State applies for grant funds and distributes them to 
local agencies to weatherize homes. Local service 
organizations, usually community action agencies, implement the 
program. There are about 750 local community action agencies 
participating in the weatherization program. Based on 
priorities established through energy audits conducted by local 
agencies, the program provides for installation of cost-
effective weatherization measures such as caulking and 
weatherstripping, wall and attic insulation, and heating system 
improvements. Authorization for the weatherization assistance 
program expired at the end of Fiscal Year 1994.

                       Export Promotion Programs

    Title II of EPCA authorizes the Committee on Renewable 
Energy Commerce and Trade (CORECT) and the Committee on Energy 
Efficiency Commerce and Trade (COEECT). CORECT, established by 
the Renewable Energy Industry Development Act of 1983, is an 
interagency working group chaired by DOE composed of 
representatives of 14 agencies. Its primary mission is to 
promote the export of U.S. renewable energy technology. CORECT 
consults with industry and non-profit organizations to make 
recommendations on how to promote exports of renewable energy 
technology and services. COEECT was established by the Energy 
Policy Act of 1992, and its intended purposes are much the same 
as CORECT. The difference is a focus on promoting the export of 
energy efficiency technology instead of renewable energy 
technology. Like CORECT, COEECT is aninteragency working group, 
chaired by DOE, and composed of representatives from 15 agencies. The 
interagency committee is charged with consulting with industry and non-
profit organizations to make recommendations on how to promote exports 
of energy efficiency technology and services. Authorization for CORECT 
and COEECT expired at the end of Fiscal Year 1995.

                  Energy Savings Performance Contracts

    Energy savings performance contracts (ESPCs) are an 
alternative to the traditional method of financing energy 
efficiency improvements in Federal buildings through the 
appropriation of funds. Under this alternative, Federal 
agencies contract with energy service companies, which pay all 
the up-front costs of making energy efficiency improvements. 
These costs include identifying building energy requirements 
and acquiring, installing, operating, and maintaining energy-
efficient equipment. In return, the energy service company 
receives a share of the energy cost savings resulting from 
these improvements until the contract period expires, which can 
be up to 25 years. After that point, the Federal government 
retains all the energy cost savings and energy-efficient 
equipment. Significantly, energy service companies bear the 
risk of performance, and guarantee energy cost savings to 
Federal agencies.
    Section 155 of the Energy Policy Act of 1992 amended Title 
VIII of NECPA, giving Federal agencies the authority to enter 
into ESPCs. The Committee recognizes that ESPCs have tremendous 
potential to produce significant energy savings at Federal 
facilities at the expense of energy service companies. DOE 
estimates the ESPCs awarded to date will produce $3 billion in 
energy cost savings.
    DOE has also developed Super Energy Savings Performance 
Contracts (Super ESPCs), a simplified process for Federal 
agencies to acquire equipment that will reduce facility costs 
by reducing energy consumption. DOE developed Super ESPCs in 
response to concerns by Federal agencies that ESPCs were a 
difficult procedure, since they must be executed under Federal 
Acquisition Regulations that are burdensome for both agencies 
and energy service companies. Super ESPCs are similar to 
conventional ESPCs, with two exceptions. First, a Super ESPC 
blankets a large geographic area, while a conventional ESPC is 
used for a specific site. Any Federal agency in the area can 
use the Super ESPCs. DOE plans to issue Super ESPCs that cover 
the entire country. Second, the Super ESPC substantially 
reduces the lead time to contract with energy service companies 
for energy efficiency improvements. Under conventional ESPCs, 
agency personnel had to do their own contracting for energy 
efficiency improvements, a process that can take as long as 18 
months. Contracting takes only 3 to 6 months using a Super 
ESPC, and DOE specialists can provide guidance to agencies on 
the most difficult aspect of the contracting process--proposal 
evaluation and award. DOE also has developed technology-
specific Super ESPCs, which emphasize a particular technology, 
such as solar collectors.

                            Technical Errors

    Three of the statutes being amended--the Energy Policy and 
Conservation Act, the Energy Conservation and Production Act, 
and the National Energy Conservation Policy Act--contain a 
large number of technical errors, including misspellings, 
punctuation errors, and incorrect cross-references. Many of 
these errors have been in the statutes since they were enacted 
as long as twenty-five years ago.

                 Energy Materials Allocation Authority

    Section 104 of EPCA amended section 101 of the Defense 
Production Act of 1950, adding a new subsection (c) granting 
the President authority to, by rule or order, require the 
allocation of, or priority performance under contracts or 
orders relating to, supplies of materials and equipment in 
order to maximize domestic energy supplies if the President 
makes certain findings. Section 104(b)(1) sunsets the authority 
of the President to issue the rules and orders necessary to 
execute this authority. The President's authority to allocate 
materials was used in the late 1970s, and again in the 1980s 
and early 1990s, to facilitate development of the Alaskan North 
Slope oil fields. This authority could also be used to assist 
electric utilities or oil refineries obtain material or 
equipment to repair facilities damaged by natural disasters, or 
to expedite repair of pipelines or other facilities during a 
drawdown of the Strategic Petroleum Reserve. The President's 
authority to issue rules and orders expired on September 30, 
1994.

                       Biodiesel Fuel Use Credit

    The Energy Policy Act of 1992 authorized programs to reduce 
consumption of petroleum motor fuel by promoting the use of 
replacement fuels and alternative fuels. Title III sets forth 
mandatory requirements for Federal fleet acquisitions of 
alternative fueled vehicles. Title V provides for separate 
regulatory mandates for the purchase of alternative fueled 
vehicles which apply to: (1) alternative fuel providers; (2) 
State government fleets; and (3) private and municipal fleets. 
These mandates set forth annual percentages of new light duty 
vehicle acquisitions which must be alternative fueled vehicles. 
Title V also allows for credits for alternative fueled vehicles 
acquired beyond what is legally required. These credits may be 
sold and used by other persons or fleets subject to an 
alternative fueled vehicle acquisition mandate.
    Biodiesel is a renewable diesel fuel substitute that can be 
made by chemically combining any natural oil or fat with an 
alcohol such as methanol or ethanol. Methanol has been the most 
commonly used alcohol in the commercial production of 
biodiesel. In Europe, biodiesel is widely available in both its 
neat form (100 percent biodiesel, also known as B-100) and in 
blends with petroleum diesel. Most European biodiesel is made 
from rapeseed oil (a cousin of canola oil). In the United 
States, initial interest in producing and using biodiesel has 
focused on the use of soybean oil as the primary feedstock, 
mainly because the United States is the world'slargest producer 
of soybean oil. Biodiesel fuel would be used largely in medium and 
heavy duty vehicles, such as buses and trucks, and also in marine 
vessels. It has limited potential for light duty vehicles.
    Section 301(2) of the Energy Policy Act defines 
``alternative fuel'' by listing various fuels. The definition 
also gives DOE discretion to add a fuel to this list if the 
Secretary determines, by rule, that it (1) is substantially not 
petroleum; (2) would yield substantial energy security 
benefits; and (3) would yield substantial environmental 
benefits. Biodiesel--either neat biodiesel or blends--is not 
one of the fuels listed in section 301(2). However, DOE 
determined in 1996 that neat biodiesel is an alternative fuel. 
The National Biodiesel Board petitioned DOE to issue a 
rulemaking determining that a biodiesel blend (B-20) that is, 
by volume, 80 percent petroleum and 20 percent biodiesel, is an 
alternative fuel. Last March, DOE announced it would issue a 
notice of proposed rulemaking addressing the petition by May 
1998. No such rule, however, was issued. At hearings held by 
the Subcommittee on Energy and Power in July 1998, DOE promised 
to issue the proposed rule within days. Again, no rule was 
issued. DOE has floated various approaches that might be taken 
in a rule, including limiting B-20 as an alternative fuel for 
use in heavy duty vehicles, making use of biodiesel mandatory, 
and establishing a credit ratio for alternative fueled vehicles 
that use biodiesel. However, DOE still has taken no action on 
the petition.
    According to a May 1998 analysis by the National Renewable 
Energy Laboratory (NREL), use of biodiesel has some significant 
advantages. First, it would reduce U.S. dependence on foreign 
oil. The U.S. transportation sector relies almost exclusively 
on petroleum, and biodiesel would replace petroleum. Second, 
biodiesel reduces greenhouse gas emissions. According to the 
NREL report, ``[d]isplacing petroleum diesel with biodiesel in 
urban buses is an extremely effective strategy for reducing 
CO2 emissions.'' Third, biodiesel would help reduce 
air pollution and related health risks. Biodiesel substantially 
reduces some pollutants--particulates, carbon monoxide, and 
sulfur dioxide. The Environmental Protection Agency targets 
these three emissions because they pose public health risks, 
especially in urban areas. Biodiesel increases hydrocarbon life 
cycle emissions, but lowers tailpipe emissions. Biodiesel 
increases NOx emissions slightly. Fourth, biodiesel 
benefits the domestic economy, by reducing spending on foreign 
oil imports.
    Section 502 of the Energy Policy Act directs DOE to 
establish a program to promote the development and use of 
domestic replacement fuels in light duty motor vehicles. The 
Act provides this program ``shall promote the replacement of 
petroleum motor fuels with replacement fuels to the maximum 
extent practicable.'' Section 502 directs DOE to determine the 
technical and economic feasibility of achieving the goals of 
producing sufficient replacement fuels to replace 10 percent of 
the projected consumption of motor fuel in the U.S. by 2000, 
and 30 percent in 2010. Section 502 left it to DOE, in 
consultation with other Federal agencies, to determine the 
appropriate program elements to achieve these replacement fuel 
goals. Section 301(14) defines the term ``replacement fuel'' as 
``the portion of any motor fuel'' that is derived from any one 
of a list of specific fuels, including ``fuels (other than 
alcohol) derived from biological materials.'' Twenty percent of 
biodiesel blend is derived from biological materials, so that 
portion appears to meet the definition of ``replacement fuel.''
    It is clear DOE will not achieve the replacement fuel goals 
established in section 502. DOE estimates actual use of 
replacement fuel in 1996 was only 3.1 percent of total highway 
motor fuel--2.9 percent was oxygenates blended into gasoline 
and 0.2 percent was alternative fuel use. This compares to the 
targets of 10 percent in 2000 and 30 percent in 2010. DOE 
estimates alternative fueled vehicle sales would have to grow 
to between 35 and 40 percent of total light duty vehicle sales 
by 1999 and stay at that level to meet the 2000 goal. The 
Department concedes that this is extremely unlikely to occur. 
DOE estimates Federal, State, and local alternative fueled 
vehicle programs could displace about 3 percent of light duty 
vehicle motor fuel use in 2010, and replacement fuels in the 
form of oxygenates could account for an additional 4.8 to 6.7 
percent of fuel use. It appears replacement fuel use in 2010 
will account for 10 percent or less of motor fuel use--far 
short of 30 percent.
    One reason the DOE alternative fueled vehicle programs are 
failing to reduce consumption of petroleum motor fuel is that 
the Energy Policy Act programs do not require use of 
alternative fuel in alternative fueled vehicles. Under section 
301(3) of the Act, ``alternative fueled vehicles'' is defined 
to include dual fueled vehicles capable of operating on 
petroleum motor fuel. This reflects a recognition by Congress 
that alternative fuels would not be available to all covered 
vehicles all the time. The Energy Policy Act mandates purchases 
of alternative fueled vehicles. However, it does not mandate 
that these vehicles actually use alternative fuels. Although 
the Act has succeeded in boosting the number of alternative 
fueled vehicles in the U.S. by more than 60 percent between 
1992 and 1998--two-thirds of alternative fueled vehicles in 
1996 were dual fueled vehicles, and many of these vehicles 
largely use petroleum motor fuel.
    There is a need for a comprehensive review of the 
effectiveness of the alternative fueled vehicle programs 
authorized by the Act. These programs have spurred development 
of alternative fueled vehicles. However, they have also failed 
to reduce consumption of petroleum motor fuel, since many 
alternative fueled vehicles use petroleum motor fuel, not 
alternative fuel.
    The bill does not designate biodiesel blend as an 
``alternative fuel'' under EPAct. Instead, it embraces an 
alternative approach that allocates credits for use of 
biodiesel fuel in blends with diesel fuel. In particular, the 
bill provides that credits for use of biodiesel fuel may be 
substituted for the acquisition of alternative fueled vehicles 
by fleets and covered persons required to purchase alternative 
fueled vehicles. This approach encourages greater use of a 
replacement fuel, displaces use of petroleum motor fuels, and 
may lead to approaches that encourage greater use of 
alternative fuels by alternative fueled vehicles.

                                Hearings

    The Subcommittee on Energy and Power held a hearing on 
September 16, 1997, on energy conservation and export promotion 
programs authorized by the Energy Policy and Conservation Act 
and Energy Conservation and Production Act and proposed 
amendments to theNational Energy Conservation Policy Act. The 
Subcommittee received testimony from: The Honorable Elizabeth Anne 
Moler, Deputy Secretary, U.S. Department of Energy; Mr. Wayne Curtis, 
Chief, Office of Human Services, Division of Economic Opportunity, 
Illinois Department of Commerce and Community Affairs, on behalf of the 
National Association for State Community Services Programs; Ms. Cheryl 
DeVol-Glowinski, Director, Office of Energy Policy, Indiana Department 
of Commerce, representing the National Association of State Energy 
Officials; Mr. David Bradley, Executive Director, National Community 
Action Foundation; and Mr. S. Lynn Sutcliffe, President and CEO, SYSCOM 
Enterprises, on behalf of the National Association of Energy Services 
Companies.
    The Subcommittee also held a hearing on July 21, 1998, on 
H.R. 2568, the Energy Policy Act Amendments of 1997. The 
Subcommittee received testimony from: Mr. Thomas Gross, Deputy 
Assistant Secretary for Transportation Technologies, Office of 
Energy Efficiency and Renewable Energy, U.S. Department of 
Energy; Mr. Jim Gay, President, National Biodiesel Board; Mr. 
Russell Teall, Chairman, Biodiesel Development Corporation; Mr. 
John Campbell, Corporate Vice President, AG Processing, Inc.; 
Mr. Robert Sellers, Maintenance Supervisor, Kansas City Area 
Transportation Authority; Mr. Gilbert Sperling, General 
Counsel, Natural Gas Vehicle Coalition.

                        Committee Consideration

    On June 11, 1998, the Subcommittee on Energy and Power met 
in open markup session and approved H.R. 4017 for Full 
Committee consideration, without amendment, by a voice vote. On 
August 5, 1998, the Full Committee met in open markup session 
and ordered H.R. 4017, the Energy Conservation Reauthorization 
Act of 1998, reported to the House, amended, by a voice vote, a 
quorum being present.

                             Rollcall Votes

    Clause 2(l)(2)(B) of rule XI of the Rules of the House 
requires the Committee to list the recorded votes on the motion 
to report legislation and amendments thereto. There were no 
recorded votes taken in connection with ordering H.R. 4017 
reported. An amendment by Mr. Schaefer to expand the use of 
energy savings performance contracts and restore the 
President's authority to allocate energy equipment under 
certain circumstances, was agreed to by a voice vote. An 
amendment by Mr. Shimkus to amend Title III of the Energy 
Policy Act of 1992 by adding a new section to promote biodiesel 
fuel use by providing credits for use of fuel, was agreed to by 
a voice vote. A motion by Mr. Bliley to order H.R. 4017 
reported to the House, amended, was agreed to by a voice vote, 
a quorum being present.

                      Committee Oversight Findings

    Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of 
the House of Representatives, the Committee held legislative 
and oversight hearings and made findings that are reflected in 
this report.

              Committee on Government Reform and Oversight

    Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of 
the House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform and Oversight.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 2(l)(3)(B) of rule XI of the 
Rules of the House of Representatives, the Committee finds that 
H.R. 4017, the Energy Conservation Reauthorization Act of 1998, 
would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of 
the House of Representatives, the following is the cost 
estimate provided by the Congressional Budget Office pursuant 
to section 402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, September 9, 1998.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4017, the Energy 
Conservation Reauthorization Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kathleen 
Gramp and Kim Cawley (for federal costs), and Pepper Santalucia 
(for the state and local impact).
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 4017--Energy Conservation Reauthorization Act of 1998

    Summary: H.R. 4017 would reauthorize various energy 
conservation programs of the Department of Energy (DOE) through 
fiscal year 2003. The bill would authorize the appropriation of 
such sums as necessary for certain international programs, the 
Committee on Renewable Energy Commerce and Trade (CORECT), the 
Committee on Energy Efficiency Commerce and Trade, and grants 
to states for weatherization assistance and other conservation 
initiatives. In addition, the bill would extend the 
authorization for the Energy Savings Performance Contracts 
(ESPC) program through 2003 and would expand the scope of the 
program to include legislative and judicial branch agencies. 
Other provisions would amend existing law regarding the use of 
alternative fuels, including biodiesel fuel, and the 
President's authority to allocate materials during energy 
emergencies.
    CBO estimates that implementing this bill would cost a 
total of about $600 million over the 1999-2003 period, assuming 
appropriation of the necessary funds. That amount is net of 
estimated savings of about $40 million over the same period for 
the provision that would encourage increase use of biodiesel 
fuel in government vehicles. H.R. 4017 could affect direct 
spending; therefore, pay-as-you-go procedures would apply, but 
CBO estimates that there would be no significant effect in any 
year. The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 4017 is shown in the following table. 
The costs of this legislation fall within budget functions 270 
(energy) and 800 (general government).

----------------------------------------------------------------------------------------------------------------
                                                               By fiscal years, in millions of dollars--        
                                                     -----------------------------------------------------------
                                                        1998      1999      2000      2001      2002      2003  
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
Spending Under Current Law:                                                                                     
    Budget Authority \1\............................       156         0         0         0         0         0
    Estimated Outlays...............................       158       116        31         8         0         0
                                                                                                                
 ``Such Sums'' Authorizations Projected at the 1998                                                             
                        Level                                                                                   
                                                                                                                
Proposed Changes:                                                                                               
    Authorization Level \2\.........................         0       158       148       148       148       148
    Estimated Outlays...............................         0        40       119       140       148       148
Spending Under H.R. 4017:                                                                                       
    Authorization Level \2\.........................       156       158       148       148       148       148
    Estimated Outlays...............................       158       156       150       148       148       148
                                                                                                                
 ``Such Sums'' Authorizations Adjusted for Inflation                                                            
                                                                                                                
Proposed Changes:                                                                                               
    Authorization Level \2\.........................         0       161       155       158       162       166
    Estimated Outlays...............................         0        41       123       147       158       162
Spending Under H.R. 4017:                                                                                       
    Authorization Level \1\.........................       156       161       155       158       162       166
    Estimated Outlays...............................       158       157       154       155       158       162
----------------------------------------------------------------------------------------------------------------
\1\ The 1998 level is the net amount appropriated for that year.                                                
\2\ The estimated net authorization declines in 2000 because of estimated savings from increased use of         
  biodiesel fuel in government vehicles.                                                                        

    Basis of estimate: For purposes of this estimate, CBO 
assumes that appropriations will be provided near the beginning 
of each fiscal year and that outlays will follow historical 
trends for the affected programs. In the absence of specified 
authorization for these activities, we assume that the amounts 
appropriated for fiscal year 1998 represent the level of 
funding currently needed to carry out the functions outlined in 
the bill. The one exception to this approach is the estimate 
for CORECT, which did not receive an appropriation for fiscal 
year 1998. In that case, we based our estimates on the 
President's request for 1999 of $2 million, which is the amount 
DOE estimates would be needed to fund the authorized 
activities. The table shows two alternative sets of 
authorization levels for fiscal years 1999-2003: one without an 
adjustment for anticipated inflation and a second that includes 
an adjustment for inflation.
    In addition, H.R. 4017 would give managers of motor vehicle 
fleets for federal agencies credit for purchasing an 
alternatively fueled vehicle if they switch from diesel to 
biodiesel and diesel fuel mixtures to operate their existing 
vehicles. Biodiesel fuel is a diesel-fuel substitute made from 
renewable materials (such as vegetable oils) and can be used in 
convention diesel engines. Under the Energy Policy Act, federal 
vehicle fleet managers are directed to procure about 15,000 
alternatively fueled vehicles (AFVs) annually. These vehicles 
are generally more costly to acquire and operate than 
comparable conventional vehicles. The premium paid for 
alternative fuel vehicles depends on the type of fuel used and 
ranges from 2 percent to 200 percent above the cost of a 
conventional vehicle. Based on information from DOE, CBO 
estimates that, under current law, federal agencies will spend 
about $35 million per year to cover the additional cost of 
acquiring AFVs that are capable of operating with either 
compressed natural gas, liquefied-petroleum gas, methanol, 
ethanol, or electricity.
    Although biodiesel fuel is more expensive than conventional 
diesel fuel, agencies could save money if they chose to use 
biodiesel fuel mixtures in existing vehicles instead of 
purchasing the types of alternatively fueled vehicles they have 
acquired in the past. Because agencies would incur no 
additional capital costs, using biodiesel fuel mixtures in 
conventional vehicles would be significantly less expensive 
than acquiring and operating many types of AFVs. H.R. 4017 
would limit the amount of credit that could be generated by use 
of biodiesel mixtures to 50 percent of AFV purchases. Thus, 
savings from this provision could total nearly $20 million 
annually if federal fleet managers were able to achieve the 
maximum amount of biodiesel credits allowed. For purposes of 
this estimate, CBO estimates that such savings would average 
about $10 million a year beginning in fiscal year 2000, 
assuming that appropriations are reduced by a corresponding 
amount.
    Finally, extending and expanding the use of ESPCs could 
reduce future spending on energy services, but CBO estimates 
that these changes would have no net effect on federal outlays 
over the 1999-2003 period. The ESPC program, which under 
current law will expire in 2000, allows agencies to use some of 
the funds appropriated for energy expenses for investments in 
measures that reduce energy consumption. Because of the way 
these contracts are structured, EPSCs have no net effect on 
agency spending until after the payback period for the 
investment, typically about 15 years. At that point, 
appropriations for energy services may be lower than they 
otherwise would be if the investments were not made. Hence, CBO 
estimates that implementing these provisions would not change 
the amounts authorized for energy expenses in the near term and 
would not result in any significant savings to the federal 
government until after 2003. Other provisions of the bill would 
not have a significant effect on federal spending.
    Pay-as-you-go-considerations: The Balance Budget and 
Emergency Deficit Control Act specifies pay-as-you-go 
procedures for legislation affecting direct spending or 
receipts. The provision regarding use of biodiesel fuel 
mixtures in federal vehicles could affect direct spending for 
agencies, such as the Bonneville Power Administration and the 
Tennessee Valley Authority, that have direct spending 
authority. CBO estimates, however, that any effect on direct 
spending for such agencies would not be significant.
    Estimated impact on State, local, and tribal governments: 
H.R. 4017 contains no intergovernmental mandates as defined in 
UMRA and would impose no costs on state, local, or tribal 
governments. The bill would authorize the appropriation of such 
sums as may be necessary for fiscal years 1999 through 2003 for 
energy conservation programs that provide assistance to states. 
The Weatherization Assistance Program provides funds to states 
to make improvements in energy efficiency for low-income 
households. This program received about $125 million or fiscal 
year 1998. The bill would also authorize funds for the State 
Energy Conservation Program, which funds the development and 
implementation of statewide energy conservation plans. 
Appropriations for this program are about $30 million in fiscal 
year 1998.
    Estimated impact on the private sector: This bill would 
impose no new private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal Costs: Kathleen Gramp and Kim 
Cawley. Impact on State, Local, and Tribal Governments: Pepper 
Santalucia.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    This section provides a short title for the bill, the 
``Energy Conservation Reauthorization Act of 1998.''

Section 2. Energy Policy and Conservation Act amendments

    Subsection (a) amends section 256(h) of the Energy Policy 
and Conservation Act to extend the authorization of the 
Committee on Renewable Energy Commerce and Trade and the 
Committee on Energy Efficiency Commerce and Trade through 
Fiscal Year 2003. The subsection authorizes such sums as may be 
necessary to carry out the functions of these interagency 
working subgroups, to be divided equitably between the 
subgroups based on program requirements.
    Subsection (b) amends section 365(f) of EPCA to extend the 
authorization of the State Energy Conservation Program through 
Fiscal Year 2003. The subsection authorizes such sums as may be 
necessary to carry out the purposes of the program.
    Subsection (c) amends section 397 of EPCA to extend the 
authorization of the Institutional Conservation Program through 
Fiscal Year 2003. The subsection authorizes such sums as may be 
necessary to carry out the purposes of the program.

Section 3. Energy Conservation and Production Act Amendment

    The section amends section 422 of the Energy Conservation 
and Production Act to extend the authorization of the 
Weatherization Assistance Program through Fiscal Year 2003. The 
section authorizes such sums as may be necessary to carry out 
the purposes of the program.

Section 4. Energy savings performance contracts

    Subsection (a) amends section 801(c) of the National Energy 
Conservation Policy Act to extend the authority of Federal 
agencies to enter into energy savings performance contracts 
through Fiscal Year 2003. The authority of Federal agencies to 
enter into energy savings performance contracts was added to 
NECPA by the Energy Policy Act of 1992. Under the current 
language of section 801(c), the authority of Federal agencies 
to enter into new contracts under section 801 ``shall cease to 
be effective five years after the date procedures and methods 
are established under subsection (b).'' Since DOE established 
the contract procedures and methods provided in section 801(b) 
in a final rule issued on April 10, 1995 (60 FR 18326), the 
authority of Federal agencies to enter into energy savings 
performance contracts expires on April 10, 2000.
    Subsection (b) amends section 801(c) of NECPA to provide a 
new definition of ``Federal agency.'' The current definition of 
``Federal agency'' is the definition used in the Administrative 
Procedures Act (APA) (5 U.S.C. 551(1)). That definition 
provides a general rule, defining ``Federal agency'' as ``each 
authority of the Government of the United States, whether or 
not it is within or subject to review by another agency.'' 
However, the definition also has a list of exceptions to the 
general rule, which includes the Congress and the courts of the 
United States.
    The new definition of ``Federal agency'' in subsection (b) 
is based on the APA definition, but it eliminates the 
exceptions listed in the APA definition. By doing so, it 
includes all authorities of the Government of the United 
States, including legislative and judicial agencies. This 
expands the universe of Federal entities that can enter into 
energy savings performance contracts, and should result in 
greater energy efficiencies.
    The courts have determined an ``authority of the Government 
of the United States'' is ``any administrative unit with 
substantial independent authority in the exercise of specific 
functions.'' Soucie v. David, 448 F.2d 1067, 1073 (D.C. Cir. 
1971). A leading treatise has suggested that in determining 
whether an ``entity is an agency * * * the most important word 
in the [APA] definition may be ``authority'.'' 1 Kenneth C. 
Davis & Richard J. Pierce, Jr., Administrative Law Treatise, 
Sec. 1.2 at 4 (1994). According to the legislative history of 
the APA, `` `authority' means any officer or board, whether 
within another agency or not, which by law has authority to 
take final and binding action with or without appeal to some 
superior administrative authority.'' Staff of the Senate Comm. 
on the Judiciary, Report on the Admin. Proc. Act, 79th Cong., 
1st Sess. 13 (Comm. Print 1945).
    Under the APA definition, agencies that are subunits of 
other agencies are Federal agencies if they have substantial 
independent authority. For example, the Immigration and 
Naturalization Service is a Federal agency, despite the fact it 
is under the supervision of the Department of Justice. Koden v. 
Dep't of Justice, 564 F.2d 228, 232 (D.C. Cir. 1977); Blackwell 
College of Business v. Attorney General, 454 F.2d 928, 933 
(D.C. Cir. 1971). Likewise, the Bureau of Prisons is a Federal 
agency, although it also is part of the Department of Justice. 
White v. Henman, 977 F.2d 292, 293 (7th Cir. 1992); Ramer v. 
Saxbe, 522 F.2d 695, 697 (D.C. Cir. 1975). According to the 
D.C. Circuit, ``the APA makes the fact that a government 
authority's decisions are subject to review irrelevant in 
determining whether that authority is an agency * * *.'' 
Washington Research Project v. HEW, 504 F.2d 238, 248 (D.C. 
Cir. 1974).
    The status of government contractors under the APA 
definition has been the subject of some dispute. The D.C. 
Circuit has suggested a contractor may become a governmental 
unit if it has authority to make decisions and comes under the 
day-to-day supervision of the Federal government. Public 
Citizen Health Research Group v. HEW, 668 F.2d 537, 543-44 
(D.C. Cir. 1981). One court grappling with the question of 
whether a Federal contractor was a Federal agency concluded 
``any general definition can be of only limited utility to a 
court confronted with one of the myriad organizational 
arrangements for getting the business of the government done. * 
* * The unavoidable fact is that each new arrangement must be 
examined anew and in its own context.'' Washington Research 
Project, 504 F.2d at 245-46.

Section 5. Technical amendments

    Section 5 makes a host of technical changes to three of the 
statutes that are amended by the bill--the Energy Policy and 
Conservation Act, the Energy Conservation and Production Act, 
and the National Energy Conservation Policy Act. A review of 
these statutes indicates there are many technical errors--such 
as spelling errors, punctuation errors, and incorrect cross-
references. Some of these errors can be traced back to 
enactment of these statutes nearly 25 years ago. The bill 
eliminates many of them.
    Subsection (a) makes technical corrections to EPCA. 
Paragraph (1) makes a number of changes to the table of 
contents. First, subparagraph (A) strikes the items relating to 
section 301, since that section was repealed by the National 
Cooperative Production Amendments of 1993. Second, subparagraph 
(B) corrects the heading for section 325. Third, subparagraph 
(C) corrects the heading for section 326. Fourth, subparagraph 
(D) strikes the items relating to part E of title III, since 
that part was repealed by the Petroleum Overcharge Distribution 
and Restitution Act of 1986. Fifth, subparagraph (E) inserts 
items relating to part J of title III, since that part was 
added to EPCA by the Alternative Motor Fuels Act of 1988, but 
that law did not amend the EPCA table of contents. Sixth, 
subparagraph (F) corrects the heading for section505. Seventh, 
subparagraph (G) strikes the item relating to section 527, since that 
section was repealed by NECPA.
    Paragraph (2) makes changes to section 321(1). Subparagraph 
(A) strikes the cross-reference to ``section 501(1) of the 
Motor Vehicle Information and Cost Savings Act'' in favor of a 
reference to ``section 32901(a)(3) of title 49, United States 
Code.'' A transportation law enacted in the 103rd Congress 
provided that a reference to section 501(1) of the Motor 
Vehicle Information and Cost Savings Act be deemed to refer to 
49 U.S.C. 32901(a)(3). Subparagraph (B) strikes the second 
period at the end of section 321(1).
    Paragraph (3) inserts close quotation marks after ``type of 
product'' in section 322(b)(2)(A). Currently, there are no 
close quotation marks in subparagraph (A). Paragraph (4) 
corrects the cross-reference in section 324(a)(2)(C)(ii), 
striking section 325(j) and inserting section 325(i). Paragraph 
(5) corrects two errors in section 325. Subparagraph (A) 
strikes the word ``paragraphs'' in section 325(e)(4)(A) and 
replaces it with ``paragraph.'' Subparagraph (A) strikes the 
semicolon at the end of the heading for section 325(g), since 
semicolons are not used at the end of headings.
    Paragraph (6) corrects the cross-reference in section 
336(c)(2), striking section 325(k) and replacing it with 
section 325(n). Section 123(f)(1) of the Energy Policy Act of 
1992 renumbered section 325(k) as section 325(n), but did not 
make this conforming change. Paragraph (7) amends section 
345(c) by adding ``standard'' after ``meets the applicable.'' 
Paragraph (8) corrects two errors in section 362. Subparagraph 
(A) inserts ``of'' after ``of the implementation'' in 
subsection (a)(1). Subparagraph (B) corrects the cross-
reference in subsection (d)(12), by striking the reference to 
subsection (g) and replacing it with a reference to subsection 
(f)(2). Paragraph (9) corrects a punctuation error at the end 
of section 391(2)(B), striking the period and replacing it with 
a semicolon.
    Paragraph (10) corrects five punctuation errors in section 
394(a) to ensure that all paragraphs end with semicolons. 
Subparagraph (A) strikes the commas at the end of paragraphs 
(1), (3), and (5) and replaces them with semicolons. 
Subparagraph (B) strikes the period at the end of paragraph (2) 
and replaces it with a semicolon. Subparagraph (C) strikes the 
colon at the end of paragraph (6) and replaces it with a 
semicolon. Paragraph (11) strikes the ``(a)'' in section 400, 
since there are no subsections in that section. Paragraph (12) 
corrects punctuation errors in section 400D(a), striking the 
commas at the end of paragraphs (1), (2), and (3) and inserting 
semicolons. Paragraph (13) corrects a punctuation error in 
section 400I(b) by striking the comma after ``Secretary 
shall.'' Paragraph (14) redesignates subsection (i) in section 
400AA as subsection (h), since currently there is no subsection 
(h). Paragraph (15) corrects two errors in section 503. 
Subparagraph (A) corrects a spelling error in subsection (b). 
Subparagraph (B) corrects a punctuation error in subsection 
(c)(1), inserting commas before and after ``controlling.''
    Subsection (b) makes technical corrections to ECPA. 
Paragraph (1) makes corrections to the table of contents. 
Subparagraph (A) corrects the heading of section 106. 
Subparagraph (B) strikes the item relating to section 207 and 
provides new section headings for sections 207 and 208. 
Paragraph (2) strikes an unnecessary subsection heading in 
section 202, since that section has no subsections.
    Subsection (c) makes technical corrections to NECPA. 
Paragraph (1) makes corrections to the table of contents. 
Subparagraph (A) corrects the heading of section 216. 
Subparagraph (B) corrects the heading of part 6 of title II. 
Subparagraph (C) strikes the item relating to section 304, 
since there is no section 304 in the statute. Subparagraph (D) 
corrects the heading for section 543. Paragraph (2) corrects a 
spelling error in section 216(d)(1)(C). Paragraph (3) makes 
technical corrections to section 251(b)(1). Subparagraph (A) 
corrects a punctuation error, inserting a close parenthesis 
after ``National Housing Act.'' Subparagraph (B) corrects a 
spelling error. Paragraph (4) corrects the U.S. Code reference 
in section 266, striking the reference to title 17 and 
replacing it with a reference to title 15. Paragraph (5) 
corrects a spelling error in section 551(8).

Section 6. Materials allocation authority extension

    This section strikes section 104(b)(1) and makes a 
conforming change to paragraph (2), providing the President 
with permanent authority to issue rules or orders under section 
101(c) of the Defense Production Act of 1950.

Section 7. Biodiesel fuel use credits

    Subsection (a) adds a new section 312 to the Energy Policy 
Act of 1992 (EPAct). Subsection (a) of section 312 provides for 
credits for use of biodiesel fuel. Paragraph (1) of that 
subsection directs DOE to allocate one credit to a fleet or 
covered person for each qualifying volume of the biodiesel 
component of fuel containing at least 20 percent biodiesel 
purchased after the date of enactment of this section for use 
by the fleet or covered person in vehicles operated by the 
fleet or covered person weighing more than 8,500 pounds. 
Paragraph (2) bars allocation of credits for purchase of 
biodiesel under two circumstances. First, subparagraph (A) bars 
allocation of credits for use in alternative fueled vehicles. 
This assures that fleets or covered persons that operate 
vehicles capable of operating on neat biodiesel do not receive 
credits for use of biodiesel in those vehicles. DOE has 
determined that neat biodiesel fuel is an alternative fuel, and 
vehicles warranted by their original equipment manufacturer or 
a certified converter to operate on neat biodiesel qualify as 
alternative fueled vehicles. Allocation of credits for use of 
biodiesel in alternative fueled vehicles would create an 
inconsistency with respect to other alternative fuels, since 
use of alternative fuels in other alternative fueled vehicles 
does not generate credits. Second, subparagraph (B) bars 
allocation of credits for purchase of biodiesel that is 
required by Federal or State law.
    Paragraph (3) grants DOE authority to lower the 20 percent 
biodiesel requirement in paragraph (1) for reasons related to 
cold start, safety, or vehicle function considerations. These 
are the same grounds provided in section 301(2) of EPAct upon 
which DOE is authorized to lower the nonpetroleum content of 
methanol, ethanol, and other alcohols. Paragraph (4) requires 
that fleets and covered persons seeking a credit under section 
312 provide written documentation to DOE supporting the 
allocation of a credit.
    Subsection (b) of new section 312 governs the use of 
credits. Paragraph (1) directs DOE, for the year in which the 
purchase of a qualifying volume of the biodiesel component of 
fuel is made, to treat that purchase as the acquisition of one 
alternative fueled vehicle the fleet or covered person is 
required to acquire under titles III, IV and V of EPAct. 
Paragraph (2) provides that credits allocated under subsection 
(a) may not be used to satisfy more than 50 percent of the 
alternative fueled vehicle requirements of a fleet or covered 
person under titles III, IV and V of EPAct. This limitation 
does not apply to a fleet or covered person that is a biodiesel 
alternative fuel provider described in section 501(a)(2)(A) of 
EPAct.
    Subsection (c) provides that a section 312 credit is not 
considered a credit under section 508. Credits issued by DOE 
may only be used by the fleet or covered person that earned the 
credits and only in the year the credit is issued, so they 
cannot be traded or banked. Subsection (d) directs DOE to issue 
a rule by January 1, 1999, establishing procedures implementing 
this section. Subsection (e) directs DOE to collect such data 
as are required to make a determination whether average annual 
alternative fuel use exceeds 450 gallons. Subsection (f) 
provides definitions of key terms used in section 312. The term 
``qualifying volume'' is defined to mean 450 gallons of 
biodiesel. DOE is authorized to increase this amount by rule to 
an amount equal to the average use of alternative fuels by 
fleets and covered persons if it determines that average annual 
alternative fuel use exceeds 450 gallons.
    Subsection (b) of section 7 makes a conforming change to 
the EPAct table of contents, adding an item relating to the new 
section 312.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

ENERGY POLICY AND CONSERVATION ACT

           *       *       *       *       *       *       *


  Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That this 
Act may be cited as the ``Energy Policy and Conservation Act''.

                            TABLE OF CONTENTS

Sec. 2. Statement of purposes.
Sec. 3. Definitions.

        TITLE I--MATTERS RELATED TO DOMESTIC SUPPLY AVAILABILITY

     * * * * * * *

                 TITLE III--IMPROVING ENERGY EFFICIENCY

                     Part A--Automotive Fuel Economy

[Sec. 301. Amendment to Motor Vehicle Information and Cost Savings Act.

               [``TITLE V--IMPROVING AUTOMOTIVE EFFICIENCY

                   [``Part A--Automotive Fuel Economy

  [``Sec. 501. Definitions.
  [``Sec. 502. Average fuel economy standards applicable to each 
          manufacturer.
  [``Sec. 503. Determination of average fuel economy.
  [``Sec. 504. Judicial review.
  [``Sec. 505. Information and reports.
  [``Sec. 506. Labeling.
  [``Sec. 507. Unlawful conduct.
  [``Sec. 508. Civil penalty.
  [``Sec. 509. Effect on State law.
  [``Sec. 510. Use of fuel efficient passenger automobile by the Federal 
          Government.
  [``Sec. 511. Retrofit devices.
  [``Sec. 512. Reports to Congress.''.]
     * * * * * * *

  Part B--Energy Conservation Program for Consumer Products Other Than 
                               Automobiles

Sec. 321. Definitions.
Sec. 322. Coverage.
     * * * * * * *
Sec. 325. Energy [efficiency] conservation standards.
Sec. 326. Requirements of manufacturers [and private labelers].
     * * * * * * *

                 [Part E--Industrial Energy Conservation

[Sec. 371. Definitions.
[Sec. 372. Program.
[Sec. 373. Identification of major energy consumers.
[Sec. 374. Industrial energy efficiency improvement targets.
[Sec. 374A. Targets for use of recovered materials.
[Sec. 375. Reports.
[Sec. 376. General provisions.]
     * * * * * * *

            Part J--Encouraging the Use of Alternative Fuels

Sec. 400AA. Alternative fuel use by light duty Federal vehicles.
Sec. 400BB. Alternative fuels truck commercial application program.
Sec. 400CC. Alternative fuels bus program.
Sec. 400DD. Interagency Commission on Alternative Motor Fuels.
Sec. 400EE. Studies and reports.

                       TITLE V--GENERAL PROVISIONS

             Part A--Energy Data Base and Energy Information

Sec. 501. Verification examinations.
     * * * * * * *
Sec. 505. Amendment to Energy Supply and Environmental Coordination Act 
          of 1974.
     * * * * * * *

                       Part B--General Provisions

Sec. 521. Prohibition on certain actions.
     * * * * * * *
[Sec. 527. Transfer of authority.]

           *       *       *       *       *       *       *


        TITLE I--MATTERS RELATED TO DOMESTIC SUPPLY AVAILABILITY

Part A--Domestic Supply

           *       *       *       *       *       *       *


                          materials allocation

  Sec. 104. (a) * * *
  (b)[(1) The authority to issue any rules or orders under 
section 101(c) of the Defense Production Act of 1950, as 
amended by this Act, shall expire at midnight September 30, 
1994, but such expiration shall not affect any action or 
pending proceedings, civil or criminal, not finally determined 
on such date, nor any action or proceeding based upon any act 
committed prior to such date.]
  [(2)] The expiration of the Defense Production Act of 1950 or 
any amendment of such Act after the date of enactment of this 
Act shall not affect the authority of the President under 
section 101(c) of such Act, as amended by subsection (a) of 
this section and in effect on the date of enactment of this 
Act, unless Congress by law expressly provides to the contrary.

           *       *       *       *       *       *       *


TITLE II--STANDBY ENERGY AUTHORITIES

           *       *       *       *       *       *       *


Part B--Authorities With Respect to International Energy Program

           *       *       *       *       *       *       *


   domestic renewable energy industry and related service industries

  Sec. 256. (a) * * *

           *       *       *       *       *       *       *

  [(h) Authorization of Appropriations.--There are authorized 
to be appropriated to the Secretary for purposes of carrying 
out the programs under subsections (d) and (e) $10,000,000, to 
be divided equitably between the interagency working subgroups 
based on program requirements, for each of the fiscal years 
1993 and 1994, and such sums as may be necessary for fiscal 
year 1995 to carry out the purposes of this subtitle. There are 
authorized to be appropriated for fiscal year 1997 such sums as 
may be necessary to carry out this part.]
  (h) Authorization of Appropriations.--There are authorized to 
be appropriated to the Secretary for fiscal years 1999 through 
2003 such sums as may be necessary to carry out subsections (d) 
and (e), to be divided equitably between the interagency 
working subgroups based on program requirements.

           *       *       *       *       *       *       *


                 TITLE III--IMPROVING ENERGY EFFICIENCY

 Part B--Energy Conservation Program for Consumer Products Other Than 
                              Automobiles

                              definitions

  Sec. 321. For purposes of this part:
          (1) The term ``consumer product'' means any article 
        (other than an automobile, as defined in [section 
        501(1) of the Motor Vehicle Information and Cost 
        Savings Act] section 32901(a)(3) of title 49, United 
        States Code) of a type--
                  (A) * * *

           *       *       *       *       *       *       *

        without regard to whether such article of such type is 
        in fact distributed in commerce for personal use or 
        consumption by an individual, except that such term 
        includes fluorescent lamp ballasts, general service 
        fluorescent lamps, incandescent reflector lamps, 
        showerheads, faucets, water closets, and urinals 
        distributed in commerce for personal or commercial use 
        or consumption.[.]

           *       *       *       *       *       *       *


                                coverage

  Sec. 322. (a) * * *
  (b) Special Classification of Consumer Product.--(1) * * *
  (2) For purposes of this subsection:
          (A) The term ``average annual per-household energy 
        use with respect to a type of product'' means the 
        estimated aggregate annual energy use (in kilowatt-
        hours or the Btu equivalent) of consumer products of 
        such type which are used by households in the United 
        States, divided by the number of such households which 
        use products of such type.

           *       *       *       *       *       *       *


                                labeling

  Sec. 324. (a) In General.--(1) * * *
  (2)(A) * * *

           *       *       *       *       *       *       *

  (C)(i) * * *
  (ii) If the Secretary determines that compliance with the 
standards specified in section [325(j)] 325(i) for any lamp 
will result in the discontinuance of the manufacture of such 
lamp, the Commission may exempt such lamp from the labeling 
rules prescribed under clause (i).

           *       *       *       *       *       *       *


                     energy conservation standards

  Sec. 325. (a) * * *

           *       *       *       *       *       *       *

  (e) Standards for Water Heaters; Pool Heaters; Direct Heating 
Equipment.--(1) * * *

           *       *       *       *       *       *       *

  (4)(A) The Secretary shall publish final rules no later than 
January 1, 1992, to determine whether the standards established 
by [paragraphs] paragraph (1), (2), or (3) for water heaters, 
pool heaters, and direct heating equipment should be amended. 
Such rule shall provide that any amendment shall apply to 
products manufactured on or after January 1, 1995.

           *       *       *       *       *       *       *

  (g) Standards for Dishwashers; Clothes Washers; Clothes 
Dryers, Fluorescent Lamp [Ballasts;] Ballasts.--(1) Dishwashers 
manufactured on or after January 1, 1988, shall be equipped 
with an option to dry without heat.

           *       *       *       *       *       *       *


              administrative procedure and judicial review

  Sec. 336. (a) * * *

           *       *       *       *       *       *       *

  (c) Jurisdiction is vested in the Federal district courts of 
the United States over actions brought by--
          (1) * * *
          (2) any person who files a petition under section 
        [325(k)] 325(n) which is denied by the Secretary.

           *       *       *       *       *       *       *


Part C--Certain Industrial Equipment

           *       *       *       *       *       *       *


         administration, penalties, enforcement, and preemption

  Sec. 345. (a) * * *

           *       *       *       *       *       *       *

  (c) With respect to any electric motor to which standards are 
applicable under section 342(b), the Secretary shall require 
manufacturers to certify, through an independent testing or 
certification program nationally recognized in the United 
States, that such motor meets the applicable standard.

           *       *       *       *       *       *       *


Part D--State Energy Conservation Plans

           *       *       *       *       *       *       *


                    state energy conservation plans

  Sec. 362. (a) The Secretary shall, by rule, within 60 days 
after the date of enactment of this Act, prescribe guidelines 
for the preparation of a State energy conservation feasibility 
report. The Secretary shall invite the Governor of each State 
to submit, within 3 months after the effective date of such 
guidelines, such a report. Such report shall include--
          (1) an assessment of the feasibility of establishing 
        a State energy conservation goal, which goal shall 
        consist of a reduction, as a result of the 
        implementation of the State energy conservation plan 
        described in this section, of 5 percent or more in the 
        total amount of energy consumed in such State in the 
        year 1980 from the projected energy consumption for 
        such State in the year 1980, and

           *       *       *       *       *       *       *

  (d) Each proposed State energy conservation plan may 
include--
          (1) * * *

           *       *       *       *       *       *       *

          (12) in accordance with subsection [(g)] (f)(2), 
        programs to implement the Energy Technology 
        Commercialization Services Program;

           *       *       *       *       *       *       *


                           general provisions

  Sec. 365. (a) * * *

           *       *       *       *       *       *       *

  [(f)(1) Except as provided in paragraph (2), for the purpose 
of carrying out this part, there are authorized to be 
appropriated not to exceed $25,000,000 for fiscal year 1991, 
$35,000,000 for fiscal year 1992, and $45,000,000 for fiscal 
year 1993.
          [(2) For the purposes of carrying out section 363(f), 
        there is authorized to be appropriated for fiscal year 
        1994 and each fiscal year thereafter such sums as may 
        be necessary, to remain available until expended.]
  (f) For the purpose of carrying out this part, there are 
authorized to be appropriated for fiscal years 1999 through 
2003 such sums as may be necessary.

           *       *       *       *       *       *       *


     Part G--Energy Conservation Program for Schools and Hospitals

                              definitions

  Sec. 391. For the purposes of this part--
  (1) * * *
  (2) The term ``energy conservation measure'' means an 
installation or modification of an installation in a building 
which is primarily intended to maintain or reduce energy 
consumption and reduce energy costs or allow the use of an 
alternative energy source, including, but not limited to--
          (A) * * *
          (B) storm windows and doors, multiglazed windows and 
        doors, heat absorbing or heat reflective glazed and 
        coated windows and door systems, additional glazing, 
        reductions in glass area, and other window and door 
        system modifications[.];

           *       *       *       *       *       *       *


                              state plans

  Sec. 394. (a) The Secretary shall invite the State energy 
agency of each State to submit, within 90 days after the 
effective date of the guidelines prescribed pursuant to section 
392, or such longer period as the Secretary may, for good 
cause, allow, a State plan under this section for such State. 
Such plan shall include--
          (1) the results of preliminary energy audits 
        conducted in accordance with the guidelines prescribed 
        under section 392(a)(1), and an estimate of the energy 
        savings that may result from the modification of 
        maintenance and operating procedures and installation 
        of energy conservation measures in the schools and 
        hospitals in such State[,];
          (2) a recommendation as to the types of energy 
        conservation projects considered appropriate for 
        schools and hospitals in such State, together with an 
        estimate of the costs of carrying out such projects in 
        each year for which funds are appropriated[.];
          (3) a program for identifying persons qualified to 
        carry out energy conservation projects[,];

           *       *       *       *       *       *       *

          (5) a statement of the extent to which, and by which 
        methods, such State will encourage utilization of solar 
        space heating, cooling, and electric systems and solar 
        water heating systems where appropriate[,];
          (6) procedures to assure that all assistance under 
        this part in such State will be expended in compliance 
        with the requirements of an approved State plan for 
        such State, and in compliance with the requirements of 
        this part[:];

           *       *       *       *       *       *       *


                    [authorization of appropriations

  [Sec. 397. For the purpose of carrying out this part, there 
are authorized to be appropriated not to exceed $40,000,000 for 
fiscal year 1991, $50,000,000 for fiscal year 1992, and 
$60,000,000 for fiscal year 1993.]


                    authorization of appropriations


  Sec. 397. For the purpose of carrying out this part, there 
are authorized to be appropriated for fiscal years 1999 through 
2003 such sums as may be necessary.

           *       *       *       *       *       *       *


                                records

  Sec. 400. [(a)] Each recipient of assistance under this part 
shall keep such records, provide such reports, and furnish such 
access to books and records as the Secretary may by rule 
prescribe.

           *       *       *       *       *       *       *


  Part H--Energy Conservation Program for Buildings Owned by Units of 
Local Government and Public Care Institutions

           *       *       *       *       *       *       *


                              state plans

  Sec. 400D. (a) The Secretary shall invite the State energy 
agency of each State to submit, within 90 days after the 
effective date of the guidelines prescribed pursuant to section 
400B, or such longer period as the Secretary may, for good 
cause, allow, a proposed State plan under this section for such 
State. Such plan shall include--
          (1) the results of preliminary energy audits 
        conducted in accordance with the guidelines prescribed 
        pursuant to section 400B(a)(1), and an estimate of the 
        energy savings that may result from the modification of 
        maintenance and operating procedures in buildings owned 
        by units of local government and public care 
        institutions[,];
          (2) a recommendation as to the types of technical 
        assistance programs considered appropriate for 
        buildings owned by units of local government and public 
        care institutions in such State, together with an 
        estimate of the costs of carrying out such programs[,];
          (3) a program for identifying persons qualified to 
        carry out technical assistance programs[,];

           *       *       *       *       *       *       *


                     administration; annual reports

  Sec. 400I. (a) The Secretary may prescribe such rules as may 
be necessary in order to carry out the provisions of this part.
  (b) The Secretary [shall,] shall include in his annual report 
a detailed description of the actions taken under this part in 
the preceding fiscal year and the actions planned to be taken 
in the subsequent fiscal year. Such description shall show the 
allocations made (including the allocations made to each State) 
and include information on the technical assistance carried out 
with funds allocated, and an estimate of the energy savings, if 
any, achieved.

           *       *       *       *       *       *       *


            PART J--ENCOURAGING THE USE OF ALTERNATIVE FUELS

SEC. 400AA. ALTERNATIVE FUEL USE BY LIGHT DUTY FEDERAL  VEHICLES.

  (a) * * *

           *       *       *       *       *       *       *

  [(i)] (h) Funding.--(1) For the purposes of this section, 
there are authorized to be appropriated such sums as may be 
necessary for fiscal years 1993 through 1998, to remain 
available until expended.
  (2) The authority of the Secretary to obligate amounts to be 
expended under this section shall be effective for any fiscal 
year only to such extent or in such amounts as are provided in 
advance by appropriation Acts.

           *       *       *       *       *       *       *


                      TITLE V--GENERAL PROVISIONS

Part A--Energy Data Base and Energy Information

           *       *       *       *       *       *       *


                          accounting practices

  Sec. 503. (a) * * *
  (b) In carrying out its responsibilities under subsection 
(a), the Securities and Exchange Commission shall--
          (1) * * *

           *       *       *       *       *       *       *

The Securities and Exchange Commission shall afford interested 
persons an opportunity to submit written comment with respect 
to whether it should exercise its discretion to recognize or 
otherwise rely on such accounting practice in lieu of 
prescribing such practices by rule and may extend the 24-month 
period referred to in subsection (a) as it determines may be 
necessary to allow for a meaningful comment period [with repect 
to] with respect to such determination.
  (c) The Securities and Exchange Commission shall assure that 
accounting practices developed pursuant to this section, to the 
greatest extent practicable, permit the compilation, treating 
domestic and foreign operations as separate categories, of an 
energy data base consisting of:
          (1) The separate calculation of capital, revenue, and 
        operating cost information pertaining to--
                  (A) prospecting,
                  (B) acquisition,
                  (C) exploration,
                  (D) development, and
                  (E) production,
        including geological and geophysical costs, carrying 
        costs, unsuccessful exploratory drilling costs, 
        intangible drilling and development costs on productive 
        wells, the cost of unsuccessful development wells, and 
        the cost of acquiring oil and gas reserves by means 
        other than development. Any such calculation shall take 
        into account disposition of capitalized costs, 
        contractual arrangements involving special conveyance 
        of rights and joint operations, differences between 
        book and tax income, and prices used in the transfer of 
        products or other assets from one person to any other 
        person, including a person controlled by [controlling], 
        controlling, or under common control with such person.

           *       *       *       *       *       *       *


Part C--Congressional Review

           *       *       *       *       *       *       *


    expedited procedure for congressional consideration of certain 
                              authorities

  Sec. 552. (a) * * *

           *       *       *       *       *       *       *

  (d)(1) * * *

           *       *       *       *       *       *       *

  (5)(A) When the committee has reported, or has been 
discharged from further consideration of, a resolution, it 
shall be at any time thereafter in order (even though a 
previous motion to the same effect has been disagreed to) to 
move to proceed to the consideration of the resolution. The 
motion shall be highly privileged and shall not be debatable. 
An amendment to the [notion] motion shall not be in order, and 
it shall not be in order to move to reconsider the vote by 
which the motion was agreed to or disagreed to.

           *       *       *       *       *       *       *

                              ----------                              


                 ENERGY CONSERVATION AND PRODUCTION ACT

  Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That this 
Act may be cited as the ``Energy Conservation and Production 
Act''.

                                CONTENTS

   TITLE I--FEDERAL ENERGY ADMINISTRATION ACT AMENDMENTS AND RELATED 
                                 MATTERS

          Part A--Federal Energy Administration Act Amendments

Sec. 101. Short title.
     * * * * * * *
Sec. 106. Limitation on the Administrator's authority with respect to 
          enforcement       of [rules and regulations] regulations and 
          rulings.
     * * * * * * *

          TITLE II--ELECTRIC UTILITIES RATE DESIGN INITIATIVES

Sec. 201. Findings.
     * * * * * * *
[Sec. 207. Authorizations of appropriations.]
Sec. 207. State utility regulatory assistance.
Sec. 208. Authorization of appropriations.
     * * * * * * *

           TITLE II--ELECTRIC UTILITY RATE DESIGN INITIATIVES

                              DEFINITIONS

  Sec. 202. As used in this title:
  [(b) Definitions.--]
          (1) The term ``Secretary'' means the Secretary of 
        Energy.

           *       *       *       *       *       *       *


  TITLE IV--ENERGY CONSERVATION AND RENEWABLE-RESOURCE ASSISTANCE FOR 
EXISTING BUILDINGS

           *       *       *       *       *       *       *


Part A--Weatherization Assistance for Low-Income Persons

           *       *       *       *       *       *       *


                    [authorization of appropriations

  [Sec. 422. (a) There are authorized to be appropriated for 
purposes of carrying out the weatherization program under this 
part, other than under subsections (d) and (e) of section 415, 
not to exceed $200,000,000 for fiscal year 1991 and such sums 
as may be necessary for fiscal years 1992, 1993, and 1994.
  [(b) There are authorized to be appropriated for purposes of 
carrying out the weatherization program under subsections (d) 
and (e) of section 415, not to exceed $20,000,000 for fiscal 
year 1992 and such sums as may be necessary for fiscal years 
1993 and 1994.]


                    authorization of appropriations


  Sec. 422. For the purpose of carrying out the weatherization 
program under this part, there are authorized to be 
appropriated for fiscal years 1999 through 2003 such sums as 
may be necessary.

           *       *       *       *       *       *       *

                              ----------                              


                NATIONAL ENERGY CONSERVATION POLICY ACT

                      TITLE I--GENERAL PROVISIONS

SEC. 101. SHORT TITLE AND TABLE OF CONTENTS.

  (a) * * *
  (b) Table of Contents.--

                       TITLE I--GENERAL PROVISIONS

Sec. 101. Short title and table of contents.
     * * * * * * *

                TITLE II--RESIDENTIAL ENERGY CONSERVATION

                         Part 1--Utility Program

Sec. 210. Definitions.
     * * * * * * *
Sec. 216. Supply[, installation, and financing] and installation by 
          public utilities.
     * * * * * * *

    Part 6--Residential Energy Efficiency [Ratings] Rating Guidelines

     * * * * * * *

 TITLE III--ENERGY CONSERVATION PROGRAMS FOR SCHOOLS AND HOSPITALS AND 
     BUILDINGS OWNED BY UNITS OF LOCAL GOVERNMENTS AND PUBLIC CARE 
                              INSTITUTIONS

                      Part 1--Schools and Hospitals

Sec. 301. Statement of findings and purposes.
     * * * * * * *
[Sec. 304. Cross reference].
     * * * * * * *

                   TITLE V--FEDERAL ENERGY INITIATIVES

     * * * * * * *

                     part 3--federal energy management

Sec. 541. Findings.
     * * * * * * *
Sec. 543. Energy management [goals] requirements.

           *       *       *       *       *       *       *


               TITLE II--RESIDENTIAL ENERGY CONSERVATION

PART 1--UTILITY PROGRAM

           *       *       *       *       *       *       *


SEC. 216. SUPPLY AND INSTALLATION BY PUBLIC UTILITIES.

  (a) * * *

           *       *       *       *       *       *       *

  (d) General Exemptions.--(1) Except as provided in paragraph 
(2), the prohibitions contained in subsection (a) shall not 
apply to--
          (A) * * *

           *       *       *       *       *       *       *

          (C) supply, installation, or financing activities by 
        a public utility with respect to energy conservation 
        measures where a law or regulation in effect on or 
        before the date of enactment of this Act either 
        requires, or [explictly] explicitly permits, the public 
        utility to carry out such activities.

           *       *       *       *       *       *       *


                         PART 4--MISCELLANEOUS

SEC. 251. ENERGY-CONSERVING IMPROVEMENTS FOR ASSISTED HOUSING.

  (a) * * *
  (b) Grants.--(1) The Secretary of Housing and Urban 
Development is authorized to make grants to finance energy 
conserving improvements (as defined in subparagraph (2) of the 
last paragraph of section 2(a) of the [National Housing Act to 
projects] National Housing Act) to projects which are financed 
with loans under section 202 of the Housing Act of 1959, or 
which are subject to mortgages insured under section 221(d)(3) 
or section 236 of the National Housing Act. The Secretary shall 
make assistance available under this subsection on a priority 
basis to those projects which are in financial difficulty as a 
result of high energy costs. In carrying out the program 
authorized by this subsection, the Secretary shall issue 
regulations requiring that any grant made under this subsection 
shall be made only on the condition that the recipient of such 
grant shall take steps (prescribed by the Secretary) to assure 
that the benefits derived from such grants in terms of lower 
energy costs shall [accure] accrue to tenants in the form of 
lower operating subsidy if such a subsidy is being paid to such 
recipient.

           *       *       *       *       *       *       *


PART 5--RESIDENTIAL ENERGY EFFICIENCY PROGRAMS

           *       *       *       *       *       *       *


SEC. 266. AUTHORITY OF THE FEDERAL ENERGY REGULATORY COMMISSION TO 
                    EXEMPT APPLICATION OF CERTAIN LAWS.

  The Federal Energy Regulatory Commission may exempt from any 
provisions in sections 4, 5, and 7 of the Natural Gas Act [(17 
U.S.C.] (15 U.S.C. 717c, 717d, and 717f) and titles II and IV 
of the Natural Gas Policy Act of 1978 (15 U.S.C. 3341 through 
3348 and 3391 through 3394) the sale or transportation, by any 
public utility, local distribution company, interstate or 
intrastate pipeline, or any other person, of any natural gas 
which is determined (in the case of a regulated utility, 
company, pipeline, or person) by the State regulatory authority 
having ratemaking authority over such utility, company, 
pipeline, or person, or (in the case of a nonregulated utility, 
company, pipeline, or person) by such utility, company, 
pipeline, or person, to have been conserved because of a 
prototype residential energy efficiency program which is 
established under a plan approved under section 262(a), if the 
Commission determines that such exemption is necessary to make 
feasible the demonstration of such prototype residential energy 
efficiency program.

           *       *       *       *       *       *       *


TITLE V--FEDERAL ENERGY INITIATIVE

           *       *       *       *       *       *       *


PART 3--FEDERAL ENERGY MANAGEMENT

           *       *       *       *       *       *       *


SEC. 551. DEFINITIONS.

  For the purposes of this part--
          (1) * * *

           *       *       *       *       *       *       *

          (8) the term ``renewable energy sources'' includes, 
        but is not limited to, sources such as agriculture and 
        urban waste, [goethermal] geothermal energy, solar 
        energy, and wind energy; and

           *       *       *       *       *       *       *


            TITLE VIII--ENERGY SAVINGS PERFORMANCE CONTRACTS

SEC. 801. AUTHORITY TO ENTER INTO CONTRACTS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Sunset and Reporting Requirements.--The authority to 
enter into new contracts under this section shall cease to be 
effective [five years after the date procedures and methods are 
established under subsection (b)] on October 1, 2003.

           *       *       *       *       *       *       *


SEC. 804. DEFINITIONS.

  For purposes of this title, the following definitions apply:
          [(1) The term ``Federal agency'' means an agency 
        defined in section 551(1) of title 5, United States 
        Code.]
          (1) The term ``Federal agency'' means each authority 
        of the Government of the United States, whether or not 
        it is within or subject to review by another agency.

           *       *       *       *       *       *       *

                              ----------                              


                       ENERGY POLICY ACT OF 1992

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Energy 
Policy Act of 1992''.
  (b) Table of Contents.--

                       TITLE I--ENERGY EFFICIENCY

                          Subtitle A--Buildings

Sec. 101. Building energy efficiency standards.
     * * * * * * *

                  TITLE III--ALTERNATIVE FUELS--GENERAL

Sec. 301. Definitions.
     * * * * * * *
Sec. 312. Biodiesel fuel use credits.
     * * * * * * *

TITLE III--ALTERNATIVE FUELS--GENERAL

           *       *       *       *       *       *       *


SEC. 312. BIODIESEL FUEL USE CREDITS.

  (a) Allocation of Credits.--
          (1) In general.--The Secretary shall allocate one 
        credit under this section to a fleet or covered person 
        for each qualifying volume of the biodiesel component 
        of fuel containing at least 20 percent biodiesel by 
        volume purchased after the date of the enactment of 
        this section for use by the fleet or covered person in 
        vehicles owned or operated by the fleet or covered 
        person that weigh more than 8,500 pounds gross vehicle 
        weight rating.
          (2) Exceptions.--No credits shall be allocated under 
        paragraph (1) for a purchase of biodiesel--
                  (A) for use in alternative fueled vehicles; 
                or
                  (B) that is required by Federal or State law.
          (3) Authority to modify percentage.--The Secretary 
        may, by rule, lower the 20 percent biodiesel volume 
        requirement in paragraph (1) for reasons related to 
        cold start, safety, or vehicle function considerations.
          (4) Documentation.--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 paragraph (1).
  (b) Use of Credits.--
          (1) In general.--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.
          (2) Limitation.--Credits allocated under subsection 
        (a) may not be used to satisfy more than 50 percent of 
        the alternative fueled vehicle requirements of a fleet 
        or covered person under this title, title IV, and title 
        V. This paragraph shall not apply to a fleet or covered 
        person that is a biodiesel alternative fuel provider 
        described in section 501(a)(2)(A).
  (c) Credit Not a Section 508 Credit.--A credit under this 
section shall not be considered a credit under section 508.
  (d) Issuance of Rule.--The Secretary shall, before January 1, 
1999, issue a rule establishing procedures for the 
implementation of this section.
  (e) Collection of Data.--The Secretary shall collect such 
data as are required to make a determination described in 
subsection (f)(2)(B).
  (f) Definitions.--For purposes of this section--
          (1) the term ``biodiesel'' means a diesel fuel 
        substitute produced from nonpetroleum renewable 
        resources that meets the registration requirements for 
        fuels and fuel additives established by the 
        Environmental Protection Agency under section 211 of 
        the Clean Air Act; and
          (2) the term ``qualifying volume'' means--
                  (A) 450 gallons; or
                  (B) 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.

           *       *       *       *       *       *       *


 ADDITIONAL VIEWS OF REPRESENTATIVES MARKEY, WAXMAN, PALLONE, DEGETTE, 
                               AND FURSE

    While all of us would support a clean reauthorization of 
the Energy Policy and Conservation Act, we have concerns about 
the Shimkus amendment that was adopted during the Committee's 
markup. Though some of us were willing to support the 
underlying legislation despite adoption of the amendment, 
others felt that the amendment raised sufficient policy 
concerns to lead us to oppose the bill. All of us agree, 
however, that while the Shimkus amendment represents an 
improvement over the original Shimkus bill (H.R. 2568), this 
legislation raises significant concerns which must be addressed 
if it is to avoid a negative impact on efforts to promote 
development of cleaner alternative fueled vehicles and reduce 
our nation's dependence on imported oil.
    We note that one of the primary goals of the Energy Policy 
Act of 1992 (``EPAct'' or ``the Act'') was to enact a 
comprehensive national energy policy that strengthens U.S. 
energy security by reducing dependence on imported oil. 
Currently, the United States consumes seven million barrels of 
oil more per day than it produces. Section 502 of the Act 
establishes goals of a 10 percent displacement in U.S. motor 
fuel consumption by the year 2000 and a 30 percent displacement 
in U.S. motor fuel consumption by the year 2010 through the 
production and increased use of replacement fuels. Section 504 
of the Act allows the Secretary to revise these goals downward. 
According to the latest projections by the Energy Information 
Administration, the transportation sector will consume 15.8 
million barrels per day of petroleum in 2010. Of this total, 
about 9.2 million barrels per day of petroleum are projected to 
be used by light duty vehicles. The Energy Information 
Administration also estimates that 60 percent of our total 
petroleum demand will be imported in 2010.
    Significant gains in displacing petroleum motor fuel 
consumption by the year 2010 are expected to occur by replacing 
gasoline with alternative fuels such as electricity, ethanol, 
hydrogen, methanol, natural gas and propane, in a portion of 
the U.S. car and truck population, which is projected to be in 
excess of 200 million vehicles in the year 2010. Currently, 
alternative fueled vehicles comprise a small fraction of the 
total U.S. vehicle stock. To enable the Act's displacement 
goals to be met, alternative fuels must be readily accessible 
and motor vehicles that operate on these alternative fuels must 
be available for purchase. Thus, two important elements of 
reducing petroleum motor fuel consumption are: a nationwide 
alternative fuels infrastructure and the availability of 
alternative fueled vehicles for purchase at a reasonable cost 
by the general public in a wide variety of vehicle types and 
fueling options. Under EPAct, a motor fuel must meet three 
requirements to be considered to be an alternative fuel. First, 
it must foster substantial environmental benefits. Second, it 
must be substantially non-petroleum. Third, it must promote 
energy security goals of the Act.
    While we share the stated concerns of some supporters of 
the Shimkus amendment that many alternative fueled vehicles 
acquired in response to EPAct do not actually operate on /
alternative fuels, we must point out that neither H.R. 2568 nor 
the Shimkus amendment adopted by the Committee addresses this 
shortcoming in current law.
    The original Shimkus bill, H.R. 2568, would have designated 
a fuel mixture that contained 80 percent petroleum and 20 
percent biodiesel (B-20) as an alternative motor fuel under 
EPAct. Since any diesel-fueled vehicle is capable of operating 
on the biodiesel fuel known as B-20, and since EPAct defines an 
alternative fueled vehicle as one which is capable of operating 
using an alternative fuel, H.R. 2568 would have transformed 
every diesel vehicle in America into an alternative fueled 
vehicle. Even if such vehicles did not use biodiesel fuel 
(which they would be unlikely to do, as B-20 costs 20-28 cents 
per gallon more than traditional petroleum diesel), they would 
have been considered an alternative fueled vehicle for the 
purposes of EPAct. This would have created a huge loophole in 
the law which would have undermined our national policy of 
seeking to promote investment in natural gas, electric, or 
other alternative fueled vehicles and would have undermined 
much of the private sector investment in such vehicle 
technologies that has occurred since EPAct's enactment in 1992.
    We note that the Shimkus amendment adopted by the Committee 
takes a different approach from H.R. 2568, and one which 
represents an improvement over the original bill. The amendment 
would allow the Secretary of Energy to allocate credits for 
each qualifying volume of the biodiesel fuel purchased for 
heavy vehicles to satisfy EPAct requirements imposed on certain 
covered persons and fleets. We were pleased that the sponsors 
agreed to make certain modifications in this amendment, such as 
striking the transferability of these credits, making certain 
modifications in the definition of biodiesel that clarifies 
that it covers only fuel substitutes produced from non-
petroleum renewable resources, and making certain 
clarifications in the DOE authority to lower the percentage of 
qualifying biodiesel volume for reasons relating to cold start, 
safety and vehicle function considerations. While these changes 
have helped to improve the amendment, we still have significant 
concerns about the language adopted by the Committee.
    First, we question whether it makes sense to allow 
biodiesel fuel to be used to meet up to 50 percent of the 
alternative fueled vehicle requirements under EPAct. The 
purpose of the alternative fuels program was to create 
incentives for private sector investments in new and more 
environmentally benign technologies which could meet our 
nation's long term energy and transportation needs without 
reliance on imported oil--much of which comes from the Middle 
East. The Shimkus amendment could undermine this important 
energy security goal by reducing by up to half the number of 
alternative fueled vehicles acquired in this country each year. 
Congress decided in 1992 to encourage the shift from petroleum 
by first getting alternative fueled vehicles on the road so 
that the infrastructure for alternative fuels could be 
supported. Allowing use of a fuel which is 80% petroleum to 
displace the acquisition of vehicles which don'trely on 
petroleum-based fuels will do little to help the U.S. achieve energy 
independence from oil imports. In fact, according to DOE staff, 
switching every single diesel vehicle in the United States to B-20 
would only displace 4.2% of petroleum usage.
    Second, alternative fuels under EPAct are required to 
foster substantial environmental benefits. It is our 
understanding that NOx emissions, a leading source of health-
threatening smog, are not reduced in biodiesel blends with less 
than 35 percent bio-mass derived fuel. Moreover, we note that 
diesel-fueled vehicles are the source of more than 40 percent 
of the pollutants from motor vehicles and are also the primary 
transportation source of fine particulate matter (PM), which 
has been determined to be a major public health problem. 
Additionally, in August 1998 the California Air Resources Board 
designated diesel particulates as carcinogenic toxic air 
contaminants. The decision means that California state 
regulators must examine strategies to limit human exposure to 
the chemicals and illustrates the growing consensus on the need 
to further reduce dangerous diesel emissions.
    Allowing a fuel which is largely petroleum-based to receive 
credits to meet up to 50 percent of the alternative fuels 
requirements of EPAct will complicate efforts to achieve the 
fundamental purposes of the alternative fuels program. 
Therefore, if this legislation moves forward, we would be far 
more comfortable if biodiesel credits were limited to a much 
lower level of between 20 to 30 percent.
    Third, we have concerns about the definition of 
``qualifying volume'' of biodiesel fuel. Under the amendment, a 
minimum of 450 gallons of biodiesel fuel qualifies for one 
credit. We think this quantity is far too low. Under current 
law, the purchase of an alternative fueled vehicle--which may 
serve in a fleet for an average of 5 or 6 years--is worth one 
credit. Under the Shimkus amendment, a vehicle which burns 450 
gallons of biodiesel per year would receive one credit for 
every year it is in service, or 5-6 credits.
    The practical impact of this difference is that credits 
will be more easily, cheaply, and plentifully generated through 
the use of biodiesel than through acquisition of alternative 
fueled vehicles. Consider that over a lifetime of 6 years, a 
natural gas dedicated vehicle could consume up to 4800 gallons 
of alternative fuel. The B-20 heavy-duty vehicle would consume 
12,000 gallons of B-20, which would equate to only 2,400 
gallons of biodiesel. The dedicated natural gas vehicle would 
get 1 credit. The B-20 vehicle could claim 1 credit per year, 
or 6 credits total over the same time frame. Also, a heavy-duty 
dedicated natural gas vehicle that consumes 12,000 gallons of 
natural gas over 6 years would also get 1 credit. This is a 
perverse policy result.
    To equate a biodiesel credit with a dedicated alternative 
fueled vehicle on a strict energy basis, therefore, the 
qualifying volume would need to be set at 4800 gallons. 
However, since many alternative fueled vehicles are not 
dedicated, but dual-fuel, they consume much less. The 
Department of Energy informs us that most dual-fuel natural gas 
vehicles consume an alternative fuel 50% of the time. Thus, we 
believe a much higher qualifying volume, such as 2250 gallons, 
would be appropriate so that biodiesel credits do not entirely 
displace investment in cleaner alternative fueled vehicles. We 
also note that to maintain the integrity of this credit system, 
the Department of Energy may need to collect fuel use records 
from fleets using biodiesel.
    When Congress enacted the alternative fuels provisions of 
EPAct, it recognized that vehicles had to come first--and that 
requiring fuel use would steer many fleets to ``avoid'' the 
program. Now that the U.S. is manufacturing significant numbers 
of alternative fueled vehicles, we must continue working to 
create a sound and viable refueling infrastructure. While some 
of us considered offering amendments to address our concerns 
regarding the Shimkus amendment, we decided not to do so at the 
Committee markup in the hope that we could continue to work 
with the sponsors of the amendment to address these issues. We 
appreciate the willingness of the sponsors of the amendment to 
work with us to address our concerns, and we are hopeful that a 
compromise can be reached to address these concerns as best as 
possible.

                                   Ed Markey.
                                   Frank Pallone, Jr.
                                   Diana DeGette.
                                   Henry A. Waxman.
                                   Elizabeth Furse.

                                
