[House Report 108-65]
[From the U.S. Government Publishing Office]



108th Congress                                             Rept. 108-65
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================



 
                       ENERGY POLICY ACT OF 2003

                                _______
                                

                 April 8, 2003.--Ordered to be printed

                                _______
                                

 Mr. Tauzin, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                             together with

               DISSENTING AND ADDITIONAL DISSENTING VIEWS

                        [To accompany H.R. 1644]

  The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 1644) to enhance energy conservation and 
research and development, to provide for security and diversity 
in the energy supply for the American people, and for other 
purposes, 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..............................................   106
Background and Need for Legislation..............................   108
Hearings.........................................................   108
Committee Consideration..........................................   109
Committee Votes..................................................   110
Committee Oversight Findings.....................................   142
Statement of General Performance Goals and Objectives............   142
New Budget Authority, Entitlement Authority, and Tax Expenditures   142
Committee Cost Estimate..........................................   142
Congressional Budget Office Estimate.............................   142
Federal Mandates Statement.......................................   142
Advisory Committee Statement.....................................   142
Constitutional Authority Statement...............................   142
Applicability to Legislative Branch..............................   142
Section-by-Section Analysis of the Legislation...................   143
Changes in Existing Law Made by the Bill, as Reported............   180
Minority, Additional, or Dissenting Views........................   341
Exchange of Committee Correspondence.............................   357

                               Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Energy Policy Act of 
2003''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

                      TITLE I--ENERGY CONSERVATION

         Subtitle A--Federal Leadership in Energy Conservation

Sec. 1001. Energy and water saving measures in congressional buildings.
Sec. 1002. Energy management requirements.
Sec. 1003. Energy use measurement and accountability.
Sec. 1004. Federal building performance standards.
Sec. 1005. Procurement of energy efficient products.
Sec. 1006. Energy savings performance contracts.
Sec. 1007. Voluntary commitments to reduce industrial energy intensity.
Sec. 1008. Federal agency participation in demand reduction programs.
Sec. 1009. Advanced Building Efficiency Testbed.
Sec. 1010. Increased use of recovered mineral component in federally 
funded projects involving procurement of cement or concrete.

            Subtitle B--Energy Assistance and State Programs

Sec. 1021. LIHEAP and weatherization assistance.
Sec. 1022. State energy programs.
Sec. 1023. Energy efficient appliance rebate programs.
Sec. 1024. Energy efficient public buildings.
Sec. 1025. Low income community energy efficiency pilot program.

                 Subtitle C--Energy Efficient Products

Sec. 1041. Energy Star program.
Sec. 1042. Consumer education on energy efficiency benefits of air 
conditioning, heating, and ventilation maintenance.
Sec. 1043. Additional definitions.
Sec. 1044. Additional test procedures.
Sec. 1045. Energy conservation standards for additional consumer and 
commercial products.
Sec. 1046. Energy labeling.
Sec. 1047. Study of energy efficiency standards.

                         TITLE II--OIL AND GAS

                Subtitle A--Alaska Natural Gas Pipeline

Sec. 2001. Short title.
Sec. 2002. Findings and purposes.
Sec. 2003. Definitions.
Sec. 2004. Issuance of certificate of public convenience and necessity.
Sec. 2005. Environmental reviews.
Sec. 2006. Pipeline expansion.
Sec. 2007. Federal Coordinator.
Sec. 2008. Judicial review.
Sec. 2009. State jurisdiction over in-State delivery of natural gas.
Sec. 2010. Study of alternative means of construction.
Sec. 2011. Clarification of ANGTA status and authorities.
Sec. 2012. Sense of Congress.
Sec. 2013. Participation of small business concerns.
Sec. 2014. Alaska pipeline construction training program.

                Subtitle B--Strategic Petroleum Reserve

Sec. 2101. Full capacity of Strategic Petroleum Reserve.
Sec. 2102. Strategic Petroleum Reserve expansion.
Sec. 2103. Permanent authority to operate the Strategic Petroleum 
Reserve and other energy programs.

                    Subtitle C--Hydraulic Fracturing

Sec. 2201. Hydraulic fracturing.

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

Sec. 2301. Program.
Sec. 2302. Eligible reservoirs.
Sec. 2303. Focus areas.
Sec. 2304. Limitation on location of activities.
Sec. 2305. Program administration.
Sec. 2306. Advisory Committee.
Sec. 2307. Limits on participation.
Sec. 2308. Payments to Federal Government.
Sec. 2309. Authorization of appropriations.
Sec. 2310. Public availability of project results and methodologies.
Sec. 2311. Sunset.
Sec. 2312. Definitions.

                       Subtitle E--Miscellaneous

Sec. 2401. Appeals relating to pipeline construction projects.
Sec. 2402. Natural gas market data transparency.
Sec. 2403. Oil and gas exploration and production defined.

                  TITLE III--HYDROELECTRIC RELICENSING

                   Subtitle A--Alternative Conditions

Sec. 3001. Alternative conditions and fishways.

                   Subtitle B--Additional Hydropower

Sec. 3201. Hydroelectric production incentives.
Sec. 3202. Hydroelectric efficiency improvement.
Sec. 3203. Small hydroelectric power projects.
Sec. 3204. Increased hydroelectric generation at existing Federal 
facilities.

                       TITLE IV--NUCLEAR MATTERS

               Subtitle A--Price-Anderson Act Amendments

Sec. 4001. Short title.
Sec. 4002. Extension of indemnification authority.
Sec. 4003. Maximum assessment.
Sec. 4004. Department of Energy liability limit.
Sec. 4005. Incidents outside the United States.
Sec. 4006. Reports.
Sec. 4007. Inflation adjustment.
Sec. 4008. Price-Anderson treatment of modular reactors.
Sec. 4009. Applicability.
Sec. 4010. Prohibition on assumption by United States Government of 
liability for certain foreign accidents.
Sec. 4011. Secure transfer of nuclear materials.
Sec. 4012. Nuclear facility threats.
Sec. 4013. Unreasonable risk consultation.
Sec. 4014. Financial accountability.
Sec. 4015. Civil penalties.

                   Subtitle B--Miscellaneous Matters

Sec. 4021. Licenses.
Sec. 4022. Nuclear Regulatory Commission meetings.
Sec. 4023. NRC training program.
Sec. 4024. Cost recovery from Government agencies.
Sec. 4025. Elimination of pension offset.
Sec. 4026. Carrying of firearms by licensee employees.
Sec. 4027. Unauthorized introduction of dangerous weapons.
Sec. 4028. Sabotage of nuclear facilities or fuel.
Sec. 4029. Cooperative research and development and special 
demonstration projects for the uranium mining industry.
Sec. 4030. Uranium sales.
Sec. 4031. Medical isotope production.
Sec. 4032. Highly enriched uranium diversion threat report.
Sec. 4033. Whistleblower protection.

                      TITLE V--VEHICLES AND FUELS

                Subtitle A--Energy Policy Act Amendments

Sec. 5011. Credit for substantial contribution toward noncovered 
fleets.
Sec. 5012. Credit for alternative fuel infrastructure.
Sec. 5013. Alternative fueled vehicle report.
Sec. 5014. Allocation of incremental costs.

            Subtitle B--FreedomCAR and Hydrogen Fuel Program

Sec. 5021. Short title.
Sec. 5022. Findings, purpose, and definitions.
Sec. 5023. Plan; report.
Sec. 5024. Public-private partnership.
Sec. 5025. Deployment.
Sec. 5026. Assessment and transfer.
Sec. 5027. Interagency task force.
Sec. 5028. Advisory Committee.
Sec. 5029. Authorization of appropriations.
Sec. 5030. Fuel cell program at National Parks.
Sec. 5030A. Advanced power system technology incentive program.

                     Subtitle C--Clean School Buses

Sec. 5031. Establishment of pilot program.
Sec. 5032. Fuel cell bus development and demonstration program.
Sec. 5033. Authorization of appropriations.

                     Subtitle D--Advanced Vehicles

Sec. 5041. Definitions.
Sec. 5042. Pilot program.
Sec. 5043. Reports to Congress.
Sec. 5044. Authorization of appropriations.

           Subtitle E--Hydrogen Fuel Cell Heavy-Duty Vehicles

Sec. 5051. Definition.
Sec. 5052. Findings.
Sec. 5053. Hydrogen fuel cell buses.
Sec. 5054. Authorization of appropriations.

                       Subtitle F--Miscellaneous

Sec. 5061. Railroad efficiency.
Sec. 5062. Mobile emission reductions trading and crediting.
Sec. 5063. Idle reduction technologies.
Sec. 5064. Study of aviation fuel conservation and emissions.
Sec. 5065. Diesel fueled vehicles.
Sec. 5066. Hybrid vehicles.
Sec. 5067. Waivers of alternative fueled vehicle fueling requirement.

                         TITLE VI--DOE PROGRAMS

Sec. 6001. Purposes.
Sec. 6002. Definitions.

                     Subtitle A--Energy Efficiency

                Part 1--Authorization of Appropriations

Sec. 6011. Energy efficiency.

                        Part 2--Lighting Systems

Sec. 6021. Next Generation Lighting Initiative.

                            Part 3--Vehicles

Sec. 6031. Definitions.
Sec. 6032. Establishment of secondary electric vehicle battery use 
program.

       Subtitle B--Distributed Energy and Electric Energy Systems

                Part 1--Authorization of Appropriations

Sec. 6201. Distributed energy and electric energy systems.

                       Part 2--Distributed Power

Sec. 6221. Strategy.
Sec. 6222. High power density industry program.
Sec. 6223. Micro-cogeneration energy technology.

                      Part 3--Transmission Systems

Sec. 6231. Transmission infrastructure systems.

                      Subtitle C--Renewable Energy

                Part 1--Authorization of Appropriations

Sec. 6301. Renewable energy.

                           Part 2--Bioenergy

Sec. 6321. Bioenergy programs.

                       Subtitle D--Nuclear Energy

                Part 1--Authorization of Appropriations

Sec. 6411. Nuclear energy.

                Part 2--Nuclear Energy Research Programs

Sec. 6421. Nuclear energy research programs.

                    Part 3--Advanced Fuel Recycling

Sec. 6431. Advanced fuel recycling program.

                      Part 4--University Programs

Sec. 6441. University nuclear science and engineering support.

                       Subtitle E--Fossil Energy

                Part 1--Authorization of Appropriations

Sec. 6501. Fossil energy.

   Part 2--Ultra-deepwater and Unconventional Natural Gas and Other 
                          Petroleum Resources

Sec. 6521. Program authority.
Sec. 6522. Ultra-deepwater program.
Sec. 6523. Unconventional natural gas and other petroleum resources 
program.
Sec. 6524. Additional requirements for awards.
Sec. 6525. Advisory committees.
Sec. 6526. Limits on participation.
Sec. 6527. Fund.
Sec. 6528. Sunset.
Sec. 6529. Definitions.

                       Subtitle F--Miscellaneous

Sec. 6601. Waste reduction and use of alternatives.
Sec. 6602. Coal gasification.
Sec. 6603. Petroleum coke gasification.
Sec. 6604. Other biopower and bioenergy.
Sec. 6605. Technology transfer.
Sec. 6606. Limitation on legal fee reimbursement.
Sec. 6607. Complex well technology testing facility.
Sec. 6608. Total integrated thermal systems.
Sec. 6609. Oil bypass filtration technology.

                         TITLE VII--ELECTRICITY

                   Subtitle A--Transmission Capacity

Sec. 7011. Transmission infrastructure improvement rulemaking.
Sec. 7012. Siting of interstate electrical transmission facilities.

                   Subtitle B--Transmission Operation

Sec. 7021. Open access transmission by certain utilities.
Sec. 7022. Regional transmission organizations.
Sec. 7023. Native load.

                        Subtitle C--Reliability

Sec. 7031. Electric reliability standards.

                      Subtitle D--PUHCA Amendments

Sec. 7041. Short title.
Sec. 7042. Definitions.
Sec. 7043. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 7044. Federal access to books and records.
Sec. 7045. State access to books and records.
Sec. 7046. Exemption authority.
Sec. 7047. Affiliate transactions.
Sec. 7048. Applicability.
Sec. 7049. Effect on other regulations.
Sec. 7050. Enforcement.
Sec. 7051. Savings provisions.
Sec. 7052. Implementation.
Sec. 7053. Transfer of resources.
Sec. 7054. Effective date.
Sec. 7055. Authorization of appropriations.
Sec. 7056. Conforming amendments to the Federal Power Act.

                      Subtitle E--PURPA Amendments

Sec. 7061. Real-time pricing and time-of-use metering standards.
Sec. 7062. Cogeneration and small power production purchase and sale 
requirements.
Sec. 7063. Smart metering.

                      Subtitle F--Renewable Energy

Sec. 7071. Net metering.
Sec. 7072. Renewable energy production incentive.
Sec. 7073. Renewable energy on Federal lands.
Sec. 7074. Assessment of renewable energy resources.

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

Sec. 7081. Market transparency rules.
Sec. 7082. Prohibition on round trip trading.
Sec. 7083. Conforming changes.
Sec. 7084. Enforcement.

                    Subtitle H--Consumer Protections

Sec. 7091. Refund effective date.
Sec. 7092. Jurisdiction over interstate sales.
Sec. 7093. Consumer privacy.
Sec. 7094. Unfair trade practices.

          Subtitle I--Merger Review Reform and Accountability

Sec. 7101. Merger review reform and accountability.

                 Subtitle J--Study of Economic Dispatch

Sec. 7111. Study on the benefits of economic dispatch.

                            TITLE VIII--COAL

Sec. 8001. Authorization of appropriations.
Sec. 8002. Project criteria.
Sec. 8003. Report.
Sec. 8004. Clean coal centers of excellence.

                         TITLE IX--MOTOR FUELS

                     Subtitle A--General Provisions

Sec. 9101. Renewable content of motor vehicle fuel.
Sec. 9102. Fuels safe harbor.
Sec. 9103. Findings and MTBE transition assistance.
Sec. 9104. Elimination of oxygen content requirement for reformulated 
gasoline.
Sec. 9105. Analyses of motor vehicle fuel changes.
Sec. 9106. Data collection.
Sec. 9107. Fuel system requirements harmonization study.

                        Subtitle B--MTBE Cleanup

Sec. 9201. Funding for MTBE contamination.

                     TITLE X--AUTOMOBILE EFFICIENCY

Sec. 10001. Authorization of appropriations for implementation and 
enforcement of fuel economy standards.
Sec. 10002. Study of feasibility and effects of reducing use of fuel 
for automobiles.

  TITLE XI--PREVENTING THE MISUSE OF NUCLEAR MATERIALS AND TECHNOLOGY

Sec. 11001. Preventing the misuse of nuclear materials and technology.

                    TITLE XII--ADDITIONAL PROVISIONS

Sec. 12001. Transmission technologies.

                      TITLE I--ENERGY CONSERVATION

         Subtitle A--Federal Leadership in Energy Conservation

SEC. 1001. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL BUILDINGS.

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

``SEC. 552. ENERGY AND WATER SAVINGS MEASURES IN CONGRESSIONAL 
                    BUILDINGS.

  ``(a) In General.--The Architect of the Capitol--
          ``(1) shall develop, update, and implement a cost-effective 
        energy conservation and management plan (referred to in this 
        section as the `plan') for all facilities administered by the 
        Congress (referred to in this section as `congressional 
        buildings') to meet the energy performance requirements for 
        Federal buildings established under section 543(a)(1); and
          ``(2) shall submit the plan to Congress, not later than 180 
        days after the date of enactment of this section.
  ``(b) Plan Requirements.--The plan shall include--
          ``(1) a description of the life cycle cost analysis used to 
        determine the cost-effectiveness of proposed energy efficiency 
        projects;
          ``(2) a schedule of energy surveys to ensure complete surveys 
        of all congressional buildings every 5 years to determine the 
        cost and payback period of energy and water conservation 
        measures;
          ``(3) a strategy for installation of life cycle cost-
        effective energy and water conservation measures;
          ``(4) the results of a study of the costs and benefits of 
        installation of submetering in congressional buildings; and
          ``(5) information packages and `how-to' guides for each 
        Member and employing authority of Congress that detail simple, 
        cost-effective methods to save energy and taxpayer dollars in 
        the workplace.
  ``(c) Annual Report.--The Architect shall submit to Congress annually 
a report on congressional energy management and conservation programs 
required under this section that describes in detail--
          ``(1) energy expenditures and savings estimates for each 
        facility;
          ``(2) energy management and conservation projects; and
          ``(3) future priorities to ensure compliance with this 
        section.''.
  (b) Table of Contents Amendment.--The table of contents of the 
National Energy Conservation Policy Act is amended by adding at the end 
of the items relating to part 3 of title V the following new item:

``Sec. 552. Energy and water savings measures in congressional 
          buildings.''.

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

SEC. 1002. ENERGY MANAGEMENT REQUIREMENTS.

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

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

          (2) Reporting baseline.--The energy reduction goals and 
        baseline established in paragraph (1) of section 543(a) of the 
        National Energy Conservation Policy Act, as amended by 
        paragraph (1) of this subsection, supersede all previous goals 
        and baselines under such paragraph, and related reporting 
        requirements.
  (b) Review and Revision of Energy Performance Requirement.--Section 
543(a) of the National Energy Conservation Policy Act (42 U.S.C. 
8253(a)) is further amended by adding at the end the following:
  ``(3) Not later than December 31, 2012, the Secretary shall review 
the results of the implementation of the energy performance requirement 
established under paragraph (1) and submit to Congress recommendations 
concerning energy performance requirements for fiscal years 2014 
through 2023.''.
  (c) Exclusions.--Section 543(c)(1) of the National Energy 
Conservation Policy Act (42 U.S.C. 8253(c)(1)) is amended by striking 
``An agency may exclude'' and all that follows through the end and 
inserting ``(A) An agency may exclude, from the energy performance 
requirement for a fiscal year established under subsection (a) and the 
energy management requirement established under subsection (b), any 
Federal building or collection of Federal buildings, if the head of the 
agency finds that--
          ``(i) compliance with those requirements would be 
        impracticable;
          ``(ii) the agency has completed and submitted all federally 
        required energy management reports;
          ``(iii) the agency has achieved compliance with the energy 
        efficiency requirements of this Act, the Energy Policy Act of 
        1992, Executive Orders, and other Federal law; and
          ``(iv) the agency has implemented all practicable, life cycle 
        cost-effective projects with respect to the Federal building or 
        collection of Federal buildings to be excluded.
  ``(B) A finding of impracticability under subparagraph (A)(i) shall 
be based on--
          ``(i) the energy intensiveness of activities carried out in 
        the Federal building or collection of Federal buildings; or
          ``(ii) the fact that the Federal building or collection of 
        Federal buildings is used in the performance of a national 
        security function.''.
  (d) Review by Secretary.--Section 543(c)(2) of the National Energy 
Conservation Policy Act (42 U.S.C. 8253(c)(2)) is amended--
          (1) by striking ``impracticability standards'' and inserting 
        ``standards for exclusion''; and
          (2) by striking ``a finding of impracticability'' and 
        inserting ``the exclusion''.
  (e) Criteria.--Section 543(c) of the National Energy Conservation 
Policy Act (42 U.S.C. 8253(c)) is further amended by adding at the end 
the following:
  ``(3) Not later than 180 days after the date of enactment of this 
paragraph, the Secretary shall issue guidelines that establish criteria 
for exclusions under paragraph (1).''.
  (f) Retention of Energy Savings.--Section 546 of the National Energy 
Conservation Policy Act (42 U.S.C. 8256) is amended by adding at the 
end the following new subsection:
  ``(e) Retention of Energy Savings.--An agency may retain any funds 
appropriated to that agency for energy expenditures, at buildings 
subject to the requirements of section 543(a) and (b), that are not 
made because of energy savings. Except as otherwise provided by law, 
such funds may be used only for energy efficiency or unconventional and 
renewable energy resources projects.''.
  (g) Reports.--Section 548(b) of the National Energy Conservation 
Policy Act (42 U.S.C. 8258(b)) is amended--
          (1) in the subsection heading, by inserting ``The President 
        and'' before ``Congress''; and
          (2) by inserting ``President and'' before ``Congress''.
  (h) Conforming Amendment.--Section 550(d) of the National Energy 
Conservation Policy Act (42 U.S.C. 8258b(d)) is amended in the second 
sentence by striking ``the 20 percent reduction goal established under 
section 543(a) of the National Energy Conservation Policy Act (42 
U.S.C. 8253(a)).'' and inserting ``each of the energy reduction goals 
established under section 543(a).''.

SEC. 1003. ENERGY USE MEASUREMENT AND ACCOUNTABILITY.

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

SEC. 1004. FEDERAL BUILDING PERFORMANCE STANDARDS.

  Section 305(a) of the Energy Conservation and Production Act (42 
U.S.C. 6834(a)) is amended--
          (1) in paragraph (2)(A), by striking ``CABO Model Energy 
        Code, 1992'' and inserting ``the 2000 International Energy 
        Conservation Code''; and
          (2) by adding at the end the following:
  ``(3) Revised federal building energy efficiency performance 
standards.--
          ``(A) In general.--Not later than 1 year after the date of 
        enactment of this paragraph, the Secretary of Energy shall 
        establish, by rule, revised Federal building energy efficiency 
        performance standards that require that, if cost-effective, for 
        new Federal buildings--
                  ``(i) such buildings be designed so as to achieve 
                energy consumption levels at least 30 percent below 
                those of the most recent ASHRAE Standard 90.1 or the 
                most recent version of the International Energy 
                Conservation Code, as appropriate; and
                  ``(ii) sustainable design principles are applied to 
                the siting, design, and construction of all new and 
                replacement buildings.
          ``(B) Additional revisions.--Not later than 1 year after the 
        date of approval of amendments to ASHRAE Standard 90.1 or the 
        2000 International Energy Conservation Code, the Secretary of 
        Energy shall determine, based on the cost-effectiveness of the 
        requirements under the amendments, whether the revised 
        standards established under this paragraph should be updated to 
        reflect the amendments.
          ``(C) Statement on compliance of new buildings.--In the 
        budget request of the Federal agency for each fiscal year and 
        each report submitted by the Federal agency under section 
        548(a) of the National Energy Conservation Policy Act (42 
        U.S.C. 8258(a)), the head of each Federal agency shall 
        include--
                  ``(i) a list of all new Federal buildings owned, 
                operated, or controlled by the Federal agency; and
                  ``(ii) a statement concerning whether the Federal 
                buildings meet or exceed the revised standards 
                established under this paragraph.''.

SEC. 1005. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

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

``SEC. 553. FEDERAL PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

  ``(a) Definitions.--In this section:
          ``(1) Energy star product.--The term `Energy Star product' 
        means a product that is rated for energy efficiency under an 
        Energy Star program.
          ``(2) Energy star program.--The term `Energy Star program' 
        means the program established by section 324A of the Energy 
        Policy and Conservation Act.
          ``(3) Executive agency.--The term `executive agency' has the 
        meaning given the term in section 4 of the Office of Federal 
        Procurement Policy Act (41 U.S.C. 403).
          ``(4) FEMP designated product.--The term `FEMP designated 
        product' means a product that is designated under the Federal 
        Energy Management Program of the Department of Energy as being 
        among the highest 25 percent of equivalent products for energy 
        efficiency.
  ``(b) Procurement of Energy Efficient Products.--
          ``(1) Requirement.--To meet the requirements of an executive 
        agency for an energy consuming product, the head of the 
        executive agency shall, except as provided in paragraph (2), 
        procure--
                  ``(A) an Energy Star product; or
                  ``(B) a FEMP designated product.
          ``(2) Exceptions.--The head of an executive agency is not 
        required to procure an Energy Star product or FEMP designated 
        product under paragraph (1) if the head of the executive agency 
        finds in writing that--
                  ``(A) an Energy Star product or FEMP designated 
                product is not cost-effective over the life of the 
                product taking energy cost savings into account; or
                  ``(B) no Energy Star product or FEMP designated 
                product is reasonably available that meets the 
                functional requirements of the executive agency.
          ``(3) Procurement planning.--The head of an executive agency 
        shall incorporate into the specifications for all procurements 
        involving energy consuming products and systems, including 
        guide specifications, project specifications, and construction, 
        renovation, and services contracts that include provision of 
        energy consuming products and systems, and into the factors for 
        the evaluation of offers received for the procurement, criteria 
        for energy efficiency that are consistent with the criteria 
        used for rating Energy Star products and for rating FEMP 
        designated products.
  ``(c) Listing of Energy Efficient Products in Federal Catalogs.--
Energy Star products and FEMP designated products shall be clearly 
identified and prominently displayed in any inventory or listing of 
products by the General Services Administration or the Defense 
Logistics Agency. The General Services Administration or the Defense 
Logistics Agency shall supply only Energy Star products or FEMP 
designated products for all product categories covered by the Energy 
Star program or the Federal Energy Management Program, except in cases 
where the agency ordering a product specifies in writing that no Energy 
Star product or FEMP designated product is available to meet the 
buyer's functional requirements, or that no Energy Star product or FEMP 
designated product is cost-effective for the intended application over 
the life of the product, taking energy cost savings into account.
  ``(d) Designation of Electric Motors.--In the case of electric motors 
of 1 to 500 horsepower, agencies shall select only premium efficient 
motors that meet astandard designated by the Secretary. The Secretary 
shall designate such a standard within 120 days after the date of the 
enactment of this section, after considering the recommendations of 
associated electric motor manufacturers and energy efficiency groups.
  ``(e) Regulations.--Not later than 180 days after the date of the 
enactment of this section, the Secretary shall issue guidelines to 
carry out this section.''.
  (b) Conforming Amendment.--The table of contents in section 101(b) of 
the National Energy Conservation Policy Act (42 U.S.C. 8201 note), as 
amended by section 1001(b) of this Act, is further amended by inserting 
after the item relating to section 552 the following:

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

SEC. 1006. ENERGY SAVINGS PERFORMANCE CONTRACTS.

  (a) Permanent Extension.--Section 801(c) of the National Energy 
Conservation Policy Act (42 U.S.C. 8287(c)) is repealed.
  (b) Replacement Facilities.--Section 801(a) of the National Energy 
Conservation Policy Act (42 U.S.C. 8287(a)) is amended by adding at the 
end the following new paragraph:
          ``(3)(A) In the case of an energy savings contract or energy 
        savings performance contract providing for energy savings 
        through the construction and operation of one or more buildings 
        or facilities to replace one or more existing buildings or 
        facilities, benefits ancillary to the purpose of such contract 
        under paragraph (1) may include savings resulting from reduced 
        costs of operation and maintenance at such replacement 
        buildings or facilities when compared with costs of operation 
        and maintenance at the buildings or facilities being replaced, 
        established through a methodology set forth in the contract.
          ``(B) Notwithstanding paragraph (2)(B), aggregate annual 
        payments by an agency under an energy savings contract or 
        energy savings performance contract referred to in subparagraph 
        (A) may take into account (through the procedures developed 
        pursuant to this section) savings resulting from reduced costs 
        of operation and maintenance as described in that 
        subparagraph.''.
  (c) Energy Savings.--Section 804(2) of the National Energy 
Conservation Policy Act (42 U.S.C. 8287c(2)) is amended to read as 
follows:
          ``(2) The term `energy savings' means--
                  ``(A) a reduction in the cost of energy or water, 
                from a base cost established through a methodology set 
                forth in the contract, used in an existing federally 
                owned building or buildings or other federally owned 
                facilities as a result of--
                          ``(i) the lease or purchase of operating 
                        equipment, improvements, altered operation and 
                        maintenance, or technical services;
                          ``(ii) the increased efficient use of 
                        existing energy sources by cogeneration or heat 
                        recovery, excluding any cogeneration process 
                        for other than a federally owned building or 
                        buildings or other federally owned facilities; 
                        or
                          ``(iii) the increased efficient use of 
                        existing water sources; or
                  ``(B) in the case of a replacement building or 
                facility described in section 801(a)(3), a reduction in 
                the cost of energy, from a base cost established 
                through a methodology set forth in the contract, that 
                would otherwise be utilized in one or more existing 
                federally owned buildings or other federally owned 
                facilities by reason of the construction and operation 
                of the replacement building or facility.''.
  (d) Energy Savings Contract.--Section 804(3) of the National Energy 
Conservation Policy Act (42 U.S.C. 8287c(3)) is amended to read as 
follows:
          ``(3) The terms `energy savings contract' and `energy savings 
        performance contract' mean a contract which provides for--
                  ``(A) the performance of services for the design, 
                acquisition, installation, testing, operation, and, 
                where appropriate, maintenance and repair, of an 
                identified energy or water conservation measure or 
                series of measures at one or more locations; or
                  ``(B) energy savings through the construction and 
                operation of one or more buildings or facilities to 
                replace one or more existing buildings or facilities.
        Such contracts shall, with respect to an agency facility that 
        is a public building as such term is defined in section 13(1) 
        of the Public Buildings Act of 1959 (40 U.S.C. 3301), be in 
        compliance with the prospectus requirements and procedures of 
        section 7 of the Public Buildings Act of 1959 (40 U.S.C. 
        3307).''.
  (e) Energy or Water Conservation Measure.--Section 804(4) of the 
National Energy Conservation Policy Act (42 U.S.C. 8287c(4)) is amended 
to read as follows:
          ``(4) The term `energy or water conservation measure' means--
                  ``(A) an energy conservation measure, as defined in 
                section 551(4) (42 U.S.C. 8259(4)); or
                  ``(B) a water conservation measure that improves 
                water efficiency, is life cycle cost-effective, and 
                involves water conservation, water recycling or reuse, 
                more efficient treatment of wastewater or stormwater, 
                improvements in operation or maintenance efficiencies, 
                retrofit activities, or other related activities, not 
                at a Federal hydroelectric facility.''.
  (f) Review.--Within 180 days after the date of the enactment of this 
section, the Secretary of Energy shall complete a review of the Energy 
Savings Performance Contract program to identify statutory, regulatory, 
and administrative obstacles that prevent Federal agencies from fully 
utilizing the program. In addition, this review shall identify all 
areas for increasing program flexibility and effectiveness, including 
audit and measurement verification requirements, accounting for energy 
use in determining savings, contracting requirements, and energy 
efficiency services covered. The Secretary shall report these findings 
to the Committee on Energy and Commerce of the House of Representatives 
and the Committee on Energy and Natural Resources of the Senate, and 
shall implement identified administrative and regulatory changes to 
increase program flexibility and effectiveness to the extent that such 
changes are consistent with statutory authority.

SEC. 1007. VOLUNTARY COMMITMENTS TO REDUCE INDUSTRIAL ENERGY INTENSITY.

  (a) Voluntary Agreements.--The Secretary of Energy shall enter into 
voluntary agreements with one or more persons in industrial sectors 
that consume significant amounts of primary energy per unit of physical 
output to reduce the energy intensity of their production activities.
  (b) Goal.--Voluntary agreements under this section shall have a goal 
of reducing energy intensity by not less than 2.5 percent each year 
from 2004 through 2014.
  (c) Recognition.--The Secretary of Energy, in cooperation with the 
Administrator of the Environmental Protection Agency and other 
appropriate Federal agencies, shall develop mechanisms to recognize and 
publicize the achievements of participants in voluntary agreements 
under this section.
  (d) Definition.--In this section, the term ``energy intensity'' means 
the primary energy consumed per unit of physical output in an 
industrial process.
  (e) Technical Assistance.--An entity that enters into an agreement 
under this section and continues to make a good faith effort to achieve 
the energy efficiency goals specified in the agreement shall be 
eligible to receive from the Secretary a grant or technical assistance 
as appropriate to assist in the achievement of those goals.
  (f) Report.--Not later than June 30, 2010 and June 30, 2014, the 
Secretary shall submit to Congress a report that evaluates the success 
of the voluntary agreements, with independent verification of a sample 
of the energy savings estimates provided by participating firms.

SEC. 1008. FEDERAL AGENCY PARTICIPATION IN DEMAND REDUCTION PROGRAMS.

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

SEC. 1009. ADVANCED BUILDING EFFICIENCY TESTBED.

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

SEC. 1010. INCREASED USE OF RECOVERED MINERAL COMPONENT IN FEDERALLY 
                    FUNDED PROJECTS INVOLVING PROCUREMENT OF CEMENT OR 
                    CONCRETE.

  (a) Amendment.--Subtitle F of the Solid Waste Disposal Act (42 U.S.C. 
6961 et seq.) is amended by adding at the end the following new 
section:
  ``increased use of recovered mineral component in federally funded 
          projects involving procurement of cement or concrete
  ``Sec. 6005. (a) Definitions.--In this section:
          ``(1) Agency head.--The term `agency head' means--
                  ``(A) the Secretary of Transportation; and
                  ``(B) the head of each other Federal agency that on a 
                regular basis procures, or provides Federal funds to 
                pay or assist in paying the cost of procuring, material 
                for cement or concrete projects.
          ``(2) Cement or concrete project.--The term `cement or 
        concrete project' means a project for the construction or 
        maintenance of a highway or other transportation facility or a 
        Federal, State, or local government building or other public 
        facility that--
                  ``(A) involves the procurement of cement or concrete; 
                and
                  ``(B) is carried out in whole or in part using 
                Federal funds.
          ``(3) Recovered mineral component.--The term `recovered 
        mineral component' means--
                  ``(A) ground granulated blast furnace slag;
                  ``(B) coal combustion fly ash; and
                  ``(C) any other waste material or byproduct recovered 
                or diverted from solid waste that the Administrator, in 
                consultation with an agency head, determines should be 
                treated as recovered mineral component under this 
                section for use in cement or concrete projects paid 
                for, in whole or in part, by the agency head.
  ``(b) Implementation of Requirements.--
          ``(1) In general.--Not later than 1 year after the date of 
        enactment of this section, the Administrator and each agency 
        head shall take such actions as are necessary to implement 
        fully all procurement requirements and incentives in effect as 
        of the date of enactment of this section (including guidelines 
        under section 6002) that provide for the use of cement and 
        concrete incorporating recovered mineral component in cement or 
        concrete projects.
          ``(2) Priority.--In carrying out paragraph (1) an agency head 
        shall give priority to achieving greater use of recovered 
        mineral component in cement or concrete projects forwhich 
recovered mineral components historically have not been used or have 
been used only minimally.
          ``(3) Conformance.--The Administrator and each agency head 
        shall carry out this subsection in accordance with section 
        6002.
  ``(c) Full Implementation Study.--
          ``(1) In general.--The Administrator, in cooperation with the 
        Secretary of Transportation and the Secretary of Energy, shall 
        conduct a study to determine the extent to which current 
        procurement requirements, when fully implemented in accordance 
        with subsection (b), may realize energy savings and 
        environmental benefits attainable with substitution of 
        recovered mineral component in cement used in cement or 
        concrete projects.
          ``(2) Matters to be addressed.--The study shall--
                  ``(A) quantify the extent to which recovered mineral 
                components are being substituted for Portland cement, 
                particularly as a result of current procurement 
                requirements, and the energy savings and environmental 
                benefits associated with that substitution;
                  ``(B) identify all barriers in procurement 
                requirements to fuller realization of energy savings 
                and environmental benefits, including barriers 
                resulting from exceptions from current law; and
                  ``(C)(i) identify potential mechanisms to achieve 
                greater substitution of recovered mineral component in 
                types of cement or concrete projects for which 
                recovered mineral components historically have not been 
                used or have been used only minimally;
                  ``(ii) evaluate the feasibility of establishing 
                guidelines or standards for optimized substitution 
                rates of recovered mineral component in those cement or 
                concrete projects; and
                  ``(iii) identify any potential environmental or 
                economic effects that may result from greater 
                substitution of recovered mineral component in those 
                cement or concrete projects.
          ``(3) Report.--Not later than 30 months after the date of 
        enactment of this section, the Administrator shall submit to 
        the Committee on Appropriations and Committee on Environment 
        and Public Works of the Senate and the Committee on 
        Appropriations, Committee on Energy and Commerce, and Committee 
        on Transportation and Infrastructure of the House of 
        Representatives a report on the study.
  ``(d) Additional Procurement Requirements.--Unless the study 
conducted under subsection (c) identifies any effects or other problems 
described in subsection (c)(2)(C)(iii) that warrant further review or 
delay, the Administrator and each agency head shall, within 1 year of 
the release of the report in accordance with subsection (c)(3), take 
additional actions authorized under this Act to establish procurement 
requirements and incentives that provide for the use of cement and 
concrete with increased substitution of recovered mineral component in 
the construction and maintenance of cement or concrete projects, so as 
to--
          ``(1) realize more fully the energy savings and environmental 
        benefits associated with increased substitution; and
          ``(2) eliminate barriers identified under subsection (c).
  ``(e) Effect of Section.--Nothing in this section affects the 
requirements of section 6002 (including the guidelines and 
specifications for implementing those requirements).''.
  (b) Table of Contents Amendment.--The table of contents of the Solid 
Waste Disposal Act is amended by adding after the item relating to 
section 6004 the following new item:

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

            Subtitle B--Energy Assistance and State Programs

SEC. 1021. LIHEAP AND WEATHERIZATION ASSISTANCE.

  (a) Low-Income Home Energy Assistance Program.--Section 2602(b) of 
the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621(b)) 
is amended by striking ``each of fiscal years 2002 through 2004'' and 
inserting ``each of fiscal years 2002 and 2003, and $3,400,000,000 for 
each of fiscal years 2004 through 2006''.
  (b) Weatherization.--Section 422 of the Energy Conservation and 
Production Act (42 U.S.C. 6872) is amended by striking ``for fiscal 
years 1999 through 2003 such sums as may be necessary'' and inserting 
``$325,000,000 for fiscal year 2004, $400,000,000 for fiscal year 2005, 
and $500,000,000 for fiscal year 2006''.
  (c) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the Secretary of Health and Human Services shall 
transmit to the Congress a report on how the Low-Income Home Energy 
Assistance Program could be used more effectively to prevent loss of 
life from extreme temperatures. In preparing such report, the Secretary 
shall consult with appropriate officials in all 50 States and the 
District of Columbia.

SEC. 1022. STATE ENERGY PROGRAMS.

  (a) State Energy Conservation Plans.--Section 362 of the Energy 
Policy and Conservation Act (42 U.S.C. 6322) is amended by inserting at 
the end the following new subsection:
  ``(g) The Secretary shall, at least once every 3 years, invite the 
Governor of each State to review and, if necessary, revise the energy 
conservation plan of such State submitted under subsection (b) or (e). 
Such reviews should consider the energy conservation plans of other 
States within the region, and identify opportunities and actions 
carried out in pursuit of common energy conservation goals.''.
  (b) State Energy Efficiency Goals.--Section 364 of the Energy Policy 
and Conservation Act (42 U.S.C. 6324) is amended to read as follows:
                    ``state energy efficiency goals
  ``Sec. 364. Each State energy conservation plan with respect to which 
assistance is made available under this part on or after the date of 
enactment of the Energy Policy Act of 2003 shall contain a goal, 
consisting of an improvement of 25 percent or more in the efficiency of 
use of energy in the State concerned in calendar year 2010 as compared 
to calendar year 1990, and may contain interim goals.''.
  (c) Authorization of Appropriations.--Section 365(f) of the Energy 
Policy and Conservation Act (42 U.S.C. 6325(f)) is amended by striking 
``for fiscal years 1999 through 2003 such sums as may be necessary'' 
and inserting ``$100,000,000 for each of the fiscal years 2004 and 2005 
and $125,000,000 for fiscal year 2006''.

SEC. 1023. ENERGY EFFICIENT APPLIANCE REBATE PROGRAMS.

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

SEC. 1024. ENERGY EFFICIENT PUBLIC BUILDINGS.

  (a) Grants.--The Secretary of Energy may make grants to the State 
agency responsible for developing State energy conservation plans under 
section 362 of the Energy Policy and Conservation Act (42 U.S.C. 6322), 
or, if no such agency exists, a State agency designated by the Governor 
of the State, to assist units of local government in the State in 
improving the energy efficiency of public buildings and facilities--
          (1) through construction of new energy efficient public 
        buildings that use at least 30 percent less energy than a 
        comparable public building constructed in compliance with 
        standards prescribed in chapter 8 of the 2000 International 
        Energy Conservation Code, or a similar State code intended to 
        achieve substantially equivalent efficiency levels; or
          (2) through renovation of existing public buildings to 
        achieve reductions in energy use of at least 30 percent as 
        compared to the baseline energy use in such buildings prior to 
        renovation, assuming a 3-year, weather-normalized average for 
        calculating such baseline.
  (b) Administration.--State energy offices receiving grants under this 
section shall--
          (1) maintain such records and evidence of compliance as the 
        Secretary may require; and
          (2) develop and distribute information and materials and 
        conduct programs to provide technical services and assistance 
        to encourage planning, financing, and design of energy 
        efficient public buildings by units of local government.
  (c) Authorization of Appropriations.--For the purposes of this 
section, there are authorized to be appropriated to the Secretary of 
Energy such sums as may be necessary for each of fiscal years 2004 
through 2013. Not more than 30 percent of appropriated funds shall be 
used for administration.

SEC. 1025. LOW INCOME COMMUNITY ENERGY EFFICIENCY PILOT PROGRAM.

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

                 Subtitle C--Energy Efficient Products

SEC. 1041. ENERGY STAR PROGRAM.

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

``SEC. 324A. ENERGY STAR PROGRAM.

  ``There is established at the Department of Energy and the 
Environmental Protection Agency a program to identify and promote 
energy-efficient products and buildings in order to reduce energy 
consumption, improve energy security, and reduce pollution through 
labeling of and other forms of communication about products and 
buildings that meet the highest energy efficiency standards. 
Responsibilities under the program shall be divided between the 
Department of Energy and the Environmental Protection Agency consistent 
with the terms of agreements between the two agencies. The 
Administrator and the Secretary shall--
          ``(1) promote Energy Star compliant technologies as the 
        preferred technologies in the marketplace for achieving energy 
        efficiency and to reduce pollution;
          ``(2) work to enhance public awareness of the Energy Star 
        label, including special outreach to small businesses;
          ``(3) preserve the integrity of the Energy Star label; and
          ``(4) solicit the comments of interested parties in 
        establishing a new Energy Star product category or in revising 
        a product category, and upon adoption of a new or revised 
        product category provide an explanation of the decision that 
        responds to significant public comments.''.
  (b) Table of Contents Amendment.--The table of contents of the Energy 
Policy and Conservation Act is amended by inserting after the item 
relating to section 324 the following new item:

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

SEC. 1042. CONSUMER EDUCATION ON ENERGY EFFICIENCY BENEFITS OF AIR 
                    CONDITIONING, HEATING, AND VENTILATION MAINTENANCE.

  Section 337 of the Energy Policy and Conservation Act (42 U.S.C. 
6307) is amended by adding at the end the following:
  ``(c) HVAC Maintenance.--(1) For the purpose of ensuring that 
installed air conditioning and heating systems operate at their maximum 
rated efficiency levels, the Secretary shall, within 180 days of the 
date of enactment of this subsection, carry out a program to educate 
homeowners and small business owners concerning the energy savings 
resulting from properly conducted maintenance of air conditioning, 
heating, and ventilating systems.
  ``(2) The Secretary shall carry out the program in cooperation with 
the Administrator of the Environmental Protection Agency and such other 
entities as the Secretary considers appropriate, including industry 
trade associations, industry members, and energy efficiency 
organizations.
  ``(d) Small Business Education and Assistance.--The Administrator of 
the Small Business Administration, in consultation with the Secretary 
of Energy and the Administrator of the Environmental Protection Agency, 
shall develop and coordinate a Government-wide program, building on the 
existing Energy Star for Small Business Program, to assist small 
business to become more energy efficient, understand the cost savings 
obtainable through efficiencies, and identify financing options for 
energy efficiency upgrades. The Secretary and the Administrator shall 
make the program information available directly to small businesses and 
through other Federal agencies, including the Federal Emergency 
Management Agency, and the Department of Agriculture.''.

SEC. 1043. ADDITIONAL DEFINITIONS.

  Section 321 of the Energy Policy and Conservation Act (42 U.S.C. 
6291) is amended by adding at the end the following:
          ``(32) The term `battery charger' means a device that charges 
        batteries for consumer products.
          ``(33) The term `commercial refrigerator, freezer and 
        refrigerator-freezer' means a refrigerator, freezer or 
        refrigerator-freezer that--
                  ``(A) is not a consumer product regulated under this 
                Act; and
                  ``(B) incorporates most components involved in the 
                vapor-compression cycle and the refrigerated 
                compartment in a single package.
          ``(34) The term `external power supply' means an external 
        power supply circuit that is used to convert household electric 
        current into either DC current or lower-voltage AC current to 
        operate a consumer product.
          ``(35) The term `illuminated exit sign' means a sign that--
                  ``(A) is designed to be permanently fixed in place to 
                identify an exit; and
                  ``(B) consists of--
                          ``(i) an electrically powered integral light 
                        source that illuminates the legend `EXIT' and 
                        any directional indicators; and
                          ``(ii) provides contrast between the legend, 
                        any directional indicators, and the background.
          ``(36)(A) Except as provided in subparagraph (B), the term 
        `low-voltage dry-type transformer' means a transformer that--
                  ``(i) has an input voltage of 600 volts or less;
                  ``(ii) is air-cooled;
                  ``(iii) does not use oil as a coolant; and
                  ``(iv) is rated for operation at a frequency of 60 
                Hertz.
          ``(B) The term `low-voltage dry-type transformer' does not 
        include--
                  ``(i) transformers with multiple voltage taps, with 
                the highest voltage tap equaling at least 20 percent 
                more than the lowest voltage tap;
                  ``(ii) transformers that are designed to be used in a 
                special purpose application, such as transformers 
                commonly known as drive transformers, rectifier 
                transformers, autotransformers, Uninterruptible Power 
                System transformers, impedance transformers, harmonic 
                transformers, regulating transformers, sealed and 
                nonventilating transformers, machine tool transformers, 
                welding transformers, grounding transformers, or 
                testing transformers; or
                  ``(iii) any transformer not listed in clause (ii) 
                that is excluded by the Secretary by rule because the 
                transformer is designed for a special application and 
                the application of standards to the transformer would 
                not result in significant energy savings.
          ``(37) The term `standby mode' means the lowest amount of 
        electric power used by a household appliance when not 
        performing its active functions, as defined on an individual 
        product basis by the Secretary.
          ``(38) The term `torchiere' means a portable electric lamp 
        with a reflector bowl that directs light upward so as to give 
        indirect illumination.
          ``(39) The term `transformer' means a device consisting of 
        two or more coils of insulated wire that transfers alternating 
        current by electromagnetic induction from one coil to another 
        to change the original voltage or current value.
          ``(40) The term `unit heater' means a self-contained fan-type 
        heater designed to be installed within the heated space, except 
        that such term does not include a warm air furnace.
          ``(41) The term `traffic signal module' means a standard 8-
        inch (200mm) or 12-inch (300mm) traffic signal indication, 
        consisting of a light source, a lens, and all other parts 
        necessary for operation, that communicates movement messages to 
        drivers through red, amber, and green colors.''.

SEC. 1044. ADDITIONAL TEST PROCEDURES.

  (a) Exit Signs.--Section 323(b) of the Energy Policy and Conservation 
Act (42 U.S.C. 6293) is amended by adding at the end the following:
          ``(9) Test procedures for illuminated exit signs shall be 
        based on the test method used under Version 2.0 of the Energy 
        Star program of the Environmental Protection Agency for 
        illuminated exit signs.
          ``(10) Test procedures for low voltage dry-type distribution 
        transformers shall be based on the `Standard Test Method for 
        Measuring the Energy Consumption of Distribution Transformers' 
        prescribed by the National Electrical Manufacturers Association 
        (NEMA TP 2-1998). The Secretary may review and revise this test 
        procedure based on future revisions to such standard test 
        method.
          ``(11) Test procedures for traffic signal modules shall be 
        based on the test method used under the Energy Star program of 
        the Environmental Protection Agency for traffic signal modules, 
        as in effect on the date of enactment of this paragraph.''.
  (b) Additional Consumer and Commercial Products.--Section 323 of the 
Energy Policy and Conservation Act (42 U.S.C. 6293) is further amended 
by adding at the end the following:
  ``(f) Additional Consumer and Commercial Products.--The Secretary 
shall within 24 months after the date of enactment of this subsection 
prescribe testing requirements for suspended ceiling fans, refrigerated 
bottled or canned beverage vending machines, commercial unit heaters, 
and commercial refrigerators, freezers and refrigerator-freezers. Such 
testing requirements shall be based on existing test procedures used in 
industry to the extent practical and reasonable. In the case of 
suspended ceiling fans, such test procedures shall include efficiency 
at both maximum output and at an output no more than 50 percent of the 
maximum output.''.

SEC. 1045. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL CONSUMER AND 
                    COMMERCIAL PRODUCTS.

  Section 325 of the Energy Policy and Conservation Act (42 U.S.C. 
6295) is amended by adding at the end the following:
  ``(u) Standby Mode Electric Energy Consumption.--
          ``(1) Initial rulemaking.--(A) The Secretary shall, within 18 
        months after the date of enactment of this subsection, 
        prescribe by notice and comment, definitions of standby mode 
        and test procedures for the standby mode power use of battery 
        chargers and external power supplies. In establishing these 
        test procedures, the Secretary shall consider, among other 
        factors, existing test procedures used for measuring energy 
        consumption in standby mode and assess the current and 
        projected future market for battery chargers and external power 
        supplies. This assessment shall include estimates of the 
        significance of potential energy savings from technical 
        improvements to these products and suggested product classes 
        for standards. Prior to the end of this time period, the 
        Secretary shall hold a scoping workshop to discuss and receive 
        comments on plans for developing energy conservation standards 
        for standby mode energy use for these products.
          ``(B) The Secretary shall, within 3 years after the date of 
        enactment of this subsection, issue a final rule that 
        determines whether energy conservation standards shall be 
        promulgated for battery chargers and external power supplies or 
        classes thereof. For each product class, any such standards 
        shall be set at the lowest level of standby energy use that--
                  ``(i) meets the criteria of subsections (o), (p), 
                (q), (r), (s) and (t); and
                  ``(ii) will result in significant overall annual 
                energy savings, considering both standby mode and other 
                operating modes.
          ``(2) Designation of additional covered products.--(A) Not 
        later than 180 days after the date of enactment of this 
        subsection, the Secretary shall publish for public comment and 
        public hearing a notice to determine whether any noncovered 
        products should be designated as covered products for the 
        purpose of instituting a rulemaking under this section to 
        determine whether an energy conservation standard restricting 
        standby mode energy consumption, should be promulgated; except 
        that any restriction on standby mode energy consumption shall 
        be limited to major sources of such consumption.
          ``(B) In making the determinations pursuant to subparagraph 
        (A) of whether to designate new covered products and institute 
        rulemakings, the Secretary shall, among other relevant factors 
        and in addition to the criteria in section 322(b), consider--
                  ``(i) standby mode power consumption compared to 
                overall product energy consumption; and
                  ``(ii) the priority and energy savings potential of 
                standards which may be promulgated under this 
                subsection compared to other required rulemakings under 
                this section and the available resources of the 
                Department to conduct such rulemakings.
          ``(C) Not later than 1 year after the date of enactment of 
        this subsection, the Secretary shall issue a determination of 
        any new covered products for which he intends to institute 
        rulemakings on standby mode pursuant to this section and he 
        shall state the dates by which he intends to initiate those 
        rulemakings.
          ``(3) Review of standby energy use in covered products.--In 
        determining pursuant to section 323 whether test procedures and 
        energy conservation standards pursuant to this section should 
        be revised, the Secretary shall consider for covered products 
        which are major sources of standby mode energy consumption 
        whether to incorporate standby mode into such test procedures 
        and energy conservation standards, taking into account, among 
        other relevant factors, the criteria for non-covered products 
        in subparagraph (B) of paragraph (2) of this subsection.
          ``(4) Rulemaking for standby mode.--(A) Any rulemaking 
        instituted under this subsection or for covered products under 
        this section which restricts standby mode power consumption 
        shall be subject to the criteria and procedures for issuing 
        energy conservation standards set forth in this section and the 
        criteria set forth in subparagraph (B) of paragraph (2) of this 
        subsection.
          ``(B) No standard can be proposed for new covered products or 
        covered products in a standby mode unless the Secretary has 
        promulgated applicable test procedures for each product 
        pursuant to section 323.
          ``(C) The provisions of section 327 shall apply to new 
        covered products which are subject to the rulemakings for 
        standby mode after a final rule has been issued.
          ``(5) Effective date.--Any standard promulgated under this 
        subsection shall be applicable to products manufactured or 
        imported 3 years after the date of promulgation.
          ``(6) Voluntary programs to reduce standby mode energy use.--
        The Secretary and the Administrator shall collaborate and 
        develop programs, including programs pursuant to section 324A 
        (relating to Energy Star Programs) andother voluntary industry 
agreements or codes of conduct, which are designed to reduce standby 
mode energy use.
  ``(v) Suspended Ceiling Fans, Vending Machines, Unit Heaters, and 
Commercial Refrigerators, Freezers and Refrigerator-Freezers.--The 
Secretary shall within 24 months after the date on which testing 
requirements are prescribed by the Secretary pursuant to section 
323(f), prescribe, by rule, energy conservation standards for suspended 
ceiling fans, refrigerated bottled or canned beverage vending machines, 
unit heaters, and commercial refrigerators, freezers and refrigerator-
freezers. In establishing standards under this subsection, the 
Secretary shall use the criteria and procedures contained in 
subsections (l) and (m). Any standard prescribed under this subsection 
shall apply to products manufactured 3 years after the date of 
publication of a final rule establishing such standard.
  ``(w) Illuminated Exit Signs.--Illuminated exit signs manufactured on 
or after January 1, 2005 shall meet the Version 2.0 Energy Star Program 
performance requirements for illuminated exit signs prescribed by the 
Environmental Protection Agency.
  ``(x) Torchieres.--Torchieres manufactured on or after January 1, 
2005--
          ``(1) shall consume not more than 190 watts of power; and
          ``(2) shall not be capable of operating with lamps that total 
        more than 190 watts.
  ``(y) Low Voltage Dry-Type Transformers.--The efficiency of low 
voltage dry-type transformers manufactured on or after January 1, 2005 
shall be the Class I Efficiency Levels for low voltage dry-type 
transformers specified in Table 4-2 of the `Guide for Determining 
Energy Efficiency for Distribution Transformers' published by the 
National Electrical Manufacturers Association (NEMA TP-1-1996).
  ``(z) Traffic Signal Modules.--Traffic signal modules manufactured on 
or after January 1, 2006 shall meet the performance requirements used 
under the Energy Star program of the Environmental Protection Agency 
for traffic signals, as in effect on the date of enactment of this 
paragraph, and shall be installed with compatible, electrically-
connected signal control interface devices and conflict monitoring 
systems.
  ``(aa) Effective Date of Section 327.--The provisions of section 327 
shall apply to products for which standards are set in subsections (v) 
through (z) of this section after the effective date for such 
standards.''.

SEC. 1046. ENERGY LABELING.

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

SEC. 1047. STUDY OF ENERGY EFFICIENCY STANDARDS.

  The Secretary of Energy shall contract with the National Academy of 
Sciences for a study, to be completed within 1 year of enactment of 
this Act, to examine whether the goals of energy efficiency standards 
are best served by measurement of energy consumed, and efficiency 
improvements, at the actual site of energy consumption, or through the 
full fuel cycle, beginning at the source of energy production. The 
Secretary shall submit the report to the Congress.

                         TITLE II--OIL AND GAS

                Subtitle A--Alaska Natural Gas Pipeline

SEC. 2001. SHORT TITLE.

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

SEC. 2002. FINDINGS AND PURPOSES.

  (a) Findings.--Congress finds the following:
          (1) Construction of a natural gas pipeline system from the 
        Alaskan North Slope to United States markets is in the national 
        interest and will enhance national energy security by providing 
        access to the significant gas reserves in Alaska needed to meet 
        the anticipated demand for natural gas.
          (2) The Commission issued a conditional certificate of public 
        convenience and necessity for the Alaska natural gas 
        transportation system, which remains in effect.
  (b) Purposes.--The purposes of this subtitle are as follows:
          (1) To provide a statutory framework for the expedited 
        approval, construction, and initial operation of an Alaska 
        natural gas transportation project, as an alternative to the 
        framework provided in the Alaska Natural Gas Transportation Act 
        of 1976 (15 U.S.C. 719 et seq.), which remains in effect.
          (2) To establish a process for providing access to such 
        transportation project in order to promote competition in the 
        exploration, development, and production of Alaska natural gas.
          (3) To clarify Federal authorities under the Alaska Natural 
        Gas Transportation Act of 1976.

SEC. 2003. DEFINITIONS.

  In this subtitle, the following definitions apply:
          (1) Alaska natural gas.--The term ``Alaska natural gas'' 
        means natural gas derived from the area of the State of Alaska 
        lying north of 64 degrees North latitude.
          (2) Alaska natural gas transportation project.--The term 
        ``Alaska natural gas transportation project'' means any natural 
        gas pipeline system that carries Alaska natural gas to the 
        border between Alaska and Canada (including related facilities 
        subject to the jurisdiction of the Commission) that is 
        authorized under either--
                  (A) the Alaska Natural Gas Transportation Act of 1976 
                (15 U.S.C. 719 et seq.); or
                  (B) section 2004.
          (3) Alaska natural gas transportation system.--The term 
        ``Alaska natural gas transportation system'' means the Alaska 
        natural gas transportation project authorized under the Alaska 
        Natural Gas Transportation Act of 1976 and designated and 
        described in section 2 of the President's decision.
          (4) Commission.--The term ``Commission'' means the Federal 
        Energy Regulatory Commission.
          (5) President's decision.--The term ``President's decision'' 
        means the decision and report to Congress on the Alaska natural 
        gas transportation system issued by the President on September 
        22, 1977, pursuant to section 7 of the Alaska Natural Gas 
        Transportation Act of 1976 (15 U.S.C. 719e) and approved by 
        Public Law 95-158 (91 Stat. 1268).

SEC. 2004. ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY.

  (a) Authority of the Commission.--Notwithstanding the provisions of 
the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719 et 
seq.), the Commission may, pursuant to section 7(c) of the Natural Gas 
Act (15 U.S.C. 717f(c)), consider and act on an application for the 
issuance of a certificate of public convenience and necessity 
authorizing the construction and operation of an Alaska natural gas 
transportation project other than the Alaska natural gas transportation 
system.
  (b) Issuance of Certificate.--
          (1) In general.--The Commission shall issue a certificate of 
        public convenience and necessity authorizing the construction 
        and operation of an Alaska natural gas transportation project 
        under this section if the applicant has satisfied the 
        requirements of section 7(e) of the Natural Gas Act (15 U.S.C. 
        717f(e)).
          (2) Considerations.--In considering an application under this 
        section, the Commission shall presume that--
                  (A) a public need exists to construct and operate the 
                proposed Alaska natural gas transportation project; and
                  (B) sufficient downstream capacity will exist to 
                transport the Alaska natural gas moving through such 
                project to markets in the contiguous United States.
  (c) Expedited Approval Process.--The Commission shall issue a final 
order granting or denying any application for a certificate of public 
convenience and necessity under section 7(c) of the Natural Gas Act (15 
U.S.C. 717f(c)) and this section not more than 60 days after the 
issuance of the final environmental impact statement for that project 
pursuant to section 2005.
  (d) Prohibition on Certain Pipeline Route.--No license, permit, 
lease, right-of-way, authorization, or other approval required under 
Federal law for the construction of any pipeline to transport natural 
gas from lands within the Prudhoe Bay oil and gas lease area may be 
granted for any pipeline that follows a route that traverses--
          (1) the submerged lands (as defined by the Submerged Lands 
        Act) beneath, or the adjacent shoreline of, the Beaufort Sea; 
        and
          (2) enters Canada at any point north of 68 degrees North 
        latitude.
  (e) Open Season.--Except where an expansion is ordered pursuant to 
section 2006, initial or expansion capacity on any Alaska natural gas 
transportation project shall be allocated in accordance with procedures 
to be established by the Commission in regulations governing the 
conduct of open seasons for such project. Such procedures shall include 
the criteria for and timing of any open seasons, be consistent with the 
purposes set forth in section 2002(b)(2), and, for any open season for 
capacity beyond the initial capacity, provide the opportunity for the 
transportation of natural gas other than from the Prudhoe Bay and Point 
Thompson units. The Commission shall issue such regulations not later 
than 120 days after the date of enactment of this Act.
  (f) Projects in the Contiguous United States.--Applications for 
additional or expanded pipeline facilities that may be required to 
transport Alaska natural gas from Canada to markets in the contiguous 
United States may be made pursuant to the Natural Gas Act. To the 
extent such pipeline facilities include the expansion of any facility 
constructed pursuant to the Alaska Natural Gas Transportation Act of 
1976, the provisions of that Act shall continue to apply.
  (g) Study of In-State Needs.--The holder of the certificate of public 
convenience and necessity issued, modified, or amended by the 
Commission for an Alaska natural gas transportation project shall 
demonstrate that it has conducted a study of Alaska in-State needs, 
including tie-in points along the Alaska natural gas transportation 
project for in-State access.
  (h) Alaska Royalty Gas.--The Commission, upon the request of the 
State of Alaska and after a hearing, may provide for reasonable access 
to the Alaska natural gas transportation project for the State of 
Alaska or its designee for the transportation of the State's royalty 
gas for local consumption needs within the State; except that the rates 
of existing shippers of subscribed capacity on such project shall not 
be increased as a result of such access.
  (i) Regulations.--The Commission may issue regulations to carry out 
the provisions of this section.

SEC. 2005. ENVIRONMENTAL REVIEWS.

  (a) Compliance With NEPA.--The issuance of a certificate of public 
convenience and necessity authorizing the construction and operation of 
any Alaska natural gas transportation project under section 2004 shall 
be treated as a major Federal action significantly affecting the 
quality of the human environment within the meaning of section 
102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 
4332(2)(C)).
  (b) Designation of Lead Agency.--The Commission shall be the lead 
agency for purposes of complying with the National Environmental Policy 
Act of 1969, and shall be responsible for preparing the statement 
required by section 102(2)(c) of that Act (42 U.S.C. 4332(2)(c)) with 
respect to an Alaska natural gas transportation project under section 
2004. The Commission shall prepare a single environmental statement 
under this section, which shall consolidate the environmental reviews 
of all Federal agencies considering any aspect of the project.
  (c) Other Agencies.--All Federal agencies considering aspects of the 
construction and operation of an Alaska natural gas transportation 
project under section 2004 shall cooperate with the Commission, and 
shall comply with deadlines established by the Commission in the 
preparation of the statement under this section. The statement prepared 
under this section shall be used by all such agencies to satisfy their 
responsibilities under section 102(2)(C) of the National Environmental 
Policy Act of 1969 (42 U.S.C. 4332(2)(C)) with respect to such project.
  (d) Expedited Process.--The Commission shall issue a draft statement 
under this section not later than 12 months after the Commission 
determines the application to be complete and shall issue the final 
statement not later than 6 months after the Commission issues the draft 
statement, unless the Commission for good cause finds that additional 
time is needed.

SEC. 2006. PIPELINE EXPANSION.

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

SEC. 2007. FEDERAL COORDINATOR.

  (a) Establishment.--There is established, as an independent office in 
the executive branch, the Office of the Federal Coordinator for Alaska 
Natural Gas Transportation Projects.
  (b) Federal Coordinator.--The Office shall be headed by a Federal 
Coordinator for Alaska Natural Gas Transportation Projects, who shall--
          (1) be appointed by the President, by and with the advice of 
        the Senate;
          (2) hold office at the pleasure of the President; and
          (3) be compensated at the rate prescribed for level III of 
        the Executive Schedule (5 U.S.C. 5314).
  (c) Duties.--The Federal Coordinator shall be responsible for--
          (1) coordinating the expeditious discharge of all activities 
        by Federal agencies with respect to an Alaska natural gas 
        transportation project; and
          (2) ensuring the compliance of Federal agencies with the 
        provisions of this subtitle.
  (d) Reviews and Actions of Other Federal Agencies.--
          (1) Expedited reviews and actions.--All reviews conducted and 
        actions taken by any Federal officer or agency relating to an 
        Alaska natural gas transportation project authorized under this 
        section shall be expedited, in a manner consistent with 
        completion of the necessary reviews and approvals by the 
        deadlines set forth in this subtitle.
          (2) Prohibition on certain terms and conditions.--Except with 
        respect to Commission actions under sections 2004, 2005, and 
        2006, no Federal officer or agency shall have the authority to 
        include terms and conditions that are permitted, but not 
        required, by law on any certificate, right-of-way, permit, 
        lease, or other authorization issued to an Alaska natural gas 
        transportation project if the Federal Coordinator determines 
        that the terms and conditions would prevent or impair in any 
        significant respect the expeditious construction and operation 
        of the project.
          (3) Prohibition on certain actions.--Except with respect to 
        Commission actions under sections 2004, 2005, and 2006, unless 
        required by law, no Federal officer or agency shall add to, 
        amend, or abrogate any certificate, right-of-way, permit, 
        lease, or other authorization issued to an Alaska natural gas 
        transportation project if the Federal Coordinator determines 
        that such action would prevent or impair in any significant 
        respect the expeditious construction and operation of the 
        project.
  (e) State Coordination.--The Federal Coordinator shall enter into a 
Joint Surveillance and Monitoring Agreement, approved by the President 
and the Governor of Alaska, with the State of Alaska similar to that in 
effect during construction of the Trans-Alaska Oil Pipeline to monitor 
the construction of the Alaska natural gas transportation project. The 
Federal Government shall have primary surveillance and monitoring 
responsibility where the Alaska natural gas transportation project 
crosses Federal lands and private lands, and the State government shall 
have primary surveillance and monitoring responsibility where the 
Alaska natural gas transportation project crosses State lands.
  (f) Transfer of Federal Inspector Functions and Authority.--Upon 
appointment of the Federal Coordinator by the President, all of the 
functions and authority of the Office of Federal Inspector of 
Construction for the Alaska Natural Gas Transportation System vested in 
the Secretary of Energy pursuant to section 3012(b) of Public Law 102-
486 (15 U.S.C. 719e(b)), including all functions and authority 
described and enumerated in the Reorganization Plan No. 1 of 1979 (44 
Fed. Reg. 33,663), Executive Order No. 12142 of June 21, 1979 (44 Fed. 
Reg. 36,927), and section 5 of the President's decision, shall be 
transferred to the Federal Coordinator.

SEC. 2008. JUDICIAL REVIEW.

  (a) Exclusive Jurisdiction.--Except for review by the Supreme Court 
of the United States on writ of certiorari, the United States Court of 
Appeals for the District of Columbia Circuit shall have original and 
exclusive jurisdiction to determine--
          (1) the validity of any final order or action (including a 
        failure to act) of any Federal agency or officer under this 
        subtitle;
          (2) the constitutionality of any provision of this subtitle, 
        or any decision made or action taken under this subtitle; or
          (3) the adequacy of any environmental impact statement 
        prepared under the National Environmental Policy Act of 1969 
        with respect to any action under this subtitle.
  (b) Deadline for Filing Claim.--Claims arising under this subtitle 
may be brought not later than 60 days after the date of the decision or 
action giving rise to the claim.
  (c) Expedited Consideration.--The United States Court of Appeals for 
the District of Columbia Circuit shall set any action brought under 
subsection (a) for expedited consideration, taking into account the 
national interest as described in section 2002(a).
  (d) Amendment to ANGTA.--Section 10(c) of the Alaska Natural Gas 
Transportation Act of 1976 (15 U.S.C. 719h) is amended by inserting 
after paragraph (1) the following:
  ``(2) The United States Court of Appeals for the District of Columbia 
Circuit shall set any action brought under this section for expedited 
consideration, taking into account the national interest described in 
section 2.''.

SEC. 2009. STATE JURISDICTION OVER IN-STATE DELIVERY OF NATURAL GAS.

  (a) Local Distribution.--Any facility receiving natural gas from the 
Alaska natural gas transportation project for delivery to consumers 
within the State of Alaska shall be deemed to be a local distribution 
facility within the meaning of section 1(b) of the Natural Gas Act (15 
U.S.C. 717(b)), and therefore not subject to the jurisdiction of the 
Commission.
  (b) Additional Pipelines.--Nothing in this subtitle, except as 
provided in section 2004(d), shall preclude or affect a future gas 
pipeline that may be constructed to deliver natural gas to Fairbanks, 
Anchorage, Matanuska-Susitna Valley, or the Kenai peninsula or Valdez 
or any other site in the State of Alaska for consumption within or 
distribution outside the State of Alaska.
  (c) Rate Coordination.--Pursuant to the Natural Gas Act, the 
Commission shall establish rates for the transportation of natural gas 
on the Alaska natural gastransportation project. In exercising such 
authority, the Commission, pursuant to section 17(b) of the Natural Gas 
Act (15 U.S.C. 717p(b)), shall confer with the State of Alaska 
regarding rates (including rate settlements) applicable to natural gas 
transported on and delivered from the Alaska natural gas transportation 
project for use within the State of Alaska.

SEC. 2010. STUDY OF ALTERNATIVE MEANS OF CONSTRUCTION.

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

SEC. 2011. CLARIFICATION OF ANGTA STATUS AND AUTHORITIES.

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

SEC. 2012. SENSE OF CONGRESS.

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

SEC. 2013. PARTICIPATION OF SMALL BUSINESS CONCERNS.

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

SEC. 2014. ALASKA PIPELINE CONSTRUCTION TRAINING PROGRAM.

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

                Subtitle B--Strategic Petroleum Reserve

SEC. 2101. FULL CAPACITY OF STRATEGIC PETROLEUM RESERVE.

  The President shall--
          (1) fill the Strategic Petroleum Reserve established pursuant 
        to part B of title I of the Energy Policy and Conservation Act 
        (42 U.S.C. 6231 et seq.) to full capacity as soon as 
        practicable;
          (2) acquire petroleum for the Strategic Petroleum Reserve by 
        the most practicable and cost-effective means, with 
        consideration being given to domestically produced petroleum, 
        including the acquisition of crude oil the United States is 
        entitled to receive in kind as royalties from production on 
        Federal lands; and
          (3) ensure that the fill rate minimizes impacts on petroleum 
        markets.

SEC. 2102. STRATEGIC PETROLEUM RESERVE EXPANSION.

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

SEC. 2103. PERMANENT AUTHORITY TO OPERATE THE STRATEGIC PETROLEUM 
                    RESERVE AND OTHER ENERGY PROGRAMS.

  (a) Amendment to Title I of the Energy Policy and Conservation Act.--
Title I of the Energy Policy and Conservation Act (42 U.S.C. 6211 et 
seq.) is amended--
          (1) by striking section 166 (42 U.S.C. 6246) and inserting--
                   ``authorization of appropriations
  ``Sec. 166. There are authorized to be appropriated to the Secretary 
such sums as may be necessary to carry out this part and part D, to 
remain available until expended.'';
          (2) by striking section 186 (42 U.S.C. 6250e); and
          (3) by striking part E (42 U.S.C. 6251; relating to the 
        expiration of title I of the Act).
  (b) Amendment to Title II of the Energy Policy and Conservation 
Act.--Title II of the Energy Policy and Conservation Act (42 U.S.C. 
6271 et seq.) is amended--
          (1) by inserting before section 273 (42 U.S.C. 6283) the 
        following:

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

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

              ``Part D--Northeast Home Heating Oil Reserve

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

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

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

``Sec. 273. Summer fill and fuel budgeting programs.''; and

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

                    Subtitle C--Hydraulic Fracturing

SEC. 2201. HYDRAULIC FRACTURING.

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

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

SEC. 2301. PROGRAM.

  The Secretary shall carry out a program to demonstrate technologies 
for the recovery of oil and natural gas reserves from reservoirs 
described in section 2302.

SEC. 2302. ELIGIBLE RESERVOIRS.

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

SEC. 2303. FOCUS AREAS.

  The program under this subtitle may focus on areas including coal-bed 
methane, deep drilling, natural gas production from tight sands, 
natural gas production from gas shales, innovative production 
techniques (including horizontal drilling, fracture detection 
methodologies, and three-dimensional seismic), and enhanced recovery 
techniques.

SEC. 2304. LIMITATION ON LOCATION OF ACTIVITIES.

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

SEC. 2305. PROGRAM ADMINISTRATION.

  (a) Role of the Secretary.--The Secretary shall have ultimate 
responsibility for, and oversight of, all aspects of the program under 
this subtitle.
  (b) Role of the Program Consortium.--
          (1) In general.--The Secretary shall contract with a 
        consortium to--
                  (A) manage awards pursuant to subsection (e)(4);
                  (B) make recommendations to the Secretary for project 
                solicitations;
                  (C) disburse funds awarded under subsection (e) as 
                directed by the Secretary in accordance with the annual 
                plan under subsection (d); and
                  (D) carry out other activities assigned to the 
                program consortium by this section.
          (2) Limitation.--The Secretary may not assign any activities 
        to the program consortium except as specifically authorized 
        under this section.
          (3) Conflict of interest.--(A) The Secretary shall establish 
        procedures--
                  (i) to ensure that each board member, officer, or 
                employee of the program consortium who is in a 
                decisionmaking capacity under subsection (e)(3) or (4) 
                shall disclose to the Secretary any financial interests 
                in, or financial relationships with, applicants for or 
                recipients of awards under this section, including 
                those of his or her spouse or minor child, unless such 
                relationships or interests would be considered to be 
                remote or inconsequential; and
                  (ii) to require any board member, officer, or 
                employee with a financial relationship or interest 
                disclosed under clause (i) to recuse himself or herself 
                from any review under subsection (e)(3) or oversight 
                under subsection (e)(4) with respect to such applicant 
                or recipient.
          (B) The Secretary may disqualify an application or revoke an 
        award under this section if a board member, officer, or 
        employee has failed to comply with procedures required under 
        subparagraph (A)(ii).
  (c) Selection of the Program Consortium.--
          (1) In general.--The Secretary shall select the program 
        consortium through an open, competitive process.
          (2) Members.--The program consortium may include corporations 
        and institutions of higher education. The Secretary shall give 
        preference in the selection of the program consortium to 
        applicants with broad representation from thevarious major oil 
and natural gas basins in the United States. After submitting a 
proposal under paragraph (4), the program consortium may not add 
members without the consent of the Secretary.
          (3) Tax status.--The program consortium shall be an entity 
        that is exempt from tax under section 501(c)(3) of the Internal 
        Revenue Code of 1986.
          (4) Schedule.--Not later than 90 days after the date of 
        enactment of this Act, the Secretary shall solicit proposals 
        for the creation of the program consortium, which must be 
        submitted not less than 180 days after the date of enactment of 
        this Act. The Secretary shall select the program consortium not 
        later than 240 days after such date of enactment.
          (5) Application.--Applicants shall submit a proposal 
        including such information as the Secretary may require. At a 
        minimum, each proposal shall--
                  (A) list all members of the consortium;
                  (B) fully describe the structure of the consortium, 
                including any provisions relating to intellectual 
                property; and
                  (C) describe how the applicant would carry out the 
                activities of the program consortium under this 
                section.
          (6) Eligibility.--To be eligible to be selected as the 
        program consortium, an applicant must be an entity whose 
        members collectively have demonstrated capabilities in planning 
        and managing programs for the production of oil or natural gas.
          (7) Criterion.--The Secretary may consider the amount of the 
        fee an applicant proposes to receive under subsection (f) in 
        selecting a consortium under this section.
  (d) Annual Plan.--
          (1) In general.--The program under this subtitle shall be 
        carried out pursuant to an annual plan prepared by the 
        Secretary in accordance with paragraph (2).
          (2) Development.--(A) Before drafting an annual plan under 
        this subsection, the Secretary shall solicit specific written 
        recommendations from the program consortium for each element to 
        be addressed in the plan, including those described in 
        paragraph (4). The Secretary may request that the program 
        consortium submit its recommendations in the form of a draft 
        annual plan.
          (B) The Secretary shall submit the recommendations of the 
        program consortium under subparagraph (A) to the Advisory 
        Committee for review, and the Advisory Committee shall provide 
        to the Secretary written comments by a date determined by the 
        Secretary. The Secretary may also solicit comments from any 
        other experts.
          (C) The Secretary shall consult regularly with the program 
        consortium throughout the preparation of the annual plan.
          (3) Publication.--The Secretary shall transmit to the 
        Congress and publish in the Federal Register the annual plan, 
        along with any written comments received under paragraph (2)(A) 
        and (B). The annual plan shall be transmitted and published not 
        later than 60 days after the date of enactment of an Act making 
        appropriations for a fiscal year for the program under this 
        subtitle.
          (4) Contents.--The annual plan shall describe the ongoing and 
        prospective activities of the program under this subtitle and 
        shall include--
                  (A) a list of any solicitations for awards that the 
                Secretary plans to issue to carry out activities, 
                including the topics for such work, who would be 
                eligible to apply, selection criteria, and the duration 
                of awards; and
                  (B) a description of the activities expected of the 
                program consortium to carry out subsection (e)(4).
  (e) Awards.--
          (1) In general.--The Secretary shall make awards to carry out 
        activities under the program under this subtitle. The program 
        consortium shall not be eligible to receive such awards, but 
        members of the program consortium may receive such awards.
          (2) Proposals.--
                  (A) Solicitation.--The Secretary shall solicit 
                proposals for awards under this subsection in such 
                manner and at such time as the Secretary may prescribe, 
                in consultation with the program consortium.
                  (B) Contents.--Each proposal submitted shall include 
                the following:
                          (i) An estimate of the potential unproven 
                        reserves in the reservoir, established by a 
                        registered petroleum engineer.
                          (ii) An estimate of the potential for success 
                        of the project.
                          (iii) A detailed project plan.
                          (iv) A detailed analysis of the costs 
                        associated with the project.
                          (v) A time frame for project completion.
                          (vi) Evidence that any lienholder on the 
                        project will subordinate its interests to the 
                        extent necessary to ensure that the Federal 
                        government receives its portion of any revenues 
                        pursuant to section 2308.
                          (vii) Such other matters as the Secretary 
                        considers appropriate.
          (3) Review.--The Secretary shall make awards under this 
        subsection through a competitive process, which shall include a 
        review by individuals selected by the Secretary. Such 
        individuals shall include, for each application, Federal 
        officials, the program consortium, and non-Federal experts who 
        are not board members, officers, or employees of the program 
        consortium or of a member of the program consortium.
          (4) Oversight.--(A) The program consortium shall oversee the 
        implementation of awards under this subsection, consistent with 
        the annual plan under subsection (d), including disbursing 
        funds and monitoring activities carried out under such awards 
        for compliance with the terms and conditions of the awards.
          (B) Nothing in subparagraph (A) shall limit the authority or 
        responsibility of the Secretary to oversee awards, or limit the 
        authority of the Secretary to review or revoke awards.
          (C) The Secretary shall provide to the program consortium the 
        information necessary for the program consortium to carry out 
        its responsibilities under this paragraph.
  (f) Fee.--To compensate the program consortium for carrying out its 
activities under this section, the Secretary shall provide to the 
program consortium a fee in an amount not to exceed 7.5 percent of the 
amounts awarded under subsection (e) for each fiscal year.
  (g) Disallowed Expenses.--No portion of any award shall be used by a 
recipient for general or administrative expenses of any kind.
  (h) Audit.--The Secretary shall retain an independent, commercial 
auditor to determine the extent to which funds provided to the program 
consortium, and funds provided under awards made under subsection (e), 
have been expended in a manner consistent with the purposes and 
requirements of this subtitle. The auditor shall transmit a report 
annually to the Secretary, who shall transmit the report to Congress, 
along with a plan to remedy any deficiencies cited in the report.

SEC. 2306. ADVISORY COMMITTEE.

  (a) Establishment.--Not later than 270 days after the date of 
enactment of this Act, the Secretary shall establish an Advisory 
Committee.
  (b) Membership.--The Advisory Committee shall be composed of members 
appointed by the Secretary and including--
          (1) individuals with extensive experience or operational 
        knowledge of oil and natural gas production, including 
        independent oil and gas producers;
          (2) individuals broadly representative of oil and natural gas 
        production; and
          (3) no individuals who are Federal employees.
  (c) Duties.--The Advisory Committee shall advise the Secretary on the 
development and implementation of activities under this subtitle.
  (d) Compensation.--A member of the Advisory Committee shall serve 
without compensation but shall receive travel expenses, including per 
diem in lieu of subsistence, in accordance with applicable provisions 
under subchapter I of chapter 57 of title 5, United States Code.
  (e) Prohibition.--The Advisory Committee shall not make 
recommendations on funding awards to consortia or for specific 
projects.

SEC. 2307. LIMITS ON PARTICIPATION.

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

SEC. 2308. PAYMENTS TO FEDERAL GOVERNMENT.

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

SEC. 2309. AUTHORIZATION OF APPROPRIATIONS.

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

SEC. 2310. PUBLIC AVAILABILITY OF PROJECT RESULTS AND METHODOLOGIES.

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

SEC. 2311. SUNSET.

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

SEC. 2312. DEFINITIONS.

  In this subtitle:
          (1) Program consortium.--The term ``program consortium'' 
        means the consortium selected under section 2305(c).
          (2) Remote or inconsequential.--The term ``remote or 
        inconsequential'' has the meaning given that term in 
        regulations issued by the Office of Government Ethics under 
        section 208(b)(2) of title 18, United States Code.
          (3) Secretary.--The term ``Secretary'' means the Secretary of 
        Energy.

                       Subtitle E--Miscellaneous

SEC. 2401. APPEALS RELATING TO PIPELINE CONSTRUCTION PROJECTS.

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

SEC. 2402. NATURAL GAS MARKET DATA TRANSPARENCY.

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

SEC. 2403. OIL AND GAS EXPLORATION AND PRODUCTION DEFINED.

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

                  TITLE III--HYDROELECTRIC RELICENSING

                   Subtitle A--Alternative Conditions

SEC. 3001. ALTERNATIVE CONDITIONS AND FISHWAYS.

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

``SEC. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS.

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

                   Subtitle B--Additional Hydropower

SEC. 3201. HYDROELECTRIC PRODUCTION INCENTIVES.

  (a) Incentive Payments.--For electric energy generated and sold by a 
qualified hydroelectric facility during the incentive period, the 
Secretary of Energy (referred to in this section as the ``Secretary'') 
shall make, subject to the availability of appropriations, incentive 
payments to the owner or operator of such facility. The amount of such 
payment made to any such owner or operator shall be as determined under 
subsection (e) of this section. Payments under this section may only be 
made upon receipt by the Secretary of an incentive payment application 
which establishes that the applicant is eligible to receive such 
payment and which satisfies such other requirements as the Secretary 
deems necessary. Such application shall be in such form, and shall be 
submitted at such time, as the Secretary shall establish.
  (b) Definitions.--For purposes of this section:
          (1) Qualified hydroelectric facility.--The term ``qualified 
        hydroelectric facility'' means a turbine or other generating 
        device owned or solely operated by a non-Federal entity which 
        generates hydroelectric energy for sale and which is added to 
        an existing dam or conduit.
          (2) Existing dam or conduit.--The term ``existing dam or 
        conduit'' means any dam or conduit the construction of which 
        was completed before the date of the enactment of this section 
        and which does not require any construction or enlargement of 
        impoundment or diversion structures (other than repair or 
        reconstruction) in connection with the installation of a 
        turbine or other generating device.
          (3) Conduit.--The term ``conduit'' has the same meaning as 
        when used in section 30(a)(2) of the Federal Power Act.
The terms defined in this subsection shall apply without regard to the 
hydroelectric kilowatt capacity of the facility concerned, without 
regard to whether the facility uses a dam owned by a governmental or 
nongovernmental entity, and without regard to whether the facility 
begins operation on or after the date of the enactment of this section.
  (c) Eligibility Window.--Payments may be made under this section only 
for electric energy generated from a qualified hydroelectric facility 
which begins operation during the period of 10 fiscal years beginning 
with the first full fiscal year occurring after the date of enactment 
of this subtitle.
  (d) Incentive Period.--A qualified hydroelectric facility may receive 
payments under this section for a period of 10 fiscal years (referred 
to in this section as the ``incentive period''). Such period shall 
begin with the fiscal year in which electric energy generated from the 
facility is first eligible for such payments.
  (e) Amount of Payment.--
          (1) In general.--Payments made by the Secretary under this 
        section to the owner or operator of a qualified hydroelectric 
        facility shall be based on the number of kilowatt hours of 
        hydroelectric energy generated by the facility during the 
        incentive period. For any such facility, the amount of such 
        payment shall be 1.8 cents per kilowatt hour (adjusted as 
        provided in paragraph (2)), subject to the availability of 
        appropriations under subsection (g), except that no facility 
        may receive more than $750,000 in one calendar year.
          (2) Adjustments.--The amount of the payment made to any 
        person under this section as provided in paragraph (1) shall be 
        adjusted for inflation for each fiscal year beginning after 
        calendar year 2003 in the same manner as provided in the 
        provisions of section 29(d)(2)(B) of the Internal Revenue Code 
        of 1986, except that in applying such provisions the calendar 
        year 2003 shall be substituted for calendar year 1979.
  (f) Sunset.--No payment may be made under this section to any 
qualified hydroelectric facility after the expiration of the period of 
20 fiscal years beginning with the first full fiscal year occurring 
after the date of enactment of this subtitle, and no payment may be 
made under this section to any such facility after a payment has been 
made with respect to such facility for a period of 10 fiscal years.
  (g) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out the purposes of this section 
$10,000,000 for each of the fiscal years 2004 through 2013.

SEC. 3202. HYDROELECTRIC EFFICIENCY IMPROVEMENT.

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

SEC. 3203. SMALL HYDROELECTRIC POWER PROJECTS.

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

SEC. 3204. INCREASED HYDROELECTRIC GENERATION AT EXISTING FEDERAL 
                    FACILITIES.

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

                       TITLE IV--NUCLEAR MATTERS

               Subtitle A--Price-Anderson Act Amendments

SEC. 4001. SHORT TITLE.

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

SEC. 4002. EXTENSION OF INDEMNIFICATION AUTHORITY.

  (a) Indemnification of Nuclear Regulatory Commission Licensees.--
Section 170 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(c)) is 
amended--
          (1) in the subsection heading, by striking ``Licenses'' and 
        inserting ``Licensees''; and
          (2) by striking ``December 31, 2003'' each place it appears 
        and inserting ``August 1, 2017''.
  (b) Indemnification of Department of Energy Contractors.--Section 170 
d.(1)(A) of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(1)(A)) is 
amended by striking ``December 31, 2004'' and inserting ``August 1, 
2017''.
  (c) Indemnification of Nonprofit Educational Institutions.--Section 
170 k. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(k)) is amended 
by striking ``August 1, 2002'' each place it appears and inserting 
``August 1, 2017''.

SEC. 4003. MAXIMUM ASSESSMENT.

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

SEC. 4004. DEPARTMENT OF ENERGY LIABILITY LIMIT.

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

SEC. 4005. INCIDENTS OUTSIDE THE UNITED STATES.

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

SEC. 4006. REPORTS.

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

SEC. 4007. INFLATION ADJUSTMENT.

  Section 170 t. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(t)) 
is amended--
          (1) by redesignating paragraph (2) as paragraph (3); and
          (2) by adding after paragraph (1) the following:
  ``(2) The Secretary shall adjust the amount of indemnification 
provided under an agreement of indemnification under subsection d. not 
less than once during each 5-year period following July 1, 2002, in 
accordance with the aggregate percentage change in the Consumer Price 
Index since--
          ``(A) that date, in the case of the first adjustment under 
        this paragraph; or
          ``(B) the previous adjustment under this paragraph.''.

SEC. 4008. PRICE-ANDERSON TREATMENT OF MODULAR REACTORS.

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

SEC. 4009. APPLICABILITY.

  The amendments made by sections 4003, 4004, and 4005 do not apply to 
a nuclear incident that occurs before the date of enactment of this 
Act.

SEC. 4010. PROHIBITION ON ASSUMPTION BY UNITED STATES GOVERNMENT OF 
                    LIABILITY FOR CERTAIN FOREIGN ACCIDENTS.

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

SEC. 4011. SECURE TRANSFER OF NUCLEAR MATERIALS.

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

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

SEC. 4012. NUCLEAR FACILITY THREATS.

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

SEC. 4013. UNREASONABLE RISK CONSULTATION.

  Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is 
amended by adding at the end the following new subsection:
  ``v. Unreasonable Risk Consultation.--(1) Before entering into an 
agreement of indemnification under this section with respect to a 
utilization facility, the Nuclear Regulatory Commission shall consult 
with the Assistant to the President for Homeland Security (or any 
successor official) concerning whether the location of the proposed 
facility and the design of that type of facility ensure that the 
facility provides for adequate protection of public health and safety 
if subject to a terrorist attack.
  ``(2) Before issuing a license or a license renewal for a sensitive 
nuclear facility, the Nuclear Regulatory Commission shall consult with 
the Secretary of Homeland Security or his designee concerning the 
emergency evacuation plan for the communities living near the sensitive 
nuclear facility. For purposes of this paragraph, the term `sensitive 
nuclear facility' has the meaning given that term in section 4012 of 
the Energy Policy Act of 2003.''.

SEC. 4014. FINANCIAL ACCOUNTABILITY.

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

SEC. 4015. CIVIL PENALTIES.

  (a) Repeal of Automatic Remission.--Section 234A b. (2) of the Atomic 
Energy Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by striking the 
last sentence.
  (b) Limitation for Nonprofit Institutions.--Subsection d. of section 
234A of the Atomic Energy Act of 1954 (42 U.S.C. 2282a(d)) is amended 
to read as follows:
  ``d. Notwithstanding subsection a., a civil penalty for a violation 
under subsection a. shall not exceed the amount of any discretionary 
fee paid under the contract under which such violation occurs for any 
nonprofit contractor, subcontractor, or supplier--
          ``(1) described in section 501(c)(3) of the Internal Revenue 
        Code of 1986 and exempt from tax under section 501(a) of such 
        Code; or
          ``(2) identified by the Secretary by rule as appropriate to 
        be treated the same under this subsection as an entity 
        described in paragraph (1), consistent with the purposes of 
        this section.''.
  (c) Effective Date.--The amendments made by this section shall not 
apply to any violation of the Atomic Energy Act of 1954 occurring under 
a contract entered into before the date of the enactment of this Act.
  (d) Rulemaking.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary of Energy shall issue a rule for 
the implementation of the amendment made by subsection (b).

                   Subtitle B--Miscellaneous Matters

SEC. 4021. LICENSES.

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

SEC. 4022. NUCLEAR REGULATORY COMMISSION MEETINGS.

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

SEC. 4023. NRC TRAINING PROGRAM.

  (a) In General.--In order to maintain the human resource investment 
and infrastructure of the United States in the nuclear sciences, health 
physics, and engineering fields, in accordance with the statutory 
authorities of the Commission relating to the civilian nuclear energy 
program, the Nuclear Regulatory Commission shall carry out a training 
and fellowship program to address shortages of individuals with 
critical nuclear safety regulatory skills.
  (b) Authorization of Appropriations.--
          (1) In general.--There are authorized to be appropriated to 
        carry out this section $1,000,000 for each of fiscal years 2004 
        through 2007.
          (2) Availability.--Funds made available under paragraph (1) 
        shall remain available until expended.

SEC. 4024. COST RECOVERY FROM GOVERNMENT AGENCIES.

  Section 161 w. of the Atomic Energy Act of 1954 (42 U.S.C. 2201(w)) 
is amended--
          (1) by striking ``for or is issued'' and all that follows 
        through ``1702'' and inserting ``to the Commission for, or is 
        issued by the Commission, a license or certificate'';
          (2) by striking ``483a'' and inserting ``9701''; and
          (3) by striking ``, of applicants for, or holders of, such 
        licenses or certificates''.

SEC. 4025. ELIMINATION OF PENSION OFFSET.

  Section 161 of the Atomic Energy Act of 1954 (42 U.S.C. 2201) is 
amended by adding at the end the following:
          ``y. exempt from the application of sections 8344 and 8468 of 
        title 5, United States Code, an annuitant who was formerly an 
        employee of the Commission who is hired by the Commission as a 
        consultant, if the Commission finds that the annuitant has a 
        skill that is critical to the performance of the duties of the 
        Commission.''.

SEC. 4026. CARRYING OF FIREARMS BY LICENSEE EMPLOYEES.

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

SEC. 4027. UNAUTHORIZED INTRODUCTION OF DANGEROUS WEAPONS.

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

SEC. 4028. SABOTAGE OF NUCLEAR FACILITIES OR FUEL.

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

SEC. 4029. COOPERATIVE RESEARCH AND DEVELOPMENT AND SPECIAL 
                    DEMONSTRATION PROJECTS FOR THE URANIUM MINING 
                    INDUSTRY.

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

SEC. 4030. URANIUM SALES.

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

SEC. 4031. MEDICAL ISOTOPE PRODUCTION.

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

SEC. 4032. HIGHLY ENRICHED URANIUM DIVERSION THREAT REPORT.

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

SEC. 4033. WHISTLEBLOWER PROTECTION.

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

                      TITLE V--VEHICLES AND FUELS

                Subtitle A--Energy Policy Act Amendments

SEC. 5011. CREDIT FOR SUBSTANTIAL CONTRIBUTION TOWARD NONCOVERED 
                    FLEETS.

  Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258) is 
amended by adding at the end the following new subsection:
  ``(e) Credit for Substantial Contribution Toward Use of Dedicated 
Vehicles in Noncovered Fleets.--
          ``(1) Definitions.--In this subsection:
                  ``(A) Medium or heavy duty vehicle.--The term `medium 
                or heavy duty vehicle' means a dedicated vehicle that--
                          ``(i) in the case of a medium duty vehicle, 
                        has a gross vehicle weight rating of more than 
                        8,500 pounds but not more than 14,000 pounds; 
                        or
                          ``(ii) in the case of a heavy duty vehicle, 
                        has a gross vehicle weight rating of more than 
                        14,000 pounds.
                  ``(B) Substantial contribution.--The term 
                `substantial contribution' means not less than $15,000 
                in cash or in kind services, as determined by the 
                Secretary.
          ``(2) Allocation of credits.--The Secretary shall allocate a 
        credit to a fleet or covered person under this section if the 
        fleet or person makes a substantial contribution toward the 
        acquisition and use of dedicated vehicles or neighborhood 
        electric vehicles by a person that owns, operates, leases, or 
        otherwise controls a fleet that is not covered by this title.
          ``(3) Multiple credits for medium and heavy duty vehicles.--
        The Secretary shall issue 2 full credits to a fleet or covered 
        person under this section if the fleet or person makes a 
        substantial contribution toward the acquisition and use of a 
        medium or heavy duty vehicle.
          ``(4) Use of credits.--At the request of a fleet or covered 
        person allocated a credit under this subsection, the Secretary 
        shall, for the year in which the acquisition of the dedicated 
        vehicle or neighborhood electric vehicle is made, treat that 
        credit as the acquisition of 1 alternative fueled vehicle that 
        the fleet or covered person is required to acquire under this 
        title.
          ``(5) Limitation.--Except as provided in paragraph (3), no 
        more than 1 credit shall be allocated under this subsection for 
        each vehicle.''.

SEC. 5012. CREDIT FOR ALTERNATIVE FUEL INFRASTRUCTURE.

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

SEC. 5013. ALTERNATIVE FUELED VEHICLE REPORT.

  (a) Definitions.--In this section:
          (1) Alternative fuel.--The term ``alternative fuel'' has the 
        meaning given the term in section 301 of the Energy Policy Act 
        of 1992 (42 U.S.C. 13211).
          (2) Alternative fueled vehicle.--The term ``alternative 
        fueled vehicle'' has the meaning given the term in section 301 
        of the Energy Policy Act of 1992 (42 U.S.C. 13211).
          (3) Light duty motor vehicle.--The term ``light duty motor 
        vehicle'' has the meaning given the term in section 301 of the 
        Energy Policy Act of 1992 (42 U.S.C. 13211).
          (4) Secretary.--The term ``Secretary'' means the Secretary of 
        Energy.
  (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall submit to Congress a report on the effect 
that titles III, IV, and V of the Energy Policy Act of 1992 have had on 
the development of alternative fueled vehicle technology, the 
availability of alternative fueled vehicles in the market, the cost of 
light duty motor vehicles that are alternative fueled vehicles, and the 
availability, cost, and use of alternative fuels and biodiesel. Such 
report shall include any recommendations of the Secretary for 
legislation concerning the alternative fueled vehicle requirements 
under the Energy Policy Act of 1992, and shall examine, discuss, and 
determine the following:
          (1) The number of alternative fueled vehicles acquired by 
        fleets or covered persons required to acquire alternative 
        fueled vehicles.
          (2) The extent to which fleets subject to alternative fueled 
        vehicle acquisition requirements have met those requirements 
        through the use of fuel mixtures that contain at least 20 
        percent biodiesel pursuant to section 312 of the Energy Policy 
        Act of 1992 (42 U.S.C. 13220).
          (3) The amount of alternative fuel used in alternative fueled 
        vehicles acquired by fleets required to acquire alternative 
        fueled vehicles under the Energy Policy Act of 1992.
          (4) The amount of petroleum displaced by the use of 
        alternative fueled vehicles acquired by fleets or covered 
        persons.
          (5) The cost of compliance with vehicle acquisition 
        requirements under the Energy Policy Act of 1992, and the 
        benefits of using such fuel and vehicles.
          (6) Projections of the amount of biodiesel, the number of 
        alternative fueled vehicles, and the amount of alternative fuel 
        that will be used over the next decade by fleets required to 
        acquire alternative fueled vehicles under the Energy Policy Act 
        of 1992.
          (7) The existence of any obstacles to increased use of 
        alternative fuel and biodiesel in vehicles acquired or 
        maintained by fleets required to acquire alternative fueled 
        vehicles under the Energy Policy Act of 1992, and the benefits 
        of using such fuel and vehicles.

SEC. 5014. ALLOCATION OF INCREMENTAL COSTS.

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

            Subtitle B--FreedomCAR and Hydrogen Fuel Program

SEC. 5021. SHORT TITLE.

  This subtitle may be cited as the ``FreedomCAR and Hydrogen Fuel Act 
of 2003'' or ``Freedom Act''.

SEC. 5022. FINDINGS, PURPOSE, AND DEFINITIONS.

  (a) Findings.--Congress finds that--
          (1) the United States is currently dependent on foreign 
        sources for a majority of its petroleum supply;
          (2) the Nation's dependence on foreign petroleum is expected 
        to increase in the decades ahead;
          (3) it is in the national interest to reduce dependence on 
        imported petroleum by accelerating Federal efforts to partner 
        with the private sector by deploying hydrogen fuel cell 
        vehicles and the refueling infrastructure to support those 
        vehicles;
          (4) it is in the national interest to develop a light duty 
        vehicle fleet that substantially reduces dependence on foreign 
        petroleum, assists the Nation in meeting its requirements under 
        the Clean Air Act and reduces greenhouse gas emissions in a 
        manner that maintains the freedom of consumers to purchase the 
        kinds of vehicles they wish to drive and the freedom to refuel 
        those vehicles safely, affordably, and conveniently;
          (5) hydrogen fuel cell vehicles and supporting infrastructure 
        have the potential to accelerate the parallel advancement of 
        fuel cells for stationary power that will enhance the 
        resiliency, reliability, and environmental performance of the 
        Nation's electricity infrastructure;
          (6) ancillary benefits for the Nation, including the 
        acceleration of fuel cell technology for consumer electronics 
        and portable power, are likely to result from the advancement 
        of hydrogen fuel cell vehicles and supporting infrastructure;
          (7) there is a need for deployment of bridging technologies 
        including gasoline electric and diesel electric hybrid drive 
        systems, advanced combustion engines including clean diesel, 
        electric battery, and power electronics, and alternative fuels 
        and other technology that can contribute to reducing petroleum 
        demand and decreasing air emissions;
          (8) low-cost hydrogen production, storage, and delivery 
        facilities are essential to the success of the FreedomCAR 
        Vehicle Programs; and
          (9) work should be performed in a manner that is cognizant of 
        consumer acceptance, passenger safety, and marketplace success.
  (b) Purpose.--The purpose of this subtitle is to reduce significantly 
the Nation's dependence on imported petroleum, enhance the production 
and conservation of energy, and reduce air emissions through support of 
the following Department of Energy actions:
          (1) Programs and activities leading to--
                  (A) a commitment by automakers and hydrogen energy 
                and energy infrastructure providers no later than year 
                2015 to offer safe, affordable, and technically viable 
                hydrogen fuel cell vehicles and refueling 
                infrastructure in the mass consumer market; and
                  (B) a commitment by the automakers and hydrogen 
                energy and energy infrastructure providers to the 
                deployment of hydrogen fuel cell vehicles and 
                affordable and convenient refueling infrastructure no 
                later than year 2020.
          (2) A program to establish international codes, standards, 
        and safety protocols for the use and manufacture of domestic 
        and foreign products.
          (3) Interagency, intergovernmental, and international 
        programs and activities for education, information exchange, 
        and cooperation.
  (c) Definitions.--In this subtitle:
          (1) The term ``Advisory Committee'' means the Hydrogen 
        Technical and Fuel Cell Advisory Committee established under 
        section 5028 of this Act.
          (2) The term ``Department'' means the Department of Energy.
          (3) The term ``FreedomCAR'' is the acronym for a Department 
        initiative in automotive research and development entitled 
        ``Freedom Cooperative Automotive Research''.
          (4) The term ``fuel cell'' means a device that directly 
        converts the chemical energy of a fuel and an oxidant into 
        electricity by an electrochemical process taking place at 
        separate electrodes in the device.
          (5) The term ``infrastructure'' means the equipment, systems, 
        or facilities used to produce, distribute, deliver, or store 
        hydrogen and other advanced clean fuels.
          (6) The term ``light duty vehicle'' means a car or truck, 
        classified by the Department of Transportation as a Class I or 
        IIA vehicle.
          (7) The term ``Secretary'' means the Secretary of Energy.

SEC. 5023. PLAN; REPORT.

  (a) Plan.--The Secretary, in consultation with other appropriate 
Federal agencies, shall prepare a comprehensive interagency 
coordination plan for activities under this subtitle. This plan may be 
provided as part of the President's annual budget submission to 
Congress.
  (b) Report.--Not later than one year after the date of enactment of 
this subtitle, and biennially thereafter, the Secretary shall transmit 
to the Congress a report on the status of programs and activities under 
this subtitle. This report may be provided as part of the President's 
annual budget submission to Congress. This report may include, in 
addition to any views and recommendations of the Secretary--
          (1) an assessment of the effectiveness of the programs and 
        activities under this subtitle and the extent to which the 
        purposes in section 5022(b) have been met; and
          (2) the potential for interagency, intergovernmental, 
        international, or private sector collaboration opportunities 
        and activities under this subtitle.

SEC. 5024. PUBLIC-PRIVATE PARTNERSHIP.

  (a) Program.--In partnership with the private sector, the Secretary 
shall conduct a program designed to facilitate the production and 
conservation of energy and the deployment of energy infrastructure, 
including all of the following:
          (1) Hydrogen energy.
          (2) Fuel cells.
          (3) Advanced vehicle technologies.
          (4) Clean fuels in addition to hydrogen.
          (5) Codes, standards, and safety protocols.
  (b) Program Goals.--
          (1) Automakers.--For automakers the goals of the program 
        are--
                  (A) to enable a commitment by automakers no later 
                than year 2015 to offer safe, affordable, and 
                technically viable hydrogen fuel cell vehicles into 
                commerce; and
                  (B) to enable production, delivery, and acceptance by 
                consumers of model year 2020 hydrogen fuel cell and 
                other vehicles that will have--
                          (i) a range of at least three hundred miles;
                          (ii) improved performance and ease of 
                        driving;
                          (iii) met all light duty safety regulations 
                        created under section 30111 of title 49, United 
                        States Code; and
                          (iv) when compared to light duty vehicles in 
                        model year 2003--
                                  (I) a fuel economy that is two and 
                                one half times the equivalent fuel 
                                economy of these vehicles as regulated 
                                under the Motor Vehicle Information and 
                                Cost Savings Act, or about 70 miles per 
                                gallon, and
                                  (II) near zero emissions of air 
                                pollutants regulated under the Clean 
                                Air Act.
          (2) Hydrogen energy and energy infrastructure.--For hydrogen 
        energy and energy infrastructure the goals of the program 
        include, but are not limited to, a commitment not later than 
        2015 that will enable the deployment by 2020 of infrastructure 
        to provide--
                  (A) safe and convenient refueling;
                  (B) activities leading to widespread availability of 
                hydrogen from domestic energy sources through--
                          (i) production, including consideration of 
                        cost-effective production from domestic energy 
                        sources;
                          (ii) delivery, including transmission by 
                        pipeline and other distribution methods for 
                        hydrogen; and
                          (iii) storage, including storage in surface 
                        transportation vehicles;
                  (C) hydrogen for fuel cells, internal combustion 
                engines, and other energy conversion devices for 
                portable, stationary, and transportation applications; 
                and
                  (D) other technologies consistent with the 
                Department's plan.
          (3) Fuel cells.--The program for fuel cells and their 
        portable, stationary, and transportation applications may 
        include, but is not limited to--
                  (A) a safe, economical, and environmentally sound 
                hydrogen fuel cell;
                  (B) a fuel cell for light duty and other vehicles; 
                and
                  (C) other technologies consistent with the 
                Department's plan.
          (4) Advanced Vehicle Technologies.--The program for advanced 
        vehicle technologies may include, but is not limited to--
                  (A) advanced combustion;
                  (B) materials;
                  (C) energy storage;
                  (D) control systems; and
                  (E) other technologies consistent with the 
                Department's plan.
          (5) Codes, Standards, and Safety Protocols.--(A) The 
        Department's program for codes, standards, and safety protocols 
        shall strive towards establishment of international codes, 
        standards, and safety protocols for the use and manufacture of 
        domestic and foreign products.
          (B) The Secretary may represent the United States interests 
        with respect to activities and programs under this subsection, 
        collaborating with the Secretary of Transportation, and in 
        consultation with other appropriate governments and 
        nongovernmental organizations including the following:
                  (i) Other Federal, State, regional, and local 
                governments and their representatives.
                  (ii) Industry and its representatives, including 
                members of the energy and transportation industries.
                  (iii) Foreign governments and their representatives 
                including international organizations.
  (c) Federal Funding.--(1) The Secretary shall carry out the programs 
and activities under this section consistent with the generally 
applicable Federal laws and regulations governing awards of financial 
assistance, contracts, or other agreements, and may include funding to 
nationally recognized university-based research centers.
  (2) The Secretary shall endeavor to avoid duplication or displacement 
of other research and development programs and activities.
  (d) Cost Sharing.--(1) The Secretary shall require a commitment from 
non-Federal sources of at least 20 percent of the cost of proposed 
programs under this section.
  (2) The Secretary may reduce or eliminate the cost sharing 
requirement under paragraph (1)--
          (A) if the Secretary determines that the activity is of a 
        basic or fundamental nature which is vital to the success of 
        the program and unlikely to occur in a timely manner without 
        reduction or elimination of the cost-sharing requirement; or
          (B) for technical analyses, outreach programs, and other 
        activities including educational programs under section 5027 of 
        this subtitle that the Secretary does not expect to result in a 
        marketable product.

SEC. 5025. DEPLOYMENT.

  (a) Deployment Program.--In partnership with the private sector, the 
Secretary shall conduct a program to facilitate the deployment of--
          (1) hydrogen energy and energy infrastructure;
          (2) fuel cells;
          (3) advanced vehicle technologies;
          (4) clean fuels in addition to hydrogen; and
          (5) codes, standards, and safety protocols.
  (b) Program Goals.--(1) For automakers, the goals of the program 
are--
          (A) to enable a decision by automakers no later than year 
        2015 to offer safe, affordable, and technically viable hydrogen 
        fuel cell vehicles into commerce; and
          (B) to enable production and delivery to, and acceptance by, 
        consumers of model year 2020 hydrogen fuel cell and other 
        vehicles that will have--
                  (i) a range of at least 300 miles;
                  (ii) improved performance and ease of driving;
                  (iii) met all light duty safety regulations created 
                under section 30111 of title 49, United States Code; 
                and
                  (iv) when compared to light duty vehicles in model 
                year 2003--
                          (I) a fuel economy that is two and one half 
                        times the equivalent fuel economy of these 
                        vehicles under the Motor Vehicle Information 
                        and Cost Savings Act, or about 70 miles per 
                        gallon; and
                          (II) near zero emissions of air pollutants 
                        regulated under the Clean Air Act.
  (2) For hydrogen energy and energy infrastructure the goals of the 
program include, but are not limited to, a commitment not later than 
2015 that will enable the deployment by 2020 of infrastructure to 
provide--
          (A) safe, convenient, and affordable refueling;
          (B) widespread availability of hydrogen from domestic energy 
        sources through--
                  (i) production, including consideration of cost-
                effective production from domestic energy sources;
                  (ii) delivery, including transmission by pipeline and 
                other distribution methods, for hydrogen in its 
                gaseous, liquid, and solid states; and
                  (iii) storage, including storage in surface 
                transportation vehicles;
          (C) hydrogen for fuel cells, internal combustion engines, and 
        other energy conversion devices for portable, stationary, and 
        transportation applications; and
          (D) other technologies consistent with the Department's plan.
  (c) Fuel Cells.--The program for fuel cells and their portable, 
stationary, and transportation applications may include but is not 
limited to--
          (1) a safe, economical, and environmentally sound hydrogen 
        fuel cell;
          (2) a fuel cell for light duty and other vehicles; and
          (3) other technologies consistent with the Department's plan.
  (d) Advanced Vehicle Technologies.--The program for advanced vehicle 
technologies may include, but is not limited to--
          (1) advanced combustion;
          (2) materials;
          (3) energy storage;
          (4) control systems; and
          (5) other technologies consistent with the Department's plan.
  (e) Federal Funding.--The Secretary shall carry out the program and 
activities under this section consistent with laws and regulations 
governing awards of financial assistance, contracts or other 
agreements, and may include funding to nationally recognized 
university-based research centers. The Secretary shall endeavor to 
avoid duplication or displacement of other programs.
  (f) Cost Sharing.--
          (1) In general.--The Secretary shall require a commitment 
        from non-Federal sources of at least 50 percent of the costs 
        directly relating to a demonstration under this section.
          (2) Reduction.--The Secretary may reduce the non-Federal 
        requirement under paragraph (1) if the Secretary determines 
        that--
                  (A) the reduction is appropriate considering the 
                technological risks involved; and
                  (B) the terms and conditions are consistent with the 
                Agreement on Subsidies and Countervailing Measures.
          (3) Cooperative Agreements with Governments.--The Secretary 
        may enter into cooperative and cost sharing agreements with 
        Federal, State, or local governments to deploy vehicles, 
        vehicle systems, and refueling infrastructure using hydrogen, 
        fuel cells, or other advanced technologies in government 
        facilities or fleet transportation systems.

SEC. 5026. ASSESSMENT AND TRANSFER.

  (a) Program.--The Secretary may conduct a program to transfer 
technology to the private sector under this subtitle.
  (b) Disclosure.--The Secretary may protect from disclosure, for up to 
5 years after the information was developed, any information developed 
pursuant to a cost shared transaction, or subagreement thereunder, 
entered into under this subtitle to advance the goals of the programs, 
which developed information is of a character that it would be 
protected from disclosure under section 552(b)(4) of title 5, United 
States Code, if this developed information had been obtained from a 
person other than a Federal agency.

SEC. 5027. INTERAGENCY TASK FORCE.

  (a) Establishment.--Not later than 120 days after the date of 
enactment of this Act, the President shall establish an interagency 
task force chaired by the Secretary or his designee with 
representatives from each of the following:
          (1) The Office of Science and Technology Policy within the 
        Executive Office of the President.
          (2) The Department of Transportation.
          (3) The Department of Defense.
          (4) The Department of Commerce (including the National 
        Institute of Standards and Technology).
          (5) The Environmental Protection Agency.
          (6) The National Aeronautics and Space Administration.
          (7) Other Federal agencies as the Secretary determines 
        appropriate.
  (b) Duties of the Interagency Task Force.--
          (1) Planning.--The task force shall coordinate the 
        implementation of the interagency plan in section 5023(a), and 
        work towards deployment of--
                  (A) a safe, economical, and environmentally sound 
                fuel infrastructure, including an infrastructure that 
                supports buses and other fleet transportation;
                  (B) fuel cells in government and other applications, 
                including portable, stationary, and transportation 
                applications; and
                  (C) distributed power generation, including the 
                generation of combined heat, power, and clean fuels 
                including hydrogen.
          (2) Information exchange.--(A) The interagency task force 
        shall coordinate interagency programs and activities including 
        the exchange of information.
          (B) The heads of all agencies, including those whose agencies 
        are not represented on the interagency task force, shall 
        cooperate with and furnish information to the interagency task 
        force, the Advisory Committee, and the Department.
          (C) The information exchange may consist of workshops, 
        publications, conferences, and a database for use by the public 
        and private sectors. The interagency task force is expected 
        to--
                  (i) foster the exchange of generic, nonproprietary 
                information and technology among industry, academia, 
                and government;
                  (ii) update the inventory and assessment of hydrogen, 
                fuel cells, and other advanced technologies, including 
                their commercial capability for the economic and 
                environmentally safe production, distribution, 
                delivery, storage, and use of clean fuels including 
                hydrogen;
                  (iii) integrate technical and other information made 
                available as a result of the programs and activities 
                under this subtitle;
                  (iv) promote the marketplace introduction of 
                infrastructure for hydrogen and other clean fuel 
                vehicles; and
                  (v) conduct an education program to provide 
                FreedomCAR and hydrogen fuel information to potential 
                end-users.

SEC. 5028. ADVISORY COMMITTEE.

  (a) Establishment.--The Hydrogen Technical and Fuel Cell Advisory 
Committee is established to advise the Secretary on the programs and 
activities under this subtitle.
  (b) Membership.--
          (1) Members.--The Advisory Committee is comprised of not 
        fewer than 12 nor more than 25 members. These members shall be 
        appointed by the Secretary to represent domestic industry, 
        academia, professional societies, government agencies, and 
        financial, environmental, and other appropriate organizations 
        based on the Department's assessment of the technical and other 
        qualifications of committee members and the needs of the 
        Advisory Committee.
          (2) Terms.--The term of a member of the Advisory Committee 
        shall not be more than 3 years. The Secretary may appoint 
        members of the Advisory Committee in a manner that allows the 
        terms of the members serving at any time to expire at spaced 
        intervals so as to ensure continuity in the functioning of the 
        Advisory Committee. A member of the Advisory Committee whose 
        term is expiring may be reappointed.
          (3) Chairperson.--The Advisory Committee shall have a 
        chairperson, who is elected by the members from among their 
        number.
  (c) Review.--The Advisory Committee shall review and make 
recommendations to the Secretary on--
          (1) the implementation of programs and activities under this 
        subtitle;
          (2) the safety, economical, and environmental consequences of 
        technologies for the production, distribution, delivery, 
        storage, or use of hydrogen energy and fuel cells; and
          (3) the interagency coordination plan under section 5023(a) 
        of this Act.
  (d) Response to Recommendations.--The Secretary shall consider, but 
need not adopt, any recommendations of the Advisory Committee under 
subsection (c).
  (e) Advisory Committee Support.--The Secretary shall provide 
resources necessary in the judgment of the Secretary for the Advisory 
Committee to carry out its responsibilities under this subtitle.

SEC. 5029. AUTHORIZATION OF APPROPRIATIONS.

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

SEC. 5030. FUEL CELL PROGRAM AT NATIONAL PARKS.

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

SEC. 5030A. ADVANCED POWER SYSTEM TECHNOLOGY INCENTIVE PROGRAM.

  (a) Program.--The Secretary of Energy is authorized to establish an 
Advanced Power System Technology Incentive Program to support the 
deployment of certain advanced power system technologies and to improve 
and protect certain critical governmental, industrial, and commercial 
processes. Funds provided under this section shall be used by the 
Secretary to make incentive payments to eligible owners or operators of 
advanced power system technologies to increase power generation through 
enhanced operational, economic, and environmental performance. Payments 
under this section may only be made upon receipt by the Secretary of an 
incentive payment application establishing an applicant as either--
          (1) a qualifying advanced power system technology facility; 
        or
          (2) a qualifying security and assured power facility.
  (b) Incentives.--Subject to availability of funds, a payment of 1.8 
cents per kilowatt-hour shall be paid to the owner or operator of a 
qualifying advanced power system technology facility under this section 
for electricity generated at such facility. An additional 0.7 cents per 
kilowatt-hour shall be paid to the owner or operator of a qualifying 
security and assured power facility for electricity generated at such 
facility. Any facility qualifying under this section shall be eligible 
for an incentive payment for up to, but not more than, the first 
10,000,000 kilowatt-hours produced in any fiscal year.
  (c) Eligibility.--For purposes of this section--
          (1) the term ``qualifying advanced power system technology 
        facility'' means a facility using an advanced fuel cell, 
        turbine, or hybrid power system or power storage system to 
        generate or store electric energy; and
          (2) the term ``qualifying security and assured power 
        facility'' means a qualifying advanced power system technology 
        facility determined by the Secretary of Energy, in consultation 
        with the Secretary of Homeland Security, to be in critical need 
        of secure, reliable, rapidly available, high-quality power for 
        critical governmental, industrial, or commercial applications.
  (d) Authorization.--There are authorized to be appropriated to the 
Secretary of Energy for the purposes of this section, $10,000,000 for 
each of the fiscal years 2004 through 2010.

                     Subtitle C--Clean School Buses

SEC. 5031. ESTABLISHMENT OF PILOT PROGRAM.

  (a) Establishment.--The Secretary of Energy, in consultation with the 
Secretary of Transportation and the Administrator of the Environmental 
Protection Agency, shall establish a pilot program for awarding grants 
on a competitive basis to eligible entities for the acquisition of 
alternative fuel school buses and ultra-low sulfur diesel school buses.
  (b) Requirements.--Not later than 3 months after the date of the 
enactment of this Act, the Secretary shall establish and publish in the 
Federal register grant requirements on eligibility for assistance, and 
on implementation of the program established under subsection (a), 
including certification requirements to ensure compliance with this 
subtitle.
  (c) Solicitation.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary shall solicit proposals for grants 
under this section.
  (d) Eligible Recipients.--A grant shall be awarded under this section 
only--
          (1) to a local or State governmental entity responsible for 
        providing school bus service to one or more public school 
        systems or responsible for the purchase of school buses; or
          (2) to a contracting entity that provides school bus service 
        to one or more public school systems, if the grant application 
        is submitted jointly with the school system or systems which 
        the buses will serve.
  (e) Types of Grants.--
          (1) In general.--Grants under this section shall promote the 
        conservation of energy and improvement of public health and the 
        environment by facilitating the acquisition of alternative fuel 
        school buses and ultra-low sulfur diesel school buses in lieu 
        of buses manufactured before model year 1977 and diesel-powered 
        buses manufactured before model year 1991.
          (2) No economic benefit.--Other than the receipt of the 
        grant, a recipient of a grant under this section may not 
        receive any economic benefit in connection with the receipt of 
        the grant.
          (3) Priority of grant applications.--The Secretary shall give 
        priority to awarding grants to applicants who will utilize 
        grants to replace buses manufactured before model year 1977.
  (f) Conditions of Grant.--A grant provided under this section shall 
include the following conditions:
          (1) All buses acquired with funds provided under the grant 
        shall be operated as part of the school bus fleet for which the 
        grant was made for a minimum of 5 years.
          (2) Funds provided under the grant may only be used--
                  (A) to pay the cost, except as provided in paragraph 
                (3), of new alternative fuel school buses or ultra-low 
                sulfur diesel school buses, including State taxes and 
                contract fees; and
                  (B) to provide--
                          (i) up to 10 percent of the price of the 
                        alternative fuel buses acquired, for necessary 
                        alternative fuel infrastructure if the 
                        infrastructure will only be available to the 
                        grant recipient; and
                          (ii) up to 15 percent of the price of the 
                        alternative fuel buses acquired, for necessary 
                        alternative fuel infrastructure if the 
                        infrastructure will be available to the grant 
                        recipient and to other bus fleets.
          (3) The grant recipient shall be required to provide at least 
        the lesser of 15 percent of the total cost of each bus received 
        or $15,000 per bus.
          (4) In the case of a grant recipient receiving a grant to 
        demonstrate ultra-low sulfur diesel school buses, the grant 
        recipient shall be required to provide documentation to the 
        satisfaction of the Secretary that diesel fuel containing 
        sulfur at not more than 15 parts per million is available for 
        carrying out the purposes of the grant, and a commitment by the 
        applicant to use such fuel in carrying out the purposes of the 
        grant.
  (g) Buses.--Funding under a grant made under this section may be used 
to facilitate the use only of new alternative fuel school buses or 
ultra-low sulfur diesel school buses--
          (1) with a gross vehicle weight of greater than 14,000 
        pounds;
          (2) that are powered by a heavy duty engine;
          (3) that, in the case of alternative fuel school buses, emit 
        not more than--
                  (A) for buses manufactured in model year 2002, 2.5 
                grams per brake horsepower-hour of nonmethane 
                hydrocarbons and oxides of nitrogen and .01 grams per 
                brake horsepower-hour of particulate matter; and
                  (B) for buses manufactured in model years 2003 
                through 2006, 1.8 grams per brake horsepower-hour of 
                nonmethane hydrocarbons and oxides of nitrogen and .01 
                grams per brake horsepower-hour of particulate matter; 
                and
          (4) that, in the case of ultra-low sulfur diesel school 
        buses, emit not more than--
                  (A) for buses manufactured in model years 2002 
                through 2003, 3.0 grams per brake horsepower-hour of 
                oxides of nitrogen and .01 grams per brake horsepower-
                hour of particulate matter; and
                  (B) for buses manufactured in model years 2004 
                through 2006, 2.5 grams per brake horsepower-hour of 
                nonmethane hydrocarbons and oxides of nitrogen and .01 
                grams per brake horsepower-hour of particulate matter,
        except that under no circumstances shall buses be acquired 
        under this section that emit nonmethane hydrocarbons, oxides of 
        nitrogen, or particulate matter at a rate greater than the best 
        performing technology of the same class of ultra-low sulfur 
        diesel school buses commercially available at the time the 
        grant is made.
  (h) Deployment and Distribution.--The Secretary shall seek to the 
maximum extent practicable to achieve nationwide deployment of 
alternative fuel school buses and ultra-low sulfur diesel school buses 
through the program under this section, and shall ensure a broad 
geographic distribution of grant awards, with a goal of no State 
receiving more than 10 percent of the grant funding made available 
under this section for a fiscal year.
  (i) Limit on Funding.--The Secretary shall provide not less than 20 
percent and not more than 25 percent of the grant funding made 
available under this section for any fiscal year for the acquisition of 
ultra-low sulfur diesel school buses.
  (j) Reduction of School Bus Idling.--Each local educational agency 
(as defined in section 9101 of the Elementary and SecondaryEducation 
Act of 1965 (20 U.S.C. 7801)) that receives Federal funds under the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.) 
is encouraged to develop a policy, consistent with the health, safety, 
and welfare of students and the proper operation and maintenance of 
school buses, to reduce the incidence of unnecessary school bus idling 
at schools when picking up and unloading students.
  (k) Annual Report.--Not later than January 31 of each year, the 
Secretary of Energy shall provide a report evaluating implementation of 
the program under this section to the Congress. Such report shall 
include the total number of grant applications received, the number and 
types of alternative fuel school buses and ultra-low sulfur diesel 
school buses requested in grant applications, a list of grants awarded 
and the criteria used to select the grant recipients, certified engine 
emission levels of all buses purchased under the program, and any other 
information the Secretary considers appropriate.
  (l) Definitions.--For purposes of this section--
          (1) the term ``alternative fuel school bus'' means a school 
        bus powered substantially by electricity (including electricity 
        supplied by a fuel cell), or by liquefied natural gas, 
        compressed natural gas, liquefied petroleum gas, hydrogen, 
        propane, or methanol or ethanol at no less than 85 percent by 
        volume;
          (2) the term ``idling'' means operating an engine while 
        remaining stationary for more than approximately 3 minutes, 
        except that such term does not apply to routine stoppages 
        associated with traffic movement or congestion; and
          (3) the term ``ultra-low sulfur diesel school bus'' means a 
        school bus powered by diesel fuel which contains sulfur at not 
        more than 15 parts per million.

SEC. 5032. FUEL CELL BUS DEVELOPMENT AND DEMONSTRATION PROGRAM.

  (a) Establishment of Program.--The Secretary shall establish a 
program for entering into cooperative agreements with private sector 
fuel cell bus developers for the acquisition of fuel cell-powered 
school buses, and subsequently with not less than 2 units of local 
government using natural gas-powered school buses and such private 
sector fuel cell bus developers to facilitate the use of fuel cell-
powered school buses.
  (b) Cost Sharing.--The non-Federal contribution for activities funded 
under this section shall be not less than 20 percent for fuel 
infrastructure development activities.
  (c) Funding.--No more than $25,000,000 of the amounts authorized 
under section 5033 may be used for carrying out this section for the 
period encompassing fiscal years 2003 through 2006.
  (d) Reports to Congress.--Not later than 3 years after the date of 
the enactment of this Act, and not later than October 1, 2006, the 
Secretary shall transmit to the Congress a report that--
          (1) evaluates the process of converting natural gas 
        infrastructure to accommodate fuel cell-powered school buses; 
        and
          (2) assesses the overall impact on energy conservation, 
        public health, and the environment as a result of this program 
        under this section.

SEC. 5033. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to the Secretary for carrying 
out this subtitle, to remain available until expended--
          (1) $60,000,000 for fiscal year 2004;
          (2) $70,000,000 for fiscal year 2005; and
          (3) $80,000,000 for fiscal year 2006.

                     Subtitle D--Advanced Vehicles

SEC. 5041. DEFINITIONS.

  For the purposes of this subtitle, the following definitions apply:
          (1) Alternative fueled vehicle..--The term ``alternative 
        fueled vehicle'' means a vehicle propelled solely on an 
        alternative fuel as defined in section 301 of the Energy Policy 
        Act of 1992 (42 U.S.C. 13211), except the term does not include 
        any vehicle that the Secretary determines, by rule, does not 
        yield substantial environmental benefits over a vehicle 
        operating solely on gasoline or diesel derived from fossil 
        fuels.
          (2) Fuel cell vehicle.--The term ``fuel cell vehicle'' means 
        a vehicle propelled by one or more cells that convert chemical 
        energy directly into electricity by combining oxygen with 
        hydrogen fuel which is stored on board the vehicle in any form 
        and may or may not require reformation prior to use.
          (3) Hybrid vehicle.--The term ``hybrid vehicle'' means a 
        medium or heavy duty vehicle propelled by an internal 
        combustion engine using any combustible fuel and an onboard 
        rechargeable battery storage system.
          (4) Neighborhood electric vehicle.--The term ``neighborhood 
        electric vehicle'' means a motor vehicle that qualifies as 
        both--
                  (A) a low-speed vehicle, as such term is defined in 
                section 571.3(b) of title 49, Code of Federal 
                Regulations; and
                  (B) a zero-emission vehicle, as such term is defined 
                in section 86.1702-99 of title 40, Code of Federal 
                Regulations.
          (5) Pilot program.--The term ``pilot program'' means the 
        competitive grant program established under section 5042.
          (6) Ultra-low sulfur diesel vehicle.--The term ``ultra-low 
        sulfur diesel vehicle'' means a vehicle manufactured in model 
        years 2002 through 2006 powered by a heavy-duty diesel engine 
        that--
                  (A) is fueled by diesel fuel which contains sulfur at 
                not more than 15 parts per million; and
                  (B) emits not more than the lesser of--
                          (i) for vehicles manufactured in--
                                  (I) model years 2002 and 2003, 3.0 
                                grams per brake horsepower-hour of 
                                oxides of nitrogen and .01 grams per 
                                brake horsepower-hour of particulate 
                                matter; and
                                  (II) model years 2004 through 2006, 
                                2.5 grams per brake horsepower-hour of 
                                nonmethane hydrocarbons and oxides of 
                                nitrogen and .01 grams per brake 
                                horsepower-hour of particulate matter; 
                                or
                          (ii) the emissions of nonmethane 
                        hydrocarbons, oxides of nitrogen, and 
                        particulate matter of the best performing 
                        technology of ultra-low sulfur diesel vehicles 
                        of the same class and application that are 
                        commercially available.

SEC. 5042. PILOT PROGRAM.

  (a) Establishment.--The Secretary shall establish a competitive grant 
pilot program, to be administered through the Clean Cities Program of 
the Department of Energy, to provide not more than 10 geographically 
dispersed project grants to State governments, local governments, or 
metropolitan transportation authorities to carry out a project or 
projects for the purposes described in subsection (b).
  (b) Grant Purposes.--Grants under this section may be used for the 
following purposes:
          (1) The acquisition of alternative fueled vehicles or fuel 
        cell vehicles, including--
                  (A) passenger vehicles including neighborhood 
                electric vehicles; and
                  (B) motorized two-wheel bicycles, scooters, or other 
                vehicles for use by law enforcement personnel or other 
                State or local government or metropolitan 
                transportation authority employees.
          (2) The acquisition of alternative fueled vehicles, hybrid 
        vehicles, or fuel cell vehicles, including--
                  (A) buses used for public transportation or 
                transportation to and from schools;
                  (B) delivery vehicles for goods or services; and
                  (C) ground support vehicles at public airports, 
                including vehicles to carry baggage or push airplanes 
                away from terminal gates.
          (3) The acquisition of ultra-low sulfur diesel vehicles.
          (4) Infrastructure necessary to directly support an 
        alternative fueled vehicle, fuel cell vehicle, or hybrid 
        vehicle project funded by the grant, including fueling and 
        other support equipment.
          (5) Operation and maintenance of vehicles, infrastructure, 
        and equipment acquired as part of a project funded by the 
        grant.
  (c) Applications.--
          (1) Requirements.--The Secretary shall issue requirements for 
        applying for grants under the pilot program. At a minimum, the 
        Secretary shall require that applications be submitted by the 
        head of a State or local government or a metropolitan 
        transportation authority, or any combination thereof, and a 
        registered participant in the Clean Cities Program of the 
        Department of Energy, and shall include--
                  (A) a description of the projects proposed in the 
                application, including how they meet the requirements 
                of this subtitle;
                  (B) an estimate of the ridership or degree of use of 
                the projects proposed in the application;
                  (C) an estimate of the air pollution emissions 
                reduced and fossil fuel displaced as a result of the 
                projects proposed in the application, and a plan to 
                collect and disseminate environmental data, related to 
                the projects to be funded under the grant, over the 
                life of the projects;
                  (D) a description of how the projects proposed in the 
                application will be sustainable without Federal 
                assistance after the completion of the term of the 
                grant;
                  (E) a complete description of the costs of each 
                project proposed in the application, including 
                acquisition, construction, operation, and maintenance 
                costs over the expected life of the project;
                  (F) a description of which costs of the projects 
                proposed in the application will be supported by 
                Federal assistance under this subtitle; and
                  (G) documentation to the satisfaction of the 
                Secretary that diesel fuel containing sulfur at not 
                more than 15 parts per million is available for 
                carrying out the projects, and a commitment by the 
                applicant to use such fuel in carrying out the 
                projects.
          (2) Partners.--An applicant under paragraph (1) may carry out 
        projects under the pilot program in partnership with public and 
        private entities.
  (d) Selection Criteria.--In evaluating applications under the pilot 
program, the Secretary shall consider each applicant's previous 
experience with similar projects and shall give priority consideration 
to applications that--
          (1) are most likely to maximize protection of the 
        environment;
          (2) demonstrate the greatest commitment on the part of the 
        applicant to ensure funding for the proposed projects and the 
        greatest likelihood that each project proposed in the 
        application will be maintained or expanded after Federal 
        assistance under this subtitle is completed; and
          (3) exceed the minimum requirements of subsection (c)(1)(A).
  (e) Pilot Project Requirements.--
          (1) Maximum amount.--The Secretary shall not provide more 
        than $20,000,000 in Federal assistance under the pilot program 
        to any applicant.
          (2) Cost sharing.--The Secretary shall not provide more than 
        50 percent of the cost, incurred during the period of the 
        grant, of any project under the pilot program.
          (3) Maximum period of grants.--The Secretary shall not fund 
        any applicant under the pilot program for more than 5 years.
          (4) Deployment and distribution.--The Secretary shall seek to 
        the maximum extent practicable to ensure a broad geographic 
        distribution of project sites.
          (5) Transfer of information and knowledge.--The Secretary 
        shall establish mechanisms to ensure that the information and 
        knowledge gained by participants in the pilot program are 
        transferred among the pilot program participants and to other 
        interested parties, including other applicants that submitted 
        applications.
  (f) Schedule.--
          (1) Publication.--Not later than 3 months after the date of 
        the enactment of this Act, the Secretary shall publish in the 
        Federal Register, Commerce Business Daily, and elsewhere as 
        appropriate, a request for applications to undertake projects 
        under the pilot program. Applications shall be due within 6 
        months of the publication of the notice.
          (2) Selection.--Not later than 6 months after the date by 
        which applications for grants are due, the Secretary shall 
        select by competitive, peer review all applications for 
        projects to be awarded a grant under the pilot program.
  (g) Limit on Funding.--The Secretary shall provide not less than 20 
percent and not more than 25 percent of the grant funding made 
available under this section for the acquisition of ultra-low sulfur 
diesel vehicles.

SEC. 5043. REPORTS TO CONGRESS.

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

SEC. 5044. AUTHORIZATION OF APPROPRIATIONS.

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

           Subtitle E--Hydrogen Fuel Cell Heavy-Duty Vehicles

SEC. 5051. DEFINITION.

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

SEC. 5052. FINDINGS.

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

SEC. 5053. HYDROGEN FUEL CELL BUSES.

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

SEC. 5054. AUTHORIZATION OF APPROPRIATIONS.

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

                       Subtitle F--Miscellaneous

SEC. 5061. RAILROAD EFFICIENCY.

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

SEC. 5062. MOBILE EMISSION REDUCTIONS TRADING AND CREDITING.

  Within 180 days after the date of enactment of this Act, the 
Administrator of the Environmental Protection Agency shall provide a 
report to the Congress on the Environmental Protection Agency's 
experience with the trading of mobile source emission reduction credits 
for use by owners and operators of stationary source emission sources 
to meet emission offset requirements within a nonattainment area. The 
report shall describe--
          (1) projects approved by the Environmental Protection Agency 
        that include the trading of mobile source emission reduction 
        credits for use by stationary sources in complying with offset 
        requirements, including project and stationary sources 
        location, volumes of emissions offset and traded, a description 
        of the sources of mobile emission reduction credits, and, if 
        available, the cost of the credits;
          (2) the significant issues identified by the Environmental 
        Protection Agency in its consideration and approval of trading 
        in such projects;
          (3) the requirements for monitoring and assessing the air 
        quality benefits of any approved project;
          (4) the statutory authority upon which the Environmental 
        Protection Agency has based approval of such projects;
          (5) an evaluation of how the resolution of issues in approved 
        projects could be utilized in other projects; and
          (6) any other issues the Environmental Protection Agency 
        considers relevant to the trading and generation of mobile 
        source emission reduction credits for use by stationary sources 
        or for other purposes.

SEC. 5063. IDLE REDUCTION TECHNOLOGIES.

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

SEC. 5064. STUDY OF AVIATION FUEL CONSERVATION AND EMISSIONS.

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

SEC. 5065. DIESEL FUELED VEHICLES.

  (a) Diesel Combustion and After Treatment Technologies.--The 
Secretary of Energy shall accelerate efforts to improve diesel 
combustion and after-treatment technologies for use in diesel fueled 
motor vehicles.
  (b) Goal.--
          (1) Compliance with tier 2 emission standards by 2010.--The 
        Secretary shall carry out subsection (a) with a view to 
        developing and demonstrating diesel technology meeting tier 2 
        emission standards not later than 2010.
          (2) Tier 2 emission standards defined.--In this subsection, 
        the term ``tier 2 emission standards'' means the motor vehicle 
        emission standards promulgated by the Administrator of the 
        Environmental Protection Agency on February 10, 2000, under 
        sections 202 and 211 of the Clean Air Act to apply to passenger 
        cars, light trucks, and larger passenger vehicles of model 
        years after the 2003 vehicle model year.

SEC. 5066. HYBRID VEHICLES.

  (a) In General.--Notwithstanding section 102(a)(1) of title 23, 
United States Code, a State may, for the purpose of promoting energy 
conservation, permit a hybrid vehicle which is either a passenger 
automobile or light duty truck with fewer than 2 occupants to operate 
in high occupancy vehicle lanes.
  (b) Definition.--In this section, the term ``hybrid vehicle'' means a 
motor vehicle which draws propulsion energy from both--
          (1) an internal combustion or heat engine using combustible 
        fuel; and
          (2) an onboard rechargeable energy storage system.

SEC. 5067. WAIVERS OF ALTERNATIVE FUELED VEHICLE FUELING REQUIREMENT.

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

                         TITLE VI--DOE PROGRAMS

SEC. 6001. PURPOSES.

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

SEC. 6002. DEFINITIONS.

  For purposes of this title:
          (1) Department.--The term ``Department'' means the Department 
        of Energy.
          (2) Departmental mission.--The term ``departmental mission'' 
        means any of the functions vested in the Secretary of Energy by 
        the Department of Energy Organization Act (42 U.S.C. 7101 et 
        seq.) or other law.
          (3) Institution of higher education.--The term ``institution 
        of higher education'' has the meaning given that term in 
        section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 
        1001(a)).
          (4) Joint venture.--The term ``joint venture'' has the 
        meaning given that term under section 2 of the National 
        Cooperative Research and Production Act of 1993 (15 U.S.C. 
        4301).
          (5) National laboratory.--The term ``National Laboratory'' 
        means any of the following laboratories owned by the 
        Department:
                  (A) Ames National Laboratory.
                  (B) Argonne National Laboratory.
                  (C) Brookhaven National Laboratory.
                  (D) Fermi National Laboratory.
                  (E) Idaho National Engineering and Environmental 
                Laboratory.
                  (F) Lawrence Berkeley National Laboratory.
                  (G) Lawrence Livermore National Laboratory.
                  (H) Los Alamos National Laboratory.
                  (I) National Energy Technology Laboratory.
                  (J) National Renewable Energy Laboratory.
                  (K) Oak Ridge National Laboratory.
                  (L) Pacific Northwest National Laboratory.
                  (M) Princeton Plasma Physics Laboratory.
                  (N) Sandia National Laboratories.
                  (O) Thomas Jefferson National Accelerator Facility.
          (6) Nonmilitary energy laboratory.--The term ``nonmilitary 
        energy laboratory'' means any of the following laboratories of 
        the Department:
                  (A) Ames National Laboratory.
                  (B) Argonne National Laboratory.
                  (C) Brookhaven National Laboratory.
                  (D) Fermi National Laboratory.
                  (E) Lawrence Berkeley National Laboratory.
                  (F) Oak Ridge National Laboratory.
                  (G) Pacific Northwest National Laboratory.
                  (H) Princeton Plasma Physics Laboratory.
                  (I) Stanford Linear Accelerator Center.
                  (J) Thomas Jefferson National Accelerator Facility.
          (7) Secretary.--The term ``Secretary'' means the Secretary of 
        Energy.

                     Subtitle A--Energy Efficiency

                PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 6011. ENERGY EFFICIENCY.

  (a) In General.--The following sums are authorized to be appropriated 
to the Secretary for energy efficiency and conservation activities, 
including activities authorized under this subtitle:
          (1) For fiscal year 2003, $560,000,000.
          (2) For fiscal year 2004, $616,000,000.
          (3) For fiscal year 2005, $695,000,000.
          (4) For fiscal year 2006, $772,000,000.
          (5) For fiscal year 2007, $865,000,000.
  (b) Allocations.--From amounts authorized under subsection (a), the 
following sums are authorized:
          (1) Lighting systems.--For activities under section 6021, 
        $10,000,000 for fiscal year 2003 and $50,000,000 for each of 
        fiscal years 2004 through 2007.
          (2) Secondary electric vehicle battery use program.--For 
        activities under section 6032--
                  (A) for fiscal year 2003, $1,000,000;
                  (B) for fiscal year 2004, $4,000,000;
                  (C) for fiscal year 2005, $7,000,000;
                  (D) for fiscal year 2006, $7,000,000; and
                  (E) for fiscal year 2007, $7,000,000.
  (c) Extended authorization.--There are authorized to be appropriated 
to the Secretary for activities under section 6021, $50,000,000 for 
each of fiscal years 2008 through 2012.
  (d) Limits on Use of Funds.--None of the funds authorized to be 
appropriated under this section may be used for--
          (1) the promulgation and implementation of energy efficiency 
        regulations;
          (2) the Weatherization Assistance Program under part A of 
        title IV of the Energy Conservation and Production Act;
          (3) the State Energy Program under part D of title III of the 
        Energy Policy and Conservation Act; or
          (4) the Federal Energy Management Program under part 3 of 
        title V of the National Energy Conservation Policy Act.

                        PART 2--LIGHTING SYSTEMS

SEC. 6021. NEXT GENERATION LIGHTING INITIATIVE.

  (a) In General.--The Secretary shall carry out a Next Generation 
Lighting Initiative in accordance with this section to support 
activities related to advanced solid-state lighting technologies based 
on white light emitting diodes.
  (b) Objectives.--The objectives of the initiative shall be--
          (1) to develop, by 2012, advanced solid-state lighting 
        technologies based on white light emitting diodes that, 
        compared to incandescent and fluorescent lighting technologies, 
        are--
                  (A) longer lasting;
                  (B) more energy-efficient; and
                  (C) cost-competitive;
          (2) to develop an inorganic white light emitting diode that 
        has an efficiency of 160 lumens per watt and a 10-year 
        lifetime; and
          (3) to develop an organic white light emitting diode with an 
        efficiency of 100 lumens per watt with a 5-year lifetime that--
                  (A) illuminates over a full color spectrum;
                  (B) covers large areas over flexible surfaces; and
                  (C) does not contain harmful pollutants, such as 
                mercury, typical of fluorescent lamps.
  (c) Consortium.--
          (1) In general.--The Secretary shall establish the Next 
        Generation Lighting Initiative through a private consortium 
        (which may include private firms, trade associations and 
        institutions of higher education), which the Secretary shall 
        select through a competitive process. Each proposed consortium 
        shall submit to the Secretary such information as the Secretary 
        may require, including a program plan agreed to by all 
        participants of the consortium.
          (2) Joint venture.--The consortium shall be structured as a 
        joint venture among the participants of the consortium. The 
        Secretary shall serve on the governing council of the 
        consortium.
          (3) Eligibility.--To be eligible to be selected as the 
        consortium under paragraph (1), an applicant must be broadly 
        representative of United States solid-state lighting research, 
        development, and manufacturing expertise as a whole.
          (4) Grants.--(A) The Secretary shall award grants to the 
        consortium, which the consortium may disburse to researchers, 
        including those who are not participants of the consortium.
          (B) To receive a grant, the consortium must provide a 
        description to the Secretary of the proposed activities and 
        list the parties that will receive funding.
          (5) National laboratories.--National Laboratories may 
        participate in the activities described in this section, and 
        may receive funds from the consortium.
          (6) Intellectual property.--Participants in the consortium 
        and the Federal Government shall have royalty-free nonexclusive 
        rights to use intellectual property derived from activities 
        funded pursuant to this subsection.
  (d) Development, Demonstration, and Commercial Application.--The 
Secretary shall carry out the development, demonstration, and 
commercial application activities of the Next Generation Lighting 
Initiative through awards to private firms, trade associations, and 
institutions of higher education. In selecting awardees, the Secretary 
may give preference to members of the consortium selected pursuant to 
subsection (c).
  (e) Plans and Assessments.--(1) The consortium shall formulate an 
annual operating plan which shall include priorities, technical 
milestones, and plans for technology transfer, and which shall be 
subject to approval by the Secretary.
  (2) The Secretary shall enter into an arrangement with the National 
Academy of Sciences to conduct periodic reviews of the Next Generation 
Lighting Initiative. The Academy shall review the priorities, technical 
milestones, and plans for technology transfer established under 
paragraph (1) and evaluate the progress toward achieving them. The 
Secretary shall consider the results of such reviews in evaluating the 
plans submitted under paragraph (1).
  (f) Audit.--The Secretary shall retain an independent, commercial 
auditor to perform an audit of the consortium to determine the extent 
to which the funds authorized by this section have been expended in a 
manner consistent with the purposes of this section. The auditor shall 
transmit a report annually to the Secretary, who shall transmit the 
report to the Congress, along with a plan to remedy any deficiencies 
cited in the report.
  (g) Sunset.--The Next Generation Lighting Initiative shall terminate 
no later than September 30, 2013.
  (h) Definitions.--As used in this section:
          (1) Advanced solid-state lighting.--The term ``advanced 
        solid-state lighting'' means a semiconducting device package 
        and delivery system that produces white light using externally 
        applied voltage.
          (2) Inorganic white light emitting diode.--The term 
        ``inorganic white light emitting diode'' means an inorganic 
        semiconducting package that produces white light using 
        externally applied voltage.
          (3) Organic white light emitting diode.--The term ``organic 
        white light emitting diode'' means an organic semiconducting 
        compound that produces white light using externally applied 
        voltage.

                            PART 3--VEHICLES

SEC. 6031. DEFINITIONS.

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

SEC. 6032. ESTABLISHMENT OF SECONDARY ELECTRIC VEHICLE BATTERY USE 
                    PROGRAM.

  (a) Program.--The Secretary shall establish and conduct a program for 
the secondary use of batteries. Such program shall be--
          (1) designed to demonstrate the use of batteries in secondary 
        application, including utility and commercial power storage and 
        power quality;
          (2) structured to evaluate the performance, including useful 
        service life and costs, of such batteries in field operations, 
        and evaluate the necessary supporting infrastructure, including 
        reuse and disposal of batteries; and
          (3) coordinated with ongoing secondary battery use programs 
        at the National Laboratories and in industry.
  (b) Solicitation.--(1) Not later than 6 months after the date of the 
enactment of this Act, the Secretary shall solicit proposals to 
demonstrate the secondary use of batteries and associated equipment and 
supporting infrastructure in geographic locations throughout the United 
States. The Secretary may make additional solicitations for proposals 
if the Secretary determines that such solicitations are necessary to 
carry out this section.
  (2)(A) Proposals submitted in response to a solicitation under this 
section shall include--
          (i) a description of the project, including the batteries to 
        be used in the project, the proposed locations and applications 
        for the batteries, the number of batteries to be demonstrated, 
        and the type, characteristics, and estimated life-cycle costs 
        of the batteries compared to other energy storage devices 
        currently used;
          (ii) the contribution, if any, of State or local governments 
        and other persons to the demonstration project;
          (iii) the type of associated equipment and supporting 
        infrastructure to be demonstrated; and
          (iv) any other information the Secretary considers 
        appropriate.
  (B) If the proposal includes a lease arrangement, the proposal shall 
indicate the terms of such lease arrangement for the batteries and 
associated equipment.
  (c) Selection of Proposals.--(1)(A) The Secretary, in cooperation 
with affected Federal Regulatory agencies, shall, not later than 3 
months after the closing date established by the Secretary for receipt 
of proposals under subsection (b), select at least 5 proposals to 
receive financial assistance under this section.
  (B) No one project selected under this section shall receive more 
than 25 percent of the funds authorized under this section. No more 
than 3 projects selected under this section shall demonstrate the same 
battery type.
  (2) In selecting a proposal under this section, the Secretary shall 
consider--
          (A) the ability of the proposer to acquire the batteries and 
        associated equipment and to successfully manage and conduct the 
        demonstration project, including satisfying the reporting 
        requirements set forth in paragraph (3)(B);
          (B) the geographic and climatic diversity of the projects 
        selected;
          (C) the long-term technical and competitive viability of the 
        batteries to be used in the project and of the original 
        manufacturer of such batteries;
          (D) the suitability of the batteries for their intended uses;
          (E) the technical performance of the batteries, including the 
        expected additional useful life and the batteries' ability to 
        retain energy;
          (F) the environmental effects of the use of and disposal of 
        the batteries proposed to be used in the project selected;
          (G) the extent of involvement of State or local government 
        and other persons in the demonstration project and whether such 
        involvement will--
                  (i) permit a reduction of the Federal cost share per 
                project; or
                  (ii) otherwise be used to allow the Federal 
                contribution to be provided to demonstrate a greater 
                number of batteries; and
          (H) such other criteria as the Secretary considers 
        appropriate.
  (3) Conditions.--The Secretary shall require that--
          (A) as a part of a demonstration project, the users of the 
        batteries provide to the proposer information regarding the 
        operation, maintenance, performance, and use of the batteries, 
        and the proposer provide such information to the battery 
        manufacturer, for 3 years after the beginning of the 
        demonstration project;
          (B) the proposer provide to the Secretary and the 
        Administrator of the United States Environmental Protection 
        Agency such information regarding the operation, maintenance, 
        performance, and use of the batteries as the Secretary or the 
        Administrator may request;
          (C) the proposer provide to the Secretary such information 
        regarding the disposal of the batteries as the Secretary may 
        require to ensure that the proposer disposes of the batteries 
        in accordance with applicable law; and
          (D) the proposer provide at least 50 percent of the costs 
        associated with the proposal.

       Subtitle B--Distributed Energy and Electric Energy Systems

                PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 6201. DISTRIBUTED ENERGY AND ELECTRIC ENERGY SYSTEMS.

  The following sums are authorized to be appropriated to the Secretary 
for distributed energy and electric energy systems activities, 
including activities authorized under this subtitle:
          (1) For fiscal year 2004, $190,000,000.
          (2) For fiscal year 2005, $200,000,000.
          (3) For fiscal year 2006, $220,000,000.
          (4) For fiscal year 2007, $240,000,000.

                       PART 2--DISTRIBUTED POWER

SEC. 6221. STRATEGY.

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

SEC. 6222. HIGH POWER DENSITY INDUSTRY PROGRAM.

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

SEC. 6223. MICRO-COGENERATION ENERGY TECHNOLOGY.

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

                      PART 3--TRANSMISSION SYSTEMS

SEC. 6231. TRANSMISSION INFRASTRUCTURE SYSTEMS.

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

                      Subtitle C--Renewable Energy

                PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 6301. RENEWABLE ENERGY.

  (a) In General.--The following sums are authorized to be appropriated 
to the Secretary for renewable energy activities, including activities 
authorized under this subtitle:
          (1) For fiscal year 2004, $460,000,000.
          (2) For fiscal year 2005, $510,000,000.
          (3) For fiscal year 2006, $560,000,000.
          (4) For fiscal year 2007, $609,000,000.
  (b) Bioenergy.--From the amounts authorized under subsection (a), the 
following sums are authorized to be appropriated to carry out section 
6321 and other bioenergy activities:
          (1) For fiscal year 2004, $135,425,000.
          (2) For fiscal year 2005, $155,600,000.
          (3) For fiscal year 2006, $167,650,000.
          (4) For fiscal year 2007, $180,000,000.
  (c) Use of Funds.--
          (1) Bioenergy.--Of the funds authorized under subsection (b), 
        not less than $5,000,000 for each fiscal year shall be made 
        available for grants to Historically Black Colleges and 
        Universities, Tribal Colleges, and Hispanic-Serving 
        Institutions.
          (2) Rural and remote locations.--In carrying out this 
        section, the Secretary, in consultation with the Secretary of 
        Agriculture, shall demonstrate the production and use of energy 
        from advanced wind power technology, biomass, geothermal energy 
        systems, and other renewable energy technologies in order to 
        assist in delivering electricity to rural and remote locations.
          (3) Hydropower.--Of the funds authorized under subsection 
        (a), not less than $5,000,000 for each fiscal year shall be 
        made available for demonstration projects of off-stream pumped 
        storage hydropower.

                           PART 2--BIOENERGY

SEC. 6321. BIOENERGY PROGRAMS.

  (a) Program.--The Secretary shall conduct a program to facilitate the 
production of bioenergy, including--
          (1) biopower energy systems;
          (2) biofuels;
          (3) integrated applications of both biopower and biofuels;
          (4) feedstocks; and
          (5) economic analysis.
  (b) Definition.--For purposes of this section, the term ``bioenergy'' 
includes energy produced from animal waste and agricultural crops.

                       Subtitle D--Nuclear Energy

                PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 6411. NUCLEAR ENERGY.

  (a) Core Programs.--The following sums are authorized to be 
appropriated to the Secretary for nuclear energy activities, regulation 
of research and development activities and nuclear regulatory research, 
including activities authorized under this subtitle, other than those 
described in subsection (b):
          (1) For fiscal year 2004, $200,000,000.
          (2) For fiscal year 2005, $233,000,000.
          (3) For fiscal year 2006, $266,000,000.
          (4) For fiscal year 2007, $300,000,000.
  (b) Nuclear Infrastructure Support.--The following sums are 
authorized to be appropriated to the Secretary for activities under 
section 6421(f):
          (1) For fiscal year 2004, $120,000,000.
          (2) For fiscal year 2005, $125,000,000.
          (3) For fiscal year 2006, $130,000,000.
          (4) For fiscal year 2007, $135,000,000.
  (c) Allocations.--From amounts authorized under subsection (a), the 
following sums are authorized:
          (1) Advanced fuel recycling program.--For activities under 
        section 6431--
                  (A) for fiscal year 2004, $80,000,000;
                  (B) for fiscal year 2005, $93,000,000;
                  (C) for fiscal year 2006, $106,000,000; and
                  (D) for fiscal year 2007, $120,000,000.
          (2) University programs.--For activities under section 6441--
                  (A) for fiscal year 2004, $25,000,000;
                  (B) for fiscal year 2005, $33,900,000;
                  (C) for fiscal year 2006, $37,900,000; and
                  (D) for fiscal year 2007, $43,600,000.
  (d) Limit on Use of Funds.--None of the funds authorized under this 
section may be used for decommissioning the Fast Flux Test Facility.

                PART 2--NUCLEAR ENERGY RESEARCH PROGRAMS

SEC. 6421. NUCLEAR ENERGY RESEARCH PROGRAMS.

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

                    PART 3--ADVANCED FUEL RECYCLING

SEC. 6431. ADVANCED FUEL RECYCLING PROGRAM.

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

                      PART 4--UNIVERSITY PROGRAMS

SEC. 6441. UNIVERSITY NUCLEAR SCIENCE AND ENGINEERING SUPPORT.

  (a) Establishment.--The Secretary shall support a program to invest 
in human resources and infrastructure in the nuclear sciences and 
engineering and related fields (including health physics and nuclear 
and radiochemistry), consistent with departmental missions related to 
civilian nuclear research and development.
  (b) Duties.--In carrying out the program under this section, the 
Secretary shall--
          (1) establish a graduate and undergraduate fellowship program 
        to attract new and talented students;
          (2) establish a Junior Faculty Research Initiation Grant 
        Program to assist institutions of higher education in 
        recruiting and retaining new faculty in the nuclear sciences 
        and engineering;
          (3) support fundamental nuclear sciences and engineering 
        research through the Nuclear Engineering Education Research 
        Program;
          (4) encourage collaborative nuclear research among industry, 
        National Laboratories, and institutions of higher education 
        through the Nuclear Energy Research Initiative; and
          (5) support communication and outreach related to nuclear 
        science and engineering.
  (c) Maintaining University Research and Training Reactors and 
Associated Infrastructure.--Activities under this section may include--
          (1) converting research reactors currently using high-
        enrichment fuels to low-enrichment fuels, upgrading operational 
        instrumentation, and sharing of reactors among institutions of 
        higher education;
          (2) providing technical assistance, in collaboration with the 
        United States nuclear industry, in relicensing and upgrading 
        training reactors as part of a student training program; and
          (3) providing funding for reactor improvements as part of a 
        focused effort that emphasizes research, training, and 
        education.
  (d) University-National Laboratory Interactions.--The Secretary shall 
develop--
          (1) a sabbatical fellowship program for professors at 
        institutions of higher education to spend extended periods of 
        time at National Laboratories in the areas of nuclear science 
        and technology; and
          (2) a visiting scientist program in which National Laboratory 
        staff can spend time in academic nuclear science and 
        engineering departments.
The Secretary may provide fellowships for students to spend time at 
National Laboratories in the area of nuclear science with a member of 
the Laboratory staff acting as a mentor.
  (e) Operating and Maintenance Costs.--Funding for a research project 
provided under this section may be used to offset a portion of the 
operating and maintenance costs of a research reactor at an institution 
of higher education used in the research project.

                       Subtitle E--Fossil Energy

                PART 1--AUTHORIZATION OF APPROPRIATIONS

SEC. 6501. FOSSIL ENERGY.

  There are authorized to be appropriated to the Secretary for fossil 
energy activities, including activities authorized under this 
subtitle--
          (1) $523,000,000 for fiscal year 2004;
          (2) $542,000,000 for fiscal year 2005;
          (3) $558,000,000 for fiscal year 2006; and
          (4) $585,000,000 for fiscal year 2007.

   PART 2--ULTRA-DEEPWATER AND UNCONVENTIONAL NATURAL GAS AND OTHER 
                          PETROLEUM RESOURCES

SEC. 6521. PROGRAM AUTHORITY.

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

SEC. 6522. ULTRA-DEEPWATER PROGRAM.

  (a) In General.--The Secretary shall carry out the activities under 
paragraphs (1) and (2) of section 6521(b), to maximize the value of the 
ultra-deepwater natural gas and other petroleum resources of the United 
States by increasing the supply of such resources and by reducing the 
cost and increasing the efficiency of exploration for and production of 
such resources, while improving safety and minimizing environmental 
impacts.
  (b) Role of the Secretary.--The Secretary shall have ultimate 
responsibility for, and oversight of, all aspects of the program under 
this section.
  (c) Role of the Program Consortium.--
          (1) In general.--The Secretary shall contract with a 
        consortium to--
                  (A) manage awards pursuant to subsection (f)(4);
                  (B) make recommendations to the Secretary for project 
                solicitations;
                  (C) disburse funds awarded under subsection (f) as 
                directed by the Secretary in accordance with the annual 
                plan under subsection (e); and
                  (D) carry out other activities assigned to the 
                program consortium by this section.
          (2) Limitation.--The Secretary may not assign any activities 
        to the program consortium except as specifically authorized 
        under this section.
          (3) Conflict of interest.--(A) The Secretary shall establish 
        procedures--
                  (i) to ensure that each board member, officer, or 
                employee of the program consortium who is in a 
                decisionmaking capacity under subsection (f)(3) or (4) 
                shall disclose to the Secretary any financial interests 
                in, or financial relationships with, applicants for or 
                recipients of awards under this section, including 
                those of his or her spouse or minor child, unless such 
                relationships or interests would be considered to be 
                remote or inconsequential; and
                  (ii) to require any board member, officer, or 
                employee with a financial relationship or interest 
                disclosed under clause (i) to recuse himself or herself 
                from any review under subsection (f)(3) or oversight 
                under subsection (f)(4) with respect to such applicant 
                or recipient.
          (B) The Secretary may disqualify an application or revoke an 
        award under this section if a board member, officer, or 
        employee has failed to comply with procedures required under 
        subparagraph (A)(ii).
  (d) Selection of the Program Consortium.--
          (1) In general.--The Secretary shall select the program 
        consortium through an open, competitive process.
          (2) Members.--The program consortium may include 
        corporations, institutions of higher education, National 
        Laboratories, or other research institutions. After submitting 
        a proposal under paragraph (4), the program consortium may not 
        add members without the consent of the Secretary.
          (3) Tax status.--The program consortium shall be an entity 
        that is exempt from tax under section 501(c)(3) of the Internal 
        Revenue Code of 1986.
          (4) Schedule.--Not later than 90 days after the date of 
        enactment of this Act, the Secretary shall solicit proposals 
        for the creation of the program consortium, which must be 
        submitted not less than 180 days after the date of enactment of 
        this Act. The Secretary shall select the program consortium not 
        later than 240 days after such date of enactment.
          (5) Application.--Applicants shall submit a proposal 
        including such information as the Secretary may require. At a 
        minimum, each proposal shall--
                  (A) list all members of the consortium;
                  (B) fully describe the structure of the consortium, 
                including any provisions relating to intellectual 
                property; and -
                  (C) describe how the applicant would carry out the 
                activities of the program consortium under this 
                section.
          (6) Eligibility.--To be eligible to be selected as the 
        program consortium, an applicant must be an entity whose 
        members collectively have demonstrated capabilities in planning 
        and managing programs in natural gas or other petroleum 
        exploration or production.
          (7) Criterion.--The Secretary may consider the amount of the 
        fee an applicant proposes to receive under subsection (g) in 
        selecting a consortium under this section.
  (e) Annual Plan.--
          (1) In general.--The program under this section shall be 
        carried out pursuant to an annual plan prepared by the 
        Secretary in accordance with paragraph (2).
          (2) Development.--(A) Before drafting an annual plan under 
        this subsection, the Secretary shall solicit specific written 
        recommendations from the program consortium for each element to 
        be addressed in the plan, including those described in 
        paragraph (4). The Secretary may request that the program 
        consortium submit its recommendations in the form of a draft 
        annual plan.
          (B) The Secretary shall submit the recommendations of the 
        program consortium under subparagraph (A) to the Ultra-
        Deepwater Advisory Committeeestablished under section 6525(a) 
for review, and such Advisory Committee shall provide to the Secretary 
written comments by a date determined by the Secretary. The Secretary 
may also solicit comments from any other experts.
          (C) The Secretary shall consult regularly with the program 
        consortium throughout the preparation of the annual plan.
          (3) Publication.--The Secretary shall transmit to the 
        Congress and publish in the Federal Register the annual plan, 
        along with any written comments received under paragraph (2)(A) 
        and (B). The annual plan shall be transmitted and published not 
        later than 60 days after the date of enactment of an Act making 
        appropriations for a fiscal year for the program under this 
        section.
          (4) Contents.--The annual plan shall describe the ongoing and 
        prospective activities of the program under this section and 
        shall include--
                  (A) a list of any solicitations for awards that the 
                Secretary plans to issue to carry out activities, 
                including the topics for such work, who would be 
                eligible to apply, selection criteria, and the duration 
                of awards; and
                  (B) a description of the activities expected of the 
                program consortium to carry out subsection (f)(4).
  (f) Awards.--
          (1) In general.--The Secretary shall make awards to carry out 
        activities under the program under this section. The program 
        consortium shall not be eligible to receive such awards, but 
        members of the program consortium may receive such awards.
          (2) Proposals.--The Secretary shall solicit proposals for 
        awards under this subsection in such manner and at such time as 
        the Secretary may prescribe, in consultation with the program 
        consortium.
          (3) Review.--The Secretary shall make awards under this 
        subsection through a competitive process, which shall include a 
        review by individuals selected by the Secretary. Such 
        individuals shall include, for each application, Federal 
        officials, the program consortium, and non-Federal experts who 
        are not board members, officers, or employees of the program 
        consortium or of a member of the program consortium.
          (4) Oversight.--(A) The program consortium shall oversee the 
        implementation of awards under this subsection, consistent with 
        the annual plan under subsection (e), including disbursing 
        funds and monitoring activities carried out under such awards 
        for compliance with the terms and conditions of the awards.
          (B) Nothing in subparagraph (A) shall limit the authority or 
        responsibility of the Secretary to oversee awards, or limit the 
        authority of the Secretary to review or revoke awards.
          (C) The Secretary shall provide to the program consortium the 
        information necessary for the program consortium to carry out 
        its responsibilities under this paragraph.
  (g) Fee.--
          (1) In general.--To compensate the program consortium for 
        carrying out its activities under this section, the Secretary 
        shall provide to the program consortium a fee in an amount not 
        to exceed 7.5 percent of the amounts awarded under subsection 
        (f) for each fiscal year.
          (2) Advance.--The Secretary shall advance funds to the 
        program consortium upon selection of the consortium, which 
        shall be deducted from amounts to be provided under paragraph 
        (1).
  (h) Audit.--The Secretary shall retain an independent, commercial 
auditor to determine the extent to which funds provided to the program 
consortium, and funds provided under awards made under subsection (f), 
have been expended in a manner consistent with the purposes and 
requirements of this part. The auditor shall transmit a report annually 
to the Secretary, who shall transmit the report to Congress, along with 
a plan to remedy any deficiencies cited in the report.

SEC. 6523. UNCONVENTIONAL NATURAL GAS AND OTHER PETROLEUM RESOURCES 
                    PROGRAM.

  (a) In General.--The Secretary, after consulting with appropriate 
Federal regulatory agencies, shall carry out activities under section 
6521(b)(3), to maximize the value of the onshore unconventional natural 
gas and other petroleum resources of the United States by increasing 
the supply of such resources and by reducing the cost and increasing 
the efficiency of exploration for and production of such resources, 
while improving safety and minimizing environmental impacts.
  (b) Awards.--
          (1) In general.--The Secretary shall carry out this section 
        through awards made through an open, competitive process.
          (2) Consortia.--In carrying out paragraph (1), the Secretary 
        shall give preference to making awards to consortia.
  (c) Audit.--The Secretary shall retain an independent, commercial 
auditor to determine the extent to which funds provided under awards 
made under this section have been expended in a manner consistent with 
the purposes and requirements of this part. The auditor shall transmit 
a report annually to the Secretary, who shall transmit the report to 
Congress, along with a plan to remedy any deficiencies cited in the 
report.
  (d) Focus Areas.--Awards under this section may focus on areas 
including advanced coal-bed methane, deep drilling, natural gas 
production from tight sands, natural gas production from gas shales, 
innovative exploration and production techniques, enhanced recovery 
techniques, and environmental mitigation of unconventional natural gas 
and other petroleum resources exploration and production.
  (e) Activities by the United States Geological Survey.--The Secretary 
of the Interior, through the United States Geological Survey, shall, 
where appropriate, carry out programs to complement the programs under 
this section.

SEC. 6524. ADDITIONAL REQUIREMENTS FOR AWARDS.

  (a) Demonstration Projects.--An application for an award under this 
part for a demonstration project shall describe with specificity the 
intended commercial use of the technology to be demonstrated.
  (b) Flexibility in Locating Demonstration Projects.--Subject to the 
limitation in section 6521(c), a demonstration project under this part 
relating to an ultra-deepwater technology or an ultra-deepwater 
architecture may be conducted in deepwater depths.
  (c) Intellectual Property Agreements.--If an award under this part is 
made to a consortium (other than the program consortium), the 
consortium shall provide to the Secretary a signed contract agreed to 
by all members of the consortium describing the rights of each member 
to intellectual property used or developed under the award.
  (d) Technology Transfer.--Each recipient of an award under this part 
shall conduct technology transfer activities, as appropriate.

SEC. 6525. ADVISORY COMMITTEES.

  (a) Ultra-Deepwater Advisory Committee.--
          (1) Establishment.--Not later than 270 days after the date of 
        enactment of this section, the Secretary shall establish an 
        advisory committee to be known as the Ultra-Deepwater Advisory 
        Committee.
          (2) Membership.--The advisory committee under this subsection 
        shall be composed of members appointed by the Secretary and 
        including--
                  (A) individuals with extensive experience or 
                operational knowledge of offshore natural gas and other 
                petroleum exploration and production;
                  (B) individuals broadly representative of the 
                affected interests in ultra-deepwater natural gas and 
                other petroleum production, including interests in 
                environmental protection and safe operations;
                  (C) no individuals who are Federal employees; and
                  (D) no individuals who are board members, officers, 
                or employees of the program consortium.
          (3) Duties.--The advisory committee under this subsection 
        shall--
                  (A) advise the Secretary on the development and 
                implementation of programs under this part related to 
                ultra-deepwater natural gas and other petroleum 
                resources; and
                  (B) carry out section 6522(e)(2)(B).
          (4) Compensation.--A member of the advisory committee under 
        this subsection shall serve without compensation but shall 
        receive travel expenses, including per diem in lieu of 
        subsistence, in accordance with applicable provisions under 
        subchapter I of chapter 57 of title 5, United States Code.
  (b) Unconventional Resources Technology Advisory Committee.--
          (1) Establishment.--Not later than 270 days after the date of 
        enactment of this section, the Secretary shall establish an 
        advisory committee to be known as the Unconventional Resources 
        Technology Advisory Committee.
          (2) Membership.--The advisory committee under this subsection 
        shall be composed of members appointed by the Secretary and 
        including--
                  (A) individuals with extensive experience or 
                operational knowledge of unconventional natural gas and 
                other petroleum resource exploration and production, 
                including independent oil and gas producers;
                  (B) individuals broadly representative of the 
                affected interests in unconventional natural gas and 
                other petroleum resource exploration and production, 
                including interests in environmental protection and 
                safe operations; and
                  (C) no individuals who are Federal employees.
          (3) Duties.--The advisory committee under this subsection 
        shall advise the Secretary on the development and 
        implementation of activities under this part related to 
        unconventional natural gas and other petroleum resources.
          (4) Compensation.--A member of the advisory committee under 
        this subsection shall serve without compensation but shall 
        receive travel expenses, including per diem in lieu of 
        subsistence, in accordance with applicable provisions under 
        subchapter I of chapter 57 of title 5, United States Code.
  (c) Prohibition.--No advisory committee established under this 
section shall make recommendations on funding awards to consortia or 
for specific projects.

SEC. 6526. LIMITS ON PARTICIPATION.

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

SEC. 6527. FUND.

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

SEC. 6528. SUNSET.

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

SEC. 6529. DEFINITIONS.

  In this part:
          (1) Deepwater.--The term ``deepwater'' means a water depth 
        that is greater than 200 but less than 1,500 meters.
          (2) Program consortium.--The term ``program consortium'' 
        means the consortium selected under section 6522(d).
          (3) Remote or inconsequential.--The term ``remote or 
        inconsequential'' has the meaning given that term in 
        regulations issued by the Office of Government Ethics under 
        section 208(b)(2) of title 18, United States Code.
          (4) Ultra-deepwater.--The term ``ultra-deepwater'' means a 
        water depth that is equal to or greater than 1,500 meters.
          (5) Ultra-deepwater architecture.--The term ``ultra-deepwater 
        architecture'' means the integration of technologies for the 
        exploration for, or production of, natural gas or other 
        petroleum resources located at ultra-deepwater depths.
          (6) Ultra-deepwater technology.--The term ``ultra-deepwater 
        technology'' means a discrete technology that is specially 
        suited to address one or more challenges associated with the 
        exploration for, or production of, natural gas or other 
        petroleum resources located at ultra-deepwater depths.
          (7) Unconventional natural gas and other petroleum 
        resource.--The term ``unconventional natural gas and other 
        petroleum resource'' means natural gas and other petroleum 
        resource located onshore in an economically inaccessible 
        geological formation.

                       Subtitle F--Miscellaneous

SEC. 6601. WASTE REDUCTION AND USE OF ALTERNATIVES.

  (a) Grant Authority.--The Secretary is authorized to make a single 
grant to a qualified institution to examine and develop the feasibility 
of burning post-consumer carpet in cement kilns as an alternative 
energy source. The purposes of the grant shall include determining--
          (1) how post-consumer carpet can be burned without disrupting 
        kiln operations;
          (2) the extent to which overall kiln emissions may be 
        reduced;
          (3) the emissions of air pollutants and other relevant 
        environmental impacts; and
          (4) how this process provides benefits to both cement kiln 
        operations and carpet suppliers.
  (b) Qualified Institution.--For the purposes of subsection (a), a 
qualified institution is a research-intensive institution of higher 
education with demonstrated expertise in the fields of fiber recycling 
and logistical modeling of carpet waste collection and preparation.
  (c) Waste Reduction and Use of Alternatives.--There are authorized to 
be appropriated to the Secretary to carry out activities under this 
section $500,000 for fiscal year 2004.

SEC. 6602. COAL GASIFICATION.

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

SEC. 6603. PETROLEUM COKE GASIFICATION.

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

SEC. 6604. OTHER BIOPOWER AND BIOENERGY.

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

SEC. 6605. TECHNOLOGY TRANSFER.

  There are authorized to be appropriated to the Secretary $1,000,000 
for a competitively awarded contract, to an entity with offshore oil 
and gas management experience, for the transfer of technologies 
relating to ultra-deepwater research and development developed at the 
Naval Surface Warfare Center, Carderock Division.

SEC. 6606. LIMITATION ON LEGAL FEE REIMBURSEMENT.

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

SEC. 6607. COMPLEX WELL TECHNOLOGY TESTING FACILITY.

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

SEC. 6608. TOTAL INTEGRATED THERMAL SYSTEMS.

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

SEC. 6609. OIL BYPASS FILTRATION TECHNOLOGY.

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

                         TITLE VII--ELECTRICITY

                   Subtitle A--Transmission Capacity

SEC. 7011. TRANSMISSION INFRASTRUCTURE IMPROVEMENT RULEMAKING.

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

``SEC. 215. TRANSMISSION INFRASTRUCTURE IMPROVEMENT RULEMAKING.

  ``(a) Rulemaking Requirement.--Within 1 year after the enactment of 
this section, the Commission shall establish, by rule, incentive-based 
(including but not limited to performance-based) transmission rate 
treatments to promote capital investment in the enlargement and 
improvement of facilities for the transmission of electric energy in 
interstate commerce as appropriate to--
          ``(1) promote economically efficient transmission and 
        generation of electricity;
          ``(2) provide a return on equity that attracts new investment 
        in transmission facilities and reasonably reflects the risks 
        taken by public utilities in restructuring control of 
        transmission assets; and
          ``(3) encourage deployment of transmission technologies and 
        other measures to increase the capacity and efficiency of 
        existing transmission facilities and improve the operation of 
        such facilities.
The Commission may, from time to time, revise such rule.
  ``(b) Funding of Certain Facilities.--The rule promulgated pursuant 
to this section shall provide that, upon the request of a regional 
transmission organization or other Commission-approved transmission 
organization, new transmission facilities that increase the transfer 
capability of the transmission system shall be participant funded. In 
such rules, the Commission shall also provide guidance as to what types 
of facilities may be participant funded.
  ``(c) Just and Reasonable Rates.--With respect to any transmission 
rate filed with the Commission on or after the effective date of the 
rule promulgated under this section, the Commission shall, in its 
review of such rate under sections 205 and 206, apply the rules adopted 
pursuant to this section, including any revisions thereto. Nothing in 
this section shall be construed to override, weaken, or conflict with 
the procedural and other requirements of this part, including the 
requirement of sections 205 and 206 that all rates, charges, terms, and 
conditions be just and reasonable and not unduly discriminatory or 
preferential.''.

SEC. 7012. SITING OF INTERSTATE ELECTRICAL TRANSMISSION FACILITIES.

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

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

  ``(a) Transmission Studies.--Within one year after the enactment of 
this section, and every 3 years thereafter, the Secretary of Energy 
shall conduct a study of electric transmission congestion. After 
considering alternatives and recommendations from interested parties 
the Secretary shall issue a report, based on such study, which may 
designate one or more geographic areas experiencing electric energy 
transmission congestion as `interstate congestion areas'.
  ``(b) Construction Permit.--The Commission is authorized, after 
notice and an opportunity for hearing, to issue permits for the 
construction or modification of electric transmission facilities in 
interstate congestion areas designated by the Secretary under 
subsection (a) if the Commission makes each of the following findings:
          ``(1) A finding that--
                  ``(A) the State in which the transmission facilities 
                are to be constructed or modified is without authority 
                to approve the siting of the facilities, or
                  ``(B) a State commission or body in the State in 
                which the transmission facilities are to be constructed 
                or modified that has authority to approve the siting of 
                the facilities has withheld approval, conditioned its 
                approval in such a manner that the proposed 
                construction or modification will not significantly 
                reduce transmission congestion in interstate commerce 
                and is otherwise not economically feasible, or delayed 
                final approval for more than one year after the filing 
                of an application seeking approval or one year after 
                the designation of the relevant interstate congestion 
                area, whichever is later.
          ``(2) A finding that the facilities to be authorized by the 
        permit will be used for the transmission of electric energy in 
        interstate commerce.
          ``(3) A finding that the proposed construction or 
        modification is consistent with the public interest.
          ``(4) A finding that the proposed construction or 
        modification will significantly reduce transmission congestion 
        in interstate commerce.
The Commission may include in a permit issued under this section 
conditions consistent with the public interest.
  ``(c) Permit Applications.--Permit applications under subsection (b) 
shall be made in writing to the Commission and verified under oath. The 
Commission shall issue rules setting forth the form of the application, 
the information it is to contain, and the manner of service of notice 
of the permit application upon interested persons.
  ``(d) Comments.--In any proceeding before the Commission under 
subsection (b), the Commission shall afford each State in which a 
transmission facility covered by the permit is or will be located, each 
affected Federal agency and Indian tribe, private property owners, and 
other interested persons, a reasonable opportunity to present their 
views and recommendations with respect to the need for and impact of a 
facility covered by the permit.
  ``(e) Rights-of-Way.--In the case of a permit under subsection (b) 
for electric transmission facilities to be located on property other 
than property owned by the United States or a State, if the permit 
holder cannot acquire by contract, or is unable to agree with the owner 
of the property to the compensation to be paid for, the necessary 
right-of-way to construct or modify such transmission facilities, the 
permit holder may acquire the right-of-way by the exercise of the right 
of eminent domain in the district court of the United States for the 
district in which the property concerned is located, or in the 
appropriate court of the State in which the property is located. The 
practice and procedure in any action or proceeding for that purpose in 
the district court of the United States shall conform as nearly as may 
be with the practice and procedure in similar action or proceeding in 
the courts of the State where the property is situated.
  ``(f) State Law.--Nothing in this section shall preclude any person 
from constructing any transmission facilities pursuant to State law.
  ``(g) Compliance With Other Laws.--Commission action under this 
section shall be subject to the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.) and all other applicable Federal laws.
  ``(h) Compensation.--Any exercise of eminent domain authority 
pursuant to this section shall be considered a taking of private 
property for which just compensation is due. Just compensation shall be 
an amount equal to the full fair market value of the property taken on 
the date of the exercise of eminent domain authority, except that the 
compensation shall exceed fair market value if necessary to make the 
landowner whole for decreases in the value of any portion of the land 
not subject to eminent domain. Any parcel of land acquired by eminent 
domain under this subsection shall be transferred back to the owner 
from whom it was acquired (or his heirs or assigns) if the land is not 
used for power line construction or modification within a reasonable 
period of time after the acquisition. Property acquired under this 
subsection may not be used for any heritage area, recreational trail, 
or park, or for any other purpose (other than power line construction 
or modification, and for power line operation and maintenance) without 
the consent of the owner of the parcel from whom the property was 
acquired (or his heirs or assigns).
  ``(i) ERCOT.--Nothing in this section shall be construed to authorize 
any interconnection with any facility owned or operated by an entity 
referred to in section 212(k)(2)(B).
  ``(j) Rights-of-Way on Federal Lands.--
          ``(1) Lead agency.--If an applicant, or prospective 
        applicant, for Federal authorization related to an electricity 
        transmission or distribution facility so requests, the 
        Department of Energy (DOE) shall act as the lead agency for 
        purposes of coordinating all applicable Federal authorization 
        and related environmental review of the facility. The term 
        `Federal authorization' shall mean any authorization required 
        under Federal law in order to site a transmission or 
        distribution facility, including but not limited to such 
        permits, special use authorizations, certifications, opinions, 
        or other approvals as may be required, whether issued by a 
        Federal or a State agency. To the maximum extent practicable 
        under applicable Federal law, the Secretary of Energy shall 
        coordinate this Federal authorization and review process with 
        any Indian tribes, multi-State entities, and State agencies 
        that are responsible for conducting any separate permitting and 
        environmental reviews of the facility, to ensure timely and 
        efficient review and permit decisions.
          ``(2) Authority to set deadlines.--As lead agency, the 
        Department of Energy, in consultation with other Federal and, 
        as appropriate, with Indian tribes, multi-State entities, and 
        State agencies that are willing to coordinate their own 
        separate permitting and environmental reviews with the Federal 
        authorization and environmental reviews, shall establish prompt 
        and binding intermediate milestones and ultimate deadlines for 
        the review of and Federal authorization decisions relating to 
        the proposed facility. The Secretary of Energy shall ensure 
        that once an application has been submitted with such data as 
        the Secretary deems necessary, all permit decisions and related 
        environmental reviews under all applicable Federal laws shall 
        be completed within 1 year or, if a requirement of another 
        provision of Federal law makes this impossible, as soon 
        thereafter as is practicable. The Secretary of Energy also 
        shall provide an expeditious pre-application mechanism for 
        prospective applicants to confer with the agencies involved to 
        have each such agency determine and communicate to the 
        prospective applicant within 60 days of when the prospective 
        applicant submits a request for such information concerning--
                  ``(A) the likelihood of approval for a potential 
                facility; and
                  ``(B) key issues of concern to the agencies and 
                public.
          ``(3) Consolidated environmental review and record of 
        decision.--The Secretary of Energy, in consultation with the 
        affected agencies, shall prepare a single environmental review 
        document, which shall be used as the basis for all decisions on 
        the proposed project under Federal law. The document may be an 
        environmental assessment or environmental impact statement 
        under the National Environmental Policy Act of 1969 if 
        warranted, or such other form of analysis as may be warranted. 
        DOE and other agencies shall streamline the review and 
        permitting of transmission and distribution facilities within 
        corridors designated under section 503 of the Federal Land 
        Policy and Management Act (43 U.S.C. 1763) by fully taking into 
        account prior analyses and decisions as to the corridors. The 
        document under this section may consist of or include an 
        environmental assessment, if allowed by law, or an 
        environmental impact statement, if warranted or required by 
        law, or such other form of analysis as warranted, consistent 
        with any requirement of the National Environmental Policy Act, 
        the Federal Land Policy and Management Act, or any other 
        applicable law. Such document shall include consideration by 
        the relevant agencies of any applicable criteria or other 
        matters as required under applicable laws.
          ``(4) Appeals.--In the event that any agency has denied a 
        Federal authorization required for a transmission or 
        distribution facility, or has failed to act by the deadline 
        established by the Secretary pursuant to this section for 
        deciding whether to issue the authorization, the applicant or 
        any State in which the facility would be located may file an 
        appeal with the Secretary of Energy, who shall, in consultation 
        with the affected agency, review the denial or take action on 
        the pending application. Based on the overall record and in 
        consultation with the affected agency, the Secretary may then 
        either issue the necessary authorization with any appropriate 
        conditions, or deny the application. The Secretary shall issue 
        a decision within 90 days of the filing of the appeal. In 
        making a decision under this paragraph, the Secretary shall 
        comply with all applicable requirements of Federal law, 
        including any requirements of the Endangered Species Act, the 
        Clean Water Act, the National Forest Management Act, the 
        National Environmental Policy Act, and the Federal Land 
        Management and Policy Act.
          ``(5) Conforming regulations and memoranda of agreement.--Not 
        later than 18 months after the date of enactment of this 
        section, the Secretary of Energy shall issue any regulations 
        necessary to implement the foregoing provisions. Not later than 
        1 year after the date of enactment of this section, the 
        Secretary and the heads of all relevant Federal departments and 
        non-departmental agencies shall, and interested Indian tribes, 
        multi-State entities, and State agencies may enter into 
        Memoranda of Agreement to ensure the timely and coordinated 
        review and permitting of electricity transmission and 
        distribution facilities. The head of each Federal department or 
        non-departmental agency with approval authority shall designate 
        a senior responsible official and dedicate sufficient other 
        staff and resources to ensure that the DOE regulations and any 
        Memoranda are fully implemented.
          ``(6) Miscellaneous.--Each Federal authorization for an 
        electricity transmission or distribution facility shall be 
        issued for a duration, as determined by the Secretary of 
        Energy, commensurate with the anticipated use of the facility 
        and with appropriate authority to manage the right-of-way for 
        reliability and environmental protection. Further, when such 
        authorizations expire, they shall be reviewed for renewal 
        taking fully into account reliance on such electricity 
        infrastructure, recognizing its importance for public health, 
        safety and economic welfare and as a legitimate use of Federal 
        lands.
          ``(7) Maintaining and enhancing the transmission 
        infrastructure.--In exercising the responsibilities under this 
        section, the Secretary of Energy shall consult regularly with 
        the Federal Energy Regulatory Commission (FERC) and FERC-
        approved Regional Transmission Organizations and Independent 
        System Operators.
  ``(k) Interstate Compacts.--The consent of Congress is hereby given 
for States to enter into interstate compacts establishing regional 
transmission siting agencies to facilitate coordination among the 
States within such areas for purposes of siting future electric energy 
transmission facilities and to carry out State electric energy 
transmission siting responsibilities. The Secretary of Energy may 
provide technical assistance to regional transmission siting agencies 
established under this subsection.
  ``(l) Savings Clause.--Nothing in this section shall be construed to 
affect any requirement of the environmental laws of the United States, 
including, but not limited to, the National Environmental Policy Act of 
1969. This section shall not apply to any component of the National 
Wilderness Preservation System, the National Wild and Scenic Rivers 
System, or the National Park system (including National Monuments 
therein).''.
  (b) Federal Corridors.--The Secretary of the Interior, the Secretary 
of Energy, the Secretary of Agriculture, and the Chairman of the 
Council on Environmental Quality shall, within 90 days of the date of 
enactment of this subsection, submit a joint report to Congress 
identifying the following:
          (1) all existing designated transmission and distribution 
        corridors on Federal land and the status of work related to 
        proposed transmission and distribution corridor designations, 
        the schedule for completing such work, any impediments to 
        completing the work, and steps that Congress could take to 
        expedite the process;
          (2) the number of pending applications to locate transmission 
        and distribution facilities on Federal lands, key information 
        relating to each such facility, how long each application has 
        been pending, the schedule for issuing a timely decision as to 
        each facility, and progress in incorporating existing and new 
        such rights-of-way into relevant land use and resource 
        management plans or their equivalent; and
          (3) the number of existing transmission and distribution 
        rights-of-way on Federal lands that will come up for renewal 
        within the following 5, 10, and 15 year periods, and a 
        description of how the Secretaries plan to manage such 
        renewals.

                   Subtitle B--Transmission Operation

SEC. 7021. OPEN ACCESS TRANSMISSION BY CERTAIN UTILITIES.

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

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

  ``(a) In General.--Subject to section 212(h), the Commission may, by 
rule or order, require an unregulated transmitting utility to provide 
transmission services--
          ``(1) at rates that are comparable to those that the 
        unregulated transmitting utility charges itself, and
          ``(2) on terms and conditions (not relating to rates) that 
        are comparable to those under which such unregulated 
        transmitting utility provides transmission services to itself 
        and that are not unduly discriminatory or preferential.
  ``(b) Exemptions.--
          ``(1) In general.--The Commission shall exempt from any rule 
        or order under this subsection any unregulated transmitting 
        utility that--
                  ``(A)(i) sells no more than 4,000,000 megawatt hours 
                of electricity per year; and
                  ``(ii) is a distribution utility; or
                  ``(B) does not own or operate any transmission 
                facilities that are necessary for operating an 
                interconnected transmission system (or any portion 
                thereof); or
                  ``(C) meets other criteria the Commission determines 
                to be in the public interest.
          ``(2) Local distribution.-- The requirements of subsection 
        (a) shall not apply to facilities used in local distribution.
  ``(c) Rate Changing Procedures.--The rate changing procedures 
applicable to public utilities under subsections (c) and (d) of section 
205 are applicable to unregulated transmitting utilities for purposes 
of this section.
  ``(d) Remand.--In exercising its authority under paragraph (1), the 
Commission may remand transmission rates to an unregulated transmitting 
utility for review and revision where necessary to meet the 
requirements of subsection (a).
  ``(e) Section 211 Requests.--The provision of transmission services 
under subsection (a) does not preclude a request for transmission 
services under section 211.
  ``(f) Definitions.--For purposes of this section--
          ``(1) The term `unregulated transmitting utility' means an 
        entity that--
                  ``(A) owns or operates facilities used for the 
                transmission of electric energy in interstate commerce, 
                and
                  ``(B) is either an entity described in section 201(f) 
                or a rural electric cooperative.
          ``(2) The term `distribution utility' means an unregulated 
        transmitting utility that serves at least ninety percent of its 
        electric customers at retail.''.

SEC. 7022. REGIONAL TRANSMISSION ORGANIZATIONS.

  (a) Sense of the Congress on RTOs.--It is the sense of Congress that, 
in order to promote fair, open access to electric transmission service, 
benefit retail consumers, facilitate wholesale competition, improve 
efficiencies in transmission grid management, promote grid reliability, 
remove opportunities for unduly discriminatory or preferential 
transmission practices, and provide for the efficient development of 
transmission infrastructure needed to meet the growing demands of 
competitive wholesale power markets, all transmitting utilities in 
interstate commerce should voluntarily become members of independently 
administered regional transmission organizations that have operational 
control of interstate transmission facilities and do not own or control 
generation facilities used to supply electric energy for sale at 
wholesale.
  (b) Sense of the Congress on Capital Investment.--It is the sense of 
the Congress that the Federal Energy Regulatory Commission should 
provide to any transmitting utility that becomes a member of an 
operational regional transmitting organization approved by the 
Commission a return on equity sufficient to attract new investment 
capital for expansion of transmission capacity, in accordance with 
sections 205 and 206 of the Federal Power Act (16 U.S.C. 824d and 
824e), including the requirement that rates be just and reasonable.
  (c) Report on Pending Applications.--Not later than 120 days after 
the date of enactment of this section, the Federal Energy Regulatory 
Commission shall submit to the Committee on Energy and Commerce of the 
United States House of Representatives and the Committee on Energy and 
Natural Resources of the United States Senate a report containing the 
following:
          (1) A list of all regional transmission organization 
        applications filed at the Commission pursuant to the 
        Commission's Order No. 2000, including an identification of 
        each public utility and other entity included within the 
        proposed membership of the regional transmission organization.
          (2) A table showing the date each such application was filed, 
        the date of any revised filings of such application, the date 
        of each preliminary or final Commission order regarding such 
        application, and a statement of whether the application has 
        been rejected, preliminarily approved, finally approved, or has 
        some other status (including a description of that status).
          (3) For any application that has not been finally approved by 
        the Commission, a detailed description of every aspect of the 
        application that the Commission has determined does not conform 
        to the requirements of Order No. 2000.
          (4) For any application that has not been finally approved by 
        the Commission, an explanation by the Commission of why the 
        items described pursuant to paragraph (3) constitute material 
        noncompliance with the requirements of the Commission's Order 
        No. 2000 sufficient to justify denial of approval by the 
        Commission.
          (5) For all regional transmission organization applications 
        filed pursuant to the Commission's Order No. 2000, whether 
        finally approved or not--
                  (A) a discussion of that regional transmission 
                organization's efforts to minimize rate seams between 
                itself and--
                          (i) other regional transmission 
                        organizations; and
                          (ii) entities not participating in a regional 
                        transmission organization; and
                  (B) a discussion of the impact of such seams on 
                consumers and wholesale competition; and
                  (C) a discussion of minimizing cost-shifting on 
                consumers.
  (d) Federal Utility Participation in RTOS.--
          (1) Definitions.--For purposes of this section--
                  (A) The term ``appropriate Federal regulatory 
                authority'' means--
                          (i) with respect to a Federal power marketing 
                        agency, the Secretary of Energy, except that 
                        the Secretary may designate the Administrator 
                        of a Federal power marketing agency to act as 
                        the appropriate Federal regulatory authority 
                        with respect to the transmission system of that 
                        Federal power marketing agency; and
                          (ii) with respect to the Tennessee Valley 
                        Authority, the Board of Directors of the 
                        Tennessee Valley Authority.
                  (B) The term ``Federal utility'' means a Federal 
                power marketing agency or the Tennessee Valley 
                Authority.
                  (C) The term ``transmission system'' means electric 
                transmission facilities owned, leased, or contracted 
                for by the United States and operated by a Federal 
                utility.
          (2) Transfer.--The appropriate Federal regulatory authority 
        is authorized to enter into a contract, agreement or other 
        arrangement transferring control and use of all or part of the 
        Federal utility's transmission system to a regional 
        transmission organization approved by the Federal Energy 
        Regulatory Commission. Such contract, agreement or arrangement 
        shall include--
                  (A) performance standards for operation and use of 
                the transmission system that the head of the Federal 
                utility determines necessary or appropriate, including 
                standards that assure recovery of all the Federal 
                utility's costs and expenses related to the 
                transmission facilities that are the subject of the 
                contract, agreement or other arrangement, consistency 
                with existing contracts and third-party financing 
                arrangements, and consistency with said Federal 
                utility's statutory authorities, obligations, and 
                limitations;
                  (B) provisions for monitoring and oversight by the 
                Federal utility of the regional transmission 
                organization's fulfillment of the terms and conditions 
                of the contract, agreement or other arrangement, 
                including a provision that may provide for the 
                resolution of disputes through arbitration or other 
                means with the regional transmission organization or 
                with other participants, notwithstanding the 
                obligations and limitations of any other law regarding 
                arbitration; and
                  (C) a provision that allows the Federal utility to 
                withdraw from the regional transmission organization 
                and terminate the contract, agreement or other 
                arrangement in accordance with its terms.
        Neither this section, actions taken pursuant to it, nor any 
        other transaction of a Federal utility using a regional 
        transmission organization shall serve to confer upon the 
        Federal Energy Regulatory Commission jurisdiction or authority 
        over the Federal utility's electric generation assets, electric 
        capacity or energy that the Federal utility is authorized by 
        law to market, or the Federal utility's power sales activities.
          (3) Existing statutory and other obligations.--
                  (A) System operation requirements.--Any statutory 
                provision requiring or authorizing a Federal utility to 
                transmit electric power or to construct, operate or 
                maintain its transmission system shall not be construed 
                to prohibit a transfer of control and use of its 
                transmission system pursuant to, and subject to all 
                requirements of paragraph (2).
                  (B) Other obligations.--This subsection shall not be 
                construed to--
                          (i) suspend, or exempt any Federal utility 
                        from, any provision of existing Federal law, 
                        including but not limited to any requirement or 
                        direction relating to the use of the Federal 
                        utility's transmission system, environmental 
                        protection, fish and wildlife protection, flood 
                        control, navigation, water delivery, or 
                        recreation; or
                          (ii) authorize abrogation of any contract or 
                        treaty obligation.

SEC. 7023. NATIVE LOAD.

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

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

  ``(a) In General.--In exercising authority under this Act, the 
Commission shall ensure that any load-serving entity that either--
          ``(1) owns transmission facilities for the transmission of 
        electric energy in interstate commerce used to purchase or 
        deliver electric energy to meet--
                  ``(A) a service obligation to customers; or
                  ``(B) an existing wholesale contractual obligation; 
                or
          ``(2) holds a contract or service agreement for firm 
        transmission service used to purchase or deliver electric 
        energy to meet--
                  ``(A) a service obligation to customers; or
                  ``(B) an existing wholesale contractual obligation
shall be entitled to use such transmission facilities or equivalent 
transmission rights to meet such obligations before transmission 
capacity is made available for other uses.
  ``(b) Use by Successor in Interest.--To the extent that all or a 
portion of the service obligation or contractual obligation covered by 
subsection (a) is transferred to another load serving entity, the 
successor shall be entitled to use such transmission facilities or firm 
transmission rights associated with the transferred service obligation 
consistent with subsection (a). Subsequent transfers to another load 
serving entity, or back to the original load-serving entity, shall be 
entitled to the same rights.
  ``(c) Other Entities.--The Commission may exercise authority under 
this Act to make transmission rights not used to meet an obligation 
covered by subsection (a) available to other entities in a manner 
determined by the Commission to be not unduly discriminatory or 
preferential.
  ``(d) Definitions.--For the purposes of this section:
          ``(1) The term `load-serving entity' means an electric 
        utility, transmitting utility or Federal power marketing agency 
        that has an obligation under Federal, State, or local law, or 
        under long-term contracts, to provide electric service to 
        either--
                  ``(A) electric consumers (as defined in section 3(5) 
                of the Public Utility Regulatory Policies Act of 1978 
                (16 U.S.C. 2602(5)); or
                  ``(B) an electric utility as defined in section 3(4) 
                of the Public Utility Regulatory Policies Act of 1978 
                (16 U.S.C. 2602(5)) that has an obligation to provide 
                electric service to electric consumers.
        Such obligations shall be deemed `service obligations'.
          ``(2) The term `existing wholesale contractual obligation' 
        means an obligation under a firm long-term wholesale contract 
        that was in effect on March 28, 2003. A contract modification 
        after March 28, 2003 (other than one that increases the 
        quantity of electric energy sold under the contract) shall not 
        affect the status of such contract as an existing wholesale 
        contractual obligation.
  ``(e) Relationship to Other Provisions.--To the extent that a 
transmitting utility reserves transmission capacity (or reserves the 
equivalent amount of tradable transmission rights) to provide firm 
transmission service to meet service obligations or firm long-term 
wholesale contractual obligations pursuant to subsection (a), that 
transmitting utility shall not be considered as engaging in undue 
discrimination or preference under this Act.
  ``(f) Jurisdiction.--This section shall not apply to an entity 
located in an area referred to in section 212(k)(2)(A).
  ``(g) Savings Clause.--Nothing in this section shall affect any 
allocation of transmission rights by the PJM Interconnection, the New 
York Independent System Operator, the New England Independent System 
Operator, the Midwest Independent System Operator, or the California 
Independent System Operator. Nothing in this section shall provide a 
basis for abrogating any contract for firm transmission service or 
rights in effect as of the date of enactment of this section.''.

                        Subtitle C--Reliability

SEC. 7031. ELECTRIC RELIABILITY STANDARDS.

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

``SEC. 218. ELECTRIC RELIABILITY.

  ``(a) Definitions.--For purposes of this section--
          ``(1) The term `bulk-power system' means--
                  ``(A) facilities and control systems necessary for 
                operating an interconnected electric energy 
                transmission network (or any portion thereof); and
                  ``(B) electric energy from generation facilities 
                needed to maintain transmission system reliability.
        The term does not include facilities used in the local 
        distribution of electric energy.
          ``(2) The terms `Electric Reliability Organization' and `ERO' 
        mean the organization certified by the Commission under 
        subsection (c) the purpose of which is to establish and enforce 
        reliability standards for the bulk-power system, subject to 
        Commission review.
          ``(3) The term `reliability standard' means a requirement, 
        approved by the Commission under this section, to provide for 
        reliable operation of the bulk-power system. The term includes 
        requirements for the operation of existing bulk-power system 
        facilities and the design of planned additions or modifications 
        to such facilities to the extent necessary to provide for 
        reliable operation of the bulk-power system, but the term does 
        not include any requirement to enlarge such facilities or to 
        construct new transmission capacity or generation capacity.
          ``(4) The term `reliable operation' means operating the 
        elements of the bulk-power system within equipment and electric 
        system thermal, voltage, and stability limits so that 
        instability, uncontrolled separation, or cascading failures of 
        such system will not occur as a result of a sudden disturbance 
        or unanticipated failure of system elements.
          ``(5) The term `Interconnection' means a geographic area in 
        which the operation of bulk-power system components is 
        synchronized such that the failure of one or more of such 
        components may adversely affect the ability of the operators of 
        other components within the system to maintain reliable 
        operation of the facilities within their control.
          ``(6) The term `transmission organization' means a regional 
        transmission organization, independent system operator, 
        independent transmission provider, or other transmission 
        organization finally approved by the Commission for the 
        operation of transmission facilities.
          ``(7) The term `regional entity' means an entity having 
        enforcement authority pursuant to subsection (e)(4).
  ``(b) Jurisdiction and Applicability.--(1) The Commission shall have 
jurisdiction, within the United States, over the ERO certified by the 
Commission under subsection (c), any regional entities, and all users, 
owners and operators of the bulk-power system, including but not 
limited to the entities described in section 201(f), for purposes of 
approving reliability standards established under this section and 
enforcing compliance with this section. All users, owners and operators 
of the bulk-power system shall comply with reliability standards that 
take effect under this section.
  ``(2) The Commission shall issue a final rule to implement the 
requirements of this section not later than 180 days after the date of 
enactment of this section.
  ``(c) Certification.--Following the issuance of a Commission rule 
under subsection (b)(2), any person may submit an application to the 
Commission for certification as the Electric Reliability Organization 
(ERO). The Commission may certify one such ERO if the Commission 
determines that such ERO--
          ``(1) has the ability to develop and enforce, subject to 
        subsection (e)(2), reliability standards that provide for an 
        adequate level of reliability of the bulk-power system;
          ``(2) has established rules that--
                  ``(A) assure its independence of the users and owners 
                and operators of the bulk-power system, while assuring 
                fair stakeholder representation in the selection of its 
                directors and balanced decisionmaking in any ERO 
                committee or subordinate organizational structure;
                  ``(B) allocate equitably reasonable dues, fees, and 
                other charges among end users for all activities under 
                this section;
                  ``(C) provide fair and impartial procedures for 
                enforcement of reliability standards through the 
                imposition of penalties in accordance with subsection 
                (e) (including limitations on activities, functions, or 
                operations, or other appropriate sanctions);
                  ``(D) provide for reasonable notice and opportunity 
                for public comment, due process, openness, and balance 
                of interests in developing reliability standards and 
                otherwise exercising its duties; and
                  ``(E) provide for taking, after certification, 
                appropriate steps to gain recognition in Canada and 
                Mexico.
  ``(d) Reliability Standards.--(1) The Electric Reliability 
Organization shall file each reliability standard or modification to a 
reliability standard that it proposes to be made effective under this 
section with the Commission.
  ``(2) The Commission may approve, by rule or order, a proposed 
reliability standard or modification to a reliability standard if it 
determines that the standard is just, reasonable, not unduly 
discriminatory or preferential, and in the public interest. The 
Commission shall give due weight to the technical expertise of the 
Electric Reliability Organization with respect to the content of a 
proposed standard or modification to a reliability standard and to the 
technical expertise of a regional entity organized on an 
Interconnection-wide basis with respect to a reliability standard to be 
applicable within that Interconnection, but shall not defer with 
respect to the effect of a standard on competition. A proposed standard 
or modification shall take effect upon approval by the Commission.
  ``(3) The Electric Reliability Organization shall rebuttably presume 
that a proposal from a regional entity organized on an Interconnection-
wide basis for a reliability standard or modification to a reliability 
standard to be applicable on an Interconnection-wide basis is just, 
reasonable, and not unduly discriminatory or preferential, and in the 
public interest.
  ``(4) The Commission shall remand to the Electric Reliability 
Organization for further consideration a proposed reliability standard 
or a modification to a reliability standard that the Commission 
disapproves in whole or in part.
  ``(5) The Commission, upon its own motion or upon complaint, may 
order the Electric Reliability Organization to submit to the Commission 
a proposed reliability standard or a modification to a reliability 
standard that addresses a specific matter if the Commission considers 
such a new or modified reliability standard appropriate to carry out 
this section.
  ``(6) The final rule adopted under subsection (b)(2) shall include 
fair processes for the identification and timely resolution of any 
conflict between a reliability standard and any function, rule, order, 
tariff, rate schedule, or agreement accepted, approved, or ordered by 
the Commission applicable to a transmission organization. Such 
transmission organization shall continue to comply with such function, 
rule, order, tariff, rate schedule or agreement accepted approved, or 
ordered by the Commission until--
          ``(A) the Commission finds a conflict exists between a 
        reliability standard and any such provision;
          ``(B) the Commission orders a change to such provision 
        pursuant to section 206 of this part; and
          ``(C) the ordered change becomes effective under this part.
If the Commission determines that a reliability standard needs to be 
changed as a result of such a conflict, it shall order the ERO to 
develop and file with the Commission a modified reliability standard 
under paragraph (4) or (5) of this subsection.
  ``(e) Enforcement.--(1) The ERO may impose, subject to paragraph (2), 
a penalty on a user or owner or operator of the bulk-power system for a 
violation of a reliability standard approved by the Commission under 
subsection (d) if the ERO, after notice and an opportunity for a 
hearing--
          ``(A) finds that the user or owner or operator has violated a 
        reliability standard approved by the Commission under 
        subsection (d); and
          ``(B) files notice and the record of the proceeding with the 
        Commission.
  ``(2) A penalty imposed under paragraph (1) may take effect not 
earlier than the 31st day after the electric reliability organization 
files with the Commission notice of the penalty and the record of 
proceedings. Such penalty shall be subject to review by the Commission, 
on its own motion or upon application by the user, owner or operator 
that is the subject of the penalty filed within 30 days after the date 
such notice is filed with the Commission. Application to the Commission 
for review, or the initiation of review by the Commission on its own 
motion, shall not operate as a stay of such penalty unless the 
Commission otherwise orders upon its own motion or upon application by 
the user, owner or operator that is the subject of such penalty. In any 
proceeding to review a penalty imposed under paragraph (1), the 
Commission, after notice and opportunity for hearing (which hearing may 
consist solely of the record before the electric reliability 
organization and opportunity for the presentation of supporting reasons 
to affirm, modify, or set aside the penalty), shall by order affirm, 
set aside, reinstate, or modify the penalty, and, if appropriate, 
remand to the electric reliability organization for further 
proceedings. The Commission shall implement expedited procedures for 
such hearings.
  ``(3) On its own motion or upon complaint, the Commission may order 
compliance with a reliability standard and may impose a penalty against 
a user or owner or operator of the bulk-power system, if the Commission 
finds, after notice and opportunity for a hearing, that the user or 
owner or operator of the bulk-power system has engaged or is about to 
engage in any acts or practices that constitute or will constitute a 
violation of a reliability standard.
  ``(4) The Commission shall establish regulations authorizing the ERO 
to enter into an agreement to delegate authority to a regional entity 
for the purpose of proposing reliability standards to the ERO and 
enforcing reliability standards under paragraph (1) if--
          ``(A) the regional entity is governed by--
                  ``(i) an independent board;
                  ``(ii) a balanced stakeholder board; or
                  ``(iii) a combination independent and balanced 
                stakeholder board.
          ``(B) the regional entity otherwise satisfies the provisions 
        of subsection (c)(1) and (2); and
          ``(C) the agreement promotes effective and efficient 
        administration of bulk-power system reliability.
The Commission may modify such delegation. The ERO and the Commission 
shall rebuttably presume that a proposal for delegation to a regional 
entity organized on an Interconnection-wide basis promotes effective 
and efficient administration of bulk-power system reliability and 
should be approved. Such regulation may provide that the Commission may 
assign the ERO's authority to enforce reliability standards under 
paragraph (1) directly to a regional entity consistent with the 
requirements of this paragraph.
  ``(5) The Commission may take such action as is necessary or 
appropriate against the ERO or a regional entity to ensure compliance 
with a reliability standard or any Commission order affecting the ERO 
or a regional entity.
  ``(6) Any penalty imposed under this section shall bear a reasonable 
relation to the seriousness of the violation and shall take into 
consideration the efforts of such user, owner, or operator to remedy 
the violation in a timely manner.
  ``(f) Changes in Electricity Reliability Organization Rules.--The 
Electric Reliability Organization shall file with the Commission for 
approval any proposed rule or proposed rule change, accompanied by an 
explanation of its basis and purpose. The Commission, upon its own 
motion or complaint, may propose a change to the rules of the Electric 
Reliability Organization. A proposed rule or proposed rule change shall 
take effect upon a finding by the Commission, after notice and 
opportunity for comment, that the change is just, reasonable, not 
unduly discriminatory or preferential, is in the public interest, and 
satisfies the requirements of subsection (c).
  ``(g) Reliability Reports.--The Electric Reliability Organization 
shall conduct periodic assessments of the reliability and adequacy of 
the bulk-power system in North America.
  ``(h) Coordination With Canada and Mexico.--The President is urged to 
negotiate international agreements with the governments of Canada and 
Mexico to provide for effective compliance with reliability standards 
and the effectiveness of the Electric Reliability Organization in the 
United States and Canada or Mexico.
  ``(i) Savings Provisions.--(1) The Electric Reliability Organization 
shall have authority to develop and enforce compliance with reliability 
standards for only the bulk-power system.
  ``(2) This section does not authorize the Electric Reliability 
Organization or the Commission to order the construction of additional 
generation or transmission capacity or to set and enforce compliance 
with standards for adequacy or safety of electric facilities or 
services.
  ``(3) Nothing in this section shall be construed to preempt any 
authority of any State to take action to ensure the safety, adequacy, 
and reliability of electric service within that State, as long as such 
action is not inconsistent with any reliability standard, except that 
the State of New York may establish rules that result in greater 
reliability within that State, as long as such action does not result 
in lesser reliability outside the State than that provided by the 
reliability standards.
  ``(4) Within 90 days of the application of the Electric Reliability 
Organization or other affected party, and after notice and opportunity 
for comment, the Commission shall issue a final order determining 
whether a State action is inconsistent with a reliability standard, 
taking into consideration any recommendation of the Electric 
Reliability Organization.
  ``(5) The Commission, after consultation with the Electric 
Reliability Organization and the State taking action, may stay the 
effectiveness of any State action, pending the Commission's issuance of 
a final order.
  ``(j) Regional Advisory Bodies.--The Commission shall establish a 
regional advisory body on the petition of at least two-thirds of the 
States within a region that have more than one-half of their electric 
load served within the region. A regional advisory body shall be 
composed or of one member from each participating State in the region, 
appointed by the Governor of each State, and may include 
representatives of agencies, States, and provinces outside the United 
States. A regional advisory body may provide advice to the Electric 
Reliability Organization, a regional entity, or the Commission 
regarding the governance of an existing or proposed regional entity 
within the same region, whether a standard proposed to apply within the 
region is just, reasonable, not unduly discriminatory or preferential, 
and in the public interest, whether fees proposed to be assessed within 
the region are just, reasonable, not unduly discriminatory or 
preferential, and in the public interest and any other responsibilities 
requested by the Commission. The Commission may give deference to the 
advice of any such regional advisory body if that body is organized on 
an Interconnection-wide basis.
  ``(k) Application to Alaska and Hawaii.--The provisions of this 
section do not apply to Alaska or Hawaii.''.

                      Subtitle D--PUHCA Amendments

SEC. 7041. SHORT TITLE.

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

SEC. 7042. DEFINITIONS.

  For purposes of this subtitle:
          (1) The term ``affiliate'' of a company means any company, 5 
        percent or more of the outstanding voting securities of which 
        are owned, controlled, or held with power to vote, directly or 
        indirectly, by such company.
          (2) The term ``associate company'' of a company means any 
        company in the same holding company system with such company.
          (3) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
          (4) The term ``company'' means a corporation, partnership, 
        association, joint stock company, business trust, or any 
        organized group of persons, whether incorporated or not, or a 
        receiver, trustee, or other liquidating agent of any of the 
        foregoing.
          (5) The term ``electric utility company'' means any company 
        that owns or operates facilities used for the generation, 
        transmission, or distribution of electric energy for sale.
          (6) The terms ``exempt wholesale generator'' and ``foreign 
        utility company'' have the same meanings as in sections 32 and 
        33, respectively, of the Public Utility Holding Company Act of 
        1935 (15 U.S.C. 79z-5a, 79z-5b), as those sections existed on 
        the day before the effective date of this subtitle.
          (7) The term ``gas utility company'' means any company that 
        owns or operates facilities used for distribution at retail 
        (other than the distribution only in enclosed portable 
        containers or distribution to tenants or employees of the 
        company operating such facilities for their own use and not for 
        resale) of natural or manufactured gas for heat, light, or 
        power.
          (8) The term ``holding company'' means--
                  (A) any company that directly or indirectly owns, 
                controls, or holds, with power to vote, 10 percent or 
                more of the outstanding voting securities of a public 
                utility company or of a holding company of any public 
                utility company; and
                  (B) any person, determined by the Commission, after 
                notice and opportunity for hearing, to exercise 
                directly or indirectly (either alone or pursuant to an 
                arrangement or understanding with one or more persons) 
                such a controlling influence over the management or 
                policies of any public utility company or holding 
                company as to make it necessary or appropriate for the 
                rate protection of utility customers with respect to 
                rates that such person be subject to the obligations, 
                duties, and liabilities imposed by this subtitle upon 
                holding companies.
          (9) The term ``holding company system'' means a holding 
        company, together with its subsidiary companies.
          (10) The term ``jurisdictional rates'' means rates 
        established by the Commission for the transmission of electric 
        energy in interstate commerce, the sale of electric energy at 
        wholesale in interstate commerce, the transportation of natural 
        gas in interstate commerce, and the sale in interstate commerce 
        of natural gas for resale for ultimate public consumption for 
        domestic, commercial, industrial, or any other use.
          (11) The term ``natural gas company'' means a person engaged 
        in the transportation of natural gas in interstate commerce or 
        the sale of such gas in interstate commerce for resale.
          (12) The term ``person'' means an individual or company.
          (13) The term ``public utility'' means any person who owns or 
        operates facilities used for transmission of electric energy in 
        interstate commerce or sales of electric energy at wholesale in 
        interstate commerce.
          (14) The term ``public utility company'' means an electric 
        utility company or a gas utility company.
          (15) The term ``State commission'' means any commission, 
        board, agency, or officer, by whatever name designated, of a 
        State, municipality, or other political subdivision of a State 
        that, under the laws of such State, has jurisdiction to 
        regulate public utility companies.
          (16) The term ``subsidiary company'' of a holding company 
        means--
                  (A) any company, 10 percent or more of the 
                outstanding voting securities of which are directly or 
                indirectly owned, controlled, or held with power to 
                vote, by such holding company; and
                  (B) any person, the management or policies of which 
                the Commission, after notice and opportunity for 
                hearing, determines to be subject to a controlling 
                influence, directly or indirectly, by such holding 
                company (either alone or pursuant to an arrangement or 
                understanding with one or more other persons) so as to 
                make it necessary for the rate protection of utility 
                customers with respect to rates that such person be 
                subject to the obligations, duties, and liabilities 
                imposed by this subtitle upon subsidiary companies of 
                holding companies.
          (17) The term ``voting security'' means any security 
        presently entitling the owner or holder thereof to vote in the 
        direction or management of the affairs of a company.

SEC. 7043. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

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

SEC. 7044. FEDERAL ACCESS TO BOOKS AND RECORDS.

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

SEC. 7045. STATE ACCESS TO BOOKS AND RECORDS.

  (a) In General.--Upon the written request of a State commission 
having jurisdiction to regulate a public utility company in a holding 
company system, the holding company or any associate company or 
affiliate thereof, other than such public utility company, wherever 
located, shall produce for inspection books, accounts, memoranda, and 
other records that--
          (1) have been identified in reasonable detail by the State 
        commission;
          (2) the State commission deems are relevant to costs incurred 
        by such public utility company; and
          (3) are necessary for the effective discharge of the 
        responsibilities of the State commission with respect to such 
        proceeding.
  (b) Limitation.--Subsection (a) does not apply to any person that is 
a holding company solely by reason of ownership of one or more 
qualifying facilities under the Public Utility Regulatory Policies Act 
of 1978 (16 U.S.C. 2601 et seq.).
  (c) Confidentiality of Information.--The production of books, 
accounts, memoranda, and other records under subsection (a) shall be 
subject to such terms and conditions as may be necessary and 
appropriate to safeguard against unwarranted disclosure to the public 
of any trade secrets or sensitive commercial information.
  (d) Effect on State Law.--Nothing in this section shall preempt 
applicable State law concerning the provision of books, accounts, 
memoranda, and other records, or in any way limit the rights of any 
State to obtain books, accounts, memoranda, and other records under any 
other Federal law, contract, or otherwise.
  (e) Court Jurisdiction.--Any United States district court located in 
the State in which the State commission referred to in subsection (a) 
is located shall have jurisdiction to enforce compliance with this 
section.

SEC. 7046. EXEMPTION AUTHORITY.

  (a) Rulemaking.--Not later than 90 days after the effective date of 
this subtitle, the Commission shall promulgate a final rule to exempt 
from the requirements of section 7044 (relating to Federal access to 
books and records) any person that is a holding company, solely with 
respect to one or more--
          (1) qualifying facilities under the Public Utility Regulatory 
        Policies Act of 1978 (16 U.S.C. 2601 et seq.);
          (2) exempt wholesale generators; or
          (3) foreign utility companies.
  (b) Other Authority.--The Commission shall exempt a person or 
transaction from the requirements of section 7044 (relating to Federal 
access to books and records) if, upon application or upon the motion of 
the Commission--
          (1) the Commission finds that the books, accounts, memoranda, 
        and other records of any person are not relevant to the 
        jurisdictional rates of a public utility or natural gas 
        company; or
          (2) the Commission finds that any class of transactions is 
        not relevant to the jurisdictional rates of a public utility or 
        natural gas company.

SEC. 7047. AFFILIATE TRANSACTIONS.

  (a) Commission Authority Unaffected.--Nothing in this subtitle shall 
limit the authority of the Commission under the Federal Power Act (16 
U.S.C. 791a et seq.) to require that jurisdictional rates are just and 
reasonable, including the ability to deny or approve the pass through 
of costs, the prevention of cross-subsidization, and the promulgation 
of such rules and regulations as are necessary or appropriate for the 
protection of utility consumers.
  (b) Recovery of Costs.--Nothing in this subtitle shall preclude the 
Commission or a State commission from exercising its jurisdiction under 
otherwise applicable law to determine whether a public utility company, 
public utility, or natural gas company may recover in rates any costs 
of an activity performed by an associate company, or any costs of goods 
or services acquired by such public utility company from an associate 
company.

SEC. 7048. APPLICABILITY.

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

SEC. 7049. EFFECT ON OTHER REGULATIONS.

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

SEC. 7050. ENFORCEMENT.

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

SEC. 7051. SAVINGS PROVISIONS.

  (a) In General.--Nothing in this subtitle prohibits a person from 
engaging in or continuing to engage in activities or transactions in 
which it is legally engaged or authorized to engage on the date of 
enactment of this Act, so long as that person continues to comply with 
the terms of any such authorization, whether by rule or by order.
  (b) Effect on Other Commission Authority.--Nothing in this subtitle 
limits the authority of the Commission under the Federal Power Act (16 
U.S.C. 791a et seq.) (including section 301 of that Act) or the Natural 
Gas Act (15 U.S.C. 717 et seq.) (including section 8 of that Act).

SEC. 7052. IMPLEMENTATION.

  Not later than 12 months after the date of enactment of this 
subtitle, the Commission shall--
          (1) promulgate such regulations as may be necessary or 
        appropriate to implement this subtitle (other than section 
        7045, relating to State access to books and records); and
          (2) submit to the Congress detailed recommendations on 
        technical and conforming amendments to Federal law necessary to 
        carry out this subtitle and the amendments made by this 
        subtitle.

SEC. 7053. TRANSFER OF RESOURCES.

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

SEC. 7054. EFFECTIVE DATE.

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

SEC. 7055. AUTHORIZATION OF APPROPRIATIONS.

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

SEC. 7056. CONFORMING AMENDMENTS TO THE FEDERAL POWER ACT.

  (a) Conflict of Jurisdiction.--Section 318 of the Federal Power Act 
(16 U.S.C. 825q) is repealed.
  (b) Definitions.--(1) Section 201(g)(5) of the Federal Power Act (16 
U.S.C. 824(g)(5)) is amended by striking ``1935'' and inserting 
``2003''.
  (2) Section 214 of the Federal Power Act (16 U.S.C. 824m) is amended 
by striking ``1935'' and inserting ``2003''.

                      Subtitle E--PURPA Amendments

SEC. 7061. REAL-TIME PRICING AND TIME-OF-USE METERING STANDARDS.

  (a) Adoption of Standards.--Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by 
adding at the end the following:
          ``(11) Real-time pricing.--(A) Each electric utility shall, 
        at the request of an electric consumer, provide electric 
        service under a real-time rate schedule, under which the rate 
        charged by the electric utility varies by the hour (or smaller 
        time interval) according to changes in the electric utility's 
        wholesale power cost. The real-time pricing service shall 
        enable the electric consumer to manage energy use and cost 
        through real-time metering and communications technology.
          ``(B) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of enactment of 
        the Public Utility Regulatory Policies Act of 1978 shall be 
        deemed to be a reference to the date of enactment of this 
        paragraph.
          ``(C) Notwithstanding subsections (b) and (c) of section 112, 
        each State regulatory authority shall consider and make a 
        determination concerning whether it is appropriate to implement 
        the standard set out in subparagraph (A) not later than 1 year 
        after the date of enactment of this paragraph.
          ``(12) Time-of-use metering.--(A) Each electric utility 
        shall, at the request of an electric consumer, provide electric 
        service under a time-of-use rate schedule which enables the 
        electric consumer to manage energy use and cost through time-
        of-use metering and technology.
          ``(B) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of enactment of 
        the Public Utility Regulatory Policies Act of 1978 shall be 
        deemed to be a reference to the date of enactment of this 
        paragraph.
          ``(C) Notwithstanding subsections (b) and (c) of section 112, 
        each State regulatory authority shall consider and make a 
        determination concerning whether it is appropriate to implement 
        the standards set out in subparagraph (A) not later than 1 year 
        after the date of enactment of this paragraph.''.
  (b) Special Rules.--Section 115 of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2625) is amended by adding at the end 
the following:
  ``(i) Real-Time Pricing.--In a State that permits third-party 
marketers to sell electric energy to retail electric consumers, the 
electric consumer shall be entitled to receive the same real-time 
metering and communication service as a direct retail electric consumer 
of the electric utility.
  ``(j) Time-of-Use Metering.--In a State that permits third-party 
marketers to sell electric energy to retail electric consumers, the 
electric consumer shall be entitled to receive the same time-of-use 
metering and communication service as a direct retail electric consumer 
of the electric utility.''.

SEC. 7062. COGENERATION AND SMALL POWER PRODUCTION PURCHASE AND SALE 
                    REQUIREMENTS.

  (a) Termination of Mandatory Purchase and Sale Requirements.--Section 
210 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
824a-3) is amended by adding at the end the following:
  ``(m) Termination of Mandatory Purchase and Sale Requirements.--
          ``(1) Obligation to purchase.--After the date of enactment of 
        this subsection, no electric utility shall be required to enter 
        into a new contract or obligation to purchase electric energy 
        from a qualifying cogeneration facility or a qualifying small 
        power production facility under this section if the Commission 
        finds that--
                  ``(A) the qualifying cogeneration facility or 
                qualifying small power production facility has access 
                to
                          ``(i) independently administered, auction-
                        based day ahead and real time wholesale markets 
                        for the sale of electric energy, and
                          ``(ii) long-term wholesale markets for the 
                        sale of capacity and electric energy;
                  ``(B) the qualifying cogeneration facility or 
                qualifying small power production facility has access 
                to a competitive wholesale market for the sale of 
                electric energy that provides such qualifying 
                cogeneration facility or qualifying small power 
                production facility with opportunities to sell electric 
                energy that, at a minimum, are comparable to the 
                opportunities provided by the markets, or some minimum 
                combination thereof, described in subparagraph (A); or
                  ``(C) the qualifying cogeneration facility does not 
                meet criteria established by the Commission pursuant to 
                the rulemaking set forth in subparagraph (n) and has 
                not filed with the Commission a notice of self-
                certification or an application for Commission 
                certification under 18 C.F.R. 292.207 prior to the date 
                of enactment of this subsection.
          ``(2) Commission review.--(A) Any electric utility may file 
        an application with the Commission for relief from the 
        mandatory purchase obligation pursuant to this subsection on a 
        utility-wide basis. Such application shall set forth the 
        reasons why such relief is appropriate and describe how the 
        conditions set forth in subparagraphs (A) and (B) of paragraph 
        (1) of this subsection have been met.
          ``(B) After notice, including sufficient notice to 
        potentially affected qualifying facilities, and an opportunity 
        for comment, and within 90 days of the filing of an application 
        under subparagraph (A), the Commission shall make a final 
        determination as to whether the conditions set forth in 
        subparagraphs (A) and (B) of paragraph (1) have been met. The 
        Commission shall not be authorized to issue a tolling order 
        regarding such application or otherwise delay a final decision 
        regarding such application.
          ``(3) Reinstatement of obligation to purchase.--(A) At any 
        time after the Commission makes a finding under paragraph (2) 
        relieving an electric utility of its obligation to purchase 
        electric energy, a qualifying cogeneration facility or a 
        qualifying small power production facility may apply to the 
        Commission for an order reinstating the electric utility's 
        obligation to purchase electric energy under this section. Such 
        application shall set forth the reasons why such relief is no 
        longer appropriate and describe how the tests set forth in 
        subparagraphs (A) and (B) of paragraph (1) of this subsection 
        are no longer met.
          ``(B) After notice, including sufficient notice to 
        potentially affected utilities, and opportunity for comment, 
        and within 90 days of the filing of an application under 
        subparagraph (A), the Commission shall issue an order 
        reinstating the electric utility's obligation to purchase 
        electric energy under this section if the Commission finds that 
        the condition in paragraph (1), which relieved the obligation 
        to purchase, is no longer met. The Commission shall not be 
        authorized to issue a tolling order regarding such application 
        or otherwise delay a final decision regarding such application.
          ``(4) Obligation to sell.--After the date of enactment of 
        this subsection, no electric utility shall be required to enter 
        into a new contract or obligation to sell electric energy to a 
        qualifying cogeneration facility or a qualifying small power 
        production facility if--
                  ``(A) competing retail electric suppliers are willing 
                and able to provide electric energy to the qualifying 
                cogeneration facility or qualifying small power 
                production facility, and
                  ``(B) the electric utility is not required by State 
                law to sell electric energy in its service territory.
          ``(5) No effect on existing rights and remedies.--Nothing in 
        this subsection affects the rights or remedies of any party 
        under any contract or obligation, in effect or pending approval 
        before the appropriate State regulatory authority or 
        nonregulated electric utility on the date of enactment of this 
        subsection, to purchase electric energy or capacity from or to 
        sell electric energy or capacity to a facility under this Act 
        (including the right to recover costs of purchasing electric 
        energy or capacity).
          ``(6) Recovery of costs.--
                  ``(A) Regulation.--To ensure recovery by an electric 
                utility that purchases electric energy or capacity from 
                a qualifying facility pursuant to any legally 
                enforceable obligation entered into or imposed under 
                this section of all prudently incurred costs associated 
                with the purchases, the Commission shall issue and 
                enforce such regulations as may be required to ensure 
                that the electric utility shall recover the prudently 
                incurred costs associated with such purchases.
                  ``(B) Enforcement.--A regulation under subparagraph 
                (A) shall be enforceable in accordance with the 
                provisions of law applicable to enforcement of 
                regulations under the Federal Power Act (16 U.S.C. 791a 
                et seq.).
  ``(n) Rulemaking for New Facilities.--
          ``(1) In general.--Not later than 180 days after the date of 
        enactment of this subsection, the Commission shall issue a rule 
        revising the criteria for qualifying cogeneration facilities in 
        18 C.F.R. 292.205. In particular, the Commission shall evaluate 
        the rules regarding qualifying facility criteria and revise 
        such rules, as necessary, to ensure--
                  ``(A) that the thermal energy output of a new 
                qualifying cogeneration facility is used in a 
                productive and beneficial manner;
                  ``(B) the electrical and thermal output of the 
                cogeneration facility is used predominantly for 
                commercial or industrial processes and not intended 
                predominantly for sale to an electric utility; and-
                  ``(C) continuing progress in the development of 
                efficient electric energy generating technology.
          ``(2) Applicability.--Any revisions made to operating and 
        efficiency standards shall be applicable only to a cogeneration 
        facility that--
                  ``(A) was not a qualifying cogeneration facility, or-
                  ``(B) had not filed with the Commission a notice of 
                self-certification or an application for Commission 
                certification under 18 C.F.R. 292.207
prior to the date of enactment of this subsection.
          ``(3) Definition.--For purposes of this subsection, the term 
        `commercial processes' includes uses of thermal and electric 
        energy for educational and healthcare facilities.
  ``(o) Rules for Existing Facilities.-- Notwithstanding rule revisions 
under subsection (n), the Commission's rules in effect prior to the 
effective date of any revised rules prescribed under subsection (n) 
shall continue to apply to any cogeneration facility or small power 
production facility that--
          ``(1) was a qualifying cogeneration facility or a qualifying 
        small power production facility, or
          ``(2) had filed with the Commission a notice of self-
        certification or an application for Commission certification 
        under 18 C.F.R. 292.207
prior to the date of enactment of subsections (m) and (n).''.
  (b) Elimination of Ownership Limitations.--(1) Section 3(17)(C) of 
the Federal Power Act (16 U.S.C. 796(17)(C)) is amended to read as 
follows:
  ``(C) `qualifying small power production facility' means a small 
power production facility that the Commission determines, by rule, 
meets such requirements (including requirements respecting minimum 
size, fuel use, and fuel efficiency) as the Commission may, by rule, 
prescribe.''.
  (2) Section 3(18)(B) of the Federal Power Act (16 U.S.C. 796(18)(B)) 
is amended to read as follows:
  ``(B) `qualifying cogeneration facility' means a cogeneration 
facility that the Commission determines, by rule, meets such 
requirements (including requirements respecting minimum size, fuel use, 
and fuel efficiency) as the Commission may, by rule, prescribe.''.

SEC. 7063. SMART METERING.

  (a) In General.--Section 111(d) of the Public Utilities Regulatory 
Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the 
end the following:
          ``(13) Time-based metering and communications.--(A) Not later 
        than eighteen (18) months after the date of enactment of this 
        paragraph, each electric utility shall offer each of its 
        customer classes, and provide individual customers upon 
        customer request, a time-based rate schedule under which the 
        rate charged by the electric utility varies during different 
        time periods and reflects the variance in the costs of 
        generating and purchasing electricity at the wholesale level. 
        The time-based rate schedule shall enable the electric consumer 
        to manage energy use and cost through advanced metering and 
        communications technology.
          ``(B) The types of time-based rate schedules that may be 
        offered under the schedule referred to in subparagraph (A) 
        include, among others, each the following:
                  ``(i) Time-Of-Use pricing whereby electricity prices 
                are set for a specific time period on an advance or 
                forward basis, typically not changing more often than 
                twice a year. Prices paid for energy consumed during 
                these periods shall be pre-established and known to 
                consumers in advance of such consumption, allowing them 
                to vary their demand and usage in response to such 
                prices and manage their energy costs by shifting usage 
                to a lower cost period or reducing their consumption 
                overall.
                  ``(ii) Critical Peak Pricing whereby time-of-use 
                prices are in effect except for certain peak days, when 
                prices may reflect the costs of generating and 
                purchasing electricity at the wholesale level and when 
                consumers may receive additional discounts for reducing 
                peak period energy consumption.
                  ``(iii) Real-Time pricing whereby electricity prices 
                are set for a specific time period on an advanced or 
                forward basis and may change as often as hourly.
          ``(C) Each electric utility subject to subparagraph (A) shall 
        provide each customer requesting a time-based rate with a time-
        based meter capable of enabling the utility and customer to 
        offer and receive such rate, respectively.
          ``(D) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of enactment of 
        the Public Utility Regulatory Policies Act of 1978 shall be 
        deemed to be a reference to the date of enactment of this 
        paragraph.
          ``(E) In a State that permits third-party marketers to sell 
        electric energy to retail electric consumers, such consumers 
        shall be entitled to receive that same time-based metering and 
        communications device and service as a retail electric consumer 
        of the electric utility.
          ``(F) Notwithstanding subsections (b) and (c) of section 112, 
        each State regulatory authority shall, not later than twelve 
        (12) months after enactment of this paragraph conduct an 
        investigation in accordance with section 115(i) and issue a 
        decision whether it is appropriate to implement the standards 
        set out in subparagraphs (A) and (C).''.
  (b) State Investigation of Demand Response and Time-Based Metering.--
  Section 115 of the Public Utilities Regulatory Policies Act of 1978 
(16 U.S.C. 2625) is amended by adding the at the end the following:
  ``(k) Time-Based Metering and Communications.--Each State regulatory 
authority shall, not later than twelve (12) months after enactment of 
this subsection, conduct an investigation and issue a decision whether 
or not it is appropriate for electric utilities to provide and install 
time-based meters and communications devices for each of their 
customers which enable such customers to participate in time-based 
pricing rate schedules and other demand response programs.''.
  (c) Federal Assistance on Demand Response.--Section 132(a) of the 
Public Utility Regulatory Polices Act of 1978 (16 U.S.C. 2642(a)) is 
amended by striking ``and'' at the end of paragraph (3), striking the 
period at the end of paragraph (4) and inserting ``; and'', and by 
adding the following at the end thereof:
          ``(5) technologies, techniques and rate-making methods 
        related to advanced metering and communications and the use of 
        these technologies, techniques and methods in demand response 
        programs.''.
  (d) Federal Guidance.--Section 132 of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2643) is amended by adding the 
following at the end thereof:
  ``(d) Demand Response.--The Secretary shall be responsible for each 
of the following:
          ``(1) Educating consumers on the availability, advantages and 
        benefits of advanced metering and communications technologies 
        including the funding of demonstration or pilot projects.
          ``(2) Working with States, utilities, other energy providers 
        and advanced metering and communications experts to identify 
        and address barriers to the adoption of demand response 
        programs, and
          ``(3) Within 6 months of enactment, provide the Congress with 
        a report that identifies and quantifies the national benefits 
        of demand response and provides policy recommendations as to 
        how to achieve specific levels of such benefits by January 1, 
        2005.''.
  (e) Demand Response and Regional Coordination.--
          (1) Policy.--It is the policy of the United States to 
        encourage States to coordinate, on a regional basis, State 
        energy policies to provide reliable and affordable demand 
        response services to the public.
          (2) Technical Assistance.--The Secretary of Energy shall 
        provide technical assistance to States and regional 
        organizations formed by two or more States to assist them in--
                  (A) identifying the areas with the greatest demand 
                response potential;
                  (B) identifying and resolving problems in 
                transmission and distribution networks, including 
                through the use of demand response; and
                  (C) developing plans and programs to use demand 
                response to respond to peak demand or emergency needs.
          (3) Report.--The Federal Energy Regulatory Commission shall 
        prepare and publish an annual report, by appropriate region, 
        that assesses demand response resources, including those 
        available from all consumer classes, and which identifies and 
        reviews each of the following:
                  (A) Saturation and penetration rate of advanced 
                meters and communications technologies, devices and 
                systems.
                  (B) Existing demand response programs and time-based 
                rate programs.
                  (C) The annual resource contribution of demand 
                resources, including the prior year and following 
                years.
                  (D) The potential for demand response as a 
                quantifiable, reliable resource for regional planning 
                purposes.
                  (E) Steps taken to ensure that, in regional 
                transmission planning and operations, that demand 
                resources are provided equitable treatment as a 
                quantifiable, reliable resource relative to the 
                resource obligations of any load-serving entity, 
                transmission provider or transmitting party.
  (f) Cost Recovery of Demand Response Devices.--It is the policy of 
the United States that time-based pricing and other forms of demand 
response, whereby electricity customers are provided with electricity 
price signals and the ability to benefit by responding to them, shall 
be encouraged and the deployment of such technology and devices that 
enable electricity customers to participate in such pricing and demand 
response systems shall be facilitated. It is further the policy of the 
United States that the benefits of such demand response that accrue to 
those not deploying such technology and devices, but who are part of 
the same regional electricity entity, shall be recognized.

                      Subtitle F--Renewable Energy

SEC. 7071. NET METERING.

  (a) Adoption of Standard.--Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by 
adding at the end the following:
          ``(14) Net metering.--(A) Each electric utility shall make 
        available upon request net metering service to any electric 
        consumer that the electric utility serves.
          ``(B) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of enactment of 
        the Public Utility Regulatory Policies Act of 1978 shall be 
        deemed to be a reference to the date of enactment of this 
        paragraph.
          ``(C) Notwithstanding subsections (b) and (c) of section 112, 
        each State regulatory authority shall consider and make a 
        determination concerning whether it is appropriate to implement 
        the standard set out in subparagraph (A) not later than 1 year 
        after the date of enactment of this paragraph.''.
  (b) Special Rules for Net Metering.--Section 115 of the Public 
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2625) is amended by 
adding at the end the following:
  ``(l) Net Metering.--In undertaking the consideration and making the 
determination under section 111 with respect to the standard concerning 
net metering established by section 111(d)(14), the term `net metering 
service' shall mean a service provided in accordance with the following 
standards:
          ``(1) Rates and charges.--An electric utility--
                  ``(A) shall charge the owner or operator of an on-
                site generating facility rates and charges that are 
                identical to those that would be charged other electric 
                consumers of the electric utility in the same rate 
                class; and
                  ``(B) shall not charge the owner or operator of an 
                on-site generating facility any additional standby, 
                capacity, interconnection, or other rate or charge.
          ``(2) Measurement.--An electric utility that sells electric 
        energy to the owner or operator of an on-site generating 
        facility shall measure the quantity of electric energy produced 
        by the on-site facility and the quantity of electric energy 
        consumed by the owner or operator of an on-site generating 
        facility during a billing period in accordance with normal 
        metering practices.
          ``(3) Electric energy supplied exceeding electric energy 
        generated.--If the quantity of electric energy sold by the 
        electric utility to an on-site generating facility exceeds the 
        quantity of electric energy supplied by the on-site generating 
        facility to the electric utility during the billing period, the 
        electric utility may bill the owner or operator for the net 
        quantity of electric energy sold, in accordance with normal 
        metering practices.
          ``(4) Electric energy generated exceeding electric energy 
        supplied.--If the quantity of electric energy supplied by the 
        on-site generating facility to the electric utility exceeds the 
        quantity of electric energy sold by the electric utility to the 
        on-site generating facility during the billing period--
                  ``(A) the electric utility may bill the owner or 
                operator of the on-site generating facility for the 
                appropriate charges for the billing period in 
                accordance with paragraph (2); and
                  ``(B) the owner or operator of the on-site generating 
                facility shall be credited for the excess kilowatt-
                hours generated during the billing period, with the 
                kilowatt-hour credit appearing on the bill for the 
                following billing period.
          ``(5) Safety and performance standards.--An eligible on-site 
        generating facility and net metering system used by an electric 
        consumer shall meet all applicable safety, performance, 
        reliability, and interconnection standards established by the 
        National Electrical Code, the Institute of Electrical and 
        Electronics Engineers, and Underwriters Laboratories.
          ``(6) Additional control and testing requirements.--The 
        Commission, after consultation with State regulatory 
        authorities and nonregulated electric utilities and after 
        notice and opportunity for comment, may adopt, by rule, 
        additional control and testing requirements for on-site 
        generating facilities and net metering systems that the 
        Commission determines are necessary to protect public safety 
        and system reliability.
          ``(7) Definitions.--For purposes of this subsection:
                  ``(A) The term `eligible on-site generating facility' 
                means--
                          ``(i) a facility on the site of a residential 
                        electric consumer with a maximum generating 
                        capacity of 10 kilowatts or less that is fueled 
                        by solar energy, wind energy, or fuel cells; or
                          ``(ii) a facility on the site of a commercial 
                        electric consumer with a maximum generating 
                        capacity of 500 kilowatts or less that is 
                        fueled solely by a renewable energy resource, 
                        landfill gas, or a high efficiency system.
                  ``(B) The term `renewable energy resource' means 
                solar, wind, biomass, or geothermal energy.
                  ``(C) The term `high efficiency system' means service 
                fuel cells or combined heat and power.
                  ``(D) The term `net metering' means service to an 
                electric consumer under which electric energy generated 
                by that electric consumer from an eligible on-site 
                generating facility and delivered to the local 
                distribution facilities may be used to offset electric 
                energy provided by the electric utility to the electric 
                consumer during the applicable billing period.''

SEC. 7072. RENEWABLE ENERGY PRODUCTION INCENTIVE.

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

SEC. 7073. RENEWABLE ENERGY ON FEDERAL LANDS.

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

SEC. 7074. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

  (a) Resource Assessment.--Not later than 3 months after the date of 
enactment of this Act, and each year thereafter, the Secretary of 
Energy shall review the available assessments of renewable energy 
resources available within the United States, including solar, wind, 
biomass, ocean, geothermal, and hydroelectric energy resources, and 
undertake new assessments as necessary, taking into account changes in 
market conditions, available technologies, and other relevant factors.
  (b) Contents of Reports.--Not later than 1 year after the date of 
enactment of this Act, and each year thereafter, the Secretary shall 
publish a report based on the assessment under subsection (a). The 
report shall contain--
          (1) a detailed inventory describing the available amount and 
        characteristics of the renewable energy resources; and
          (2) such other information as the Secretary believes would be 
        useful in developing such renewable energy resources, including 
        descriptions of surrounding terrain, population and load 
        centers, nearby energy infrastructure, location of energy and 
        water resources, and available estimates of the costs needed to 
        develop each resource, together with an identification of any 
        barriers to providing adequate transmission for remote sources 
        of renewable energy resources to current and emerging markets, 
        recommendations for removing or addressing such barriers, and 
        ways to provide access to the grid that do not unfairly 
        disadvantage renewable or other energy producers.

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

SEC. 7081. MARKET TRANSPARENCY RULES.

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

``SEC. 219. MARKET TRANSPARENCY RULES.

  ``(a) Commission Rules.--Not later than 180 days after the date of 
enactment of this section, the Commission shall issue rules 
establishing an electronic information system to provide the Commission 
and the public with access to such information as is necessary or 
appropriate to facilitate price transparency and participation in 
markets subject to the Commission's jurisdiction. Such systems shall 
provide information about the availability and market price of sales of 
electric energy at wholesale in interstate commerce and transmission of 
electric energy in interstate commerce to the Commission, State 
commissions, buyers and sellers of wholesale electric energy, users of 
transmission services, and the public on a timely basis. The Commission 
shall have authority to obtain such information from any person, and 
any entity described in section 201(f), who sells electric energy at 
wholesale in interstate commerce or provides transmission services in 
interstate commerce.
  ``(b) Exemptions.--The Commission shall exempt from disclosure 
information it determines would, if disclosed, (1) be detrimental to 
the operation of an effective market; or (2) jeopardize system 
security. This section shall not apply to an entity described in 
section 212(k)(2)(B) with respect to transactions for the purchase or 
sale of wholesale electric energy and transmission services within the 
area described in section 212(k)(2)(A).''.

SEC. 7082. PROHIBITION ON ROUND TRIP TRADING.

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

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

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

SEC. 7083. CONFORMING CHANGES.

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

SEC. 7084. ENFORCEMENT.

  (a) Complaints.--Section 306 of the Federal Power Act (16 U.S.C. 
825e) is amended by--
          (1) inserting ``electric utility,'' after ``Any person,''; 
        and
          (2) inserting ``, transmitting utility,'' after ``licensee'' 
        each place it appears.
  (b) Review of Commission Orders.--Section 313(a) of the Federal Power 
Act (16 U.S.C. 8251) is amended by inserting ``electric utility,'' 
after ``person,'' in the first place it appears and by striking ``any 
person unless such person'' and inserting ``any entity unless such 
entity''.
  (c) Criminal Penalties.--Section 316 of the Federal Power Act (16 
U.S.C. 825o) is amended--
          (1) in subsection (a), by striking ``$5,000'' and inserting 
        ``$1,000,000'', and by striking ``two years'' and inserting 
        ``five years'';
          (2) in subsection (b), by striking ``$500'' and inserting 
        ``$25,000''; and
          (3) by striking subsection (c).
  (d) Civil Penalties.--Section 316A of the Federal Power Act (16 
U.S.C. 825-1) is amended--
          (1) in subsections (a) and (b), by striking ``section 211, 
        212, 213, or 214'' each place it appears and inserting ``Part 
        II''; and
          (2) in subsection (b), by striking ``$10,000'' and inserting 
        ``$1,000,000''.

                    Subtitle H--Consumer Protections

SEC. 7091. REFUND EFFECTIVE DATE.

  Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b)) is 
amended by--
          (1) striking ``the date 60 days after the filing of such 
        complaint nor later than 5 months after the expiration of such 
        60-day period'' in the second sentence and inserting ``the date 
        of the filing of such complaint nor later than 5 months after 
        the filing of such complaint'';
          (2) striking ``60 days after'' in the third sentence and 
        inserting ``of'';
          (3) striking ``expiration of such 60-day period'' in the 
        third sentence and inserting ``publication date''; and
          (4) in the fifth sentence after ``rendered by the'' insert 
        ``date 60 days after the''.

SEC. 7092. JURISDICTION OVER INTERSTATE SALES.

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

SEC. 7093. CONSUMER PRIVACY.

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

SEC. 7094. UNFAIR TRADE PRACTICES.

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

          Subtitle I--Merger Review Reform and Accountability

SEC. 7101. MERGER REVIEW REFORM AND ACCOUNTABILITY.

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

                 Subtitle J--Study of Economic Dispatch

SEC. 7111. STUDY ON THE BENEFITS OF ECONOMIC DISPATCH.

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

                            TITLE VIII--COAL

SEC. 8001. AUTHORIZATION OF APPROPRIATIONS.

  (a) Clean Coal Power Initiative.--Except as provided in subsection 
(b), there are authorized to be appropriated to the Secretary to carry 
out the activities authorized by this title $200,000,000 for each of 
the fiscal years 2005 through 2013, to remain available until expended.
  (b) Limit on Use of Funds.--The Secretary shall transmit to the 
Congress the report required by this subsection not later than 
September 30, 2004. Notwithstanding subsection (a), no funds may be 
used to carry out the activities authorized by this title after 
September 30, 2004, unless the report has been transmitted. The report 
shall include, with respect to subsection (a), a 10-year plan 
containing--
          (1) a detailed assessment of whether the aggregate funding 
        levels provided under subsection (a) are the appropriate 
        funding levels for that program;
          (2) a detailed description of how proposals will be solicited 
        and evaluated, including a list of all activities expected to 
        be undertaken;
          (3) a detailed list of technical milestones for each coal and 
        related technology that will be pursued; and
          (4) a detailed description of how the program will avoid 
        problems enumerated in General Accounting Office reports on the 
        Clean Coal Technology Program, including problems that have 
        resulted in unspent funds and projects that failed either 
        financially or scientifically.
  (c) Applicability.--Subsection (b) shall not apply to any project 
begun before September 30, 2004.

SEC. 8002. PROJECT CRITERIA.

  (a) In General.--The Secretary shall not provide funding under this 
title for any project that does not advance efficiency, environmental 
performance, and cost competitiveness well beyond the level of 
technologies that on a full scale are in operation or have been 
demonstrated as of the date of the enactment of this Act.
  (b) Technical Criteria for Clean Coal Power Initiative.--
          (1) Gasification.--(A) In allocating the funds made available 
        under section 8001(a), the Secretary shall ensure that up to 80 
        percent of the funds are used only for coal-based gasification 
        technologies, including gasification combined cycle, 
        gasification fuel cells, gasification coproduction and hybrid 
        gasification/combustion.
          (B) The Secretary shall set technical milestones specifying 
        emissions levels for projects funded under this paragraph. The 
        milestones shall be designed to increasingly restrict emission 
        levels through the life of the program. The milestones shall be 
        designed to achieve by 2020 coal gasification projects able--
                  (i) to remove 99 percent of sulfur dioxide;
                  (ii) to emit no more than .05 lbs of NOx per million 
                BTU;
                  (iii) to achieve substantial reductions in mercury 
                emissions; and
                  (iv) to achieve a thermal efficiency of--
                          (I) 60 percent for coal of more than 9,000 
                        Btu;
                          (II) 59 percent for coal of 7,000 to 9,000 
                        Btu; and
                          (III) 50 percent for coal of less than 7,000 
                        Btu.
          (2) Other projects.--For projects not described in paragraph 
        (1), the Secretary shall set technical milestones specifying 
        emissions levels. The milestones shall be designed to 
        increasingly restrict emission levels through the life of the 
        program. The milestones shall be designed to achieve by 2010 
        projects able--
                  (A) to remove 97 percent of sulfur dioxide;
                  (B) to emit no more than .08 lbs of NOx per million 
                BTU;
                  (C) to achieve substantial reductions in mercury 
                emissions; and
                  (D) except as provided in paragraph (4), to achieve a 
                thermal efficiency of--
                          (i) 45 percent for coal of more than 9,000 
                        Btu;
                          (ii) 44 percent for coal of 7,000 to 9,000 
                        Btu; and
                          (iii) 42 percent for coal of less than 7,000 
                        Btu.
          (3) Consultation.--Before setting the technical milestones 
        under paragraphs (1)(B) and (2), the Secretary shall consult 
        with the Administrator of the Environmental Protection Agency 
        and interested entities, including coal producers, industries 
        using coal, organizations to promote coal or advanced coal 
        technologies, environmental organizations, and organizations 
        representing workers.
          (4) Existing units.--In the case of projects at existing 
        units, in lieu of the thermal efficiency requirements set forth 
        in paragraph (1)(B)(iv) and (2)(D), the projects shall be 
        designed to achieve an overall thermal design efficiency 
        improvement compared to the efficiency of the unit as operated, 
        of not less than--
                  (A) 7 percent for coal of more than 9,000 Btu;
                  (B) 6 percent for coal of 7,000 to 9,000 Btu; or
                  (C) 4 percent for coal of less than 7,000 Btu.
          (5) Permitted uses.--In allocating funds made available under 
        section 8001, the Secretary may fund projects that include, as 
        part of the project, the separation and capture of carbon 
        dioxide.
  (c) Financial Criteria.--The Secretary shall not provide a funding 
award under this title unless the recipient has documented to the 
satisfaction of the Secretary that--
          (1) the award recipient is financially viable without the 
        receipt of additional Federal funding;
          (2) the recipient will provide sufficient information to the 
        Secretary for the Secretary to ensure that the award funds are 
        spent efficiently and effectively; and
          (3) a market exists for the technology being demonstrated or 
        applied, as evidenced by statements of interest in writing from 
        potential purchasers of the technology.
  (d) Financial Assistance.--The Secretary shall provide financial 
assistance to projects that meet the requirements of subsections (a), 
(b), and (c) and are likely to--
          (1) achieve overall cost reductions in the utilization of 
        coal to generate useful forms of energy;
          (2) improve the competitiveness of coal among various forms 
        of energy in order to maintain a diversity of fuel choices in 
        the United States to meet electricity generation requirements; 
        and
          (3) demonstrate methods and equipment that are applicable to 
        25 percent of the electricity generating facilities, utilizing 
        different types of coal, that use coal as the primary feedstock 
        as of the date of the enactment of this Act.
  (e) Federal Share.--The Federal share of the cost of a project funded 
by the Secretary under this title shall not exceed 50 percent.
  (f) Applicability.--No technology, or level of emission reduction, 
shall be treated as adequately demonstrated for purposes of section 111 
of the Clean Air Act, achievable for purposes of section 169 of that 
Act, or achievable in practice for purposes of section 171 of that Act 
solely by reason of the use of such technology, or the achievement of 
such emission reduction, by one or more facilities receiving assistance 
under this title.

SEC. 8003. REPORT.

  Not later than 1 year after the date of the enactment of this Act, 
and once every 2 years thereafter for the following 8 years, the 
Secretary, in consultation with other appropriate Federal agencies, 
shall transmit to the Congress a report describing--
          (1) the technical milestones set forth in section 8002 and 
        how those milestones ensure progress toward meeting the 
        requirements of subsections (b)(1)(B) and (b)(2) of section 
        8002; and
          (2) the status of projects funded under this title.

SEC. 8004. CLEAN COAL CENTERS OF EXCELLENCE.

  As part of the program authorized in section 8001, the Secretary 
shall award competitive, merit-based grants to universities for the 
establishment of Centers of Excellence for Energy Systems of the 
Future. The Secretary shall provide grants to universities that can 
show the greatest potential for advancing new clean coal technologies.

                         TITLE IX--MOTOR FUELS

                     Subtitle A--General Provisions

SEC. 9101. RENEWABLE CONTENT OF MOTOR VEHICLE FUEL.

  (a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545) is 
amended--
          (1) by redesignating subsection (o) as subsection (q); and
          (2) by inserting after subsection (n) the following:
  ``(o) Renewable Fuel Program.--
          ``(1) Definitions.--In this section:
                  ``(A) Cellulosic biomass ethanol.--The term 
                `cellulosic biomass ethanol' means ethanol derived from 
                any lignocellulosic or hemicellulosic matter that is 
                available on a renewable or recurring basis, 
                including--
                          ``(i) dedicated energy crops and trees;
                          ``(ii) wood and wood residues;
                          ``(iii) plants;
                          ``(iv) grasses;
                          ``(v) agricultural residues;
                          ``(vi) fibers;
                          ``(vii) animal wastes and other waste 
                        materials; and
                          ``(viii) municipal solid waste.
                  ``(B) Renewable fuel.--
                          ``(i) In general.--The term `renewable fuel' 
                        means motor vehicle fuel that--
                                  ``(I)(aa) is produced from grain, 
                                starch, oilseeds, or other biomass; or
                                  ``(bb) is natural gas produced from a 
                                biogas source, including a landfill, 
                                sewage waste treatment plant, feedlot, 
                                or other place where decaying organic 
                                material is found; and
                                  ``(II) is used to replace or reduce 
                                the quantity of fossil fuel present in 
                                a fuel mixture used to operate a motor 
                                vehicle.
                          ``(ii) Inclusion.--The term `renewable fuel' 
                        includes cellulosic biomass ethanol and 
                        biodiesel (as defined in section 312(f) of the 
                        Energy Policy Act of 1992 (42 U.S.C. 13220(f)) 
                        and any blending components derived from 
                        renewable fuel (provided that only the 
                        renewable fuel portion of any such blending 
                        component shall be considered part of the 
                        applicable volume under the renewable fuel 
                        program established by this subsection).
                  ``(C) Small refinery.--The term `small refinery' 
                means a refinery for which average aggregate daily 
                crude oil throughput for the calendar year (as 
                determined by dividing the aggregate throughput for the 
                calendar year by the number of days in the calendar 
                year) does not exceed 75,000 barrels.
          ``(2) Renewable fuel program.--
                  ``(A) In general.--Not later than 1 year from 
                enactment of this provision, the Administrator shall 
                promulgate regulations ensuring that gasoline sold or 
                dispensed to consumers in the contiguous United States, 
                on an annual average basis, contains the applicable 
                volume of renewable fuel as specified in subparagraph 
                (B). Regardless of the date of promulgation, such 
                regulations shall contain compliance provisions for 
                refiners, blenders, and importers, as appropriate, to 
                ensure that the requirements of this section are met, 
                but shall not restrict where renewables can be used, or 
                impose any per-gallon obligation for the use of 
                renewables. If the Administrator does not promulgate 
                such regulations, the applicable percentage, on a 
                volume percentage of gasoline basis, shall be 1.62 in 
                2005.
                  ``(B) Applicable volume.--
                          ``(i) Calendar years 2005 through 2015.--For 
                        the purpose of subparagraph (A), the applicable 
                        volume for any of calendar years 2005 through 
                        2015 shall be determined in accordance with the 
                        following table:

                  Applicable volume of renewable fuel

  ``Calendar year:                             (In billions of gallons)
                2005.......................................        2.7 
                2006.......................................        2.7 
                2007.......................................        2.9 
                2008.......................................        2.9 
                2009.......................................        3.4 
                2010.......................................        3.4 
                2011.......................................        3.4 
                2012.......................................        4.2 
                2013.......................................        4.2 
                2014.......................................        4.2 
                2015.......................................        5.0.

                          ``(ii) Calendar year 2016 and thereafter.--
                        For the purpose of subparagraph (A), the 
                        applicable volume for calendar year 2016 and 
                        each calendar year thereafter shall be equal to 
                        the product obtained by multiplying--
                                  ``(I) the number of gallons of 
                                gasoline that the Administrator 
                                estimates will be sold or introduced 
                                into commerce in the calendar year; and
                                  ``(II) the ratio that--
                                          ``(aa) 5.0 billion gallons of 
                                        renewable fuels; bears to
                                          ``(bb) the number of gallons 
                                        of gasoline sold or introduced 
                                        into commerce in calendar year 
                                        2015.
          ``(3) Applicable percentages.--Not later than October 31 of 
        each calendar year after 2002, the Administrator of the Energy 
        Information Administration shall provide the Administrator an 
        estimate of the volumes of gasoline sales in the United States 
        for the coming calendar year. Based on such estimates, the 
        Administrator shall, by November 30 of each calendar year after 
        2003, determine and publish in the Federal Register, the 
        renewable fuel obligation, on a volume percentage of gasoline 
        basis, applicable to refiners, blenders, and importers, as 
        appropriate, for the coming calendar year, to ensure that the 
        requirements of paragraph (2) are met. For each calendar year, 
        the Administrator shall establish a single applicable 
        percentage that applies to all parties, and make provision to 
        avoid redundant obligations. In determining the applicable 
        percentages, the Administrator shall make adjustments to 
        account for the use of renewable fuels by exempt small 
        refineries during the previous year.
          ``(4) Cellulosic biomass ethanol.--For the purpose of 
        paragraph (2), 1 gallon of cellulosic biomass ethanol shall be 
        considered to be the equivalent of 1.5 gallon of renewable 
        fuel.
          ``(5) Credit program.--
                  ``(A) In general.--The regulations promulgated to 
                carry out this subsection shall provide for the 
                generation of an appropriate amount of credits by any 
                person that refines, blends, or imports gasoline that 
                contains a quantity of renewable fuel that is greater 
                than the quantity required under paragraph (2). Such 
                regulations shall provide for the generation of an 
                appropriate amount of credits for biodiesel fuel. If a 
                small refinery notifies the Administrator that it 
                waives the exemption provided by this Act, the 
                regulations shall provide for the generation of credits 
                by the small refinery beginning in the year following 
                such notification.
                  ``(B) Use of credits.--A person that generates 
                credits under subparagraph (A) may use the credits, or 
                transfer all or a portion of the credits to another 
                person, for the purpose of complying with paragraph 
                (2).
                  ``(C) Life of credits.--A credit generated under this 
                paragraph shall be valid to show compliance:
                          ``(i) in the calendar year in which the 
                        credit was generated or the next calendar year, 
                        or
                          ``(ii) in the calendar year in which the 
                        credit was generated or next two consecutive 
                        calendar years if the Administrator promulgates 
                        regulations under paragraph (6).
                  ``(D) Inability to purchase sufficient credits.--The 
                regulations promulgated to carry out this subsection 
                shall include provisions allowing any person that is 
                unable to generate or purchase sufficient credits to 
                meet the requirements under paragraph (2) to carry 
                forward a renewables deficit provided that, in the 
                calendar year following the year in which the 
                renewables deficit is created, such person shall 
                achieve compliance with the renewables requirement 
                under paragraph (2), and shall generate or purchase 
                additional renewables credits to offset the renewables 
                deficit of the previous year.
          ``(6) Seasonal variations in renewable fuel use.--
                  ``(A) Study.--For each of calendar years 2005 through 
                2015, the Administrator of the Energy Information 
                Administration, shall conduct a study of renewable 
                fuels blending to determine whether there are excessive 
                seasonal variations in the use of renewable fuels.
                  ``(B) Regulation of excessive seasonal variations.--
                If, for any calendar year, the Administrator of the 
                Energy Information Administration, based on the study 
                under subparagraph (A), makes the determinations 
                specified in subparagraph (C), the Administrator shall 
                promulgate regulations to ensure that 35 percent or 
                more of the quantity of renewable fuels necessary to 
                meet the requirement of paragraph (2) is used during 
                each of the periods specified in subparagraph (D) of 
                each subsequent calendar year.
                  ``(C) Determinations.--The determinations referred to 
                in subparagraph (B) are that--
                          ``(i) less than 35 percent of the quantity of 
                        renewable fuels necessary to meet the 
                        requirement of paragraph (2) has been used 
                        during one of the periods specified in 
                        subparagraph (D) of the calendar year;
                          ``(ii) a pattern of excessive seasonal 
                        variation described in clause (i) will continue 
                        in subsequent calendar years; and
                          ``(iii) promulgating regulations or other 
                        requirements to impose a 35% or more seasonal 
                        use of renewable fuels will not prevent or 
                        interfere with the attainment of national 
                        ambient air quality standards or significantly 
                        increase the price of motor fuels to the 
                        consumer.
                  ``(D) Periods.--The two periods referred to in this 
                paragraph are--
                          ``(i) April through September; and
                          ``(ii) January through March and October 
                        through December.
                  ``(E) Exclusions.--Renewable fuels blended or 
                consumed in 2005 in a State which has received a waiver 
                under section 209(b) shall not be included in the study 
                in subparagraph (A).
          ``(7) Waivers.--
                  ``(A) In general.--The Administrator, in consultation 
                with the Secretary of Agriculture and the Secretary of 
                Energy, may waive the requirement of paragraph (2) in 
                whole or in part on petition by one or more States by 
                reducing the national quantity of renewable fuel 
                required under this subsection--
                          ``(i) based on a determination by the 
                        Administrator, after public notice and 
                        opportunity for comment, that implementation of 
                        the requirement would have a significant and 
                        meaningful adverse impact on the economy or 
                        environment of a State, a region, or the United 
                        States, or will prevent or interfere with the 
                        attainment of a national ambient air quality 
                        standard in any area of a State; or
                          ``(ii) based on a determination by the 
                        Administrator, after public notice and 
                        opportunity for comment, that there is an 
                        inadequate domestic supply or distribution 
                        capacity to meet the requirement.
                   ``(B) Petitions for waivers.--The Administrator, in 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy, shall approve or disapprove a 
                State petition for a waiver of the requirement of 
                paragraph (2) within 90 days after the date on which 
                the petition is received by the Administrator. If the 
                Administrator does not act to approve or disapprove a 
                State petition for a waiver within 90 days, the 
                Administrator shall publish a notice setting forth the 
                reasons for not acting within the required 90-day 
                period.
                  ``(C) Termination of waivers.--A waiver granted under 
                subparagraph (A) shall terminate after 1 year, but may 
                be renewed by the Administrator after consultation with 
                the Secretary of Agriculture and the Secretary of 
                Energy.
          ``(8) Study and waiver for initial year of program.--Not 
        later than 180 days from enactment, the Secretary of Energy 
        shall complete for the Administrator a study assessing whether 
        the renewable fuels requirement under paragraph (2) will likely 
        result in significant adverse consumer impacts in 2005, on a 
        national, regional or State basis. Such study shall evaluate 
        renewable fuel supplies and prices, blendstock supplies, and 
        supply and distribution system capabilities. Based on such 
        study, the Secretary shall make specific recommendations to the 
        Administrator regarding waiver of the requirements of paragraph 
        (2), in whole or in part, to avoid any such adverse impacts. 
        Within 270 days from enactment, the Administrator shall, 
        consistent with the recommendations of the Secretary waive, in 
        whole or in part, the renewable fuels requirement under 
        paragraph (2) by reducing the national quantity of renewable 
        fuel required under this subsection in 2005. This provision 
        shall not be interpreted as limiting the Administrator's 
        authority to waive the requirements of paragraph (2) in whole, 
        or in part, under paragraph (7) or paragraph (9), pertaining to 
        waivers.
          ``(9) Assessment and waiver.--The Secretary of Energy, in 
        consultation with the Administrator of the Environmental 
        Protection Agency and the Secretary of Agriculture on his own 
        motion, or upon petition of any State shall evaluate the 
        requirement of paragraph (2) and determine, prior to January 1, 
        2007, or prior to January 1 of any subsequent year in which the 
        applicable volume of renewable fuel is increased under 
        paragraph (2)(B), whether the requirement of paragraph (2), 
        including the applicable volume of renewable fuel contained in 
        paragraph (2)(B) should remain in effect, in whole or in part, 
        during 2007 or any year or years subsequent to 2007. In 
        evaluating the requirement of paragraph (2) and in making any 
        determination under this section, the Secretary shall consider 
        the best available information and data collected by accepted 
        methods or best available means regarding--
                  ``(A) the capacity of renewable fuel producers to 
                supply an adequate amount of renewable fuel at 
                competitive prices to fulfill the requirement in 
                paragraph (2);
                  ``(B) the potential of the requirement in paragraph 
                (2) to significantly raise the price of gasoline, food 
                or heating oil for consumers in any significant area or 
                region of the country above the price that would 
                otherwise apply to such commodities in the absence of 
                the requirement;
                  ``(C) the potential of the requirement in paragraph 
                (2) to interfere with the supply of fuel in any 
                significant gasoline market or region of the country, 
                including interference with the efficient operation of 
                refiners, blenders, importers, wholesale suppliers, and 
                retail vendors of gasoline, and other motor fuels; and
                  ``(D) the potential of the requirement to cause or 
                promote exceedences of Federal, State, or local air 
                quality standards.
        If the Secretary determines, after public notice and the 
        opportunity for comment, that the requirement of paragraph (2) 
        would have significant and meaningful adverse impact on the 
        supply of fuel and related infrastructure or on the economy, 
        environment, public health or environment of any significant 
        area or region of the country, the Secretary may waive, in 
        whole or in part, the requirement of paragraph (2) in any one 
        year or period of years as well as reduce the applicable volume 
        of renewable fuel contained in paragraph (2)(B) in any one year 
        or period of years.
          ``(10) Small refineries.--
                  ``(A) In general.--The requirement of paragraph (2) 
                shall not apply to small refineries until the first 
                calendar year beginning more than 5 years after the 
                first year set forth in the table in paragraph 
                (2)(B)(i). Not later than December 31, 2006, the 
                Secretary of Energy shall complete for the 
                Administrator a study to determine whether the 
                requirement of paragraph (2) would impose a 
                disproportionate economic hardship on small refineries. 
                For any small refinery that the Secretary of Energy 
                determines would experience a disproportionate economic 
                hardship, the Administrator shall extend the small 
                refinery exemption for such small refinery for no less 
                than two additional years.
                  ``(B) Economic hardship.--
                          ``(i) Extension of exemption.--A small 
                        refinery may at any time petition the 
                        Administrator for an extension of the exemption 
                        from the requirement of paragraph (2) for the 
                        reason of disproportionate economic hardship. 
                        In evaluating a hardship petition, the 
                        Administrator, in consultation with the 
                        Secretary of Energy, shall consider the 
                        findings of the study in addition to other 
                        economic factors.
                          ``(ii) Deadline for action on petitions.--The 
                        Administrator shall act on any petition 
                        submitted by a small refinery for a hardship 
                        exemption not later than 90 days after the 
                        receipt of the petition.
                  ``(C) Credit program.--If a small refinery notifies 
                the Administrator that it waives the exemption provided 
                by this Act, the regulations shall provide for the 
                generation of credits by the small refinery beginning 
                in the year following such notification.
                  ``(D) Opt-in for small refiners.--A small refinery 
                shall be subject to the requirements of this section if 
                it notifies the Administrator that it waives the 
                exemption under subparagraph (A).''.
  (b) Penalties and Enforcement.--Section 211(d) of the Clean Air Act 
(42 U.S.C. 7545(d)) is amended--
          (1) in paragraph (1)--
                  (A) in the first sentence, by striking ``or (n)'' 
                each place it appears and inserting ``(n) or (o)''; and
                  (B) in the second sentence, by striking ``or (m)'' 
                and inserting ``(m), or (o)''; and
          (2) in the first sentence of paragraph (2), by striking ``and 
        (n)'' each place it appears and inserting ``(n), and (o)''.
  (c) Survey of Renewable Fuel Market.--
          (1) Survey and report.--Not later than December 1, 2006, and 
        annually thereafter, the Administrator of the Environmental 
        Protection Agency (in consultation with the Secretary of Energy 
        acting through the Administrator of the Energy Information 
        Administration) shall--
                  (A) conduct, with respect to each conventional 
                gasoline use area and each reformulated gasoline use 
                area in each State, a survey to determine the market 
                shares of--
                          (i) conventional gasoline containing ethanol;
                          (ii) reformulated gasoline containing 
                        ethanol;
                          (iii) conventional gasoline containing 
                        renewable fuel; and
                          (iv) reformulated gasoline containing 
                        renewable fuel; and
                  (B) submit to Congress, and make publicly available, 
                a report on the results of the survey under 
                subparagraph (A).
          (2) Recordkeeping and reporting requirements.--The 
        Administrator may require any refiner, blender, or importer to 
        keep such records and make such reports as are necessary to 
        ensure that the survey conducted under paragraph (1) is 
        accurate. The Administrator shall rely, to the extent 
        practicable, on existing reporting and recordkeeping 
        requirements to avoid duplicative requirements.
          (3) Applicable law.--Activities carried out under this 
        subsection shall be conducted in a manner designed to protect 
        confidentiality of individual responses.
          (4) Calculation of market shares.--Market shares for 
        conventional gasoline and reformulated gasoline use areas will 
        be calculated on a statewide basis using information collected 
        under paragraph (2) and other information available to the 
        Administrator. Market share information may be based upon 
        gasoline distribution patterns that include multistate use 
        areas.

SEC. 9102. FUELS SAFE HARBOR.

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

SEC. 9103. FINDINGS AND MTBE TRANSITION ASSISTANCE.

  (a) Findings.--Congress finds that--
          (1) since 1979, methyl tertiary butyl ether (referred to in 
        this section as ``MTBE'') has been used nationwide at low 
        levels in gasoline to replace lead as an octane booster or 
        anti-knocking agent;
          (2) Public Law 101-549 (commonly known as the ``Clean Air Act 
        Amendments of 1990'') (42 U.S.C. 7401 et seq.) established a 
        fuel oxygenate standard under which reformulated gasoline must 
        contain at least 2 percent oxygen by weight;
          (3) at the time of the adoption of the fuel oxygen standard, 
        Congress was aware that significant use of MTBE would result 
        from the adoption of that standard, and that the use of MTBE 
        would likely be important to the cost-effective implementation 
        of that program;
          (4) Congress was aware that gasoline and its component 
        additives can and do leak from storage tanks;
          (5) the fuel industry responded to the fuel oxygenate 
        standard established by Public Law 101-549 by making 
        substantial investments in--
                  (A) MTBE production capacity; and
                  (B) systems to deliver MTBE-containing gasoline to 
                the marketplace;
          (6) Congress has--
                  (A) reconsidered the relative value of the oxygenate 
                requirement for reformulated gasoline; and
                  (B) decided to provide for the elimination of the 
                oxygenate requirement for reformulated gasoline and to 
                provide for a renewable content requirement for motor 
                fuel; and
          (7) it is appropriate for Congress to provide some limited 
        transition assistance--
                  (A) to merchant producers of MTBE who produced MTBE 
                in response to a market created by the oxygenate 
                requirement contained in the Clean Air Act; and
                  (B) for the purpose of mitigating any fuel supply 
                problems that may result from the elimination of the 
                oxygenate requirement for reformulated gasoline.
  (b) Purposes.--The purpose of this section is to provide assistance 
to merchant producers of MTBE in making the transition from producing 
MTBE to producing other fuel additives.
  (c) MTBE Merchant Producer Conversion Assistance.--Section 211(c) of 
the Clean Air Act (42 U.S.C. 7545(c)) is amended by adding at the end 
the following:
          ``(5) MTBE merchant producer conversion assistance.--
                  ``(A) In general.--
                          ``(i) Grants.--The Secretary of Energy, in 
                        consultation with the Administrator, may make 
                        grants to merchant producers of methyl tertiary 
                        butyl ether in the United States to assist the 
                        producers in the conversion of eligible 
                        production facilities described in subparagraph 
                        (C) to the production of iso-octane and 
                        alkylates.
                          ``(ii) Determination.--The Administrator, in 
                        consultation with the Secretary of Energy, may 
                        determine that transition assistance for the 
                        production of iso-octane and alkylates is 
                        inconsistent with the provisions of 
                        subparagraph (B) and, on that basis, may deny 
                        applications for grants authorized by this 
                        provision.
                  ``(B) Further grants.--The Secretary of Energy, in 
                consultation with the Administrator, may also further 
                make grants to merchant producers of MTBE in the United 
                States to assist the producers in the conversion of 
                eligible production facilities described in 
                subparagraph (C) to the production of such other fuel 
                additives that, consistent with this subsection--
                          ``(i) unless the Administrator determines 
                        that such fuel additives may reasonably be 
                        anticipated to endanger public health or the 
                        environment;
                          ``(ii) have been registered and have been 
                        tested or are being tested in accordance with 
                        the requirements of this section; and
                          ``(iii) will contribute to replacing gasoline 
                        volumes lost as a result of paragraph (5).
                  ``(C) Eligible production facilities.--A production 
                facility shall be eligible to receive a grant under 
                this paragraph if the production facility--
                          ``(i) is located in the United States; and
                          ``(ii) produced methyl tertiary butyl ether 
                        for consumption before April 1, 2003 and ceased 
                        production at any time after the date of 
                        enactment.
                  ``(D) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $250,000,000 for each of fiscal years 2004 
                through 2006, to remain available until expended.''.
  (d) Effect on State Law.--The amendments made to the Clean Air Act by 
this title have no effect regarding any available authority of States 
to limit the use of methyl tertiary butyl ether in motor vehicle fuel.

SEC. 9104. ELIMINATION OF OXYGEN CONTENT REQUIREMENT FOR REFORMULATED 
                    GASOLINE.

  (a) Elimination.--
          (1) In general.--Section 211(k) of the Clean Air Act (42 
        U.S.C. 7545(k)) is amended--
                  (A) in paragraph (2)--
                          (i) in the second sentence of subparagraph 
                        (A), by striking ``(including the oxygen 
                        content requirement contained in subparagraph 
                        (B))'';
                          (ii) by striking subparagraph (B); and
                          (iii) by redesignating subparagraphs (C) and 
                        (D) as subparagraphs (B) and (C), respectively;
                  (B) in paragraph (3)(A), by striking clause (v);
                  (C) in paragraph (7)--
                          (i) in subparagraph (A)--
                                  (I) by striking clause (i); and
                                  (II) by redesignating clauses (ii) 
                                and (iii) as clauses (i) and (ii), 
                                respectively; and
                          (ii) in subparagraph (C)--
                                  (I) by striking clause (ii); and
                                  (II) by redesignating clause (iii) as 
                                clause (ii); and
          (2) Effective date.--The amendments made by paragraph (1) 
        take effect 270 days after the date of enactment of this Act, 
        except that such amendments shall take effect upon enactment in 
        any State that has received a waiver under section 209(b) of 
        the Clean Air Act.
  (b) Maintenance of Toxic Air Pollutant Emission Reductions.--Section 
211(k)(1) of the Clean Air Act (42 U.S.C. 7545(k)(1)) is amended--
          (1) by striking ``Within 1 year after the enactment of the 
        Clean Air Act Amendments of 1990,'' and inserting the 
        following:
                  ``(A) In general.--Not later than November 15, 
                1991,''; and
          (2) by adding at the end the following:
                  ``(B) Maintenance of toxic air pollutant emissions 
                reductions from reformulated gasoline.--
                          ``(i) Definitions.--In this subparagraph the 
                        term `PADD' means a Petroleum Administration 
                        for Defense District.
                          ``(ii) Regulations regarding emissions of 
                        toxic air pollutants.--Not later than 270 days 
                        after the date of enactment of this 
                        subparagraph the Administrator shall establish, 
                        for each refinery or importer, standards for 
                        toxic air pollutants from use of the 
                        reformulated gasoline produced or distributed 
                        by the refinery or importer that maintain the 
                        reduction of the average annual aggregate 
                        emissions of toxic air pollutants for 
                        reformulated gasoline produced or distributed 
                        by the refinery or importer during calendar 
                        years 1999 and 2000, determined on the basis of 
                        data collected by the Administrator with 
                        respect to the refinery or importer.
                          ``(iii) Standards applicable to specific 
                        refineries or importers.--
                                  ``(I) Applicability of standards.--
                                For any calendar year, the standards 
                                applicable to a refinery or importer 
                                under clause (ii) shall apply to the 
                                quantity of gasoline produced or 
                                distributed by the refinery or importer 
                                in the calendar year only to the extent 
                                that the quantity is less than or equal 
                                to the average annual quantity of 
                                reformulated gasoline produced or 
                                distributed by the refinery or importer 
                                during calendar years 1999 and 2000.
                                  ``(II) Applicability of other 
                                standards.--For any calendar year, the 
                                quantity of gasoline produced or 
                                distributed by a refinery or importer 
                                that is in excess of the quantity 
                                subject to subclause (I) shall be 
                                subject to standards for toxic air 
                                pollutants promulgated under 
                                subparagraph (A) and paragraph (3)(B).
                          ``(iv) Credit program.--The Administrator 
                        shall provide for the granting and use of 
                        credits for emissions of toxic air pollutants 
                        in the same manner as provided in paragraph 
                        (7).
                          ``(v) Regional protection of toxics reduction 
                        baselines.--
                                  ``(I) In general.--Not later than 60 
                                days after the date of enactment of 
                                this subparagraph, and not later than 
                                April 1 of each calendar year that 
                                begins after that date of enactment, 
                                the Administrator shall publish in the 
                                Federal Register a report that 
                                specifies, with respect to the previous 
                                calendar year--
                                          ``(aa) the quantity of 
                                        reformulated gasoline produced 
                                        that is in excess of the 
                                        average annual quantity of 
                                        reformulated gasoline produced 
                                        in 1999 and 2000; and
                                          ``(bb) the reduction of the 
                                        average annual aggregate 
                                        emissions of toxic air 
                                        pollutants in each PADD, based 
                                        on retail survey data or data 
                                        from other appropriate sources.
                                  ``(II) Effect of failure to maintain 
                                aggregate toxics reductions.--If, in 
                                any calendar year, the reduction of the 
                                average annual aggregate emissions of 
                                toxic air pollutants in a PADD fails to 
                                meet or exceed the reduction of the 
                                average annual aggregate emissions of 
                                toxic air pollutants in the PADD in 
                                calendar years 1999 and 2000, the 
                                Administrator, not later than 90 days 
                                after the date of publication of the 
                                report for the calendar year under 
                                subclause (I), shall--
                                          ``(aa) identify, to the 
                                        maximum extent practicable, the 
                                        reasons for the failure, 
                                        including the sources, volumes, 
                                        and characteristics of 
                                        reformulated gasoline that 
                                        contributed to the failure; and
                                          ``(bb) promulgate revisions 
                                        to the regulations promulgated 
                                        under clause (ii), to take 
                                        effect not earlier than 180 
                                        days but not later than 270 
                                        days after the date of 
                                        promulgation, to provide that, 
                                        notwithstanding clause 
                                        (iii)(II), all reformulated 
                                        gasoline produced or 
                                        distributed at each refinery or 
                                        importer shall meet the 
                                        standards applicable under 
                                        clause (ii) not later than 
                                        April 1 of the year following 
                                        the report in subclause (II) 
                                        and for subsequent years.
                          ``(vi) Regulations to control hazardous air 
                        pollutants from motor vehicles and motor 
                        vehicle fuels.--Not later than July 1, 2004, 
                        the Administrator shall promulgate final 
                        regulations to control hazardous air pollutants 
                        from motor vehicles and motor vehicle fuels, as 
                        provided for in section 80.1045 of title 40, 
                        Code of Federal Regulations (as in effect on 
                        the date of enactment of this subparagraph).''.
  (c) Consolidation in Reformulated Gasoline Regulations.--Not later 
than 180 days after the date of enactment of this Act, the 
Administrator shall revise the reformulated gasoline regulations under 
subpart D of part 80 of title 40, Code of Federal Regulations, to 
consolidate the regulations applicable to VOC-Control Regions 1 and 2 
under section 80.41 of that title by eliminating the less stringent 
requirements applicable to gasoline designated for VOC-Control Region 2 
and instead applying the more stringent requirements applicable to 
gasoline designated for VOC-Control Region 1.
  (d) Savings Clause.--Nothing in this section is intended to affect or 
prejudice either any legal claims or actions with respect to 
regulations promulgated by the Administrator prior to enactment of this 
Act regarding emissions of toxic air pollutants from motor vehicles or 
the adjustment of standards applicable to a specific refinery or 
importer made under such prior regulations and the Administrator may 
apply such adjustments to the standards applicable to such refinery or 
importer under clause (iii)(I) of section 211(k)(1)(B) of the Clean Air 
Act, except that--
          (1) the Administrator shall revise such adjustments to be 
        based only on calendar years 1999-2000, and
          (2) for adjustments based on toxic air pollutant emissions 
        from reformulated gasoline significantly below the national 
        annual average emissions of toxic air pollutants from all 
        reformulated gasoline, the Administrator may revise such 
        adjustments to take account of the scope of any lawful and 
        enforceable Federal or State prohibition on methyl tertiary 
        butyl ether imposed after the effective date of the enactment 
        of this paragraph, except that any such adjustment shall 
        require such refiner or importer, to the greatest extent 
        practicable, to maintain the reduction achieved during calendar 
        year 1999-2000 in the average annual aggregate emissions of 
        toxic air pollutants from reformulated gasoline produced or 
        distributed by the refinery or importer. Any such adjustment 
        shall not be made at a level below the average percentage of 
        reductions of emissions of toxic air pollutants for 
        reformulated gasoline supplied to PADD I during calendar years 
        1999-2000.

SEC. 9105. ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

  Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by 
inserting after subsection (o) the following:
  ``(p) Analyses of Motor Vehicle Fuel Changes and Emissions Model.--
          ``(1) Anti-backsliding analysis.--
                  ``(A) Draft analysis.--Not later than 4 years after 
                the date of enactment of this paragraph, the 
                Administrator shall publish for public comment a draft 
                analysis of the changes in emissions of air pollutants 
                and air quality due to the use of motor vehicle fuel 
                and fuel additives resulting from implementation of the 
                amendments made by title IX of the Energy Policy Act of 
                2003.
                  ``(B) Final analysis.--After providing a reasonable 
                opportunity for comment but not later than 5 years 
                after the date of enactment of this paragraph, the 
                Administrator shall publish the analysis in final form.
          ``(2) Emissions model.--For the purposes of this subsection, 
        as soon as the necessary data are available, the Administrator 
        shall develop and finalize an emissions model that reasonably 
        reflects the effects of gasoline characteristicsor components 
on emissions from vehicles in the motor vehicle fleet during calendar 
year 2005.''.

SEC. 9106. DATA COLLECTION.

  Section 205 of the Department of Energy Organization Act (42 U.S.C. 
7135) is amended by adding at the end the following:
  ``(m) Renewable fuels survey.--(1) In order to improve the ability to 
evaluate the effectiveness of the Nation's renewable fuels mandate, the 
Administrator shall conduct and publish the results of a survey of 
renewable fuels demand in the motor vehicle fuels market in the United 
States monthly, and in a manner designed to protect the confidentiality 
of individual responses. In conducting the survey, the Administrator 
shall collect information both on a national and regional basis, 
including--
          ``(A) the quantity of renewable fuels produced;
          ``(B) the quantity of renewable fuels blended;
          ``(C) the quantity of renewable fuels imported;
          ``(D) the quantity of renewable fuels demanded;
          ``(E) market price data; and
          ``(F) such other analyses or evaluations as the Administrator 
        finds is necessary to achieve the purposes of this section.
  ``(2) The Administrator shall also collect or estimate information 
both on a national and regional basis, pursuant to subparagraphs (A) 
through (F) of paragraph (1), for the five years prior to 
implementation of this subsection.
  ``(3) This subsection does not affect the authority of the 
Administrator to collect data under section 52 of the Federal Energy 
Administration Act of 1974 (15 U.S.C. 790a).''.

SEC. 9107. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.

  (a) Study.--
          (1) In general.--The Administrator of the Environmental 
        Protection Agency and the Secretary of Energy shall jointly 
        conduct a study of Federal, State, and local requirements 
        concerning motor vehicle fuels, including--
                  (A) requirements relating to reformulated gasoline, 
                volatility (measured in Reid vapor pressure), 
                oxygenated fuel, and diesel fuel; and
                  (B) other requirements that vary from State to State, 
                region to region, or locality to locality.
          (2) Required elements.--The study shall assess--
                  (A) the effect of the variety of requirements 
                described in paragraph (1) on the supply, quality, and 
                price of motor vehicle fuels available to consumers in 
                various States and localities;
                  (B) the effect of the requirements described in 
                paragraph (1) on achievement of--
                          (i) national, regional, and local air quality 
                        standards and goals; and
                          (ii) related environmental and public health 
                        protection standards and goals;
                  (C) the effect of Federal, State, and local motor 
                vehicle fuel regulations, including multiple motor 
                vehicle fuel requirements, on--
                          (i) domestic refineries;
                          (ii) the fuel distribution system; and
                          (iii) industry investment in new capacity;
                  (D) the effect of the requirements described in 
                paragraph (1) on emissions from vehicles, refineries, 
                and fuel handling facilities;
                  (E) the feasibility of developing national or 
                regional motor vehicle fuel slates for the 48 
                contiguous States that, while improving air quality at 
                the national, regional and local levels consistent with 
                the attainment of national ambient air quality 
                standards, could--
                          (i) enhance flexibility in the fuel 
                        distribution infrastructure and improve fuel 
                        fungibility;
                          (ii) reduce price volatility and costs to 
                        consumers and producers;
                          (iii) provide increased liquidity to the 
                        gasoline market; and
                          (iv) enhance fuel quality, consistency, and 
                        supply;
                  (F) the feasibility of providing incentives, to 
                promote cleaner burning motor vehicle fuel; and
                  (G) the extent to which improvements in air quality 
                and any increases or decreases in the price of motor 
                fuel can be projected to result from the Environmental 
                Protection Agency's Tier II requirements for 
                conventional gasoline and vehicle emission systems, the 
                reformulated gasoline program, the renewable content 
                requirements established by this subtitle, State 
                programs regarding gasoline volatility, and any other 
                requirements imposed by States or localities affecting 
                the composition of motor fuel.
  (b) Report.--
          (1) In general.--Not later than December 31, 2006, the 
        Administrator of the Environmental Protection Agency and the 
        Secretary of Energy shall submit to Congress a report on the 
        results of the study conducted under subsection (a).
          (2) Recommendations.--
                  (A) In general.--The report shall contain 
                recommendations for legislative and administrative 
                actions that may be taken--
                          (i) to improve air quality;
                          (ii) to reduce costs to consumers and 
                        producers; and
                          (iii) to increase supply liquidity.
                  (B) Required considerations.--The recommendations 
                under subparagraph (A) shall take into account the need 
                to provide advance notice of required modifications to 
                refinery and fuel distribution systems in order to 
                ensure an adequate supply of motor vehicle fuel in all 
                States.
          (3) Consultation.--In developing the report, the 
        Administrator of the Environmental Protection Agency and the 
        Secretary of Energy shall consult with--
                  (A) the Governors of the States;
                  (B) automobile manufacturers;
                  (C) motor vehicle fuel producers and distributors; 
                and
                  (D) the public.

                        Subtitle B--MTBE Cleanup

SEC. 9201. FUNDING FOR MTBE CONTAMINATION.

  Notwithstanding any other provision of law, there is authorized to be 
appropriated to the Administrator of the United States Environmental 
Protection Agency from the Leaking Underground Storage Tank Trust Fund 
not more than $850,000,000 to be used for taking such action limited to 
site assessment (including exposure assessment), corrective action, 
inspection of underground storage tank systems, and groundwater 
monitoring as the Administrator deems necessary to protect human 
health, welfare, and the environment from underground storage tank 
releases of fuel containing fuel oxygenates.

                     TITLE X--AUTOMOBILE EFFICIENCY

SEC. 10001. AUTHORIZATION OF APPROPRIATIONS FOR IMPLEMENTATION AND 
                    ENFORCEMENT OF FUEL ECONOMY STANDARDS.

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

SEC. 10002. STUDY OF FEASIBILITY AND EFFECTS OF REDUCING USE OF FUEL 
                    FOR AUTOMOBILES.

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

  TITLE XI--PREVENTING THE MISUSE OF NUCLEAR MATERIALS AND TECHNOLOGY

SEC. 11001. PREVENTING THE MISUSE OF NUCLEAR MATERIALS AND TECHNOLOGY.

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

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

                    TITLE XII--ADDITIONAL PROVISIONS

SEC. 12001. TRANSMISSION TECHNOLOGIES.

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

                          Purpose and Summary

    The purpose of the Energy Policy Act of 2003 is to promote 
increased energy conservation and increase the availability of 
energy supplies nationwide. This bill is the first step toward 
ensuring our Nation's continued welfare and security by 
providing for our long-term energy needs.
    Energy production and environmental protection are non-
exclusive national goals. In recent decades, technological 
advances have made energy development and use more efficient 
and less environmentally harmful. Building on this trend, the 
Energy Policy Act of 2003 encourages energy production and 
demand reduction by promoting new technology, more efficient 
processes, and greater public awareness.
    The Energy Policy Act of 2003 addresses a wide range of 
issues related to energy generation, transportation, and use. 
It provides for accelerated market penetration for clean coal 
technologies, incentives for the use of alternative 
transportation fuels and changes to the reformulated gasoline 
program, and promotion of energy conservation and efficiency. 
The bill also provides for improvements in the hydropower 
licensing process and will remove barriers to expanded use of 
nuclear energy. Finally, the bill addresses the need for 
investment in electric transmission capacity, as well as 
improvements to competitive wholesale electricity markets, 
along with a number of other miscellaneous issues.

                  Background and Need for Legislation

    According to the Energy Information Administration, over 
the next 20 years, growth in U.S. energy consumption will 
increasingly outpace energy production. Meeting this increased 
demand will require a combination of increased energy supplies 
and using existing supplies more efficiently. Total U.S. energy 
consumption is projected to grow 43% by 2025, from 97.3 
quadrillion BTU to 139.1 quadrillion. Computers, electronic 
equipment, appliances, telecommunications, and transportation 
will account for the bulk of this growth.
    Conservation and increased energy efficiency allow us to 
manage existing energy supplies better. Energy intensity, the 
amount of energy it takes to produce one dollar of gross 
domestic product, has steadily declined in the United States 
over the past three decades. Thus, while the economy has grown 
by 126% since 1970, energy consumption has only increased by 
30%. These gains have largely been the result of advances in 
technology, along with better management practices and better 
application of these new technologies. Consumer choice is also 
a driver of energy efficiency, and Federal programs such as 
energy labels and Energy Star enable consumers to make energy-
conscious purchasing decisions. Federal and state governments 
are large users of energy and promote energy efficiency by 
investing in research and procuring energy efficient products. 
A variety of Federal grant programs have spurred significant 
progress in energy efficiency at the state and local levels. 
These programs include funding for weatherization and state 
energy programs. The Department of Energy (DOE) establishes 
energy conservation standards for a variety of consumer, 
commercial, and industrial products, and these standards have 
resulted in substantial increases in energy efficiency. If our 
Nation is to meet its energy needs in the coming decades, it 
will be in part due to continued advances in energy efficiency 
and conservation.
    Nuclear energy provides 20% of the nation's electricity. 
There are 103 operating commercial nuclear reactors in the 
United States, most of these located in the Midwest and East. 
It has been twenty years since the Nuclear Regulatory 
Commission (NRC) issued a license to construct a new nuclear 
power plant, and as recently as a few years ago, it was thought 
that most of the existing fleet of nuclear reactors would be 
closed over the next thirty years. However, several companies 
have recently expressed a renewed interest in extending the 
licenses of existing nuclear plants, as well as constructing a 
new generation of advanced nuclear plants that are smaller, 
cheaper to build, and easier to operate.
    Over the next 15 years, more than half of our Nation's 
hydroelectric power projects (roughly 28,000 megawatts) must be 
relicensed. Currentlaw gives states and the Federal resources 
agencies (U.S. Fish and Wildlife Service, U.S. Forest Service, and 
National Marine Fisheries Service) authority to impose mandatory 
conditions on FERC-issued hydroelectric power licenses. One of the 
areas identified to improve the licensing process would be to require 
agencies to consider alternative conditions proposed by a licensee. 
Current law does not require resources agencies to consider alternative 
conditions that may be lest costly (in dollars or energy lost) while 
not diminishing environmental protection.
    The United States presently generates just over half of its 
total electric power by burning coal, relying largely on 
domestic resources that constitute an estimated 25% of the 
world's total recoverable reserves of coal. Coal also 
represents over 94% of the nation's proven fossil energy 
reserves. Despite this abundance of recoverable resources and 
the nation's historical reliance on coal for electric power 
generation, however, few companies have current plans to build 
new coal-fired generation. A number of factors have contributed 
to this situation, including natural gas prices that, despite 
recent trends, have been relatively low over the last few 
years. In addition, high capital costs and high operating costs 
of currently available clean coal technology have also been a 
factor, along with uncertainty over future environmental 
requirements. The Clean Coal Technology Demonstration Program 
(CCT) has sought to address this situation and demonstrate the 
feasibility of new coal-generation technology and processes. As 
of 2001, 30 CCT projects had been completed and an additional 8 
projects were in process. These projects included two 
integrated gasification combined cycle (IGCC) units and a third 
IGCC project in its design phase.
    Investment in electric transmission expansion has not kept 
pace with electricity demand. The electricity sector, currently 
severely weakened by scandals, and legal and regulatory 
uncertainty, is facing its deepest financial crisis in 70 
years. Between 2001 and 2002, the sector lost more than $200 
billion (more than 80%) of its market capitalization. 
Legislation is needed to address the issues of transmission 
capacity, operation, and reliability. By some estimates, the 
sector has recently canceled as much as 53,000 megawatts (40%) 
of new generation planned over the past three years. Although 
wholesale electricity prices are relatively low, industry 
analysts now predict that the financial situation facing the 
industry could result in electricity shortages beginning in 
2004, potentially hampering economic recovery. Measures 
proposed in the bill, such as repealing the Public Utility 
Holding Company Act, would facilitate needed investment in the 
sector.

                                Hearings

    The Subcommittee on Energy and Air Quality held the first 
in a series of hearings on a comprehensive national energy 
policy on March 5, 2003. The Subcommittee received testimony 
from: The Honorable Kyle McSlarrow, Deputy Secretary, 
Department of Energy; The Honorable Richard Meserve, Chairman, 
Nuclear Regulatory Commission; The Honorable Patrick Wood, 
Chairman, Federal Energy Regulatory Commission; The Honorable 
Nora Mead-Brownell, Commissioner, Federal Energy Regulatory 
Commission; The Honorable William L. Massey, Commissioner, 
Federal Energy Regulatory Commission; Mr. Marvin Fertel, Senior 
Vice President of Business Operations, Nuclear Energy 
Institute; Ms. Anna Aurilio, Legislative Director, U.S. Public 
Interest Research Group; Mr. Jeff Benjamin, Vice President, 
Licensing and Regulatory Affairs, Exelon Nuclear; Dr. Edwin 
Lyman, President, Nuclear Control Institute; Mr. Steven Nadel, 
Executive Director, American Council for an Energy-Efficient 
Economy; Dr. Malcolm O' Hagan, President, National Electrical 
Manufacturers Association; and, Mr. Alden Meyer, Director of 
Government Relations, Union of Concerned Scientists.
    The Subcommittee on Energy and Air Quality held the second 
in a series of hearings on comprehensive national energy policy 
on March 12, 2003. The Subcommittee received testimony from: 
Mr. J. Mark Robinson, Director, Office of Energy Projects, 
Federal Energy Regulatory Commission; Ms. Julie Keil, Director 
of Hydro Licensing and Water Rights, Portland General Electric; 
Mr. Rob Masonis, American Rivers, Director, Northwest Regional 
Office; and, Mr. Leon Szeptycki, Eastern Conservation Director 
and General Counsel, Trout Unlimited.
    The Subcommittee on Energy and Air Quality held the final 
hearing in the series of hearings on comprehensive national 
energy policy on March 13, 2003. The Subcommittee received 
testimony from: Mr. David K. Owens, Executive Vice-President, 
Business Operations Group, Edison Electric Institute; Ms. Jan 
Schori, Esq., General Manager and CEO, Sacramento Utility 
District, on behalf of: Large Public Power Council; Mr. John 
Twitty, General Manager, City Utilities of Springfield, MO, on 
behalf of: American Public Power Association; Mr. Glenn 
English, CEO, National Rural Electric Cooperative Association; 
Mr. Ron Walter, Executive Vice President, Calpine Corporation, 
on behalf of: Electric Power Supply Association; Mr. W. Henson 
Moore, President and CEO, American Forest & Paper Association, 
on behalf of: Electricity Consumers Resource Council and 
American Chemistry Council; The Honorable Sam J. Ervin, 
Commissioner, North Carolina Public Utility Commission; Mr. 
Michehl R. Gent, President and Chief Executive Officer, North 
American Electric Reliability Council; Mr. Gerald A. Norlander, 
Executive Director, Public Utility Law Project of New York, 
Chairman, National Association of State Utility Consumer 
Advocates; Ms. Christine Tezak, Electricity Analyst, Washington 
Research Group, Schwab Capital Markets, LP; Mr. Marty Kanner, 
Coordinator, Consumers for Fair Competition; Ms. Sharon 
Buccino, Senior Attorney, Natural Resources Defense Council; 
Mr. Edward Murphy, General Manager, Downstream, American 
Petroleum Institute; Mr. Bob Slaughter, President, National 
Petrochemical & Refiners Association; Mr. Bill Douglass, CEO, 
Douglass Distributing Company, on behalf of: The National 
Association of Convenience Stores and The Society of 
Independent Gasoline Marketers of America; Mr. A. Blakeman 
Early, Environmental Consultant, American Lung Association, on 
behalf of: Northeast States for Coordinated Air Use Management; 
Mr. Erik Olson, Senior Attorney, Natural Resources Defense 
Council; Mr. Bob Dinneen, President and CEO, Renewable Fuels 
Association; and, Mr. Scott Segal, Counsel, Oxygenated Fuels 
Association.

                        Committee Consideration

    On Wednesday, March 19, 2003, the Subcommittee on Energy 
and Air Quality met in open markup session and approved a 
Committee Print for Full Committee consideration, as amended, 
by a record vote of 21 yeas and 9 nays. On Tuesday, April 1, 
2002, Wednesday, April 2, 2003, and Thursday, April 3, 2003, 
the Full Committee met in open markup session and ordered a 
Committee Print reported to the House, as amended, by a record 
vote of 36 yeas and 17 nays. A request by Mr. Tauzin to allow a 
report to be filed on a bill to be introduced by Mr. Tauzin, 
and that the actions of the Committee be deemed as actions on 
that bill, was agreed to by unanimous consent.

                            Committee Votes

    Clause 3(b) of Rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
following are the recorded votes taken on amendments offered to 
the measure, including the names of those Members voting for 
and against. A motion by Mr. Barton to order the Committee 
Print reported to the House, as amended, was agreed to by a 
record vote of 36 yeas and 17 nays.


                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee oversight and hearings 
made findings that are reflected in this report.

         Statement of General Performance Goals and Objectives

    The goal of the Energy Policy and Conservation Act is to 
enhance energy conservation and increase the supply of various 
energy sources for the American people.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
1644, the Energy Policy Act of 2003, would result in no new or 
increased budget authority, entitlement authority, or tax 
expenditures or revenues.

  Committee Cost Estimate, Congressional Budget Office Estimate, and 
                       Federal Mandates Statement

    The Congressional Budget Office estimate required pursuant 
to clause 3(c)(3) of rule XIII of the Rules of the House of 
Representatives section 402 of the Congressional Budget Act of 
1974, and the estimate of Federal mandates required pursuant to 
section 423 of the Unfunded Mandates Reform Act were requested 
from the Congressional Budget Office, but were not prepared as 
of the date of filing of this report. The Congressional Budget 
Office estimate and accompanying materials will be contained in 
a supplemental report.

                      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 3(d)(1) of rule XIII 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


                      TITLE I--ENERGY CONSERVATION


         Subtitle A--Federal Leadership in Energy Conservation


Section 1001. Energy and water saving measures in Congressional 
        buildings

    Section 1001 directs the Architect of the Capitol to 
develop a plan for Congressional buildings to comply with 
energy efficiency standards applicable to other Federal 
buildings. This section also requires the Architect to submit 
an annual report to Congress on energy conservation programs 
being implemented and to commission a study of Capitol Complex 
energy infrastructure to identify opportunities for energy 
efficiency gains and increased use of unconventional and 
renewable energy resources. Authorizes $2,000,000 to be 
appropriated to carry out the section.

Section 1002. Energy management requirements

    Section 1002 amends current law, which requires federal 
agencies to consume 20 percent less energy per square foot in 
federal buildings in FY 2000 than in FY 1985, by requiring a 20 
percent reduction in energy use from year 2001 levels by the 
year 2013. Energy performance requirements for 2014 to 2023 are 
to be recommended by the Secretary before 2013. The section 
further provides for exclusions from these requirements under 
specified conditions and directs the Secretary to issue 
guidelines that establish criteria for excluding buildings from 
these requirements. In addition, section 1002 authorizes 
agencies to retain funds appropriated for energy expenditures 
that are not spent because of energy savings in agency 
buildings and to use those retained funds for energy efficiency 
and unconventional and renewable energy projects.

Section 1003. Federal building performance standards

    Section 1003 requires metering and sub-metering of Federal 
buildings by October 1, 2010 using advanced meters to the 
maximum extent practicable. The Secretary of Energy, in 
consultation with the Defense Department and the General 
Services Administration (GSA), shall establish guidelines for 
the implementation of this requirement. The guidelines shall 
consider the costs and benefits of metering and shall establish 
a prioritized schedule for the types and locations of buildings 
to be metered. The guidelines may also establish exclusions 
from the requirement where energy consumption is de minimis.

Section 1004. Federal building performance standards

    Section 1004 directs the Secretary of Energy to establish 
new energy efficiency performance standards for new federal 
buildings. The standards shall require that new buildings 
achieve energy consumption levels at least 30 percent below 
specified building codes and incorporate sustainable design 
principles.

Section 1005. Procurement of energy efficient products

    Section 1005 directs federal agencies to purchase, with 
specified exceptions, energy-consuming products that meet the 
energy efficiency criteria of the Energy Star program or have 
been designated as energy efficient by the Federal Energy 
Management Program (FEMP). This section also directs the 
Secretary of Energy to designate a standard for certain premium 
efficient electric motors after considering the recommendations 
of associated electric motor manufacturers and energy 
efficiency groups. In purchasing energy efficient products 
under this section, agencies are directed to select motors 
designated by the Secretary as meeting certain criteria.

Section 1006. Energy savings performance contracts

    Section 1006 makes the authority for federal agencies to 
enter into energy savings performance contracts (ESPCs), which 
sunsets at the end of FY 2003, permanent by repealing the 
sunset provision. In addition, this section provides that when 
an energy savings performance contract is used to replace one 
or more existing buildings or facilities, the benefits of the 
contract may include the reduced operations and maintenance 
costs of the replacement building compared to the replaced 
buildings or facilities. Section 1006 also: (1) expands the 
definition of energy savings (in the context of an ESPC) to 
include a reduction in the cost of water; (2) permits the use 
of ESPCs for replacement facilities; and, (3) defines ``energy 
or water conservation measure.'' Section 1006 provides for a 
report to Congress identifying obstacles that prevent the full 
utilization of the ESPC program and opportunities to increase 
program flexibility and effectiveness.

Section 1007. Voluntary commitments to reduce industrial energy 
        intensity

    Section 1007 provides for voluntary commitments to improve 
industrial efficiency. This section authorizes the Secretary of 
Energy to enter into agreements with industry to improve energy 
intensity by a minimum of 2.5 percent per year for the years 
2004 through 2014. Industry participants would be eligible for 
grants or technical assistance and would receive public 
recognition of their achievements. The Secretary shall also 
submit to Congress two reports evaluating the success of the 
program, the first before June 30, 2010 and the second before 
June 30, 2014.

Section 1008. Federal agency participation in demand reduction programs

    Section 1008 encourages Federal agencies to participate in 
state or regional electricity demand side reduction programs.

Section 1009. Advanced building efficiency testbed

    Section 1009 directs the Secretary of Energy to establish 
an Advanced Building Efficiency Testbed program for energy 
efficient buildings research. A qualifying university in 
partnership with other qualifying universities and entities 
shall lead the program. Funding is authorized at $6 million for 
each of fiscal years 2004 through 2006.

Section 1010. Increased use of recovered mineral component in federally 
        funded projects involving procurement of cement or concrete

    Section 1010 amends the Solid Waste Disposal Act (SWDA) to 
provide for increased use of recovered mineral component in 
federally funded projects involving procurement of cement or 
concrete. It directs the Administrator of the Environmental 
Protection Agency, in cooperation with the Secretary of 
Transportation and the Secretary of Energy, to conduct a 
related implementation study and to submit a report on the 
study to specified committees of the Congress.

            Subtitle B--Energy Assistance and State Programs


Section 1021. LIHEAP and weatherization assistance

    Subsection (a) of section 1021 authorizes $3.4 billion for 
LIHEAP for each of fiscal years 2004 through 2006 (existing 
authorization: $2.0 billion). For weatherization assistance (to 
aid low-income families in improving energy efficiency of their 
homes), subsection (b) authorizes $325 million for fiscal year 
2004, $400 million for 2005, and $500 million for 2006.
    Subsection (c) directs the Secretary of Health and Human 
Services to report to Congress on how the LIHEAP program could 
be used more effectively to prevent loss of life. The Low 
Income Energy Assistance Act of 1981 places a special emphasis 
on assisting households with the ``highest home energy needs,'' 
defined to include consideration of the needs of ``vulnerable 
populations, including very young children, individuals with 
disabilities, and frail older individuals.'' (Section 2603(4)). 
Consistent with this statutory emphasis, the Committee expects 
that the report will assist the Secretary in developing a more 
accurate formula allocation methodology to protect such 
vulnerable members of society. In focusing on loss of life as a 
measure for equitable allocation of LIHEAP funds, the report 
shall include examination of how an allocation formula 
methodology can utilize (1) the latest, best-available 
statistical data and model currently available; (2) a simple, 
easy-to-understand, science-based mechanism using estimates of 
State expenditures for Btu requirements for low-income 
households for each fuel source contributing to home heating 
and cooling needs; and, (3) thelatest available annually 
updated heating and cooling degree day and fuel price information 
available (for coal, electricity, fuel oil, petroleum gases, and 
natural gas) at the State level. The report shall also include a 
recommendation for the level of funding needed for the LIHEAP program 
to fully protect vulnerable populations in all regions of the country. 
In preparing the report, the Secretary is directed to consult with 
appropriate officials in all 50 States and the District of Columbia.

Section 1022. State energy programs

    Section 1022 authorizes $100 million for each of fiscal 
years 2004 and 2005 and $125 million for fiscal year 2006 for 
state energy programs. Section 1022 provides for revised state 
energy conservation plans and goals.

Section 1023. Energy efficient appliance rebate programs

    Section 1023 directs the Secretary of Energy to allocate 
funds to States with energy efficient appliance rebate programs 
that meet certain standards. $50,000,000 is authorized to be 
appropriated for such programs for each of fiscal years 2004 
through 2008.

Section 1024. Energy efficient public buildings

    Section 1024 authorizes the Secretary of Energy to make 
grants to States to assist local governments, including school 
districts, to improve the energy efficiency and environmental 
quality of public buildings. The grants are primarily intended 
for architectural, design and energy efficiency services that 
will result in new and renovated buildings that achieve energy 
efficiency results that exceed the requirements of the 
International Energy Conservation Code of 2000 or a similar 
state code intended to achieve substantially equivalent 
efficiency levels. Funding for the program is authorized for FY 
2004 through FY 2013, with the qualification that not more than 
30 percent of appropriated funds shall be used for 
administration of the program.

Section 1025. Low income community energy efficiency pilot program

    Section 1025 authorizes the Secretary of Energy to make 
grants to local governments, community development 
organizations, and Indian tribes for energy efficiency, 
renewable energy and distributed energy projects in low-income 
urban and rural communities. This section authorizes 
$20,000,000 for each fiscal year 2004 through 2006.

                 Subtitle C--Energy Efficient Products


Section 1041. Energy Star Program

    Section 1041 authorizes the Energy Star Program, which is a 
program previously established by administrative actions by the 
Department of Energy and the Environmental Protection Agency to 
identify and promote energy efficient products and buildings. 
The section establishes a statutory foundation for continued 
operation of the Energy Star Program and instructs the two 
agencies to further their partnership in promoting and 
designating Energy Star products. This section provides that 
responsibilities under the Energy Star Program, including 
responsibilities for particular product categories, shall be 
allocated consistent with agreements between the agencies, such 
as are currently in place but potentially including amendments 
to such agreements as may be necessary or appropriate to best 
carry out the purposes of the program.

Section 1042. Consumer education on energy efficiency benefits of air 
        conditioning, heating, and ventilation maintenance

    Section 1042 directs the Secretary of Energy to carry out a 
program to educate homeowners and small business owners on the 
energy savings benefits resulting from maintenance of air 
conditioning, heating and ventilating systems by professional 
or licensed contractors. The Secretary is directed to carry out 
the program in cooperation with the Administrator of the 
Environmental Protection Agency (EPA) and other appropriate 
entities including energy efficiency organizations, industry 
trade associations, and industry members. This section also 
directs the Administrator of the Small Business Administration, 
in consultation with the Secretary of Energy and the 
Administrator of EPA to implement a program, building on the 
existing Energy Star for Small Business Program, to assist 
small businesses to become more energy efficient.

Section 1043. Additional definitions

    Section 1043 defines terms used in provisions relating to 
energy conservation standards for the consumer and commercial 
products subject to section 1045 of this bill.

Section 1044. Additional test procedures

    Section 1044 provides for test procedures for consumer and 
commercial products subjected to energy conservation standards 
under section 1045 of this bill.

Section 1045. Energy conservation standards for additional consumer and 
        commercial products

    Section 1045: (1) establishes minimum energy efficiency 
standards for four products (exit signs; torchiere lamps, low-
voltage dry-type transformers, and traffic signals); (2) 
requires Department of Energy rulemakings to develop efficiency 
standards for four products (ceiling fans, vending machines, 
commercial refrigerators and freezers, and unit heaters); (3) 
requires an expedited rulemaking for standby energy use in 
battery chargers and external power supplies; and, (4) requires 
a process to determine whether efficiency standards should be 
established for the standby mode of other appliances.

Section 1046. Energy labeling

    Section 1046 provides for Federal Trade Commission (FTC) 
rulemakings to determine effectiveness of the existing FTC 
labeling program and authorizes the Secretary of Energy or the 
FTC, as appropriate, to establish labels for products newly 
covered by the Department of Energy consumer products energy 
conservation program under the Energy Policy and Conservation 
Act, as amended by this Act.

Section 1047. Study of energy efficiency standards

    Section 1047 requires the Secretary of Energy to contract 
with the National Academy of Sciences to study and report 
within one year on differences in efficiency standards measured 
at the site of energy consumption or at the source of energy 
production.

                         TITLE II--OIL AND GAS


                Subtitle A--Alaska Natural Gas Pipeline


Section 2001. Short title

    Section 2001 establishes the short title as the ``Alaska 
Natural Gas Pipeline Act of 2002.''

Section 2002. Findings and purposes

    Section 2002 sets forth the findings of Congress to be that 
construction of a natural gas pipeline from the Alaskan North 
Slope to United States markets is in natural interest and will 
enhance national energy security.
    This section also sets forth the purposes of this title, 
which are to provide a statutory framework for the expedited 
approval, construction, and initial operation of a pipeline in 
Alaska and to establish a process to promote competition in the 
exploration, development, and production of Alaska natural gas.

Section 2003. Definitions

    Section 2003 sets forth definitions for the various terms 
used in the title.

Section 2004. Issuance of certificate of public convenience and 
        necessity

    Section 2004 provides that the Federal Energy Regulatory 
Commission (FERC) may consider an application for the issuance 
of a certificate of public convenience and necessity for an 
Alaska natural gas pipeline other than the Alaska natural gas 
transportation system established pursuant to the Alaska 
Natural Gas Transportation Act of 1976 (15 U.S.C. 719 et seq.).
    This section also provides that, in considering an 
application for the issuance of a certificate of public 
convenience and necessity, the FERC shall presume a public need 
exists and that there is sufficient downstream capacity to 
transport the natural gas to markets in the United States and 
that any such application shall be expedited.
    In addition, this section places a prohibition on the so-
called northern route.

Section 2005. Environmental reviews

    Section 2005 provides for FERC to be the lead agency for 
compliance with the National Environmental Policy Act of 1969, 
which shall be an expedited process.

Section 2006. Pipeline expansion

    Section 2006 provides that FERC may order an expansion of 
the pipeline capacity if FERC determines that such expansion is 
required by the present and future public convenience and 
necessity.

Section 2007. Federal Coordinator

    Section 2007 establishes the Office of Federal Coordinator 
for Alaska Natural Gas Transportation Projects, whose duties 
shall be to coordinate the expeditious discharge of all 
activities by Federal agencies with respect to the project.

Section 2008. Judicial review

    Section 2008 establishes that the court of original 
jurisdiction for all claims brought regarding this section 
shall be the United States Court of Appeals for the District of 
Columbia Circuit, with discretionary appeal to the Supreme 
Court of the United States.

Section 2009. State jurisdiction over in-State delivery of natural gas

    Section 2009 provides that FERC shall not have jurisdiction 
over natural gas delivered for consumption in the Alaska.

Section 2010. Study of alternative means of construction

    Section 2010 provides that the Secretary of Energy shall 
conduct a study to determine alternative approaches to the 
construction and operation of the project, if no application 
for the issuance of public convenience and necessity is filed 
with 18 months from the date of enactment.

Section 2011. Clarification of ANGTA status and authorities

    Section 2011 clarifies no decision is affected concerning, 
certificate, permit, right-of-way, lease, or other 
authorization issued under the Alaska Natural Gas 
Transportation Act of 1976.

Section 2012. Sense of Congress

    Section 2012 expresses the sense of Congress that the 
project will provide significant economic benefits to the 
United States and Canada. Therefore, Congress urges the 
sponsors to make every effort to use steel that is manufactured 
or produced in North America and to negotiate a project labor 
agreement to expedite construction of the pipeline.

Section 2013. Participation of small business concerns

    Section 2013 expresses the sense of Congress that the 
project will provide significant economic benefits to the 
United States and Canada and urges the sponsors to maximize the 
participation of small business concerns in contracts and 
subcontracts awarded in carrying out the project.

Section 2014. Alaska pipeline construction training program

    Section 2014 provides that the Secretary of Labor may make 
grants to the Alaska Department of Labor and Workforce 
Development to develop a training program for Alaskans so that 
they may acquire the skills necessary to construct and operate 
an Alaska gas pipeline system. This section also authorizes the 
appropriation of $20,000,000 to the Secretary of Labor to carry 
out this section.

                Subtitle B--Strategic Petroleum Reserve


Section 2101. Full capacity of Strategic Petroleum Reserve

    Section 2101 requires that the President fill the Strategic 
Petroleum Reserve to full capacity as soon as practicable, 
doing so in a manner that is cost-effective and minimizes 
impacts on petroleum markets, giving consideration to 
domestically produced petroleum and royalty in kind petroleum.

Section 2102. Strategic Petroleum Reserve expansion

    Section 2102 requires the Secretary of Energy to submit a 
plan to the Congress within 180 days of enactment for the 
expansion of the Strategic Petroleum Reserve to one billion 
barrels, with specific criteria to be considered. This section 
also directs the Secretary of Energy to acquire property and 
complete construction for the expansion the accordance with the 
plan submitted to the Congress. The sum of $1.5 billion is 
authorized to be appropriated.

Section 2103. Permanent authority to operate the Strategic Petroleum 
        Reserve and other energy programs

    Section 2103 permanently authorizes the Strategic Petroleum 
Reserve and the Northeast Home Heating Oil Reserve and makes 
technical amendments.

                    Subtitle D--Hydraulic Fracturing


Section 2201. Hydraulic fracturing

    Section 2201 excludes hydraulic fracturing from the 
definition of underground injection as set forth in the Safe 
Drinking Water Act.

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


Section 2301. Program

    Section 2301 provides for a program to demonstrate 
technologies for the recovery of oil and natural gas reserves 
from reservoirs with certain characteristics.

Section 2302. Eligible reservoirs

    Section 2302 sets forth the reservoir characteristics, any 
one of which are required for the program. The characteristics 
are complex geology, low reservoir pressure, or unconventional 
natural gas reservoirs in coalbeds, tight sands, or shales.

Section 2303. Focus areas

    Section 2303 says that the program may focus on areas with 
unique attributes as set forth therein.

Section 2304. Limitation on location of activities

    Section 2304 limits the activities of the program to 
onshore lands in the United States.

Section 2305. Program administration

    Section 2305 establishes the roles of the Secretary of 
Energy and the Program Consortium. The Secretary shall contract 
with the consortium to manage awards and make recommendations 
to the Secretary, distribute funds, and carry out other 
activities assigned by the Secretary.
    This section also provides for the selection of the 
consortium and provides for procedures to be used to prevent 
conflicts of interest. Applicants for recognition must disclose 
members of the consortium, fully describe the structure of the 
consortium, and describe how the activities would be 
implemented. This section sets forth requirements foran annual 
plan, to be prepared by the Secretary after soliciting written 
recommendations from the consortium.
    Additionally, this section sets forth the parameters for 
award proposals, establishes a consortium fee, and requires an 
annual audit.

Section 2306. Advisory Committee

    Section 2306 establishes an advisory committee composed of 
members appointed by the Secretary of Energy. The advisory 
committee shall advise the Secretary on the development and 
implementation of activities, but not on funding awards for 
specific projects.

Section 2307. Limits on participation

    Section 2307 limits award eligibility if the entity's 
participation is in the economic interest of the United States, 
the entity in a United States-owned entity with production 
levels of less than 1,000 barrels per day of oil equivalent, 
and the entity has demonstrated that non-governmental third 
party sources of financing are not available for the proposed 
project.

Section 2308. Payments to Federal Government

    Section 2308 provides that the Federal government shall 
receive 95 percent of all revenues derived from the increased 
incremental production attributable to participation in the 
program. After repayment, the Federal government's share drops 
to 5 percent.

Section 2309. Authorization of appropriations

    Section 2309 authorizes to be appropriated the sum of $100 
million, to remain until expended.

Section 2310. Public availability of project results and methodologies

    Section 2310 requires the Secretary of Energy to make 
public the results and methodologies used by an award 
recipient.

Section 2311. Sunset

    Section 2311 provides for the termination of this subtitle 
on September 30, 2010.

Section 2312. Definitions

    Section 2312 provides certain definitions.

                       Subtitle E--Miscellaneous


Section 2401. Appeals relating to pipeline construction projects

    Section 2401 provides that any Federal administrative 
agency proceeding that is an appeal or review of Federal 
authority for an interstate natural gas pipeline construction 
project, shall use the record developed by FERC.

Section 2402. Natural gas market data transparency

    Section 2402 requires FERC to issue rules authorizing or 
establishing an electronic information system so that timely 
access to information to facilitate price transparency and 
participation in natural gas markets will be made available to 
the public. Violations of the rules issued pursuant to this 
section are subject to civil penalties of not more than 
$1,000,000 for each day that a violation continues.

Section 2403. Oil and gas exploration and production defined

    Section 2403, in the context of the Federal Water Pollution 
Control Act, defines the term ``oil and gas exploration and 
production'' to include all field operations necessary, for 
exploration and production, including activities necessary to 
prepare a site for drilling.

                  TITLE III--HYDROELECTRIC RELICENSING


                   Subtitle A--Alternative Conditions


Section 3001. Alternative conditions and fishways

    Section 3001 amends the Federal Power Act to give licensees 
the right to an agency trial-type hearing of any disputed 
issues of material fact whenever the Secretary of the resource 
agency determines a condition or fishway is required for a 
hydroelectric license.
    This section also adds a new section 33 to the Federal 
Power Act, requiring the relevant Secretary to accept 
alternatives to conditions or fishways proposed by a licensee, 
if such alternatives meet the statutory standards. The section 
requires the Secretary to provide a written statement for the 
record containing specific information with respect to each 
condition, fishway, or alternative. The section allows the 
Commission to refer disputes regarding conditions, fishways, 
and alternatives to the Commission's Dispute Resolution 
Service, which may then issue non-binding advisory opinions.

                   Subtitle A--Additional Hydropower


Section 3201. Hydroelectric production incentives

    Section 3201 authorizes the Secretary of Energy to make 
limited incentive payments to certain qualified hydroelectric 
facilities for the addition of turbines or other electricity 
generating devices to existing dams or conduits for a period of 
ten years. The section authorizes $10,000,000 for each of 
fiscal years 2004 through 2013.

Section 3202. Hydroelectric efficiency improvement

    Section 3202 authorizes the Secretary of Energy to make 
limited incentive payments to owners or operators of existing 
hydroelectric facilities to improve the efficiency of such 
facilities by at least 3 percent.

Section 3203. Small hydroelectric power projects

    Section 3203 amends the Public Utility Regulatory Policies 
Act of 1978 to make new small hydroelectric power projects 
eligible for low-interest Federal loans and other programs.

Section 3204. Increased hydroelectric generation at existing Federal 
        facilities

    Section 3204 directs the Secretary of Energy, in 
consultation with the Secretaries of Interior and the Army, to 
conduct studies of opportunities to increase hydropower 
production and operational efficiency at Federal dams.

                       TITLE IV--NUCLEAR MATTERS


               Subtitle A--Price-Anderson Act Amendments


Section 4001. Short title

    Section 4001 provides the short title of the legislation, 
the ``Price-Anderson Reauthorization Act of 2003.''

Section 4002. Extension of indemnification authority

    Section 4002 authorizes an extension of Price-Anderson 
indemnification authority, to August 1, 2017, for Nuclear 
Regulatory Commission (NRC) licensees, Department of Energy 
(DOE) contractors, and DOE nonprofit educational institutions.

Section 4003. Maximum assessment

    The 1988 Price Anderson Amendments Act established an 
inflation adjustment for the $63 million standard deferred 
premium. However, there was no inflation adjustment requirement 
for the annual maximum premium assessment, which was set at $10 
million. Over time, the effect of not adjusting the $10 million 
maximum premium assessment for inflation results in a 
substantially longer payout period in the event of a nuclear 
accident. The last inflation adjustment on the standard 
deferred premium was in 1998, which adjusted it to $88 million. 
Section 4003 adjusts for inflation to July 1, 2001, both the 
standard deferred premium to $94 million, and the maximum 
premium assessment to $15 million, based on the Consumer Price 
Index for all urban consumers (CPI-U). Both will be adjusted 
for inflation from the July 1, 2001 baseline not less than once 
every five years.

Section 4004. Department of Energy liability limit

    Section 4004 sets the limitation on aggregate public 
liability for DOE contractors for a single nuclear incident. 
Under current law, DOE contractor indemnity and liability 
provisions are linked to the amount of protection required of 
nuclear power reactor licensees by setting the amount of DOE 
contractor indemnity to the amount of protection which is 
available to nuclear power reactor licensees. This section de-
links the DOE contractor provisions for liability and 
indemnification from the NRC licensee provisions, and 
establishes the amount of indemnification of DOE contractors at 
$10 billion, subject to adjustment for inflation, for all 
persons indemnified in connection with the contract, and for 
each nuclear incident.

Section 4005. Incidents outside the United States

    Section 4005 increases the amount of indemnification and 
liability limit for incidents outside of the United States from 
$100,000,000 to $500,000,000 for DOE contractors.

Section 4006. Reports

    Section 4006 requires the NRC and DOE, by August 1, 2013, 
to submit detailed reports to Congress concerning the Price-
Anderson Act and related matters, such as the availability of 
private insurance.

Section 4007. Inflation adjustment

    Section 4007 takes the new July 1, 2001 baseline 
established in section 4003 for the $94 million standard 
deferred premium and the $15 million maximum annual assessment, 
and requires an inflation adjustment for both not less than 
every five years following July 1, 2001.

Section 4008. Price-Anderson treatment of modular reactors

    Section 4008 would allow a combination of two or more 
modular reactors each with a rated capacity between 100 and 300 
megawatts, and built at the same site, to be considered one 
facility for purposes of indemnification under section 170. 
Thus, a combination of such reactors would be assessed only one 
standard deferred premium, with a cap on the combined rated 
capacity of 1,300 megawatts. For example, a site with ten 110 
megawatt modular reactors, having a combined rated capacity of 
1,100 megawatts, would be considered one facility under section 
170. A site with five 300 megawatt reactors, with a combined 
rated capacity of 1,500 megawatts, would be considered two 
facilities. This new definition of ``facility'' in this section 
applies only for purposes of section 170 financial protection 
requirements.
    This section is intended to encourage the development of a 
new generation of smaller or ``modular'' reactors. Several 
companies are developing modular reactors that may be deployed 
in groups of as manyas ten, and operated from one central 
control room. The size of known modular reactors designs currently 
under development generally is expected to be less than 300 megawatts. 
General Atomics is developing a gas turbine modular helium reactor that 
will operate in the range of 250 to 300 megawatts.

Section 4009. Applicability

    Section 4009 ensures that the amendments made by sections 
4003, 4004, and 4005 do not apply to a nuclear incident that 
occurs before the date of enactment of the Act.

Section 4010. Prohibition on assumption by United States Government of 
        liability for certain foreign accidents

    Section 4010 prevents any instrumentality of the United 
States Government from entering into any arrangement that would 
impose liability on any instrumentality of the United States 
Government for nuclear accidents that occur in any country 
identified by the Secretary of State as a sponsor of terrorist 
activities, including countries known to have repeatedly 
provided support for acts of international terrorism.

Section 4011. Secure transfer of nuclear materials

    Section 4011 directs the Nuclear Regulatory Commission 
(NRC) to establish a system to ensure that: (1) vehicles 
transporting certain radioactive materials carry a manifest 
describing the type and amount of materials being transported; 
(2) individuals driving or traveling with such vehicles are 
subject to background checks; and, (3) vehicles transporting 
such materials must travel to a NRC licensed facility, an 
appropriate Federal facility, or a country with whom the United 
States has an agreement for cooperation under section 123 of 
the Atomic Energy Act. The effective date of the system is 
delayed until the NRC, not later than one year of enactment, 
issues regulations identifying, consistent with the protection 
of public health and safety and the common defense and 
security, radioactive materials that are appropriate exceptions 
to the system.
    The Committee intends that the rulemaking in this section 
apply only to the potential for a particular material to be 
used in a terrorist attack or other destructive act. 
Accordingly, the Commission need not include within the scope 
of its rulemaking materials with small quantities of 
radioactivity that would have little or no impact on public 
health or safety. The NRC should focus particular attention on 
identifying radiopharmaceuticals and other medical materials 
for appropriate exemption from the new requirements, to assure 
the uninterrupted availability of these materials to patients 
that need them. Of course, the regulations promulgated pursuant 
to section 4011 are not intended to alter any other applicable 
rules relating to the proper use, handling, or disposal of any 
nuclear materials.

Section 4012. Nuclear facility threats

    Section 4012 requires the President to conduct a study to 
identify the types of threats that pose an appreciable risk to 
the security of the various classes of NRC-licensed facilities. 
In preparing the study, the President is to consult with the 
NRC and other governmental and nongovernmental entities. The 
study must consider: the events of September 11, 2001; 
physical, cyber, biochemical, and other terrorist threats; the 
potential for attack on facilities and spent fuel shipments by 
multiple coordinated teams of a large number of individuals; 
the potential for assistance in an attack from several 
employees at the facility; the potential for suicide attacks; 
the potential for water-based and air-based threats; the 
potential use of explosive devices of considerable size and 
other modern weaponry, the potential for attacks by persons 
with a sophisticated knowledge of facility operations; and, the 
potential for fires, especially fires of long duration.
    After the study is completed, and within 180 days after 
enactment, the President is to submit a report to Congress and 
the NRC. The Report must summarize the types of threats 
identified and must classify each type of threat as either 
involving attacks and destructive acts, including sabotage, 
directed against the facility by an enemy of the United States 
or otherwise falling under the responsibilities of the Federal 
Government, or involving the type of risks that the NRC 
licensees should be responsible for guarding against. Following 
submission of the report, the President is required to transmit 
a report to Congress within 90 days on actions taken, or to be 
taken, to address the types of threats identified in the 
President's report as involving attacks and destructive acts, 
including sabotage, directed against the facility by an enemy 
of the United States or otherwise falling under the 
responsibilities of the Federal Government. The NRC is required 
to promulgate regulations, including changes to the design 
basis threat, to ensure that licensees address the threats 
identified in the President's report as involving the type of 
risks that the NRC licensees should be responsible for guarding 
against. The NRC must promulgate such regulations not later 
than 270 days after the President transmits his initial report 
to the Commission and Congress.
    Section 4012(e) is intended to provide statutory direction 
to the Commission in implementing an operational safeguards 
response evaluation program. In doing so, the Committee is very 
concerned that the Commission conducts a rigorous program that 
will ensure accurate measurements of a facility's ability to 
defeat design basis threats. The Committee is deeply troubled 
about reports that terrorists may target domestic nuclear 
facilities, and envisions a fully developed program as being 
the first line of defense against any such attacks. To address 
these concerns, the language of section 4012(e) directs the 
Commission to take a dominant role in the implementation of 
force-on-force exercises. The Commission controls the three 
critical aspects for carrying out tests of operational 
safeguards: it must either design or approve the design for 
each force-on-force exercise; it must physically observe the 
exercises; and, it is the final arbiter on the results of the 
exercises. The Commission should not serve as a rubber stamp at 
any step of the way. For instance, to the extent a licensee has 
devised all or any part of an exercise design, the NRC should 
scrutinize the design rigorously to ensure that it willprovide 
the information necessary to determine whether a licensee can defeat 
design basis threats. The Committee contemplates, in particular, that 
any design approval process would be an iterative, collaborative one, 
reflecting the work of both a licensee and Commission staff in 
composing a plan appropriate to the facility involved.

Section 4013. Unreasonable risk consultation

    Section 4013 requires the NRC to consult with the Assistant 
to the President for Homeland Security (or any successor 
official) concerning whether the location and design of a 
proposed utilization facility provides for adequate protection 
of public health and safety if subject to a terrorist attack. 
The consultation is required before NRC enters into an 
agreement of indemnification with a utilization facility under 
section 170. This section also requires the NRC to consult with 
the Secretary of Homeland Security, or his designee, regarding 
the emergency evacuation plan for sensitive nuclear facilities 
required to maintain such plans before issuing an initial 
license or license renewal.

Section 4014. Financial accountability

    Section 4014 authorizes the Attorney General to bring an 
action to recover from a DOE contractor, subcontractor, or 
supplies amounts paid by the Federal government under a section 
170 indemnity agreement for public liability resulting from 
conduct which constitutes intentional misconduct of any 
corporate officer, manager, or superintendent of the DOE 
contractor, subcontractor, or supplier. The Attorney General, 
however, may not recover an amount exceeding the amount of 
profit derived by the defendant under the contract. DOE cannot 
reimburse the contractor of the amount recovered. This 
provision does not apply to any nonprofit entity conducting 
activities under the DOE contract. DOE is required to define 
the terms `profit' and `nonprofit entity' in a rulemaking to be 
completed within 180 days after enactment.

Section 4015. Civil penalties

    Section 4015 ends the automatic remission of civil 
penalties for nonprofit institutions listed in section 234A(d). 
This section also ends the Secretary's authority to determine 
whether nonprofit educational institutions should receive 
automatic remission of any civil penalty issued under section 
234A. It is the intent of this section to make all of DOE's 
nonprofit contractors, subcontractors, and suppliers subject to 
civil penalties for nuclear safety violations under 234A. Civil 
penalties are limited to the amount of the discretionary fee 
paid to the contractor under the contract under which the 
nuclear safety violation occurs. The term `discretionary fee' 
refers to that portion of the contract fee which is paid, or 
not, at the discretion of the DOE contracting officer based on 
the contractor's performance.

                   Subtitle B--Miscellaneous Matters


Section 4021. Licenses

    Section 4021 provides that the initial period of a combined 
construction and operating license for a production or 
utilization facility, as authorized by the Energy Policy Act of 
1992 (P.L. 102-486, 106 Stat. 2776), may not exceed 40 years 
from the date on which the NRC finds that the acceptance 
criteria for such license required under section 185(b) of the 
Atomic Energy Act of 1954 (42 U.S.C. 2235) have been met. The 
intent of this section is to align the beginning of the 
licensing period with the beginning of the facility's 
operation.

Section 4022. Nuclear Regulatory Commission meetings

    Section 4022 is intended to make available to the public, 
upon request, a transcript of discussions involving a quorum of 
NRC Commissioners who gather to discuss official Commission 
business. This provision requires that NRC make a recording of 
such meetings, and provide notice to the public within 15 days 
after such meetings. NRC is required to promptly make a 
transcript available to the public, upon request, to the extent 
that public disclosure of the transcript is not subject to an 
exemption or prohibition under applicable law. A similar 
provision considered and reported by the Committee in H.R. 2531 
in the 106th Congress would have codified the Commission's 1977 
rule implementing the Sunshine Act that required the Commission 
open to the public any meeting of a quorum of the Commissioners 
involving official Commission business. This provision does not 
alter the Commission's new rule, implemented in 1999, which 
allows for certain discussions involving a quorum of 
Commissioners to be conducted outside of the Sunshine Act's 
definition of ``meeting.'' Although this section does not 
impose a specific time limit for response by the Commission, 
the NRC should develop a process for the prompt response to any 
public request for a transcript.

Section 4023. NRC training program

    Section 4023 establishes a training and fellowship program 
to address shortages of individuals with critical nuclear 
safety regulatory skills. For Fiscal Years 2004 through 2007, 
$1 million per year is authorized to be appropriated to carry 
out this program.

Section 4024. Cost recovery from Government agencies

    Section 4024 authorizes the Commission to assess and 
collect fees from other Federal agencies in return for services 
rendered by the NRC, rather than recovering these costs through 
the annual fees assessed to all NRC licensees. Existing 
authority in section 161w of the Atomic Energy Act (42 U.S.C. 
2235) provides for cost recovery only in limited situations. 
This section authorizes full cost recovery for the entire range 
of services that the NRC provides to other Federal agencies. 
Thereplacement of section 483a with section 9701 is a 
correction to the proper United State Code reference.

Section 4025. Elimination of pension offset

    Section 4025 allows retired NRC employees with critical 
skills to receive full pay from NRC for any consulting 
services. Currently, retired NRC employees are reluctant to 
work for the NRC because the pay for such activities is reduced 
by the amount received from the Federal government in the form 
of pension payments. The consulting services of retired 
employees is essential as NRC trains the next generation of 
nuclear regulators.

Section 4026. Carrying of firearms by licensee employees

    Section 4026 authorizes guards at certain facilities 
licensed or certified by the Commission to carry and use 
weapons where necessary to protect the facilities or prevent 
the theft of special nuclear materials. This section also 
permits guards so authorized to carry firearms to make arrests 
without warrant under certain specified circumstances. The 
language also prevents guards at such facilities from being 
prosecuted under state law for the discharge of firearms in the 
performance of official duties.
    Current statute permits such authority only for DOE 
security forces, although several NRC-licensed or certified 
facilities also handle and store special nuclear materials. 
Under current law, guards at these facilities are constrained 
by the restrictions of state law, which may allow the use of 
weapons by guards only to protect their own lives or the lives 
of others, and not to prevent the theft or sabotage of 
radioactive materials. The section extends the same authorities 
and protections granted to DOE guards to guards at certain 
sites licensed or certified by the NRC.
    This provision could be a valuable asset in protecting 
national security assets which could be subject to theft or 
sabotage. The Committee expects that the NRC, in issuing its 
regulations to implement this authority, will adopt regulations 
similar to those promulgated by the Department of Energy, and 
will limit its application to employees at those facilities 
engaged in the protection of property of significance to the 
common defense and security of the United States or being 
transported to and from such facilities. Such facilities 
include, but are not limited to, production facilities licensed 
by the Commission which utilize special nuclear materials, or 
gaseous diffusion plants, at which guards must protect 
significant quantities of radioactive materials and the gaseous 
diffusion technology utilized to enrich uranium.

Section 4027. Unauthorized introduction of dangerous weapons

    Section 4027 expands current law authorizing the NRC to 
regulate the introduction of dangerous weapons onto its own 
facilities to include facilities licensed or certified by the 
Commission. This change ensures that the full range of 
facilities regulated by the NRC are subject to the statutory 
provisions prohibiting the introduction of unauthorized weapons 
or other dangerous instruments, providing an additional measure 
of security for materials which could be subject to theft or 
sabotage.

Section 4028. Sabotage of nuclear facilities or fuel

    Section 4028 expands current law prohibiting the sabotage 
or attempted sabotage of nuclear facilities to include nuclear 
waste treatment and disposal facilities and nuclear fuel 
fabrication facilities. This section also extends Federal 
criminal sanctions to the sabotage or attempted sabotage of 
NRC-licensed or certified facilities during the construction 
phase when public health and safety may be affected during 
subsequent facility operation. These changes ensure that the 
full range of NRC-licensed or certified facilities are covered 
under the statute's provisions. This section also establishes a 
fine of up to $1,000,000 for any person who intentionally and 
willfully destroys or causes damage to nuclear facilities or 
nuclear fuel, and a prison term up to life in prison without 
parole for the same offense.

Section 4029. Cooperative research and development and special 
        demonstration projects for the uranium mining industry

    Section 4029 authorizes $10,000,000 per year for three 
years beginning in 2004, for cooperative, cost-shared, 
agreements between DOE and domestic uranium producers to 
develop in site leaching mining technologies, and low cost 
environmental restoration technologies. The funding is also 
provided for competitively selected demonstration projects with 
domestic uranium producers for enhanced production, restoration 
of well fields, and decommissioning and decontamination 
activities. This provision applies to only those domestic 
uranium producers that have engaged in active production since 
July 30, 1998, in Colorado, Nebraska, Texas, Utah, or Wyoming.

Section 4030. Uranium sales

    Section 14030 authorizes DOE to sell or transfer its 
uranium inventories, in any form owned by DOE, in amounts not 
to exceed 3 million pounds in fiscal years 2004 through 2009; 5 
million pounds in fiscal year 2010 or 2011; 7 million pounds in 
fiscal year 2012; and 10 million pounds in fiscal year 2013 or 
thereafter. This section also authorizes DOE to transfer up to 
9,550 metric tons of uranium to the United States Enrichment 
Corporation (USEC). The section also authorizes DOE to 
terminate, waive, or modify its June 17, 2002 Agreement with 
USEC.

Section 4031. Medical isotope production

    Section 4031 sets out conditions under which the NRC can 
license the export of highly enriched uranium used in foreign 
reactors for medical isotope production. NRC is required to 
review the adequacy of physical security of the materials in 
transport, and impose additional security requirements if 
necessary.

Section 4032. Highly enriched uranium diversion threat report

    Section 4032 requires the Secretary of Energy to provide a 
report with recommendations to Congress on reducing the threat 
of diversion of highly enriched uranium within 6 months.

Section 4033. Whistleblower protection

    Section 4033 expands the definition of employer under 
section 211(a)(2) of the Energy Reorganization Act (ERA) to 
include all DOE and NRC Federal employees, and all contractor 
and subcontractor employees of DOE and NRC. Any such employees 
that experience an act of discrimination related to activities 
covered under 211(a)(1) of the ERA may file a complaint with 
the Secretary of Labor. This section also provides 
whistleblowers with the opportunity to bring the complaint 
directly to Federal district court if the Secretary of Labor 
has failed to issue a final order within 180 days from the date 
the complaint is filed. This is necessary to alleviate the 
extensive delays that have frustrated the purpose of 
whistleblower statutes. It is intended that this provision 
would cover acts of retaliation regardless of whether in whole 
or in part the source of retaliation comes from a government or 
contractor and subcontractor.

                      TITLE V--VEHICLES AND FUELS


                Subtitle A--Energy Policy Act Amendments


Section 5011. Credit for substantial contribution toward noncovered 
        fleets

    Section 5011 provides credits under the Energy Policy Act 
of 1992 (EPACT) (42 U.S.C. 13258) for substantial contribution 
toward purchase and use of dedicated alternative fuel vehicles 
or neighborhood electric vehicles. ``Substantial contribution'' 
means not less than $154,000 in case or in kind services. The 
Secretary of Energy must allocate two credits or medium or 
heavy duty vehicles, and if requested by the fleet or covered 
person, such credits may use such credits for the year the 
alternative fuel vehicle is acquired.

Section 5012. Credit for alternative fuel infrastructure

    Section 5012 provides EPACT credit for investment in 
alternative fuel infrastructure. The Secretary of Energy shall 
allocate one EPACT credit to a fleet or covered person for an 
investment of $25,000 in case or in kind services. One credit 
equals the acquisition of one alternative fueled vehicle under 
EPACT.

Section 5013. Alternative fueled vehicle report

    Section 5013 requires the Secretary of Energy to complete 
an alternative fueled vehicle study to look at the effect EPACT 
has had on the development of alternative fueled vehicle 
technology, the availability in the market, the cost, and the 
availability, cost and use of alternative fuels. The report 
must include legislative recommendations.

Section 5014. Allocation of incremental costs

    Section 5014 amends the EPACT to require the General 
Services Administration to allocate the incremental costs of 
the alternative fuel vehicles across the entire fleet of 
vehicles in order to incentivize the purchase of new 
alternative fueled vehicles in the federal fleet.

            Subtitle B--FreedomCAR and Hydrogen Fuel Program


Section 5021. Short title

    Section 5021 provides the short title of the ``FreedomCAR 
and Hydrogen Fuel Act of 2003.''

Section 5022. Findings, purpose, and definitions

    Section 5022 includes the findings, purposes and 
definitions.

Section 5023. Plan; report

    Section 5023(a) requires the Secretary of Energy to work 
with other federal agencies to prepare a comprehensive 
interagency coordination plan for activities under the 
subtitle. This plan may be provided as part of the President's 
annual budget submission. Section 5023(b) requires the 
Secretary of Energy to submit a report within one year of 
enactment, and biennially thereafter, on the status of the 
programs under this subtitle.

Section 5024. Public-private partnership

    Section 5024 requires the Secretary of Energy to work with 
the private sector to conduct a program to facilitate the 
production and conservation of energy and the deployment of 
energy infrastructure for hydrogen and advanced vehicle 
technologies. The goals for automakers include; (1) a range of 
300 miles; (2) improved performance and ease of driving; (3) 
meeting all light duty vehicle safety requirements; (4) fuel 
economy that is two and a half times the equivalent fuel 
economy, or about 70 mpg; and, (5) near zero emissions.
    Hydrogen infrastructure goals must include a commitment by 
2015 to enable the deployment by 2020 of infrastructure to 
provide; (1) safe and convenient refueling; (2) widespread 
availability of hydrogen through production, delivery, and 
storage; (3) hydrogen for fuel cells; and, (4) other 
technologies. There are additionally goals for fuel cells, 
advanced vehicle technologies and codes, standards, and safety 
protocols.The Secretary shall require a 20 percent financial 
commitment from the private sector.

Section 5025. Deployment

    Section 5025 requires the Secretary of Energy to work with 
the private sector to conduct a program to facilitate 
deployment of hydrogen vehicles, energy infrastructure, 
advanced vehicle technologies, clean fuels, and codes and 
standards. The goals are the same as those goals outlined in 
section 5024. The Secretary shall require a 50 percent 
financial commitment from the private sector.

Section 5026. Assessment and transfer

    Section 5026 allows the Secretary of Energy to conduct a 
program to transfer technology to the private sector, and 
provides disclosure procedures for protection of research. 
Section 5027 requires the Secretary to put together an 
interagency task force of all relevant agencies and 
administrations that will be responsible for planning and 
information exchange.

Section 5027. Interagency task force

    Section 5027 requires the creation of an interagency task 
force, to be chaired by the Secretary, within 120 days after 
enactment. Other agencies represented on the task force shall 
include: the Office of Science and Technology Policy within the 
Executive Office of the President, Department of 
Transportation, Department of Defense, Department of Commerce, 
Environmental Protection Agency, National Aeronautics and Space 
Administration, and other federal agencies as are necessary. 
The duties of the task force shall include coordinating the 
implementation of the interagency plan and work towards 
deployment of safe, economical and environmentally sound 
infrastructure, fuel cells in government applications, and 
distributed power generation. The task force shall also 
coordinate interagency information sharing to further the 
development of hydrogen technologies.

Section 5028. Advisory Committee

    Section 5028 requires the creation of an ``Advisory 
Committee'' to advise the Secretary of Energy on the programs 
and activities under the subtitle comprised of between 12-25 
members from industry, academia, government, professional 
groups, and any other appropriate organizations. The Secretary 
shall consider but need not adopt the recommendations from the 
Advisory Committee.

Section 5029. Authorization of appropriations

    Section 5029 authorizes appropriations as follows: 
$273,500,000 in fiscal year 2004; $325,000,000 in fiscal year 
2005; $375,000,000 in fiscal year 2006; $400,000,000 in fiscal 
year 2007; and, $425,000,000 in fiscal year 2008.

Section 5030. Fuel cell program at National Parks

    Section 5030 authorizes the Secretary of Energy, in 
cooperation with the Secretary of Interior and the National 
Park Service, to provide matching funds to assist the 
deployment of fuel cells at one or more National Parks. The 
program is intended to complement existing activities taking 
place at Yosemite National Park, and the Secretary must report 
to Congress on activities taken pursuant to this section. The 
section authorizes $2,000,000 per year for years 2004 through 
2010 for such program.

Section 5030A. Advanced power system technology incentive program

    Section 5030A authorizes a new program at the Department of 
Energy to provide incentive payments to qualifying facilities 
using certain advanced technologies. Additional payments may be 
made to such facilities if they produce electricity for 
critical governmental, industrial, or commercial processes as 
determined by the Secretary of Energy in consultation with the 
Secretary of Homeland Security. The section authorizes 
$10,000,000 per year for years 2004 through 2010 for such 
program.

                     Subtitle C--Clean School Buses


Section 5031. Establishment of pilot program

    Section 5031 establishes a pilot program within the 
Department of Energy for awarding grants for the acquisition of 
alternative fuel and ultra-low sulfur school buses. Grants may 
be made to state or local governments or contract entities that 
provide bus service for public schools. Emission standards are 
specified for different types of buses qualified to participate 
in the program.

Section 5032. Fuel cell bus development and demonstration program

    Section 5032 establishes a program for cooperative 
agreements with private sector fuel cell bus developers and 
local governments to facilitate the use of fuel-cell powered 
buses.

Section 5033. Authorization of appropriations

    Section 5033 authorizes $60,000,000 in fiscal year 2004, 
$70,000,000 in fiscal year 2005 and, $80,000,000 in fiscal year 
2006 to carry out the program.

                     Subtitle D--Advanced Vehicles


Section 5041. Definitions

    Section 5041 provides definitions for purposes of the 
subtitle.

Section 5042. Pilot program

    Section 5042 establishes a competitive grant program, 
administered by the Secretary of Energy, to provide not more 
than 10 geographically dispersed project grants to state and 
local governments or metropolitan transportation authorities. 
Grants are made available for the acquisition of alternative 
fueled, fuel cell or hybrid vehicles as well as ultra-low 
sulfur vehicles and necessary infrastructure and operation and 
maintenance expenses. The section provides various selection 
criteria and grant requirements.

Section 5043. Reports to Congress

    Section 5043 requires a report to Congress identifying 
grant recipients, grant applicants and other information from 
the Secretary.

Section 5044. Authorization of appropriations

    Section 5044 authorizes $200 million for this program to 
remain available until expended.

           Subtitle E--Hydrogen Fuel Cell Heavy-Duty Vehicles


Section 5051. Definition

    Section 5051 defines ``advanced vehicle technologies 
program'' for purpose of the subtitle.

Section 5052. Findings

    Section 5052 makes various findings concerning ongoing 
efforts by the Department of Energy and Department of 
Transportation and hydrogen fuel cell heavy-duty vehicles.

Section 5053. Hydrogen fuel cell buses

    Section 5053 authorizes the Secretary of Energy to provide 
funding for 4 demonstration sites to address the reliability of 
heavy-duty fuel cell vehicles, expense of such vehicles and 
infrastructure, safety, training and other issues.

Section 5054. Authorization of appropriations

    Section 5054 authorizes $10,000,000 for each of the fiscal 
years 2004 through 2008.

                       Subtitle F--Miscellaneous


Section 5061. Railroad efficiency

    Section 5061 directs the Secretary of Energy to establish a 
public-private research partnership and a research and test 
center. The goal of this partnership includes developing and 
demonstrating locomotive technologies that increase fuel 
economy, reduce emissions and lower costs. The section 
authorizes $25 million in fiscal year 2004, $30,000,000 in 
fiscal year 2005 and $35 million in fiscal year 2006 for this 
purpose.

Section 5062. Mobile emission reductions trading and crediting

    Section 5062 requires the Environmental Protection Agency 
to report on the Agency's experience with the trading of mobile 
source emission reduction credits and evaluate how resolution 
of issues in mobile trading could be utilized in other 
projects.

Section 5063. Idle reduction technologies

    Section 5063 requires the Secretary of Energy to analyze 
the potential fuel savings resulting from idle reduction 
technologies. The Section also requires the Environmental 
Protection Agency to review its mobile source emission models 
to determine whether such models accurately reflect emissions 
from long-duration idling. The Section additionally permits a 
vehicle weight exemption for on board idle reduction technology 
up to 400 pounds.

Section 5064. Study of aviation fuel conservation and emissions

    Section 5064 requires the Environmental Protection Agency 
and the Federal Aviation Administration to jointly study the 
impact of aircraft emissions on air quality in nonattainment 
areas and to identify ways to promote fuel conservation 
measures for aviation as well as reduced air emissions.

Section 5065. Diesel fueled vehicles

    Section 5065 requires the Secretary of Energy to accelerate 
efforts to improve diesel combustion and after-treatment 
technologies with a goal of compliance with ``Tier 2'' emission 
standards by 2010.

Section 5066. Hybrid vehicles

    Section 5066 permits a state, for the purpose of promoting 
energy conservation, to permit hybrid vehicles with less than 2 
passengers to operate in high occupancy vehicle lanes.

Section 5067. Waivers of alternative fueled vehicle fueling 
        requirements

    Section 5067 amends the Energy Policy and Conservation Act 
to require dual-fueled vehicles to operate on alternative fuels 
unless an agency needs a waiver of such requirement under 
certain specified conditions.

                         TITLE VI--DOE PROGRAMS


Section 6001. Purposes

    Section 6001 sets forth the purposes of Title VI.

Section 6002. Definitions

    Section 6002 defines certain terms used in Title VI.

                     Subtitle A--Energy Efficiency


                PART 1--AUTHORIZATION OF APPROPRIATIONS


Section 6011. Energy efficiency

    Section 6011 authorizes certain sums for Department of 
Energy programs and activities related to energy efficiency and 
conservation, allocates amounts from those sums for certain 
activities, and limits the use of funds authorized under this 
section.

                        PART 2--LIGHTING SYSTEMS


Section 6021. Next generation lighting initiative

    Section 6021 directs the Secretary of Energy to carry out 
an initiative to support activities related to certain advanced 
lighting technologies through establishment of a private 
consortium. The Secretary is authorized to make grants the 
consortium for disbursement to researchers, and to make awards 
to private firms, trade associations, and institutions of 
higher learning. Section 6021 requires the Secretary retain an 
independent, commercial auditor to audit the activities of the 
consortium.

                            PART 3--VEHICLES


Section 6031. Definitions

    Section 6031 defines certain terms used in Part 3.

Section 6032. Establishment of secondary electric vehicle battery use 
        program

    Section 6032 directs the Secretary to establish a program 
for the secondary use of batteries. The program shall include 
demonstration projects, which meet certain criteria and 
conditions.

       Subtitle B--Distributed Energy and Electric Energy Systems


                PART 1--AUTHORIZATION OF APPROPRIATIONS


Section 6201. Distributed energy and electric energy systems

    Section 6201 authorizes certain sums for DOE activities 
related to distributed energy and electric energy systems.

                       PART 2--DISTRIBUTED POWER


Section 6221. Strategy

    Section 6221 directs the Secretary of Energy to develop and 
transmit to Congress within one year a strategy for a 
comprehensive program to develop hybrid distributed power 
systems.

Section 6222. High power density industry program

    Section 6222 directs the Secretary of Energy to establish a 
comprehensive program to improve the energy efficiency of high 
power density facilities.

Section 6223. Micro-cogeneration energy technology

    Section 6223 directs the Secretary of Energy to make 
competitive, merit-based grants to consortia for the 
development of micro-cogeneration energy technologies.

                      PART 3--TRANSMISSION SYSTEMS


Section 6231. Transmission infrastructure systems

    Section 6231 directs the Secretary of Energy to develop a 
program to promote improved reliability and efficiency of 
electrical transmission systems.

                      Subtitle C--Renewable Energy


                PART 1--AUTHORIZATION OF APPROPRIATIONS


Section 6301. Renewable energy

    Section 6301 authorizes certain sums for Department of 
Energy activities related to renewable energy and allocates 
amounts from those sums for certain institutions and projects.

                           PART 2--BIOENERGY


Section 6321. Bioenergy programs

    Section 6321 directs the Secretary of Energy to establish a 
program to facilitate the production of bioenergy.

                       Subtitle D--Nuclear Energy


                PART 1--AUTHORIZATION OF APPROPRIATIONS


Section 6411. Nuclear energy

    Section 6411 authorizes certain sums for Department of 
Energy programs for nuclear energy activities, regulation of 
research and development activities, nuclear regulatory 
research, and nuclear infrastructure support. The section 
allocates amounts from the authorizations for certain programs 
and places limits on the use of funds.

                PART 2--NUCLEAR ENERGY RESEARCH PROGRAMS


Section 6421. Nuclear energy research programs

    Section 6421 authorizes the Secretary of Energy to carry 
out the nuclear energy research initiative, the nuclear energy 
plant optimization program, the nuclear power 2010 program, the 
generation IV nuclear energy systems initiative, a reactor 
production of hydrogen program, and nuclear infrastructure 
support.

                    PART 3--ADVANCED FUEL RECYCLING


Section 6431. Advanced fuel recycling program

    Section 6431 authorizes the Secretary of Energy to conduct 
an advanced fuel recycling technology research and development 
program to evaluate proliferation-resistant fuel recycling and 
transmutation technologies which minimize environmental or 
public health and safety impacts.

                      PART 4--UNIVERSITY PROGRAMS


Section 6441. University nuclear science and engineering support

    Section 6441 authorizes the Secretary of Energy to carry 
out a university nuclear science and engineering support 
program to invest in human resources and infrastructure in the 
nuclear science and engineering and related fields (including 
health physics and nuclear and radiochemistry), consistent with 
departmental missions related to civilian nuclear research and 
development.

                       Subtitle E--Fossil Energy


                PART 1--AUTHORIZATION OF APPROPRIATIONS


Section 6501. Fossil energy

    Section 6501 authorizes certain sums for Department of 
Energy activities related to fossil energy.

   PART 2--ULTRA-DEEPWATER AND UNCONVENTIONAL NATURAL GAS AND OTHER 
                          PETROLEUM RESOURCES


Section 6521. Program authority

    Section 6521 requires the Secretary of Energy to carry out 
a program for ultra-deepwater and unconventional natural gas 
and other petroleum resource exploration and production, 
including safe operations and environmental mitigation. This 
section sets forth the program elements, as well as the 
limitation on locations of field activities. Additionally, this 
section requires participation of the National Energy 
Technology Laboratory and requires consultation with the 
Secretary of the Interior on a regular basis.

Section 6522. Ultra-deepwater program

    Section 6522 requires the Secretary of Energy to carry out 
the activities set forth in this part to maximize the value of 
the ultra-deepwater natural gas and other petroleum resources 
through cost reductions and increased efficiencies, while 
improving safety and minimizing environmental impacts. The 
Secretary shall be responsible for the program, but shall 
contract with a consortium to manage awards, make 
recommendations to the Secretary for project solicitations, and 
the disbursement of funds. The authority of the Secretary to 
assign activities to the consortium is limited to that 
specifically authorized. This section also provides for the 
selection of the consortium and provides for procedures to be 
used to prevent conflicts of interest. Applicants for 
recognition must disclose members of the consortium, fully 
describe the structure of the consortium, and describe how the 
activities would be implemented.
    This section sets forth requirements for an annual plan, to 
be prepared by the Secretary after soliciting written 
recommendations from the consortium. Additionally, this section 
sets forth the parameters for award proposals, establishes a 
consortium fee, and requires an annual audit.

Section 6523. Unconventional natural gas and other petroleum resources 
        program

    Section 6523 requires the Secretary to carry out activities 
set forth in this part to maximize the value of onshore 
unconventional natural gas and other petroleum resources by 
increasing supply, increasing cost reductions and efficiencies, 
while improving safety and minimizing environmental impacts. 
Additionally, this section sets forth the parameters for award 
proposals, requires an annual audit, and sets forth the focus 
areas that may be considered for this section. This section 
further requires the Secretary of the Interior, through the 
United States Geological Survey, where appropriate, to carry 
out programs to complement the programs established under this 
section.

Section 6524. Additional requirements for awards

    Section 6524 requires that applications for an award under 
this part for a demonstration project set forth with 
specificity the intended commercial use of the technology to be 
demonstrated. This section requires the execution of a contract 
by consortium members describing the rights of each member to 
intellectual property used or developed under the award. 
Technology transfers are required where appropriate.

Section 6525. Advisory committees

    Section 6525 establishes advisory committees composed of 
members appointed by the Secretary of Energy. The advisory 
committees shall advise the Secretary on the development and 
implementation of activities, but not on funding awards for 
specific projects.

Section 6526. Limits on participation

    Section 6526 limits award eligibility if the entity's 
participation is in the economic interest of the United States, 
the entity in a United States-owned entity, or an entity 
organized under the laws of the United States whose parent 
entity is organized under the laws of a foreign country that 
affords similar opportunities and protections to United States-
owned entities as are available in the United States.
    This section also sets forth the sense of the Congress that 
ultra-deepwater technology developed under this part is to be 
developed primarily for production of ultra-deepwater natural 
gas and other petroleum resources, and this priority should be 
reflected in the terms of grants, contracts, and cooperative 
agreements entered under this part.

Section 6527. Fund

    Section 6527 establishes a separate fund with the Treasury 
of the United States to be known as the ``Ultra-Deepwater and 
Unconventional Natural Gas and Other Petroleum Products Fund.''

Section 6528. Sunset

    Section 6528 sets forth a termination date for the 
authority under this part as September 30, 2010.

Section 6529. Definitions

    Section 6529 sets forth definitions for various terms set 
forth in this part.

                       Subtitle F--Miscellaneous


Section 6601. Waste reduction and use of alternatives

    Section 6601 authorizes $500,000 for the Secretary of 
Energy to make grants to a qualified institution, such as the 
Georgia Institute of Technology, to examine and develop the 
feasibility of burning post-consumer carpet in cement kilns as 
an alternative energy source.

Section 6602. Coal gasification

    Section 6602 authorizes the Secretary of Energy to provide 
loan guarantees for a project using integrated gasification 
combined cycle technology of at least 400 megawatts in 
capacity.

Section 6603. Petroleum coke gasification

    Section 6603 authorizes the Secretary of Energy to provide 
loan guarantees for at least one petroleum coke gasification 
polygeneration project.

Section 6604. Other biopower and bioenergy

    Section 6604 directs the Secretary of Energy to conduct a 
program to assist projects to convert rice straw, rice hulls, 
sugarcane bagasse, forest thinnings, and barley grain into 
biopower and biofuels.

Section 6605. Technology transfer

    Section 6605 authorizes $1,000,000 for the Secretary of 
Energy to make a competitively awarded contract to an entity 
with offshore oil and gas management experience for the 
transfer of technologies relating to ultradeepwater research 
and development developed at the Naval Surface Warfare Center, 
Carderock Division.

Section 6606. Limitation on legal fee reimbursement

    Section 6606 amends the Atomic Energy Act to conditionally 
limit reimbursement by the Department of Energy (DOE) of any 
legal fees or expenses of a contractor or subcontractor 
subsequent to an adverse administrative determination by DOE's 
Director of the Office of Hearings and Appeals, or an 
administrative law judge at the Department of Labor, or 
subsequent to a final judgment by any court against the 
contractor or subcontractor in whistleblower cases. If, for 
instance, an administrative law judge at the Department of 
Labor finds in favor of a whistleblower, then DOE is 
specifically barred from further legal fee reimbursement of a 
contractor related to that complaint, unless the contractor 
wins a subsequent ruling on appeal. It is the intent of this 
section to end the structural incentive for contractors to 
prolong reprisal disputes as long as possible, and end the 
delays experienced at DOL that can last over a decade in some 
instances due to repetitive appeals. DOE is also strongly 
encouraged to examine its policy of reimbursing legal fees and 
expenses to contractors or subcontractors in cases in which the 
contractor or subcontractor asserts a legal defense based upon 
state sovereign immunity, in order to determine whether this is 
an appropriate use of taxpayer funds.

Section 6607. Complex well technology testing facility

    Section 6607 requires the Secretary of Energy to coordinate 
with industry leaders in extended reach drilling technology to 
establish a Complex Well Technology Testing Facility at the 
Rocky Mountain Oilfield Testing Center to increase the range of 
extended drilling technology to 50,000 feet.

Section 6608. Total integrated thermal systems

    Section 6608 requires DOE to conduct a study of the 
benefits of advanced integrated thermal management systems in 
reducing demand for oil and protecting the environment and the 
use such technology can offer in the Department of Defense and 
federal fleets.

Section 6609. Oil bypass filtration technology

    Section 6609 requires DOE and the EPA to conduct a joint 
study of the benefits of oil filtration bypass technology in 
reducing demand for oil and protecting the environment and the 
use such technology can offer in the federal fleets.

                         TITLE VII--ELECTRICITY


                   Subtitle A--Transmission Capacity


Section 7011. Transmission infrastructure improvement rulemaking

    Section 7011 promotes needed investment in transmission by 
requiring the Federal Energy Regulatory Commission (FERC) to 
conduct a rulemaking on just and reasonable incentive-based and 
performance-based transmission rates and ``participant 
funding'' of certain transmission facilities.

Section 7012. Siting of interstate electrical transmission facilities

    Section 7012 expedites the construction of critical 
transmission lines identified by the DOE. The section provides 
that for such lines, persons may obtain a permit from FERC and 
exercise eminent domain if, after one year, a State is unable 
or refuses to site the line. If such line crosses Federal land 
and an applicant so requests, DOE is designated as the lead 
agency for coordinating Federal review and permitting 
processes, including establishing deadlines, coordination with 
States and tribes, and consolidating environmental reviews into 
a single record to serve as the basis for decisions. If a 
Federal agency denies an application or fails to comply with a 
timeframe established by DOE, an applicant or State may appeal 
to DOE to review the denial and take action within 90 days. 
States are authorized to form voluntary compacts to facilitate 
transmission siting. This section directs the Federal 
government to study the use of existing corridors on Federal 
land and the potential to establish new corridors and report to 
Congress. The Committee intends this report to go to the House 
Committees on Energy and Commerce and Resources. The section 
requires Federal land management agencies, DOE, and CEQ to 
develop a Memorandum of Understanding to coordinate permitting 
decisions and environmental reviews.

                   Subtitle B--Transmission Operation


Section 7021. Open access transmission by certain utilities

    Section 7021 grants FERC partial jurisdiction over the 
interstate transmission of currently non-regulated utilities 
(municipally-owned utilities, rural electric cooperatives, and 
Federal utilities) to improve the operation of competitive 
wholesale markets in interstate commerce.

Section 7022. Regional transmission organizations

    Section 7022 authorizes the Federal electric utilities 
(Bonneville Power Administration, other Power Marketing 
Administrations, and the Tennessee Valley Authority) to 
participate in regional transmission organizations (RTOs). In 
addition, this section expresses the Sense of Congress that all 
utilities should voluntarily participate in RTOs and that FERC 
should grant incentives for their participation. Section 7022 
also requires FERC to report to Congress on review of pending 
applications to form RTOs.

Section 7023. Native load

    Section 7023 requires FERC to ensure that utilities serving 
electricity consumers are entitled to use their transmission 
facilities or equivalent transmission rights to serve ``native 
load,'' i.e., to meet certain service obligations and certain 
contractual obligations (only contracts in effect on March 28, 
2003). This section clarifies that reservation of transmission 
capacity for native load shall not be considered discriminatory 
under the Federal Power Act. Section 7023 states that this 
section shall not affect the allocation of transmission rights 
by certain transmission organizations approved prior to 
enactment of the section. This section is intended to be 
consistent with the Commission's Order 888.

                        Subtitle C--Reliability


Section 7031. Electric reliability standards

    Section 7031 amends the Federal Power Act by adding a new 
section to provide for the establishment of mandatory, 
enforceable electric reliability standards for the bulk-power 
system. The section provides that FERC shall have jurisdiction, 
within the United States, over an Electric Reliability 
Organization (ERO), certain regional entities, and all users, 
owners and operators of the bulk-power system for purposes of 
approving mandatory, enforceable reliability standards. FERC 
may certify an ERO that meets certain requirements. The 
certified ERO shall propose reliability standards for FERC 
approval. The section provides for a rebuttable presumption 
that a proposal from a regional entity organized on an 
Interconnection-wide basis for a reliability standard or 
modification to a reliability standard to be applicable on an 
Interconnection-wide basis is just, reasonable, and not unduly 
discriminatory or preferential, and in the public interest. The 
section provides for fair processes for resolution of any 
conflict between a reliability standard or implementation 
thereof and any function, rule, order, tariff, rate schedule, 
or agreement accepted, approved, or ordered by FERC applicable 
to a transmission organization. The section provides for 
enforcement of FERC-approved reliability standards. The 
President is urged to negotiate related international 
agreements with the governments of Canada and Mexico to provide 
for effective compliance with reliability standards and the 
effectiveness of the ERO in the United States and Canada or 
Mexico. The section also includes savings provisions relating 
to the scope of the provision and State authority. The section 
provides that FERC shall establish a regional advisory body to 
provide advice regarding certain matters. FERC may give 
deference to the advice of any such regional advisory body if 
that body is organized on an Interconnection-wide basis.

                      Subtitle D--PUHCA Amendments


Section 7041. Short title

    Section 7041 establishes the short title of subtitle D as 
``Public Utility Holding Company Act of 2003.''

Section 7042. Definitions

    Section 7042 defines certain terms used in this subtitle.

Section 7043. Repeal of the Public Utility Holding Company Act of 1935

    Section 7043 repeals the Public Utility Holding Company Act 
of 1935 (PUHCA).

Section 7044. Federal access to books and records

    Section 7044 directs holding companies and associate 
companies to maintain and make available to the Commission such 
books and other records as the Commission deems relevant to 
costs and necessary or appropriate for the protection of 
utility customers with respect to jurisdictional rates. 
Subsection (b) directs affiliates and subsidiaries of holding 
companies to maintain and make available to the Commission 
books and other records with respect to transactions with other 
affiliates. Subsection (c) contains similar requirements with 
respect to books and other records for any company in a holding 
company system and affiliates thereof. Subsection (d) requires 
the Commission to protect the confidentiality of books and 
other records acquired under this section, except as may be 
directed by the Commission or a court of competent 
jurisdiction.

Section 7045. State access to books and records

    Section 7045 gives State commissions access to certain 
books and other records if they meet specific requirements. 
Upon written request by the State commission with jurisdiction 
to regulate a public utility in a holding company system, the 
holding company, associate or affiliate company is directed to 
produce for inspection books and other records that have been 
identified in reasonable detail by the State commission, deemed 
by the commission to be relevant to costs incurred by the 
public utility, and necessary for the effective discharge of 
the responsibilities of the State commission with respect to 
such proceedings. Subsection (b) exempts from this requirement 
any person that is a holding company solely by reason of 
ownership of one or more qualifying facilities under the Public 
Utility Regulatory Policies Act of 1978. Subsection (c) 
protects trade secrets and other sensitive commercial 
information from unwarranted disclosure to the public. 
Subsection (d) protects existing state law concerning books and 
other records, and provides that nothing in this section limits 
the existing rights of any state to obtain books and other 
records under Federal law, contract, or otherwise. Subsection 
(e) gives a United States district court in the State referred 
to in Subsection (a) jurisdiction to enforce this section.

Section 7046. Exemption authority

    Section 7046 directs the Commission to exempt certain 
companies from the requirements of section 7044.

Section 7047. Affiliate transactions

    Section 7047 provides that nothing in this subtitle shall 
limit the existing authority of the Commission under the 
Federal Power Act to ensure that rates are just and reasonable, 
and, to whatever extent the Commission already has authority, 
to approve or deny the pass through of costs and to prevent 
cross-subsidization. Subsection (b) provides that nothing in 
this subtitle shall preclude the Commission or a State 
commission under otherwise applicable law from allowing 
recovery of costs in jurisdictional rates.

Section 7048. Applicability

    Section 7048 prohibits application of this subtitle to the 
Federal government, states, and foreign governments, except as 
otherwise specifically provided.

Section 7049. Effect on other regulations

    Section 7049 provides that nothing in this subtitle 
precludes the Commission or a State commission from exercising 
its jurisdiction under otherwise applicable law to protect 
utility consumers.

Section 7050. Enforcement

    Section 7050 specifies the powers available to the 
Commission to enforce this subtitle.

Section 7051. Savings provisions

    Section 7051 provides that nothing in the subtitle 
prohibits a person from engaging in certain activities that 
were authorized prior to the date of enactment, so long as they 
continue comply with the terms of their authorization, nor 
limits the authority of the Commission under the Federal Power 
Act or the Natural Gas Act.

Section 7052. Implementation

    Section 7052 directs the Commission, within 12 months, to 
promulgate regulations necessary to implement this subtitle and 
submit to Congress recommendations for technical or conforming 
amendments.

Section 7053. Transfer of resources

    Section 7053 provides for the transfer of all books and 
records related to the functions of the Commission under this 
subtitle from the Securities and Exchange Commission to the 
FERC.

Section 7054. Effective date

    Section 7054 provides that this section shall take effect 
12 months after the date of enactment.

Section 7055. Authorization of appropriations

    Section 7055 authorizes to be appropriated such sums as 
necessary to carry out this subtitle.

Section 7056. Conforming amendments to the Federal Power Act

    Section 7056 makes conforming amendments to the Federal 
Power Act.

                      Subtitle E--PURPA Amendments


Section 7061. Real-time pricing and time-of-use metering standards

    Section 7061 provides for state consideration of model 
Federal standards for real-time pricing and time-of-use 
metering services.

Section 7062. Cogeneration and small power production purchase and sale 
        requirements

    Section 7062 amends PURPA section 210 by adding at the end 
thereof new subsections (m), (n), and (o). New subsection (m) 
(1) specifies conditions under which the mandatory purchase 
obligation of utilities under section 210 may be relieved; (2) 
establishes procedures both for utilities to apply to the 
Commission for relief if such conditions are met, and for 
qualifying facilities to apply for reinstatement of the 
purchase obligation; (3) terminates a utility's obligation to 
sell electricity to qualifying facilities under certain 
conditions; (4) protects existing contracts or certain pending 
contracts; and, (5) directs the Commission to issue and enforce 
regulations to ensure that electric utilities collect the costs 
associated with contracts under section 210.
    New subsection (n) directs the Commission to revise the 
rules for qualifying cogeneration facilities eligible for the 
purchase requirements of 210 until the conditions in new 
subsection (m) are met. Specifically, for new cogeneration 
facilities certified or filing for self certification after the 
date of enactment, the new rules must ensure the thermal energy 
output of the facility is used in a productive and beneficial 
manner, the total energy output of such facilities is used 
predominantly for commercial or industrial processes and not 
intended predominantly for sale to an electric utility, and 
continuing progress in the development of efficient electric 
energy generating technology.
    New subsection (o) clarifies that the rule revisions 
required in subsection (n) do not apply to qualifying small 
power production facilities or existing qualifying cogeneration 
facilities. For those facilities, the purchase obligation 
continues, conditioned upon new subsection (m).
    Finally, section 7062(b) eliminates existing ownership 
restrictions on qualifying small power production facilities 
and qualifying cogeneration facilities.

Section 7063. Smart metering

    Section 7061 provides for state consideration of model 
Federal standards for smart metering service.

                      Subtitle F--Renewable Energy


Section 7071. Net metering

    Section 7071 provides for state consideration of model 
Federal standards for ``net metering'' service.

Section 7072. Renewable energy production incentive

    Section 7072 reauthorizes the Renewable Energy Production 
Incentive (REPI), which provides payments for production of 
certain renewables. The section expands the program to include 
landfill gas.

Section 7073. Renewable energy on Federal lands

    Section 7073 requires the Secretary of the Interior, in 
cooperation with the Secretary of Agriculture, to report to 
Congress on opportunities to develop renewable energy on 
Federal lands.

Section 7074. Assessment of renewable energy resources

    Section 7074 requires the Secretary of Energy to review 
available assessments of certain renewable energy resources in 
the United States, and to prepare an annual report on the same.

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


Section 7081. Market transparency rules

    Section 7081 directs FERC to establish rules improving 
transparency in wholesale electric power markets.

Section 7082. Prohibition on round trip trading

    Section 7082 prohibits round-trip (or ``wash'') trades of 
electric power with intent to distort prices.

Section 7083. Conforming changes

    Section 7083 makes conforming changes to reflect the 
addition of new sections to the Federal Power Act.

Section 7084. Enforcement

    Section 7084 increases criminal and civil penalties for 
violations of the Federal Power Act. The section extends the 
applicability of suchpenalties to violations of any provision 
of Part II of the Federal Power Act.

                    Subtitle H--Consumer Protection


Section 7091. Refund effective date

    Section 7091 changes the effective date from 60 days after 
complaint to the date of complaint for FERC-ordered refunds 
under section 206 of the Federal Power Act.

Section 7092. Jurisdiction over interstate sales

    Section 7092(a) and (b) provides that all spot market sales 
of wholesale power, including those by municipally-owned 
utilities and cooperatives, are subject to FERC-ordered refunds 
for sales above just and reasonable rates. Section 7092(c) 
clarifies that FERC's existing investigation authority under 
section 307 of the Federal Power Act applies with respect to 
electric utilities, transmitting utilities and other entities.
    Section 7092(d) provides that FERC, before abrogating 
certain contracts, must meet a public interest standard, unless 
the contract expressly provides for a different standard. The 
Committee intends ``expressly'' to mean more than merely a 
clause authorizing Commission review. It must expressly state 
that the standard for reviewing the contract is not the public 
interest standard. This provision applies only prospectively 
(i.e., to contracts executed on or after the date of 
enactment), except that if the contract is an interconnection 
agreement the prospectivity limitation does not apply. The 
Committee recognizes that under existing judicial and FERC 
interpretations of the Federal Power Act and Natural Gas Act, 
the ``public interest'' standard applies to certain contracts, 
including, but not limited to, contracts that explicitly 
restrict the rights of parties unilaterally to seek changes to 
rates or terms, and to contracts that do not expressly address 
the issue but which establish a fixed rate. The language in 
subsection (d) is not intended to and does not, by negative 
implication mean that under existing law, the ``public 
interest'' standard did not or does not apply to such existing 
contracts.

Section 7093. Consumer privacy

    Section 7093 directs the Federal Trade Commission to 
establish rules regarding consumer privacy.

Section 7094. Unfair trade practices

    Section 7094 directs the Federal Trade Commission to 
establish rules prohibiting ``slamming'' and ``cramming'' in 
retail electricity markets.

          Subtitle I--Merger Review Reform and Accountability


Section 7101. Merger review reform and accountability

    Subsection (a) of section 7101 directs the Secretary of 
Energy, in consultation with the Federal Energy Regulatory 
Commission and the Department of Justice, to report to the 
House Committee on Energy and Commerce and the Senate Committee 
on Energy and Natural Resources on (1) duplicative authorities 
vested in the FERC under section 203 of the Federal Power Act; 
and (2) recommendations on reforms to the Federal Power Act to 
eliminate unnecessary duplication. Subsection (b) directs the 
FERC to report annually to the same committees on conditions 
imposed on mergers and other dispositions of property reviewed 
under section 203.

                 Subtitle J--Study of Economic Dispatch


Section 7101. Study on the benefits of economic dispatch

    Section 7011 directs the Secretary of Energy, in 
coordination and consultation with the states, to conduct a 
study on economic dispatch procedures and potential benefits of 
certain revisions to such procedures. The Secretary is directed 
to report the results of such study to the Congress and the 
States on a yearly basis.

                            TITLE VIII--COAL


Section 8001. Authorization of appropriations

    Section 8001 authorizes $200 million for each fiscal year 
2005 through 2013, subject to a limitation that the Secretary 
of Energy provide a report regarding an assessment of the Clean 
Coal Power Initiative, how proposals will be solicited and 
evaluated under the program and a list of technical milestones 
for the program.

Section 8002. Project criteria

    Section 8002 establishes technical and financial criteria 
for the Clean Coal Power Initiative regarding gasification 
projects and other projects funded under the Initiative. The 
section also specifies the applicability of certain identified 
sections of the Clean Air Act.

Section 8003. Report

    Section 8003 requires the Secretary of Energy to transmit 
regular reports to Congress concerning technical milestones 
established in the program and the status of projects funded 
under the program.

Section 8004. Clean coal centers of excellence

    Section 8004 authorizes competitive, merit-based grants for 
the establishment of Centers of Excellence for Energy Systems 
of the Future.

                         TITLE IX--MOTOR FUELS


                     Subtitle A--General Provisions


Section 9101. Renewable content of motor vehicle fuel

    Section 9101 establishes a renewable content requirement 
for gasoline sold or dispensed to consumers in the contiguous 
United States. Starting in 2005, the total volume of such 
gasoline must contain an ``applicable volume'' of renewable 
fuel, determined on a yearly basis. This volume is 2.7 billion 
gallons in 2005, rising in several steps to 5.0 billion gallons 
in 2015. After 2015, the amount of the requirement will be 
adjusted each year to account for growth in volume of gasoline 
sold or dispensed. Under this section, 1 gallon of cellulosic 
biomass ethanol is equivalent to 1.5 gallon of renewable fuel 
for purposes of meeting the renewable content requirement. A 
credit program, which allows for the transfer of renewable fuel 
credits, is also established.
    Section 9101 allows for waivers of the renewable fuel 
requirement, in whole or in part, in any one year upon the 
petition of one or more states. The section also requires a 
study before the initiation of the renewable fuels program in 
2005 and allows for a waiver in this year if there are 
significant adverse consumer impacts on a national, regional or 
state basis. In addition, the section requires the Secretary of 
Energy to determine, prior to increases in the renewable 
content requirement, whether there is sufficient renewable fuel 
production capacity, the potential for increases in the price 
of gasoline, food or heating oil, the potential for supply 
disruptions, and the potential for exceedances of air quality 
standards. The Secretary may waive, in whole or in part, the 
renewable fuel requirement if there is significant adverse 
impact. The section additionally provides for extension of the 
renewable fuel requirement for small refineries.

Section 9102. Fuels safe harbor

    Section 9102 provides for a fuels safe harbor for renewable 
fuel and fuel containing MTBE. This safe harbor applies only to 
defects in design or manufacture by virtue of the fact that a 
fuel contains a renewable fuel or MTBE. This safe harbor does 
not apply to any other liability, including liability for 
environmental remediation costs, drinking water contamination, 
negligence or public nuisance.

Section 9103. Findings and MTBE transition assistance

    Section 9103 contains findings and authorization for MTBE 
transition assistance. The purpose of this assistance to aid in 
the transition from MTBE production to the production of other 
fuel additives.

Section 9104. Elimination of oxygen content requirement for 
        reformulated gasoline

    Section 9104 eliminates the oxygenate requirement for 
reformulated gasoline. The requirement is eliminated upon date 
of enactment for the State of California and 270 days after 
enactment for all other states. This section also contains 
provisions providing for the maintenance of air quality 
standards in different areas of the country. No later than 270 
days after enactment, the EPA must establish standards for each 
refinery or importer based on a baseline for calendar years 
1999 and 2000.

Section 9105. Analyses of motor vehicle fuel changes

    Section 9105 requires an ``antibacksliding analysis'' of 
the changes in air pollutants and air quality due to the use of 
motor fuel and fuel additives resulting from implementation of 
the amendments made by title IX.

Section 9106. Data collection

    Section 9106 requires data collection in order to evaluate 
the effectiveness of the new renewable fuels requirement.

Section 9107. Fuel system requirements harmonization study

    Section 9107 requires a study of federal, state and local 
requirements concerning motor fuels and the effect of these 
requirements on the supply, quality and price of motor fuels.

                        Subtitle B--MTBE Cleanup


Section 9201. Funding for cleanup of MTBE contamination

    Section 9201 authorizes $850,000,000 from the Leaking 
Underground Storage Trust Fund for site assessments, corrective 
actions, inspections and monitoring activities with respect to 
remediation of releases of fuel containing fuel oxygenates from 
underground storage tanks.

                     TITLE X--AUTOMOBILE EFFICIENCY


Section 10001. Authorization of appropriations for implementation and 
        enforcement of fuel economy standards

    Section 10001 authorizes the National Highway Traffic 
Safety Administration (NHTSA) additional $5 million to 
implement and enforce fuel economy standards for fiscal years 
2004 through 2006.

Section 10002. Study of feasibility and effects of reducing use of fuel 
        for automobiles

    Section 10002 directs the NHTSA to, within 30 days of the 
date of enactment of this bill, to study the feasibility and 
effects of reducing, by a significant percentage, fuel 
consumption by automobiles by model year 2012. This study must 
examine, and recommend alternatives to, the Corporate Average 
Fuel Economy (CAFE) program, examine how automobile makers can 
contribute toward achieving the fuel savings, examine the 
potential of fuel cell technology, and how fuel cell technology 
may contribute towards achieving the fuel consumption reduction 
discussed in this section. In addition, the study must examine 
the effects of fuel consumption reductions on gasoline 
supplies, the automobile industry, including sales of 
automobiles manufactured in the United States, vehicle safety, 
and air quality. The report must be completed not later than 
one year after enactment of this bill.

  TITLE XI--PREVENTING THE MISUSE OF NUCLEAR MATERIALS AND TECHNOLOGY


Section 11001. Preventing the misuse of nuclear materials and 
        technology

    Section 11001 establishes a general policy of the U.S. to 
prevent any nuclear materials, technology, components, 
substances, technical information, or related goods or services 
from being misused or diverted from peaceful nuclear energy 
purposes. The section also specifically prevents any Federal 
agency from issuing any license or other authorization for the 
transfer or export of special nuclear material, nuclear 
production or utilization facilities, or components and other 
technology to any government identified by the Secretary of 
State as engaged in state sponsorship of terrorist activities.

                    TITLE XII--ADDITIONAL PROVISIONS


Section 12001. Transmission technologies

    Section 12001 directs the Federal Energy Regulatory 
Commission to take affirmative steps in the exercise of its 
authorities under the Federal Power Act (including its review 
of incentive-based and performance-based transmission rates) to 
encourage the deployment of transmission technologies that 
utilize real time monitoring and analytical software to 
increase and maximize the capacity and efficiency of 
transmission networks and to reduce line losses. Such 
analytical software for real time monitoring shall timely 
adjust line amperage for maximum output, efficiency and 
capacity.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) 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):

                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 V--FEDERAL ENERGY INITIATIVES

     * * * * * * *

                    part 3--federal energy management

Sec. 541. Findings.
     * * * * * * *
Sec. 552. Energy and water savings measures in congressional buildings.
Sec. 553. Federal procurement of energy efficient products.
     * * * * * * *

TITLE V--FEDERAL ENERGY INITIATIVE

           *       *       *       *       *       *       *


PART 3--FEDERAL ENERGY MANAGEMENT

           *       *       *       *       *       *       *


SEC. 543. ENERGY MANAGEMENT REQUIREMENTS.

  (a) Energy Performance Requirement for Federal Buildings.--
(1) Subject to paragraph (2), each agency shall apply energy 
conservation measures to, and shall improve the design for the 
construction of, [its Federal buildings so that the energy 
consumption per gross square foot of its Federal buildings in 
use during the fiscal year 1995 is at least 10 percent less 
than the energy consumption per gross square foot of its 
Federal buildings in use during the fiscal year 1985 and so 
that the energy consumption per gross square foot of its 
Federal buildings in use during the fiscal year 2000 is at 
least 20 percent less than the energy consumption per gross 
square foot of its Federal buildings in use during fiscal year 
1985.] the Federal buildings of the agency (including each 
industrial or laboratory facility) so that the energy 
consumption per gross square foot of the Federal buildings of 
the agency in fiscal years 2004 through 2013 is reduced, as 
compared with the energy consumption per gross square foot of 
the Federal buildings of the agency in fiscal year 2001, by the 
percentage specified in the following table:

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

     * * * * * * *
  (3) Not later than December 31, 2012, the Secretary shall 
review the results of the implementation of the energy 
performance requirement established under paragraph (1) and 
submit to Congress recommendations concerning energy 
performance requirements for fiscal years 2014 through 2023.

           *       *       *       *       *       *       *

  (c) Exclusions.--(1) [An agency may exclude, from the energy 
consumption requirements for the year 2000 established under 
subsection (a) and the requirements of subsection (b)(1), any 
Federal building or collection of Federal buildings, and the 
associated energy consumption and gross square footage, if the 
head of such agency finds that compliance with such 
requirements would be impractical. A finding of 
impracticability shall be based on the energy intensiveness of 
activities carried out in such Federal buildings or collection 
of Federal buildings, the type and amount of energy consumed, 
the technical feasibility of making the desired changes, and, 
in the cases of the Departments of Defense and Energy, the 
unique character of certain facilities operated by such 
Departments.] (A) An agency may exclude, from the energy 
performance requirement for a fiscal year established under 
subsection (a) and the energy management requirement 
established under subsection (b), any Federal building or 
collection of Federal buildings, if the head of the agency 
finds that--
          (i) compliance with those requirements would be 
        impracticable;
          (ii) the agency has completed and submitted all 
        federally required energy management reports;
          (iii) the agency has achieved compliance with the 
        energy efficiency requirements of this Act, the Energy 
        Policy Act of 1992, Executive Orders, and other Federal 
        law; and
          (iv) the agency has implemented all practicable, life 
        cycle cost-effective projects with respect to the 
        Federal building or collection of Federal buildings to 
        be excluded.
  (B) A finding of impracticability under subparagraph (A)(i) 
shall be based on--
          (i) the energy intensiveness of activities carried 
        out in the Federal building or collection of Federal 
        buildings; or
          (ii) the fact that the Federal building or collection 
        of Federal buildings is used in the performance of a 
        national security function.
  (2) Each agency shall identify and list, in each report made 
under section 548(a), the Federal buildings designated by it 
for such exclusion. The Secretary shall review such findings 
for consistency with the [impracticability standards] standards 
for exclusion set forth in paragraph (1), and may within 90 
days after receipt of the findings, reverse [a finding of 
impracticability] the exclusion. In the case of any such 
reversal, the agency shall comply with the energy consumption 
requirements for the building concerned.
  (3) Not later than 180 days after the date of enactment of 
this paragraph, the Secretary shall issue guidelines that 
establish criteria for exclusions under paragraph (1).

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


SEC. 546. INCENTIVES FOR AGENCIES.

  (a)  * * *

           *       *       *       *       *       *       *

  (c) Utility Incentive Programs.--(1)  * * *

           *       *       *       *       *       *       *

  (6) Federal agencies are encouraged to participate in State 
or regional demand side reduction programs. The availability of 
such programs, including measures employing onsite generation, 
and the savings resulting from such participation, should be 
included in the evaluation of energy options for Federal 
facilities.

           *       *       *       *       *       *       *

  (e) Retention of Energy Savings.--An agency may retain any 
funds appropriated to that agency for energy expenditures, at 
buildings subject to the requirements of section 543(a) and 
(b), that are not made because of energy savings. Except as 
otherwise provided by law, such funds may be used only for 
energy efficiency or unconventional and renewable energy 
resources projects.

           *       *       *       *       *       *       *


SEC. 548. REPORTS.

  (a)  * * *
  (b) Reports to The President and Congress.--The Secretary 
shall report, not later than April 2 of each year, with respect 
to each fiscal year beginning after the date of the enactment 
of this subsection, to the President and Congress--
          (1)  * * *

           *       *       *       *       *       *       *


SEC. 550. SURVEY OF ENERGY SAVING POTENTIAL.

  (a)  * * *

           *       *       *       *       *       *       *

  (d) Report.--As soon as practicable after the completion of 
the project carried out under this section, the Secretary shall 
transmit a report of the findings and conclusions of the 
project to the Committee on Energy and Natural Resources and 
the Committee on Governmental Affairs of the Senate, the 
Committee on Energy and Commerce, the Committee on Government 
Operations, and the Committee on Public Works and 
Transportation of the House of Representatives, and the 
agencies who own the buildings involved in such project. Such 
report shall include an analysis of the probability of each 
agency achieving [the 20 percent reduction goal established 
under section 543(a) of the National Energy Conservation Policy 
Act (42 U.S.C. 8253(a)).] each of the energy reduction goals 
established under section 543(a).

           *       *       *       *       *       *       *


SEC. 552. ENERGY AND WATER SAVINGS MEASURES IN CONGRESSIONAL BUILDINGS.

  (a) In General.--The Architect of the Capitol--
          (1) shall develop, update, and implement a cost-
        effective energy conservation and management plan 
        (referred to in this section as the ``plan'') for all 
        facilities administered by the Congress (referred to in 
        this section as ``congressional buildings'') to meet 
        the energy performance requirements for Federal 
        buildings established under section 543(a)(1); and
          (2) shall submit the plan to Congress, not later than 
        180 days after the date of enactment of this section.
  (b) Plan Requirements.--The plan shall include--
          (1) a description of the life cycle cost analysis 
        used to determine the cost-effectiveness of proposed 
        energy efficiency projects;
          (2) a schedule of energy surveys to ensure complete 
        surveys of all congressional buildings every 5 years to 
        determine the cost and payback period of energy and 
        water conservation measures;
          (3) a strategy for installation of life cycle cost-
        effective energy and water conservation measures;
          (4) the results of a study of the costs and benefits 
        of installation of submetering in congressional 
        buildings; and
          (5) information packages and ``how-to'' guides for 
        each Member and employing authority of Congress that 
        detail simple, cost-effective methods to save energy 
        and taxpayer dollars in the workplace.
  (c) Annual Report.--The Architect shall submit to Congress 
annually a report on congressional energy management and 
conservation programs required under this section that 
describes in detail--
          (1) energy expenditures and savings estimates for 
        each facility;
          (2) energy management and conservation projects; and
          (3) future priorities to ensure compliance with this 
        section.

SEC. 553. FEDERAL PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

  (a) Definitions.--In this section:
          (1) Energy star product.--The term ``Energy Star 
        product'' means a product that is rated for energy 
        efficiency under an Energy Star program.
          (2) Energy star program.--The term ``Energy Star 
        program'' means the program established by section 324A 
        of the Energy Policy and Conservation Act.
          (3) Executive agency.--The term ``executive agency'' 
        has the meaning given the term in section 4 of the 
        Office of Federal Procurement Policy Act (41 U.S.C. 
        403).
          (4) FEMP designated product.--The term ``FEMP 
        designated product'' means a product that is designated 
        under the Federal Energy Management Program of the 
        Department of Energy as being among the highest 25 
        percent of equivalent products for energy efficiency.
  (b) Procurement of Energy Efficient Products.--
          (1) Requirement.--To meet the requirements of an 
        executive agency for an energy consuming product, the 
        head of the executive agency shall, except as provided 
        in paragraph (2), procure--
                  (A) an Energy Star product; or
                  (B) a FEMP designated product.
          (2) Exceptions.--The head of an executive agency is 
        not required to procure an Energy Star product or FEMP 
        designated product under paragraph (1) if the head of 
        the executive agency finds in writing that--
                  (A) an Energy Star product or FEMP designated 
                product is not cost-effective over the life of 
                the product taking energy cost savings into 
                account; or
                  (B) no Energy Star product or FEMP designated 
                product is reasonably available that meets the 
                functional requirements of the executive 
                agency.
          (3) Procurement planning.--The head of an executive 
        agency shall incorporate into the specifications for 
        all procurements involving energy consuming products 
        and systems, including guide specifications, project 
        specifications, and construction, renovation, and 
        services contracts that include provision of energy 
        consuming products and systems, and into the factors 
        for the evaluation of offers received for the 
        procurement, criteria for energy efficiency that are 
        consistent with the criteria used for rating Energy 
        Star products and for rating FEMP designated products.
  (c) Listing of Energy Efficient Products in Federal 
Catalogs.--Energy Star products and FEMP designated products 
shall be clearly identified and prominently displayed in any 
inventory or listing of products by the General Services 
Administration or the Defense Logistics Agency. The General 
Services Administration or the Defense Logistics Agency shall 
supply only Energy Star products or FEMP designated products 
for all product categories covered by the Energy Star program 
or the Federal Energy Management Program, except in cases where 
the agency ordering a product specifies in writing that no 
Energy Star product or FEMP designated product is available to 
meet the buyer's functional requirements, or thatno Energy Star 
product or FEMP designated product is cost-effective for the intended 
application over the life of the product, taking energy cost savings 
into account.
  (d) Designation of Electric Motors.--In the case of electric 
motors of 1 to 500 horsepower, agencies shall select only 
premium efficient motors that meet a standard designated by the 
Secretary. The Secretary shall designate such a standard within 
120 days after the date of the enactment of this section, after 
considering the recommendations of associated electric motor 
manufacturers and energy efficiency groups.
  (e) Regulations.--Not later than 180 days after the date of 
the enactment of this section, the Secretary shall issue 
guidelines to carry out this section.

           *       *       *       *       *       *       *


            TITLE VIII--ENERGY SAVINGS PERFORMANCE CONTRACTS

SEC. 801. AUTHORITY TO ENTER INTO CONTRACTS.

  (a) In General.--(1)  * * *

           *       *       *       *       *       *       *

          (3)(A) In the case of an energy savings contract or 
        energy savings performance contract providing for 
        energy savings through the construction and operation 
        of one or more buildings or facilities to replace one 
        or more existing buildings or facilities, benefits 
        ancillary to the purpose of such contract under 
        paragraph (1) may include savings resulting from 
        reduced costs of operation and maintenance at such 
        replacement buildings or facilities when compared with 
        costs of operation and maintenance at the buildings or 
        facilities being replaced, established through a 
        methodology set forth in the contract.
          (B) Notwithstanding paragraph (2)(B), aggregate 
        annual payments by an agency under an energy savings 
        contract or energy savings performance contract 
        referred to in subparagraph (A) may take into account 
        (through the procedures developed pursuant to this 
        section) savings resulting from reduced costs of 
        operation and maintenance as described in that 
        subparagraph.

           *       *       *       *       *       *       *

  [(c) Sunset and Reporting Requirements.--The authority to 
enter into new contracts under this section shall cease to be 
effective on October 1, 2003.]

           *       *       *       *       *       *       *


SEC. 804. DEFINITIONS.

  For purposes of this title, the following definitions apply:
          (1)  * * *
          [(2) The term ``energy savings'' means a reduction in 
        the cost of energy, from a base cost established 
        through a methodology set forth in the contract, 
        utilized in an existing federally owned building or 
        buildings or other federally owned facilities as a 
        result of--
                  [(A) the lease or purchase of operating 
                equipment, improvements, altered operation and 
                maintenance, or technical services; or
                  [(B) the increased efficient use of existing 
                energy sources by cogeneration or heat 
                recovery, excluding any cogeneration process 
                for other than a federally owned building or 
                buildings or other federally owned facilities.
          [(3) The terms ``energy savings contract'' and 
        ``energy savings performance contract'' mean a contract 
        which provides for the performance of services for the 
        design, acquisition, installation, testing, operation, 
        and, where appropriate, maintenance and repair, of an 
        identified energy conservation measure or series of 
        measures at one or more locations. Such contracts--
                  [(A) may provide for appropriate software 
                licensing agreements; and
                  [(B) shall, with respect to an agency 
                facility that is a public building as such term 
                is defined in section 13(1) of the Public 
                Buildings Act of 1959 (40 U.S.C. 612(1)), be in 
                compliance with the prospectus requirements and 
                procedures of section 7 of the Public Buildings 
                Act of 1959 (40 U.S.C. 606).
          [(4) The term ``energy conservation measures'' has 
        the meaning given such term in section 551(4).]
          (2) The term ``energy savings'' means--
                  (A) a reduction in the cost of energy or 
                water, from a base cost established through a 
                methodology set forth in the contract, used in 
                an existing federally owned building or 
                buildings or other federally owned facilities 
                as a result of--
                          (i) the lease or purchase of 
                        operating equipment, improvements, 
                        altered operation and maintenance, or 
                        technical services;
                          (ii) the increased efficient use of 
                        existing energy sources by cogeneration 
                        or heat recovery, excluding any 
                        cogeneration process for other than a 
                        federally owned building or buildings 
                        or other federally owned facilities; or
                          (iii) the increased efficient use of 
                        existing water sources; or
                  (B) in the case of a replacement building or 
                facility described in section 801(a)(3), a 
                reduction in the cost of energy, from a base 
                cost established through a methodology set 
                forth in the contract, that would otherwise be 
                utilized in one or more existing federally 
                owned buildings or other federally owned 
                facilities by reason of the construction and 
                operation of the replacement building or 
                facility.
          (3) The terms ``energy savings contract'' and 
        ``energy savings performance contract'' mean a contract 
        which provides for--
                  (A) the performance of services for the 
                design, acquisition, installation, testing, 
                operation, and, where appropriate, maintenance 
                and repair, of an identified energy or water 
                conservation measure or series of measures at 
                one or more locations; or
                  (B) energy savings through the construction 
                and operation of one or more buildings or 
                facilities to replace one or more existing 
                buildings or facilities.
        Such contracts shall, with respect to an agency 
        facility that is a public building as such term is 
        defined in section 13(1) of the Public Buildings Act of 
        1959 (40 U.S.C. 612(1)), be in compliance with the 
        prospectus requirements and procedures of section 7 of 
        the Public Buildings Act of 1959 (40 U.S.C. 606).
          (4) The term ``energy or water conservation measure'' 
        means--
                  (A) an energy conservation measure, as 
                defined in section 551(4) (42 U.S.C. 8259(4)); 
                or
                  (B) a water conservation measure that 
                improves water efficiency, is life cycle cost-
                effective, and involves water conservation, 
                water recycling or reuse, more efficient 
                treatment of wastewater or stormwater, 
                improvements in operation or maintenance 
                efficiencies, retrofit activities, or other 
                related activities, not at a Federal 
                hydroelectric facility.
                              ----------                              


     SECTION 310 OF THE LEGISLATIVE BRANCH APPROPRIATIONS ACT, 1999

  [Sec. 310. The Architect of the Capitol--
          [(1) shall develop and implement a cost-effective 
        energy conservation strategy for all facilities 
        currently administered by Congress to achieve a net 
        reduction of 20 percent in energy consumption on the 
        congressional campus compared to fiscal year 1991 
        consumption levels on a Btu-per-gross-square-foot basis 
        not later than 7 years after the enactment of this Act;
          [(2) shall submit to Congress no later than 10 months 
        after the enactment of this Act a comprehensive energy 
        conservation and management plan which includes life 
        cycle costs methods to determine the cost-effectiveness 
        of proposed energy efficiency projects;
          [(3) shall submit to the Committee on Appropriations 
        in the Senate and the House of Representatives a 
        request for the amount of appropriations necessary to 
        carry out this section;
          [(4) shall present to Congress annually a report on 
        congressional energy management and conservation 
        programs which details energy expenditures for each 
        facility, energy management and conservation projects, 
        and future priorities to ensure compliance with the 
        requirements of this section;
          [(5) shall perform energy surveys of all 
        congressional 
        buildings and update such surveys as needed;
          [(6) shall use such surveys to determine the cost and 
        payback period of energy and water conservation 
        measures likely to achieve the required energy 
        consumption levels;
          [(7) shall install energy and water conservation 
        measures that will achieve the requirements through 
        previously determined life cycle cost methods and 
        procedures;
          [(8) may contract with nongovernmental entities and 
        employ private sector capital to finance energy 
        conservation projects and achieve energy consumption 
        targets;
          [(9) may develop innovative contracting methods that 
        will attract private sector funding for the 
        installation of energy-efficient and renewable energy 
        technology to meet the requirements of this section;
          [(10) may participate in the Department of Energy's 
        Financing Renewable Energy and Efficiency (FREE 
        Savings) contracts program for Federal Government 
        facilities; and
          [(11) shall produce information packages and ``how-
        to'' guides for each Member and employing authority of 
        the Congress that detail simple, cost-effective methods 
        to save energy and taxpayer dollars.]
                              ----------                              


ENERGY CONSERVATION AND PRODUCTION ACT

           *       *       *       *       *       *       *


TITLE III--ENERGY CONSERVATION STANDARDS FOR NEW BUILDINGS

           *       *       *       *       *       *       *


SEC. 305. FEDERAL BUILDING ENERGY EFFICIENCY STANDARDS.

  (a)(1)  * * *
  (2) The standards established under paragraph (1) shall--
          (A) contain energy saving and renewable energy 
        specifications that meet or exceed the energy saving 
        and renewable energy specifications of [CABO Model 
        Energy Code, 1992] the 2000 International Energy 
        Conservation Code (in the case of residential 
        buildings) or ASHRAE Standard 90.1-1989 (in the case of 
        commercial buildings);

           *       *       *       *       *       *       *

  (3) Revised federal building energy efficiency performance 
standards.--
          (A) In general.--Not later than 1 year after the date 
        of enactment of this paragraph, the Secretary of Energy 
        shall establish, by rule, revised Federal building 
        energy efficiency performance standards that require 
        that, if cost-effective, for new Federal buildings--
                  (i) such buildings be designed so as to 
                achieve energy consumption levels at least 30 
                percent below those of the most recent ASHRAE 
                Standard 90.1 or the most recent version of the 
                International Energy Conservation Code, as 
                appropriate; and
                  (ii) sustainable design principles are 
                applied to the siting, design, and construction 
                of all new and replacement buildings.
          (B) Additional revisions.--Not later than 1 year 
        after the date of approval of amendments to ASHRAE 
        Standard 90.1 or the 2000 International Energy 
        Conservation Code, the Secretary of Energy shall 
        determine, based on the cost-effectiveness of the 
        requirements under the amendments, whether the revised 
        standards established under this paragraph should be 
        updated to reflect the amendments.
          (C) Statement on compliance of new buildings.--In the 
        budget request of the Federal agency for each fiscal 
        yearand each report submitted by the Federal agency 
under section 548(a) of the National Energy Conservation Policy Act (42 
U.S.C. 8258(a)), the head of each Federal agency shall include--
                  (i) a list of all new Federal buildings 
                owned, operated, or controlled by the Federal 
                agency; and
                  (ii) a statement concerning whether the 
                Federal buildings meet or exceed the revised 
                standards established under this paragraph.

           *       *       *       *       *       *       *


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

           *       *       *       *       *       *       *


Part A--Weatherization Assistance for Low-Income Persons

           *       *       *       *       *       *       *


                    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] $325,000,000 for fiscal year 2004, 
$400,000,000 for fiscal year 2005, and $500,000,000 for fiscal 
year 2006.

           *       *       *       *       *       *       *

                              ----------                              


                        SOLID WASTE DISPOSAL ACT

                     TITLE II--SOLID WASTE DISPOSAL

                     Subtitle A--General Provisions

                   short title and table of contents

      Sec. 1001. This title (hereinafter in this title referred 
to as ``this Act''), together with the following table of 
contents, may be cited as the ``Solid Waste Disposal Act'':

                     Subtitle A--General Provisions

Sec. 1001. Short title and table of contents.
     * * * * * * *

                  Subtitle F--Federal Responsibilities

Sec. 6001. Application of Federal, State, and local law to Federal 
          facilities.
     * * * * * * *
Sec. 6005. Increased use of recovered mineral component in federally 
          funded projects involving procurement of cement or concrete.

           *       *       *       *       *       *       *


Subtitle F--Federal Responsibilities

           *       *       *       *       *       *       *


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

  Sec. 6005. (a) Definitions.--In this section:
          (1) Agency head.--The term ``agency head'' means--
                  (A) the Secretary of Transportation; and
                  (B) the head of each other Federal agency 
                that on a regular basis procures, or provides 
                Federal funds to pay or assist in paying the 
                cost of procuring, material for cement or 
                concrete projects.
          (2) Cement or concrete project.--The term ``cement or 
        concrete project'' means a project for the construction 
        or maintenance of a highway or other transportation 
        facility or a Federal, State, or local government 
        building or other public facility that--
                  (A) involves the procurement of cement or 
                concrete; and
                  (B) is carried out in whole or in part using 
                Federal funds.
          (3) Recovered mineral component.--The term 
        ``recovered mineral component'' means--
                  (A) ground granulated blast furnace slag;
                  (B) coal combustion fly ash; and
                  (C) any other waste material or byproduct 
                recovered or diverted from solid waste that the 
                Administrator, in consultation with an agency 
                head, determines should be treated as recovered 
                mineral component under this section for use in 
                cement or concrete projects paid for, in whole 
                or in part, by the agency head.
  (b) Implementation of Requirements.--
          (1) In general.--Not later than 1 year after the date 
        of enactment of this section, the Administrator and 
        each agency head shall take such actions as are 
        necessary to implement fully all procurement 
        requirements and incentives in effect as of the date of 
        enactment of this section (including guidelines under 
        section 6002) that provide for the use of cement and 
        concrete incorporating recovered mineral component in 
        cement or concrete projects.
          (2) Priority.--In carrying out paragraph (1) an 
        agency head shall give priority to achieving greater 
        use of recovered mineral component in cement or 
        concrete projects for which recovered mineral 
        components historically have not been used or have been 
        used only minimally.
          (3) Conformance.--The Administrator and each agency 
        head shall carry out this subsection in accordance with 
        section 6002.
  (c) Full Implementation Study.--
          (1) In general.--The Administrator, in cooperation 
        with the Secretary of Transportation and the Secretary 
        of Energy, shall conduct a study to determine the 
        extent to which current procurement requirements, when 
        fully implemented in accordance with subsection (b), 
        may realize energy savings and environmental benefits 
        attainable with substitution of recoveredmineral 
component in cement used in cement or concrete projects.
          (2) Matters to be addressed.--The study shall--
                  (A) quantify the extent to which recovered 
                mineral components are being substituted for 
                Portland cement, particularly as a result of 
                current procurement requirements, and the 
                energy savings and environmental benefits 
                associated with that substitution;
                  (B) identify all barriers in procurement 
                requirements to fuller realization of energy 
                savings and environmental benefits, including 
                barriers resulting from exceptions from current 
                law; and
                  (C)(i) identify potential mechanisms to 
                achieve greater substitution of recovered 
                mineral component in types of cement or 
                concrete projects for which recovered mineral 
                components historically have not been used or 
                have been used only minimally;
                  (ii) evaluate the feasibility of establishing 
                guidelines or standards for optimized 
                substitution rates of recovered mineral 
                component in those cement or concrete projects; 
                and
                  (iii) identify any potential environmental or 
                economic effects that may result from greater 
                substitution of recovered mineral component in 
                those cement or concrete projects.
          (3) Report.--Not later than 30 months after the date 
        of enactment of this section, the Administrator shall 
        submit to the Committee on Appropriations and Committee 
        on Environment and Public Works of the Senate and the 
        Committee on Appropriations, Committee on Energy and 
        Commerce, and Committee on Transportation and 
        Infrastructure of the House of Representatives a report 
        on the study.
  (d) Additional Procurement Requirements.--Unless the study 
conducted under subsection (c) identifies any effects or other 
problems described in subsection (c)(2)(C)(iii) that warrant 
further review or delay, the Administrator and each agency head 
shall, within 1 year of the release of the report in accordance 
with subsection (c)(3), take additional actions authorized 
under this Act to establish procurement requirements and 
incentives that provide for the use of cement and concrete with 
increased substitution of recovered mineral component in the 
construction and maintenance of cement or concrete projects, so 
as to--
          (1) realize more fully the energy savings and 
        environmental benefits associated with increased 
        substitution; and
          (2) eliminate barriers identified under subsection 
        (c).
  (e) Effect of Section.--Nothing in this section affects the 
requirements of section 6002 (including the guidelines and 
specifications for implementing those requirements).

           *       *       *       *       *       *       *

                              ----------                              


   SECTION 2602 OF THE LOW-INCOME HOME ENERGY ASSISTANCE ACT OF 1981

                     HOME ENERGY GRANTS AUTHORIZED

  Sec. 2602. (a)  * * *
  (b) There are authorized to be appropriated to carry out the 
provisions of this title (other than section 2607A), 
$2,000,000,000 for each of fiscal years 1995 through 1999, such 
sums as may be necessary for each of fiscal years 2000 and 
2001, and $2,000,000,000 for [each of fiscal years 2002 through 
2004] each of fiscal years 2002 and 2003, and $3,400,000,000 
for each of fiscal years 2004 through 2006. The authorizations 
of appropriations contained in this subsection are subject to 
the program year provisions of subsection (c).

           *       *       *       *       *       *       *

                              ----------                              


ENERGY POLICY AND CONSERVATION ACT

           *       *       *       *       *       *       *


                            TABLE OF CONTENTS

     * * * * * * *

        TITLE I--MATTERS RELATED TO DOMESTIC SUPPLY AVAILABILITY

     * * * * * * *

               Part D--Northeast Home Heating Oil Reserve

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

                  TITLE II--STANDBY ENERGY AUTHORITIES

     * * * * * * *

                 [Part C--Energy Emergency Preparedness

[Sec. 271. Congressional findings, policy, and purpose.
[Sec. 272. Preparation for petroleum supply interruptions.
[Sec. 273. Summer fill and fuel budgeting programs.

                           [Part D--Expiration

[Sec. 281. Expiration.]

             Part C--Summer Fill and Fuel Budgeting Programs

Sec. 273. Summer fill and fuel budgeting programs.

                 TITLE III--IMPROVING ENERGY EFFICIENCY

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

Sec. 321. Definitions.
     * * * * * * *
Sec. 324A. Energy Star program.

           *       *       *       *       *       *       *


TITLE I--MATTERS RELATED TO DOMESTIC SUPPLY AVAILABILITY

           *       *       *       *       *       *       *



Part B--Strategic Petroleum Reserve

           *       *       *       *       *       *       *


  [Sec. 166. There are authorized to be appropriated such sums 
as may be necessary to implement this part, to remain available 
until expended.]

                    AUTHORIZATION OF APPROPRIATIONS

  Sec. 166. There are authorized to be appropriated to the 
Secretary such sums as may be necessary to carry out this part 
and part D, to remain available until expended.

           *       *       *       *       *       *       *


Part D--Northeast Home Heating Oil Reserve

           *       *       *       *       *       *       *


                      CONDITIONS FOR RELEASE; PLAN

  Sec. 183. (a)  * * *
  (b) Definition.--For purposes of this section a ``dislocation 
in the heating oil market'' shall be deemed to occur only 
when--
          (1) The price differential between crude oil, as 
        reflected in an industry daily publication such as 
        ``Platt's Oilgram Price Report'' or ``Oil Daily'' and 
        No. 2 heating oil, as reported in the Energy 
        Information Administration's retail price data for the 
        Northeast, increases by more tan 60 percent over its 5 
        year rolling average for the months of mid-October 
        through March (considered as a heating season average), 
        and continues for 7 consecutive days; and

           *       *       *       *       *       *       *


                    [AUTHORIZATION OF APPROPRIATIONS

  [Sec. 186. There are authorized to be appropriated such sums 
as may be necessary to implement this part.

                          [Part E--Expiration

                              [EXPIRATION

  [Sec. 191. Except as otherwise provided in title I, all 
authority under any provision of title I (other than a 
provision of such title amending another law) and any rule, 
regulation, or order issued pursuant to such authority, shall 
expire at midnight, September 30, 2008, 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 midnight, 
September 30, 2008.]

TITLE II--STANDBY ENERGY AUTHORITIES

           *       *       *       *       *       *       *


            Part C--Summer Fill and Fuel Budgeting Programs

SEC. 273. SUMMER FILL AND FUEL BUDGETING PROGRAMS.

  (a)  * * *

           *       *       *       *       *       *       *

  [(e) Inapplicability of Expiration Provision.--Section 281 
does not apply to this section.

                          [Part D--Expiration

  [Sec. 281. Except as otherwise provided in title II, all 
authority under any provision of title II (other than a 
provision of such title amending another law) and any rule, 
regulation, or order issued pursuant to such authority, shall 
expire at midnight, September 30, 2008, 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 midnight, 
September 30, 2008.]

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)  * * *

           *       *       *       *       *       *       *

          (32) The term ``battery charger'' means a device that 
        charges batteries for consumer products.
          (33) The term ``commercial refrigerator, freezer and 
        refrigerator-freezer'' means a refrigerator, freezer or 
        refrigerator-freezer that--
                  (A) is not a consumer product regulated under 
                this Act; and
                  (B) incorporates most components involved in 
                the vapor-compression cycle and the 
                refrigerated compartment in a single package.
          (34) The term ``external power supply'' means an 
        external power supply circuit that is used to convert 
        household electric current into either DC current or 
        lower-voltage AC current to operate a consumer product.
          (35) The term ``illuminated exit sign'' means a sign 
        that--
                  (A) is designed to be permanently fixed in 
                place to identify an exit; and
                  (B) consists of--
                          (i) an electrically powered integral 
                        light source that illuminates the 
                        legend ``EXIT'' and any directional 
                        indicators; and
                          (ii) provides contrast between the 
                        legend, any directional indicators, and 
                        the background.
          (36)(A) Except as provided in subparagraph (B), the 
        term ``low-voltage dry-type transformer'' means a 
        transformer that--
                  (i) has an input voltage of 600 volts or 
                less;
                  (ii) is air-cooled;
                  (iii) does not use oil as a coolant; and
                  (iv) is rated for operation at a frequency of 
                60 Hertz.
          (B) The term ``low-voltage dry-type transformer'' 
        does not include--
                  (i) transformers with multiple voltage taps, 
                with the highest voltage tap equaling at least 
                20 percent more than the lowest voltage tap;
                  (ii) transformers that are designed to be 
                used in a special purpose application, such as 
                transformers commonly known as drive 
                transformers, rectifier transformers, 
                autotransformers, Uninterruptible Power System 
                transformers, impedance transformers, harmonic 
                transformers, regulating transformers, sealed 
                and nonventilating transformers, machine tool 
                transformers, welding transformers, grounding 
                transformers, or testing transformers; or
                  (iii) any transformer not listed in clause 
                (ii) that is excluded by the Secretary by rule 
                because the transformer is designed for a 
                special application and the application of 
                standards to the transformer would not result 
                in significant energy savings.
          (37) The term ``standby mode'' means the lowest 
        amount of electric power used by a household appliance 
        when not performing its active functions, as defined on 
        an individual product basis by the Secretary.
          (38) The term ``torchiere'' means a portable electric 
        lamp with a reflector bowl that directs light upward so 
        as to give indirect illumination.
          (39) The term ``transformer'' means a device 
        consisting of two or more coils of insulated wire that 
        transfers alternating current by electromagnetic 
        induction from one coil to another to change the 
        original voltage or current value.
          (40) The term ``unit heater'' means a self-contained 
        fan-type heater designed to be installed within the 
        heated space, except that such term does not include a 
        warm air furnace.
          (41) The term ``traffic signal module'' means a 
        standard 8-inch (200mm) or 12-inch (300mm) traffic 
        signal indication, consisting of a light source, a 
        lens, and all other parts necessary for operation, that 
        communicates movement messages to drivers through red, 
        amber, and green colors.

           *       *       *       *       *       *       *


                            TEST PROCEDURES

  Sec. 323. (a)  * * *
  (b) Amended and New Procedures.--(1)  * * *

           *       *       *       *       *       *       *

          (9) Test procedures for illuminated exit signs shall 
        be based on the test method used under Version 2.0 of 
        the Energy Star program of the Environmental Protection 
        Agency for illuminated exit signs.
          (10) Test procedures for low voltage dry-type 
        distribution transformers shall be based on the 
        `Standard Test Method for Measuring the Energy 
        Consumption of Distribution Transformers' prescribed by 
        the National Electrical Manufacturers Association (NEMA 
        TP 2-1998). The Secretary may review and revise this 
        test procedure based on future revisions to such 
        standard test method.
          (11) Test procedures for traffic signal modules shall 
        be based on the test method used under the Energy Star 
        program of the Environmental Protection Agency for 
        traffic signal modules, as in effect on the date of 
        enactment of this paragraph.

           *       *       *       *       *       *       *

  (f) Additional Consumer and Commercial Products.--The 
Secretary shall within 24 months after the date of enactment of 
this subsection prescribe testing requirements for suspended 
ceiling fans, refrigerated bottled or canned beverage vending 
machines, commercial unit heaters, and commercial 
refrigerators, freezers and refrigerator-freezers. Such testing 
requirements shall be based on existing test procedures used in 
industry to the extent practical and reasonable. In the case of 
suspended ceiling fans, such test procedures shall include 
efficiency at both maximum output and at an output no more than 
50 percent of the maximum output.

                                LABELING

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

           *       *       *       *       *       *       *

  (F) Not later than 3 months after the date of enactment of 
this subparagraph, the Commission shall initiate a rulemaking 
to consider the effectiveness of the current consumer products 
labeling program in assisting consumers in making purchasing 
decisions and improving energy efficiency and to consider 
changes to the labeling rules that would improve the 
effectiveness of consumer product labels. Such rulemaking shall 
be completed within 2 years after the date of enactment of this 
subparagraph.

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


SEC. 324A. ENERGY STAR PROGRAM.

  There is established at the Department of Energy and the 
Environmental Protection Agency a program to identify and 
promote energy-efficient products and buildings in order to 
reduce energy consumption, improve energy security, and reduce 
pollution through labeling of and other forms of communication 
about products and buildings that meet the highest energy 
efficiency standards. Responsibilities under the program shall 
be divided between the Department of Energy and the 
Environmental Protection Agency consistentwith the terms of 
agreements between the two agencies. The Administrator and the 
Secretary shall--
          (1) promote Energy Star compliant technologies as the 
        preferred technologies in the marketplace for achieving 
        energy efficiency and to reduce pollution;
          (2) work to enhance public awareness of the Energy 
        Star label, including special outreach to small 
        businesses;
          (3) preserve the integrity of the Energy Star label; 
        and
          (4) solicit the comments of interested parties in 
        establishing a new Energy Star product category or in 
        revising a product category, and upon adoption of a new 
        or revised product category provide an explanation of 
        the decision that responds to significant public 
        comments.

                     ENERGY CONSERVATION STANDARDS

  Sec. 325. (a)  * * *

           *       *       *       *       *       *       *

  (u) Standby Mode Electric Energy Consumption.--
          (1) Initial rulemaking.--(A) The Secretary shall, 
        within 18 months after the date of enactment of this 
        subsection, prescribe by notice and comment, 
        definitions of standby mode and test procedures for the 
        standby mode power use of battery chargers and external 
        power supplies. In establishing these test procedures, 
        the Secretary shall consider, among other factors, 
        existing test procedures used for measuring energy 
        consumption in standby mode and assess the current and 
        projected future market for battery chargers and 
        external power supplies. This assessment shall include 
        estimates of the significance of potential energy 
        savings from technical improvements to these products 
        and suggested product classes for standards. Prior to 
        the end of this time period, the Secretary shall hold a 
        scoping workshop to discuss and receive comments on 
        plans for developing energy conservation standards for 
        standby mode energy use for these products.
          (B) The Secretary shall, within 3 years after the 
        date of enactment of this subsection, issue a final 
        rule that determines whether energy conservation 
        standards shall be promulgated for battery chargers and 
        external power supplies or classes thereof. For each 
        product class, any such standards shall be set at the 
        lowest level of standby energy use that--
                  (i) meets the criteria of subsections (o), 
                (p), (q), (r), (s) and (t); and
                  (ii) will result in significant overall 
                annual energy savings, considering both standby 
                mode and other operating modes.
          (2) Designation of additional covered products.--(A) 
        Not later than 180 days after the date of enactment of 
        this subsection, the Secretary shall publish for public 
        comment and public hearing a notice to determine 
        whether any noncovered products should be designated as 
        covered products for the purpose of instituting a 
        rulemaking under this section to determine whether an 
        energy conservation standard restricting standby mode 
        energy consumption, should be promulgated; except that 
        any restriction on standby mode energy consumption 
        shall be limited to major sources of such consumption.
          (B) In making the determinations pursuant to 
        subparagraph (A) of whether to designate new covered 
        products and institute rulemakings, the Secretary 
        shall, among other relevant factors and in addition to 
        the criteria in section 322(b), consider--
                  (i) standby mode power consumption compared 
                to overall product energy consumption; and
                  (ii) the priority and energy savings 
                potential of standards which may be promulgated 
                under this subsection compared to other 
                required rulemakings under this section and the 
                available resources of the Department to 
                conduct such rulemakings.
          (C) Not later than 1 year after the date of enactment 
        of this subsection, the Secretary shall issue a 
        determination of any new covered products for which he 
        intends to institute rulemakings on standby mode 
        pursuant to this section and he shall state the dates 
        by which he intends to initiate those rulemakings.
          (3) Review of standby energy use in covered 
        products.--In determining pursuant to section 323 
        whether test procedures and energy conservation 
        standards pursuant to this section should be revised, 
        the Secretary shall consider for covered products which 
        are major sources of standby mode energy consumption 
        whether to incorporate standby mode into such test 
        procedures and energy conservation standards, taking 
        into account, among other relevant factors, the 
        criteria for non-covered products in subparagraph (B) 
        of paragraph (2) of this subsection.
          (4) Rulemaking for standby mode.--(A) Any rulemaking 
        instituted under this subsection or for covered 
        products under this section which restricts standby 
        mode power consumption shall be subject to the criteria 
        and procedures for issuing energy conservation 
        standards set forth in this section and the criteria 
        set forth in subparagraph (B) of paragraph (2) of this 
        subsection.
          (B) No standard can be proposed for new covered 
        products or covered products in a standby mode unless 
        the Secretary has promulgated applicable test 
        procedures for each product pursuant to section 323.
          (C) The provisions of section 327 shall apply to new 
        covered products which are subject to the rulemakings 
        for standby mode after a final rule has been issued.
          (5) Effective date.--Any standard promulgated under 
        this subsection shall be applicable to products 
        manufactured or imported 3 years after the date of 
        promulgation.
          (6) Voluntary programs to reduce standby mode energy 
        use.--The Secretary and the Administrator shall 
        collaborate and develop programs, including programs 
        pursuant to section 324A (relating to Energy Star 
        Programs) and other voluntary industry agreements or 
        codes of conduct, which are designed to reduce standby 
        mode energy use.
  (v) Suspended Ceiling Fans, Vending Machines, Unit Heaters, 
and Commercial Refrigerators, Freezers and Refrigerator-
Freezers.--The Secretary shall within 24 months after the date 
on which testing requirements are prescribed by the Secretary 
pursuant to section 323(f), prescribe, by rule, energy 
conservation standards for suspended ceiling fans, refrigerated 
bottled or canned beverage vending machines, unit heaters, and 
commercial refrigerators, freezers and refrigerator-freezers. 
In establishing standards under this subsection, the Secretary 
shall use the criteria and procedures contained in subsections 
(l) and (m). Any standard prescribed under this subsection 
shall apply to products manufactured 3 years after the date of 
publication of a final rule establishing such standard.
  (w) Illuminated Exit Signs.--Illuminated exit signs 
manufactured on or after January 1, 2005 shall meet the Version 
2.0 Energy Star Program performance requirements for 
illuminated exit signs prescribed by the Environmental 
Protection Agency
  (x) Torchieres.--Torchieres manufactured on or after January 
1, 2005--
          (1) shall consume not more than 190 watts of power; 
        and
          (2) shall not be capable of operating with lamps that 
        total more than 190 watts.
  (y) Low Voltage Dry-Type Transformers.--The efficiency of low 
voltage dry-type transformers manufactured on or after January 
1, 2005 shall be the Class I Efficiency Levels for low voltage 
dry-type transformers specified in Table 4-2 of the ``Guide for 
Determining Energy Efficiency for Distribution Transformers'' 
published by the National Electrical Manufacturers Association 
(NEMA TP-1-1996).
  (z) Traffic Signal Modules.--Traffic signal modules 
manufactured on or after January 1, 2006 shall meet the 
performance requirements used under the Energy Star program of 
the Environmental Protection Agency for traffic signals, as in 
effect on the date of enactment of this paragraph, and shall be 
installed with compatible, electrically-connected signal 
control interface devices and conflict monitoring systems.
  (aa) Effective Date of Section 327.--The provisions of 
section 327 shall apply to products for which standards are set 
in subsections (v) through (z) of this section after the 
effective date for such standards.

           *       *       *       *       *       *       *


                           CONSUMER EDUCATION

  Sec. 337. (a)  * * *

           *       *       *       *       *       *       *

  (c) HVAC Maintenance.--(1) For the purpose of ensuring that 
installed air conditioning and heating systems operate at their 
maximum rated efficiency levels, the Secretary shall, within 
180 days of the date of enactment of this subsection, carry out 
a program to educate homeowners and small business owners 
concerning the energy savings resulting from properly conducted 
maintenance of air conditioning, heating, and ventilating 
systems.
  (2) The Secretary shall carry out the program in cooperation 
with the Administrator of the Environmental Protection Agency 
and such other entities as the Secretary considers appropriate, 
includingindustry trade associations, industry members, and 
energy efficiency organizations.
  (d) Small Business Education and Assistance.--The 
Administrator of the Small Business Administration, in 
consultation with the Secretary of Energy and the Administrator 
of the Environmental Protection Agency, shall develop and 
coordinate a Government-wide program, building on the existing 
Energy Star for Small Business Program, to assist small 
business to become more energy efficient, understand the cost 
savings obtainable through efficiencies, and identify financing 
options for energy efficiency upgrades. The Secretary and the 
Administrator shall make the program information available 
directly to small businesses and through other Federal 
agencies, including the Federal Emergency Management Agency, 
and the Department of Agriculture.

           *       *       *       *       *       *       *


Part D--State Energy Conservation Plans

           *       *       *       *       *       *       *


                    STATE ENERGY CONSERVATION PLANS

  Sec. 362. (a)  * * *

           *       *       *       *       *       *       *

  (g) The Secretary shall, at least once every 3 years, invite 
the Governor of each State to review and, if necessary, revise 
the energy conservation plan of such State submitted under 
subsection (b) or (e). Such reviews should consider the energy 
conservation plans of other States within the region, and 
identify opportunities and actions carried out in pursuit of 
common energy conservation goals.

           *       *       *       *       *       *       *


                     [STATE ENERGY EFFICIENCY GOALS

  [Sec. 364. Each State energy conservation plan with respect 
to which assistance is made available under this part on or 
after October 1, 1991, shall contain a goal, consisting of an 
improvement of 10 percent or more in the efficiency of use of 
energy in the State concerned in the calendar year 2000 as 
compared to the calendar year 1990, and may contain interim 
goals.]

                     STATE ENERGY EFFICIENCY GOALS

  Sec. 364. Each State energy conservation plan with respect to 
which assistance is made available under this part on or after 
the date of enactment of the Energy Policy Act of 2003 shall 
contain a goal, consisting of an improvement of 25 percent or 
more in the efficiency of use of energy in the State concerned 
in calendar year 2010 as compared to calendar year 1990, and 
may contain interim goals.

                           GENERAL PROVISIONS

  Sec. 365. (a)  * * *

           *       *       *       *       *       *       *

  (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] $100,000,000 for each of 
the fiscal years 2004 and 2005 and $125,000,000 for fiscal year 
2006.

           *       *       *       *       *       *       *


            PART J--ENCOURAGING THE USE OF ALTERNATIVE FUELS

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

  (a) Department of Energy Program.--(1)  * * *

           *       *       *       *       *       *       *

  (3)(A)  * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                              ----------                              


    SECTION 10 OF THE ALASKA NATURAL GAS TRANSPORTATION ACT OF 1976

                            JUDICIAL REVIEW

  Sec. 10. (a)  * * *

           *       *       *       *       *       *       *

  (c)(1)  * * *
  (2) The United States Court of Appeals for the District of 
Columbia Circuit shall set any action brought under this 
section for expedited consideration, taking into account the 
national interest described in section 2.

           *       *       *       *       *       *       *

                              ----------                              


              SECTION 1421 OF THE SAFE DRINKING WATER ACT


                     REGULATIONS FOR STATE PROGRAMS

  Sec. 1421. (a)  * * *

           *       *       *       *       *       *       *

  (d) For purposes of this part:
          [(1) The term ``underground injection'' means the 
        subsurface emplacement of fluids by well injection. 
        Such term does not include the underground injection of 
        natural gas for purposes of storage.]
          (1) The term ``underground injection''--
                  (A) means the subsurface emplacement of 
                fluids by well injection; and
                  (B) excludes--
                          (i) the underground injection of 
                        natural gas for purposes of storage; 
                        and
                          (ii) the underground injection of 
                        fluids or propping agents pursuant to 
                        hydraulic fracturing operations related 
                        to oil or gas production activities.

           *       *       *       *       *       *       *

                              ----------                              


         SECTION 502 OF THE FEDERAL WATER POLLUTION CONTROL ACT

                          GENERAL DEFINITIONS

      Sec. 502. Except as otherwise specifically provided, when 
used in this Act:
      (1)  * * *

           *       *       *       *       *       *       *

  (24) The term ``oil and gas exploration and production'' 
means all field operations necessary for both exploration and 
production of oil and gas, including activities necessary to 
prepare a site for drilling and for the movement and placement 
of drilling equipment, whether or not such activities may be 
considered construction activities.
                              ----------                              


                           FEDERAL POWER ACT

PART I

           *       *       *       *       *       *       *


  Sec. 3. The words defined in this section shall have the 
following meanings for purpose of this Act, to wit:
  (1)  * * *

           *       *       *       *       *       *       *

  (17)(A)  * * *

           *       *       *       *       *       *       *

  [(C) ``qualifying small power production facility'' means a 
small power production facility--
          [(i) which the Commission determines, by rule, meets 
        such requirements (including requirements respecting 
        fuel use, fuel efficiency, and reliability) as the 
        Commission may, by rule, prescribe; and
          [(ii) which is owned by a person not primarily 
        engaged in the generation or sale of electric power 
        (other than electric power solely from cogeneration 
        facilities or small power production facilities);]
  (C) ``qualifying small power production facility'' means a 
small power production facility that the Commission determines, 
by rule, meets such requirements (including requirements 
respecting minimum size, fuel use, and fuel efficiency) as the 
Commission may, by rule, prescribe.

           *       *       *       *       *       *       *

  (18)(A)  * * *
  [(B) ``qualifying cogeneration facility'' means a 
cogeneration facility which--
          [(i) the Commission determines, by rule, meets such 
        requirements (including requirements respecting minimum 
        size, fuel use, and fuel efficiency) as the Commission 
        may, by rule, prescribe; and
          [(ii) is owned by a person not primarily engaged in 
        the generation or sale of electric power (other than 
        electric power solely from cogeneration facilities or 
        small power production facilities);]
  (B) ``qualifying cogeneration facility'' means a cogeneration 
facility that the Commission determines, by rule, meets such 
requirements (including requirements respecting minimum size, 
fuel use, and fuel efficiency) as the Commission may, by rule, 
prescribe.

           *       *       *       *       *       *       *

  Sec. 4. The Commission is hereby authorized and empowered--
  (a)  * * *

           *       *       *       *       *       *       *

  (e) To issue licenses to citizens of the United States, or to 
any association of such citizens, or to any corporation 
organized under the laws of the United States or any State 
thereof, or to any State or municipality for the purpose of 
constructing, operating, and maintaining dams, water conduits, 
reservoirs, power houses, transmission lines, or other project 
works necessary or convenient for the development and 
improvement of navigation and for the development, 
transmission, and utilization of power across, along, from or 
in any of the streams or other bodies of water over which 
Congress has jurisdiction under its authority to regulate 
commerce with foreign nations and among the several States, or 
upon any part of the public lands and reservations of the 
United States (including the Territories), or for the purpose 
of utilizing the surplus water or water power from any 
Government dam, except as herein provided: Provided, That 
licenses shall be issued within any reservation only after a 
finding by the Commission that the licensewill not interfere or 
be inconsistent with the purpose for which such reservation was created 
or acquired, and shall be subject to and contain such conditions as the 
Secretary of the department under whose supervision such reservation 
falls shall deem necessary for the adequate protection and utilization 
of such reservation. The license applicant shall be entitled to a 
determination on the record, after opportunity for an agency trial-type 
hearing of any disputed issues of material fact, with respect to such 
conditions. Provided further, That no license affecting the navigable 
capacity of any navigable waters of the United States shall be issued 
until the plans of the dam or other structures affecting navigation 
have been approved by the Chief of Engineers and the Secretary of the 
Army. Whenever the contemplated improvement is, in the judgment of the 
Commission, desirable and justified in the public interest for the 
purpose of improving or developing a waterway or waterways for the use 
or benefit of interstate or foreign commerce, a finding to that effect 
shall be made by the Commission and shall become a part of the records 
of the Commission: Provided further, That in case the Commission shall 
find that any Government dam may be advantageously used by the United 
States for public purposes in addition to navigation, no license 
therefor shall be issued until two years after it shall have reported 
to Congress the facts and conditions relating thereto, except that this 
provision shall not apply to any Government dam constructed prior to 
June 10, 1920: And provided further, That upon the filing of any 
application for a license which has not been preceded by a preliminary 
permit under subsection (f) of this section, notice shall be given and 
published as required by the proviso of said subsection. In deciding 
whether to issue any license under this Part for any project, the 
Commission, in addition to the power and development purposes for which 
licenses are issued, shall give equal consideration to the purposes of 
energy conservation, the protection, mitigation of damage to, and 
enhancement of, fish and wildlife (including related spawning grounds 
and habitat), the protection of recreational opportunities, and the 
preservation of other aspects of environmental quality.

           *       *       *       *       *       *       *

  Sec. 18. The Commission shall require the construction, 
maintenance, and operation by a licensee at its own expense of 
such lights and signals as may be directed by the Secretary of 
the Department in which the Coast Guard is operating, and such 
fishways as may be prescribed by the Secretary of Commerce. The 
license applicant shall be entitled to a determination on the 
record, after opportunity for an agency trial-type hearing of 
any disputed issues of material fact, with respect to such 
fishways. The operation of any navigation facilities which may 
be constructed as a part of or in connection with any dam or 
diversion structure built under the provisions of this Act, 
whether at the expense of a licensee hereunder or of the United 
States, shall at all times be controlled by such reasonable 
rules and regulations in the interest of navigation, including 
the control of the level of the pool caused by such dam or 
diversion structure as may be made from time to time by the 
Secretary of the Army, and for willful failure to comply with 
any such rule or regulation such licensee shall be deemed 
guilty of a misdemeanor, and upon conviction thereof shall be 
punished as provided in section 316 hereof.

           *       *       *       *       *       *       *


SEC. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS.

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

PART II--REGULATION OF ELECTRIC UTILITY COMPANIES ENGAGED IN INTERSTATE 
                                COMMERCE


        DECLARATION OF POLICY; APPLICATION OF PART; DEFINITIONS

  Section 201. (a)  * * *
  (b)(1) The provisions of this Part shall apply to the 
transmission of electric energy in interstate commerce and to 
the sale of electric energy at wholesale in interstate 
commerce, but except as provided in paragraph (2) shall not 
apply to any other sale of electric energy or deprive a State 
or State commission of its lawful authority now exercised over 
the exportation of hydroelectric energy which is transmitted 
across a State line. The Commission shall have jurisdiction 
over all facilities for such transmission or sale of electric 
energy, but shall not have jurisdiction, except as specifically 
provided in this Part and the Part next following, over 
facilities used for the generation of electric energy or over 
facilities used in local distribution or only for the 
transmission of electric energy in intrastate commerce, or over 
facilities for the transmission of electric energy consumed 
wholly by the transmitter.
  (2) The provisions of [sections 210] sections 206(f), 210, 
211, [and 212] 212, 215, 216, 217, 218, 219, and 220 shall 
apply to the entities described in such provisions, and such 
entities shall be subject to the jurisdiction of the Commission 
for purposes of carrying out such provisions and for purposes 
of applying the enforcement authorities of this Act with 
respect to such provisions. Compliance with any order of the 
Commission under the provisions of [section 210] section 
206(f), 210, or 211, shall not make an electric utility or 
other entity subject to the jurisdiction of the Commission for 
any purposes other than the purposes specified in the preceding 
sentence.

           *       *       *       *       *       *       *

  (e) The term ``public utility'' when used in this Part or in 
the Part next following means any person who owns or operates 
facilities subject to the jurisdiction of the Commission under 
this Part (other than facilities subject to such jurisdiction 
solely by reason of [section 210] section 206(f), 210, 211, [or 
212] 212, 215, 216, 217, 218, 219, or 220).

           *       *       *       *       *       *       *

  (g) Books and Records.--(1)  * * *

           *       *       *       *       *       *       *

  (5) As used in this subsection the terms ``affiliate'', 
``associate company'', ``electric utility company'', ``holding 
company'', ``subsidiary company'', and ``exempt wholesale 
generator'' shall have the same meaning as when used in the 
Public Utility Holding Company Act of [1935] 2003.

           *       *       *       *       *       *       *


   FIXING RATES AND CHARGES; DETERMINATION OF COST OF PRODUCTION OR 
                             TRANSPORTATION

  Sec. 206. (a) Whenever the Commission, after a [hearing had] 
hearing held upon its own motion or upon complaint, shall find 
that any rate, charges, or classification demanded, observed, 
charged, or collected by any public utility for any 
transmission or sale subject to the jurisdiction of the 
Commission, or that any rule, regulation, practice, or contract 
affecting such rate, charge, or classification is unjust, 
unreasonable, unduly discriminatory or preferential, the 
Commission shall determine the just and reasonable rate, 
charge, classification, rule, regulation, practice, or contract 
to be thereafter observed and in force, and shall fix the same 
by order.
  (b) Whenever the Commission institutes a proceeding under 
this section, the Commission shall establish a refund effective 
date. In the case of a proceeding instituted on complaint, the 
refund effective date shall not be earlier than [the date 60 
days after the filing of such complaint nor later than 5 months 
after the expiration of such 60-day period] the date of the 
filing of such complaint nor later than 5 months after the 
filing of such complaint. In the case of a proceeding 
instituted by the Commission on its own motion, the refund 
effective date shall not be earlier than the date [60 days 
after] of the publication by the Commission of notice of its 
intention to initiate such proceeding nor later than 5 months 
after the [expiration of such 60-day period] publication date. 
Upon institution of a proceeding under this section, the 
Commission shall give to the decision of such proceeding the 
same preference as provided under section 205 of this Act and 
otherwise act as speedily as possible. If no final decision is 
rendered by the date 60 days after the refund effective date or 
by the conclusion of the 180-day period commencing upon 
initiation of a proceeding pursuant to this section, whichever 
is earlier, the Commission shall state the reasons why it has 
failed to do so and shall state its best estimate as to when it 
reasonably expects to make such decision. In any proceeding 
under this section, the burden of proof to show that any rate, 
charge, classification, rule, regulation, practice, or contract 
is unjust, unreasonable, unduly discriminatory, or preferential 
shall be upon the Commission or the complainant. At the 
conclusion of any proceeding under this section, the Commission 
may order [the public utility to make] refunds of any amounts 
paid, for the period subsequent to the refund effective date 
through a date fifteen months after such refund effective date, 
in excess of those which would have been paid under the just 
and reasonable rate, charge, classification, rule, regulation, 
practice, or contract which the Commission orders to be 
thereafter observed and in force: Provided, That if the 
proceeding is not concluded within fifteen months after the 
refund effective date and if the Commission determines at the 
conclusion of the proceeding that the proceeding was not 
resolved within the fifteen-month period primarily because of 
dilatory behavior by the public utility, the Commission may 
order refunds of any or all amounts paid for the period 
subsequent to the refund effective date and prior to the 
conclusion of the proceeding. The refunds shall be made, with 
interest, to those persons who have paid those rates or charges 
which are the subject of the proceeding.

           *       *       *       *       *       *       *

  (e)(1) If an entity that is not a public utility (including 
an entity referred to in section 201(f)) voluntarily makes a 
spot market sale of electric energy and such sale violates 
Commission rules in effectat the time of such sale, such entity 
shall be subject to the Commission's refund authority under this 
section with respect to such violation.
  (2) This section shall not apply to any entity that is 
either--
          (A) an entity described in section 201(f); or
          (B) a rural electric cooperative
that does not sell more than 4,000,000 megawatt hours of 
electricity per year.
  (3) For purposes of this subsection, the term ``spot market 
sale'' means an agreement for the sale of electric energy at 
wholesale in interstate commerce that is for 24 hours or less 
and that is entered into the day of, or the day prior to, 
delivery.

           *       *       *       *       *       *       *


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

  (a) In General.--Subject to section 212(h), the Commission 
may, by rule or order, require an unregulated transmitting 
utility to provide transmission services--
          (1) at rates that are comparable to those that the 
        unregulated transmitting utility charges itself, and
          (2) on terms and conditions (not relating to rates) 
        that are comparable to those under which such 
        unregulated transmitting utility provides transmission 
        services to itself and that are not unduly 
        discriminatory or preferential.
  (b) Exemptions.--
          (1) In general.--The Commission shall exempt from any 
        rule or order under this subsection any unregulated 
        transmitting utility that--
                  (A)(i) sells no more than 4,000,000 megawatt 
                hours of electricity per year; and
                  (ii) is a distribution utility; or
                  (B) does not own or operate any transmission 
                facilities that are necessary for operating an 
                interconnected transmission system (or any 
                portion thereof); or
                  (C) meets other criteria the Commission 
                determines to be in the public interest.
          (2) Local distribution.-- The requirements of 
        subsection (a) shall not apply to facilities used in 
        local distribution.
  (c) Rate Changing Procedures.--The rate changing procedures 
applicable to public utilities under subsections (c) and (d) of 
section 205 are applicable to unregulated transmitting 
utilities for purposes of this section.
  (d) Remand.--In exercising its authority under paragraph (1), 
the Commission may remand transmission rates to an unregulated 
transmitting utility for review and revision where necessary to 
meet the requirements of subsection (a).
  (e) Section 211 Requests.--The provision of transmission 
services under subsection (a) does not preclude a request for 
transmission services under section 211.
  (f) Definitions.--For purposes of this section--
          (1) The term ``unregulated transmitting utility'' 
        means an entity that--
                  (A) owns or operates facilities used for the 
                transmission of electric energy in interstate 
                commerce, and
                  (B) is either an entity described in section 
                201(f) or a rural electric cooperative.
          (2) The term ``distribution utility'' means an 
        unregulated transmitting utility that serves at least 
        ninety percent of its electric customers at retail.

           *       *       *       *       *       *       *


SEC. 214. SALES BY EXEMPT WHOLESALE GENERATORS.

  No rate or charge received by an exempt wholesale generator 
for the sale of electric energy shall be lawful under section 
205 if, after notice and opportunity for hearing, the 
Commission finds that such rate or charge results from the 
receipt of any undue preference or advantage from an electric 
utility which is an associate company or an affiliate of the 
exempt wholesale generator. For purposes of this section, the 
terms ``associate company'' and ``affiliate'' shall have the 
same meaning as provided in section 2(a) of the Public Utility 
Holding Company Act of [1935] 2003.

SEC. 215. TRANSMISSION INFRASTRUCTURE IMPROVEMENT RULEMAKING.

  (a) Rulemaking Requirement.--Within 1 year after the 
enactment of this section, the Commission shall establish, by 
rule, incentive-based (including but not limited to 
performance-based) transmission rate treatments to promote 
capital investment in the enlargement and improvement of 
facilities for the transmission of electric energy in 
interstate commerce as appropriate to--
          (1) promote economically efficient transmission and 
        generation of electricity;
          (2) provide a return on equity that attracts new 
        investment in transmission facilities and reasonably 
        reflects the risks taken by public utilities in 
        restructuring control of transmission assets; and
          (3) encourage deployment of transmission technologies 
        and other measures to increase the capacity and 
        efficiency of existing transmission facilities and 
        improve the operation of such facilities.
The Commission may, from time to time, revise such rule.
  (b) Funding of Certain Facilities.--The rule promulgated 
pursuant to this section shall provide that, upon the request 
of a regional transmission organization or other Commission-
approved transmission organization, new transmission facilities 
that increase the transfer capability of the transmission 
system shall be participant funded. In such rules, the 
Commission shall also provide guidance as to what types of 
facilities may be participant funded.
  (c) Just and Reasonable Rates.--With respect to any 
transmission rate filed with the Commission on or after the 
effective date of the rule promulgated under this section, the 
Commission shall, in its review of such rate under sections 205 
and 206, apply the rules adopted pursuant to this section, 
including any revisions thereto. Nothing in this section shall 
be construed to override, weaken, or conflict with the 
procedural and other requirements of this part, including the 
requirement of sections 205 and 206 that allrates, charges, 
terms, and conditions be just and reasonable and not unduly 
discriminatory or preferential.

SEC. 216. SITING OF INTERSTATE ELECTRICAL TRANSMISSION FACILITIES.

  (a) Transmission Studies.--Within one year after the 
enactment of this section, and every 3 years thereafter, the 
Secretary of Energy shall conduct a study of electric 
transmission congestion. After considering alternatives and 
recommendations from interested parties the Secretary shall 
issue a report, based on such study, which may designate one or 
more geographic areas experiencing electric energy transmission 
congestion as ``interstate congestion areas''.
  (b) Construction Permit.--The Commission is authorized, after 
notice and an opportunity for hearing, to issue permits for the 
construction or modification of electric transmission 
facilities in interstate congestion areas designated by the 
Secretary under subsection (a) if the Commission makes each of 
the following findings:
          (1) A finding that--
                  (A) the State in which the transmission 
                facilities are to be constructed or modified is 
                without authority to approve the siting of the 
                facilities, or
                  (B) a State commission or body in the State 
                in which the transmission facilities are to be 
                constructed or modified that has authority to 
                approve the siting of the facilities has 
                withheld approval, conditioned its approval in 
                such a manner that the proposed construction or 
                modification will not significantly reduce 
                transmission congestion in interstate commerce 
                and is otherwise not economically feasible, or 
                delayed final approval for more than one year 
                after the filing of an application seeking 
                approval or one year after the designation of 
                the relevant interstate congestion area, 
                whichever is later.
          (2) A finding that the facilities to be authorized by 
        the permit will be used for the transmission of 
        electric energy in interstate commerce.
          (3) A finding that the proposed construction or 
        modification is consistent with the public interest.
          (4) A finding that the proposed construction or 
        modification will significantly reduce transmission 
        congestion in interstate commerce.
The Commission may include in a permit issued under this 
section conditions consistent with the public interest.
  (c) Permit Applications.--Permit applications under 
subsection (b) shall be made in writing to the Commission and 
verified under oath. The Commission shall issue rules setting 
forth the form of the application, the information it is to 
contain, and the manner of service of notice of the permit 
application upon interested persons.
  (d) Comments.--In any proceeding before the Commission under 
subsection (b), the Commission shall afford each State in which 
a transmission facility covered by the permit is or will be 
located, each affected Federal agency and Indian tribe, private 
property owners, and other interested persons, a reasonable 
opportunity to present their views and recommendations with 
respect to the need for and impact of a facility covered by the 
permit.
  (e) Rights-of-Way.--In the case of a permit under subsection 
(b) for electric transmission facilities to be located on 
property other than property owned by the United States or a 
State, if the permit holder cannot acquire by contract, or is 
unable to agree with the owner of the property to the 
compensation to be paid for, the necessary right-of-way to 
construct or modify such transmission facilities, the permit 
holder may acquire the right-of-way by the exercise of the 
right of eminent domain in the district court of the United 
States for the district in which the property concerned is 
located, or in the appropriate court of the State in which the 
property is located. The practice and procedure in any action 
or proceeding for that purpose in the district court of the 
United States shall conform as nearly as may be with the 
practice and procedure in similar action or proceeding in the 
courts of the State where the property is situated.
  (f) State Law.--Nothing in this section shall preclude any 
person from constructing any transmission facilities pursuant 
to State law.
  (g) Compliance With Other Laws.--Commission action under this 
section shall be subject to the National Environmental Policy 
Act of 1969 (42 U.S.C. 4321 et seq.) and all other applicable 
Federal laws.
  (h) Compensation.--Any exercise of eminent domain authority 
pursuant to this section shall be considered a taking of 
private property for which just compensation is due. Just 
compensation shall be an amount equal to the full fair market 
value of the property taken on the date of the exercise of 
eminent domain authority, except that the compensation shall 
exceed fair market value if necessary to make the landowner 
whole for decreases in the value of any portion of the land not 
subject to eminent domain. Any parcel of land acquired by 
eminent domain under this subsection shall be transferred back 
to the owner from whom it was acquired (or his heirs or 
assigns) if the land is not used for power line construction or 
modification within a reasonable period of time after the 
acquisition. Property acquired under this subsection may not be 
used for any heritage area, recreational trail, or park, or for 
any other purpose (other than power line construction or 
modification, and for power line operation and maintenance) 
without the consent of the owner of the parcel from whom the 
property was acquired (or his heirs or assigns).
  (i) ERCOT.--Nothing in this section shall be construed to 
authorize any interconnection with any facility owned or 
operated by an entity referred to in section 212(k)(2)(B).
  (j) Rights of Way on Federal Lands.--
          (1) Lead agency.--If an applicant, or prospective 
        applicant, for Federal authorization related to an 
        electricity transmission or distribution facility so 
        requests, the Department of Energy (DOE) shall act as 
        the lead agency for purposes of coordinating all 
        applicable Federal authorization and related 
        environmental review of the facility. The term 
        ``Federal authorization'' shall mean any authorization 
        required under Federal law in order to site a 
        transmission or distribution facility, including but 
        not limited to such permits, special use 
        authorizations, certifications, opinions, or other 
        approvals as may be required,whether issued by a 
Federal or a State agency. To the maximum extent practicable under 
applicable Federal law, the Secretary of Energy shall coordinate this 
Federal authorization and review process with any Indian tribes, multi-
State entities, and State agencies that are responsible for conducting 
any separate permitting and environmental reviews of the facility, to 
ensure timely and efficient review and permit decisions.
          (2) Authority to set deadlines.--As lead agency, the 
        Department of Energy, in consultation with other 
        Federal and, as appropriate, with Indian tribes, multi-
        State entities, and State agencies that are willing to 
        coordinate their own separate permitting and 
        environmental reviews with the Federal authorization 
        and environmental reviews, shall establish prompt and 
        binding intermediate milestones and ultimate deadlines 
        for the review of and Federal authorization decisions 
        relating to the proposed facility. The Secretary of 
        Energy shall ensure that once an application has been 
        submitted with such data as the Secretary deems 
        necessary, all permit decisions and related 
        environmental reviews under all applicable Federal laws 
        shall be completed within 1 year or, if a requirement 
        of another provision of Federal law makes this 
        impossible, as soon thereafter as is practicable. The 
        Secretary of Energy also shall provide an expeditious 
        pre-application mechanism for prospective applicants to 
        confer with the agencies involved to have each such 
        agency determine and communicate to the prospective 
        applicant within 60 days of when the prospective 
        applicant submits a request for such information 
        concerning--
                  (A) the likelihood of approval for a 
                potential facility; and
                  (B) key issues of concern to the agencies and 
                public.
          (3) Consolidated environmental review and record of 
        decision.--The Secretary of Energy, in consultation 
        with the affected agencies, shall prepare a single 
        environmental review document, which shall be used as 
        the basis for all decisions on the proposed project 
        under Federal law. The document may be an environmental 
        assessment or environmental impact statement under the 
        National Environmental Policy Act of 1969 if warranted, 
        or such other form of analysis as may be warranted. DOE 
        and other agencies shall streamline the review and 
        permitting of transmission and distribution facilities 
        within corridors designated under Section 503 of the 
        Federal Land Policy and Management Act (43 U.S.C. 
        Section 1763) by fully taking into account prior 
        analyses and decisions as to the corridors. The 
        document under this section may consist of or include 
        an environmental assessment, if allowed by law, or an 
        environmental impact statement, if warranted or 
        required by law, or such other form of analysis as 
        warranted, consistent with any requirement of the 
        National Environmental Policy Act, the Federal Land 
        Policy and Management Act, or any other applicable law. 
        Such document shall include consideration by the 
        relevant agencies of any applicable criteria or other 
        matters as required under applicable laws.
          (4) Appeals.--In the event that any agency has denied 
        a Federal authorization required for a transmission or 
        distribution facility, or has failed to act by the 
        deadline established by the Secretary pursuant to this 
        section for deciding whether to issue the 
        authorization, the applicant or any State in which the 
        facility would be located may file an appeal with the 
        Secretary of Energy, who shall, in consultation with 
        the affected agency, review the denial or take action 
        on the pending application. Based on the overall record 
        and in consultation with the affected agency, the 
        Secretary may then either issue the necessary 
        authorization with any appropriate conditions, or deny 
        the application. The Secretary shall issue a decision 
        within 90 days of the filing of the appeal. In making a 
        decision under this paragraph, the Secretary shall 
        comply with all applicable requirements of Federal law, 
        including any requirements of the Endangered Species 
        Act, the Clean Water Act, the National Forest 
        Management Act, the National Environmental Policy Act, 
        and the Federal Land Management and Policy Act.
          (5) Conforming regulations and memoranda of 
        agreement.--Not later than 18 months after the date of 
        enactment of this section, the Secretary of Energy 
        shall issue any regulations necessary to implement the 
        foregoing provisions. Not later than 1 year after the 
        date of enactment of this section, the Secretary and 
        the heads of all relevant Federal departments and non-
        departmental agencies shall, and interested Indian 
        tribes, multi-State entities, and State agencies may, 
        enter into Memoranda of Agreement to ensure the timely 
        and coordinated review and permitting of electricity 
        transmission and distribution facilities. The head of 
        each Federal department or non-departmental agency with 
        approval authority shall designate a senior responsible 
        official and dedicate sufficient other staff and 
        resources to ensure that the DOE regulations and any 
        Memoranda are fully implemented.
          (6) Miscellaneous.--Each Federal authorization for an 
        electricity transmission or distribution facility shall 
        be issued for a duration, as determined by the 
        Secretary of Energy, commensurate with the anticipated 
        use of the facility and with appropriate authority to 
        manage the right-of-way for reliability and 
        environmental protection. Further, when such 
        authorizations expire, they shall be reviewed for 
        renewal taking fully into account reliance on such 
        electricity infrastructure, recognizing its importance 
        for public health, safety and economic welfare and as a 
        legitimate use of Federal lands.
          (7) Maintaining and enhancing the transmission 
        infrastructure.--In exercising the responsibilities 
        under this Section, the Secretary of Energy shall 
        consult regularly with the Federal Energy Regulatory 
        Commission (FERC) and FERC-approved Regional 
        Transmission Organizations and Independent System 
        Operators.
  (k) Interstate Compacts.--The consent of Congress is hereby 
given for States to enter into interstate compacts establishing 
regional transmission siting agencies to facilitate 
coordination among the States within such areas for purposes of 
siting future electric energy transmission facilities and to 
carry out State electric energy transmission siting 
responsibilities. The Secretary of Energy mayprovide technical 
assistance to regional transmission siting agencies established under 
this subsection.
  (l) Savings Clause.--Nothing in this section shall be 
construed to affect any requirement of the environmental laws 
of the United States, including, but not limited to, the 
National Environmental Policy Act of 1969. This section shall 
not apply to any component of the National Wilderness 
Preservation System, the National Wild and Scenic Rivers 
System, or the National Park system (including National 
Monuments therein).

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

  (a) In General.--In exercising authority under this Act, the 
Commission shall ensure that any load-serving entity that 
either--
          (1) owns transmission facilities for the transmission 
        of electric energy in interstate commerce used to 
        purchase or deliver electric energy to meet--
                  (A) a service obligation to customers; or
                  (B) an existing wholesale contractual 
                obligation; or
          (2) holds a contract or service agreement for firm 
        transmission service used to purchase or deliver 
        electric energy to meet--
                  (A) a service obligation to customers; or
                  (B) an existing wholesale contractual 
                obligation
shall be entitled to use such transmission facilities or 
equivalent transmission rights to meet such obligations before 
transmission capacity is made available for other uses.
  (b) Use by Successor in Interest.--To the extent that all or 
a portion of the service obligation or contractual obligation 
covered by subsection (a) is transferred to another load 
serving entity, the successor shall be entitled to use such 
transmission facilities or firm transmission rights associated 
with the transferred service obligation consistent with 
subsection (a). Subsequent transfers to another load serving 
entity, or back to the original load-serving entity, shall be 
entitled to the same rights.
  (c) Other Entities.--The Commission may exercise authority 
under this Act to make transmission rights not used to meet an 
obligation covered by subsection (a) available to other 
entities in a manner determined by the Commission to be not 
unduly discriminatory or preferential.
  (d) Definitions.--For the purposes of this section:
          (1) The term ``load-serving entity'' means an 
        electric utility, transmitting utility or Federal power 
        marketing agency that has an obligation under Federal, 
        State, or local law, or under long-term contracts, to 
        provide electric service to either--
                  (A) electric consumers (as defined in section 
                3(5) of the Public Utility Regulatory Policies 
                Act of 1978 (16 U.S.C. 2602(5)); or
                  (B) an electric utility as defined in section 
                3(4) of the Public Utility Regulatory Policies 
                Act of 1978 (16 U.S.C. 2602(5)) that has an 
                obligation to provide electric service to 
                electric consumers.
        Such obligations shall be deemed ``service 
        obligations''.
          (2) The term ``existing wholesale contractual 
        obligation'' means an obligation under a firm long-term 
        wholesale contract that was in effect on March 28, 
        2003. A contract modification after March 28, 2003 
        (other than one that increases the quantity of electric 
        energy sold under the contract) shall not affect the 
        status of such contract as an existing wholesale 
        contractual obligation.
  (e) Relationship to Other Provisions.--To the extent that a 
transmitting utility reserves transmission capacity (or 
reserves the equivalent amount of tradable transmission rights) 
to provide firm transmission service to meet service 
obligations or firm long-term wholesale contractual obligations 
pursuant to subsection (a), that transmitting utility shall not 
be considered as engaging in undue discrimination or preference 
under this Act.
  (f) Jurisdiction.--This section shall not apply to an entity 
located in an area referred to in section 212(k)(2)(A).
  (g) Savings Clause.--Nothing in this section shall affect any 
allocation of transmission rights by the PJM Interconnection, 
the New York Independent System Operator, the New England 
Independent System Operator, the Midwest Independent System 
Operator, or the California Independent System Operator. 
Nothing in this section shall provide a basis for abrogating 
any contract for firm transmission service or rights in effect 
as of the date of enactment of this section.

SEC. 218. ELECTRIC RELIABILITY.

  (a) Definitions.--For purposes of this section--
          (1) The term ``bulk-power system'' means--
                  (A) facilities and control systems necessary 
                for operating an interconnected electric energy 
                transmission network (or any portion thereof); 
                and
                  (B) electric energy from generation 
                facilities needed to maintain transmission 
                system reliability.
        The term does not include facilities used in the local 
        distribution of electric energy.
          (2) The terms ``Electric Reliability Organization'' 
        and ``ERO'' mean the organization certified by the 
        Commission under subsection (c) the purpose of which is 
        to establish and enforce reliability standards for the 
        bulk-power system, subject to Commission review.
          (3) The term ``reliability standard'' means a 
        requirement, approved by the Commission under this 
        section, to provide for reliable operation of the bulk-
        power system. The term includes requirements for the 
        operation of existing bulk-power system facilities and 
        the design of planned additions or modifications to 
        such facilities to the extent necessary to provide for 
        reliable operation of the bulk-power system, but the 
        term does not include any requirement to enlarge such 
        facilities or to construct new transmission capacity or 
        generation capacity.
          (4) The term ``reliable operation'' means operating 
        the elements of the bulk-power system within equipment 
        and electric system thermal, voltage, and stability 
        limits so that instability, uncontrolled separation, or 
        cascading failures of such system will not occur as a 
        result of a sudden disturbance or unanticipated failure 
        of system elements.
          (5) The term ``Interconnection'' means a geographic 
        area in which the operation of bulk-power system 
        components is synchronized such that the failure of one 
        or more of such components may adversely affect the 
        ability of the operators of other components within the 
        system to maintain reliable operation of the facilities 
        within their control.
          (6) The term ``transmission organization'' means a 
        regional transmission organization, independent system 
        operator, independent transmission provider, or other 
        transmission organization finally approved by the 
        Commission for the operation of transmission 
        facilities.
          (7) The term ``regional entity'' means an entity 
        having enforcement authority pursuant to subsection 
        (e)(4).
  (b) Jurisdiction and Applicability.--(1) The Commission shall 
have jurisdiction, within the United States, over the ERO 
certified by the Commission under subsection (c), any regional 
entities, and all users, owners and operators of the bulk-power 
system, including but not limited to the entities described in 
section 201(f), for purposes of approving reliability standards 
established under this section and enforcing compliance with 
this section. All users, owners and operators of the bulk-power 
system shall comply with reliability standards that take effect 
under this section.
  (2) The Commission shall issue a final rule to implement the 
requirements of this section not later than 180 days after the 
date of enactment of this section.
  (c) Certification.--Following the issuance of a Commission 
rule under subsection (b)(2), any person may submit an 
application to the Commission for certification as the Electric 
Reliability Organization (ERO). The Commission may certify one 
such ERO if the Commission determines that such ERO--
          (1) has the ability to develop and enforce, subject 
        to subsection (e)(2), reliability standards that 
        provide for an adequate level of reliability of the 
        bulk-power system;
          (2) has established rules that--
                  (A) assure its independence of the users and 
                owners and operators of the bulk-power system, 
                while assuring fair stakeholder representation 
                in the selection of its directors and balanced 
                decisionmaking in any ERO committee or 
                subordinate organizational structure;
                  (B) allocate equitably reasonable dues, fees, 
                and other charges among end users for all 
                activities under this section;
                  (C) provide fair and impartial procedures for 
                enforcement of reliability standards through 
                the imposition of penalties in accordance with 
                subsection (e) (including limitations on 
                activities, functions, or operations, or other 
                appropriate sanctions);
                  (D) provide for reasonable notice and 
                opportunity for public comment, due process, 
                openness, and balance of interests in 
                developing reliability standards and otherwise 
                exercising its duties; and
                  (E) provide for taking, after certification, 
                appropriate steps to gain recognition in Canada 
                and Mexico.
  (d) Reliability Standards.--(1) The Electric Reliability 
Organization shall file each reliability standard or 
modification to a reliability standard that it proposes to be 
made effective under this section with the Commission.
  (2) The Commission may approve, by rule or order, a proposed 
reliability standard or modification to a reliability standard 
if it determines that the standard is just, reasonable, not 
unduly discriminatory or preferential, and in the public 
interest. The Commission shall give due weight to the technical 
expertise of the Electric Reliability Organization with respect 
to the content of a proposed standard or modification to a 
reliability standard and to the technical expertise of a 
regional entity organized on an Interconnection-wide basis with 
respect to a reliability standard to be applicable within that 
Interconnection, but shall not defer with respect to the effect 
of a standard on competition. A proposed standard or 
modification shall take effect upon approval by the Commission.
  (3) The Electric Reliability Organization shall rebuttably 
presume that a proposal from a regional entity organized on an 
Interconnection-wide basis for a reliability standard or 
modification to a reliability standard to be applicable on an 
Interconnection-wide basis is just, reasonable, and not unduly 
discriminatory or preferential, and in the public interest.
  (4) The Commission shall remand to the Electric Reliability 
Organization for further consideration a proposed reliability 
standard or a modification to a reliability standard that the 
Commission disapproves in whole or in part.
  (5) The Commission, upon its own motion or upon complaint, 
may order the Electric Reliability Organization to submit to 
the Commission a proposed reliability standard or a 
modification to a reliability standard that addresses a 
specific matter if the Commission considers such a new or 
modified reliability standard appropriate to carry out this 
section.
  (6) The final rule adopted under subsection (b)(2) shall 
include fair processes for the identification and timely 
resolution of any conflict between a reliability standard and 
any function, rule, order, tariff, rate schedule, or agreement 
accepted, approved, or ordered by the Commission applicable to 
a transmission organization. Such transmission organization 
shall continue to comply with such function, rule, order, 
tariff, rate schedule or agreement accepted approved, or 
ordered by the Commission until--
          (A) the Commission finds a conflict exists between a 
        reliability standard and any such provision;
          (B) the Commission orders a change to such provision 
        pursuant to section 206 of this part; and
          (C) the ordered change becomes effective under this 
        part.
If the Commission determines that a reliability standard needs 
to be changed as a result of such a conflict, it shall order 
the ERO to develop and file with the Commission a modified 
reliability standard under paragraph (4) or (5) of this 
subsection.
  (e) Enforcement.--(1) The ERO may impose, subject to 
paragraph (2), a penalty on a user or owner or operator of the 
bulk-power system for a violation of a reliability standard 
approved by the Commission under subsection (d) if the ERO, 
after notice and an opportunity for a hearing--
          (A) finds that the user or owner or operator has 
        violated a reliability standard approved by the 
        Commission under subsection (d); and
          (B) files notice and the record of the proceeding 
        with the Commission.
  (2) A penalty imposed under paragraph (1) may take effect not 
earlier than the 31st day after the electric reliability 
organization files with the Commission notice of the penalty 
and the record of proceedings. Such penalty shall be subject to 
review by the Commission, on its own motion or upon application 
by the user, owner or operator that is the subject of the 
penalty filed within 30 days after the date such notice is 
filed with the Commission. Application to the Commission for 
review, or the initiation of review by the Commission on its 
own motion, shall not operate as a stay of such penalty unless 
the Commission otherwise orders upon its own motion or upon 
application by the user, owner or operator that is the subject 
of such penalty. In any proceeding to review a penalty imposed 
under paragraph (1), the Commission, after notice and 
opportunity for hearing (which hearing may consist solely of 
the record before the electric reliability organization and 
opportunity for the presentation of supporting reasons to 
affirm, modify, or set aside the penalty), shall by order 
affirm, set aside, reinstate, or modify the penalty, and, if 
appropriate, remand to the electric reliability organization 
for further proceedings. The Commission shall implement 
expedited procedures for such hearings.
  (3) On its own motion or upon complaint, the Commission may 
order compliance with a reliability standard and may impose a 
penalty against a user or owner or operator of the bulk-power 
system, if the Commission finds, after notice and opportunity 
for a hearing, that the user or owner or operator of the bulk-
power system has engaged or is about to engage in any acts or 
practices that constitute or will constitute a violation of a 
reliability standard.
  (4) The Commission shall establish regulations authorizing 
the ERO to enter into an agreement to delegate authority to a 
regional entity for the purpose of proposing reliability 
standards to the ERO and enforcing reliability standards under 
paragraph (1) if--
          (A) the regional entity is governed by--
                  (i) an independent board;
                  (ii) a balanced stakeholder board; or
                  (iii) a combination independent and balanced 
                stakeholder board.
          (B) the regional entity otherwise satisfies the 
        provisions of subsection (c)(1) and (2); and
          (C) the agreement promotes effective and efficient 
        administration of bulk-power system reliability.
The Commission may modify such delegation. The ERO and the 
Commission shall rebuttably presume that a proposal for 
delegation to a regional entity organized on an 
Interconnection-wide basis promotes effective and efficient 
administration of bulk-power system reliability and should be 
approved. Such regulation may provide that the Commission may 
assign the ERO's authority to enforce reliability standards 
under paragraph (1) directly to a regional entity consistent 
with the requirements of this paragraph.
  (5) The Commission may take such action as is necessary or 
appropriate against the ERO or a regional entity to ensure 
compliance with a reliability standard or any Commission order 
affecting the ERO or a regional entity.
  (6) Any penalty imposed under this section shall bear a 
reasonable relation to the seriousness of the violation and 
shall take into consideration the efforts of such user, owner, 
or operator to remedy the violation in a timely manner.
  (f) Changes in Electricity Reliability Organization Rules.--
The Electric Reliability Organization shall file with the 
Commission for approval any proposed rule or proposed rule 
change, accompanied by an explanation of its basis and purpose. 
The Commission, upon its own motion or complaint, may propose a 
change to the rules of the Electric Reliability Organization. A 
proposed rule or proposed rule change shall take effect upon a 
finding by the Commission, after notice and opportunity for 
comment, that the change is just, reasonable, not unduly 
discriminatory or preferential, is in the public interest, and 
satisfies the requirements of subsection (c).
  (g) Reliability Reports.--The Electric Reliability 
Organization shall conduct periodic assessments of the 
reliability and adequacy of the bulk-power system in North 
America.
  (h) Coordination with Canada and Mexico.--The President is 
urged to negotiate international agreements with the 
governments of Canada and Mexico to provide for effective 
compliance with reliability standards and the effectiveness of 
the Electric Reliability Organization in the United States and 
Canada or Mexico.
  (i) Savings Provisions.--(1) The Electric Reliability 
Organization shall have authority to develop and enforce 
compliance with reliability standards for only the bulk-power 
system.
  (2) This section does not authorize the Electric Reliability 
Organization or the Commission to order the construction of 
additional generation or transmission capacity or to set and 
enforce compliance with standards for adequacy or safety of 
electric facilities or services.
  (3) Nothing in this section shall be construed to preempt any 
authority of any State to take action to ensure the safety, 
adequacy, and reliability of electric service within that 
State, as long as such action is not inconsistent with any 
reliability standard, except that the State of New York may 
establish rules that result in greater reliability within that 
State, as long as such action does not result in lesser 
reliability outside the State than that provided by the 
reliability standards.
  (4) Within 90 days of the application of the Electric 
Reliability Organization or other affected party, and after 
notice and opportunity for comment, the Commission shall issue 
a final order determining whether a State action is 
inconsistent with a reliability standard, taking into 
consideration any recommendation of the Electric Reliability 
Organization.
  (5) The Commission, after consultation with the Electric 
Reliability Organization and the State taking action, may stay 
the effectiveness of any State action, pending the Commission's 
issuance of a final order.
  (j) Regional Advisory Bodies.--The Commission shall establish 
a regional advisory body on the petition of at least two-thirds 
of the States within a region that have more than one-half of 
their electric load served within the region. A regional 
advisory body shall be composed or of one member from each 
participating State in the region, appointed by the Governor of 
each State, and may include representatives of agencies, 
States, and provinces outside the United States. A regional 
advisory body may provide advice to the Electric Reliability 
Organization, a regional entity, or the Commission regarding 
the governance of an existing or proposed regional entity 
within the same region, whether a standard proposed to apply 
within the region is just, reasonable, not unduly 
discriminatory or preferential, and in the public interest, 
whether fees proposed to be assessed within the region are 
just, reasonable, not unduly discriminatory or preferential, 
and in the public interest and any other responsibilities 
requested by the Commission. The Commission may give deference 
to the advice of any such regional advisory body if that body 
is organized on an Interconnection-wide basis.
  (k) Application to Alaska and Hawaii.--The provisions of this 
section do not apply to Alaska or Hawaii.

SEC. 219. MARKET TRANSPARENCY RULES.

  (a) Commission Rules.--Not later than 180 days after the date 
of enactment of this section, the Commission shall issue rules 
establishing an electronic information system to provide the 
Commission and the public with access to such information as is 
necessary or appropriate to facilitate price transparency and 
participation in markets subject to the Commission's 
jurisdiction. Such systems shall provide information about the 
availability and market price of sales of electric energy at 
wholesale in interstate commerce and transmission of electric 
energy in interstate commerce to the Commission, State 
commissions, buyers and sellers of wholesale electric energy, 
users of transmission services, and the public on a timely 
basis. The Commission shall have authority to obtain such 
information from any person, and any entity described in 
section 201(f), who sells electric energy at wholesale in 
interstate commerce or provides transmission services in 
interstate commerce.
  (b) Exemptions.--The Commission shall exempt from disclosure 
information it determines would, if disclosed, (1) be 
detrimental to the operation of an effective market; or (2) 
jeopardize system security. This section shall not apply to an 
entity described in section 212(k)(2)(B) with respect to 
transactions for the purchase or sale of wholesale electric 
energy and transmission services within the area described in 
section 212(k)(2)(A).

SEC. 220. PROHIBITION ON ROUND TRIP TRADING.

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

PART III--LICENSEES AND PUBLIC UTILITIES; PROCEDURAL AND ADMINISTRATIVE 
PROVISIONS

           *       *       *       *       *       *       *


                               COMPLAINTS

  Sec. 306. Any person, electric utility, State, municipality, 
or State commission complaining of anything done or omitted to 
be done by any licensee, transmitting utility, or public 
utility in contravention of the provisions of this Act may 
apply to the Commission by petition which shall briefly state 
the facts, whereupon a statement of the complaint thus made 
shall be forwarded by the Commission to such licensee, 
transmitting utility, or public utility, who shall be called 
upon to satisfy the complaint or to answer the same in writing 
within a reasonable time to be specified by the Commission. If 
such licensee, transmitting utility, or public utility shall 
not satisfy the complaint within the time specified or there 
shall appear to be any reasonable ground for investigating such 
complaint, it shall be the duty of the Commission to 
investigate the matters complained of in such manner and by 
such means as it shall find proper.

   INVESTIGATIONS BY COMMISSION; ATTENDANCE OF WITNESSES; DEPOSITIONS

  Sec. 307. (a) The Commission may investigate any facts, 
conditions, practices, or matters which it may find necessary 
or proper in order to determine whether any person, electric 
utility, transmitting utility, or other entity has violated or 
is about to violate any provisions of this Act or any rule, 
regulation, or order thereunder, or to aid in the enforcement 
of the provisions of this Act or in prescribing rules or 
regulations thereunder, or in obtaining information to serve as 
a basis for recommending further legislation concerning the 
matters to which this Act relates[.] or in obtaining 
information about the sale of electric energy at wholesale in 
interstate commerce and the transmission of electric energy in 
interstate commerce. The Commission may permit any person, 
electric utility, transmitting utility, or other entity to file 
with it a statement in writing under oath or otherwise, as it 
shall determine, as to any or all facts and circumstances 
concerning a matter which may be the subject of investigation. 
The Commission, in its discretion, may publish or make 
available to State commissions information concerning any such 
subject.

           *       *       *       *       *       *       *


                   REHEARINGS; COURT REVIEW OF ORDERS

  Sec. 313. (a) Any person, electric utility, State, 
municipality, or State commission aggrieved by an order issued 
by the Commission in a proceeding under this Act to which such 
person, State, municipality, or State commission is a party may 
apply for a rehearingwithin thirty days after the issuance of 
such order. The application for rehearing shall set forth specifically 
the ground or grounds upon which such application is based. Upon such 
application the Commission shall have power to grant or deny rehearing 
or to abrogate or modify its order without further hearing. Unless the 
Commission acts upon the application for rehearing within thirty days 
after it is filed, such application may be deemed to have been denied. 
No proceeding to review any orders of the Commission shall be brought 
by [any person unless such person] any entity unless such entity shall 
have made application to the Commission for a rehearing thereon. Until 
the record in a proceeding shall have been filed in a court of appeals, 
as provided in subsection (b), the Commission may at any time, upon 
reasonable notice and in such manner as it shall deem proper, modify or 
set aside, in whole or in part, any finding or order made or issued by 
it under the provisions of this act.

           *       *       *       *       *       *       *


                           GENERAL PENALTIES

  Sec. 316. (a) Any person who willfully and knowingly does or 
causes or suffers to be done any act, matter, or thing in this 
Act prohibited or declared to be unlawful, or who willfully and 
knowingly omits or fails to do any act, matter, or thing in 
this Act required to be done, or willfully and knowingly causes 
or suffers such omission or failure, shall, upon conviction 
thereof, be punished by a fine of not more than [$5,000] 
$1,000,000 or by imprisonment for not more than [two years] 
five years or both.
  (b) Any person who willfully and knowingly violates any rule, 
regulation, restriction, condition, or order made or imposed by 
the Commission under authority of this Act, or any rule or 
regulation imposed by the Secretary of the Army under authority 
of Part I of this Act shall, in addition to any other penalties 
provided by law, be punished upon conviction thereof by a fine 
of not exceeding [$500] $25,000 for each and every day during 
which such offense occurs.
  [(c) This subsection shall not apply in the case of any 
provision of section 211, 212, 213, or 214 or any rule or order 
issued under any such provision.]

SEC. 316A. ENFORCEMENT OF CERTAIN PROVISIONS.

  (a) Violations.--It shall be unlawful for any person to 
violate any provision of [section 211, 212, 213, or 214] Part 
II or any rule or order issued under any such provision.
  (b) Civil Penalties.--Any person who violates any provision 
of [section 211, 212, 213, or 214] Part II or any provision of 
any rule or order thereunder shall be subject to a civil 
penalty of not more than [$10,000] $1,000,000 for each day that 
such violation continues. Such penalty shall be assessed by the 
Commission, after notice and opportunity for public hearing, in 
accordance with the same provisions as are applicable under 
section 31(d) in the case of civil penalties assessed under 
section 31. In determining the amount of a proposed penalty, 
the Commission shall take into consideration the seriousness of 
the violation and the efforts of such person to remedy the 
violation in a timely manner.

           *       *       *       *       *       *       *


                       [CONFLICT OF JURISDICTION

  [Sec. 318. If, with respect to the issue, sale, or guaranty 
of a security, or assumption of obligation or liability in 
respect of a security, the method of keeping accounts, the 
filing of reports, or the acquisition or disposition of any 
security, capital assets, facilities, or any other subject 
matter, any person is subject both to a requirement of the 
Public Utility Holding Company Act of 1935 or of a rule, 
regulation, or other thereunder and to a requirement of this 
Act or of a rule, regulation, or order thereunder, the 
requirement of the Public Utility Holding Company Act of 1935 
shall apply to such person, and such person shall not be 
subject to the requirement of this Act, or of any rule, 
regulation, or order thereunder, with respect to the same 
subject matter, unless the Securities and Exchange Commission 
has exempted such person from such requirement of the Public 
Utility Holding Company Act of 1935, in which case the 
requirements of this Act shall apply to such person.]

           *       *       *       *       *       *       *

                              ----------                              


PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978

           *       *       *       *       *       *       *



TITLE I--RETAIL REGULATORY POLICIES FOR ELECTRIC UTILITIES

           *       *       *       *       *       *       *


              Subtitle B--Standards For Electric Utilities

SEC. 111. CONSIDERATION AND DETERMINATION RESPECTING CERTAIN RATEMAKING 
                    STANDARDS.

  (a)  * * *

           *       *       *       *       *       *       *

  (d) Establishment.--The following Federal standards are 
hereby established:
          (1)  * * *

           *       *       *       *       *       *       *

          (11) Real-time pricing.--(A) Each electric utility 
        shall, at the request of an electric consumer, provide 
        electric service under a real-time rate schedule, under 
        which the rate charged by the electric utility varies 
        by the hour (or smaller time interval) according to 
        changes in the electric utility's wholesale power cost. 
        The real-time pricing service shall enable theelectric 
consumer to manage energy use and cost through real-time metering and 
communications technology.
          (B) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of 
        enactment of the Public Utility Regulatory Policies Act 
        of 1978 shall be deemed to be a reference to the date 
        of enactment of this paragraph.
          (C) Notwithstanding subsections (b) and (c) of 
        section 112, each State regulatory authority shall 
        consider and make a determination concerning whether it 
        is appropriate to implement the standard set out in 
        subparagraph (A) not later than 1 year after the date 
        of enactment of this paragraph.
          (12) Time-of-use metering.--(A) Each electric utility 
        shall, at the request of an electric consumer, provide 
        electric service under a time-of-use rate schedule 
        which enables the electric consumer to manage energy 
        use and cost through time-of-use metering and 
        technology.
          (B) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of 
        enactment of the Public Utility Regulatory Policies Act 
        of 1978 shall be deemed to be a reference to the date 
        of enactment of this paragraph.
          (C) Notwithstanding subsections (b) and (c) of 
        section 112, each State regulatory authority shall 
        consider and make a determination concerning whether it 
        is appropriate to implement the standards set out in 
        subparagraph (A) not later than 1 year after the date 
        of enactment of this paragraph.
          (13) Time-based metering and communications.--(A) Not 
        later than eighteen (18) months after the date of 
        enactment of this paragraph, each electric utility 
        shall offer each of its customer classes, and provide 
        individual customers upon customer request, a time-
        based rate schedule under which the rate charged by the 
        electric utility varies during different time periods 
        and reflects the variance in the costs of generating 
        and purchasing electricity at the wholesale level. The 
        time-based rate schedule shall enable the electric 
        consumer to manage energy use and cost through advanced 
        metering and communications technology.
          (B) The types of time-based rate schedules that may 
        be offered under the schedule referred to in 
        subparagraph (A) include, among others, each the 
        following:
                  (i) Time-Of-Use pricing whereby electricity 
                prices are set for a specific time period on an 
                advance or forward basis, typically not 
                changing more often than twice a year. Prices 
                paid for energy consumed during these periods 
                shall be pre-established and known to consumers 
                in advance of such consumption, allowing them 
                to vary their demand and usage in response to 
                such prices and manage their energy costs by 
                shifting usage to a lower cost period or 
                reducing their consumption overall.
                  (ii) Critical Peak Pricing whereby time-of-
                use prices are in effect except for certain 
                peak days, when prices may reflect the costs of 
                generating and purchasing electricity at the 
                wholesale level and when consumers may receive 
                additional discounts for reducing peak period 
                energy consumption.
                  (iii) Real-Time pricing whereby electricity 
                prices are set for a specific time period on an 
                advanced or forward basis and may change as 
                often as hourly.
          (C) Each electric utility subject to subparagraph (A) 
        shall provide each customer requesting a time-based 
        rate with a time-based meter capable of enabling the 
        utility and customer to offer and receive such rate, 
        respectively.
          (D) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of 
        enactment of the Public Utility Regulatory Policies Act 
        of 1978 shall be deemed to be a reference to the date 
        of enactment of this paragraph.
          (E) In a State that permits third-party marketers to 
        sell electric energy to retail electric consumers, such 
        consumers shall be entitled to receive that same time-
        based metering and communications device and service as 
        a retail electric consumer of the electric utility.
          (F) Notwithstanding subsections (b) and (c) of 
        section 112, each State regulatory authority shall, not 
        later than twelve (12) months after enactment of this 
        paragraph conduct an investigation in accordance with 
        section 115(i) and issue a decision whether it is 
        appropriate to implement the standards set out in 
        subparagraphs (A) and (C).
          (14) Net metering.--(A) Each electric utility shall 
        make available upon request net metering service to any 
        electric consumer that the electric utility serves.
          (B) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of 
        enactment of the Public Utility Regulatory Policies Act 
        of 1978 shall be deemed to be a reference to the date 
        of enactment of this paragraph.
          (C) Notwithstanding subsections (b) and (c) of 
        section 112, each State regulatory authority shall 
        consider and make a determination concerning whether it 
        is appropriate to implement the standard set out in 
        subparagraph (A) not later than 1 year after the date 
        of enactment of this paragraph.

           *       *       *       *       *       *       *


SEC. 115. SPECIAL RULES FOR STANDARDS.

  (a)  * * *

           *       *       *       *       *       *       *

  (i) Real-Time Pricing.--In a State that permits third-party 
marketers to sell electric energy to retail electric consumers, 
the electric consumer shall be entitled to receive the same 
real-time metering and communication service as a direct retail 
electric consumer of the electric utility.
  (j) Time-of-Use Metering.--In a State that permits third-
party marketers to sell electric energy to retail electric 
consumers, the electric consumer shall be entitled to receive 
the same time-of-use metering and communication service as a 
direct retail electric consumer of the electric utility.
  (k) Time-Based Metering and Communications.--Each State 
regulatory authority shall, not later than twelve (12) months 
after enactment of this subsection, conduct an investigation 
and issue a decision whether or not it is appropriate for 
electric utilities to provide and install time-based meters and 
communications devices foreach of their customers which enable 
such customers to participate in time-based pricing rate schedules and 
other demand response programs.
  (l) Net Metering.--In undertaking the consideration and 
making the determination under section 111 with respect to the 
standard concerning net metering established by section 
111(d)(14), the term ``net metering service'' shall mean a 
service provided in accordance with the following standards:
          (1) Rates and charges.--An electric utility--
                  (A) shall charge the owner or operator of an 
                on-site generating facility rates and charges 
                that are identical to those that would be 
                charged other electric consumers of the 
                electric utility in the same rate class; and
                  (B) shall not charge the owner or operator of 
                an on-site generating facility any additional 
                standby, capacity, interconnection, or other 
                rate or charge.
          (2) Measurement.--An electric utility that sells 
        electric energy to the owner or operator of an on-site 
        generating facility shall measure the quantity of 
        electric energy produced by the on-site facility and 
        the quantity of electric energy consumed by the owner 
        or operator of an on-site generating facility during a 
        billing period in accordance with normal metering 
        practices.
          (3) Electric energy supplied exceeding electric 
        energy generated.--If the quantity of electric energy 
        sold by the electric utility to an on-site generating 
        facility exceeds the quantity of electric energy 
        supplied by the on-site generating facility to the 
        electric utility during the billing period, the 
        electric utility may bill the owner or operator for the 
        net quantity of electric energy sold, in accordance 
        with normal metering practices.
          (4) Electric energy generated exceeding electric 
        energy supplied.--If the quantity of electric energy 
        supplied by the on-site generating facility to the 
        electric utility exceeds the quantity of electric 
        energy sold by the electric utility to the on-site 
        generating facility during the billing period--
                  (A) the electric utility may bill the owner 
                or operator of the on-site generating facility 
                for the appropriate charges for the billing 
                period in accordance with paragraph (2); and
                  (B) the owner or operator of the on-site 
                generating facility shall be credited for the 
                excess kilowatt-hours generated during the 
                billing period, with the kilowatt-hour credit 
                appearing on the bill for the following billing 
                period.
          (5) Safety and performance standards.--An eligible 
        on-site generating facility and net metering system 
        used by an electric consumer shall meet all applicable 
        safety, performance, reliability, and interconnection 
        standards established by the National Electrical Code, 
        the Institute of Electrical and Electronics Engineers, 
        and Underwriters Laboratories.
          (6) Additional control and testing requirements.--The 
        Commission, after consultation with State regulatory 
        authorities and nonregulated electric utilities and 
        after notice and opportunity for comment, may adopt, by 
        rule, additional control and testing requirements for 
        on-site generating facilities and net metering systems 
        that the Commission determines are necessary to protect 
        public safety and system reliability.
          (7) Definitions.--For purposes of this subsection:
                  (A) The term ``eligible on-site generating 
                facility'' means--
                          (i) a facility on the site of a 
                        residential electric consumer with a 
                        maximum generating capacity of 10 
                        kilowatts or less that is fueled by 
                        solar energy, wind energy, or fuel 
                        cells; or
                          (ii) a facility on the site of a 
                        commercial electric consumer with a 
                        maximum generating capacity of 500 
                        kilowatts or less that is fueled solely 
                        by a renewable energy resource, 
                        landfill gas, or a high efficiency 
                        system.
                  (B) The term ``renewable energy resource'' 
                means solar, wind, biomass, or geothermal 
                energy.
                  (C) The term ``high efficiency system'' means 
                service fuel cells or combined heat and power.
                  (D) The term ``net metering'' means service 
                to an electric consumer under which electric 
                energy generated by that electric consumer from 
                an eligible on-site generating facility and 
                delivered to the local distribution facilities 
                may be used to offset electric energy provided 
                by the electric utility to the electric 
                consumer during the applicable billing period.

           *       *       *       *       *       *       *


Subtitle D--Administrative Provisions

           *       *       *       *       *       *       *


SEC. 132. RESPONSIBILITIES OF SECRETARY OF ENERGY.

  (a) Authority.--The Secretary may periodically notify the 
State regulatory authorities, and electric utilities identified 
pursuant to section 102(c)--
          (1)  * * *

           *       *       *       *       *       *       *

          (3) methods for determining cost of service; [and]
          (4) any other data or information which the Secretary 
        determines would assist such authorities and utilities 
        in carrying out the provisions of this title[.]; and
          (5) technologies, techniques and rate-making methods 
        related to advanced metering and communications and the 
        use of these technologies, techniques and methods in 
        demand response programs.

           *       *       *       *       *       *       *

  (d) Demand Response.--The Secretary shall be responsible for 
each of the following:
          (1) Educating consumers on the availability, 
        advantages and benefits of advanced metering and 
        communications technologies including the funding of 
        demonstration or pilot projects.
          (2) Working with States, utilities, other energy 
        providers and advanced metering and communications 
        experts to identify and address barriers to the 
        adoption of demand response programs, and
          (3) Within 6 months of enactment, provide the 
        Congress with a report that identifies and quantifies 
        the national benefits of demand response and provides 
        policy recommendations as to how to achieve specific 
        levels of such benefits by January 1, 2005.

           *       *       *       *       *       *       *


 TITLE II--CERTAIN FEDERAL ENERGY REGULATORY COMMISSION AND DEPARTMENT 
OF ENERGY AUTHORITIES

           *       *       *       *       *       *       *


SEC. 210. COGENERATION AND SMALL, POWER PRODUCTION.

  (a)  * * *

           *       *       *       *       *       *       *

  (m) Termination of Mandatory Purchase and Sale 
Requirements.--
          (1) Obligation to purchase.--After the date of 
        enactment of this subsection, no electric utility shall 
        be required to enter into a new contract or obligation 
        to purchase electric energy from a qualifying 
        cogeneration facility or a qualifying small power 
        production facility under this section if the 
        Commission finds that--
                  (A) the qualifying cogeneration facility or 
                qualifying small power production facility has 
                access to
                          (i) independently administered, 
                        auction-based day ahead and real time 
                        wholesale markets for the sale of 
                        electric energy, and
                          (ii) long-term wholesale markets for 
                        the sale of capacity and electric 
                        energy;
                  (B) the qualifying cogeneration facility or 
                qualifying small power production facility has 
                access to a competitive wholesale market for 
                the sale of electric energy that provides such 
                qualifying cogeneration facility or qualifying 
                small power production facility with 
                opportunities to sell electric energy that, at 
                a minimum, are comparable to the opportunities 
                provided by the markets, or some minimum 
                combination thereof, described in subparagraph 
                (A); or
                  (C) the qualifying cogeneration facility does 
                not meet criteria established by the Commission 
                pursuant to the rulemaking set forth in 
                subparagraph (n) and has not filed with the 
                Commission a notice of self-certification or an 
                application for Commission certification under 
                18 C.F.R. 292.207 prior to the date of 
                enactment of this subsection.
          (2) Commission review.--(A) Any electric utility may 
        file an application with the Commission for relief from 
        the mandatory purchase obligation pursuant to this 
        subsection on a utility-wide basis. Such application 
        shall set forth the reasons why such relief is 
        appropriate and describe how the conditions set forth 
        in subparagraphs (A) and (B) of paragraph (1) of this 
        subsection have been met.
          (B) After notice, including sufficient notice to 
        potentially affected qualifying facilities, and an 
        opportunity for comment, and within 90 days of the 
        filing of an application under subparagraph (A), the 
        Commission shall make a final determination as to 
        whether the conditions set forth in subparagraphs (A) 
        and (B) of paragraph (1) have been met. The Commission 
        shall not be authorized to issue a tolling order 
        regarding such application or otherwise delay a final 
        decision regarding such application.
          (3) Reinstatement of obligation to purchase.--(A) At 
        any time after the Commission makes a finding under 
        paragraph (2) relieving an electric utility of its 
        obligation to purchase electric energy, a qualifying 
        cogeneration facility or a qualifying small power 
        production facility may apply to the Commission for an 
        order reinstating the electric utility's obligation to 
        purchase electric energy under this section. Such 
        application shall set forth the reasons why such relief 
        is no longer appropriate and describe how the tests set 
        forth in subparagraphs (A) and (B) of paragraph (1) of 
        this subsection are no longer met.
          (B) After notice, including sufficient notice to 
        potentially affected utilities, and opportunity for 
        comment, and within 90 days of the filing of an 
        application under subparagraph (A), the Commission 
        shall issue an order reinstating the electric utility's 
        obligation to purchase electric energy under this 
        section if the Commission finds that the condition in 
        paragraph (1), which relieved the obligation to 
        purchase, is no longer met. The Commission shall not be 
        authorized to issue a tolling order regarding such 
        application or otherwise delay a final decision 
        regarding such application.
          (4) Obligation to sell.--After the date of enactment 
        of this subsection, no electric utility shall be 
        required to enter into a new contract or obligation to 
        sell electric energy to a qualifying cogeneration 
        facility or a qualifying small power production 
        facility if--
                  (A) competing retail electric suppliers are 
                willing and able to provide electric energy to 
                the qualifying cogeneration facility or 
                qualifying small power production facility, and
                  (B) the electric utility is not required by 
                State law to sell electric energy in its 
                service territory.
          (5) No effect on existing rights and remedies.--
        Nothing in this subsection affects the rights or 
        remedies of any party under any contract or obligation, 
        in effect or pending approval before the appropriate 
        State regulatory authority or nonregulated electric 
        utility on the date of enactment of this subsection, to 
        purchase electric energy or capacity from or to sell 
        electric energy or capacity to a facility under this 
        Act (including the right to recover costs of purchasing 
        electric energy or capacity).
          (6) Recovery of costs.--
                  (A) Regulation.--To ensure recovery by an 
                electric utility that purchases electric energy 
                or capacity from a qualifying facility pursuant 
                to any legally enforceable obligation entered 
                into or imposed under this section of all 
                prudently incurred costs associated with the 
                purchases, the Commission shall issue and 
                enforce such regulations as may be required to 
                ensure that the electric utility shall recover 
                the prudently incurred costs associated with 
                such purchases.
                  (B) Enforcement.--A regulation under 
                subparagraph (A) shall be enforceable in 
                accordance with the provisions of law 
                applicable to enforcement of regulations under 
                the Federal Power Act (16 U.S.C. 791a et seq.).
  (n) Rulemaking for new facilities.--
          (1) In general.--Not later than 180 days after the 
        date of enactment of this subsection, the Commission 
        shall issue a rule revising the criteria for qualifying 
        cogeneration facilities in 18 C.F.R. 292.205. In 
        particular, the Commission shall evaluate the rules 
        regarding qualifying facility criteria and revise such 
        rules, as necessary, to ensure--
                  (A) that the thermal energy output of a new 
                qualifying cogeneration facility is used in a 
                productive and beneficial manner;
                  (B) the electrical and thermal output of the 
                cogeneration facility is used predominantly for 
                commercial or industrial processes and not 
                intended predominantly for sale to an electric 
                utility; and
                  (C) continuing progress in the development of 
                efficient electric energy generating 
                technology.
          (2) Applicability.--Any revisions made to operating 
        and efficiency standards shall be applicable only to a 
        cogeneration facility that--
                  (A) was not a qualifying cogeneration 
                facility, or
                  (B) had not filed with the Commission a 
                notice of self-certification or an application 
                for Commission certification under 18 C.F.R. 
                292.207
prior to the date of enactment of this subsection.
          (3) Definition.--For purposes of this subsection, the 
        term ``commercial processes'' includes uses of thermal 
        and electric energy for educational and healthcare 
        facilities.
  (o) Rules for Existing Facilities.-- Notwithstanding rule 
revisions under subsection (n), the Commission's rules in 
effect prior to the effective date of any revised rules 
prescribed under subsection (n) shall continue to apply to any 
cogeneration facility or small power production facility that--
          (1) was a qualifying cogeneration facility or a 
        qualifying small power production facility, or
          (2) had filed with the Commission a notice of self-
        certification or an application for Commission 
        certification under 18 C.F.R. 292.207
prior to the date of enactment of subsections (m) and (n).

           *       *       *       *       *       *       *


TITLE IV--SMALL HYDROELECTRIC POWER PROJECTS

           *       *       *       *       *       *       *


SEC. 408. DEFINITIONS.

  (a) For purposes of this title, the term--
          (1)  * * *

           *       *       *       *       *       *       *

          (6) ``existing dam'' means any dam, the construction 
        of which was completed on or before [April 20, 1977] 
        March 4, 2003, and which does not require any 
        construction or enlargement of impoundment structures 
        (other than repairs or reconstruction) in connection 
        with the installation of any small hydroelectric power 
        project;

           *       *       *       *       *       *       *

                              ----------                              


                       ATOMIC ENERGY ACT OF 1954

                            TABLE OF CONTENTS

                         TITLE I--ATOMIC ENERGY

     * * * * * * *

                      Chapter 14. General Authority

Sec. 161. General provisions.
     * * * * * * *
Sec. 170C. Secure transfer of nuclear materials.
Sec. 170D. Preventing the misuse of nuclear materials and technology.
     * * * * * * *

TITLE I--ATOMIC ENERGY

           *       *       *       *       *       *       *


CHAPTER 10. ATOMIC ENERGY LICENSES

           *       *       *       *       *       *       *


  Sec. 103. Commercial Licenses.--
  a.  * * *

           *       *       *       *       *       *       *

  c. Each such license shall be issued for a specified period, 
as determined by the Commission, depending on the type of 
activity to be licensed, but not exceeding forty years from the 
authorization to commence operations, and may be renewed upon 
the expiration of such period.

           *       *       *       *       *       *       *


CHAPTER 11. INTERNATIONAL ACTIVITIES

           *       *       *       *       *       *       *


  Sec. 134. Further Restrictions on Exports.--
  a.  * * *
  b. The Commission may issue a license authorizing the export 
(including shipment to and use at intermediate and ultimate 
consignees specified in the license) to a Recipient Country of 
highly enriched uranium for medical isotope production if, in 
addition to any other requirements of this Act, the Commission 
determines that--
          (1) a Recipient Country that supplies an assurance 
        letter to the United States Government in connection 
        with the Commission's consideration of the export 
        license application has informed the United States 
        Government that any intermediate consignees and the 
        ultimate consignee specified in the application are 
        required to use such highly enriched uranium solely to 
        produce medical isotopes; and
          (2) the highly enriched uranium for medical isotope 
        production will be irradiated only in a reactor in a 
        Recipient Country that--
                  (A) uses an alternative nuclear reactor fuel; 
                or
                  (B) is the subject of an agreement with the 
                United States Government to convert to an 
                alternative nuclear reactor fuel when such fuel 
                can be used in that reactor.
  c. Applications to the Commission for licenses authorizing 
the export to a Recipient Country of highly enriched uranium 
for medical isotope production shall be subject to subsection 
b., and subsection a. shall not be applicable to such exports.
  d. The Commission is authorized to specify, by rulemaking or 
decision in connection with an export license application, that 
a country other than a Recipient Country may receive exports of 
highly enriched uranium for medical isotope production in 
accordance with the same criteria established by subsection b. 
for exports to a Recipient Country, upon the Commission's 
finding that such additional country is a party to the Treaty 
on the Nonproliferation of Nuclear Weapons and the Convention 
on the Physical Protection of Nuclear Material and will receive 
such highly enriched uranium pursuant to an agreement with the 
United States concerning peaceful uses of nuclear energy.
  e. The Commission shall review the adequacy of physical 
protection requirements that are currently applicable to the 
transportation of highly enriched uranium for medical isotope 
production. If it determines that additional physical 
protection measures are necessary, including any limits that 
the Commission finds are necessary on the quantity of highly 
enriched uranium contained in a single shipment for medical 
isotope production, the Commission shall impose such 
requirements, as license conditions or through other 
appropriate means.
  [b.] f. As used in this section--
          (1)  * * *
          (2) the term ``highly enriched uranium'' means 
        uranium enriched to 20 percent or more in the isotope 
        U-235; [and]
          (3) a fuel or target ``can be used'' in a nuclear 
        research or test reactor if--
                  (A)  * * *
                  (B) use of the fuel or target will permit the 
                large majority of ongoing and planned 
                experiments and isotope production to be 
                conducted in the reactor without a large 
                percentage increase in the total cost of 
                operating the reactor[.];
          (4) the term ``medical isotopes'' means radioactive 
        isotopes, including Molybdenum 99, Iodine 131, and 
        Xenon 133, that are used to produce 
        radiopharmaceuticals for diagnostic or therapeutic 
        procedures on patients, or in connection with research 
        and development of radiopharmaceuticals;
          (5) the term ``highly enriched uranium for medical 
        isotope production'' means highly enriched uranium 
        contained in, or for use in, targets to be irradiated 
        for the sole purpose of producing medical isotopes;
          (6) the term ``radiopharmaceuticals'' means 
        radioactive isotopes containing byproduct material 
        combined with chemical or biological material that are 
        designed to accumulate temporarily in a part of the 
        body, for therapeutic purposes or for enabling the 
        production of a useful image of the appropriate body 
        organ or function for use in diagnosis of medical 
        conditions; and
          (7) the term ``Recipient Country'' means Canada, 
        Belgium, France, Germany, and the Netherlands.

           *       *       *       *       *       *       *


                     CHAPTER 14. GENERAL AUTHORITY

  Sec. 161. General Provisions.--In the performance of its 
functions the Commission is authorized to--
          a.  * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          w. prescribe and collect from any other Government 
        agency, which applies [for or is issued a license for a 
        utilization facility designed to produce electrical or 
        heat energy pursuant to section 103 or 104 b., or which 
        operates any facility regulated or certified under 
        section 1701 or 1702] to the Commission for, or is 
        issued by the Commission, a license or certificate, any 
        fee, charge, or price which it may require, in 
        accordance with the provisions of section [483a] 9701 
        of title 31 of the United States Code or any other 
        law[, of applicants for, or holders of, such licenses 
        or certificates].

           *       *       *       *       *       *       *

          y. exempt from the application of sections 8344 and 
        8468 of title 5, United States Code, an annuitant who 
        was formerly an employee of the Commission who is hired 
        by the Commission as a consultant, if the Commission 
        finds that the annuitant has a skill that is critical 
        to the performance of the duties of the Commission.

           *       *       *       *       *       *       *

  Sec. 170. Indemnification and Limitation of Liability.--
  a.  * * *
  b. Amount and Type of Financial Protection for Licensees.--
(1) The amount of primary financial protection required shall 
be the amount of liability insurance available from private 
sources, except that the Commission may establish a lesser 
amount on the basis of criteria set forth in writing, which it 
may revise from time to time, taking into consideration such 
factors as the following: (A) the cost and terms of private 
insurance, (B) the type, size, and location of the licensed 
activity and other factors pertaining to the hazard, and (C) 
the nature and purpose of the licensed activity: Provided, That 
for facilities designed for producing substantial amounts of 
electricity and having a rated capacity of 100,000 electrical 
kilowatts or more, the amount of primary financial protection 
required shall be the maximum amount available at reasonable 
cost and on reasonable terms from private sources (excluding 
the amount of private liability insurance available under the 
industry retrospective rating plan required in this 
subsection). Such primary financial protection may include 
private insurance, private contractual indemnities, self-
insurance, other proof of financial responsibility, or a 
combination of such measures and shall be subject to such terms 
and conditions as the Commission may, by rule, regulation, or 
order, prescribe. The Commission shall require licensees that 
are required to have and maintain primary financial protection 
equal to the maximum amount of liability insurance available 
from private sources to maintain, in addition to such primary 
financial protection, private liability insurance available 
under an industry retrospective rating plan providing for 
premium charges deferred in whole or major part until public 
liability from a nuclear incident exceeds or appears likely to 
exceed the level of the primary financial protection required 
of the licensee involved in the nuclearincident: Provided, That 
such insurance is available to, and required of, all of the licensees 
of such facilities without regard to the manner in which they obtain 
other types or amounts of such primary financial protection: And 
provided further: That the maximum amount of the standard deferred 
premium that may be charged a licensee following any nuclear incident 
under such a plan shall not be more than [$63,000,000] $94,000,000 
(subject to adjustment for inflation under subsection t.), but not more 
than [$10,000,000 in any 1 year] $15,000,000 in any 1 year (subject to 
adjustment for inflation under subsection t.), for each facility for 
which such licensee is required to maintain the maximum amount of 
primary financial protection: And provided further, That the amount 
which may be charged a licensee following any nuclear incident shall 
not exceed the licensee's pro rata share of the aggregate public 
liability claims and costs (excluding legal costs subject to subsection 
o. (1)(D), payment of which has not been authorized under such 
subsection) arising out of the nuclear incident. Payment of any State 
premium taxes which may be applicable to any deferred premium provided 
for in this Act shall be the responsibility of the licensee and shall 
not be included in the retrospective premium established by the 
Commission.

           *       *       *       *       *       *       *

  (5)(A) For purposes of this section only, the Commission 
shall consider a combination of facilities described in 
subparagraph (B) to be a single facility having a rated 
capacity of 100,000 electrical kilowatts or more.
  (B) A combination of facilities referred to in subparagraph 
(A) is 2 or more facilities located at a single site, each of 
which has a rated capacity of 100,000 electrical kilowatts or 
more but not more than 300,000 electrical kilowatts, with a 
combined rated capacity of not more than 1,300,000 electrical 
kilowatts.
  c. Indemnification of [Licenses] Licensees by Nuclear 
Regulatory Commission.--The Commission shall, with respect to 
licenses issued between August 30, 1954, and [December 31, 
2003] August 1, 2017, for which it requires financial 
protection of less than $560,000,000, agree to indemnify and 
hold harmless the licensee and other persons indemnified, as 
their interest may appear, from public liability arising from 
nuclear incidents which is in excess of the level of financial 
protection required of the licensee. The aggregate indemnity 
for all persons indemnified in connection with each nuclear 
incident shall not exceed $500,000,000, excluding costs of 
investigating and settling claims and defending suits for 
damage: Provided, however, That this amount of indemnity shall 
be reduced by the amount that the financial protection required 
shall exceed $60,000,000. Such a contract of indemnification 
shall cover public liability arising out of or in connection 
with the licensed activity. With respect to any production or 
utilization facility for which a construction permit is issued 
between August 30, 1954, and [December 31, 2003] August 1, 
2017, the requirements of this subsection shall apply to any 
license issued for such facility subsequent to [December 31, 
2003] August 1, 2017.
  d. Indemnification of Contractors by Department of Energy.--
(1)(A) In addition to any other authority the Secretary of 
Energy (in this section referred to as the ``Secretary'') may 
have, the Secretary shall, until [December 31, 2004] August 1, 
2017, enter into agreements of indemnification under this 
subsection with any person who may conduct activities under a 
contract with the Department of Energy that involve the risk of 
public liability and that are not subject to financial 
protection requirements under subsection b. or agreements of 
indemnification under subsection c. or k.

           *       *       *       *       *       *       *

  [(2) In agreements of indemnification entered into under 
paragraph (1), the Secretary may require the contractor to 
provide and maintain financial protection of such a type and in 
such amounts as the Secretary shall determine to be appropriate 
to cover public liability arising out of or in connection with 
the contractual activity, and shall indemnify the persons 
indemnified against such claims above the amount of the 
financial protection required, to the full extent of the 
aggregate public liability of the persons indemnified for each 
nuclear incident, including such legal costs of the contractor 
as are approved by the Secretary.
  [(3)(A) Notwithstanding paragraph (2), if the maximum amount 
of financial protection required of the contractor, shall at 
all times remain equal to or greater than the maximum amount of 
financial protection required of licensees under subsection b.
  [(B) The amount of indemnity provided contractors under this 
subsection shall not, at any time, be reduced in the event that 
the maximum amount of financial protection required of 
licensees is reduced.
  [(C) All agreements of indemnification under which the 
Department of Energy (or its predecessor agencies) may be 
required to indemnify any person, shall be deemed to be 
amended, on the date of the enactment of the Price-Anderson 
Amendments Act of 1988, to reflect the amount of indemnity for 
public liability andany applicable financial protection 
required of the contractor under this subsection on such date.]
  (2) In an agreement of indemnification entered into under 
paragraph (1), the Secretary--
          (A) may require the contractor to provide and 
        maintain the financial protection of such a type and in 
        such amounts as the Secretary shall determine to be 
        appropriate to cover public liability arising out of or 
        in connection with the contractual activity; and
          (B) shall indemnify the persons indemnified against 
        such liability above the amount of the financial 
        protection required, in the amount of $10,000,000,000 
        (subject to adjustment for inflation under subsection 
        t.), in the aggregate, for all persons indemnified in 
        connection with the contract and for each nuclear 
        incident, including such legal costs of the contractor 
        as are approved by the Secretary.
  (3) All agreements of indemnification under which the 
Department of Energy (or its predecessor agencies) may be 
required to indemnify any person under this section shall be 
deemed to be amended, on the date of enactment of the Price-
Anderson Amendments Act of 2003, to reflect the amount of 
indemnity for public liability and any applicable financial 
protection required of the contractor under this subsection.

           *       *       *       *       *       *       *

  (5) In the case of nuclear incidents occurring outside the 
United States, the amount of the indemnity provided by the 
Secretary under this subsection shall not exceed [$100,000,000] 
$500,000,000.

           *       *       *       *       *       *       *

  e. Limitation on Aggregate Public Liability.--(1) The 
aggregate public liability for a single nuclear incident of 
persons indemnified, including such legal costs as are 
authorized to be paid under subsection o. (1)(D), shall not 
exceed--
          (A)  * * *
          (B) in the case of contractors with whom the 
        Secretary has entered into an agreement of 
        indemnification under subsection d., [the maximum 
        amount of financial protection required under 
        subsection b. or] the amount of indemnity and financial 
        protection that may be required under [paragraph (3) of 
        subsection d., whichever amount is more] paragraph (2) 
        of subsection d.; and

           *       *       *       *       *       *       *

  (4) With respect to any nuclear incident occurring outside of 
the United States to which an agreement of indemnification 
entered into under the provisions of subsection d. is 
applicable, such aggregate public liability shall not exceed 
the amount of [$100,000,000] $500,000,000, together with the 
amount of financial protection required of the contractor.

           *       *       *       *       *       *       *

  k. Exemption From Financial Protection Requirement for 
Nonprofit Educational Institutions.--With respect to any 
license issued pursuant to section 53, 63, 81, 104 a., or 104 
c. for the conduct of educational activities to a person found 
by the Commission to be a nonprofit educational institution, 
the Commission shall exempt such licensee from the financial 
protection requirement of subsection a. With respect to 
licenses issued between August 30, 1954, and [August 1, 2002] 
August 1, 2017, for which the Commission grants such exemption:
          (1)  * * *

           *       *       *       *       *       *       *

Any licensee may waive an exemption to which it is entitled 
under this subsection. With respect to any production or 
utilization facility for which a construction permit is issued 
between August 30, 1954, and [August 1, 2002] August 1, 2017, 
the requirements of this subsection shall apply to any license 
issued for such facility subsequent to [August 1, 2002] August 
1, 2017.

           *       *       *       *       *       *       *

  p. Reports to Congress.--The Commission and the Secretary 
shall submit to the Congress by [August 1, 1998] August 1, 
2013, detailed reports concerning the need for continuation or 
modification of the provisions of this section, taking into 
account the condition of the nuclear industry, availability of 
private insurance, and the state of knowledge concerning 
nuclear safety at that time, among other relevant factors, and 
shall include recommendations as to the repeal or modification 
of any of the provisions of this section.

           *       *       *       *       *       *       *

  t. Inflation Adjustment.--(1) The Commission shall adjust the 
amount of the maximum total and annual standard deferred 
premium under subsection b. (1) not less than once during each 
5-year period following [the date of the enactment of the 
Price-Anderson Amendments Act of 1988] July 1, 2002, in 
accordance with the aggregate percentage change in the Consumer 
Price Index since--
          (A) [such date of enactment] July 1, 2002, in the 
        case of the first adjustment under this subsection; or

           *       *       *       *       *       *       *

  (2) The Secretary shall adjust the amount of indemnification 
provided under an agreement of indemnification under subsection 
d. not less than once during each 5-year period following July 
1, 2002, in accordance with the aggregate percentage change in 
the Consumer Price Index since--
          (A) that date, in the case of the first adjustment 
        under this paragraph; or
          (B) the previous adjustment under this paragraph.
  [(2)] (3) For purposes of this subsection, the term 
``Consumer Price Index'' means the Consumer Price Index for all 
urban consumers published by the Secretary of Labor.
  u. Prohibition on Assumption of Liability for Certain Foreign 
Accidents.--Notwithstanding this section or any other provision 
of law, no officer of the United States or of any department, 
agency, or instrumentality of the United States Government may 
enter into any contract or other arrangement, or into any 
amendment or modification of a contract or other arrangement, 
the purpose or effect of which would be to directly or 
indirectly impose liability on the United States Government, or 
any department, agency, or instrumentality of the United States 
Government, or to otherwise directly or indirectly require an 
indemnity by the United States Government, for nuclear 
accidents occurring in connection with the design, 
construction, or operation of a production facility or 
utilization facility in any country whose government has been 
identified by the Secretary of State as engaged in state 
sponsorship of terrorist activities (specifically including any 
country the government of which, as of September 11, 2001, had 
been determined by the Secretary of State under section 620A(a) 
of the Foreign Assistance Act of 1961, section 6(j)(1) of the 
Export Administration Act of 1979, or section 40(d) of the Arms 
Export Control Act to have repeatedly provided support for acts 
of international terrorism).
  v. Unreasonable Risk Consultation.--(1) Before entering into 
an agreement of indemnification under this section with respect 
to a utilization facility, the Nuclear Regulatory Commission 
shall consult with the Assistant to the President for Homeland 
Security (or any successor official) concerning whether the 
location of the proposed facility and the design of that type 
of facility ensure that thefacility provides for adequate 
protection of public health and safety if subject to a terrorist 
attack.
  (2) Before issuing a license or a license renewal for a 
sensitive nuclear facility, the Nuclear Regulatory Commission 
shall consult with the Secretary of Homeland Security or his 
designee concerning the emergency evacuation plan for the 
communities living near the sensitive nuclear facility. For 
purposes of this paragraph, the term ``sensitive nuclear 
facility'' has the meaning given that term in section 4012 of 
the Energy Policy Act of 2003.
  w. Financial Accountability.--(1) Notwithstanding subsection 
d., the Attorney General may bring an action in the appropriate 
United States district court to recover from a contractor of 
the Secretary (or subcontractor or supplier of such contractor) 
amounts paid by the Federal Government under an agreement of 
indemnification under subsection d. for public liability 
resulting from conduct which constitutes intentional misconduct 
of any corporate officer, manager, or superintendent of such 
contractor (or subcontractor or supplier of such contractor).
  (2) The Attorney General may recover under paragraph (1) an 
amount not to exceed the amount of the profit derived by the 
defendant from the contract.
  (3) No amount recovered from any contractor (or subcontractor 
or supplier of such contractor) under paragraph (1) may be 
reimbursed directly or indirectly by the Department of Energy.
  (4) Paragraph (1) shall not apply to any nonprofit entity 
conducting activities under contract for the Secretary.
  (5) No waiver of a defense required under this section shall 
prevent a defendant from asserting such defense in an action 
brought under this subsection.
  (6) The Secretary shall, by rule, define the terms ``profit'' 
and ``nonprofit entity'' for purposes of this subsection. Such 
rulemaking shall be completed not later than 180 days after the 
date of the enactment of this subsection.

           *       *       *       *       *       *       *

  Sec. 170C. Secure Transfer of Nuclear Materials.--
  a. The Nuclear Regulatory Commission shall establish a system 
to ensure that, with respect to activities by any party 
pursuant to a license issued under this Act--
          (1) materials described in subsection b., when 
        transferred or received in the United States--
                  (A) from a facility licensed by the Nuclear 
                Regulatory Commission;
                  (B) from a facility licensed by an agreement 
                State; or
                  (C) from a country with whom the United 
                States has an agreement for cooperation under 
                section 123,
        are accompanied by a manifest describing the type and 
        amount of materials being transferred;
          (2) each individual transferring or accompanying the 
        transfer of such materials has been subject to a 
        security background check by appropriate Federal 
        entities; and
          (3) such materials are not transferred to or received 
        at a destination other than a facility licensed by the 
        Nuclear Regulatory Commission or an agreement State 
        under this Act or other appropriate Federal facility, 
        or a destination outside the United States in a country 
        with whom the United States has an agreement for 
        cooperation under section 123.
  b. Except as otherwise provided by the Commission by 
regulation, the materials referred to in subsection a. are 
byproduct materials, source materials, special nuclear 
materials, high-level radioactive waste, spent nuclear fuel, 
transuranic waste, and low-level radioactive waste (as defined 
in section 2(16) of the Nuclear Waste Policy Act of 1982 (42 
U.S.C. 10101(16))).
  Sec. 170D. Preventing the Misuse of Nuclear Materials and 
Technology.--
  a. In order to successfully promote the development of 
nuclear energy as a safe and reliable source of electrical 
energy, it is the policy of the United States to prevent any 
nuclear materials, technology, components, substances, 
technical information, or related goods or services from being 
misused or diverted from peaceful nuclear energy purposes.
  b. In order to further advance the policy set forth in 
subsection a., notwithstanding any other provision of law, no 
Federal agency shall issue any license, approval, or 
authorization for the export or reexport, or the transfer or 
retransfer, either directly or indirectly, to any country whose 
government has been identified by the Secretary of State as 
engaged in state sponsorship of terrorist activities 
(specifically including any country the government of which, as 
of September 11, 2001, had been determined by the Secretary of 
State under section 620A(a) of the Foreign Assistance Act of 
1961, section 6(j)(1) of the Export Administration Act of 1979, 
or section 40(d) of the Arms Export Control Act to have 
repeatedly provided support for acts of international 
terrorism) of--
          (1) any special nuclear material or byproduct 
        material;
          (2) any nuclear production or utilization facilities; 
        or
          (3) any components, technologies, substances, 
        technical information, or related goods or services 
        used (or which could be used) in a nuclear production 
        or utilization facility.
  c. Any license, approval, or authorization described in 
subsection b. made prior to the date of enactment of this 
section is hereby revoked.

           *       *       *       *       *       *       *


CHAPTER 18. ENFORCEMENT

           *       *       *       *       *       *       *


  Sec. 229, Trespass Upon Commission Installations.--
          a. The Commission is authorized to issue regulations 
        relating to the entry upon or carrying, transporting, 
        or otherwise introducing or causing to be introduced 
        any dangerous weapons, explosive, or other dangerous 
        instrument or material likely to produce substantial 
        injury or damage to persons or property, into or upon 
        any facility, installation, or real property subject to 
        the jurisdiction, administration, or in the custody of 
        the Commission or subject to its licensing authority or 
        to certification by the Commission under this Act or 
        any other Act. Every such regulation of the Commission 
        shall be posted conspicuously at the location involved.

           *       *       *       *       *       *       *

  Sec. 234A. Civil Monetary Penalties for Violations of 
Department of Energy Safety Regulations.--a.  * * *
  b. (1)  * * *
  (2) In determining the amount of any civil penalty under this 
subsection, the Secretary shall take into account the nature, 
circumstances, extent, and gravity of the violation or 
violations and, with respect to the violator, ability to pay, 
effect on ability to continue to do business, any history of 
prior such violations, the degree of culpability, and such 
other matters as justice may require. [In implementing this 
section, the Secretary shall determine by rule whether 
nonprofit educational institutions should receive automatic 
remission of any penalty under this section.]

           *       *       *       *       *       *       *

  [d. The provisions of this section shall not apply to:
          [(1) The University of Chicago (and any 
        subcontractors or suppliers thereto) for activities 
        associated with Argonne National Laboratory;
          [(2) The University of California (and any 
        subcontractors or suppliers thereto) for activities 
        associated with Los Alamos National Laboratory, 
        Lawrence Livermore National Laboratory, and Lawrence 
        Berkeley National Laboratory;
          [(3) American Telephone an Telegraph Company and its 
        subsidiaries (and any subcontractors or suppliers 
        thereto) for activities associated with Sandia National 
        Laboratories;
          [(4) Universities Research Association, Inc. (and any 
        subcontractors or suppliers thereto) for activities 
        associated with FERMI National Laboratory;
          [(5) Princeton University (and any subcontractors or 
        suppliers thereto) for activities associated with 
        Princeton Plasma Physics Laboratory;
          [(6) The Associated Universities, Inc. (and any 
        subcontractors or suppliers thereto) for activities 
        associated with the Brookhaven National Laboratory; and
          [(7) Battelle Memorial Institute (and any 
        subcontractors or suppliers thereto) for activities 
        associated with Pacific Northwest Laboratory.]
  d. Notwithstanding subsection a., a civil penalty for a 
violation under subsection a. shall not exceed the amount of 
any discretionary fee paid under the contract under which such 
violation occurs for any nonprofit contractor, subcontractor, 
or supplier--
          (1) described in section 501(c)(3) of the Internal 
        Revenue Code of 1986 and exempt from tax under section 
        501(a) of such Code; or
          (2) identified by the Secretary by rule as 
        appropriate to be treated the same under this 
        subsection as an entity described in paragraph (1), 
        consistent with the purposes of this section.

           *       *       *       *       *       *       *

  Sec. 236. Sabotage of Nuclear Facilities or Fuel.--
  [a. Any person who intentionally and willfully destroys or 
causes physical damage to--
          [(1) any production facility or utilization facility 
        licensed under this Act;
          [(2) any nuclear waste storage facility licensed 
        under this Act;
          [(3) any nuclear fuel for such a utilization 
        facility, or any spent nuclear fuel from such a 
        facility; or
          [(4) any uranium enrichment facility licensed by the 
        Nuclear Regulatory Commission,
or attempts or conspires to do such an act, shall be fined not 
more than $10,000 or imprisoned for not more than 20 years, or 
both, and, if death results to any person, shall be imprisoned 
for any term of years or for life.]
  a. Any person who intentionally and willfully destroys or 
causes physical damage to, or who intentionally and willfully 
attempts to destroy or cause physical damage to--
          (1) any production facility or utilization facility 
        licensed under this Act;
          (2) any nuclear waste storage, treatment, or disposal 
        facility licensed under this Act;
          (3) any nuclear fuel for a utilization facility 
        licensed under this Act or any spent nuclear fuel from 
        such a facility;
          (4) any uranium enrichment or nuclear fuel 
        fabrication facility licensed or certified by the 
        Nuclear Regulatory Commission; or
          (5) any production, utilization, waste storage, waste 
        treatment, waste disposal, uranium enrichment, or 
        nuclear fuel fabrication facility subject to licensing 
        or certification under this Act during its construction 
        where the destruction or damage caused or attempted to 
        be caused could affect public health and safety during 
        the operation of the facility,
shall be fined not more than $1,000,000 or imprisoned for up to 
life in prison without parole, or both.

           *       *       *       *       *       *       *

                              ----------                              


               SECTION 3112 OF THE USEC PRIVATIZATION ACT

SEC. 3112. URANIUM TRANSFERS AND SALES.

  (a)  * * *

           *       *       *       *       *       *       *

  [(d) Inventory Sales.--(1) In addition to the transfers 
authorized under subsections (c) and (e), the Secretary may, 
from time to time, sell natural and low-enriched uranium 
(including low-enriched uranium derived from highly enriched 
uranium) from the Department of Energy's stockpile.
      [(2) Except as provided in subsections (b), (c), and (e), 
no sale or transfer of natural or low-enriched uranium shall be 
made unless--
          [(A) the President determines that the material is 
        not necessary for national security needs,
          [(B) the Secretary determines that the sale of the 
        material will not have an adverse material impact on 
        the domestic uranium mining, conversion, or enrichment 
        industry, taking intoaccount the sales of uranium under 
the Russian HEU Agreement and the Suspension Agreement, and
          [(C) the price paid to the Secretary will not be less 
        than the fair market value of the material.]
  (d) Inventory Sales.--(1) In addition to the transfers and 
sales authorized under subsections (b), (c), and (e), the 
Secretary of Energy or the Secretary of the Army may transfer 
or sell uranium subject to paragraph (2).
  (2) Except as provided in subsections (b), (c), and (e), no 
sale or transfer of uranium shall be made under this subsection 
by the Secretary of Energy or the Secretary of the Army 
unless--
          (A) the President determines that the material is not 
        necessary for national security needs;
          (B) the price paid to the appropriate Secretary, if 
        the transaction is a sale, will not be less that the 
        fair market value of the material; and
          (C) the sale or transfer to end users is made 
        pursuant to a contract of at least 3 years duration.
  (3) The Secretary of Energy shall not make any transfer or 
sale of uranium under this subsection that would cause the 
total amount of uranium transferred or sold pursuant to this 
subsection that is delivered for consumption by end users to 
exceed--
          (A) 3 million pounds of U3O8 
        equivalent in fiscal year 2004, 2005, 2006, 2007, 2008, 
        or 2009;
          (B) 5 million pounds of U3O8 
        equivalent in fiscal year 2010 or 2011;
          (C) 7 million pounds of U3O8 
        equivalent in fiscal year 2012; and
          (D) 10 million pounds of U3O8 
        equivalent in fiscal year 2013 or any fiscal year 
        thereafter.
  (4) For the purposes of this subsection, the recovery of 
uranium from uranium bearing materials transferred or sold by 
the Secretary of Energy or the Secretary of the Army to the 
domestic uranium industry shall be the preferred method of 
making uranium available. The recovered uranium shall be 
counted against the annual maximum deliveries set for in this 
section, when such uranium is sold to end users.

           *       *       *       *       *       *       *

  (g) Transfers to Corporation.--Notwithstanding subsection 
(b)(2) and subsection (d)(2), the Secretary may transfer up to 
9,550 metric tons of uranium to the Corporation to replace 
uranium that the Secretary transferred to the Corporation on or 
about June 30, 1993, April 20, 1998, and May 18, 1998, and that 
does not meet commercial specifications.
  (h) Services.--(1) Notwithstanding any other provision of 
this section, if the Secretary determines that if the 
Corporation has failed, or may fail, to perform any obligation 
under the Agreement between the Department of Energy and the 
Corporation dated June 17, 2002, and as amended thereafter, 
which failure could result in termination of the Agreement, the 
Secretary shall notify the Committee on Energy and Commerce of 
the House of Representatives and the Committee on Energy and 
Natural Resources of the Senate, in such a manner that affords 
the Committees an opportunity to comment, prior to a 
determination by the Secretary whether termination, waiver, or 
modification of the Agreement is required. The Secretary is 
authorized to take such action as he determines necessary under 
the Agreement to terminate, waive, or modify provisions of the 
Agreement to achieve its purposes.
  (2) Notwithstanding any other provision of this section, if 
the Secretary determines in accordance with Article 2D of the 
Agreement between the Department of Energy and the Corporation 
dated June 17, 2002, and as amended thereafter, to transition 
operation of the Paducah gaseous diffusion plant, the Secretary 
may provide uranium enrichment services in a manner consistent 
with Article 2D of such Agreement.
                              ----------                              


ENERGY REORGANIZATION ACT OF 1974

           *       *       *       *       *       *       *


    TITLE II--NUCLEAR REGULATORY COMMISSION; NUCLEAR WHISTLEBLOWER 
PROTECTION

           *       *       *       *       *       *       *


                          employee protection

  Sec. 211. (a)(1)  * * *
  (2) For purposes of this section, the term ``employer'' 
includes--
          (A)  * * *

           *       *       *       *       *       *       *

          (C) a contractor or subcontractor of such a licensee 
        or applicant; [and]
          (D) a contractor or subcontractor of the Department 
        of Energy [that is indemnified by the Department under 
        section 170 d. of the Atomic Energy Act of 1954 (42 
        U.S.C. 2210(d)), but such term shall not include any 
        contractor or subcontractor covered by Executive Order 
        No. 12344.] or the Commission; and
          (E) the Department of Energy and the Commission.
  (b)(1)  * * *

           *       *       *       *       *       *       *

  (4) If the Secretary has not issued a final decision within 
180 days after the filing of a complaint under paragraph (1), 
and there is no showing that such delay is due to the bad faith 
of the claimant, the claimant may bring an action at law or 
equity for de novo review in the appropriate district court of 
the United States, which shall have jurisdiction over such an 
action without regard to the amount in controversy.

           *       *       *       *       *       *       *


                                reports

  Sec. 307. (a)  * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                              ----------                              


ENERGY POLICY ACT OF 1992

           *       *       *       *       *       *       *


TITLE III--ALTERNATIVE FUELS--GENERAL

           *       *       *       *       *       *       *


SEC. 303. MINIMUM FEDERAL FLEET REQUIREMENT.

  (a)  * * *

           *       *       *       *       *       *       *

  (c) Allocation of Incremental Costs.--The General Services 
Administration and any other Federal agency that procures motor 
vehicles for distribution to other Federal agencies [may] shall 
allocate the incremental cost of alternative fueled vehicles 
over the cost of comparable gasoline vehicles across the entire 
fleet of motor vehicles distributed by such agency.

           *       *       *       *       *       *       *


TITLE V--AVAILABILITY AND USE OF REPLACEMENT FUELS, ALTERNATIVE FUELS, 
AND ALTERNATIVE FUELED PRIVATE VEHICLES

           *       *       *       *       *       *       *


SEC. 508. CREDITS.

  (a)  * * *

           *       *       *       *       *       *       *

  (e) Credit for Substantial Contribution Toward Use of 
Dedicated Vehicles in Noncovered Fleets.--
          (1) Definitions.--In this subsection:
                  (A) Medium or heavy duty vehicle.--The term 
                ``medium or heavy duty vehicle'' means a 
                dedicated vehicle that--
                          (i) in the case of a medium duty 
                        vehicle, has a gross vehicle weight 
                        rating of more than 8,500 pounds but 
                        not more than 14,000 pounds; or
                          (ii) in the case of a heavy duty 
                        vehicle, has a gross vehicle weight 
                        rating of more than 14,000 pounds.
                  (B) Substantial contribution.--The term 
                ``substantial contribution'' means not less 
                than $15,000 in cash or in kind services, as 
                determined by the Secretary.
          (2) Allocation of credits.--The Secretary shall 
        allocate a credit to a fleet or covered person under 
        this section if the fleet or person makes a substantial 
        contribution toward the acquisition and use of 
        dedicated vehicles or neighborhood electric vehicles by 
        a person that owns, operates, leases, or otherwise 
        controls a fleet that is not covered by this title.
          (3) Multiple credits for medium and heavy duty 
        vehicles.--The Secretary shall issue 2 full credits to 
        a fleet or covered person under this section if the 
        fleet or person makes a substantial contribution toward 
        the acquisition and use of a medium or heavy duty 
        vehicle.
          (4) Use of credits.--At the request of a fleet or 
        covered person allocated a credit under this 
        subsection, the Secretary shall, for the year in which 
        the acquisition of the dedicated vehicle or 
        neighborhood electric vehicle is made, treat that 
        credit as the acquisition of 1 alternative fueled 
        vehicle that the fleet or covered person is required to 
        acquire under this title.
          (5) Limitation.--Except as provided in paragraph (3), 
        no more than 1 credit shall be allocated under this 
        subsection for each vehicle.
  (f) Credit for Investment in Alternative Fuel 
Infrastructure.--
          (1) Definition.--In this subsection, the term 
        ``qualifying infrastructure'' means--
                  (A) equipment required to refuel or recharge 
                alternative fueled vehicles;
                  (B) facilities or equipment required to 
                maintain, repair, or operate alternative fueled 
                vehicles;
                  (C) training programs, educational materials, 
                or other activities necessary to provide 
                information regarding the operation, 
                maintenance, or benefits associated with 
                alternative fueled vehicles; and
                  (D) such other activities the Secretary 
                considers to constitute an appropriate 
                expenditure in support of the operation, 
                maintenance, or further widespread adoption of 
                or utilization of alternative fueled vehicles.
          (2) Allocation of credits.--The Secretary shall 
        allocate a credit to a fleet or covered person under 
        this section for investment in qualifying 
        infrastructure if the qualifying infrastructure is open 
        to the general public during regular business hours.
          (3) Amount.--For the purposes of credits under this 
        subsection--
                  (A) 1 credit shall be equal to a minimum 
                investment of $25,000 in cash or in kind 
                services, as determined by the Secretary; and
                  (B) except in the case of a Federal or State 
                fleet, no part of the investment may be 
                provided by Federal or State funds.
          (4) Use of credits.--At the request of a fleet or 
        covered person allocated a credit under this 
        subsection, the Secretary shall, for the year in which 
        the investment is made, treat that credit as the 
        acquisition of 1 alternative fueled vehicle that the 
        fleet or covered person is required to acquire under 
        this title.

           *       *       *       *       *       *       *


TITLE XII--RENEWABLE ENERGY

           *       *       *       *       *       *       *


SEC. 1212. RENEWABLE ENERGY PRODUCTION INCENTIVE.

  (a) Incentive Payments.--For electric energy generated and 
sold by a qualified renewable energy facility during the 
incentive period, the Secretary shall make, subject to the 
availability of appropriations, incentive payments to the owner 
or operator of such facility. The amount of such payment made 
to any such owner or operator shall be as determined under 
subsection (e). Payments under this section may only be made 
upon receipt by the Secretary of an incentive payment 
application which establishes that the applicant is eligible to 
receive such payment [and which satisfies such other 
requirements as the Secretary deems necessary. Such application 
shall be in such form, and shall be submitted at such time, as 
the Secretary shall establish.]. If there are insufficient 
appropriations to make full payments for electric production 
from all qualified renewable energy facilities in any given 
year, the Secretary shall assign 60 percent of appropriated 
funds for that year to facilities that use solar, wind, 
geothermal, or closed-loop (dedicated energy crops) biomass 
technologies to generate electricity, and assign the remaining 
40 percent to other projects. The Secretary may, after 
transmitting to the Congress an explanation of the reasons 
therefor, alter the percentage requirements of the preceding 
sentence.
  (b) Qualified Renewable Energy Facility.--For purposes of 
this section, a qualified renewable energy facility is a 
facility which is owned by [a State or any political 
subdivision of a State (or an agency, authority, or 
instrumentality of a State or a political subdivision), by any 
corporation or association which is wholly owned, directly or 
indirectly, by one or more of the foregoing, or by a nonprofit 
electrical cooperative] a not-for-profit electric cooperative, 
a public utility described in section 115 of the Internal 
Revenue Code of 1986, a State, Commonwealth, territory, or 
possession of the United States or the District of Columbia, or 
a political subdivision thereof, or an Indian tribal government 
of subdivision thereof, and which generates electric energy for 
sale in, or affecting, interstatecommerce using solar, wind, 
biomass, landfill gas, or geothermal energy, except that--
          (1)  * * *
  (c) Eligibility Window.--Payments may be made under this 
section only for electricity generated from a qualified 
renewable energy facility first used [during the 10-fiscal year 
period beginning with the first full fiscal year occurring 
after the enactment of this section] after October 1, 2003, and 
before October 1, 2013.

           *       *       *       *       *       *       *

  (e) Amount of Payment.--
          (1) In general.--Incentive payments made by the 
        Secretary under this section to the owner or operator 
        of any qualified renewable energy facility shall be 
        based on the number of kilowatt hours of electricity 
        generated by the facility through the use of solar, 
        wind, biomass, landfill gas, or geothermal energy 
        during the payment period referred to in subsection 
        (d). For any facility, the amount of such payment shall 
        be 1.5 cents per kilowatt hour, adjusted as provided in 
        paragraph (2).

           *       *       *       *       *       *       *

  (f) Sunset.--No payment may be made under this section to any 
facility after [the expiration of the 20-fiscal year period 
beginning with the first full fiscal year occurring after the 
enactment of this section] September 30, 2023, and no payment 
may be made under this section to any facility after a payment 
has been made with respect to such facility for a 10-fiscal 
year period.
  [(g) Authorization of Appropriations.--There are authorized 
to be appropriated to the Secretary for fiscal years 1993, 
1994, and 1995 such sums as may be necessary to carry out the 
purposes of this section.]
  (g) Authorization of Appropriations.--
          (1) In general.--Subject to paragraph (2), there are 
        authorized to be appropriated such sums as may be 
        necessary to carry out this section for fiscal years 
        2003 through 2023.
          (2) Availability of funds.--Funds made available 
        under paragraph (1) shall remain available until 
        expended.

           *       *       *       *       *       *       *

                              ----------                              


              SECTION 127 OF TITLE 23, UNITED STATES CODE

Sec. 127. Vehicle weight limitations--Interstate System

  (a) In General.--No funds shall be apportioned in any fiscal 
year under section 104(b)(1) of this title to any State which 
does not permit the use of the National System of Interstate 
and Defense Highways within its boundaries by vehicles with a 
weight of twenty thousand pounds carried on any one axle, 
including enforcement tolerances, or with a tandem axle weight 
of thirty-four thousand pounds, including enforcement 
tolerances, or a gross weight of at least eighty thousand 
pounds for vehicle combinations of five axles or more. However, 
the maximum gross weight to be allowed by any State for 
vehicles using the National System of Interstate and Defense 
Highways shall be twenty thousand pounds carried on one axle, 
including enforcement tolerances, and a tandem axle weight of 
thirty-four thousand pounds, including enforcement tolerances 
and with an overall maximum gross weight, including enforcement 
tolerances, on a group of two or more consecutive axles 
produced by application of the following formula:


                                         LN
      W=500           <3-ln (>    ---------------     +12N+36<3-ln )>
                                        N-1
------------------------------------------------------------------------


where W equals overall gross weight on any group of two or more 
consecutive axles to the nearest five hundred pounds, L equals 
distance in feet between the extreme of any group of two or 
more consecutive axles, and N equals number of axles in group 
under consideration, except that two consecutive sets of tandem 
axles may carry a gross load of thirty-four thousand pounds 
each providing the overall distance between the first and last 
axles of such consecutive sets of tandem axles is (1) thirty-
six feet or more, or (2) in the case of a motor vehicle hauling 
any tank trailer, dump trailer, or ocean transport container 
before September 1, 1989, is 30 feet or more: Provided, That 
such overall gross weight may not exceed eighty thousand 
pounds, including all enforcement tolerances, except for 
vehicles using Interstate Route 29 between Sioux City, Iowa, 
and the border between Iowa and South Dakota or vehicles using 
Interstate Route 129 between Sioux City, Iowa, and the border 
between Iowa and Nebraska, and except for those vehicles and 
loads which cannot be easily dismantled or divided and which 
have been issued special permits in accordance with applicable 
State laws, or the corresponding maximum weights permitted for 
vehicles using the public highways of such State under laws or 
regulations established by appropriate State authority in 
effect on July 1, 1956 except in the case of the overall gross 
weight of any group of two or more consecutive axles on any 
vehicle (other than a vehicle comprised of a motor vehicle 
hauling any tank trailer, dump trailer, or ocean transport 
container on or after September 1, 1989), on the date of 
enactment of the Federal-Aid Highway Amendments of 1974, 
whichever is the greater. Any amount which is withheld from 
apportionment to any State pursuant to the foregoing provisions 
shall lapse if not released and obligated within the 
availability period specified in section 118(b)(1) of this 
title. This section shall not be construed to deny 
apportionment to any State allowing the operation within such 
State of any vehicles or combinations thereof, other than 
vehicles or combinations subject to subsection (d) of this 
section, which the State determines could be lawfully operated 
within such State on July 1, 1956, except in the case of the 
overall gross weight of any group of two or more consecutive 
axles, on the date of enactment of the Federal-Aid Highway 
Amendments of 1974. With respect to State of Hawaii, laws or 
regulations in effect on February 1, 1960, shall be applicable 
for the purposes of this section in lieu of those in effect on 
July 1, 1956. With respect to the State of Colorado, vehicles 
designed to carry 2 or more precast concrete panels shall be 
considered a nondivisible load. With respect to the State of 
Michigan, laws or regulations in effect onMay 1, 1982, shall be 
applicable for the purposes of this subsection. With respect to the 
State of Maryland, laws and regulations in effect on June 1, 1993, 
shall be applicable for the purposes of this subsection. The State of 
Louisiana may allow, by special permit, the operation of vehicles with 
a gross vehicle weight of up to 100,000 pounds for the hauling of 
sugarcane during the harvest season, not to exceed 100 days annually. 
With respect to Interstate Route 95 in the State of New Hampshire, 
State laws (including regulations) concerning vehicle weight 
limitations that were in effect on January 1, 1987, and are applicable 
to State highways other than the Interstate System, shall be applicable 
in lieu of the requirements of this subsection. With respect to that 
portion of the Maine Turnpike designated Interstate Route 95 and 495, 
and that portion of Interstate Route 95 from the southern terminus of 
the Maine Turnpike to the New Hampshire State line, laws (including 
regulations) of the State of Maine concerning vehicle weight 
limitations that were in effect on October 1, 1995, and are applicable 
to State highways other than the Interstate System, shall be applicable 
in lieu of the requirements of this subsection. In instances where an 
idle reduction technology is installed onboard a motor vehicle, the 
maximum gross vehicle weight limit and the axle weight limit for any 
motor vehicle equipped with an idling reduction system may be increased 
by an amount necessary to compensate for the additional weight of the 
idling reduction system, except that the weight limit increase shall be 
no greater than 400 pounds.
                              ----------                              


               PUBLIC UTILITY HOLDING COMPANY ACT OF 1935

  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 ``Public Utility Act of 1935.''

         [TITLE I--CONTROL OF PUBLIC-UTILITY HOLDING COMPANIES


              [NECESSITY FOR CONTROL OF HOLDING COMPANIES

  [Section 1. (a) Public-utility holding companies and their 
subsidiary companies are affected with a national public 
interest in that, among other things, (1) their securities are 
widely marketed and distributed by means of the mails and 
instrumentalities of interstate commerce and are sold to a 
large number of investors in different States; (2) their 
service, sales, construction, and other contracts and 
arrangements are often made and performed by means of the mails 
and instrumentalities of interstate commerce; (3) their 
subsidiary public-utility companies often sell and transport 
gas and electric energy by the use of means and 
instrumentalities of interstate commerce; (4) their practices 
in respect of and control over subsidiary companies often 
materially affect the interstate commerce in which those 
companies engage; (5) their activities extending over many 
States are not susceptible of effective control by any State 
and make difficult, if not impossible, effective State 
regulation of public-utility companies.
  [(b) Upon the basis of facts disclosed by the reports of the 
Federal Trade Commission made pursuant to S. Res. 83 
(Seventieth Congress, first session), the reports of the 
Committee on Interstate and Foreign Commerce, House of 
Representatives, made pursuant to H. Res. 59 (Seventy-second 
Congress, first session) and H.J. Res. 572 (Seventy-second 
Congress, second session) and otherwise disclosed and 
ascertained, it is hereby declared that the national public 
interest, the interest of investors in the securities of 
holding companies and their subsidiary companies and 
affiliates, and the interest of consumers of electric energy 
and natural and manufactured gas, are or may be adversely 
affected--
          [(1) when such investors cannot obtain the 
        information necessary to appraise the financial 
        position or earning power of the issuers, because of 
        the absence of uniform standard accounts; when such 
        securities are issued without the approval or consent 
        of the States having jurisdiction over subsidiary 
        public-utility companies; when such securities are 
        issued upon the basis of fictitious or unsound asset 
        values having no fair relation to the sums invested in 
        or the earning capacity of the properties and upon the 
        basis of paper profits from intercompany transactions, 
        or in anticipation of excessive revenues from 
        subsidiary public-utility companies; when such 
        securities are issued by a subsidiary public-utility 
        company under circumstances which subject such company 
        to the burden of supporting an overcapitalized 
        structure and tend to prevent voluntary rate 
        reductions;
          [(2) when subsidiary public-utility companies are 
        subjected to excessive charges for services, 
        construction work, equipment, and materials, or enter 
        into transactions in which evils result from an absence 
        of arm's-length bargaining or from restraint of free 
        and independent competition; when service, management, 
        construction, and other contracts involve the 
        allocation of charges among subsidiary public-utility 
        companies in different States so as to present problems 
        of regulation which cannot be dealt with effectively by 
        the States;
          [(3) when control of subsidiary public-utility 
        companies affects the accounting practices and rate, 
        dividend, and other policies of such companies so as to 
        complicate and obstruct State regulation of such 
        companies, or when control of such companies is exerted 
        through disproportionately small investment;
          [(4) when the growth and extension of holding 
        companies bears no relation to economy of management 
        and operation or the integration and coordination of 
        related operating properties; or
          [(5) when in any other respect there is lack of 
        economy of management and operation of public-utility 
        companies or lack of efficiency and adequacy of service 
        rendered by such companies, or lack of effective public 
        regulation, or lack of economies in the raising of 
        capital.
  [(c) When abuses of the character above enumerated become 
persistent and wide-spread the holding company becomes an 
agency which, unless regulated, is injurious to investors, 
consumers, and the general public; and it is hereby declared to 
be the policy of this title, in accordance with which policy 
all the provisions of this title shall be interpreted, to meet 
the problems and eliminatethe evils as enumerated in this 
section, connected with public-utility holding companies which are 
engaged in interstate commerce or in activities which directly affect 
or burden interstate commerce; and for the purpose of effectuating such 
policy to compel the simplification of public-utility holding-company 
systems and the elimination therefrom of properties detrimental to the 
proper functioning of such systems, and to provide as soon as 
practicable for the elimination of public-utility holding companies 
except as otherwise expressly provided in this title.

                              [DEFINITIONS

  [Sec. 2. (a) When used in this title, unless the context 
otherwise requires--
          [(1) ``Person'' means an individual or company.
          [(2) ``Company'' means a corporation, a partnership, 
        an association, a joint-stock company, a business 
        trust, or an organized group of persons, whether 
        incorporated or not; or any receiver, trustee, or other 
        liquidating agent of any of the foregoing in his 
        capacity as such.
          [(3) ``Electric utility company'' means any company 
        which owns or operates facilities used for the 
        generation, transmission, or distribution of electric 
        energy for sale, other than sale to tenants or 
        employees of the company operating such facilities for 
        their own use and not for resale. The Commission, upon 
        application, shall by order declare a company operating 
        any such facilities not to be an electric utility 
        company if the Commission finds that (A) such company 
        is primarily engaged in one or more businesses other 
        than the business of an electric utility company, and 
        by reason of the small amount of electric energy sold 
        by such company it is not necessary in the public 
        interest or for the protection of investors or 
        consumers that such company be considered an electric 
        utility company for the purposes of this title, or (B) 
        such company is one operating within a single State, 
        and substantially all of its outstanding securities are 
        owned directly or indirectly by another company to 
        which such operating company sells or furnishes 
        electric energy which it generates; such other company 
        uses and does not resell such electric energy, is 
        engaged primarily in manufacturing (other than the 
        manufacturing of electric energy or gas) and is not 
        controlled by any other company; and by reason of the 
        small amount of electric energy sold or furnished by 
        such operating company to other persons it is not 
        necessary in the public interest or for the protection 
        of investors or consumers that it be considered an 
        electric utility company for the purposes of this 
        title. The filing of an application hereunder in good 
        faith shall exempt such company (and the owner of the 
        facilities operated by such company) from the 
        application of this paragraph until the Commission has 
        acted upon such application. As a condition to the 
        entry of any such order, and as a part thereof, the 
        Commission may require application to be made 
        periodically for a renewal of such order, and may 
        require the filing of such periodic or special reports 
        regarding the business of the company as the Commission 
        may find necessary or appropriate to insure that such 
        company continues to be entitled to such exemption 
        during the period for which such order is effective. 
        The Commission, upon its own motion or upon 
        application, shall revoke such order whenever it finds 
        that the conditions specified in clause (A) or (B) are 
        not satisfied in the case of such company. Any action 
        of the Commission under the preceding sentence shall be 
        by order. Application under this paragraph may be made 
        by the company in respect of which the order is to be 
        issued or by the owner of the facilities operated by 
        such company. Any order issued under this paragraph 
        shall apply equally to such company and such owner. The 
        Commission may by rules or regulations conditionally or 
        unconditionally provide that any specified class or 
        classes of companies which it determines to satisfy the 
        conditions specified in clause (A) or (B), and 
theowners of the facilities operated by such companies, shall not be 
deemed electric utility companies within the meaning of this paragraph.
          [(4) ``Gas utility company'' means any company which 
        owns or operates facilities used for the distribution 
        at retail (other than distribution only in enclosed 
        portable containers, or distribution to tenants or 
        employees of the company operating such facilities for 
        their own use and not for resale) of natural or 
        manufactured gas for heat, light, or power. The 
        Commission, upon application, shall by order declare a 
        company operating any such facilities not to be a gas 
        utility company if the Commission finds that (A) such 
        company is primarily engaged in one or more businesses 
        other than the business of a gas utility company, and 
        (B) by reason of the small amount of natural or 
        manufactured gas distributed at retail by such company 
        it is not necessary in the public interest or for the 
        protection of investors or consumers that such company 
        be considered a gas utility company for the purposes of 
        this title. The filing of an application hereunder in 
        good faith shall exempt such company (and the owner of 
        the facilities operated by such company) from the 
        application of this paragraph until the Commission has 
        acted upon such application. As a condition to the 
        entry of any such order, and as a part thereof, the 
        Commission may require application to be made 
        periodically for a renewal of such order, and may 
        require the filing of such periodic or special reports 
        regarding the business of the company as the Commission 
        may find necessary or appropriate to insure that such 
        company continues to be entitled to such exemption 
        during the period for which such order is effective. 
        The Commission, upon its own motion or upon 
        application, shall revoke such order whenever it finds 
        that the conditions specified in clauses (A) and (B) 
        are not satisfied in the case of such company. Any 
        action of the Commission under the preceding sentence 
        shall be by order. Application under this paragraph may 
        be made by the company in respect of which the order is 
        to be issued or by the owner of the facilities operated 
        by such company. Any order issued under this paragraph 
        shall apply equally to such company and such owner. The 
        Commission may by rules or regulations conditionally or 
        unconditionally provide that any specified class or 
        classes of companies which it determines to satisfy the 
        conditions specified in clauses (A) and (B), and the 
        owners of the facilities operated by such companies, 
        shall not be deemed gas utility companies within the 
        meaning of this paragraph.
          [(5) ``Public-utility company'' means an electric 
        utility company or a gas utility company.
          [(6) ``Commission'' means the Securities and Exchange 
        Commission.
          [(7) ``Holding company'' means--
                  [(A) any company which directly or indirectly 
                owns, controls, or holds with power to vote, 10 
                per centum or more of the outstanding voting 
                securities of a public-utility company or of a 
                company which is a holding company by virtue of 
                this clause or clause (B), unless the 
                Commission, as hereinafter provided, by order 
                declares such company not to be a holding 
                company; and
                  [(B) any person which the Commission 
                determines, after notice and opportunity for 
                hearing, directly or indirectly to exercise 
                (either alone or pursuant to an arrangement or 
                understanding with one or more other persons) 
                such a controlling influence over the 
                management or policies of any public-utility or 
                holding company as to make it necessary or 
                appropriate in the public interest or for the 
                protection of investors or consumers that such 
                person be subject to the obligations, duties, 
                and liabilities imposed in this title upon 
                holding companies.
        The Commission, upon application, shall by order 
        declare that a company is not a holding company under 
        clause (A) if the Commission finds that the applicant 
        (i) does not, either alone or pursuant to an 
        arrangement or understanding with one or more other 
        persons, directly or indirectly control a public-
        utility or holding company either through one or more 
        intermediary persons or by any means or device 
        whatsoever, (ii) is not an intermediary company through 
        which such control is exercised, and (iii) does not, 
        directly or indirectly, exercise (either alone or 
        pursuant to an arrangement or understanding with one or 
        more other persons) such a controlling influence over 
        the management or policies of any public-utility or 
        holding company as to make it necessary or appropriate 
        in the public interest or for the protection of 
        investors or consumers that the applicant be subject to 
        the obligations, duties, and liabilities imposed in 
        this title upon holding companies. Thefiling of an 
application hereunder in good faith by a company other than a 
registered holding company shall exempt the applicant from any 
obligation, duty, or liability imposed in this title upon the applicant 
as a holding company, until the Commission has acted upon such 
application. Within a reasonable time after the receipt of any 
application hereunder, the Commission shall enter an order granting, 
or, after notice and opportunity for hearing, denying or otherwise 
disposing of, such application. As a condition to the entry of any 
order granting such application and as a part of any such order, the 
Commission may require the applicant to apply periodically for a 
renewal of such order and to do or refrain from doing such acts or 
things, in respect of exercise of voting rights, control over proxies, 
designation of officers and directors, existence of interlocking 
officers, directors and other relationships, and submission of periodic 
or special reports regarding affiliations or intercorporate 
relationships of the applicant, as the Commission may find necessary or 
appropriate to ensure that in the case of the applicant the conditions 
specified in clauses (i), (ii), and (iii) are satisfied during the 
period for which such order is effective. The Commission, upon its own 
motion or upon application of the company affected, shall revoke the 
order declaring such company not to be a holding company whenever in 
its judgment any condition specified in clause (i), (ii), or (iii) is 
not satisfied in the case of such company, or modify the terms of such 
order whenever in its judgment such modification is necessary to ensure 
that in the case of such company the conditions specified in clauses 
(i), (ii), and (iii) are satisfied during the period for which such 
order is effective. Any action of the Commission under the preceding 
sentence shall be by order.
          [(8) ``Subsidiary company'' of a specified holding 
        company means--
                  [(A) any company 10 per centum or more of the 
                outstanding voting securities of which are 
                directly or indirectly owned, controlled, or 
                held with power to vote, by such holding 
                company (or by a company that is a subsidiary 
                company of such holding company by virtue of 
                this clause or clause (B)), unless the 
                Commission, as hereinafter provided, by order 
                declares such company not to be a subsidiary 
                company of such holding company; and
                  [(B) any person the management or policies of 
                which the Commission, after notice and 
                opportunity for hearing, determines to be 
                subject to a controlling influence, directly or 
                indirectly, by such holding company (either 
                alone or pursuant to an arrangement or 
                understanding with one or more other persons) 
                so as to make it necessary or appropriate in 
                the public interest or for the protection of 
                investors or consumers that such person be 
                subject to the obligations, duties, and 
                liabilities imposed in this title upon 
                subsidiary companies of holding companies.
        The Commission, upon application, shall by order 
        declare that a company is not a subsidiary company of a 
        specified holding company under clause (A) if the 
        Commission finds that (i) the applicant is not 
        controlled, directly or indirectly, by such holding 
        company (either alone or pursuant to an arrangement or 
        understanding with one or more other persons) either 
        through one or more intermediary persons or by any 
        means or device whatsoever, (ii) the applicant is not 
        an intermediary company through which such control of 
        another company is exercised, and (iii) the management 
        or policies of the applicant are not subject to a 
        controlling influence, directly or indirectly, by such 
        holding company (either alone or pursuant to an 
        arrangement or understanding with one or more other 
        persons) so as to make it necessary or appropriate in 
        the public interest or for the protection of investors 
        or consumers that the applicant be subject to the 
        obligations, duties, and liabilities imposed in this 
        title upon subsidiary companies of holding companies. 
        The filing of an application hereunder in good faith 
        shall exempt the applicant from any obligation, duty, 
        or liability imposed in this title upon the applicant 
        as a subsidiary company of such specified holding 
        company until the Commission has acted upon such 
        application. Within a reasonable time after the receipt 
        of any application hereunder, the Commission shall 
        enter an order granting, or, after notice and 
        opportunity for hearing, denying or otherwise disposing 
        of, such application. As a condition to the entry of, 
        and as a part of, any order granting such application, 
        the Commission may require the applicant to apply 
        periodically for a renewal of such order and to file 
        such periodic or special reports regarding the 
        affiliations or intercorporate relationships of the 
        applicant as the Commission may find necessary or 
        appropriate to enable it to determine whether in the 
        case of the applicant the conditions specified in 
        clauses (i), (ii), and (iii) are satisfied during the 
        period for which such order is effective. The 
        Commission, upon its own motion or upon application, 
        shall revoke the order declaring such company not to be 
        a subsidiary company whenever in its judgment any 
        condition specified in clause (i), (ii), or (iii) is 
        not satisfied in the case of such company, or modify 
        the terms of such order whenever in its judgment such 
        modification is necessary to ensure that in the case of 
        such company the conditions specified in clauses (i), 
        (ii), and (iii) are satisfied during the period for 
        which such order is effective. Any action of the 
        Commission under the preceding sentence shall be by 
        order. Any application under this paragraph may be made 
        by the holding company or the company in respect of 
        which the order is to be entered, but as used in this 
        paragraph the term ``applicant'' means only the company 
        in respect of which the order is to be entered.
          [(9) ``Holding-company system'' means any holding 
        company, together with all its subsidiary companies, 
        and all mutual service companies (as defined in 
        paragraph (13) of this subsection) of which such 
        holding company or any subsidiary company thereof is a 
        member company (as defined in paragraph (14) of this 
        subsection).
          [(10) ``Associate company'' of a company means any 
        company in the same holding-company system with such 
        company.
          [(11) ``Affiliate'' of a specified company means--
                  [(A) any person that directly or indirectly 
                owns, controls, or holds with power to vote, 5 
                per centum or more of the outstanding voting 
                securities of such specified company;
                  [(B) any company 5 per centum or more of 
                whose outstanding voting securities are owned, 
                controlled, or held with power to vote, 
                directly or indirectly, by such specified 
                company;
                  [(C) any individual who is an officer or 
                director of such specified company, or of any 
                company which is an affiliate thereof under 
                clause (A) of this paragraph; and
                  [(D) any person or class of persons that the 
                Commission determines, after appropriate notice 
                and opportunity for hearing, to stand in such 
                relation to such specified company that there 
                is liable to be such an absence of arm's-length 
                bargaining in transactions between them as to 
                make it necessary or appropriate in the public 
                interest or for the protection of investors or 
                consumers that such person be subject to the 
                obligations, duties, and liabilities imposed in 
                this title upon affiliates of a company.
          [(12) ``Registered holding company'' means a person 
        whose registration is in effect under section 5.
          [(13) ``Mutual service company'' means a company 
        approved as a mutual service company under section 13.
          [(14) ``Member company'' means a company which is a 
        member of an association or group of companies mutually 
        served by a mutual service company.
          [(15) ``Director'' means any director of a 
        corporation or any individual who performs similar 
        functions in respect of any company.
          [(16) ``Security'' means any note, draft, stock, 
        treasury stock, bond, debenture, certificate of 
        interest or participation in any profit-sharing 
        agreement or in any oil, gas, other mineral royalty or 
        lease, any collateral-trust certificate, 
        preorganization certificate or subscription, 
        transferable share, investment contract, voting-trust 
        certificate, certificate of deposit for a security, 
        receiver's or trustee's certificate, or, in general, 
        any instrument commonly known as a ``security''; or any 
        certificate of interest or participation in, temporary 
        or interim certificate for, receipt for, guaranty of, 
        assumption of liability on, or warrant or right to 
        subscribe to or purchase, any of the foregoing.
          [(17) ``Voting security'' means any security 
        presently entitling the owner or holder thereof to vote 
        in the direction or management of the affairs of a 
        company, or any security issued under or pursuant to 
        any trust, agreement, or arrangement whereby a trustee 
        or trustees or agent or agents for the owner or holder 
        of such security are presently entitled to vote in the 
        direction or management of the affairs of a company; 
        and a specified per centum of the outstanding voting 
        securities of a company means such amount of the 
        outstanding voting securities of such company as 
        entitles the holder or holders thereof to cast said 
        specified per centum of the aggregate votes which the 
        holders of all the outstanding voting securities of 
        such company are entitled to cast in the direction or 
        management of the affairs of such company.
          [(18) ``Utility assets'' means the facilities, in 
        place, of any electric utility company or gas utility 
        company for the production, transmission, 
        transportation, or distribution of electric energy or 
        natural or manufactured gas.
          [(19) ``Service contract'' means any contract, 
        agreement, or understanding whereby a person undertakes 
        to sell or furnish, for a charge, any managerial, 
        financial, legal, engineering, purchasing, marketing, 
        auditing, statistical, advertising, publicity, tax, 
        research, or any other service, information, or data.
          [(20) ``Sales contract'' means any contract, 
        agreement, or understanding whereby a person undertakes 
        to sell, lease, or furnish, for a charge, any goods, 
        equipment, materials, supplies, appliances, or similar 
        property. As used in thisparagraph the term 
``property'' does not include electric energy or natural or 
manufactured gas.
          [(21) ``Construction contract'' means any contract, 
        agreement, or understanding for the construction, 
        extension, improvement, maintenance, or repair of the 
        facilities or any part thereof of a company for a 
        charge.
          [(22) ``Buy'', ``acquire'', ``acquisition'', or 
        ``purchase'' includes any purchase, acquisition by 
        lease, exchange, merger, consolidation, or other 
        acquisition.
          [(23) ``Sale'' or ``sell'' includes any sale, 
        disposition by lease, exchange or pledge, or other 
        disposition.
          [(24) ``State'' means any State of the United States 
        or the District of Columbia.
          [(25) ``United States'', when used in a geographical 
        sense, means the States.
          [(26) ``State commission'' means any commission, 
        board, agency, or officer, by whatever name designated, 
        of a State, municipality, or other political 
        subdivision of a State which under the law of such 
        State has jurisdiction to regulate public-utility 
        companies.
          [(27) ``State securities commission'' means any 
        commission, board, agency, or officer, by whatever name 
        designated, other than a State commission as defined in 
        paragraph (26) of this subsection, which under the law 
        of a State has jurisdiction to regulate, approve, or 
        control the issue or sale of a security by a company.
          [(28) ``Interstate commerce'' means trade, commerce, 
        transportation, transmission, or communication among 
        the several States or between any State and any place 
        outside thereof.
          [(29) ``Integrated public-utility system'' means--
                  [(A) As applied to electric utility 
                companies, a system consisting of one or more 
                units of generating plants and/or transmission 
                lines and/or distributing facilities, whose 
                utility assets, whether owned by one or more 
                electric utility companies, are physically 
                interconnected or capable of physical 
                interconnection and which under normal 
                conditions may be economically operated as a 
                single interconnected and coordinated system 
                confined in its operations to a single area or 
                region, in one or more States, not so large as 
                to impair (considering the state of the art and 
                the area or region affected) the advantages of 
                localized management, efficient operation, and 
                the effectiveness of regulation; and
                  [(B) As applied to gas utility companies, a 
                system consisting of one or more gas utility 
                companies which are so located and related that 
                substantial economies may be effectuated by 
                being operated as a single coordinated system 
                confined in its operations to a single area or 
                region, in one or more States, not so large as 
                to impair (considering the state of the art and 
                the area or region affected) the advantages of 
                localized management, efficient operation, and 
                the effectiveness of regulation; Provided, That 
                gas utility companies deriving natural gas from 
                a common source of supply may be deemed to be 
                included in a single area or region.
  [(b) No person shall be deemed to be a holding company under 
clause (B) of paragraph (7) of subsection (a), or a subsidiary 
company under clause (B) of paragraph (8) of such subsection, 
or an affiliate under clause (D) of paragraph (11) of such 
subsection, unless the Commission, after appropriate notice and 
opportunity for hearing, has issued an order declaring such 
person to be a holding company, a subsidiary company, or an 
affiliate, or declaring a class of which such person is a 
member to be affiliates. Such an order shall not become 
effective for at least thirty days after the mailing of a copy 
thereof to the person thereby declared to be a holding company, 
subsidiary company, or affiliate; or, in the case of 
determination of affiliates by classes, until at least thirty 
days after appropriate publication thereof in such manner as 
the Commission shall determine. Whenever the Commission, on its 
own motion or upon application by the person declared to be a 
holding company, subsidiary company, or affiliate, finds that 
the circumstances which gave rise to the issuance of any such 
order no longer exist, the Commission shall by order revoke 
such order.
  [(c) No provision in this title shall apply to, or be deemed 
to include, the United States, a State, or any political 
subdivision of a State, or any agency, authority, or 
instrumentality of any one or more of the foregoing, or any 
corporation which is wholly owned directly or indirectly by any 
one or more of the foregoing, or any officer, agent, or 
employee of any of the foregoing acting as such in the course 
of his official duty, unless such provision makes specific 
reference thereto.

   [POWER TO MAKE PARTICULAR EXEMPTIONS REGARDING HOLDING COMPANIES, 
                  SUBSIDIARY COMPANIES, AND AFFILIATES

  [Sec. 3. (a) The Commission, by rules and regulations upon 
its own motion, or by order upon application, shall exempt any 
holding company, and every subsidiary company thereof as such, 
from any provision or provisions of this title, unless and 
except insofar as it finds the exemption detrimental to the 
public interest or the interest of investors or consumers, if--
          [(1) such holding company, and every subsidiary 
        company thereof which is a public-utility company from 
        which such holding company derives, directly or 
        indirectly, any material part of its income, are 
        predominantly intrastate in character and carry on 
        their business substantially in a single State in which 
        such holding company and every such subsidiary company 
        thereof are organized;
          [(2) such holding company is predominantly a public-
        utility company whose operations as such do not extend 
        beyond the State in which it is organized and States 
        contiguous thereto;
          [(3) such holding company is only incidentally a 
        holding company, being primarily engaged or interested 
        in one or more businesses other than the business of a 
        public-utility company and (A) not deriving, directly 
        or indirectly, any material part of its income from any 
        one or more subsidiary companies, the principal 
        business of which is that of a public-utility 
company,or (B) deriving a material part of its income from any one or 
more such subsidiary companies, if substantially all the outstanding 
securities of such companies are owned, directly or indirectly, by such 
holding company;
          [(4) such holding company is temporarily a holding 
        company solely by reason of the acquisition of 
        securities for purposes of liquidation or distribution 
        in connection with a bona fide debt previously 
        contracted or in connection with a bona fide 
        arrangement for the underwriting or distribution of 
        securities; or
          [(5) such holding company is not, and derives no 
        material part of its income, directly or indirectly, 
        from any one or more subsidiary companies which are, a 
        company or companies the principal business of which 
        within the United States is that of a public-utility 
        company.
  [(b) The Commission, by rules and regulations upon its own 
motion, or by order upon application, shall exempt any 
subsidiary company, as such, of a holding company from any 
provision or provisions of this title, the application of which 
to such subsidiary company the Commission finds is not 
necessary in the public interest orfor the protection of 
investors, if such subsidiary company derives no material part of its 
income, directly or indirectly, from sources within the United States, 
and neither it nor any of its subsidiary companies is a public-utility 
company operating in the United States.
  [(c) Within a reasonable time after the receipt of an 
application for exemption under subsection (a) or (b), the 
Commission shall enter an order granting, or, after notice and 
opportunity for hearing, denying or otherwise disposing of such 
application. The filing of an application in good faith under 
subsection (a) by a person other than a registered holding 
company shall exempt the applicant from any obligation, duty, 
or liability imposed in this title upon the applicant as a 
holding company until the Commission has acted upon such 
application. The filing of an application in good faith under 
subsection (b) shall exempt the applicant from any obligation, 
duty, or liability imposed in this title upon the applicant as 
a subsidiary company until the Commission has acted upon such 
application. Whenever the Commission, on its own motion, or 
upon application by the holding company or any subsidiary 
company thereof exempted by any order issued under subsection 
(a), or by the subsidiary company exempted by any order issued 
under subsection (b), finds that the circumstances which gave 
rise to the issuance of such order no longer exist, the 
Commission shall by order revoke such order.
  [(d) The Commission may, by rules and regulations, 
conditionally or unconditionally exempt any specified class or 
classes of persons from the obligations, duties, or liabilities 
imposed upon such persons as subsidiary companies or affiliates 
under any provision or provisions of this title, and may 
provide within the extent of any such exemption that such 
specified class or classes of persons shall not be deemed 
subsidiary companies or affiliates within the meaning of any 
such provision or provisions, if and to the extent that it 
deems the exemption necessary or appropriate in the public 
interest or for the protection of investors or consumers and 
not contrary to the purposes of this title.

            [TRANSACTIONS BY UNREGISTERED HOLDING COMPANIES

  [Sec. 4. (a) After December 1, 1935, unless a holding company 
is registered under section 5, it shall be unlawful for such 
holding company, directly or indirectly--
          [(1) to sell, transport, transmit, or distribute, or 
        own or operate any utility assets for the 
        transportation, transmission, or distribution of, 
        natural or manufactured gas or electric energy in 
        interstate commerce;
          [(2) by use of the mails or any means or 
        instrumentality of interstate commerce, to negotiate, 
        enter into, or take any step in the performance of, any 
        service, sales, or construction contract undertaking to 
        perform services or construction work for, or sell 
        goods to, any public-utility company or holding 
        company;
          [(3) to distribute or make any public offering for 
        sale or exchange of any security of such holding 
        company, any subsidiary company or affiliate of such 
        holding company, any public-utility company, or any 
        holding company, by use of the mails or any means or 
        instrumentality of interstate commerce, or to sell any 
        such security having reason to believe that such 
        security, by use of the mails or any means or 
        instrumentality of interstate commerce, will be 
        distributed or made the subject of a public offering;
          [(4) by use of the mails or any means or 
        instrumentality of interstate commerce, to acquire or 
        negotiate for the acquisition of any security or 
        utility assets of any subsidiary company or affiliate 
        of such holding company, any public-utility company, or 
        any holding company;
          [(5) to engage in any business in interstate 
        commerce; or
          [(6) to own, control, or hold with power to vote, any 
        security of any subsidiary company thereof that does 
        any of the acts enumerated in paragraphs (1) to (5), 
        inclusive, of this subsection.
  [(b) Every holding company which has outstanding any security 
any of which, by use of the mails or any means or 
instrumentality of interstate commerce, has been distributed or 
made the subject of a public offering subsequent to January 1, 
1925, and any of which security is owned or held on October 1, 
1935 (or, if such company is not a holding company on that 
date, on the date such company becomes a holding company) by 
persons not resident in the State in which such holding company 
is organized, shall register under section 5 on or before 
December 1, 1935 or the thirtieth day after such company 
becomes a holding company, whichever date is later.

                   [REGISTRATION OF HOLDING COMPANIES

  [Sec. 5. (a) On or at any time after October 1, 1935, any 
holding company or any person purposing to become a holding 
company may register by filing with the Commission a 
notification of registration, in such form as the Commission 
may by rules and regulations prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors or consumers. A person shall be deemed to be 
registered upon receipt by the Commission of such notification 
of registration.
  [(b) It shall be the duty of every registered holding company 
to file with the Commission, within such reasonable time after 
registration as the Commission shall fix by rules and 
regulations or order, a registration statement in such form as 
the Commission shall by rules and regulations or order 
prescribe asnecessary or appropriate in the public interest or 
for the protection of investors or consumers. Such registration 
statement shall include--
          [(1) such copies of the charter or articles of 
        incorporation, partnership, or agreement, with all 
        amendments thereto, and the bylaws, trust indentures, 
        mortgages, underwriting arrangements, voting-trust 
        agreements, and similar documents, by whatever name 
        known, of or relating to the registrant or any of its 
        associate companies as the Commission may by rules and 
        regulations or order prescribe as necessary or 
        appropriate in the public interest or for the 
        protection of investors or consumers;
          [(2) such information in such form and in such detail 
        relating to, and copies of such documents of or 
        relating to, the registrant and its associate companies 
        as the Commission may by rules and regulations or order 
        prescribe as necessary or appropriate in the public 
        interest or for the protection of investors or 
        consumers in respect of--
                  [(A) the organization and financial structure 
                of such companies and the nature of their 
                business;
                  [(B) the terms, position, rights, and 
                privileges of the different classes of their 
                securities outstanding;
                  [(C) the terms and underwriting arrangements 
                under which their securities, during not more 
                than the five preceding years, have been 
                offered to the public or otherwise disposed of 
                and the relations of underwriters to, and their 
                interest in, such companies;
                  [(D) the directors and officers of such 
                companies, their remuneration, their interest 
                in the securities of, their material contracts 
                with, and their borrowings from, any of such 
                companies;
                  [(E) bonus and profit-sharing arrangements;
                  [(F) material contracts, not made in the 
                ordinary course of business, and service, 
                sales, and construction contracts;
                  [(G) options in respect of securities;
                  [(H) balance sheets for not more than the 
                five preceding fiscal years certified, if 
                required by the rules and regulations of the 
                Commission, by an independent public 
                accountant;
                  [(I) profit and loss statements for not more 
                than the five preceding fiscal years, 
                certified, if required by the rules and 
                regulations of the Commission, by an 
                independent public accountant;
          [(3) such further information or documents regarding 
        the registrant or its associate companies or the 
        relations between them as the Commission may by rules 
        and regulations or order prescribe as necessary or 
        appropriate in the public interest or for the 
        protection of investors or consumers.
  [(c) The Commission by such rules and regulations or order as 
it deems necessary or appropriate in the public interest or for 
the protection of investors or consumers, may permit a 
registrant to file a preliminary registration statement without 
complying with the provisions of subsection (b); but every 
registrant shall file a complete registration statement with 
the Commission within such reasonable period of time as the 
Commission shall fix by rules and regulations or order, but not 
later than one year after the date of registration.
  [(d) Whenever the Commission, upon application, finds that a 
registered holding company has ceased to be a holding company, 
it shall so declare by order and upon the taking effect of such 
order the registration of such company shall, upon such terms 
and conditions as the Commission finds and in such order 
prescribes as necessary for the protection of investors, cease 
to be in effect. The denial of any such application by the 
Commission shall be by order.

 [UNLAWFUL SECURITY TRANSACTIONS BY REGISTERED HOLDING AND SUBSIDIARY 
                               COMPANIES

  [Sec. 6. (a) Except in accordance with a declaration 
effective under section 7 and with the order under such section 
permitting such declaration to become effective, it shall be 
unlawful for any registered holding company or subsidiary 
company thereof, by use of the mails or any means or 
instrumentality of interstate commerce, or otherwise, directly 
or indirectly (1) to issue or sell any security of such 
company; or (2) to exercise any privilege or right to alter the 
priorities, preferences, voting power, or other rights of the 
holders of an outstanding security of such company.
  [(b) The provisions of subsection (a) shall not apply to the 
issue, renewal, or guaranty by a registered holding company or 
subsidiary company thereof of a note or draft (including the 
pledge of any security as collateral therefor) if such note or 
draft (1) is not part of a public offering, (2) matures or is 
renewed for not more than nine months, exclusive of days of 
grace, after the date of such issue, renewal, or guaranty 
thereof, and (3) aggregates (together with all other then 
outstanding notes and drafts of a maturity of nine months or 
less, exclusive of days of grace, as to which such company is 
primarily or secondarily liable) not more than 5 per centum of 
the principal amount and par value of the other securities of 
such company then outstanding, or such greater per centum 
thereof as the Commission upon application may by order 
authorize as necessary or appropriate in the public interest or 
for the protection of investors or consumers. In the case of 
securities having no principal amount or no par value, the 
value for the purposes of this subsection shall be the 
fairmarket value as of the date of issue. The Commission by 
rules and regulations or order, subject to such terms and 
conditions as it deems appropriate in the public interest or 
for the protection of investors or consumers, shall exempt from 
the provisions of subsection (a) the issue or sale of any 
security by any subsidiary company of a registered holding 
company, if the issue and sale of such security are solely for 
the purpose of financing the business of such subsidiary 
company and have been expressly authorized by the State 
commission of the State in which such subsidiary company is 
organized and doing business, or if the issue and sale of such 
security are solely for the purpose of financing the business 
of such subsidiary company when such subsidiary company is not 
a holding company, a public-utility company, an investment 
company, or a fiscal or financing agency of a holding company, 
a public-utility company, or an investment company. The 
provisions of subsection (a) shall not apply to the issue, by a 
registered holding company or subsidiary company thereof, of a 
security issued pursuant to the terms of any security 
outstanding on January 1, 1935, giving the holder of such 
outstanding security the right to convert such outstanding 
security into another security of the same issuer or of another 
person, or giving the right to subscribe to another security of 
the same issuer or another issuer. Within ten days after any 
issue, sale, renewal, or guaranty exempted from the application 
of subsection (a) by or under authority of this subsection, 
such holding company or subsidiary company thereof shall file 
with the Commission a certificate of notification in such form 
and setting forth such of the information required in a 
declaration under section 7 as the Commission may by rules and 
regulations or order prescribe as necessary or appropriate in 
the public interest or for the protection of investors or 
consumers.
  [(c) It shall be unlawful, by use of the mails or any means 
or instrumentality of interstate commerce, or otherwise, for 
any registered holding company or any subsidiary company 
thereof, directly or indirectly,--
          [(1) to sell or offer for sale or to cause to be sold 
        or offered for sale, from house to house, any security 
        of such holding company; or
          [(2) to cause any officer or employee of any 
        subsidiary company of such holding company to sell or 
        cause to be sold any security of such holding company.
As used in this subsection the term ``house'' shall not include 
an office used for business purposes.

[DECLARATIONS BY REGISTERED HOLDING AND SUBSIDIARY COMPANIES IN RESPECT 
                        OF SECURITY TRANSACTIONS

  [Sec. 7. (a) A registered holding company or subsidiary 
company thereof may file a declaration with the Commission, 
regarding any of the acts enumerated in subsection (a) of 
section 6, in such form as the Commission may be rules and 
regulations prescribe as necessary or appropriate in the public 
interest or for the protection of investors or consumers. Such 
declaration shall include--
          [(1) such of the information and documents which are 
        required to be filed in order to register a security 
        under section 7 of the Securities Act of 1933, as 
        amended, as the Commission may by rules and regulations 
        or order prescribe as necessary or appropriate in the 
        public interest or for the protection of investors or 
        consumers; and
          [(2) such additional information, in such form and 
        detail, and such documents regarding the declarant or 
        any associate company thereof, the particular security 
        and compliance with such State laws as may apply to the 
        act in question as the Commission may by rules and 
        regulations or order prescribe as necessary or 
        appropriate in the public interest or for the 
        protection of investors or consumers.
  [(b) A declaration filed under this section shall become 
effective within such reasonable period of time after the 
filing thereof as the Commission shall fix by rules and 
regulations or order, unless the Commission prior to the 
expiration of such period shall have issued an order to the 
declarant to show cause why such declaration should become 
effective. Within a reasonable time after an opportunity for 
hearing upon an order to show cause under this subsection, 
unless the declarant shall withdraw its declaration, the 
Commission shall enter an order either permitting such 
declaration to become effective as filed or amended, or 
refusing to permit such declaration to become effective. 
Amendments to a declaration may be made upon such terms and 
conditions as the Commission may prescribe.
  [(c) The Commission shall not permit a declaration regarding 
the issue or sale of a security to become effective unless it 
finds that--
          [(1) such security is (A) a common stock having a par 
        value and being without preference as to dividends or 
        distribution over, and having at least equal voting 
        rights with, any outstanding security of the declarant; 
        (B) a bond (i) secured by a first lien on physical 
        property of the declarant, or (ii) secured by an 
        obligation of a subsidiary company of the declarant 
        secured by a first lien on physical property of such 
        subsidiary company, or (iii) secured by any other 
        assets of the type and character which the Commission 
        by rules and regulations or order may prescribe as 
        appropriate in the public interest or for the 
        protection of investors; (C) a guaranty of, or 
        assumption of liability on, a security of another 
        company; or (D) a receiver's or trustee's certificate 
        duly authorized by the appropriate court or courts; or
          [(2) such security is to be issued or sold solely (A) 
        for the purpose of refunding, extending, exchanging, or 
        discharging an outstanding security of the declarant 
        and/or a predecessor company thereof or for the purpose 
        of effecting a merger, consolidation, or other 
        reorganization; (B) for the purpose of financing the 
        business of the declarant as a public-utility company; 
        (C) for the purpose of financing the business of the 
        declarant, when the declarant is neither a holding 
        company nor a public-utility company; and/or (D) for 
        necessary and urgent corporate purposes of the 
        declarant where the requirements of the provisions of 
        paragraph (1) would impose an unreasonable financial 
        burden upon the declarant and are not necessary or 
        appropriate in the public interest or for the 
        protection of investors or consumers; or
          [(3) such security is one the issuance of which was 
        authorized by the company prior to January 1, 1935, and 
        which the Commission by rules and regulations or order 
        authorizes as necessary or appropriate in the public 
        interest or for the protection of investors or 
        consumers.
  [(d) If the requirements of subsections (c) and (g) are 
satisfied, the Commission shall permit a declaration regarding 
the issue or sale of a security to become effective unless the 
Commission finds that--
          [(1) the security is not reasonably adapted to the 
        security structure of the declarant and other companies 
        in the same holding-company system;
          [(2) the security is not reasonably adapted to the 
        earning power of the declarant;
          [(3) financing by the issue and sale of the 
        particular security is not necessary or appropriate to 
        the economical and efficient operation of a business in 
        which the applicant lawfully is engaged or has an 
        interest;
          [(4) the fees, commissions, or other remuneration, to 
        whomsoever paid, directly or indirectly, in connection 
        with the issue, sale, or distribution of the security 
        are not reasonable;
          [(5) in the case of a security that is a guaranty of, 
        or assumption of liability on, a security of another 
        company, the circumstances are such as to constitute 
        the making of such guaranty or the assumption of such 
        liability an improper risk for the declarant; or
          [(6) the terms and conditions of the issue or sale of 
        the security are detrimental to the public interest or 
        the interest of investors or consumers.
  [(e) If the requirements of subsection (g) are satisfied, the 
Commission shall permit a declaration to become effective 
regarding the exercise of a privilege or right to alter the 
priorities, preferences, voting power, or other rights of the 
holders of an outstanding security unless the Commission finds 
that such exercise of such privilege or right will result in an 
unfair or inequitable distribution of voting power among 
holders of the securities of the declarant or is otherwise 
detrimental to the public interest or the interest of investors 
or consumers.
  [(f) Any order permitting a declaration to become effective 
may contain such terms and conditions as the Commission finds 
necessary to assure compliance with the conditions specified in 
this section.
  [(g) If a State commission or State securities commission, 
having jurisdiction over any of the acts enumerated in 
subsection (a) of section 6, shall inform the Commission, upon 
request by the Commission for an opinion or otherwise, that 
State laws applicable to the act in question have not been 
complied with, the Commission shall not permit a declaration 
regarding the act in question to become effective until and 
unless the Commission is satisfied that such compliance has 
been effected.

[ACQUIRING INTEREST IN ELECTRIC AND GAS UTILITY COMPANIES SERVING SAME 
                               TERRITORY

  [Sec. 8. Whenever a State law prohibits, or requires approval 
or authorization of, the ownership or operation by a single 
company of the utility assets of an electric utility company 
and a gas utility company serving substantially the same 
territory, it shall be unlawful for a registered holding 
company, or any subsidiary company thereof, by use of the mails 
or any means or instrumentality of interstate commerce, or 
otherwise--
          [(1) to take any step, without the express approval 
        of the State commission of such State, which results in 
        its having a direct or indirect interest in an electric 
        utility company and a gas utility company serving 
        substantially the same territory; or
          [(2) if it already has any such interest, to acquire, 
        without the express approval of the State commission, 
        any direct or indirect interest in an electric utility 
        company or gas utility company serving substantially 
        the same territory as that served by such companies in 
        which it already has an interest.

   [ACQUISITION OF SECURITIES AND UTILITY ASSETS AND OTHER INTERESTS

  [Sec. 9. (a) Unless the acquisition has been approved by the 
Commission under section 10, it shall be unlawful--
          [(1) for any registered holding company or any 
        subsidiary company thereof, by use of the mails or any 
        means or instrumentality of interstate commerce, or 
        otherwise, to acquire, directly or indirectly, any 
        securities or utility assets or any other interest in 
        any business;
          [(2) for any person, by use of the mails or any means 
        or instrumentality of interstate commerce, to acquire, 
        directly or indirectly, any security of any public-
        utility company, if such person is an affiliate, under 
        clause (A) of paragraph (11) of subsection (a) of 
        section 2, of such company and of any other public 
        utility or holding company, or will by virtue of such 
        acquisition become such an affiliate.
  [(b) Subsection (a) shall not apply to--
          [(1) the acquisition by a public-utility company of 
        utility assets the acquisition of which has been 
        expressly authorized by a State commission; or
          [(2) the acquisition by a public-utility company of 
        securities of a subsidiary public-utility company 
        thereof, provided that both such public-utility 
        companies and all other public-utility companies in the 
        same holding-company system are organized in the same 
        State, that the business of each such company in such 
        system is substantially confined to such State, and 
        that the acquisition of such securities has been 
        expressly authorized by the State commission of such 
        State.
  [(c) Subsection (a) shall not apply to the acquisition by a 
registered holding company, or a subsidiary company thereof, 
of--
          [(1) securities of, or securities the principal or 
        interest of which is guaranteed by, the United States, 
        a State, or political subdivision of a State, or any 
        agency, authority, or instrumentality of any one or 
        more of the foregoing, or any corporation which is 
        wholly owned, directly or indirectly, by any one or 
        more of the foregoing;
          [(2) such other readily marketable securities, within 
        the limitation of such amounts, as the Commission may 
        by rules and regulations prescribe as appropriate for 
        investment of current funds and as not detrimental to 
        the public interest or the interest of investors or 
        consumers; or
          [(3) such commercial paper and other securities, 
        within such limitations, as the Commission may by rules 
        and regulations or order prescribe as appropriate in 
        the ordinary course of business of a registered holding 
        company or subsidiary company thereof and as not 
        detrimental to the public interest or the interest of 
        investors or consumers.

  [APPROVAL OF ACQUISITION OF SECURITIES AND UTILITY ASSETS AND OTHER 
                               INTERESTS

  [Sec. 10. (a) A person may apply for approval of the 
acquisition of securities or utility assets, or of any other 
interest in any business, by filing an application in such form 
as the Commission may by rules and regulations prescribe as 
necessary or appropriate in the public interest or for the 
protection of investors and consumers. Such application shall 
include--
          [(1) in the case of the acquisition of securities, 
        such information and copies of such documents as the 
        Commission may by rules and regulations or order 
        prescribe as necessary or appropriate in the public 
        interest or for the protection of investors or 
        consumers in respect of--
                  [(A) the security to be acquired, the 
                consideration to be paid therefor, and 
                compliance with such State laws as may apply in 
                respect of the issue, sale, or acquisition 
                thereof,
                  [(B) the outstanding securities of the 
                company whose security is to be acquired, the 
                terms, position, rights, and privileges of each 
                class and the options in respect of any such 
                securities,
                  [(C) the names of all security holders of 
                record (or otherwise known to the applicant) 
                owning, holding, or controlling 1 per centum or 
                more of any class of security of such company, 
                the officers and directors of such company, and 
                their remuneration, security holdings in, 
                material contracts with, and borrowings from 
                such company and the offices or directorships 
                held, and securities owned, held, or 
                controlled, by them in other companies,
                  [(D) the bonus, profit-sharing and voting-
                trust agreements, underwriting arrangements, 
                trust indentures, mortgages, and similar 
                documents, by whatever name known, of or 
                relating to such company,
                  [(E) the material contracts, not made in the 
                ordinary course of business, and the service, 
                sales, and construction contracts of such 
                company,
                  [(F) the securities owned, held, or 
                controlled, directly or indirectly, by such 
                company,
                  [(G) balance sheets and profit and loss 
                statements of such company for not more than 
                the five preceding fiscal years, certified, if 
                required by the rules and regulations of the 
                Commission by an independent public accountant,
                  [(H) any further information regarding such 
                company and any associate company or affiliate 
                thereof, or its relations with the applicant 
                company, and
                  [(I) if the applicant be not a registered 
                holding company, any of the information and 
                documents which may be required under section 5 
                from a registered holding company;
          [(2) in the case of the acquisition of utility 
        assets, such information concerning such assets, the 
        value thereof and consideration to be paid therefor, 
        the owner or owners thereof and their relation to, 
        agreements with, and interest in the securities of, the 
        applicant or any associate company thereof as the 
        Commission may by rules and regulations or order 
        prescribe as necessary or appropriate in the public 
        interest or for the protection of investors or 
        consumers; and
          [(3) in the case of the acquisition of any other 
        interest in any business, such information concerning 
        such business and the interest to be acquired, and the 
        consideration to be paid, as the Commission may by 
        rules and regulations or order prescribe as necessary 
        or appropriate in the public interest or for the 
        protection of investors or consumers.
  [(b) If the requirements of subsection (f) are satisfied, the 
Commission shall approve the acquisition unless the Commission 
finds that--
          [(1) such acquisition will tend towards interlocking 
        relations or the concentration of control of public-
        utility companies, of a kind or to an extent 
        detrimental to the public interest or the interest of 
        investors, or consumers;
          [(2) in case of the acquisition of securities or 
        utility assets, the consideration, including all fees, 
        commissions, and other remuneration, to whomsoever 
        paid, to be given, directly or indirectly, in 
        connection with such acquisition is not reasonable or 
        does not bear a fair relation to the sums invested in 
        or the earning capacity of the utility assets to be 
        acquired or the utility assets underlying the 
        securities to be acquired; or
          [(3) such acquisition will unduly complicate the 
        capital structure of the holding-company system of the 
        applicant or will be detrimental to the public interest 
        or the interest of investors or consumers or the proper 
        functioning of such holding-company system.
The Commission may condition its approval of the acquisition of 
securities of another company upon such a fair offer to 
purchase such of the other securities of the company whose 
security is to be acquired as the Commission may find necessary 
or appropriate in the public interest or for the protection of 
investors or consumers.
  [(c) Notwithstanding the provisions of subsection (b), the 
Commission shall not approve--
          [(1) an acquisition of securities or utility assets, 
        or of any other interest, which is unlawful under the 
        provisions of section 8 or is detrimental to the 
        carrying out of the provisions of section 11; or
          [(2) the acquisition of securities or utility assets 
        of a public-utility or holding company unless the 
        Commission finds that such acquisition will serve the 
        public interest by tending towards the economical and 
        efficient development of an integrated public-utility 
        system. This paragraph shall not apply to the 
        acquisition of securities or utility assets of a 
        public-utility company operating exclusively outside 
        the United States.
  [(d) Within such reasonable time after the filing of an 
application under this section as the Commission shall fix by 
rules and regulations or order, the Commission shall enter an 
order either granting or, after notice and opportunity for 
hearing, denying approval of the acquisition unless the 
applicant shall withdraw its application. Amendments to an 
application may be made upon such terms and conditions as the 
Commission may prescribe.
  [(e) The Commission, in any order approving the acquisition 
of securities or utility assets, may prescribe such terms and 
conditions in respect of such acquisition, including the price 
to be paid for such securities or utility assets, as the 
Commission may find necessary or appropriate in the public 
interest or for the protection of investors or consumers.
  [(f) The Commission shall not approve any acquisition as to 
which an application is made under this section unless it 
appears to the satisfaction of the Commission that such State 
laws as may apply in respect of such acquisition have been 
complied with, except where the Commission finds that 
compliance with such State laws would be detrimental to the 
carrying out of the provisions of section 11.

               [SIMPLIFICATION OF HOLDING-COMPANY SYSTEMS

  [Sec. 11. (a) It shall be the duty of the Commission to 
examine the corporate structure of every registered holding 
company and subsidiary company thereof, the relationships among 
the companies in the holding-company system of every such 
company and the character of the interests thereof and the 
properties owned or controlled thereby to determine the extent 
to which the corporate structure of such holding-company system 
and the companies therein may be simplified, unnecessary 
complexities therein eliminated, voting power fairly and 
equitably distributed among the holders of securities thereof, 
and the properties and business thereof confined to those 
necessary or appropriate to the operations of an integrated 
public-utility system.
  [(b) It shall be the duty of the Commission, as soon as 
practicable after January 1, 1938:
          [(1) To require by order, after notice and 
        opportunity for hearing, that each registered holding 
        company, and each subsidiary company thereof, shall 
        take such action as the Commission shall find necessary 
        to limit the operations of the holding-company system 
        of which such company is a part to a single integrated 
        public-utility system, and to such other businesses as 
        are reasonably incidental, or economically necessary or 
        appropriate to the operations of such integrated 
        public-utility system: Provided, however, That the 
        Commission shall permit a registered holding company to 
        continue to control one or more additional integrated 
        public-utility systems, if, after notice and 
        opportunity for hearing, it finds that--
                  [(A) Each of such additional systems cannot 
                be operated as an independent system without 
                the loss of substantial economies which can be 
                secured by the retention of control by such 
                holding company of such system;
                  [(B) All of such additional systems are 
                located in one State, or in adjoining States, 
                or in a contiguous foreign country; and
                  [(C) The continued combination of such 
                systems under the control of such holding 
                company is not so large (considering the state 
                of the art and the area or region affected) as 
                to impair the advantages of localized 
                management, efficient operation, or the 
                effectiveness of regulation.
        The Commission may permit as reasonably incidental, or 
        economically necessary or appropriate to the operations 
        of one or more integrated public-utility systems the 
        retention of an interest in any business (other than 
        the business of a public-utility company as such) which 
        the Commission shall find necessary or appropriate in 
        the public interest or for the protection of investors 
        or consumers and not detrimental to the proper 
        functioning of such system or systems.
          [(2) To require by order, after notice and 
        opportunity for hearing, that each registered holding 
        company, and each subsidiary company thereof, shall 
        take such steps as the Commission shall find necessary 
        to ensure that the corporate structure or continued 
        existence of any company in the holding-company system 
        does not unduly or unnecessarily complicate the 
        structure, or unfairly or inequitably distribute voting 
        power among security holders, of such holding-company 
        system. In carrying out the provisions of this 
        paragraph the Commission shall require each registered 
        holding company (and any company in the same holding-
        company system with such holding company) to take such 
        action as the Commission shall find necessary in order 
        that such holding company shall cease to be a holding 
        company with respect to each of its subsidiary 
        companies which itself has a subsidiary company which 
        is a holding company. Except for the purpose of fairly 
        and equitably distributing voting power among the 
        security holders of such company, nothing in this 
        paragraph shall authorize the Commission to require any 
        change in the corporate structure or existence of any 
        company which is not a holding company, or of any 
        company whose principal business is that of a public-
        utility company.
The Commission may by order revoke or modify any order 
previously made under this subsection, if, after notice and 
opportunity for hearing, it finds that the conditions upon 
which the order was predicated do not exist. Any order made 
under this subsection shall be subject to judicial review as 
provided in section 24.
  [(c) Any order under subsection (b) shall be complied with 
within one year from the date of such order; but the Commission 
shall, upon a showing (made before or after the entry of such 
order) that the applicant has been or will be unable in the 
exercise of due diligence to comply with such order within such 
time, extend such time for an additional period not exceeding 
one year if it finds such extension necessary or appropriate in 
the public interest or for the protection of investors or 
consumers.
  [(d) The Commission may apply to a court, in accordance with 
the provisions of subsection (f) of section 18, to enforce 
compliance with any order issued under subsection (b). In any 
such proceeding, the court as a court of equity may, to such 
extent as it deems necessary for purposes of enforcement of 
such order, take exclusive jurisdiction and possession of the 
company or companies and the assets thereof, wherever located; 
and the court shall have jurisdiction, in any such proceeding, 
to appoint a trustee, and the courtmay constitute and appoint 
the Commission as sole trustee, to hold or administer under the 
direction of the court the assets so possessed. In any proceeding for 
the enforcement of an order of the Commission issued under subsection 
(b), the trustee with the approval of the court shall have power to 
dispose of any or all of such assets and, subject to such terms and 
conditions as the court may prescribe, may make such disposition in 
accordance with a fair and equitable reorganization plan which shall 
have been approved by the Commission after opportunity for hearing. 
Such reorganization plan may be proposed in the first instance by the 
Commission, or, subject to such rules and regulations as the Commission 
may deem necessary or appropriate in the public interest or for the 
protection of investors, by any person having a bona fide interest (as 
defined by the rules and regulations of the Commission) in the 
reorganization.
  [(e) In accordance with such rules and regulations or order 
as the Commission may deem necessary or appropriate in the 
public interest or for the protection of investors or 
consumers, any registered holding company or any subsidiary 
company of a registered holding company may, at any time after 
January 1, 1936, submit a plan to the Commission for the 
divestment of control, securities, or other assets, or for 
other action by such company or any subsidiary company thereof 
for the purpose of enabling such company or any subsidiary 
company thereof to comply with the provisions of subsection 
(b). If, after notice and opportunity for hearing, the 
Commission shall find such plan, as submitted or as modified, 
necessary to effectuate the provisions of subsection (b) and 
fair and equitable to the persons affected by such plan, the 
Commission shall make an order approving such plan; and the 
Commission, at the request of the company, may apply to a 
court, in accordance with the provisions of subsection (f) of 
section 18, to enforce and carry out the terms and provisions 
of such plan. If, upon any such application, the court, after 
notice and opportunity for hearing, shall approve such plan as 
fair and equitable and as appropriate to effectuate the 
provisions of section 11, the court as a court of equity may, 
to such extent as it deems necessary for the purpose of 
carrying out the terms and provisions of such plan, take 
exclusive jurisdiction and possession of the company or 
companies and the assets thereof, wherever located; and the 
court shall have jurisdiction to appoint a trustee, and the 
court may constitute and appoint the Commission as sole 
trustee, to hold or administer, under the direction of the 
court and in accordance with the plan theretofore approved by 
the court and the Commission, the assets so possessed.
  [(f) In any proceeding in a court of the United States, 
whether under this section or otherwise, in which a receiver or 
trustee is appointed for any registered holding company, or any 
subsidiary company thereof, the court may constitute and 
appoint the Commission as sole trustee or receiver, subject to 
the directions and orders of the court, whether or not a 
trustee or receiver shall theretofore have been appointed, and 
in any such proceeding the court shall not appoint any person 
other than the Commission trustee or receiver without notifying 
the Commission and giving it an opportunity to be heard before 
making any such appointment. In no proceeding under this 
section or otherwise shall the Commission be appointed as 
trustee or receiver without its express consent. In any such 
proceeding a reorganization plan for a registered holding 
company or any subsidiary company thereof shall not become 
effective unless such plan shall have been approved by the 
Commission after opportunity for hearing prior to its 
submission to the court. Notwithstanding any other provision of 
law, any such reorganization plan may be proposed in the first 
instance by the Commission or, subject to such rules and 
regulations as the Commission may deem necessary or appropriate 
in the public interest or for the protection of investors, by 
any person having a bona fide interest (as defined by the rules 
and regulations of the Commission) in the reorganization. The 
Commission may, by such rules and regulations or order as it 
may deem necessary or appropriate in the public interest or for 
the protection of investors or consumers, require that any or 
all fees, expenses, and remuneration, to whomsoever paid, in 
connection with any reorganization, dissolution, liquidation, 
bankruptcy, or receivership of a registered holding company or 
subsidiary company thereof, in any such proceeding, shall be 
subject to approval by the Commission.
  [(g) It shall be unlawful for any person to solicit or permit 
the use of his or its name to solicit, by use of the mails or 
any means or instrumentality of interestate commerce, or 
otherwise, any proxy, consent, authorization, power of 
attorney, deposit, or dissent in respect of any reorganization 
plan of a registered holding company or any subsidiary company 
thereof under this section, or otherwise, or in respect of any 
plan under this section for the divestment of control, 
securities, or other assets, or for the dissolution of any 
registered holding company or any subsidiary company thereof, 
unless--
          [(1) the plan has been proposed by the Commission, or 
        the plan and such information regarding it and its 
        sponsors as the Commission may deem necessary or 
        appropriate in the public interest or for the 
        protection of investors or consumers has been submitted 
        to the Commission by a person having a bona fide 
        interest (as defined by the rules and regulations of 
        the Commission) in such reorganization;
          [(2) each such solicitation is accompanied or 
        preceded by a copy of a report on the plan which shall 
        be made by the Commission after an opportunity for a 
        hearing on the plan and other plans submitted to it, or 
        by an abstract of such report made or approved by the 
        Commission; and
          [(3) each such solicitation is made not in 
        contravention of such rules and regulations or orders 
        as the Commission may deem necessary or appropriate in 
        the public interest or for the protection of investors 
        or consumers.
Nothing in this subsection or the rules and regulations 
thereunder shall prevent any person from appearing before the 
Commission or any court through an attorney or proxy.

[INTERCOMPANY LOANS; DIVIDENDS; SECURITY TRANSACTIONS; SALE OF UTILITY 
                  ASSETS; PROXIES; OTHER TRANSACTIONS

  [Sec. 12. (a) It shall be unlawful for any registered holding 
company, by use of the mails or any means or instrumentality of 
interstate commerce, or otherwise, directly or indirectly, to 
borrow,or to receive any extension of credit or indemnity, from 
any public-utility company in the same holding-company system or from 
any subsidiary company of such holding company, but it shall not be 
unlawful under this subsection to renew, or extend the time of, any 
loan, credit, or indemnity outstanding on the date of the enactment of 
this title.
  [(b) It shall be unlawful for any registered holding company 
or subsidiary company thereof, by use of the mails or any means 
or instrumentality of interstate commerce, or otherwise, 
directly or indirectly, to lend or in any manner extend its 
credit to or indemnify any company in the same holding-company 
system in contravention of such rules and regulations or orders 
as the Commission deemsnecessary or appropriate in the public 
interest or for the protection of investors or consumers or to prevent 
the circumvention of the provisions of this title or the rules, 
regulations, or orders thereunder.
  [(c) It shall be unlawful for any registered holding company 
or any subsidiary company thereof, by use of the mails or any 
means or instrumentality of interstate commerce, or otherwise, 
to declare or pay any dividend on any security of such company 
or to acquire, retire, or redeem any security of such company, 
in contravention of such rules and regulations or orders as the 
Commission deems necessary or appropriate to protect the 
financial integrity of companies in holding-company systems, to 
safeguard the working capital of public-utility companies, to 
prevent the payment of dividends out of capital or unearned 
surplus, or to prevent the circumvention of the provisions of 
this title or the rules, regulations, or orders thereunder.
  [(d) It shall be unlawful for any registered holding company, 
by use of the mails or any means or instrumentality of 
interstate commerce, or otherwise, to sell any security which 
it owns of any public-utility company, or any utility assets, 
in contravention of such rules and regulations or orders 
regarding the consideration to be received for such sale, 
maintenance of competitive conditions, fees and commissions, 
accounts, disclosure of interest, and similar matters as the 
Commission deems necessary or appropriate in the public 
interest or for the protection of investors or consumers or to 
prevent the circumvention of the provisions of this title or 
the rules, regulations, or orders thereunder.
  [(e) It shall be unlawful for any person to solicit or to 
permit the use of his or its name to solicit, by use of the 
mails or any means or instrumentality of interstate commerce, 
or otherwise, any proxy, power of attorney, consent, or 
authorization regarding any security of a registered holding 
company or a subsidiary company thereof in contravention of 
such rules and regulations or orders as the Commission deems 
necessary or appropriate in the public interest or for the 
protection of investors or consumers or to prevent the 
circumvention of the provisions of this title or the rules, 
regulations, or orders thereunder.
  [(f) It shall be unlawful for any registered holding company 
or subsidiary company thereof, by use of the mails or any means 
or instrumentality of interstate commerce, or otherwise, to 
negotiate, enter into, or take any step in the performance of 
any transaction not otherwise unlawful under this title, with 
any company in the same holding-company system or with any 
affiliate of a company in such holding-company system in 
contravention of such rules and regulations or orders regarding 
reports, accounts, costs, maintenance of competitive 
conditions, a disclosure of interest, duration of contracts, 
and similar matters as the Commission deems necessary or 
appropriate in the public interest or for the protection of 
investors or consumers or to prevent the circumvention of the 
provisions of this title or the rules and regulations 
thereunder.
  [(g) It shall be unlawful for any affiliate of any public-
utility company, by use of the mails or any means or 
instrumentality of interstate commerce, or for any affiliate of 
any public-utility company engaged in interstate commerce, or 
of any registered holding company or any subsidiary company 
thereof, by use of the mails or any means or instrumentality of 
interstate commerce, or otherwise, to negotiate, enter into, or 
take any step in the performance of any transaction not 
otherwise unlawful under this title, with any such company of 
which it is an affiliate, in contravention of such rules and 
regulations or orders regarding reports, accounts, costs, 
maintenance of competitive conditions, disclosure of interest, 
duration of contracts, and similar matters as the Commission 
deems necessary or appropriate to prevent the circumvention of 
the provisions of this title.
  [(h) It shall be unlawful for any registered holding company, 
or any subsidiary company thereof, by use of the mails or any 
means or instrumentality of interstate commerce, or otherwise, 
directly or indirectly--
          [(1) to make any contribution whatsoever in 
        connection with the candidacy, nomination, election or 
        appointment of any person for or to any office or 
        position in the Government of the United States, a 
        State, or any political subdivision of a State, or any 
        agency, authority, or instrumentality of any one or 
        more of the foregoing; or
          [(2) to make any contribution to or in support of any 
        political party or any committee or agency thereof.
The term ``contribution'' as used in this subsection includes 
any gift, subscription, loan, advance, or deposit of money or 
anything of value, and includes any contract, agreement, or 
promise, whether or not legally enforceable, to make a 
contribution.
  [(i) It shall be unlawful for any person employed or retained 
by any registered holding company, or any subsidiary company 
thereof, to present, advocate, or oppose any matter affecting 
any registered holding company or any subsidiary company 
thereof, before the Congress or any Member or committee 
thereof, or before the Commission or Federal Power Commission, 
or any member, officer, or employee of either such Commission, 
unless such person shall file with the Commission in such form 
and detail and at such time as the Commission shall by rules 
and regulations or order prescribe as necessary or appropriate 
in the public interest or for the protection of investors or 
consumers, a statement of the subject matter in respect of 
which such person is retained or employed, the nature and 
character of such retainer or employment, and the amount of 
compensation received or to be received by such person, 
directly or indirectly, in connection therewith. It shall be 
the duty of every such person so employed or retained to file 
with the Commission within ten days after the close of each 
calendar month during such retainer or employment, in such form 
and detail as the Commission shall by rules and regulations or 
order prescribe as necessary or appropriate in the public 
interest or for the protection of investors or consumers, a 
statement of the expenses incurred and the compensation 
received by such person during such month in connection with 
such retainer or employment.

              [SERVICE, SALES, AND CONSTRUCTION CONTRACTS

  [Sec. 13. (a) After April 1, 1936, it shall be unlawful for 
any registered holding company, by use of the mails or any 
means or instrumentality of interstate commerce, or otherwise, 
to enter into or take any step in the performance of any 
service, sales, or construction contract by which such company 
undertakes to perform services or construction work for, or 
sell goods to, any associate company thereof which is a public-
utility or mutual service company. This provision shall not 
apply to such transactions, involving special or unusual 
circumstances or not in the ordinary course of business, as the 
Commission by rules and regulations or order may conditionally 
or unconditionally exempt as being necessary or appropriate in 
the public interest or for the protection of investors or 
consumers.
  [(b) After April 1, 1936, it shall be unlawful for any 
subsidiary company of any registered holding company or for any 
mutual service company, by use of the mails or any means or 
instrumentality of interstate commerce, or otherwise, to enter 
into or take any step in the performance of any service, sales, 
or construction contract by which such company undertakes to 
perform services or construction work for, or sell goods to, 
any associate company thereof except in accordance with such 
terms and conditions and subject to such limitations and 
prohibitions as the Commission by rules and regulations or 
order shall prescribe as necessary or appropriate in the public 
interest or for the protection of investors or consumers and to 
insure that such contracts are performed economically and 
efficiently for the benefit of such associate companies at 
cost, fairly and equitably allocated among such companies. This 
provision shall not apply to such transactions as the 
Commission by rules and regulations or order may conditionally 
or unconditionally exempt as being necessary or appropriate in 
the public interest or for the protection of investors or 
consumers, if such transactions (1) are with any associate 
company which does not derive, directly or indirectly, any 
material part of its income from sources within the United 
States and which is not a public-utility company operating 
within the United States, or (2) involve special or unusual 
circumstances or are not in the ordinary course of business.
  [(c) The rules and regulations and orders of the Commission 
under this section may prescribe, among other things, such 
terms and conditions regarding the determination of costs and 
the allocation thereof among specified classes of companies and 
for specified classes of service, sales, and construction 
contracts, the duration of such contracts, the making and 
keeping of accounts and cost-accounting procedures, the filing 
of annual and other periodic and special reports, the 
maintenance of competitive conditions, the disclosure of 
interests, and similar matters, as the Commission deems 
necessary or appropriate in the public interest or for the 
protection of investors or consumers.
  [(d) The rules and regulations and orders of the Commission 
under this section shall prescribe, among other things, such 
terms and conditions regarding the manner in which application 
may be made for approval as a mutual service company and the 
granting and continuance of such approval, the nature and 
enforcement of agreements for the sharing of expenses and 
distributing of revenues among member companies, and matters 
relating to such agreements, the nature and types of businesses 
and transactions in which mutual service companies may engage, 
and the manner of engaging therein, and the relations and 
transactions with member companies and affiliates, as the 
Commission deems necessary or appropriate in the public 
interest or for the protection of investors or consumers. The 
Commission shall not approve, or continue the approval of, any 
company as a mutual service company unless the Commission finds 
such company is so organized as to ownership, costs, revenues, 
and the sharing thereof as reasonably to insure the efficient 
and economical performance of service, sales, or construction 
contracts by such company for member companies, at cost fairly 
and equitably allocated among such member companies, at a 
reasonable saving to member companies over the cost to such 
companies of comparable contracts performed by independent 
persons. The Commission, upon its own motion or at the request 
of a member company or a State commission, may, after notice 
and opportunity for hearing, by order require a reallocation or 
reapportionment of costs among member companies of a mutual 
service company if it finds the existing allocation inequitable 
and may require the elimination of a service or services to a 
member company which does not bear its fair proportion of costs 
or which, by reason of its size or other circumstances, does 
not require such service or services. The Commission, after 
notice and opportunity for hearing, by order shall revoke, 
suspend, or modify the approval given any mutual service 
company if it finds that such company has persistently violated 
any provision of this section or any rule, regulation, or order 
thereunder.
  [(e) It shall be unlawful for any affiliate of any public-
utility company engaged in interstate commerce, or of any 
registered holding company or subsidiary company thereof, by 
use of the mails or any means or instrumentality of interstate 
commerce, or otherwise, to enter into or take any step in the 
performance of any service, sales, or construction contract, by 
which such affiliate undertakes to perform services or 
construction work for, or sell goods to, any such company of 
which it is an affiliate, in contravention of such rules and 
regulations or orders regarding reports, accounts, costs, 
maintenance of competitive conditions, disclosure of interest, 
duration of contracts, and similar matters, as the Commission 
deems necessary or appropriate to prevent the circumvention of 
the provisions of this title or the rules, regulations, or 
orders thereunder.
  [(f) It shall be unlawful for any person whose principal 
business is the performance of service, sales, or construction 
contracts for public-utility or holding companies, by use of 
the mails or any means or instrumentality of interstate 
commerce, to enter into or take any step in the performance of 
any service, sales, or construction contract with any public-
utility company, or for any such person, by use of the mails or 
any means or instrumentality of interstate commerce, or 
otherwise, to enter into or take any step in the performance of 
any service, sales, or construction contract with any public-
utility company engaged in interstate commerce, or with any 
registered holding company or any subsidiary company of a 
registered holding company, in contravention of such rules and 
regulations or orders regarding reports, accounts, costs, 
maintenance of competitive conditions, disclosure of interest, 
duration of contracts, and similar matters as the Commission 
deems necessary or appropriate in the public interest or for 
the protection of investors or consumers or to prevent the 
circumvention of the provisions of this title or the rules, 
regulations, or orders thereunder.
  [(g) The Commission, in order to obtain information to serve 
as a basis for recommending further legislation, shall from 
time to time conduct investigations regarding the making, 
performance, and costs of service, sales, and construction 
contracts with holding companies and subsidiary companies 
thereof and with public-utility companies, the economies 
resulting therefrom, and the desirability thereof. The 
Commission shall report to Congress, from time to time, the 
results of such investigations, together with such 
recommendations for legislation as it deems advisable. On the 
basis of such investigations the Commission shall classify the 
different types of such contracts and the work done thereunder, 
and shall make recommendations from time to time regarding the 
standards and scope of such contracts in relation to public-
utility companies of different kinds and sizes and the costs 
incurred thereunder and economies resulting therefrom. Such 
recommendations shall be made available to State commissions, 
public-utility companies, and to the public in such form and at 
such reasonable charge as the Commission may prescribe.

                      [PERIODIC AND OTHER REPORTS

  [Sec. 14. Every registered holding company and every mutual 
service company shall file with the Commission such annual, 
quarterly, and other periodic and special reports, the answers 
to such specific questions and the minutes of such directors', 
stockholders', and other meetings, as the Commission may by 
rules and regulations or order prescribe as necessary or 
appropriate in the public interest or for the protection of 
investors or consumers. Such reports, if required by the rules 
and regulations of the Commission, shall be certified by an 
independent public accountant, and shall be made and filed at 
such time and in such form and detail as the Commission shall 
prescribe. The Commission may require that there be included in 
reports filed with it such information and documents as it 
finds necessary or appropriate to keep reasonably current the 
information filed under section 5 or 13, and such further 
information concerning the financial condition, security 
structure, security holdings, assets, and cost thereof, 
wherever determinable, and affiliations of the reporting 
company and the associate companies, member companies, and 
affiliates thereof as the Commission deems necessary or 
appropriate in the public interest or for the protection of 
investors or consumers.

                         [ACCOUNTS AND RECORDS

  [Sec. 15. (a) Every registered holding company and every 
subsidiary company thereof shall make, keep, and preserve for 
such periods, such accounts, cost-accounting procedures, 
correspondence, memoranda, papers, books, and other records as 
the Commission deems necessary or appropriate in the public 
interest or for the protection of investors or consumers or for 
the enforcement of the provisions of this title or the rules, 
regulations, or orders thereunder.
  [(b) Every affiliate of a registered holding company or of 
any subsidiary company thereof, or of any public-utility 
company engaged in interstate commerce or not so engaged, shall 
make, keep, and preserve for such periods, such accounts, cost-
accounting procedures, correspondence, memoranda, papers, 
books, and other records relating to any transaction of such 
affiliate which is subject to any provision of this title or 
any rule, regulation, or order thereunder, as the Commission 
deems necessary or appropriate in the public interest or for 
the protection of investors or consumers or for the enforcement 
of the provisions of this title or the rules, regulations, or 
orders thereunder.
  [(c) Every mutual service company, and every affiliate of a 
mutual service company as to any transaction of such affiliate 
which is subject to any provision of this title or any rule, 
regulation, or order thereunder, shall make, keep, and preserve 
for such periods, such accounts, cost-accounting procedures, 
correspondence, memoranda, papers, books, and other records, as 
the Commission deems necessary or appropriate in the public 
interest or for the protection of investors or consumers or for 
the enforcement of the provisions of this title or the rules, 
regulations, or orders thereunder.
  [(d) Every person whose principal business is the performance 
of service, sales, or construction contracts for public-utility 
or holding companies shall make, keep, and preserve for such 
periods, such accounts, cost-accounting procedures, 
correspondence, memoranda, papers, books, and other records, 
relating to any transaction by such person which is subject to 
any provision of this title or any rule, regulation, or order 
thereunder, as the Commission deems necessary or appropriate in 
the public interest or for the protection of investors or 
consumers or for the enforcement of the provisions of this 
title or the rules and regulations thereunder.
  [(e) After the Commission has prescribed the form and manner 
of making and keeping accounts, cost-accounting procedures, 
correspondence, memoranda, papers, books, and other records to 
be kept by any person hereunder, it shall be unlawful for any 
such person to keep any accounts, cost-accounting procedures, 
correspondence, memoranda, papers, books, or other records 
other than those prescribed or such as may be approved by the 
Commission, or to keep his or its accounts, cost-accounting 
procedures, correspondence, memoranda, papers, books, or other 
records in any manner other than that prescribed or approved by 
the Commission.
  [(f) All accounts, cost-accounting procedures, 
correspondence, memoranda, papers, books, and other records 
kept or required to be kept by persons subject to any provision 
of this section shall be subject at any time and from time to 
time to such reasonable periodic, special, and other 
examinations by the Commission, or any member or representative 
thereof, as the Commission may prescribe. The Commission, after 
notice and opportunity for hearing, may prescribe the account 
or accounts in which particular outlays, receipts, and other 
transactions shall be entered, charged, or credited and the 
manner in which such entry, charge, or credit shall be made, 
and may require an entry to be modified or supplemented so as 
properly to show the cost of any asset or any other cost.
  [(g) It shall be the duty of every registered holding company 
and of every subsidiary company thereof and of every affiliate 
of a company insofar as such affiliate is subject to any 
provision of this title or any rule, regulation, or order 
thereunder, to submit the accounts, cost-accounting procedures, 
correspondence, memoranda, papers, books, and other records of 
such holding company, subsidiary company, or affiliate, as the 
case may be, to such examinations, in person or by duly 
appointed attorney, by the holder of any security of such 
holding company, subsidiary company, or affiliate, as the case 
may be, as the Commission deems necessary or appropriate in the 
public interest or for the protection of investors or 
consumers.
  [(h) It shall be the duty of every mutual service company, 
and of every affiliate of a mutual service company, and of 
every person whose principal business is the performance of 
service, sales, or construction contracts for public-utility or 
holding companies, insofar as such affiliate or such person is 
subject to any provision of this title or any rule, regulation, 
or order thereunder, to submit the accounts, cost-accounting 
procedures, correspondence, memoranda, papers, books, and other 
records of such mutual service company, affiliate, or person to 
such examinations, in person or by duly appointed attorney, by 
member companies of such mutual service company and by public-
utility or holding companies for which such person performs 
service, sales, or construction contracts as the Commission 
deems necessary or appropriate in the public interest or for 
the protection of investors or consumers.
  [(i) The Commission, by such rules and regulations as it 
deems necessary or appropriate in the public interest or for 
the protection of investors or consumers may prescribe for 
persons subject to the provisions of subsection (a), (b), (c), 
or (d) of this section uniform methods for keeping accounts 
required under any provision of this section, including, among 
other things, the manner in which the cost of all assets, 
whenever determinable, shall be shown, the methods of 
classifying and segregating accounts, and the manner in which 
cost-accounting procedures shall be maintained.

                  [LIABILITY FOR MISLEADING STATEMENTS

  [Sec. 16. (a) Any person who shall make or cause to be made 
any statement in any application, report, registration 
statement, or document filed pursuant to any provision of this 
title, or any rule, regulation, or order thereunder, which 
statement was at the time and in the light of the circumstances 
under which it was made false or misleading with respect to any 
material fact shall be liable in the same manner, to the same 
extent, and subject to the same limitations as provided in 
section 18 of the Securities Exchange Actof 1934 with respect 
to an application, report, or document filed pursuant to the Securities 
Exchange Act of 1934.
  [(b) The rights and remedies provided by this title, except 
as provided in section 17(b), shall be in addition to any and 
all other rights and remedies that may exist under the 
Securities Act of 1933, as amended, or the Securities Exchange 
Act of 1934, or otherwise at law or in equity; but no person 
permitted to maintain a suit for damages under the provisions 
of this title shall recover, through satisfaction of judgment 
in one or more actions, a total amount in excess of his actual 
damages on account of the act complained of.

               [OFFICERS, DIRECTORS, AND OTHER AFFILIATES

  [Sec. 17. (a) Every person who is an officer or director of a 
registered holding company shall file with the Commission in 
such form as the Commission shall prescribe (1) at the time of 
the registration of such holding company, or within ten days 
after such person becomes an officer or director, a statement 
of the securities of such registered holding company or any 
subsidiary company thereof of which he is, directly or 
indirectly, the beneficial owner, and (2) within ten days after 
the close of each calendar month thereafter, if there has been 
any change in such ownership during such month, a statement of 
such ownership as of the close of such calendar month and of 
the changes in such ownership that have occurred during such 
calendar month.
  [(b) For the purpose of preventing the unfair use of 
information which may have been obtained by any such officer or 
director by reason of his relationship to such registered 
holding company or any subsidiary company thereof, any profit 
realized by any such officer or director from any purchase and 
sale, or any sale and purchase, of any security of such 
registered holding company or any subsidiary company thereof 
within any period of less than six months, unless such security 
was acquired in good faith in connection with a debt previously 
contracted, shall inure to and be recoverable by the holding 
company or subsidiary company in respect of the security of 
which such profit was realized, irrespective of any intention 
on the part of such officer or director in entering into such 
transaction to hold the security purchased or not to repurchase 
the security sold for a period of more than six months. Suit to 
recover such profit may be instituted at law or in equity in 
any court of competent jurisdiction by the company entitled 
thereto or by the owner of any security of such company in the 
name and in the behalf of such company if such company shall 
fail or refuse to bring such suit within sixty days after 
request or shall fail diligently to prosecute the same 
thereafter; but no such suit shall be brought more than two 
years after the date such profit was realized. This subsection 
shall not cover any transaction where such person was not an 
officer or director at the times of the purchase and sale, or 
the sale and purchase, of the security involved, or any 
transaction or transactions which the Commission by rules and 
regulations may, as necessary or appropriate in the public 
interest or for the protection of investors or consumers, 
exempt as not comprehended within the purpose of this 
subsection. Nothing in this subsection shall be construed to 
give a remedy in the case of any transaction in respect of 
which a remedy is given under subsection (b) of section 16 of 
the Securities Exchange Act of 1934.
  [(c) After one year from the date of the enactment of this 
title, no registered holding company or any subsidiary company 
thereof shall have, as an officer or director thereof, any 
executive officer, director, partner, appointee, or 
representative of any bank, trust company, investment banker, 
or banking association or firm, or any executive officer, 
director, partner, appointee, or representative of any 
corporation a majority of whose stock, having the unrestricted 
right to vote for the election of directors, is owned by any 
bank, trust company, investment banker, or banking association 
or firm, except in such cases as rules and regulations 
prescribed by the Commission may permit as not adversely 
affecting the public interest or the interest of investors or 
consumers.

[INVESTIGATIONS; INJUNCTIONS, ENFORCEMENT OF TITLE, AND PROSECUTION OF 
                                OFFENSES

  [Sec. 18. (a) The Commission, in its discretion, may 
investigate any facts, conditions, practices, or matters which 
it may deem necessary or appropriate to determine whether any 
person has violated or is about to violate any provision of 
this title or any rule or regulation thereunder, or to aid in 
the enforcement of the provisions of this title, in the 
prescribing of rules and regulations thereunder, or in 
obtaining information to serve as a basis for recommending 
further legislation concerning the matters to which this title 
relates. The Commission may require or permit any person to 
file with it a statement in writing, under oath or otherwise as 
it shall determine, as to any or all facts and circumstances 
concerning a matter which may be the subject of investigation. 
The Commission, in its discretion, may publish, or make 
available to State commissions, information concerning any such 
subject.
  [(b) The Commission upon its own motion or at the request of 
a State commission may investigate, or obtain any information 
regarding the business, financial condition, or practices of 
any registered holding company or subsidiary company thereof or 
facts, conditions, practices, or matters affecting the 
relations between any such company and any other company or 
companies in the same holding-company system.
  [(c) For the purpose of any investigation or any other 
proceeding under this title, any member of the Commission, or 
any officer thereof designated by it, is empowered to 
administer oaths and affirmations, subpoena witnesses, compel 
their attendance, take evidence, and require the production of 
any books, papers, correspondence, memoranda, contracts, 
agreements, or other records which the Commission deems 
relevant or material to the inquiry. Such attendance of 
witnesses and the production of any such records may be 
required from any place in any State or in any Territory or 
other place subject to the jurisdiction of the United States at 
any designated place of hearing.
  [(d) In case of contumacy by, or refusal to obey a subpoena 
issued to, any person, the Commission may invoke the aid of any 
court of the United States within the jurisdiction of which 
such investigation or proceeding is carried on, or where such 
person resides or carries on business, in requiring the 
attendance andtestimony of witnesses and the production of 
books, papers, correspondence, memoranda, contracts, agreements, and 
other records. And such court may issue an order requiring such person 
to appear before the Commission or member or officer designated by the 
Commission, there to produce records, if so ordered, or to give 
testimony touching the matter under investigation or in question; and 
any failure to obey such order of the court may be punished by such 
court as a contempt thereof. All process in any such case may be served 
in the judicial district whereof such person is an inhabitant or 
wherever he may be found. Any person who, without just cause, shall 
fail or refuse to attend and testify or to answer any lawful inquiry or 
to produce books, papers, correspondence, memoranda, contracts, 
agreements, or other records, if in his or its power so to do, in 
obedience to the subpoena of the Commission, shall be guilty of a 
misdemeanor and, upon conviction, shall be subject to a fine of not 
more than $1,000 or to imprisonment for a term of not more than one 
year, or both.
  [(e) Whenever it shall appear to the Commission that any 
person is engaged or about to engage in any acts or practices 
which constitute or will constitute a violation of the 
provisions of this title, or of any rule, regulation, or order 
thereunder, it may in its discretion bring an action in the 
proper district court of the United States or the United States 
courts of any Territory or other place subject to the 
jurisdiction of the United States, to enjoin such acts or 
practices and to enforce compliance with this title or any 
rule, regulation, or order thereunder, and upon a proper 
showing a permanent or temporary injunction or degree or 
restraining order shall be granted without bond. The Commission 
may transmit such evidence as may be available concerning such 
acts or practices to the Attorney General, who, in his 
discretion, may institute the appropriate criminal proceedings 
under this title.
  [(f) Upon application of the Commission, the district courts 
of the United States, and the United States courts of any 
Territory or other place subject to the jurisdiction of the 
United States shall have jurisdiction to issue writs of 
mandamus commanding any person to comply with the provisions of 
this title or any rule, regulation, or order of the Commission 
thereunder.

                        [HEARINGS BY COMMISSION

  [Sec. 19. Hearings may be public and may be held before the 
Commission, any member or members thereof, or any officer or 
officers of the Commission designated by it, and appropriate 
records thereof shall be kept. In any proceeding before the 
Commission, the Commission, in accordance with such rules and 
regulations as it may prescribe, shall admit as a party any 
interested State, State commission, State securities 
commission, municipality, or other political subdivision of a 
State, and may admit as a party any representative of 
interested consumers or security holders, or any other person 
whose participation in the proceedings may be in the public 
interest or for the protection of investors or consumers.

                    [RULES, REGULATIONS, AND ORDERS

  [Sec. 20. (a) The Commission shall have authority from time 
to time to make, issue, amend, and rescind such rules and 
regulations and such orders as it may deem necessary or 
appropriate to carry out the provisions of this title, 
including rules and regulations defining accounting, technical, 
and trade terms used in this title. Among other things, the 
Commission shall have authority, for the purpose of this title, 
to prescribe the form or forms in which information required in 
any statement, declaration, application, report, or other 
document filed with the Commission shall be set forth, the 
items or details to be shown in balance sheets, profit and loss 
statements, and surplus accounts, the manner in which the cost 
of all assets, whenever determinable, shall be shown in regard 
to such statements, declarations, applications, reports, and 
other documents filed with the Commission, or accounts required 
to be kept by the rules, regulations, or orders of the 
Commission, and the methods to be followed in the keeping of 
accounts and cost-accounting procedures and the preparation of 
reports, in the segregation and allocation of costs, in the 
determination of liabilities, in the determination of 
depreciation and depletion, in the differentiation of recurring 
and nonrecurring income, in the differentiation of investment 
and operating income, and in the keeping or preparation, where 
the Commission deems it necessary or appropriate, of separate 
or consolidated balance sheets or profit and loss statements 
for any companies in the same holding-company system.
  [(b) In the case of the accounts of any company whose methods 
of accounting are prescribed under the provisions of any law of 
the United States or of any State, the rules and regulations or 
orders of the Commission in respect of accounts shall not be 
inconsistent with the requirements imposed by such law or any 
rule or regulation thereunder; nor shall anything in this title 
relieve any public-utility company from the duty to keep the 
accounts, books, records, or memoranda which may be required to 
be kept by the law of any State in which it operates or by the 
State commission of any such State. But this provision shall 
not prevent the Commission from imposing such additional 
requirements regarding reports or accounts as it may deem 
necessary or appropriate in the public interest or for the 
protection of investors or consumers.
  [(c) The rules and regulations of the Commission shall be 
effective upon publication in the manner which the Commission 
shall prescribe. For the purpose of its rules, regulations, or 
orders the Commission may classify persons and matters within 
its jurisdiction and prescribe different requirements for 
different classes of persons or matters. Orders of the 
Commission under this title shall be issued only after 
opportunity for hearing.
  [(d) The Commission, by such rules and regulations or order 
as it deems necessary or appropriate in the public interest or 
for the protection of investors or consumers, may authorize the 
filing of any information or documents required to be filed 
with the Commission under this title, or under the Securities 
Act of 1933, as amended, or under the Securities Exchange Act 
of 1934, by incorporating by reference any information or 
documents theretofore or concurrently filed with the Commission 
under this title or either of such Acts. No provision of this 
title imposing any liability shall apply to any act done or 
omitted in good faith in conformity with any rule, regulation, 
or order of the Commission, notwithstanding that such rule, 
regulation, or order may, after such act or omission,be amended 
or rescinded or be determined by judicial or other authority to be 
invalid for any reason.

                        [EFFECT ON EXISTING LAW

  [Sec. 21. Nothing in this title shall affect (1) the 
jurisdiction of the Commission under the Securities Act of 
1933, as amended, or the Securities Exchange Act of 1934 over 
any person, security, or contract, or (2) the rights, 
obligations, duties, or liabilities of any person under such 
Acts; nor shall anything in this title affect the jurisdiction 
of any other commission, board, agency, or officer of the 
United States or of any State or political subdivision of any 
State, over any person, security, or contract, insofar as such 
jurisdiction does not conflict with any provision of this title 
or any rule, regulation, or order thereunder.

                 [INFORMATION FILED WITH THE COMMISSION

  [Sec. 22. (a) When in the judgment of the Commission the 
disclosure of such information would be in the public interest 
or the interest of investors or consumers, the information 
contained in any statement, application, declaration, report, 
or other document filed with the Commission shall be available 
to the public, and copies thereof may be furnished to any 
person at such reasonable charge and under such reasonable 
limitations as the Commission may prescribe: Provided, however, 
That nothing in this title shall be construed to require, or to 
authorize the Commission to require, the revealing of trade 
secrets or processes in any application, declaration, report, 
or document filed with the Commission under this title.
  [(b) Any person filing such application, declaration, report, 
or document may make written objection to the public disclosure 
of information contained therein, stating the grounds for such 
objection, and the Commission is authorized to hear objections 
in any such case where it finds it advisable.
  [(c) It shall be unlawful for any member, officer, or 
employee of the Commission to disclose to any person other than 
a member, officer, or employee of the Commission, or to use for 
personal benefit, any information contained in any application, 
declaration, report, or document filed with the Commission 
which is not made available to the public pursuant to this 
section.

                     [ANNUAL REPORTS OF COMMISSION

  [Sec. 23. The Commission shall submit annually a report to 
the Congress covering the work of the Commission for the 
preceding year and including such information, data, and 
recommendations for further legislation in connection with the 
matters covered by this title as it may find advisable.

                        [COURT REVIEW OF ORDERS

  [Sec. 24. (a) Any person or party aggrieved by an order 
issued by the Commission under this title may obtain a review 
of such order in the court of appeals of the United States 
within any circuit wherein such person resides or has his 
principal place of business, or in the United States Court of 
Appeals for the District of Columbia, by filing in such court, 
within sixty days after the entry of such order, a written 
petition praying that the order of the Commission be modified 
or set aside in whole or in part. A copy of such petition shall 
be forthwith transmitted by the clerk of the court to any 
member of the Commission, or any officer thereof designated by 
the Commission for that purpose, and thereupon the Commission 
shall file in the court the record upon which the order 
complained of was entered, as provided in section 2112 of title 
28, United States Code. Upon the filing of such petition such 
court shall have jurisdiction, which upon the filing of the 
record shall be exclusive, to affirm, modify, or set aside such 
order, in whole or in part. No objection to the order of the 
Commission shall be considered by the court unless such 
objection shall have been urged before the Commission or unless 
there were reasonable grounds for failure so to do. The 
findings of the Commissions as to the facts, if supported by 
substantial evidence, shall be conclusive. If application is 
made to the court for leave to adduce additional evidence, and 
it is shown to the satisfaction of the court that such 
additional evidence is material and that there were reasonable 
grounds for failure to adduce such evidence in the proceeding 
before the Commission, the court may order such additional 
evidence to be taken before the Commission and to be adduced 
upon the hearing in such manner and upon such terms and 
conditions as to the court may seem proper. The Commission may 
modify its findings as to the facts by reason of the additional 
evidence so taken, and it shall file with the court such 
modified or new findings, which, if supported by substantial 
evidence, shall be conclusive, and its recommendation, if any, 
for the modification or setting aside of the original order. 
The judgment and decree of the court affirming, modifying, or 
setting aside, in whole or in part, any such order of the 
Commission shall be final, subject to review by the Supreme 
Court of the United States upon certiorari or certification as 
provided in section 1254 of title 28, United States Code.
  [(b) The commencement of proceedings under subsection (a) 
shall not, unless specifically ordered by the court, operate as 
a stay of the Commission's order.

                  [JURISDICTION OF OFFENSES AND SUITS

  [Sec. 25. The District Courts of the United States and the 
United States courts of any Territory or other place subject to 
the jurisdiction of the United States shall have jurisdiction 
of violations of this title or the rules, regulations, or 
orders thereunder, and, concurrently with State and Territorial 
courts, of all suits in equity and actions at law brought to 
enforce any liability or duty created by, or to enjoin any 
violation of, this title or the rules, regulations, or orders 
thereunder. Any criminal proceeding may be brought in the 
district wherein any act or transaction constituting the 
violation occurred. Any suit or action to enforce any liability 
or duty created by, or to enjoin any violation of, this title 
or rules, regulations, or orders thereunder, may be brought in 
any such district or in the district wherein the defendant is 
an inhabitant or transacts business, and process in such cases 
may be served in any district of which the defendant is an 
inhabitant or transacts business or wherever the defendant may 
be found. Judgments and decrees so rendered shall be subject to 
review as provided in sections 1254,1291, 1292, and 1294 of 
title 28, United States Code. No costs shall be assessed for or against 
the Commission in any proceeding under this title brought by or against 
the Commission in any court.

                         [VALIDITY OF CONTRACTS

  [Sec. 26. (a) Any condition, stipulation, or provision 
binding any person to waive compliance with any provision of 
this title or with any rule, regulation, or order thereunder 
shall be void.
  [(b) Every contract made in violation of any provision of 
this title or of any rule, regulation, or order thereunder, and 
every contract heretofore or hereafter made, the performance of 
which involves the violation of, or the continuance of any 
relationship or practice in violation of, any provision of this 
title, or any rule, regulation, or order thereunder, shall be 
void (1) as regards the rights of any person who, in violation 
of any such provision, rule, regulation, or order, shall have 
made or engaged in the performance of any such contract, and 
(2) as regards the rights of any person who, not being a party 
to such contract, shall have acquired any right thereunder with 
actual knowledge of the facts by reason of which the making or 
performance of such contract was in violation of any such 
provision, rule, regulation, or order.
  [(c) Nothing in this title shall be construed (1) to affect 
the validity of any loan or extension of credit (or any 
extension or renewal thereof) made or of any lien created prior 
or subsequent to the enactment of this title, unless at the 
time of the making of such loan or extension of credit (or 
extension or renewal thereof) or the creating of such lien, the 
person making such loan or extension of credit (or extension or 
renewal thereof) or acquiring such lien shall have actual 
knowledge of facts by reason of which the making of such loan 
or extension of credit (or extension or renewal thereof) or the 
acquisition of such lien as a violation of the provisions of 
this title or any rule or regulation thereunder, or (2) to 
afford a defense to the collection of any debt or obligation or 
the enforcement of any lien by any person who shall have 
acquired such debt, obligation, or lien in good faith for value 
and without actual knowledge of the violation of any provision 
of this title or any rule or regulation thereunder affecting 
the legality of such debt, obligation, or lien.

  [LIABILITY OF CONTROLLING PERSONS; PREVENTING COMPLIANCE WITH TITLE

  [Sec. 27. (a) It shall be unlawful for any person, directly 
or indirectly, to cause to be done any act or thing through or 
by means of any other person which it would be unlawful for 
such person to do under the provisions of this title or any 
rule, regulation, or order thereunder.
  [(b) It shall be unlawful for any person without just cause 
to hinder, delay, or obstruct the making, filing, or keeping of 
any information, document, report, record, or account required 
to be made, filed, or kept under any provision of this title or 
any rule, regulation, or order thereunder.

                       [UNLAWFUL REPRESENTATIONS

  [Sec. 28. It shall be unlawful for any person in issuing, 
selling, or offering for sale any security of a registered 
holding company or subsidiary company thereof, to represent or 
imply in any manner whatsoever that such security has been 
guaranteed, sponsored, or recommended for investment by the 
United States or any agency or officer thereof.

                               [PENALTIES

  [Sec. 29. Any person who willfully violates any provision of 
this title or any rule, regulation, or order thereunder (other 
than an order of the Commission under subsection (b), (d), (e), 
or (f) of section 11), or any person who willfully makes any 
statement or entry in an application, report, document, 
account, or record filed or kept or required to be filed or 
kept under the provisions of this title or any rule, 
regulation, or order thereunder, knowing such statement or 
entry to be false or misleading in any material respect, or any 
person who willfully destroys (except after such time as may be 
prescribed under any rules or regulations under this title), 
mutilates, alters, or by any means, or device falsifies any 
account, correspondence, memorandum, book, paper, or other 
record kept or required to be kept under the provisions of this 
title or any rule, regulation, or order thereunder, shall upon 
conviction be fined not more than $10,000 or imprisoned not 
more than five years, or both, except that in the case of a 
violation of a provision of subsection (a) or (b) of section 4 
by a holding company which is not an individual, the fine 
imposed upon such holding company shall be a fine not exceeding 
$200,000; but no person shall be convicted under this section 
for the violation of any rule, regulation, or order if he 
proves that he had no knowledge of such rule, regulation, or 
order.

           [STUDY OF PUBLIC-UTILITY AND INVESTMENT COMPANIES

  [Sec. 30. The Commission is authorized and directed to make 
studies and investigations of public-utility companies, the 
territories served or which can be served by public-utility 
companies, and the manner in which the same are or can be 
served, to determine the sizes, types, and locations of public-
utility companies which do or can operate most economically and 
efficiently in the public interest, in the interest of 
investors and consumers, and in furtherance of a wider and more 
economical use of gas and electric energy; upon the basis of 
such investigations and studies the Commission shall make 
public from time to time its recommendations as to the type and 
size of geographically and economically integrated public-
utility systems which, having regard for the nature and 
character of the locality served, can best promote and 
harmonize the interests of the public, the investor, and the 
consumer.

            [HIRING AND LEASING AUTHORITY OF THE COMMISSION

  [Sec. 31. The provisions of section 4(b) of the Securities 
Exchange Act of 1934 shall be applicable with respect to the 
power of the Commission--
          [(1) to appoint and fix the compensation of such 
        employees as may be necessary for carrying out its 
        functions under this title, and
          [(2) to lease and allocate such real property as may 
        be necessary for carrying out its functions under this 
        title.

[SEC. 32. EXEMPT WHOLESALE GENERATORS.

  [(a) Definitions.--For purposes of this section--
          [(1) Exempt wholesale generator.--The term ``exempt 
        wholesale generator'' means any person determined by 
        the Federal Energy Regulatory Commission to be engaged 
        directly, or indirectly through one or more affiliates 
        as defined in section 2(a)(11)(B), and exclusively in 
        the business of owning or operating, or both owning and 
        operating, all or part of one or more eligible 
        facilities and selling electric energy at wholesale. No 
        person shall be deemed to be an exempt wholesale 
        generator under this section unless such person has 
        applied to the Federal Energy Regulatory Commission for 
        a determination under this paragraph. A person applying 
        in good faith for such a determination shall be deemed 
        an exempt wholesale generator under this section, with 
        all of the exemptions provided by this section, until 
        the Federal Energy Regulatory Commission makes such 
        determination. The Federal Energy Regulatory Commission 
        shall make such determination within 60 days of its 
        receipt of such application and shall notify the 
        Commission whenever a determination is made under this 
        paragraph that any person is an exempt wholesale 
        generator. Not later than 12 months after the date of 
        enactment of this section, the Federal Energy 
        Regulatory Commission shall promulgate rules 
        implementing the provisions of this paragraph. 
        Applications for determination filed after the 
        effective date of such rules shall be subject thereto.
          [(2) Eligible facility.--The term ``eligible 
        facility'' means a facility, wherever located, which is 
        either--
                  [(A) used for the generation of electric 
                energy exclusively for sale at wholesale, or
                  [(B) used for the generation of electric 
                energy and leased to one or more public utility 
                companies; Provided, That any such lease shall 
                be treated as a sale of electric energy at 
                wholesale for purposes of sections 205 and 206 
                of the Federal Power Act.
        Such term shall not include any facility for which 
        consent is required under subsection (c) if such 
        consent has not been obtained. Such term includes 
        interconnecting transmission facilities necessary to 
        effect a sale of electric energy at wholesale. For 
        purposes of this paragraph, the term ``facility'' may 
        include a portion of a facility subject to the 
        limitations of subsection (d) and shall include a 
        facility the construction of which has not been 
        commenced or completed.
          [(3) Sale of electric energy at wholesale.--The term 
        ``sale of electric energy at wholesale'' shall have the 
        same meaning as provided in section 201(d) of the 
        Federal Power Act (16 U.S.C. 824(d)).
          [(4) Retail rates and charges.--The term ``retail 
        rates and charges'' means rates and charges for the 
        sale of electric energy directly to consumers.
  [(b) Foreign Retail Sales.--Notwithstanding paragraphs (1) 
and (2) of subsection (a), retail sales of electric energy 
produced by a facility located in a foreign country shall not 
prevent such facility from being an eligible facility, or 
prevent a person owning or operating, or both owning and 
operating, such facility from being an exempt wholesale 
generator if none of the electric energy generated by such 
facility is sold to consumers in the United States.
  [(c) State Consent for Existing Rate-Based Facilities.--If a 
rate or charge for, or in connection with, the construction of 
a facility, or for electric energy produced by a facility 
(other than any portion of a rate or charge which represents 
recovery of the cost of a wholesale rate or charge) was in 
effect under the laws of any State as of the date of enactment 
of this section, in order for the facility to be considered an 
eligible facility, every State commission having jurisdiction 
over any such rate or charge must make a specific determination 
that allowing such facility to be an eligible facility (1) will 
benefit consumers, (2) is in the public interest, and (3) does 
not violate State law; Provided, That in the case of such a 
rate or charge which is a rate or charge of an affiliate of a 
registered holding company:
          [(A) such determination with respect to the facility 
        in question shall be required from every State 
        commission having jurisdiction over the retail rates 
        and charges of the affiliates of such registered 
        holding company; and
          [(B) the approval of the Commission under this Act 
        shall not be required for the transfer of the facility 
        to an exempt wholesale generator.
  [(d) Hybrids.--(1) No exempt wholesale generator may own or 
operate a portion of any facility if any other portion of the 
facility is owned or operated by an electric utility company 
that is an affiliate or associate company of such exempt 
wholesale generator.
  [(2) Eligible Facility.--Notwithstanding paragraph (1), an 
exempt wholesale generator may own or operate a portion of a 
facility identified in paragraph (1) if such portion has become 
an eligible facility as a result of the operation of subsection 
(c).
  [(e) Exemption of EWGS.--An exempt wholesale generator shall 
not be considered an electric utility company under section 
2(a)(3) of this Act and, whether or not a subsidiary company, 
an affiliate, or an associate company of a holding company, an 
exempt wholesale generator shall be exempt from all provisions 
of this Act.
  [(f) Ownership of EWGS by Exempt Holding Companies.--
Notwithstanding any provision of this Act, a holding company 
that is exempt under section 3 of this Act shall be permitted, 
without condition or limitation under this Act, to acquire and 
maintain an interest in the business of one or more exempt 
wholesale generators.
  [(g) Ownership of EWGS by Registered Holding Companies.--
Notwithstanding any provision of this Act and the Commission's 
jurisdiction as provided under subsection (h) of this section, 
a registered holding company shall be permitted (without the 
need to apply for, or receive, approval from the Commission, 
and otherwise without condition under this Act) to acquire and 
hold the securities, or an interest in the business, of one or 
more exempt wholesale generators.
  [(h) Financing and Other Relationships Between EWGS and 
Registered Holding Companies.--The issuance of securities by a 
registered holding company for purposes of financing the 
acquisition of an exempt wholesale generator, the guarantee of 
securities of an exempt wholesale generator by a registered 
holding company, the entering into service, sales or 
construction contracts, and the creation or maintenance of any 
other relationship in addition to that described in subsection 
(g) between an exempt wholesale generator and a registered 
holding company, its affiliates and associate companies, shall 
remain subject to the jurisdiction of the Commission under this 
Act: Provided, That--
          [(1) section 11 of this Act shall not prohibit the 
        ownership of an interest in the business of one or more 
        exempt wholesale generators by a registered holding 
        company (regardless of where facilities owned or 
        operated by such exempt wholesale generators are 
        located), and such ownership by a registered holding 
        company shall be deemed consistent with the operation 
        of an integrated public utility system;
          [(2) the ownership of an interest in the business of 
        one or more exempt wholesale generators by a registered 
        holding company (regardless of where facilities owned 
        or operated by such exempt wholesale generators are 
        located) shall be considered as reasonably incidental, 
        or economically necessary or appropriate, to the 
        operations of an integrated public utility system;
          [(3) in determining whether to approve (A) the issue 
        or sale of a security by a registered holding company 
        for purposes of financing the acquisition of an exempt 
        wholesale generator, or (B) the guarantee of a security 
        of an exempt wholesale generator by a registered 
        holding company, the Commission shall not make a 
        finding that such security is not reasonably adapted to 
        the earning power of such company or to the security 
        structure of such company and other companies in the 
        same holding company system, or that the circumstances 
        are such as to constitute the making of such guarantee 
        an improper risk for such company, unless the 
        Commission first finds that the issue or sale of such 
        security, or the making of the guarantee, would have a 
        substantial adverse impact on the financial integrity 
        of the registered holding company system;
          [(4) in determining whether to approve (A) the issue 
        or sale of a security by a registered holding company 
        for purposes other than the acquisition of an exempt 
        wholesale generator, or (B) other transactions by such 
        registered holding company or by its subsidiaries other 
        than with respect to exempt wholesale generators, the 
        Commission shall not consider the effect of the 
        capitalization or earnings of any subsidiary which is 
        an exempt wholesale generator upon the registered 
        holding company system, unless the approval of the 
        issue or sale or other transaction, together with the 
        effect of such capitalization and earnings, would have 
        a substantial adverse impact on the financial integrity 
        of the registered holding company system;
          [(5) the Commission shall make its decision under 
        paragraph (3) to approve or disapprove the issue or 
        sale of a security or the guarantee of a security 
        within 120 days of the filing of a declaration 
        concerning such issue, sale or guarantee; and
          [(6) the Commission shall promulgate regulations with 
        respect to the actions which would be considered, for 
        purposes of this subsection, to have a substantial 
        adverse impact on the financial integrity of the 
        registered holding company system; such regulations 
        shall ensure that the action has no adverse impact on 
        any utility subsidiary or its customers, or on the 
        ability of State commissions to protect such subsidiary 
        or customers, and shall take into account the amount 
        and type of capital invested in exempt wholesale 
        generators, the ratio of such capital to the total 
        capital invested in utility operations, the 
        availability of books and records, and the financial 
        and operating experience of the registered holding 
        company and the exempt wholesale generator; the 
        Commission shall promulgate such regulations within 6 
        months after the enactment of this section; after such 
        6-month period the Commission shall not approve any 
        actions under paragraph (3), (4) or (5) except in 
        accordance with such issued regulations.
  [(i) Application of Act to Other Eligible Facilities.--In the 
case of any person engaged directly and exclusively in the 
business of owning or operating (or both owning and operating) 
all or part of one or more eligible facilities, an advisory 
letter issued by the Commission staff under this Act after the 
date of enactment of this section, or an order issued by the 
Commission under this Act after the date of enactment of this 
section, shall not be required for the purpose, or have the 
effect, of exempting such person from treatment as an electric 
utility company under section 2(a)(3) or exempting such person 
from any provision of this Act.
  [(j) Ownership of Exempt Wholesale Generators and Qualifying 
Facilities.--The ownership by a person of one or more exempt 
wholesale generators shall not result in such person being 
considered as being primarily engaged in the generation or sale 
of electric power within the meaning of sections 3(17)(C)(ii) 
and 3(18)(B)(ii) of the Federal Power Act (16 U.S.C. 
796(17)(C)(ii) and 796(18)(B)(ii)).
  [(k) Protection Against Abusive Affiliate Transactions.--
          [(1) Prohibition.--After the date of enactment of 
        this section, an electric utility company may not enter 
        into a contract to purchase electric energy at 
        wholesale from an exempt wholesale generator if the 
        exempt wholesale generator is an affiliate or associate 
        company of the electric utility company.
          [(2) State authority to exempt from prohibition.--
        Notwithstanding paragraph (1), an electric utility 
        company may enter into a contract to purchase electric 
        energy at wholesale from an exempt wholesale generator 
        that is an affiliate or associate company of the 
        electric utility company--
                  [(A) if every State commission having 
                jurisdiction over the retail rates of such 
                electric utility company makes each of the 
                following specific determinations in advance of 
                the electric utility company entering into such 
                contract:
                          [(i) A determination that such 
                        commission has sufficient regulatory 
                        authority, resources and access to 
                        books and records of the electric 
                        utility company and any relevant 
                        associate, affiliate or subsidiary 
                        company to exercise its duties under 
                        this subparagraph.
                          [(ii) A determination that the 
                        transaction--
                                  [(I) will benefit consumers,
                                  [(II) does not violate any 
                                State law (including where 
                                applicable, least cost 
                                planning),
                                  [(III) would not provide the 
                                exempt wholesale generator any 
                                unfair competitive advantage by 
                                virtue of its affiliation or 
                                association with the electric 
                                utility company, and
                                  [(IV) is in the public 
                                interest; or
                  [(B) if such electric utility company is not 
                subject to State commission retail rate 
                regulation and the purchased electric energy:
                          [(i) would not be resold to any 
                        affiliate or associate company, or
                          [(ii) the purchased electric energy 
                        would be resold to an affiliate or 
                        associate company and every State 
                        commission having jurisdiction over the 
                        retail rates of such affiliate or 
                        associate company makes each of the 
                        determinations provided under 
                        subparagraph (A), including the 
                        determination concerning a State 
                        commission's duties.
  [(l) Reciprocal Arrangements Prohibited.--Reciprocal 
arrangements among companies that are not affiliates or 
associate companies of each other that are entered into in 
order to avoid the provisions of this section are prohibited.

[SEC. 33. TREATMENT OF FOREIGN UTILITIES.

  [(a) Exemptions for Foreign Utility Companies.--
          [(1) In general.--A foreign utility company shall be 
        exempt from all of the provisions of this Act, except 
        as otherwise provided under this section, and shall 
        not, for any purpose under this Act, be deemed to be a 
        public utility company under section 2(a)(5), 
        notwithstanding that the foreign utility company may be 
        a subsidiary company, an affiliate, or an associate 
        company of a holding company or of a public utility 
        company.
          [(2) State commission certification.--Section (a)(1) 
        shall not apply or be effective unless every State 
        commission having jurisdiction over the retail electric 
        or gas rates of a public utility company that is an 
        associate company or an affiliate of a company 
        otherwise exempted under section (a)(1) (other than a 
        public utility company that is an associate company or 
        an affiliate of a registered holding company) has 
        certified to the Commission that it has the authority 
        and resources to protect ratepayers subject to its 
        jurisdiction and that it intends to exercise its 
        authority. Such certification, upon the filing of a 
        notice by such State commission, may be revised or 
        withdrawn by the State commission prospectively as to 
        any future acquisition. The requirement of State 
        certification shall be deemed satisfied if the relevant 
        State commission had, prior to the date of enactment of 
        this section, on the basis of prescribedconditions of 
general applicability, determined that ratepayers of a public utility 
company are adequately insulated from the effects of diversification 
and the diversification would not impair the ability of the State 
commission to regulate effectively the operations of such company.
          [(3) Definition.--For purposes of this section, the 
        term ``foreign utility company'' means any company 
        that--
                  [(A) owns or operates facilities that are not 
                located in any State and that are used for the 
                generation, transmission, or distribution of 
                electric energy for sale or the distribution at 
                retail of natural or manufactured gas for heat, 
                light, or power, if such company--
                          [(i) derives no part of its income, 
                        directly or indirectly, from the 
                        generation, transmission, or 
                        distribution of electric energy for 
                        sale or the distribution at retail of 
                        natural or manufactured gas for heat, 
                        light, or power, within the United 
                        States; and
                          [(ii) neither the company nor any of 
                        its subsidiary companies is a public 
                        utility company operating in the United 
                        States; and
                  [(B) provides notice to the Commission, in 
                such form as the Commission may prescribe, that 
                such company is a foreign utility company.
  [(b) Ownership of Foreign Utility Companies by Exempt Holding 
Companies.--Notwithstanding any provision of this Act except as 
provided under this section, a holding company that is exempt 
under section 3 of the Act shall be permitted without condition 
or limitation under the Act to acquire and maintain an interest 
in the business of one or more foreign utility companies.
  [(c) Registered Holding Companies.--
          [(1) Ownership of foreign utility companies by 
        registered holding companies.--Notwithstanding any 
        provision of this Act except as otherwise provided 
        under this section, a registered holding company shall 
        be permitted as of the date of enactment of this 
        section (without the need to apply for, or receive 
        approval from the Commission) to acquire and hold the 
        securities or an interest in the business, of one or 
        more foreign utility companies. The Commission shall 
        promulgate rules or regulations regarding registered 
        holding companies' acquisition of interests in foreign 
        utility companies which shall provide for the 
        protection of the customers of a public utility company 
        which is an associate company of a foreign utility 
        company and the maintenance of the financial integrity 
        of the registered holding company system.
          [(2) Issuance of securities.--The issuance of 
        securities by a registered holding company for purposes 
        of financing the acquisition of a foreign utility 
        company, the guarantee of securities of a foreign 
        utility company by a registered holding company, the 
        entering into service, sales, or construction 
        contracts, and the creation or maintenance of any other 
        relationship between a foreign utility company and a 
        registered holding company, its affiliates and 
        associate companies, shall remain subject to the 
        jurisdiction of the Commission under this Act (unless 
        otherwise exempted under this Act, in the case of a 
        transaction with an affiliate or associate company 
        located outside of the United States). Any State 
        commission with jurisdiction over the retail rates of a 
        public utility company which is part of a registered 
        holding company system may make such recommendations to 
        the Commission regarding the registered holding 
        company's relationship to a foreign utility company, 
        and the Commission shall reasonably and fully consider 
        such State recommendation.
          [(3) Construction.--Any interest in the business of 1 
        or more foreign utility companies, or 1 or more 
        companies organized exclusively to own, directly or 
        indirectly, the securities or other interest in a 
        foreign utility company, shall for all purposes of this 
        Act, be considered to be--
                  [(A) consistent with the operation of a 
                single integrated public utility system, within 
                the meaning of section 11; and
                  [(B) reasonably incidental, or economically 
                necessary or appropriate, to the operations of 
                an integrated public utility system, within the 
                meaning of section 11.
  [(d) Effect on Existing Law; No State Preemption.--Nothing in 
this section shall--
          [(1) preclude any person from qualifying for or 
        maintaining any exemption otherwise provided for under 
        this Act or the rules, regulations, or orders 
        promulgated or issued under this Act; or
          [(2) be deemed or construed to limit the authority of 
        any State (including any State regulatory authority) 
        with respect to--
                  [(A) any public utility company or holding 
                company subject to such State's jurisdiction; 
                or
                  [(B) any transaction between any foreign 
                utility company (or any affiliate or associate 
                company thereof) and any public utility company 
                or holding company subject to such State's 
                jurisdiction.
  [(e) Reporting Requirements.--
          [(1) Filing of reports.--A public utility company 
        that is an associate company of a foreign utility 
        company shall file with the Commission such reports 
        (with respect to such foreign utility company) as the 
        Commission may by rules, regulations, or order 
        prescribe as necessary or appropriate in the public 
        interest or for the protection of investors or 
        consumers.
          [(2) Notice of acquisitions.--Not later than 30 days 
        after the consummation of the acquisition of an 
        interest in a foreign utility company by an associate 
        company of a public utility company that is subject to 
        the jurisdiction of a State commission with respect to 
        itsretail electric or gas rates or by such public 
utility company, such associate company or such public utility company, 
shall provide notice of such acquisition to every State commission 
having jurisdiction over the retail electric or gas rates of such 
public utility company, in such form as may be prescribed by the State 
commission.
  [(f) Prohibition on Assumption of Liabilities.--
          [(1) In general.--No public utility company that is 
        subject to the jurisdiction of a State commission with 
        respect to its retail electric or gas rates shall issue 
        any security for the purpose of financing the 
        acquisition, or for the purposes of financing the 
        ownership or operation, of a foreign utility company, 
        nor shall any such public utility company assume any 
        obligation or liability as guarantor, endorser, surety, 
        or otherwise in respect of any security of a foreign 
        utility company.
          [(2) Exception for holding companies which are 
        predominantly public utility companies.--Subsection 
        (f)(1) shall not apply if:
                  [(A) the public utility company that is 
                subject to the jurisdiction of a State 
                commission with respect to its retail electric 
                or gas rates is a holding company and is not an 
                affiliate under section 2(a)(11)(B) of another 
                holding company or is not subject to regulation 
                as a holding company and has no affiliate as 
                defined in section 2(a)(11)(A) that is a public 
                utility company subject to the jurisdiction of 
                a State commission with respect to its retail 
                electric or gas rates; and
                  [(B) each State commission having 
                jurisdiction with respect to the retail 
                electric and gas rates of such public utility 
                company expressly permits such public utility 
                to engage in a transaction otherwise prohibited 
                under section (f)(1); and
                  [(C) the transaction (aggregated with all 
                other then-outstanding transactions exempted 
                under this subsection) does not exceed 5 per 
                centum of the then-outstanding total 
                capitalization of the public utility.
  [(g) Prohibition on Pledging or Encumbering Utility Assets.--
No public utility company that is subject to the jurisdiction 
of a State commission with respect to its retail electric or 
gas rates shall pledge or encumber any utility assets or 
utility assets of any subsidiary thereof for the benefit of an 
associate foreign utility company.

[SEC. 34. EXEMPT TELECOMMUNICATIONS COMPANIES.

  [(a) Definitions.--For purposes of this section--
          [(1) Exempt telecommunications company.--The term 
        ``exempt telecommunications company'' means any person 
        determined by the Federal Communications Commission to 
        be engaged directly or indirectly, wherever located, 
        through one or more affiliates (as defined in section 
        2(a)(11)(B)), and exclusively in the business of 
        providing---
                  [(A) telecommunications services;
                  [(B) information services;
                  [(C) other services or products subject to 
                the jurisdiction of the Federal Communications 
                Commission; or
                  [(D) products or services that are related or 
                incidental to the provision of a product or 
                service described in subparagraph (A), (B), or 
                (C).
        No person shall be deemed to be an exempt 
        telecommunications company under this section unless 
        such person has applied to the Federal Communications 
        Commission for a determination under this paragraph. A 
        person applying in good faith for such a determination 
        shall be deemed an exempt telecommunications company 
        under this section, with all of the exemptions provided 
        by this section, until the Federal Communications 
        Commission makes such determination. The Federal 
        Communications Commission shall make such determination 
        within 60 days of its receipt of any such application 
        filed after the enactment of this section and shall 
        notify the Commission whenever a determination is made 
        under this paragraph that any person is an exempt 
        telecommunications company. Not later than 12 months 
        after the date of enactment of this section, the 
        Federal Communications Commission shall promulgate 
        rules implementing the provisions of this paragraph 
        which shall be applicable to applications filed under 
        this paragraph after the effective date of such rules.
          [(2) Other terms.--For purposes of this section, the 
        terms ``telecommunications services'' and ``information 
        services'' shall have the same meanings as provided in 
        the Communications Act of 1934.
  [(b) State Consent for Sale of Existing Rate-Based 
Facilities.--If a rate or charge for the sale of electric 
energy or natural gas (other than any portion of a rate or 
charge which represents recovery of the cost of a wholesale 
rate or charge) for, or in connection with, assets of a public 
utility company that is an associate company or affiliate of a 
registered holding company was in effect under the laws of any 
State as of December 19, 1995, the public utility company 
owning such assets may not sell such assets to an exempt 
telecommunications company that is an associate company or 
affiliate unless State commissions having jurisdiction over 
such public utility company approve such sale. Nothing in this 
subsection shall preempt the otherwise applicable authority of 
any State to approve or disapprove the sale of such assets. The 
approval of the Commission under this Act shall not be required 
for the sale of assets as provided in this subsection.
  [(c) Ownership of ETCS by Exempt Holding Companies.--
Notwithstanding any provision of this Act, a holding company 
that is exempt under section 3 of this Act shall be permitted, 
without condition or limitation under this Act, to acquire and 
maintain an interest in the business of one or more exempt 
telecommunications companies.
  [(d) Ownership of ETCS by Registered Holding Companies.--
Notwithstanding any provision of this Act, a registered holding 
company shall be permitted (without the need to apply for, or 
receive, approval from the Commission, and otherwise without 
condition under this Act) to acquire and hold the securities, 
or an interest in the business, of one or more exempt 
telecommunications companies.
  [(e) Financing and Other Relationships Between ETCS and 
Registered Holding Companies.--The relationship between an 
exempt telecommunications company and a registered holding 
company, its affiliates and associate companies, shall remain 
subject to the jurisdiction of the Commission under this Act: 
Provided, That--
          [(1) section 11 of this Act shall not prohibit the 
        ownership of an interest in the business of one or more 
        exempt telecommunications companies by a registered 
        holding company (regardless of activities engaged in or 
        where facilities owned oroperated by such exempt 
telecommunications companies are located), and such ownership by a 
registered holding company shall be deemed consistent with the 
operation of an integrated public utility system;
          [(2) the ownership of an interest in the business of 
        one or more exempt telecommunications companies by a 
        registered holding company (regardless of activities 
        engaged in or where facilities owned or operated by 
        such exempt telecommunications companies are located) 
        shall be considered as reasonably incidental, or 
        economically necessary or appropriate, to the 
        operations of an integrated public utility system;
          [(3) the Commission shall have no jurisdiction under 
        this Act over, and there shall be no restriction or 
        approval required under this Act with respect to (A) 
        the issue or sale of a security by a registered holding 
        company for purposes of financing the acquisition of an 
        exempt telecommunications company, or (B) the guarantee 
        of a security of an exempt telecommunications company 
        by a registered holding company; and
          [(4) except for costs that should be fairly and 
        equitably allocated among companies that are associate 
        companies of a registered holding company, the 
        Commission shall have no jurisdiction under this Act 
        over the sales, service, and construction contracts 
        between an exempt telecommunications company and a 
        registered holding company, its affiliates and 
        associate companies.
  [(f) Reporting Obligations Concerning Investments and 
Activities of Registered Public-Utility Holding Company 
Systems.--
          [(1) Obligations to report information.--Any 
        registered holding company or subsidiary thereof that 
        acquires or holds the securities, or an interest in the 
        business, of an exempt telecommunications company shall 
        file with the Commission such information as the 
        Commission, by rule, may prescribe concerning--
                  [(A) investments and activities by the 
                registered holding company, or any subsidiary 
                thereof, with respect to exempt 
                telecommunications companies, and
                  [(B) any activities of an exempt 
                telecommunications company within the holding 
                company system,
        that are reasonably likely to have a material impact on 
        the financial or operational condition of the holding 
        company system.
          [(2) Authority to require additional information.--
        If, based on reports provided to the Commission 
        pursuant to paragraph (1) of this subsection or other 
        available information, the Commission reasonably 
        concludes that it has concerns regarding the financial 
        or operational condition of any registered holding 
        company or any subsidiary thereof (including an exempt 
        telecommunications company), the Commission may require 
        such registered holding company to make additional 
        reports and provide additional information.
          [(3) Authority to limit disclosure of information.--
        Notwithstanding any other provision of law, the 
        Commission shall not be compelled to disclose any 
        information required to be reported under this 
        subsection. Nothing in this subsection shall authorize 
        the Commission to withhold the information from 
        Congress, or prevent the Commission from complying with 
        a request for information from any other Federal or 
        State department or agency requesting the information 
        for purposes within the scope of its jurisdiction. For 
        purposes of section 552 of title 5, United States Code, 
        this subsection shall be considered a statute described 
        in subsection (b)(3)(B) of such section 552.
  [(g) Assumption of Liabilities.--Any public utility company 
that is an associate company, or an affiliate, of a registered 
holding company and that is subject to the jurisdiction of a 
State commission with respect to its retail electric or gas 
rates shall not issue any security for the purpose of financing 
the acquisition, ownership, or operation of an exempt 
telecommunications company. Any public utility company that is 
an associate company, or an affiliate, of a registered holding 
company and that is subject to the jurisdiction of a State 
commission with respect to its retail electric or gas rates 
shall not assume any obligation or liability as guarantor, 
endorser, surety, or otherwise by the public utility company in 
respect of any security of an exempt telecommunications 
company.
  [(h) Pledging or Mortgaging of Assets.--Any public utility 
company that is an associate company, or affiliate, of a 
registered holding company and that is subject to the 
jurisdiction of a State commission with respect to its retail 
electric or gas rates shall not pledge, mortgage, or otherwise 
use as collateral any assets of the public utility company or 
assets of any subsidiary company thereof for the benefit of an 
exempt telecommunications company.
  [(i) Protection Against Abusive Affiliate Transactions.--A 
public utility company may enter into a contract to purchase 
services or products described in subsection (a)(1) from an 
exempt telecommunications company that is an affiliate or 
associate company of the public utility company only if--
          [(1) every State commission having jurisdiction over 
        the retail rates of such public utility company 
        approves such contract; or
          [(2) such public utility company is not subject to 
        State commission retail rate regulation and the 
        purchased services or products--
                  [(A) would not be resold to any affiliate or 
                associate company; or
                  [(B) would be resold to an affiliate or 
                associate company and every State commission 
                having jurisdiction over the retail rates of 
                such affiliate or associate company makes the 
                determination required by subparagraph (A).
The requirements of this subsection shall not apply in any case 
in which the State or the State commission concerned publishes 
a notice that the State or State commission waives its 
authority under this subsection.
  [(j) Nonpreemption of Rate Authority.--Nothing in this Act 
shall preclude the Federal Energy Regulatory Commission or a 
State commission from exercising its jurisdiction under 
otherwise applicable law to determine whether a public utility 
company may recover in rates the costs of products or services 
purchased from orsold to an associate company or affiliate that 
is an exempt telecommunications company, regardless of whether such 
costs are incurred through the direct or indirect purchase or sale of 
products or services from such associate company or affiliate.
  [(k) Reciprocal Arrangements Prohibited.--Reciprocal 
arrangements among companies that are not affiliates or 
associate companies of each other that are entered into in 
order to avoid the provisions of this section are prohibited.
  [(l) Books and Records.--(1) Upon written order of a State 
commission, a State commission may examine the books, accounts, 
memoranda, contracts, and records of--
          [(A) a public utility company subject to its 
        regulatory authority under State law;
          [(B) any exempt telecommunications company selling 
        products or services to such public utility company or 
        to an associate company of such public utility company; 
        and
          [(C) any associate company or affiliate of an exempt 
        telecommunications company which sells products or 
        services to a public utility company referred to in 
        subparagraph (A),
wherever located, if such examination is required for the 
effective discharge of the State commission's regulatory 
responsibilities affecting the provision of electric or gas 
service in connection with the activities of such exempt 
telecommunications company.
  [(2) Where a State commission issues an order pursuant to 
paragraph (1), the State commission shall not publicly disclose 
trade secrets or sensitive commercial information.
  [(3) Any United States district court located in the State in 
which the State commission referred to in paragraph (1) is 
located shall have jurisdiction to enforce compliance with this 
subsection.
  [(4) Nothing in this section shall--
          [(A) preempt applicable State law concerning the 
        provision of records and other information; or
          [(B) in any way limit rights to obtain records and 
        other information under Federal law, contracts, or 
        otherwise.
  [(m) Independent Audit Authority for State Commissions.--
          [(1) State may order audit.--Any State commission 
        with jurisdiction over a public utility company that--
                  [(A) is an associate company of a registered 
                holding company; and
                  [(B) transacts business, directly or 
                indirectly, with a subsidiary company, an 
                affiliate or an associate company that is an 
                exempt telecommunications company,
        may order an independent audit to be performed, no more 
        frequently than on an annual basis, of all matters 
        deemed relevant by the selected auditor that reasonably 
        relate to retail rates: Provided, That such matters 
        relate, directly or indirectly, to transactions or 
        transfers between the public utility company subject to 
        its jurisdiction and such exempt telecommunications 
        company.
          [(2) Selection of firm to conduct audit.--(A) If a 
        State commission orders an audit in accordance with 
        paragraph (1), the public utility company and the State 
        commission shall jointly select, within 60 days, a firm 
        to perform the audit. The firm selected to perform the 
        audit shall possess demonstrated qualifications 
        relating to--
                  [(i) competency, including adequate technical 
                training and professional proficiency in each 
                discipline necessary to carry out the audit; 
                and
                  [(ii) independence and objectivity, including 
                that the firm be free from personal or external 
                impairments to independence, and should assume 
                an independent position with the State 
                commission and auditee, making certain that the 
                audit is based upon an impartial consideration 
                of all pertinent facts and responsible 
                opinions.
          [(B) The public utility company and the exempt 
        telecommunications company shall cooperate fully with 
        all reasonable requests necessary to perform the audit 
        and the public utility company shall bear all costs of 
        having the audit performed.
          [(3) Availability of auditor's report.--The auditor's 
        report shall be provided to the State commission not 
        later than 6 months after the selection of the auditor, 
        and provided to the public utility company not later 
        than 60 days thereafter.
  [(n) Applicability of Telecommunications Regulation.--Nothing 
in this section shall affect the authority of the Federal 
Communications Commission under the Communications Act of 1934, 
or the authority of State commissions under State laws 
concerning the provision of telecommunications services, to 
regulate the activities of an exempt telecommunications 
company.

                      [SEPARABILITY OF PROVISIONS

  [Sec. 35. If any provision of this title or the application 
of such provision to any person or circumstances shall be held 
invalid, the remainder of the title and the application of such 
provision to persons or circumstances other than those as to 
which it is held invalid shall not be affected thereby.

                              [SHORT TITLE

  [Sec. 36. This title may be cited as the ``Public Utility 
Holding Company Act of 1935''.

            [TITLE II--AMENDMENTS TO FEDERAL WATER POWER ACT

    [Section 201. Section 3 of the Federal Water Power Act, as 
amended, is amended to read as follows:
    [``Sec. 3. The words defined in this section shall have the 
following meanings for purposes of this Act, to with:
    [``(1) `public lands' means such lands and interest in 
lands owned by the United States as are subject to private 
appropriation and disposal under public land laws. It shall not 
include `reservations', as hereinafter defined;
    [``(2) `reservations' means national forests, tribal lands 
embraced within Indian reservations, military reservations, and 
other lands and interested in lands acquired and held for any 
public purposes; but shall not include national monuments or 
national park;
    [``(3) `corporation' means any corporation, joint-stock 
company, partnership, association, business trust, organized 
group of persons, whether incorporated or not, or a receiver or 
receivers, trustee or trustees of any of the foregoing. It 
shall not include `municipalities' as hereinafter defined;
    [``(4) `person' means an individual or a corporation;
    [``(5) `licensee' means any person, State, or municipality 
licensed under the provisions of section of this Act, and any 
assignee or successor in interest thereof;
    [``(6) `State' means a State admitted to the Union, the 
District of Columbia, and any organized Territory of the United 
States;
    [``(7) `municipality' means a city, county, irrigation 
district, drainage district, or other political subdivision or 
agency of a State competent under the laws thereof to carry on 
the business of developing, transmitting, utilizing, or 
distributing power;
    [``(8) `navigable waters' means those parts of streams or 
other bodies of water over which Congress has jurisdiction 
under its authority to regulate commerce with foreign nations 
and among the several States, and which either in their natural 
or improved condition notwithstanding interruptions between the 
navigable parts of such streams or waters by falls, shallows, 
or rapids compelling land carriage, are used or suitable for 
use for the transportation of persons or property in interstate 
or foreign commerce, including therein all such interrupting 
falls, shallows, or rapids, together with such other parts of 
streams as shall have been authorized by Congress for 
improvement by the United States or shall have been recommended 
to Congress for such improvement after investigation under its 
authority;
    [``(9) `municipal purposes' means and includes all purposes 
within municipal powers as defined by the constitution or laws 
of the State or by the charter of the municipality;
    [``(10) `Government dam' means a dam or other work 
constructed or owned by the United States for Government 
purposes with or without constribution from others;
    [``(11) `project' means complete unit of improvement or 
development, consisting of a power house, all water conduits, 
all dams and appurtenant works and structures (including 
navigation structures)which are a part of said unit, and all 
storage, diverting, or forebay reservoirs directly connected therewith, 
the primary line or lines transmitting power therefrom to the point of 
junction with the distribution system or with the interconnected 
primary transmission system, all miscellaneous structures used and 
useful in connection with said unit or any part thereof, and all water-
rights, rights-of-way, ditches, dams reservoirs, lands, or interest in 
lands the use and occupancy of which are necessary or appropriate in 
the maintenance and operation of such unit;
    [``(12) `project works' means the physical structures of a 
project;
    [``(13) `net investment' in a project means the actual 
legitimate original cost thereof as defined and interpreted in 
the `classification of investment in road and equipment of 
steam roads, issue of 1914, Interstate Commerce Commission', 
plus similar costs of additions thereto and betterments 
thereof, minus the sum of the following items properly 
allocated thereto, if and to the extent that such items have 
been accumulated during the period of the license from earnings 
in excess of a fair return on such investment: (a) 
Unappropriated surplus, (b) aggregate credit balances of 
current depreciation accounts, and (c) aggregate appropriations 
of surplus expended for additions or betterments or used for 
the purposes for which such reserves were created. The term 
`cost' shall include, insofar as applicable, the elements 
thereof prescribed in said classification, but shall not 
include expenditures from funds obtained through donations by 
States, municipalities, individuals or others, and said 
classification of investment of the Interstate Commerce 
Commission shall insofar as applicable be published and 
promulgated as a part of the rules and regulations of the 
Commission;
    [``(14) `Commission' and ``Commissioner' means the Federal 
Power Commission, and a member thereof, respectively;
    [``(15) `State commission' means the regulatory body of the 
State or municipality having jurisdiction to regulate rates and 
charges for the sale of electric energy to consumers within the 
State or municipality;
    [``(16) `security' means any note, stock, treasury stock, 
bond, debenture, or other evidence of interest in or 
indebtedness of a corporation subject to the provisions of this 
Act.''
    [Sec. 202. Section 4 of the Federal Water Power Act, as 
amended, is amended to read as follows:
    [``Sec. 4. The Commission is hereby authorized and 
empowered--
    [``(a) To make investigations and to collect and record 
data concerning the utilization of the water resources of any 
region to be developed, the water-power industry and its 
relation to other industries and to interstate or foreign 
commerce, and concerning the location, capacity, development 
costs, and relation to markets of power sites, and whether the 
power from Government dams can be advantageously used by the 
United States for its public purposes, and what is a fair value 
of such power, to the extent the Commission may deem necessary 
or useful for the purpose of this Act.
    [``(b) To determine the actual legitimate original cost of 
and the net investment in a licensed project, and to aid the 
Commission in such determinations, each licensee shall, upon 
oath, within a reasonable period of time to be fixed by the 
Commission, after the construction of the original project or 
any addition thereto or betterment thereof, file with the 
Commission in such detail as the Commission may require, a 
statement in duplicate showing the actual legitimate original 
cost of construction of such project, addition, or betterment, 
and of the price paid for water rights, rights-of-way, lands, 
orinterest in lands. The licensee shall grant to the Commission 
or to its duly authorized agent or agents, at all reasonable times, 
free access to such project, addition, or betterment, and to all maps, 
profiles, contracts, reports of engineers, accounts, books, records, 
and all other papers and documents relating thereto. The statement of 
actual legitimate original cost of said project, and revisions thereof 
as determined by the Commission, shall be filed with the Secretary of 
the Treasury.
    [``(c) To cooperate with the executive departments and 
other agencies of State or National Governments in such 
investigations; and for such purpose the several departments 
and agencies of the National Government are authorized and 
directed upon the request of the Commission to furnish such 
records, papers, and information in their possession as may be 
requested by the Commission, and temporarily to detail to the 
Commission such officers or experts as may be necessary in such 
investigations.
    [``(d) To make public from time to time the information 
secured hereunder and to provide for the publication of its 
reports and investigations in such form and manner as may be 
best adapted for public information and use. The Commission, on 
or before the 3d day of January of each year, shall submit to 
Congress for the fiscal year preceding a classified report 
showing the permits and licenses issued under this Part, and in 
each case the parties thereto, the terms prescribed, and the 
moneys received if any, or account thereof. Such report shall 
contain the names and show the compensation of the persons 
employed by the Commission.
    [``(e) To issue licenses to citizens of the United States, 
or to any association of such citizens, or to any corporation 
organized under the laws of the United States or any State 
thereof, or to any State or municipality for the purpose of 
constructing, operating, and maintaining dams, water conduits, 
reservoirs, power houses, transmission lines, or other project 
works necessary or convenient for the development and 
improvement of navigation and for the development, 
transmission, and utilization of power across, along, from, or 
in any of the streams or other bodies of water over which 
Congress has jurisdiction under its authority to regulate 
commerce with foreign nations and among the several States, or 
upon any part of the public lands and reservations of the 
United States (including the Territories), or for the purpose 
of utilizing the surplus water or water power from any 
Government dam, except as herein provided: Provided, That 
licenses shall be issued within any reservation only after a 
finding by the Commission that the license will not interfere 
or be inconsistent with the purpose for which such reservation 
was created or acquired, and shall be subject to and contain 
such conditions as the Secretary of the department under whose 
supervision such reservation falls shall deem necessary for the 
adequate protection and utilization of such reservation: 
Provided further, That no license affecting the navigable 
capacity of any navigable waters of the United States shall be 
issued until the plans of the same or other structures 
affecting navigation have been approved by the Chief of 
Engineers and the Secretary of War. Whenever the contemplated 
improvement is, in the judgment of the Commission, desirable 
and justified in the public interest for the purpose of 
improving or developing a waterway or waterways for the use or 
benefit of interstate or foreign commerce, a finding to that 
effect shall be made by the Commission and shall become a part 
of the records of the Commission: Provided further, That in 
case the Commission shall find that any Government dam may be 
advantageously used by the United States for public purposesin 
addition to navigation, no license therefor shall be issued until two 
years after it shall have reported to Congress the facts and conditions 
relating thereto, except that this provision shall not apply to any 
Government dam constructed prior to June 10, 1920: And provided 
further, That upon the filing of any application for a license which 
has not been preceded by a preliminary permit under subsection (f) of 
this section, notice shall be given and published as required by the 
proviso of said subsection.
    [``(f) To issue preliminary permits for the purpose of 
enabling applicants for a license hereunder to secure the data 
and to perform the acts required by section 9 hereof: Provided, 
however, That upon the filing of any application for a 
preliminary permit by any person, association, or corporation 
the Commission, before granting such application, shall at once 
give notice of such application in writing to any State or 
municipality likely to be interested in or affected by such 
application; and shall also publish notice of such application 
once each week for four weeks in a daily or weekly newspaper 
published in the county or counties in which the project or any 
part thereof or the lands affected thereby are situated.
    [``(g) Upon its own motion to order an investigation of any 
occupancy of, or evidenced intention to occupy, for the purpose 
of developing electric power, public lands, reservations, or 
streams or other bodies of water over which Congress has 
jurisdiction under its authority to regulate commerce with 
foreign nations and among the several States by any person, 
corporation, State, or municipality and to issue such order as 
it may find appropriate, expedient, and in the public interest 
to conserve and utilize the navigation and water-power 
resources of the region.''
    [Sec. 203. Section 5 of the Federal Water Power Act, as 
amended, is amended to read as follows:
    [``Sec. 5. Each preliminary permit issued under this Part 
shall be for the sole purpose of maintaining priority of 
application for a license under the terms of this Act for such 
period or periods, not exceeding a total of three years, as in 
the discretion of the Commission may be necessary for making 
examinations and surveys, for preparing maps, plans, 
specifications, and estimates, and for making financial 
arrangements. Each such permit shall set forth the conditions 
under which priority shall be maintained. Such permits shall 
not be transferable, and may be canceled by order of the 
Commission upon failure of permittees to comply with the 
conditions thereof or for other good cause shown after notice 
and opportunity for hearing.''
    [Sec. 204. Section 6 of the Federal Water Power Act, as 
amended, is amended to read as follows:
    [``Sec. 6. Licenses under this Part shall be issued for a 
period not exceeding fifty years. Each such license shall be 
conditioned upon acceptance by the licensee of all the terms 
and conditions of this Act and such further conditions, if any, 
as the Commission shall prescribe in conformity with this Act, 
which said terms and conditions and the acceptance thereof 
shall be expressed in said license. Licenses may be revoked 
only for the reasons and in the manner prescribed under the 
provisions of this Act, and may be altered or surrendered only 
upon mutual agreement between the licensee and the Commission 
after thirty days' public notice. Copies of all licenses issued 
under the provisions of this Part and calling for the payment 
of annual charges shall be deposited with the General 
Accounting Office, in compliance with section 3743, Revised 
Statutes, as amended (U.S.C., title 41, sec. 20).''
    [Sec. 205. Section 7 of the Federal Water Power Act, as 
amended, is amended to read as follows:
    [``Sec. 7. (a) In issuing preliminary permits hereunder or 
licenses where no preliminary permit has been issued and in 
issuing licenses to new licensees under section 15 hereof the 
Commission shall give preference to applications therefor by 
States and municipalities, provided the plans for the same are 
deemed by the Commission equally well adapted, or shall within 
a reasonable time to be fixed by the Commission be made equally 
well adapted, to conserve and utilize in the public interest 
the water resources of the region; and as between other 
applicants, the Commission may give preference to the applicant 
the plans of which it finds and determines are best adapted to 
develop, conserve, and utilize in the public interest the water 
resources of the region, if it be satisfied as to the ability 
of the applicant to carry out such plans.
    [``(b) Whenever, in the judgment of the Commission, the 
development of any water resources for public purposes should 
be undertaken by the United States itself, the Commission shall 
not approve any application for any project affecting such 
development, but shall cause to be made such examinations, 
surveys, reports, plans, and estimates of the cost of the 
proposed development as it may find necessary, and shall submit 
its findings to Congress with such recommendations as it may 
find appropriate concerning such development.''
    [Sec. 206. Section 10 of the Federal Water Power Act, as 
amended, is amended to read as follows:
    [``Sec. 10. All licenses issued under this Part shall be on 
the following conditions:
    [``(a) That the project adopted, including the maps, plans, 
and specifications, shall be such as in the judgment of the 
Commission will be best adapted to a comprehensive plan for 
improving or developing a waterway or waterways for the use or 
benefit of interstate or foreign commerce, for the improvement 
and utilization of water-power development, and for other 
beneficial public uses, including recreational purposes; and if 
necessary in order to secure such plan the Commission shall 
have authority to require the modification of any project and 
of the plans and specifications of the project works before 
approval.
    [``(b) That except when emergency shall require for the 
protection of navigation, life, health, or property, no 
substantial alteration or addition, not in conformity with the 
approved plans shall be made to any dam or other project works 
constructed hereunder of an installed capacity in excess of one 
hundred horsepower without the prior approval of the 
Commission; and any emergency alteration or addition so made 
shall thereafter be subject to such modification and change as 
the Commission may direct.
    [``(c) That the licensee shall maintain the project works 
in a condition of repair adequate for the purposes of 
navigation and for the efficient operation of said works in the 
development and transmission of power, shall make all necessary 
renewals and replacements, shall establish and maintain 
adequate depreciation reserves for such purposes, shall so 
maintain and operate said works as not to impair navigation, 
and shall conform to such rules and regulations as the 
Commission may from time to time prescribe for the protection 
of life, health, and property. Each licensee hereunder shall be 
liable for all damages occasioned to the property of others by 
the construction, maintenance, or operation of the project 
works or of the works appurtenant or accessory thereto, 
constructed under the license, and in no event shall the United 
States be liable therefor.
    [``(d) That after the first twenty years of operation, out 
of surplus earned thereafter, if any, accumulated in excess of 
a specified reasonable rate of return upon the net investment 
of a licensee in any project or projects under license, the 
licensee shall establish and maintain amortization reserves, 
which reserves shall, in the discretion of the Commission, be 
held until the termination of the license or be applied from 
time to time in reduction of the net investment. Such specified 
rate of return and the proportion of such surplus earnings to 
be paid into and held in such reserves shall be set forth in 
the license.
    [``(e) That the licensee shall pay to the United States 
reasonable annual charges in an amount to be fixed by the 
Commission for the purpose of reimbursing the United States for 
the costs of the administration of this Part; for recompensing 
it for the use, occupancy, and enjoyment of its lands or other 
property; and for the expropriation to the Government of 
excessive profits until the respective States shall make 
provision for preventing excessive profits or for the 
expropriation thereof to themselves, or until the period of 
amortization as herein provided is reached, and in fixing such 
charges the Commission shall seek to avoid increasing the price 
to the consumers of power by such charges, and any such charges 
may be adjusted from time to time by the Commission as 
conditions may require: Provided, That when licenses are issued 
involving the use of Government dams or other structures owned 
by the United States or tribal lands embraced within Indian 
reservations the Commission shall, subject to the approval of 
the Secretary of the Interior in the case of such dams or 
structures in reclamation projects and, in the case of such 
tribal lands, subject to the approval of the Indian tribe 
having jurisdiction of such lands as provided in section 16 of 
the Act of June 18, 1934 (48 Stat. 984), fix a reasonable 
annual charge for the use thereof, and such charges may with 
like approval be readjusted by the Commission at the end of 
twenty years after the project is available for service and at 
periods of not less than ten years thereafter upon notice and 
opportunity for hearing: Provided further, That licenses for 
the development, transmission, or distribution of power by 
States or municipalities shall be issued and enjoyed without 
charge to the extent such power is sold to the public without 
profit or is used by such State or municipality for State or 
municipal purposes, except that as to projects constructed or 
to be constructed by States or municipalities primarily 
designed to provide or improve navigation, licenses therefor 
shall be issued without charge; and that licenses for the 
development, transmission, or distribution of power for 
domestic, mining, or other beneficial use in projects of not 
more than one hundred horsepower installed capacity may be 
issued without charge, except on tribal lands within Indian 
reservations; but in no case shall a license be issued free of 
charge for the development and utilization of power created by 
any Government dam and that the amount charged therefor in any 
license shall be such as determined by the Commission. In the 
event an overpayment of any charge due under this section shall 
be made by a licensee, the Commission is authorized to allow a 
credit for such overpayment when charges are due for any 
subsequent period.
    [``(f) That whenever any licensee hereunder is directly 
benefited by the construction work of another licensee, a 
permittee, or of the United States of a storage reservoir or 
other headwater improvement, the Commission shall require as a 
condition of the license that the licensee so benefited shall 
reimburse the owner of such reservoir or other improvements for 
such part of the annual charges for interest, maintenance, and 
depreciation thereon as the Commission may deemequitable. The 
proportion of such charges to be paid by any licensee shall be 
determined by the Commission. The licensees or permittees affected 
shall pay to the United States the cost of making such determination as 
fixed by the Commission.
    [``Whenever such reservoir or other improvement is 
constructed by the United States the Commission shall assess 
similar charges against any licensee directly benefited 
thereby, and any amount so assessed shall be paid into the 
Treasury of the United States, to be reserved and appropriated 
as a part of the special fund for headwater improvements as 
provided in section 17 hereof.
    [``Whenever any power project not under license is 
benefited by the construction work of a licensee or permittee, 
the United States or any agency thereof, the Commission, after 
notice to the owner or owners of such unlicensed project, shall 
determine and fix a reasonable and equitable annual charge to 
be paid to the licensee or permittee on account of such 
benefits, or to the United States if it be the owner of such 
headwater improvement.
    [``(g) Such other conditions not inconsistent with the 
provisions of this Act as the Commission may require.
    [``(h) That combinations, agreements, arrangements, or 
understandings, express or implied, to limit the output of 
electrical energy, to restrain trade, or to fix, maintain, or 
increase prices for electrical energy or service are hereby 
prohibited.
    [``(i) In issuing licenses for a minor part only of a 
complete project, or for a complete project of not more than 
one hundred horsepower installed capacity, the Commission may 
in its discretion waive such conditions, provisions, and 
requirements of this Part, except the license period of fifty 
years, as it may deem to be to the public interest to waive 
under the circumstances: Provided, That the provisions hereof 
shall not apply to annual charges for use of lands within 
Indian reservations.''
    [``Sec. 207. Section 14 of the Federal Water Power Act, as 
amended, is amended to read as follows:
    [``Sec. 14. Upon not less than two years' notice in writing 
from the Commission the United States shall have the right upon 
or after the expiration of any license to take over and 
thereafter to maintain and operate any project or projects as 
defined in section 3 hereof, and covered in whole or in part by 
the license, or the right to take over upon mutual agreement 
with the licensee all property owned and held by the licensee 
then valuable and serviceable in the development, transmission, 
or distribution of power and which is then dependent for its 
usefulness upon the continuance of the license, together with 
any lock or locks or other aids to navigation constructed at 
the expense of the licensee, upon the condition that before 
taking possession it shall pay the net investment of the 
licensee in the project or projects taken, not to exceed the 
fair value of the property taken, plus such reasonable damages, 
if any, to property of the licensee valuable, serviceable, and 
dependent as above set forth but not taken, as may be caused by 
the severance therefrom of property taken, and shall assume all 
contracts entered into by the licensee with the approval of the 
Commission. The net investment of the licensee in the project 
or projects so taken and the amount of such severance damages, 
if any, shall be determined by the Commission after notice and 
opportunity for hearing. Such net investment shall not include 
or be affected by the value of any lands, rights-of-way, or 
other property of the United States licensed by the Commission 
under this Act, by the license or by good will, going value, or 
prospective revenues; nor shall the values allowed for water 
rights, rights-of-way, lands, or interest in lands be in excess 
of the actual reasonablecost thereof at the time of acquisition 
by the licensee: Provided, That the right of the United States or any 
State or municipality to take over, maintain, and operate any project 
licensed under this Act at any time by condemnation proceedings upon 
payment of just compensation is hereby expressly reserved.''
    [Sec. 208. Section 17 of the Federal Water Power Act, as 
amended, is amended to read as follows:
    [Sec. 17. (a) All proceeds from any Indian reservation 
shall be placed to the credit of the Indians of such 
reservation. All other charges arising from licenses hereunder, 
except charges fixed by the Commission for the purpose of 
reimbursing the United States for the costs of administration 
of this Part, shall be paid into the Treasury of the United 
States, subject to the following distribution: 12\1/2\ per 
centum thereof is hereby appropriated to be paid into the 
Treasury of the United States and credited to `Miscellaneous 
receipts'; 50 per centum of the charges arising from licenses 
hereunder for the occupancy and use of public lands and 
national forests shall be paid into, reserved, and appropriated 
as a part of the reclamation fund created by the Act of 
Congress known as the Reclamation Act, approved June 17, 1902; 
and 37\1/2\ per centum of the charges arising from licenses 
hereunder for the occupancy and use of national forests and 
public lands from development within the boundaries of any 
State shall be paid by the Secretary of the Treasury to such 
State; and 50 per centum of the charges arising from all other 
licenses hereunder is hereby reserved and appropriated as a 
special fund in the Treasury to be expended under the direction 
as a special fund in the Treasury to be expended under the 
direction of the Secretary of War in the maintenance and 
operation of dams and other navigation structures owned by the 
United States or in the construction, maintenance, or operation 
of headwater or other improvements of navigable waters of the 
United States. The proceeds of charges made by the Commission 
for the purpose of reimbursing the United States for the costs 
of the administration of this Part shall be paid into the 
Treasury of the United States and credited to miscellaneous 
receipts.
    [(b) In case of delinquency on the part of any licensee in 
the payment of annual charges a penalty of 5 per centum of the 
total amount so delinquent may be added to the total charges 
which shall apply for the first month or part of month so 
delinquent with an additional penalty of 3 per centum for each 
subsequent month until the total of the charges and penalties 
are paid or until the license is canceled and the charges and 
penalties satisfied in accordance with law.''
    [Sec. 209. Section 18 of the Federal Water Power Act, as 
amended, is amended to read as follows:
    [``Sec. 18. The Commission shall require the construction, 
maintenance, and operation by a licensee at its own expense of 
such lights and signals as may be directed by the Secretary of 
War, and such fishways as may be prescribed by the Secretary of 
Commerce. The operation of any navigation facilities which may 
be constructed as a part of or in connection with any dam or 
diversion structure built under the provisions of this Act, 
whether at the expense of a licensee hereunder or of the United 
States, shall at all times be controlled by such reasonable 
rules and regulations in the interest of navigation, including 
the control of the level of the pool caused by such dam or 
diversion structure as may be made from time to time by the 
Secretary of War; and for willful failure to comply with any 
such rule or regulation such licensee shall be deemed guilty of 
a misdemeanor, and upon conviction thereof shall be punished as 
provided in section 316 hereof.''
    [Sec. 210. Section 23 of the Federal Water Power Act, as 
amended, is amended to read as follows:
    [``Sec. 23. (a) The provisions of this Part shall not be 
construed as affecting any permit or valid existing right-of-
way heretofore granted or as confirming or otherwise affecting 
any claim, or as affecting any authority heretofore given 
pursuant to law, but any person, association, corporation, 
State, or municipality holding or possessing such permit, 
right-of-way, or authority may apply for a license hereunder, 
and upon such application the Commission may issue to any such 
applicant a license in accordance with the provisions of this 
Part and in such case the provisions of the Act shall apply to 
such applicant as a license hereunder: Provided, That when 
application is made for a license under this section for a 
project or projects already constructed the fair value of said 
project or projects determined as provided in this section, 
shall for the purposes of this Part and of said license be 
deemed to be the amount to be allowed as the net investment of 
the applicant in such project or projects as of the date of 
such license, or as of the date of such determination, if 
license has not been issued. Such fair value shall be 
determined by the Commission after notice and opportunity for 
hearing.
    [``(b) It shall be unlawful for any person, State, or 
municipality, for the purpose of developing electric power, to 
construct, operate, or maintain any dam, water conduit, 
reservoir, power house, or other works incidental thereto 
across, along, or in any of the navigable waters of the United 
States, or upon any part of the public lands or reservations of 
the United States (including the Territories), or utilize the 
surplus water or water power from any Government dam, except 
under and in accordance with the terms of a permit or valid 
existing right-of-way granted prior to June 10, 1920, or a 
license granted pursuant to this Act. Any person, association, 
corporation, State, or municipality intending to construct a 
dam or other project works across, along, over, or in any 
stream or part thereof, other than those defined herein as 
navigable waters, and over which Congress has jurisdiction 
under its authority to regulate commerce with foreign nations 
and among the several States shall before such construction 
file declaration of such intention with the Commission, 
whereupon the Commission shall cause immediate investigation of 
such proposed construction to be made, and if upon 
investigation it shall find that the interests of interstate or 
foreign commerce would be affected by such proposed 
construction, such person, association, corporation, State, or 
municipality shall not construct, maintain, or operate such dam 
or other project works until it shall have applied for and 
shall have received a license under the provisions of this Act. 
If the Commission shall not so find, and if no public lands or 
reservations are affected, permission is hereby granted to 
construct such dam or other project works in such stream upon 
compliance with State laws.''
    [Sec. 211. Section 24 of the Federal Water Power Act, as 
amended, is amended to read as follows:
    [``Sec. 24. Any lands of the United States included in any 
proposed project under the provisions of this Part shall from 
the date of filing of application therefor be reserved from 
entry, location, or other disposal under the laws of the United 
States until otherwise directed by the Commission or by 
Congress. Notice that such application has been made, together 
with the date of filing thereof and a description of the lands 
of the United States affected thereby, shall be filled in the 
local land office for the district in which suchlands are 
located. Whenever the Commission shall determine that the value of any 
lands of the United States so applied for, or heretofore or hereafter 
reserved or classified as power sites, will not be injured or destroyed 
for the purposes of power development by location, entry, or selection 
under the public land laws, the Secretary of the Interior, upon notice 
of such determination, shall deserve such lands open to location, 
entry, or selection, for such purpose or purposes and under such 
restrictions as the Commission may determine, subject to and with a 
reservation of the right of the United States or its permittees or 
licensees to enter upon, occupy, and use any part or all of said lands 
necessary, in the judgment of the Commission, for the purposes of this 
Part, which right shall be expressly reserved in every patent issued 
for such lands; and no chain or right to compensation shall accrue from 
the occupation or use of any of said lands for said purposes. The 
United States or any licensee for any such lands hereunder may enter 
thereupon for the purposes of this Part, upon payment of any damages to 
crops, buildings, or other improvements caused thereby to the owner 
thereof, or upon giving a good and sufficient bond to the United States 
for the use and benefit of the owner to secure the payment of such 
damages as may be determined and fixed in an action brought upon the 
bond in a court of competent jurisdiction, said bond to be in the form 
prescribed by the Commission: Provided, That locations, entries, 
selections, or filings heretofore made for lands reserved as water-
power sites, or in connection with water-power development, or 
electrical transmission may proceed to approval or patent under and 
subject to the limitations and conditions in this section contained.
    [Sec. 212. Sections 1 and 29, inclusive, of the Federal 
Water Power Act, as amended, shall constitute Part I of that 
Act, and sections 25 and 30 of such Act, as amended, are 
repealed: Provided, That nothing in that Act, as amended, shall 
be construed to repeal or amend the provisions of the amendment 
to the Federal Water Power Act approved March 3, 1921 (41 Stat. 
1353), or the provisions of any other Act relating to national 
parks and national monuments.
    [Sec. 213. The Federal Water Power Act, as amended, is 
further amended by adding thereto the following parts:

    [``PART II--REGULATION OF ELECTRIC UTILITY COMPANIES ENGAGED IN 
                          INTERSTATE COMMERCE


       [``DECLARATION OF POLICY; APPLICATION OF PART; DEFINITIONS

    [``Section 201. (a) It is hereby declared that the business 
of transmitting and selling electric energy for ultimate 
distribution to the public is affected with a public interest, 
and that Federal regulation of matters relating to generation 
to the extent provided in this Part and the Part next following 
and of that part of such business which consists of the 
transmission of electric energy in interstate commerce and the 
sale of such energy at wholesale in interstate commerce is 
necessary in the public interest, such Federal regulation, 
however, to extent only to those matters which are not subject 
to regulation by the States.
    [(b) The provisions of this Part shall apply to the 
transmission of electric energy in interstate commerce and to 
the sale of electric energy at wholesale in interstate 
commerce, but shall not apply to any other sale of electric 
energy or deprive a State or State commission of its lawful 
authority now exercised over the exportation of hydroelectric 
energy which is transmitted across a State line. The Commission 
shall have jurisdiction over all facilities for 
suchtransmission or sale of electric energy, but shall not have 
jurisdiction, except as specifically provided in this Part and the Part 
next following, over facilities used for the generation of electric 
energy or over facilities used in local distribution or only for the 
transmission of electric energy in intrastate commerce, or over 
facilities for the transmission of electric energy consumed wholly by 
the transmitter.
    [``(c) For the purpose of this Part, electric energy shall 
be held to be transmitted in interstate commerce if transmitted 
from a State and consumed at any point outside thereof; but 
only insofar as such transmission takes place within the United 
States.
    [``(d) The term `sale of electric energy at wholesale' when 
used in this Part means a sale of electric energy to any person 
for resale.
    [``(e) The term `public utility' when used in this Part or 
in the Part next following means any person who owns or 
operates facilities subject to the jurisdiction of the 
Commission under this Part.
    [``(f) No provision in this Part shall apply to, or be 
deemed to include, the United States, a State or any political 
subdivision of a State, or any agency, authority, or 
instrumentality of any one or more of the foregoing, or any 
corporation which is wholly owned, directly or indirectly, by 
any one or more of the foregoing, or any officer, agent, or 
employee of any of the foregoing acting as such in the course 
of his official duty, unless such provision makes specific 
reference thereto.

    [``INTERCONNECTION AND COORDINATION OF FACILITIES; EMERGENCIES; 
                   TRANSMISSION TO FOREIGN COUNTRIES

    [``Sec. 202. (a) For the purpose of assuring an abundant 
supply of electric energy throughout the United States with the 
greatest possible economy and with regard to the proper 
utilization and conservation of natural resources, the 
Commission is empowered and directed to divide the country into 
regional districts for the voluntary interconnection and 
coordination of facilities for the generation, transmission, 
and sale of electric energy, and it may at any time thereafter, 
upon its own motion or upon application, make such 
modifications thereof as in its judgment will promote the 
public interest. Each such district shall embrace an area 
which, in the judgment of the Commission, can economically be 
served by such interconnected and coordinated electric 
facilities. It shall be the duty of the Commission to promote 
and encourage such interconnection and coordination within each 
such district and between such districts. Before establishing 
any such district and fixing or modifying the boundaries 
thereof the Commission shall give notice to the State 
commission of each State situated wholly or in part within such 
district, and shall afford each such State commission 
reasonable opportunity to present its views and 
recommendations, and shall receive and consider such views and 
recommendations.
    [``(b) Wherever the Commission, upon application of any 
State commission or of any person engaged in the transmission 
or sale of electric energy, and after notice to each State 
commission and public utility affected and after notice to each 
State commission and public utility affected and after 
opportunity for hearing, finds such action necessary or 
appropriate in the public interest it may by order direct a 
public utility (if the Commission finds that no undue burden 
will be placed upon such public utility thereby) to establish 
physical connection of its transmission facilities with the 
facilities of one or more other persons engaged in the 
transmission or sale of electric energy, to sell energy to or 
exchange energy with such persons; Provided, That the 
Commission shall have no authority to compel the enlargement of 
generating facilities for such purposes, nor tocompel such 
public utility to sell or exchange energy when to do so would impair 
its ability to render adequate service to its customers. The Commission 
may prescribe the terms and conditions of the arrangement to be made 
between the persons affected by any such order, including the 
apportionment of cost between them and the compensation or 
reimbursement reasonably due to any of them.
    [``(c) During the continuance of any war in which the 
United States is engaged, or whenever the Commission determines 
that an emergency exists by reason of a sudden increase in the 
demand for electric energy, or a shortage of electric energy or 
of facilities for the generation or transmission of electric 
energy, or of fuel or water for generating facilities, or other 
causes, the Commission shall have authority, either upon its 
own motion or upon complaint, with or without notice, hearing, 
or report, to require by order such temporary connections of 
facilities and such generation, delivery, interchange, or 
transmission of electric energy as in its judgement will best 
meet the emergency and serve the public interest. If the 
parties affected by such order fail to agree upon the terms of 
any arrangement between them in carrying out such order, the 
Commission, after hearing held either before or after such 
order takes effect, may prescribe by supplemental order such 
terms as it finds to be just and reasonable, including the 
compensation or reimbursement which should be paid to or by any 
such party.
    [``(d) During the continuance of any emergency requiring 
immediate action, any person engaged in the transmission or 
sale of electric energy and not otherwise subject to the 
jurisdiction of the Commission may make such temporary 
connections with any public utility subject to the jurisdiction 
of the Commission or may construct such temporary facilities 
for the transmission of electric energy in interstate commerce 
as may be necessary or appropriate to meet such emergency, and 
shall not become subject to the jurisdiction of the Commission 
by reason of such temporary connection or temporary 
construction: Provided, That such temporary connection shall be 
discontinued or such temporary construction removed or 
otherwise disposed of upon the termination of such emergency: 
Provided further, That upon approval of the Commission 
permanent connections for emergency use only may be made 
hereunder.
    [``(e) After six months from the date on which this Part 
takes effect, no person shall transmit any electric energy from 
the United States to a foreign country without first having 
secured an order of the Commission authorizing it to do so. The 
Commission shall issue such order upon application unless, 
after opportunity for hearing, it finds that the proposed 
transmission would impair the sufficiency of electric supply 
within the United States or would impede or tend to impede the 
coordination in the public interest of facilities subject to 
the jurisdiction of the Commission. The Commission may by its 
order grant such application in whole or in part, with such 
modifications and upon such terms and conditions as the 
Commission may find necessary or appropriate, and may from time 
to time, after opportunity for hearing and for good cause shown 
make such supplemental orders in the premises as it may find 
necessary or appropriate.

   [``DISPOSITION OF PROPERTY; CONSOLIDATIONS; PURCHASE OF SECURITIES

    [``Sec. 203. (a) No public utility shall sell, lease, or 
otherwise dispose of the whole of its facilities subject to the 
jurisdiction of the Commission, or any part thereof of a value 
in excess of $50,000,or by any means whatsoever, directly or 
indirectly, merge or consolidate such facilities or any part thereof 
with those of any other person, or purchase, acquire, or take any 
security of any other public utility, without first having secured an 
order of the Commission authorizing it to do so. Upon application for 
such approval the Commission shall give reasonable notice in writing to 
the Governor and State commission of each of the States in which the 
physical property affected, or any part thereof, is situated, and to 
such other persons as it may deem advisable. After notice and 
opportunity for hearing, if the Commission finds that the proposed 
disposition, consolidation, acquisition, or control will be consistent 
with the public interest, it shall approve the same.
    [``(b) The Commission may grant any application for an 
order under this section in whole or in part and upon such 
terms and conditions as it finds necessary or appropriate to 
secure the maintenance of adequate service and the coordination 
in the public interest of facilities subject to the 
jurisdiction of the Commission. The Commission may from time to 
time for good cause show make such orders supplemental to any 
order made under this section as it may find necessary or 
appropriate.

          [``ISSUANCE OF SECURITIES; ASSUMPTION OF LIABILITIES

    [``Sec. 204. (a) No public utility shall issue any 
security, or assume any obligation or liability as guarantor, 
indorser, surety, or otherwise in respect of any security of 
another person, unless and until, and then only to the extent 
that, upon application by the public utility, the Commission by 
order authorizes such issue or assumption of liability. The 
Commission shall make such order only if it finds that such 
issue or assumption (a) is for some lawful object, within the 
corporate purposes of the applicant and compatible with the 
public interest, which is necessary or appropriate for or 
consistent with the proper performance by the applicant of 
service as a public utility and which will not impair its 
ability to perform that service, and (b) is reasonably 
necessary or appropriate for such purposes. The provisions of 
this section shall be effective six months after this Part 
takes effect.
    [``(b) The Commission, after opportunity for hearing, may 
grant any application under this section in whole or in part, 
and with such modifications and upon such terms and conditions 
as it may find necessary or appropriate, and may from time to 
time, after opportunity for hearing and for good cause shown, 
make such supplemental orders in the premises as it may find 
necessary or appropriate, and may by any such supplemental 
order modify the provisions of any previous order as to the 
particular purposes, uses, and extent to which, or the 
conditions under which, any security so theretofore authorized 
or the proceeds thereof may be applied, subject always to the 
requirements of subsection (a) of this section.
    [``(c) No public utility shall, without the consent of the 
Commission, apply any security or any proceeds thereof to any 
purpose not specified in the Commission's order, or 
supplemental order, or to any purpose in excess of the amount 
allowed for such purpose in such order, or otherwise in 
contravention of such order.
    [``(d) The Commission shall not authorize the 
capitalization of the right to be a corporation or of any 
franchise, permit, or contract for consolidation, merger, or 
lease in excess of the amount (exclusive of any tax or annual 
charge) actually paid as the consideration for such right, 
franchise, permit, or contract.
    [``(e) Subsection (a) shall not apply to the issue or 
renewal of, or assumption of liability on, a note or draft 
maturing not more than one year after the date of such issue, 
renewal or assumption of liability, and aggregating (together 
with all other then outstanding notes and drafts of a maturity 
of one year or less on which such public utility is primarily 
or secondarily liable) not more than 5 per centum of the par 
value of the other securities of the public utility then 
outstanding. In the case of securities having no par value, the 
par value for the purpose of this subsection shall be the fair 
market value as of the date of issue. Within ten days after any 
such issue, renewal, or assumption of liability, the public 
utility shall file with the Commission a certificate of 
notification, in such form as may be prescribed by the 
Commission, setting forth such matters as the Commission shall 
by regulation require.
    [``(f) The provisions of this section shall not extend to a 
public utility organized and operating in a State under the 
laws of which its security issues are regulated by a State 
commission.
    [``(g) Nothing in this section shall be construed to imply 
any guarantee or obligation on the part of the United States in 
respect of any securities to which the provisions of this 
section relate.
    [``(h) Any public utility whose security issues are 
approved by the Commission under this section may file with the 
Securities and Exchange Commission duplicate copies of reports 
filed with the Federal Power Commission in lieu of the reports, 
information, and documents required under section 7 of the 
Securities Act of 1933 and sections 12 and 13 of the Securities 
and Exchange Act of 1934.

        [``RATES AND CHARGES; SCHEDULES; SUSPENSION OF NEW RATES

    [``Sec. 205. (a) All rates and charges made, demanded, or 
received by any public utility for or in connection with the 
transmission or sale of electric energy subject to the 
jurisdiction of the Commission, and all rules and regulations 
affecting or pertaining to such rates or charges shall be just 
and reasonable, and any such rate or charge that is not just 
and reasonable is hereby declared to be unlawful.
    [``(b) No public utility shall, with respect to any 
transmission or sale subject to the jurisdiction of the 
Commission, (1) make or grant any undue preference or advantage 
to any person or subject any person to any undue prejudice or 
disadvantage, or (2) maintain any unreasonable difference in 
rates, charges, service, facilities, or in any other respect, 
either as between localities or as between classes of service.
    [``(c) Under such rules and regulations as the Commission 
may prescribe, every public utility shall file with the 
Commission, within such time and in such form as the Commission 
may designate, and shall keep open in convenient form and place 
for public inspection schedules showing all rates and charges 
for any transmission or sale subject to the jurisdiction of the 
Commission, and the classifications, practices, and regulations 
affecting such rates and charges, together with all contracts 
which in any manner affect or relate to such rates, charges, 
classifications, and services.
    [``(d) Unless the Commission otherwise orders, no change 
shall be made by any public utility in any such rate, charge, 
classification, or service, or in any rule, regulation, or 
contract relating thereto, except after thirty days' notice to 
the Commission and to the public. Such notice shall be given by 
filing with the Commission and keeping open for public 
inspection new schedules stating plainly the change or changes 
to be made in the schedule or schedules then in force and the 
time when the change or changes will go into effect. 
TheCommission, for good cause shown, may allow changes to take effect 
without requiring the thirty days' notice herein provided for by an 
order specifying the changes so to be made and the time when they shall 
take effect and the manner in which they shall be filed and published.
    [``(e) Whenever any such new schedule is filed the 
Commission shall have authority, either upon complaint or upon 
its own initiative without complaint, at once, and, if it so 
orders, without answer or formal pleading by the public 
utility, but upon reasonable notice, to enter upon a hearing 
concerning the lawfulness of such rate, charge, classification, 
or service; and, pending such hearing and the decision thereon, 
the Commission, upon filing with such schedules and delivering 
to the public utility affected thereby a statement in writing 
of its reasons for such suspension, may suspend the operation 
of such schedule and defer the use of such rate, charge, 
classification, or service, but not for a longer period than 
five months beyond the time when it would otherwise go into 
effect; and after full hearings, either completed before or 
after the rate, charge, classification, or service goes into 
effect, the Commission may make such orders with reference 
thereto as would be proper in a proceeding initiated after it 
had become effective. If the proceeding has not been concluded 
and an order made at the expiration of such five months, the 
proposed change of rate, charge, classification, or service 
shall go into effect at the end of such period, but in case of 
a proposed increased rate or charge, the Commission may by 
order require the interested public utility or public utilities 
to keep accurate account in detail of all amounts received by 
reason of such increase, specifying by whom and in whose behalf 
such amounts are paid, and upon completion of the hearing and 
decision may by further order require such public utility or 
public utilities to refund, with interest, to the persons in 
whose behalf such amounts were paid, such portion of such 
increased rates or charges as by its decision shall be found 
not justified. At any hearing involving a rate or charge sought 
to be increased, the burden of proof to show that the increased 
rate or charge is just and reasonable shall be upon the public 
utility, and the Commission shall give to the hearing and 
decision of such questions preference over other questions 
pending before it and decide the same as speedily as possible.

  [``FIXING RATES AND CHARGES; DETERMINATION OF COST OF PRODUCTION OR 
                              TRANSMISSION

    [``Sec. 206. (a) Whenever the Commission, after a hearing 
had upon its own motion or upon complaint, shall find that any 
rate, charge, or classification, demanded, observed, charged, 
or collected by any public utility for any transmission or sale 
subject to the jurisdiction of the Commission, or that any 
rule, regulation, practice, or contract affecting such rate, 
charge, or classification is unjust, unreasonable, unduly 
discriminatory or preferential, the Commission shall determine 
the just and reasonable rate, charge, classification, rule, 
regulation, practice, or contract to be thereafter observed and 
in force, and shall fix the same by order.
    [``(b) The Commission upon its own motion, or upon the 
request of any State commission whenever it can do so without 
prejudice to the efficient and proper conduct of its affairs, 
may investigate and determine the cost of the production or 
transmission of electric energy by means of facilities under 
the jurisdiction of the Commission in cases where the 
Commission has no authority to establish a rate governing the 
sale of such energy.

                   [``FURNISHING OF ADEQUATE SERVICE

    [``Sec. 207. Whenever the Commission, upon complaint of a 
State commission, after notice to each State commission and 
public utility affected and after opportunity for hearing, 
shall find that any interstate service of any public utility is 
inadequate or insufficient, the Commission shall determine the 
proper, adequate, or sufficient service to be furnished, and 
shall fix the same by its order, rule, or regulation: Provided, 
That the Commission shall have no authority to compel the 
enlargement of generating facilities for such purposes, nor to 
compel the public utility to sell or exchange energy when to do 
so would impair its ability to render adequate service to its 
customers.

                  [``ASCERTAINMENT OF COST OF PROPERTY

    [``Sec. 208. (a) The Commission may investigate and 
ascertain the actual legitimate cost of the property of every 
public utility, the depreciation therein, and, when found 
necessary for rate-making purposes, other facts which bear on 
the determination of such cost or depreciation, and the fair 
value of such property.
    [``(b) Every public utility upon request shall file with 
the Commission an inventory of all or any part of its property 
and a statement of the original cost thereof, and shall keep 
the Commission informed regarding the cost of all additions, 
betterments, extensions, and new construction.

       [``USE OF JOINT BOARDS; COOPERATION WITH STATE COMMISSIONS

    [``Sec. 209. (a) The Commission may refer any matter 
arising in the administration of this Part to a board to be 
composed of a member or members, as determined by the 
Commission, from the State or each of the States affected or to 
be affected by such matter. Any such board shall be vested with 
the same power and be subject to the same duties and 
liabilities as in the case of a member of the Commission when 
designated by the Commission to hold any hearings. The action 
of such board shall have such force and effect and its 
proceedings shall be conducted in such manner as the Commission 
shall by regulations prescribe. The board shall be appointed by 
the Commission from persons nominated by the State commission 
of each State affected, or by the Governor of such State if 
there is no State commission. Each State affected shall be 
entitled to the same number of representatives on the board 
unless the nominating power of such State waives such right. 
The Commission shall have discretion to reject the nominee from 
any State, but shall thereupon invite a new nomination from 
that State. The members of a board shall receive such 
allowances for expenses as the Commission shall provide. The 
Commission may, when in its discretion sufficient reason exists 
therefor, revoke any reference to such a board.
    [``(b) The Commission may confer with any State commission 
regarding the relationship between rate structures, costs, 
accounts, charges, practices, classifications, and regulations 
of public utilities subject to the jurisdiction of such State 
commission and of the Commission; and the Commission is 
authorized, under such rules and regulations as it shall 
prescribe, to hold joint hearings with any State commission in 
connection with any matter with respect to which the Commission 
is authorized to act. The Commission is authorized in the 
administration of this Act to avail itself of such cooperation, 
services, records, and facilities as may be afforded by any 
State commission.
    [``(c) The Commission shall make available to the several 
State commissions such information and reports as may be of 
assistance in State regulation of public utilities. Whenever 
the Commission can do so without prejudice to the efficient and 
proper conduct of its affairs, it may upon request from a State 
make available to such State as witnesses any of its trained 
rate, valuation, or other experts, subject to reimbursement to 
the Commission by such State of the compensation and traveling 
expenses of such witnesses. All sums collected hereunder shall 
be credited to the appropriation from which the amounts were 
expended in carrying out the provisions of this subsection.

      [``PART III--LICENSEES AND PUBLIC UTILITIES; PROCEDURAL AND 
                       ADMINISTRATIVE PROVISIONS


                  [``ACCOUNTS, RECORDS, AND MEMORANDA

    [``Section 301. (a) Every licensee and public utility shall 
make, keep, and preserve for such periods, such accounts, 
records of cost-accounting procedures, correspondence, 
memoranda, papers, books, and other records as the Commission 
may by rules and regulations prescribe as necessary or 
appropriate for purposes of the administration of this Act, 
including accounts, records, and memoranda of the generation, 
transmission, distribution, delivery, or sale of electric 
energy, the furnishing of services or facilities in connection 
therewith, and receipts and expenditures with respect to any of 
the foregoing: Provided, however, That nothing in this Act 
shall relieve any public utility from keeping any accounts, 
memoranda, or records which such public utility may be required 
to keep by or under authority of the laws of any State. The 
Commission may prescribe a system of accounts to be kept by 
licensees and public utilities and may classify such licensees 
and public utilities and prescribe a system of accounts for 
each class. The Commission, after notice and opportunity for 
hearing, may determine by order the accounts in which 
particular outlays and receipts shall be entered, charged, or 
credited. The burden of proof to justify every accounting entry 
questioned by the Commission shall be on the person making, 
authorizing, or requiring such entry, and the Commission may 
suspend a charge or credit pending submission of satisfactory 
proof in support thereof.
    [``(b) The Commission shall at all times have access to and 
the right to inspect and examine all accounts, records, and 
memoranda of licensees and public utilities, and it shall be 
the duty of such licensees and public utilities to furnish to 
the Commission, within such reasonable time as the Commission 
may order, any information with respect thereto which the 
Commission may by order require, including copies of maps, 
contracts, reports of engineers, and other data, records, and 
papers, and to grant to all agents of the Commission free 
access to its property and its accounts, records, and memoranda 
when requested so to do. No member, officer, or employee of the 
Commission shall divulge any fact or information which may come 
to his knowledge during the course of examination of books or 
other accounts, as hereinbefore provided, except insofar as he 
may be directed by the Commission or by a court.
    [``(c) The books, accounts, memoranda, and records of any 
person who controls, directly or indirectly, a licensee or 
public utility subject to the jurisdiction of the Commission, 
and of any other company controlled by such person, insofar as 
they relate to transactions with or the business of such 
licensee or public utility, shall be subject to examination on 
the order of the Commission.

                        [``RATES OF DEPRECIATION

    [``Sec. 302. (a) The Commission may, after hearing, require 
licensees and public utilities to carry a proper and adequate 
depreciation account in accordance with such rules, 
regulations, and forms of account as the Commission may 
prescribe. The Commission may, from time to time, ascertain and 
determine, and by order fix, the proper and adequate rates of 
depreciation of the several classes of property of each 
licensee and public utility. Each licensee and public utility 
shall conform its depreciation accounts to the rates so 
ascertained, determined, and fixed. The licensees and public 
utilities subject to the jurisdiction of the Commission shall 
not charge to operating expenses any depreciation charges on 
classes of property other than those prescribed by the 
Commission, or charge with respect to any class of property a 
percentage of depreciation other than that prescribed therefor 
by the Commission. No such licensee or public utility shall in 
any case include in any form under its operating or other 
expenses any depreciation or other charge or expenditure 
included elsewhere as a depreciation charge or otherwise under 
its operating or other expenses. Nothing in this section shall 
limit the power of a State commission to determine in the 
exercise of its jurisdiction, with respect to any public 
utility, the percentage rate of depreciation to be allowed, as 
to any class of property of such public utility, or the 
composite depreciation rate, for the purpose of determining 
rates or charges.
    [``(b) The Commission, before prescribing any rules or 
requirements as to accounts, records, or memoranda, or as to 
depreciation rates, shall notify each State commission having 
jurisdiction with respect to any public utility involved, and 
shall give reasonable opportunity to each such commission to 
present its views, and shall receive and consider such views 
and recommendations.

      [``REQUIREMENTS APPLICABLE TO AGENCIES OF THE UNITED STATES

    [``Sec. 303. All agencies of the United States engaged in 
the generation and sale of electric energy for ultimate 
distribution to the public shall be subject, as to all 
facilities used for such generation and sale, and as to the 
electric energy sold by such agency, to the provisions of 
sections 301 and 302 hereof, so far as may be practicable, and 
shall comply with the provisions of such sections and with the 
rules and regulations of the Commission thereunder to the same 
extent as may be required in the case of a public utility.

                    [``PERIODIC AND SPECIAL REPORTS

    [``Sec. 304. (a) Every licensee and every public utility 
shall file with the Commission such annual and other periodic 
or special reports as the Commission may by rules and 
regulations or order prescribe as necessary or appropriate to 
assist the Commission in the proper administration of this Act. 
The Commission may prescribe the manner and form in which such 
reports shall be made, and require from such persons specific 
answers to all questions upon which the Commission may need 
information. The Commission may require that such reports shall 
include, among other things, full information as to assets and 
liabilities, capitalization, net investment, and reduction 
thereof, gross receipts, interest due and paid, depreciation, 
and other reserves, cost of project and other facilities, cost 
of maintenance and operation of the project and other 
facilities, cost of renewals and replacement of the project 
works and other facilities, depreciation, generation, 
transmission, distribution, delivery, use, and sale of electric 
energy. The Commission may requireany such person to make 
adequate provision for currently determining such costs and other 
facts. Such reports shall be made under oath unless the Commission 
otherwise specifies.
    [``(b) It shall be unlawful for any person willfully to 
hinder, delay, or obstruct the making, filing, or keeping of 
any information, document, report, memorandum, record, or 
account required to be made, filed, or kept under this act or 
any rule, regulation, or order thereunder.

     [``OFFICIALS DEALING IN SECURITIES; INTERLOCKING DIRECTORATES

    [``Sec. 305. (a) It shall be unlawful for any officer or 
director of any public utility to receive for his own benefit, 
directly or indirectly, any money of thing of value in respect 
of the negotiation, hypothecation, or sale by such public 
utility of any security issued or to be issued by such public 
utility, or to share in any of the proceeds thereof, or to 
participate in the making or paying of any dividends of such 
utility from any funds properly included in capital account.
    [``(b) After six months from the date on which this Part 
takes effect, it shall be unlawful for any person to hold the 
position of officer or director of more than one public utility 
or to hold the position of officer or director of a public 
utility and the position of officer or director of any bank, 
trust company, banking association, or firm that is authorized 
by law to underwrite or participate in the marketing of 
securities of a public utility, or officer or director of any 
company supplying electrical equipment to such public utility, 
unless the holding of such positions shall have been authorized 
by order of the Commission, upon due showing in form and manner 
prescribed by the Commission, that neither public nor private 
interests will be adversely affected thereby. The Commission 
shall not grant any such authorization in respect of such 
positions held on the date on which this Part takes effect, 
unless application for such authorization is filed with the 
Commission within sixty days after that date.

                             [``COMPLAINTS

    [``Sec. 306. Any person, State, municipality, or State 
commission complaining of anything done or omitted to be done 
by any licensee or public utility in contravention of the 
provisions of this Act may supply to the Commission by petition 
which shall briefly state the facts, whereupon a statement of 
the complaint thus made shall be forwarded by the Commission to 
such licensee or public utility, who shall be called upon to 
satisfy the complaint or to answer the same in writing within a 
reasonable time to be specified by the Commission. If such 
licensee or public utility shall not satisfy the complaint 
within the time specified or there shall appear to be any 
reasonable ground for investigating such complaint, it shall be 
the duty of the Commission to investigate the matters 
complained of in such manner and by such means as it shall find 
proper.

 [``INVESTIGATIONS BY COMMISSION; ATTENDANCE OF WITNESSES; DEPOSITIONS

    [``Sec. 307. (a) The Commission may investigate any facts, 
conditions, practices, or matters which it may find necessary 
or proper in order to determine whether any person has violated 
or is about to violate any provision of this Act or any rule, 
regulation, or order thereunder, or to aid in the enforcement 
of the provisions of this Act or in prescribing rules or 
regulations thereunder, or in obtaininginformation to serve as 
a basis for recommending further legislation concerning the matters to 
which this Act relates. The Commission may permit any person to file 
with it a statement in writing under oath or otherwise, as it shall 
determine, as to any or all facts and circumstances concerning a matter 
which may be the subject of investigation. The Commission, in its 
discretion, may publish or make available to State commissions 
information concerning any such subject.
    [``(b) For the purpose of any investigation or any other 
proceeding under this Act, any member of the Commission, or any 
officer designated by it, is empowered to administer oaths and 
affirmations, subpena witnesses, compel their attendance, take 
evidence, and require the production of any books, papers, 
correspondence, memoranda, contracts, agreements, or other 
records which the Commission finds relevant or material to the 
inquiry. Such attendance of witnesses and the production of any 
such records may be required from any place in the United 
States at any designated place of hearing. Witnesses summoned 
by the Commission to appear before it shall be paid the same 
fees and mileage that are paid witnesses in the courts of the 
United States.
    [``(c) In case of contumacy by, or refusal to obey a 
subpena issued to, any person, the Commission may invoke the 
aid of any court of the United States within the jurisdiction 
of which such investigation or proceeding is carried on, or 
where such person resides or carries on business, in requiring 
the attendance and testimony of witnesses and the production of 
books, papers, correspondence, memoranda, contracts, 
agreements, and other records. Such court may issue an order 
requiring such person to appear before the Commission or member 
or officer designated by the Commission, there to produce 
records, if so ordered, or to give testimony touching the 
matter under investigation or in question; and any failure to 
obey such order of the court may be punished by such court as a 
contempt thereof. All process in any such case may be served in 
the judicial district whereof such person is an inhabitant or 
wherever he may be found or may be doing business. Any person 
who willfully shall fail or refuse to attend and testify or to 
answer any lawful inquiry or to produce books, papers, 
correspondence, memoranda, contracts, agreements, or other 
records, if in his or its power so to do, in obedience to the 
subpena of the Commission, shall be guilty of a misdemeanor 
and, upon conviction, shall be subject to a fine of not more 
than $1,000 or to imprisonment for a term of not more than one 
year, or both.
    [``(d) The testimony of any witness may be taken, at the 
instance of a party, in any proceeding or investigation pending 
before the Commission, by deposition, at any time after the 
proceeding is at issue. The Commission may also order testimony 
to be taken by deposition in any proceeding or investigation 
pending before it, at any stage of such proceeding or 
investigation. Such depositions may be taken before any person 
authorized to administer oaths not being of counsel or attorney 
to either of the parties, nor interested in the proceeding or 
investigation. Reasonable notice must first be given in writing 
by the party or his attorney proposing to take such deposition 
to the opposite party or his attorney of record, as either may 
be nearest, which notice shall state the name of the witness 
and the time and place of the taking of his deposition. Any 
person may be compelled to appear and depose, and to produce 
documentary evidence, in the same manner as witnesses may be 
compelled to appear and testify and produce documentary 
evidence before the Commission, as hereinbefore provided. Such 
testimony shall bereduced to writing by the person taking the 
deposition, or under his direction, and shall, after it has been 
reduced to writing, be subscribed by the dependent.
    [``(e) If a witness whose testimony may be desired to be 
taken by deposition be in a foreign country, the deposition may 
be taken before an officer or person designated by the 
Commission, or agreed upon by the parties by stipulation in 
writing to be filed with the Commission. All depositions must 
be promptly filed with the Commission.
    [``(f) Witnesses whose depositions are taken as authorized 
in this Act, and the person or officer taking the same, shall 
be entitled to the same fees as are paid for like services in 
the courts of the United States.
    [``(g) No person shall be excused from attending and 
testifying or from producing books, papers, correspondence, 
memoranda, contracts, agreements, or other records, and 
documents before the Commission, or in obedience to the 
subpoena of the Commission or any cause or proceeding 
instituted by the Commission, on the ground that the testimony 
or evidence, documentary or otherwise, required of him may tend 
to incriminate him or subject him to a penalty or forfeiture; 
but no individual shall be prosecuted or subjected to any 
penalty or forfeiture for or on account of any transaction, 
matter, or thing concerning which he is compelled to testify or 
produce evidence, documentary or otherwise, after having 
claimed his privilege against self-incrimination, except that 
such individual so testifying shall not be exempt from 
prosecution and punishment for perjury committed in so 
testifying.

                     [``HEARING; RULES OF PROCEDURE

    [``Sec. 308. (a) Hearings under this Act may be held before 
the Commission, any member or members thereof or any 
representative of the Commission designated by it, and 
appropriate records thereof shall be kept. In any proceeding 
before it, the Commission, in accordance with such rules and 
regulations as it may prescribe, may admit as a party any 
interested State, State commission, municipality, or any 
representative of interested consumers or security holders, or 
any competitor of a party to such proceeding, or any other 
person whose participation in the proceeding may be in the 
public interest.
    [``(b) All hearings, investigations, and proceedings under 
this Act shall be governed by rules of practice and procedure 
to be adopted by the Commission, and in the conduct thereof the 
technical rules of evidence need not be applied. No informality 
in any hearing investigation, or proceeding or in the manner of 
taking testimony shall invalidate any order, decision, rule, or 
regulation issued under the authority of this Act.

 [``ADMINISTRATIVE POWERS OF COMMISSION; RULES, REGULATIONS, AND ORDERS

    [``Sec. 309. The Commission shall have power to perform any 
and all acts, and to prescribe, issue, make, amend, and rescind 
such orders, rules, and regulations as it may find necessary or 
appropriate to carry out the provisions of this Act. Among 
other things, such rules and regulations may define accounting, 
technical, and trade terms used in this Act; and may prescribe 
the form or forms of all statements, declarations, 
applications, and reports to be filed with the Commission, the 
information which they shall contain, and the timewithin which 
they shall be filed. Unless a different date is specified therein, 
rules and regulations of the Commission shall be effective thirty days 
after publication in the manner which the Commission shall prescribe. 
Orders of the Commission shall be effective on the date and in the 
manner which the Commission shall prescribe. For the purposes of its 
rules and regulations, the Commission may classify persons and matters 
within its jurisdiction and prescribe different requirements for 
different classes of persons or matters. All rules and regulations of 
the Commission shall be filed with its secretary and shall be kept open 
in convenient form for public inspection and examination during 
reasonable business hours.

                [``APPOINTMENT OF OFFICERS AND EMPLOYEES

    [``Sec. 310. The Commission is authorized to appoint and 
fix the compensation of such officers, attorneys, examiners, 
and experts as may be necessary for carrying out its functions 
under this Act, without regard to the provisions of other laws 
applicable to the employment and compensation of officers and 
employees of the United States; and the Commission may, subject 
to civil-service laws, appoint such other officers and 
employees as are necessary for carrying out such functions and 
fix their salaries in accordance with the Classification Act of 
1923, as amended.

             [``INVESTIGATIONS RELATING TO ELECTRIC ENERGY

    [``Sec. 311. In order to secure information necessary or 
appropriate as a basis for recommending legislation, the 
Commission is authorized and directed to conduct investigations 
regarding the generation, transmission, distribution, and sale 
of electric energy, however produced, throughout the United 
States and its possessions, whether or not otherwise subject to 
the jurisdiction of the Commission, including the generation, 
transmission, distribution, and sale of electric energy by any 
agency, authority, or instrumentality of the United States, or 
of any State or municipality or other political subdivision of 
a State. It shall, so far as practicable, secure and keep 
current information regarding the ownership, operation, 
management, and control of all facilities for such generation, 
transmission, distribution, and sale; the capacity and output 
thereof and the relationship between the two; the cost of 
generation, transmission, and distribution; the rates, charges, 
and contracts in respect of the sale of electric energy and its 
service to residential, rural, commercial, and industrial 
consumers and other purchasers by private and public agencies; 
and the relation of any or all such facts to the development of 
navigation, industry, commerce, and the national defense. The 
Commission shall report to Congress the results of 
investigations made under authority of this section.

                   [``PUBLICATION AND SALE OF REPORTS

    [``Sec. 312. The Commission may provide for the publication 
of its reports and decisions in such form and manner as may be 
best adapted for public information and use, and is authorized 
to sell at reasonable prices copies of all maps, atlases, and 
reports as it may from time to time publish. Such reasonable 
prices may include the cost of compilation, composition, and 
reproduction. The Commission is also authorized to make such 
charges as it deems reasonable for special statistical services 
and other special or periodic services. The amounts collected 
under this section shall be deposited in theTreasury to the 
credit of miscellaneous receipts. All printing for the Federal Power 
Commission making use of engraving, lithography, and photolithography, 
together with the plates for the same, shall be contracted for and 
performed under the direction of the Commission, under such limitations 
and conditions as the Joint Committee on Printing may from time to time 
prescribe, and all other printing for the Commission shall be done by 
the Public Printer under such limitations and conditions as the Joint 
Committee on Printing may from time to time prescribe. The entire work 
may be done at, or ordered through, the Government Printing Office 
whenever, in the judgment of the Joint Committee on Printing, the same 
would be to the interest of the Government: Provided, That when the 
exigencies of the public service so require, the Joint Committee on 
Printing may authorize the Commission to make immediate contracts for 
engraving, lithographing, and photolithography, without advertisement 
for proposals: Provided further, That nothing contained in this or any 
other Act shall prevent the Federal Power Commission from placing 
orders with other departments or establishments for engraving, 
lithographing, and photolithographing, in accordance with the 
provisions of sections 601 and 602 of the Act of June 30, 1932 (47 
Stat. 417), providing for interdepartmental work.

                 [``REHEARINGS; COURT REVIEW OF ORDERS

    [``Sec. 313. (a) Any person, State, municipality, or State 
commission aggrieved by an order issued by the Commission in a 
proceeding under this Act to which such person, State, 
municipality, or State commission is a party may apply for a 
rehearing within thirty days after the issuance of such order. 
The application for rehearing shall set forth specifically the 
ground or grounds upon which such application is based. Upon 
such application the Commission shall have power to grant or 
deny rehearing or to abrogate or modify its order without 
further hearing. Unless the Commission acts upon the 
application for rehearing within thirty days after it is filed, 
such application may be deemed to have been denied. No 
proceeding to review any order of the Commission shall be 
brought by any person unless such person shall have made 
application to the Commission for a rehearing thereon.
    [``(b) Any party to a proceeding under this Act aggrieved 
by an order issued by the Commission in such proceeding may 
obtain a review of such order in the Circuit Court of Appeals 
of the United States for any circuit wherein the licensee or 
public utility to which the order relates is located or has its 
principal place of business, or in the United States Court of 
Appeals for the District of Columbia, by filing in such court, 
within sixty days after the order of the Commission upon the 
application for rehearing, a written petition praying that the 
order of the Commission be modified or set aside in whole or in 
part. A copy of such petition shall forthwith be served upon 
any member of the Commission and thereupon the Commission shall 
certify and file with the court a transcript of the record upon 
which the order complained of was entered. Upon the filing of 
such transcript such court shall have exclusive jurisdiction to 
affirm, modify, or set aside such order in whole or in part. No 
objection to the order of the Commission shall be considered by 
the court unless such objection shall have been urged before 
the Commission in the application for rehearing unless there is 
reasonable ground for failure so to do. The finding of the 
Commission as to the facts, if supported by substantial 
evidence, shall be conclusive. If any party shall apply to the 
court for leave to adduce additional evidence, andshall show to 
the satisfaction of the court that such additional evidence is material 
and that there were reasonable grounds for failure to adduce such 
evidence in the proceedings before the Commission, the court may order 
such additional evidence to be taken before the Commission and to be 
adduced upon the hearing in such manner and upon such terms and 
conditions as to the court may seem proper. The Commission may modify 
its findings as to the facts by reason of the additional evidence so 
taken, and it shall file with the court such modified or new findings 
which, if supported by substantial evidence, shall be conclusive, and 
its recommendation, if any, for the modification or setting aside of 
the original order. The judgment and decree of the court, affirming, 
modifying, or setting aside, in whole or in part, any such order of the 
Commission, shall be final, subject to review by the Supreme Court of 
the United States upon certiorari or certification as provided in 
sections 239 and 240 of the Judicial Code, as amended (U.S.C., title 
28, secs. 346 and 347).
    [``(c) The filing of an application for rehearing under 
subsection (a) shall not, unless specifically ordered by the 
Commission, operate as a stay of the Commission's order. The 
commencement of proceedings under subsection (b) of this 
section shall not, unless specifically ordered by the court, 
operate as a stay of the Commission's order.

             [``ENFORCEMENT OF ACT, REGULATIONS AND ORDERS

    [``Sec. 314. (a) Whenever it shall appear to the Commission 
that any person is engaged or about to engage in any acts or 
practices which constitute or will constitute a violation of 
the provisions of this Act, or of any rule, regulation, or 
order thereunder, it may in its discretion bring an action in 
the proper District Court of the United States, the Supreme 
Court of the District of Columbia, or the United States courts 
of any Territory or other place subject to the jurisdiction of 
the United States, to enjoin such acts or practices and to 
enforce compliance with this Act or any rule, regulation, or 
order thereunder, and upon a proper showing a permanent or 
temporary injunction or decree or restraining order shall be 
granted without bond. The Commission may transmit such evidence 
as may be available concerning such acts or practices to the 
Attorney General, who, in his discretion, may institute the 
necessary criminal proceedings under this Act.
    [``(b) Upon application of the Commission the district 
courts of the United States, the Supreme Court of the District 
of Columbia, and the United States courts of any Territory or 
other place subject to the jurisdiction of the United States 
shall have jurisdiction to issue writs of mandamus commanding 
any person to comply with the provisions of this Act or any 
rule, regulation, or order of the Commission thereunder.
    [``(c) The Commission may employ such attorneys as it finds 
necessary for proper legal aid and service of the Commission or 
its members in the conduct of their work, or for proper 
representation of the public interests in investigations made 
by it or cases or proceedings pending before it, whether at the 
Commission's own instance or upon complaint, or to appear for 
or represent the Commission in any case in court; and the 
expenses of such employment shall be paid out of the 
appropriation for the Commission.

                    [``GENERAL FORFEITURE PROVISION

    [``Sec. 315. (a) Any licensee or public utility which 
willfully fails, within the time prescribed by the Commission, 
to comply with any order of the Commission, to file any report 
required under thisAct or any rule or regulation of the 
Commission thereunder, to submit any information or document required 
by the Commission in the course of an investigation conducted under 
this Act, or to appear by an officer or agent at any hearing or 
investigation in response to a subpoena issued under this Act, shall 
forfeit to the United States an amount not exceeding $1,000 to be fixed 
by the Commission after notice and opportunity for hearing. The 
imposition or payment of any such forfeiture shall not bar or affect 
any penalty prescribed in this Act but such forfeiture shall be in 
addition to any such penalty.
    [``(b) The forfeitures provided for in this Act shall be 
payable into the Treasury of the United States and shall be 
recoverable in a civil suit in the name of the United States, 
brought in the district where the person is an inhabitant or 
has his principal place of business, or if a licensee or public 
utility, in any district in which such licensee or public 
utility transacts business. It shall be the duty of the various 
district attorneys, under the direction of the Attorney General 
of the United States, to prosecute for the recovery of 
forfeitures under this Act. The costs and expenses of such 
prosecution shall be paid from the appropriations for the 
expenses of the courts of the United States.

                      [``GENERAL PENALTIES; VENUE

    [``Sec. 316. (a) Any person who willfully and knowingly 
does or causes or suffers to be done any act, matter, or thing 
in this Act prohibited or declared to be unlawful, or who 
willfully and knowingly omits or fails to do any act, matter, 
or thing in this Act required to be done, or willfully and 
knowingly causes or suffers such omission or failure, shall, 
upon conviction thereof, be punished by a fine of not more than 
$5,000 or by imprisonment for not more than two years, or both.
    [``(b) Any person who willfully and knowingly violates any 
rule, regulation, restriction, condition, or order made or 
imposed by the Commission under authority of this Act, or any 
rule or regulation imposed by the Secretary of War under 
authority of Part I of this Act shall, in addition to any other 
penalties provided by law, be punished upon conviction thereof 
by a fine of not exceeding $500 for each and every day during 
which such offense occurs.

   [``JURISDICTION OF OFFENSES; ENFORCEMENT OF LIABILITIES AND DUTIES

    [``Sec. 317. The District Courts of the United States, the 
Supreme Court of the District of Columbia, and the United 
States courts of any Territory or other place subject to the 
jurisdiction of the United States shall have exclusive 
jurisdiction of violations of this Act or the rules, 
regulations, and orders thereunder, and of all suits in equity 
and actions at law brought to enforce any liability or duty 
created by, or to enjoin any violation of, this Act or any 
rule, regulation, or order thereunder. Any criminal proceeding 
shall be brought in the district wherein any act or transaction 
constituting the violation occurred. Any suit or action to 
enforce any liability or duty created by, or to enjoin any 
violation of, this Act or any rule, regulation, or order 
thereunder may be brought in any such district or in the 
district wherein the defendant is an inhabitant, and process in 
such cases may be served wherever the defendant may be found. 
Judgments and decrees so rendered shall be subject to review as 
provided in sections 128 and 240 of the Judicial Code, as 
amended (U.S.C., title 28, secs. 225 and 347). No costs shall 
be assessed against the Commission in any judicial proceeding 
by or against the Commission under this Act.

                      [``CONFLICT OF JURISDICTION

    [``Sec. 318. If, with respect to the issue, sale, or 
guaranty of a security, or assumption of obligation or 
liability in respect of a security, the method of keeping 
accounts, the filing of reports, or the acquisition or 
disposition of any security, capital assets, facilities, or any 
other subject matter, any person is subject both to a 
requirement of the Public Utility Holding Company Act of 1935 
or of a rule, regulation, or order thereunder and to a 
requirement of this Act or of a rule, regulation, or order 
thereunder, the requirement of the Public Utility Holding 
Company Act of 1935 shall apply to such person, and such person 
shall not be subject to the requirement of this Act, or of any 
rule, regulation, or order thereunder, with respect to the same 
subject matter, unless the Securities and Exchange Commission 
has exempted such person from such requirement of the Public 
Utility Holding Company Act of 1935, in which case the 
requirements of this Act shall apply to such person.

                     [``SEPARABILITY OF PROVISIONS

    [``Sec. 319. If any provision of this Act, or the 
application of such provision to any person or circumstance, 
shall be held invalid, the remainder of the Act, and the 
application of such provision to persons or circumstances other 
than those as to which it is held invalid, shall not be 
affected thereby.

                             [``SHORT TITLE

    [``Sec. 320. This Act may be cited as the `Federal Power 
Act'.'']
                              ----------                              


                    SECTION 211 OF THE CLEAN AIR ACT


                          regulation of fuels

      Sec. 211. (a)  * * *

           *       *       *       *       *       *       *

      (c)(1)  * * *

           *       *       *       *       *       *       *

          (5) MTBE merchant producer conversion assistance.--
                  (A) In general.--
                          (i) Grants.--The Secretary of Energy, 
                        in consultation with the Administrator, 
                        may make grants to merchant producers 
                        of methyl tertiary butyl ether in the 
                        United States to assist the producers 
                        in the conversion of eligible 
                        production facilities described in 
                        subparagraph (C) to the production of 
                        iso-octane and alkylates.
                          (ii) Determination.--The 
                        Administrator, in consultation with the 
                        Secretary of Energy, may determine that 
                        transition assistance for the 
                        production of iso-octane and alkylates 
                        is inconsistent with the provisions of 
                        subparagraph (B) and, on that basis, 
                        may deny applications for grants 
                        authorized by this provision.
                  (B) Further grants.--The Secretary of Energy, 
                in consultation with the Administrator, may 
                also further make grants to merchant producers 
                of MTBE in the United States to assist the 
                producers in the conversion of eligible 
                production facilities described in subparagraph 
                (C) to the production of such other fuel 
                additives that, consistent with this 
                subsection--
                          (i) unless the Administrator 
                        determines that such fuel additives may 
                        reasonably be anticipated to endanger 
                        public health or the environment;
                          (ii) have been registered and have 
                        been tested or are being tested in 
                        accordance with the requirements of 
                        this section; and
                          (iii) will contribute to replacing 
                        gasoline volumes lost as a result of 
                        paragraph (5).
                  (C) Eligible production facilities.--A 
                production facility shall be eligible to 
                receive a grant under this paragraph if the 
                production facility--
                          (i) is located in the United States; 
                        and
                          (ii) produced methyl tertiary butyl 
                        ether for consumption before April 1, 
                        2003 and ceased production at any time 
                        after the date of enactment.
                  (D) Authorization of appropriations.--There 
                is authorized to be appropriated to carry out 
                this paragraph $250,000,000 for each of fiscal 
                years 2004 through 2006, to remain available 
                until expended.
  (d) Penalties and Injunctions.--
          (1) Civil penalties.--Any person who violates 
        subsection (a), (f), (g), (k), (l), (m), [or (n)] (n) 
        or (o) of this section or the regulations prescribed 
        under subsection (c), (h), (i), (k), (l), (m), [or (n)] 
        (n) or (o) of this section or who fails to furnish any 
        information or conduct any tests required by the 
        Administrator under subsection (b) of this section 
        shall be liable to the United States for a civil 
        penalty of not more than the sum of $25,000 for every 
        day of such violation and the amount of economic 
        benefit or savings resulting from the violation. Any 
        violation with respect to a regulation prescribed under 
        subsection (c), (k), (l), [or (m)] (m), or (o) of this 
        section which establishes a regulatory standard based 
        upon a multiday averaging period shall constitute a 
        separate day of violation for each and every day in the 
        averaging period. Civil penalties shall be assessed in 
        accordance with subsections (b) and (c) of section 205.
          (2) Injunctive authority.--The district courts of the 
        United States shall have jurisdiction to restrain 
        violations of subsections (a), (f), (g), (k), (l), (m), 
        [and (n)] (n), and (o) of this section and of the 
        regulations prescribed under subsections (c), (h), (i), 
        (k), (l), (m), [and (n)] (n), and (o) of this section, 
        to award other appropriate relief, and to compel the 
        furnishing of information and the conduct of tests 
        required by the Administrator under subsection (b) of 
        this section. Actions to restrain such violations and 
        compel such actions shall be brought by and in the name 
        of the United States. In any such action, subpoenas for 
        witnesses who are required to attend a district court 
        in any district may run into any other district.

           *       *       *       *       *       *       *

  (k) Reformulated Gasoline for Conventional Vehicles.--
          (1)  EPA regulations.--[Within 1 year after the 
        enactment of the Clean Air Act Amendments of 1990,]
                  (A) In general.--Not later than November 15, 
                1991, the Administrator shall promulgate 
                regulations under this section establishing 
                requirements for reformulated gasoline to be 
                used in gasoline-fueled vehicles in specified 
                nonattainment areas. Such regulations shall 
                require the greatest reduction in emissions of 
                ozone forming volatile organic compounds 
                (during the high ozone season) and emissions of 
                toxic air pollutants (during the entire year) 
                achievable through the reformulation of 
                conventional gasoline, taking into 
                consideration the cost of achieving such 
                emission reductions, any nonair-quality and 
                other air-quality related health and 
                environmental impacts and energy requirements.
                  (B) Maintenance of toxic air pollutant 
                emissions reductions from reformulated 
                gasoline.--
                          (i) Definitions.--In this 
                        subparagraph the term ``PADD'' means a 
                        Petroleum Administration for Defense 
                        District.
                          (ii) Regulations regarding emissions 
                        of toxic air pollutants.--Not later 
                        than 270 days after the date of 
                        enactment of this subparagraph the 
                        Administrator shall establish, for each 
                        refinery or importer, standards for 
                        toxic air pollutants from use of the 
                        reformulated gasoline produced or 
                        distributed by the refinery or importer 
                        that maintain the reduction of the 
                        average annual aggregate emissions of 
                        toxic air pollutants for reformulated 
                        gasoline produced or distributed by the 
                        refinery or importer during calendar 
                        years 1999 and 2000, determined on the 
                        basis of data collected by the 
                        Administrator with respect to the 
                        refinery or importer.
                          (iii) Standards applicable to 
                        specific refineries or importers.--
                                  (I) Applicability of 
                                standards.--For any calendar 
                                year, the standards applicable 
                                to a refinery or importer under 
                                clause (ii) shall apply to the 
                                quantity of gasoline produced 
                                or distributed by the refinery 
                                or importer in the calendar 
                                year only to the extent that 
                                the quantity is less than or 
                                equal to the average annual 
                                quantity of reformulated 
                                gasoline produced or 
                                distributed by the refinery or 
                                importer during calendar years 
                                1999 and 2000.
                                  (II) Applicability of other 
                                standards.--For any calendar 
                                year, the quantity of gasoline 
                                produced or distributed by a 
                                refinery or importer that is in 
                                excess of the quantity subject 
                                to subclause (I) shall be 
                                subject to standards for toxic 
                                air pollutants promulgated 
                                under subparagraph (A) and 
                                paragraph (3)(B).
                          (iv) Credit program.--The 
                        Administrator shall provide for the 
                        granting and use of credits for 
                        emissions of toxic air pollutants in 
                        the same manner as provided in 
                        paragraph (7).
                          (v) Regional protection of toxics 
                        reduction baselines.--
                                  (I) In general.--Not later 
                                than 60 days after the date of 
                                enactment of this subparagraph, 
                                and not later than April 1 of 
                                each calendar year that begins 
                                after that date of enactment, 
                                the Administrator shall publish 
                                in the Federal Register a 
                                report that specifies, with 
                                respect to the previous 
                                calendar year--
                                          (aa) the quantity of 
                                        reformulated gasoline 
                                        produced that is in 
                                        excess of the average 
                                        annual quantity of 
                                        reformulated gasoline 
                                        produced in 1999 and 
                                        2000; and
                                          (bb) the reduction of 
                                        the average annual 
                                        aggregate emissions of 
                                        toxic air pollutants in 
                                        each PADD, based on 
                                        retail survey data or 
                                        data from other 
                                        appropriate sources.
                                  (II) Effect of failure to 
                                maintain aggregate toxics 
                                reductions.--If, in any 
                                calendar year, the reduction of 
                                the average annual aggregate 
                                emissions of toxic air 
                                pollutants in a PADD fails to 
                                meet or exceed the reduction of 
                                the average annual aggregate 
                                emissions of toxic air 
                                pollutants in the PADD in 
                                calendar years 1999 and 2000, 
                                the Administrator, not later 
                                than 90 days after thedate of 
publication of the report for the calendar year under subclause (I), 
shall--
                                          (aa) identify, to the 
                                        maximum extent 
                                        practicable, the 
                                        reasons for the 
                                        failure, including the 
                                        sources, volumes, and 
                                        characteristics of 
                                        reformulated gasoline 
                                        that contributed to the 
                                        failure; and
                                          (bb) promulgate 
                                        revisions to the 
                                        regulations promulgated 
                                        under clause (ii), to 
                                        take effect not earlier 
                                        than 180 days but not 
                                        later than 270 days 
                                        after the date of 
                                        promulgation, to 
                                        provide that, 
                                        notwithstanding clause 
                                        (iii)(II), all 
                                        reformulated gasoline 
                                        produced or distributed 
                                        at each refinery or 
                                        importer shall meet the 
                                        standards applicable 
                                        under clause (ii) not 
                                        later than April 1 of 
                                        the year following the 
                                        report in subclause 
                                        (II) and for subsequent 
                                        years.
                          (vi) Regulations to control hazardous 
                        air pollutants from motor vehicles and 
                        motor vehicle fuels.--Not later than 
                        July 1, 2004, the Administrator shall 
                        promulgate final regulations to control 
                        hazardous air pollutants from motor 
                        vehicles and motor vehicle fuels, as 
                        provided for in section 80.1045 of 
                        title 40, Code of Federal Regulations 
                        (as in effect on the date of enactment 
                        of this subparagraph).
          (2) General requirements.--The regulations referred 
        to in paragraph (1) shall require that reformulated 
        gasoline comply with paragraph (3) and with each of the 
        following requirements (subject to paragraph (7)):
                  (A)  NOx emissions.--The emissions 
                of oxides of nitrogen (NOx) from 
                baseline vehicles when using the reformulated 
                gasoline shall be no greater than the level of 
                such emissions from such vehicles when using 
                baseline gasoline. If the Administrator 
                determines that compliance with the limitation 
                on emissions of oxides of nitrogen under the 
                preceding sentence is technically infeasible, 
                considering the other requirements applicable 
                under this subsection to such gasoline, the 
                Administrator may, as appropriate to ensure 
                compliance with this subparagraph, adjust (or 
                waive entirely), any other requirements of this 
                paragraph [(including the oxygen content 
                requirement contained in subparagraph (B))] or 
                any requirements applicable under paragraph 
                (3)(A).
                  [(B) Oxygen content.--The oxygen content of 
                the gasoline shall equal or exceed 2.0 percent 
                by weight (subject to a testing tolerance 
                established by the Administrator) except as 
                otherwise required by this Act. The 
                Administrator may waive, in whole or in part, 
                the application of this subparagraph for any 
                ozone nonattainment area upon a determination 
                by the Administrator that compliance with such 
                requirement would prevent or interfere with the 
                attainment by the area of a national primary 
                ambient air quality standard.]
                  [(C)] (B) Benzene content.--The benzene 
                content of the gasoline shall not exceed 1.0 
                percent by volume.
                  [(D)] (C) Heavy metals.--The gasoline shall 
                have no heavy metals, including lead or 
                manganese. The Administrator may waive the 
                prohibition contained in this subparagraph for 
                a heavy metal (other than lead) if the 
                Administrator determines that addition of the 
                heavy metal to the gasoline will not increase, 
                on an aggregate mass or cancer-risk basis, 
                toxic air pollutant emissions from motor 
                vehicles.
          (3) More stringent of formula or performance 
        standards.--The regulations referred to in paragraph 
        (1) shall require compliance with the more stringent of 
        either the requirements set forth in subparagraph (A) 
        or the requirements of subparagraph (B) of this 
        paragraph. For purposes of determining the more 
        stringent provision, clause (i) and clause (ii) of 
        subparagraph (B) shall be considered independently.
                  (A) Formula.--
                          (i)  * * *

           *       *       *       *       *       *       *

                          [(v) Oxygen content.--The oxygen 
                        content of the reformulated gasoline 
                        shall equal or exceed 2.0 percent by 
                        weight (subject to a testing tolerance 
                        established by the Administrator) 
                        except as otherwise required by this 
                        Act.]

           *       *       *       *       *       *       *

          (7) Credits.--(A) The regulations promulgated under 
        this subsection shall provide for the granting of an 
        appropriate amount of credits to a person who refines, 
        blends, or imports and certifies a gasoline or slate of 
        gasoline that--
                  [(i) has an oxygen content (by weight) that 
                exceeds the minimum oxygen content specified in 
                paragraph (2);]
                  [(ii)] (i) has an aromatic hydrocarbon 
                content (by volume) that is less than the 
                maximum aromatic hydrocarbon content required 
                to comply with paragraph (3); or
                  [(iii)] (ii) has a benzene content (by 
                volume) that is less than the maximum benzene 
                content specified in paragraph (2).

           *       *       *       *       *       *       *

          (C) The regulations promulgated under subparagraphs 
        (A) and (B) shall ensure the enforcement of the 
        requirements for the issuance, application, and 
        transfer of the credits. Such regulations shall 
        prohibit the granting or transfer of such credits for 
        use with respect to any gasoline in a nonattainment 
        area, to the extent the use of such credits would 
        result in any of the following:
                  (i)  * * *
                  [(ii) An average gasoline oxygen content (by 
                weight) for the nonattainment area (taking into 
                account all gasoline sold for use in 
                conventional gasoline-fueled vehicles in the 
                nonattainment area) lower than the average 
                gasolineoxygen content (by weight) that would 
occur in the absence of using any such credits.]
                  [(iii)] (ii) An average benzene content (by 
                volume) for the nonattainment area (taking into 
                account all gasoline sold for use in 
                conventional gasoline-fueled vehicles in the 
                nonattainment area) higher than the average 
                benzene content (by volume) that would occur in 
                the absence of using any such credits.

           *       *       *       *       *       *       *

  (o) Renewable Fuel Program.--
          (1) Definitions.--In this section:
                  (A) Cellulosic biomass ethanol.--The term 
                ``cellulosic biomass ethanol'' means ethanol 
                derived from any lignocellulosic or 
                hemicellulosic matter that is available on a 
                renewable or recurring basis, including--
                          (i) dedicated energy crops and trees;
                          (ii) wood and wood residues;
                          (iii) plants;
                          (iv) grasses;
                          (v) agricultural residues;
                          (vi) fibers;
                          (vii) animal wastes and other waste 
                        materials; and
                          (viii) municipal solid waste.
                  (B) Renewable fuel.--
                          (i) In general.--The term ``renewable 
                        fuel'' means motor vehicle fuel that--
                                  (I)(aa) is produced from 
                                grain, starch, oilseeds, or 
                                other biomass; or
                                  (bb) is natural gas produced 
                                from a biogas source, including 
                                a landfill, sewage waste 
                                treatment plant, feedlot, or 
                                other place where decaying 
                                organic material is found; and
                                  (II) is used to replace or 
                                reduce the quantity of fossil 
                                fuel present in a fuel mixture 
                                used to operate a motor 
                                vehicle.
                          (ii) Inclusion.--The term ``renewable 
                        fuel'' includes cellulosic biomass 
                        ethanol and biodiesel (as defined in 
                        section 312(f) of the Energy Policy Act 
                        of 1992 (42 U.S.C. 13220(f)) and any 
                        blending components derived from 
                        renewable fuel (provided that only the 
                        renewable fuel portion of any such 
                        blending component shall be considered 
                        part of the applicable volume under the 
                        renewable fuel program established by 
                        this subsection).
                  (C) Small refinery.--The term ``small 
                refinery'' means a refinery for which average 
                aggregate daily crude oil throughput for the 
                calendar year (as determined by dividing the 
                aggregate throughput for the calendar year by 
                the number of days in the calendar year) does 
                not exceed 75,000 barrels.
          (2) Renewable fuel program.--
                  (A) In general.--Not later than 1 year from 
                enactment of this provision, the Administrator 
                shall promulgate regulations ensuring that 
                gasoline sold or dispensed to consumers in the 
                contiguous United States, on an annual average 
                basis, contains the applicable volume of 
                renewable fuel as specified in subparagraph 
                (B). Regardless of the date of promulgation, 
                such regulations shall contain compliance 
                provisions for refiners, blenders, and 
                importers, as appropriate, to ensure that the 
                requirements of this section are met, but shall 
                not restrict where renewables can be used, or 
                impose any per-gallon obligation for the use of 
                renewables. If the Administrator does not 
                promulgate such regulations, the applicable 
                percentage, on a volume percentage of gasoline 
                basis, shall be 1.62 in 2005.
                  (B) Applicable volume.--
                          (i) Calendar years 2005 through 
                        2015.--For the purpose of subparagraph 
                        (A), the applicable volume for any of 
                        calendar years 2005 through 2015 shall 
                        be determined in accordance with the 
                        following table:

                   Applicable volume of renewable fuel

  Calendar year:                                (In billions of gallons)
        2005..................................................      2.7 
        2006..................................................      2.7 
        2007..................................................      2.9 
        2008..................................................      2.9 
        2009..................................................      3.4 
        2010..................................................      3.4 
        2011..................................................      3.4 
        2012..................................................      4.2 
        2013..................................................      4.2 
        2014..................................................      4.2 
        2015..................................................      5.0.
                          (ii) Calendar year 2016 and 
                        thereafter.--For the purpose of 
                        subparagraph (A), the applicable volume 
                        for calendar year 2016 and each 
                        calendar year thereafter shall be equal 
                        to the product obtained by 
                        multiplying--
                                  (I) the number of gallons of 
                                gasoline that the Administrator 
                                estimates will be sold or 
                                introduced into commerce in the 
                                calendar year; and
                                  (II) the ratio that--
                                          (aa) 5.0 billion 
                                        gallons of renewable 
                                        fuels; bears to
                                          (bb) the number of 
                                        gallons of gasoline 
                                        sold or introduced into 
                                        commerce in calendar 
                                        year 2015.
          (3) Applicable percentages.--Not later than October 
        31 of each calendar year after 2002, the Administrator 
        of the Energy Information Administration shall provide 
        the Administrator an estimate of the volumes of 
        gasoline sales in the United States for the coming 
        calendar year. Based on such estimates, the 
        Administrator shall, by November 30 of each calendar 
        year after 2003, determine and publish in the Federal 
        Register, the renewable fuel obligation, on a volume 
        percentage of gasoline basis, applicable to refiners, 
        blenders, and importers, as appropriate, for the coming 
        calendar year, to ensure that the requirements of 
        paragraph (2) are met. For each calendar year, the 
        Administrator shall establish a single applicable 
        percentage that applies to all parties, and make 
        provision to avoid redundantobligations. In determining 
the applicable percentages, the Administrator shall make adjustments to 
account for the use of renewable fuels by exempt small refineries 
during the previous year.
          (4) Cellulosic biomass ethanol.--For the purpose of 
        paragraph (2), 1 gallon of cellulosic biomass ethanol 
        shall be considered to be the equivalent of 1.5 gallon 
        of renewable fuel.
          (5) Credit program.--
                  (A) In general.--The regulations promulgated 
                to carry out this subsection shall provide for 
                the generation of an appropriate amount of 
                credits by any person that refines, blends, or 
                imports gasoline that contains a quantity of 
                renewable fuel that is greater than the 
                quantity required under paragraph (2). Such 
                regulations shall provide for the generation of 
                an appropriate amount of credits for biodiesel 
                fuel. If a small refinery notifies the 
                Administrator that it waives the exemption 
                provided by this Act, the regulations shall 
                provide for the generation of credits by the 
                small refinery beginning in the year following 
                such notification.
                  (B) Use of credits.--A person that generates 
                credits under subparagraph (A) may use the 
                credits, or transfer all or a portion of the 
                credits to another person, for the purpose of 
                complying with paragraph (2).
                  (C) Life of credits.--A credit generated 
                under this paragraph shall be valid to show 
                compliance:
                          (i) in the calendar year in which the 
                        credit was generated or the next 
                        calendar year, or
                          (ii) in the calendar year in which 
                        the credit was generated or next two 
                        consecutive calendar years if the 
                        Administrator promulgates regulations 
                        under paragraph (6).
                  (D) Inability to purchase sufficient 
                credits.--The regulations promulgated to carry 
                out this subsection shall include provisions 
                allowing any person that is unable to generate 
                or purchase sufficient credits to meet the 
                requirements under paragraph (2) to carry 
                forward a renewables deficit provided that, in 
                the calendar year following the year in which 
                the renewables deficit is created, such person 
                shall achieve compliance with the renewables 
                requirement under paragraph (2), and shall 
                generate or purchase additional renewables 
                credits to offset the renewables deficit of the 
                previous year.
          (6) Seasonal variations in renewable fuel use.--
                  (A) Study.--For each of calendar years 2005 
                through 2015, the Administrator of the Energy 
                Information Administration, shall conduct a 
                study of renewable fuels blending to determine 
                whether there are excessive seasonal variations 
                in the use of renewable fuels.
                  (B) Regulation of excessive seasonal 
                variations.--If, for any calendar year, the 
                Administrator of the Energy Information 
                Administration, based on the study under 
                subparagraph (A), makes the determinations 
                specified in subparagraph (C), the 
                Administrator shall promulgate regulations to 
                ensure that 35 percent or more of the quantity 
                of renewable fuels necessary to meet the 
                requirement of paragraph (2) is used during 
                each of the periods specified in subparagraph 
                (D) of each subsequent calendar year.
                  (C) Determinations.--The determinations 
                referred to in subparagraph (B) are that--
                          (i) less than 35 percent of the 
                        quantity of renewable fuels necessary 
                        to meet the requirement of paragraph 
                        (2) has been used during one of the 
                        periods specified in subparagraph (D) 
                        of the calendar year;
                          (ii) a pattern of excessive seasonal 
                        variation described in clause (i) will 
                        continue in subsequent calendar years; 
                        and
                          (iii) promulgating regulations or 
                        other requirements to impose a 35% or 
                        more seasonal use of renewable fuels 
                        will not prevent or interfere with the 
                        attainment of national ambient air 
                        quality standards or significantly 
                        increase the price of motor fuels to 
                        the consumer.
                  (D) Periods.--The two periods referred to in 
                this paragraph are--
                          (i) April through September; and
                          (ii) January through March and 
                        October through December.
                  (E) Exclusions.--Renewable fuels blended or 
                consumed in 2005 in a State which has received 
                a waiver under section 209(b) shall not be 
                included in the study in subparagraph (A).
          (7) Waivers.--
                  (A) In general.--The Administrator, in 
                consultation with the Secretary of Agriculture 
                and the Secretary of Energy, may waive the 
                requirement of paragraph (2) in whole or in 
                part on petition by one or more States by 
                reducing the national quantity of renewable 
                fuel required under this subsection--
                          (i) based on a determination by the 
                        Administrator, after public notice and 
                        opportunity for comment, that 
                        implementation of the requirement would 
                        have a significant and meaningful 
                        adverse impact on the economy or 
                        environment of a State, a region, or 
                        the United States, or will prevent or 
                        interfere with the attainment of a 
                        national ambient air quality standard 
                        in any area of a State; or
                          (ii) based on a determination by the 
                        Administrator, after public notice and 
                        opportunity for comment, that there is 
                        an inadequate domestic supply or 
                        distribution capacity to meet the 
                        requirement.
                   (B) Petitions for waivers.--The 
                Administrator, in consultation with the 
                Secretary of Agriculture and the Secretary of 
                Energy, shall approve or disapprove a State 
                petition for a waiver of the requirement of 
                paragraph (2) within90 days after the date on 
which the petition is received by the Administrator. If the 
Administrator does not act to approve or disapprove a State petition 
for a waiver within 90 days, the Administrator shall publish a notice 
setting forth the reasons for not acting within the required 90-day 
period.
                  (C) Termination of waivers.--A waiver granted 
                under subparagraph (A) shall terminate after 1 
                year, but may be renewed by the Administrator 
                after consultation with the Secretary of 
                Agriculture and the Secretary of Energy.
          (8) Study and waiver for initial year of program.--
        Not later than 180 days from enactment, the Secretary 
        of Energy shall complete for the Administrator a study 
        assessing whether the renewable fuels requirement under 
        paragraph (2) will likely result in significant adverse 
        consumer impacts in 2005, on a national, regional or 
        State basis. Such study shall evaluate renewable fuel 
        supplies and prices, blendstock supplies, and supply 
        and distribution system capabilities. Based on such 
        study, the Secretary shall make specific 
        recommendations to the Administrator regarding waiver 
        of the requirements of paragraph (2), in whole or in 
        part, to avoid any such adverse impacts. Within 270 
        days from enactment, the Administrator shall, 
        consistent with the recommendations of the Secretary 
        waive, in whole or in part, the renewable fuels 
        requirement under paragraph (2) by reducing the 
        national quantity of renewable fuel required under this 
        subsection in 2005. This provision shall not be 
        interpreted as limiting the Administrator's authority 
        to waive the requirements of paragraph (2) in whole, or 
        in part, under paragraph (7) or paragraph (9), 
        pertaining to waivers.
          (9) Assessment and waiver.--The Secretary of Energy, 
        in consultation with the Administrator of the 
        Environmental Protection Agency and the Secretary of 
        Agriculture on his own motion, or upon petition of any 
        State shall evaluate the requirement of paragraph (2) 
        and determine, prior to January 1, 2007, or prior to 
        January 1 of any subsequent year in which the 
        applicable volume of renewable fuel is increased under 
        paragraph (2)(B), whether the requirement of paragraph 
        (2), including the applicable volume of renewable fuel 
        contained in paragraph (2)(B) should remain in effect, 
        in whole or in part, during 2007 or any year or years 
        subsequent to 2007. In evaluating the requirement of 
        paragraph (2) and in making any determination under 
        this section, the Secretary shall consider the best 
        available information and data collected by accepted 
        methods or best available means regarding--
                  (A) the capacity of renewable fuel producers 
                to supply an adequate amount of renewable fuel 
                at competitive prices to fulfill the 
                requirement in paragraph (2);
                  (B) the potential of the requirement in 
                paragraph (2) to significantly raise the price 
                of gasoline, food or heating oil for consumers 
                in any significant area or region of the 
                country above the price that would otherwise 
                apply to such commodities in the absence of the 
                requirement;
                  (C) the potential of the requirement in 
                paragraph (2) to interfere with the supply of 
                fuel in any significant gasoline market or 
                region of the country, including interference 
                with the efficient operation of refiners, 
                blenders, importers, wholesale suppliers, and 
                retail vendors of gasoline, and other motor 
                fuels; and
                  (D) the potential of the requirement to cause 
                or promote exceedences of Federal, State, or 
                local air quality standards.
        If the Secretary determines, after public notice and 
        the opportunity for comment, that the requirement of 
        paragraph (2) would have significant and meaningful 
        adverse impact on the supply of fuel and related 
        infrastructure or on the economy, environment, public 
        health or environment of any significant area or region 
        of the country, the Secretary may waive, in whole or in 
        part, the requirement of paragraph (2) in any one year 
        or period of years as well as reduce the applicable 
        volume of renewable fuel contained in paragraph (2)(B) 
        in any one year or period of years.
          (10) Small refineries.--
                  (A) In general.--The requirement of paragraph 
                (2) shall not apply to small refineries until 
                the first calendar year beginning more than 5 
                years after the first year set forth in the 
                table in paragraph (2)(B)(i). Not later than 
                December 31, 2006, the Secretary of Energy 
                shall complete for the Administrator a study to 
                determine whether the requirement of paragraph 
                (2) would impose a disproportionate economic 
                hardship on small refineries. For any small 
                refinery that the Secretary of Energy 
                determines would experience a disproportionate 
                economic hardship, the Administrator shall 
                extend the small refinery exemption for such 
                small refinery for no less than two additional 
                years.
                  (B) Economic hardship.--
                          (i) Extension of exemption.--A small 
                        refinery may at any time petition the 
                        Administrator for an extension of the 
                        exemption from the requirement of 
                        paragraph (2) for the reason of 
                        disproportionate economic hardship. In 
                        evaluating a hardship petition, the 
                        Administrator, in consultation with the 
                        Secretary of Energy, shall consider the 
                        findings of the study in addition to 
                        other economic factors.
                          (ii) Deadline for action on 
                        petitions.--The Administrator shall act 
                        on any petition submitted by a small 
                        refinery for a hardship exemption not 
                        later than 90 days after the receipt of 
                        the petition.
                  (C) Credit program.--If a small refinery 
                notifies the Administrator that it waives the 
                exemption provided by this Act, the regulations 
                shall provide for the generation of credits by 
                the small refinery beginning in the year 
                following such notification.
                  (D) Opt-in for small refiners.--A small 
                refinery shall be subject to the requirements 
                of this section if it notifies the 
                Administrator that it waives the exemption 
                under subparagraph (A).
  (p) Analyses of Motor Vehicle Fuel Changes and Emissions 
Model.--
          (1) Anti-backsliding analysis.--
                  (A) Draft analysis.--Not later than 4 years 
                after the date of enactment of this paragraph, 
                the Administrator shall publish for public 
                comment a draft analysis of the changes in 
                emissions of air pollutants and air quality due 
                to the use of motor vehicle fuel and fuel 
                additives resulting from implementation of the 
                amendments made by title IX of the Energy 
                Policy Act of 2003.
                  (B) Final analysis.--After providing a 
                reasonable opportunity for comment but not 
                later than 5 years after the date of enactment 
                of this paragraph, the Administrator shall 
                publish the analysis in final form.
          (2) Emissions model.--For the purposes of this 
        subsection, as soon as the necessary data are 
        available, the Administrator shall develop and finalize 
        an emissions model that reasonably reflects the effects 
        of gasoline characteristics or components on emissions 
        from vehicles in the motor vehicle fleet during 
        calendar year 2005.
  [(o)] (q) Fuel and Fuel Additive Importers and Importation.--
For the purposes of this section, the term ``manufacturer'' 
includes an importer and the term ``manufacture'' includes 
importation.
                              ----------                              


        SECTION 205 OF THE DEPARTMENT OF ENERGY ORGANIZATION ACT

                   ENERGY INFORMATION ADMINISTRATION

  Sec. 205. (a)  * * *

           *       *       *       *       *       *       *

  (m) Renewable fuels survey.--(1) In order to improve the 
ability to evaluate the effectiveness of the Nation's renewable 
fuels mandate, the Administrator shall conduct and publish the 
results of a survey of renewable fuels demand in the motor 
vehicle fuels market in the United States monthly, and in a 
manner designed to protect the confidentiality of individual 
responses. In conducting the survey, the Administrator shall 
collect information both on a national and regional basis, 
including--
          (A) the quantity of renewable fuels produced;
          (B) the quantity of renewable fuels blended;
          (C) the quantity of renewable fuels imported;
          (D) the quantity of renewable fuels demanded;
          (E) market price data; and
          (F) such other analyses or evaluations as the 
        Administrator finds is necessary to achieve the 
        purposes of this section.
  (2) The Administrator shall also collect or estimate 
information both on a national and regional basis, pursuant to 
subparagraphs (A) through (F) of paragraph (1), for the five 
years prior to implementation of this subsection.
  (3) This subsection does not affect the authority of the 
Administrator to collect data under section 52 of the Federal 
Energy Administration Act of 1974 (15 U.S.C. 790a).

                            DISSENTING VIEWS

          Electricity and Hydroelectric Relicensing Provisions

    The bill reported by the Committee on Energy and Commerce 
in this Congress differs dramatically from the one reported in 
the previous Congress. In that Congress, we worked in a 
bipartisan manner to report a bill that most of our Committee 
could support. In order to do so, we worked on bipartisan 
compromises in some areas, such as hydroelectric relicensing, 
and agreed to defer consideration of other matters, such as 
electricity issues, until a consensus arose.
    Unfortunately, our Republican colleagues chose to pursue a 
different path in this Congress and drafted a partisan bill. 
This can be seen in the fact that last Congress, 5 Democrats 
out of 26 voted against the bill. In this Congress, 17 
Democrats voted against the bill.
    While some of the bill reflects some bipartisan agreements 
reached during last year's energy bill conference, which was 
never completed, other portions of the bill reflect partisan 
decisions that will do little in solving our energy needs, but 
instead will hurt our environment, and reduce protections for 
consumers and investors in energy.
    While many of our Democratic colleagues take issue with a 
variety of provisions in this bill, these Dissenting Views will 
deal with two of the worst problems with the bill--provisions 
relating to electricity and hydroelectric relicensing. In each 
case, Democrats offered substitutes that were defeated along 
party lines.
    In the case of electricity, the Republican bill would, 
among other things, repeal the Public Utility Holding Company 
Act, and preempt state and Federal decisions on power line 
siting. In contrast, the Democratic substitute, identical to 
H.R. 1272, would provide improved regulation to prevent 
fraudulent practices by energy traders, and provide other 
common sense reforms to protect consumers and investors from 
the manipulative practices of traders like Enron in the Western 
electricity markets.
    In the case of hydroelectric relicensing, the Republican 
bill abandoned a bipartisan compromise reached in the committee 
in the last Congress, and supported by all stakeholders, that 
would have allowed all parties to propose alternatives to 
mandatory conditions, while achieving the same level of 
resource protections. Instead the Republican bill includes 
provisions that would tip the scales in favor of the utility 
and reduce important resource, fish and wildlife protections.
    Our detailed comments on these two subjects follow.
Electricity
    The electricity provisions contained in Title VII suffer 
from sins of both commission and omission. They ignore the 
lessons of the past several years of volatility in electricity 
markets, which harmed consumers in California and other western 
states and eroded investor confidence in this critical 
industry. The title represents a victory for various special 
interests at the expense of the citizens whom our federal 
energy laws are supposed to safeguard. Indeed, it combines the 
worst of deregulatory principles with favors to a select few.
    Among the most objectionable features of Title VII is the 
outright repeal of the Public Utility Holding Company Act of 
1935 (PUHCA), without appropriate compensating protections to 
ensure that investors and consumers are not subject to 
unconstrained market power. It contains so-called ``reforms,'' 
which hardly scratch the surface of what is needed to prevent 
the recurrence of market abuses that cost consumers billions of 
dollars in electricity overcharges and compromised the 
reliability of an electricity system that once was without 
peer.
    The title includes ``native load protections'' that exempt 
so many regions that the net effect is impossible to determine. 
It displaces the traditional ``just and reasonable'' standard 
for modifying unfair contracts with a far less protective 
standard in an effort to tie the hands of federal regulators 
who recently have had to modify agreements that were harmful to 
consumers.
    Finally, the title includes transmission siting provisions 
which preempt not only state decisions about which new or 
expanded lines should be built in our neighborhoods, but also 
federal land agencies' decisions as to whether lines should be 
built in our national forests and other public lands.
    A far better alternative for electricity reform was 
proposed by the Democratic substitute amendment, identical to 
H.R. 1272, which was introduced by Congressmen Dingell, Waxman, 
Markey, and Boucher and cosponsored by 13 other Committee on 
Energy and Commerce Democrats. The premise of this substitute 
was to protect consumers by setting aside further deregulatory 
efforts and instead instituting reforms to prevent the sort of 
manipulation that occurred in west coast electricity markets 
from 2000 through 2001. As the Federal Energy Regulatory 
Commission (FERC) reported late last month, the massive fraud 
which took place during that period appears to have involved 
dozens of parties. It is particularly disappointing that the 
committee would report a bill at this time that repeals PUHCA 
and includes only superficial consumer protections.
    The Democratic substitute amendment set aside the most 
divisive questions about ``restructuring'' the industry in 
favor of targeted, common sense reforms designed to ensure that 
FERC and the Securities and Exchange Commission (SEC) can and 
do fulfill their responsibilities to protect consumers and 
investors. Most significantly, the amendment banned fraudulent 
or manipulative practices in the sale and transmission of 
electricity, and in the sale and transportation of natural gas. 
It established audit trail requirements to improve FERC's 
ability to conduct investigations and take enforcement actions, 
and provided for greater transparency by requiring the 
reporting of information about transactions or quotations 
involving the purchase and sale, and the transmission and 
transportation, of electric power and natural gas.
    The amendment updated the Federal Power Act's penalties for 
civil and criminal offenses to the same levels included in the 
Sarbanes-Oxley Act enacted during the last Congress. It 
directed the SEC to review existing PUHCA exemptions, so that 
it does not miss another Enron, only to discover belatedly that 
the company should not have had the ``exempt'' status that 
enabledit to exploit investors and consumers. The amendment 
required FERC to issue rules against affiliate abuse to ensure that 
entities that are regulated by the Commission are not exploited 
financially by affiliates that FERC does not regulate, and reformed the 
Federal Power Act to allow the Commission to issue refunds for ``unjust 
and unreasonable rates'' from the date they were charged. Finally, the 
amendment reformed FERC's market-based rate policy, to require frequent 
review of such rates and the revocation of this privilege when it was 
abused.
    Unlike the Democratic substitute, Title VII does not 
provide FERC with anti-fraud authority, despite the fact that 
the Commission staff has found some western market abuses were 
not illegal under current law and its Chairman's support for 
such authority. It repeals PUHCA, and erodes that just and 
reasonable standard for contracts. It offers only thin and 
patently inadequate protections for consumers. In so doing, it 
both misses an opportunity to respond to recent abuses in 
electric markets and obviates Congress' responsibility to 
stabilize this critical industry.

Hydroelectric Relicensing

    The hydroelectric relicensing provisions contained in Title 
III, like many other sections of this legislation, abandon the 
bipartisan consensus that was reached during the last Congress 
in favor of an approach that drastically alters the licensing 
process to benefit the hydropower industry and undermines 
several decades of important environmental and fish and 
wildlife protections. The title also contains a costly new 
subsidy program for hydroelectric utilities, an unnecessary 
measure given the maturity of the industry.
    Title III confers super-party status on license applicants 
by allowing them to propose alternatives to the mandatory 
conditions of the resource agencies. The Secretary of the 
relevant agency must accept the alternative provided it meets 
certain criteria, one of which is a weaker standard for the 
protection of public lands. License applicants are also 
entitled to an on-the-record, trial-type hearing, and a 
referral of their disputes to the FERC's Dispute Resolution 
Service. None of these procedural entitlements are granted to 
other legitimate stakeholders in the relicensing process 
including states, tribes, sportsmen or concerned citizens.
    This represents a fundamental shift away from the principle 
that has guided licensing of hydroelectric facilities for 
decades: that our rivers are public resources in which many 
stakeholders have legitimate interests. Instead, this 
legislation treats these resources as the private dominion of 
utilities.
    The legislation commits egregious offenses against the 
environment as well as fish and wildlife through the rollback 
of fishway prescriptions that have been a part of the law for 
nearly 100 years. By allowing license applicants to substitute 
a hatchery for a fishway, the bill could have disastrous 
effects on migratory fish species. Allowing fish to press 
upstream and downstream of a dam ensures that their natural 
patterns and life cycle are not interrupted. This is vital not 
only to the species, but to river health in general.
    The title's subsidy program or ``incentive payment'' scheme 
is an unnecessary and costly addition to an already offensive 
title. Hydroelectricity is a very mature technology that hardly 
needs the benefits of taxpayer dollars at a time when the 
nation is facing massive deficits and an uncertain economic 
outlook.
    A Democratic substitute offered by Representative Dingell 
proposed a superior alternative to this title. It consisted of 
the bipartisan compromise language passed by the full House in 
last year's energy bill. The compromise introduces flexibility 
into the licensing process by allowing any party to propose an 
alternative to mandatory conditions. This approach recognizes 
that there may be less costly means of meeting licensing 
requirements without sacrificing natural resource or fish and 
wildlife protections.

                                   John D. Dingell.
                                   Jim Davis.
                                   Karen McCarthy.
                                   Edward J. Markey.
                                   Sherrod Brown.
                                   Bart Gordon.
                                   Eliot L. Engel.
                                   Lois Capps.
                                   Jan Schakowsky.
                                   Bart Stupak.
                                   Frank Pallone, Jr.
                                   Anna Eshoo.
                                   Hilda L. Solis.
                                   Rick Boucher.
                                   Diana DeGette.
                                   Ted Strickland.
                                   Henry A. Waxman.

                            DISSENTING VIEWS

                         Oil and Gas Provisions

    Although Title II contains a number of noncontroversial 
provisions, it also includes several new provisions that 
undermine environmental protections under current law.
    Section 2201 eliminates authority under the Safe Drinking 
Water Act that ensures that hydraulic fracturing for oil and 
gas production does not endanger underground sources of 
drinking water. Section 2401 amends the Coastal Zone Management 
Act to limit the record for appeals of federal agency decisions 
concerning construction of interstate natural gas pipelines 
(including liquefied natural gas facilities) to that developed 
by the Federal Energy Regulatory Commission, thereby 
marginalizing the Secretary of Commerce and the coastal state's 
roles. Section 2403 amends the Clean Water Act to enlarge a 
current loophole for the oil and gas industry, exempting all of 
their exploration and production activities from EPA storm 
water permit requirements.
Hydraulic Fracturing and Safe Drinking Water (Section 2201)
    Part C of the Safe Drinking Water Act (SDWA) is designed to 
protect underground drinking water sources from contamination 
caused by underground injection of fluids. In two separate 
decisions in 1997 and 2001 the United States Court of Appeals 
for the Eleventh Circuit concluded that hydraulic fracturing 
activities constitute injection under Part C of the SDWA and 
that wells used for the injection of hydraulic fracturing 
fluids should be regulated as Class II wells. No other Federal 
court has addressed the issue or concluded otherwise.
    Hydraulic fracturing is a technique used to enhance the 
recovery of methane gas from coal beds. The Environmental 
Protection Agency (EPA) defines hydraulic fracturing as a 
``temporary and intermittent process in which fluids are 
injected underground at high pressures to create fractures in 
the coals seam that enhance the recovery of methane gas by 
creating pathways for the gas to flow to the surface.''
    The EPA has been conducting a narrowly focused study to 
address hydraulic fracturing of coal bed methane wells, but not 
all hydraulic fracturing practices. The study has not yet been 
completed or finalized but a draft evaluation of impacts to 
underground sources of drinking water by hydraulic fracturing 
of coal bed methane reservoirs was publicly released in August 
2002. The EPA is currently reviewing and incorporating the 
comments received from the public on the draft evaluation.
    The Committee Print that was provided to the minority 
members approximately 72 hours before the Committee markup 
contained a new provision (Section 2201) amending the Safe 
Drinking Water Act (SDWA). Section 2201 eliminates existing 
statutory authority under SDWA to ensure that hydraulic 
fracturing does not endanger underground sources of drinking 
water by removing hydraulic fracturing for oil and gas 
operations from the term ``underground injection'' in Section 
1421.
    In doing so the majority is acting before the EPA study is 
completed and without the benefit of a final report 
incorporating the public's comments. Rather, the majority 
provision in Section 2201 eliminates all EPA authority under 
the Safe Drinking Water Act to protect sources of drinking 
water from improper or harmful hydraulic fracturing practices 
now or in the future. It does not allow for a regulatory 
determination by the EPA after a completed study. Further, the 
majority action is taken without the benefit of any hearings on 
this matter by the Subcommittee on Environment and Hazardous 
Materials which has jurisdiction over Safe Drinking Water Act 
matters.
    While the EPA's initial findings indicated that the threat 
to public health from hydraulic fracturing appears to be low, 
it did indicate that the use of diesel fuel in fracturing 
fluids by some companies introduced the majority of 
constituents of concern to underground sources of drinking 
water. The EPA also stated that water-based alternatives exist 
and from an environmental perspective are preferable to the 
injection of diesel fuel in underground sources of drinking 
water.
    Underground sources of drinking water are the source of 
groundwater for all current and future drinking water supplies 
across the country. Over 50% of all Americans rely on 
groundwater for their drinking water. Recognizing the 
importance of protecting current and future supplies of 
drinking water Representative Dingell offered an amendment to 
the Committee Print for Section 2201. In summary, Rep. 
Dingell's amendment provided for:
           A completed study and independent scientific 
        review by the National Academy of Science;
           A regulatory determination by the 
        Administrator of the EPA;
           Preservation of federal authority to respond 
        in the future where endangerment of underground sources 
        of drinking water or adverse health effects are 
        established; and
           Prevention of lawsuits that would force 
        state regulation under the Safe Drinking Water Act.
    This approach is based on a bipartisan staff agreement that 
was circulated for inclusion in the conference report last 
fall. We believe this approach which preserves authority under 
the Safe Drinking Water Act to protect underground sources of 
drinking water but addresses industry fears of lawsuits forcing 
regulation is a far sounder public policy approach than the one 
set forth in Section 2201 of the Committee Print.
Coastal Zone Management Act (Section 2401)
    Seciton 2401 essentially guts the process envisioned under 
the Coastal Zone Management Act (CZMA) for considering the 
environmental effects of siting interstate natural gas 
pipelines (including liquefied natural gas facilities) 
offshore, including the states' role in determining the 
consistency of any proposal with state coastal management 
policies. The section alters current law by declaring that the 
record developed by the Federal Energy Regulatory Commission 
(FERC) under section 7 of the Natural Gas Act, in proceedings 
primarily concerned witheconomic issues, shall be the 
``exclusive'' record for reviewing any appeals. In so doing, it would 
require administrative appeal decisions of the Secretary of Commerce 
under the CZMA to be based on a record compiled for a different 
purpose.
    It would preclude language in the CZMA requiring the 
Secretary to provide ``a reasonable opportunity for detailed 
comments'' from interested Federal agencies and from the state, 
and preclude the Secretary from considering new information 
relevant to administrative appeals that was not covered in the 
FERC proceeding. Section 2401 also includes a ``sense of 
Congress'' provision directing Federal and State agencies to 
coordinate their proceedings concerning pipeline construction 
with FERC's procedural timelines, which would prevent an 
adequate opportunity for parties in an appeal under the CZMA to 
present information to the Secretary in support of their 
position.

Oil and Gas Exploration and Production Defined (Section 2403)

    Sec. 2403 of the Committee Print adds a definition to the 
Federal Water Pollution Control Act for ``oil and gas 
exploration and production'' that includes all related 
activities, including construction activities.
    Currently, the Clean Water Act includes an exemption from 
the National Pollutant Discharge Elimination System for oil and 
gas facilities for storm water runoff that does not come in 
contact with ``any overburden, raw material, intermediate 
products, finished product, byproduct, or waste products 
located on the site of such operations.''
    Previously, the Environmental Protection Agency interpreted 
this exemption to exclude construction activities. Thus, 
construction activities, including those at oil and gas 
exploration and production sites have been required to get a 
storm water permit. Initially, the permit requirements only 
applied to sites greater than 5 acres in size (phase I). In 
December 1999, EPA issued rules that required permits for sites 
from 1 to 5 acres in size (phase II). This permit requirement 
should have taken effect on March 10, 2003. However, on March 
10, 2003, EPA issued a rule that delayed for two years the 
permit requirement for oil and gas construction sites from 1 to 
5 acres in size. (68 Fed. Reg. 11325)
    The language in the Republican bill would provide two 
immediate benefits for the oil and gas industry at the expense 
of the environment:
    1. 1-5 acre (Phase II) oil and gas facilities would not 
have to gain storm water permits for any activity related to 
field operations, and the requirement for construction 
activities to oil and gas sites greater than 5 acres (Phase I) 
would become invalid.
    2. No legal challenge to EPA's extension language would be 
possible.
    Adoption of this provision would provide the ``certainty'' 
that Majority Counsel said the oil and gas industry was looking 
for at the Subcommittee markup on March 19, 2003, when 
questioned by Ranking Member Dingell regard this section, but 
this would be the ``certainty'' that the industry could pollute 
with impunity. We do not believe that any coherent argument has 
been made for granting the oil and gas industry this type of 
exemption.
    The Republican language ignores the fact that construction 
is construction. The purpose of the permits is to ensure that 
polluters take steps to reduce the harm they are causing to our 
Nation's water. The primary water pollution problem from 
construction is erosion. Construction activities cause 
excessive sediment to flow into the Nation's waterways, harming 
drinking water supplies and aquatic life. At oil and gas sites, 
there is the additional problem of toxics including benzene, 
toluene and heavy metals. While toxics may not necessarily be a 
problem at a completely new drilling site, most construction is 
occurring at existing sites where oil and waste products can be 
easily disturbed and enter the Nation's waters. EPA has no 
evidence whatsoever that construction at oil and gas sites 
causes less pollution than other construction activities.
    Including this non-germane section in the Energy and 
Commerce Committee's print and then blocking the Markey 
amendment to delete this non-germane provision on grounds of 
germaness was unfair and denied the full legislative 
consideration of this change to the Clean Water Act. The Energy 
and Commerce Committee does not have jurisdiction over the 
Clean Water Act and has had no hearings on this issue. The 
Committee has not heard from EPA regarding the implementation 
of this program or from industry regarding the effect of these 
regulations on their practices. In a letter to Representative 
Don Young, Chairman of the Committee on Transportation and 
Infrastructure--the committee of jurisdiction on this section--
Representative Oberstar, Ranking Member of that Committee, 
expressed his view that no legislation within the jurisdiction 
of the Transportation Committee should be included in another 
committee's legislation unless it had been specifically 
considered by the Transportation Committee and urged that the 
provision be deleted from the bill.
    The oil and gas industry says that it is possible to 
develop in an environmentally responsible way, yet this 
language would exempt them from pollution control requirements 
that other industries have to follow. if they are serious about 
their claims, they should follow the rules every other industry 
has learned to live with.
    We continue to believe that Sec. 2403 is unwise, harmful to 
the environment and urge its deletion from the bill.

                                   John D. Dingell.
                                   Bart Gordon.
                                   Eliot L. Engel.
                                   Ed Markey.
                                   Lois Capps.
                                   Jan Schakowsky.
                                   Frank Pallone, Jr.
                                   Anna Eshoo.
                                   Hilda L. Solis.
                                   Sherrod Brown.
                                   Karen McCarthy.
                                   Jim Davis.
                                   Henry A. Waxman.

                            DISSENTING VIEWS

                   Motor Fuels Provisions (Title IX)

    In 1990, Congress created the Reformulated Gasoline (RFG) 
program under section 211 of the Clean Air Act. Under this 
provision, Congress required the use of reformulated gasoline 
in certain ozone nonattainment areas. In addition, the Act 
further specified that RFG must contain 2% oxygen by weight, 
which was thought to be helpful in reducing ozone precursors. 
The primary fuel additives used to meet the 2% oxygenate 
requirement have been Methyl Tertiary Butyl Ether (MTBE) and 
ethanol. However, it is worth noting that the Act in no way 
mandated the use of either MTBE or ethanol and this fact was 
confirmed by Subcommittee Chairman Barton at the full Committee 
mark-up.
    Although the 2% oxygenate requirement has been useful in 
reducing air pollution (especially in wintertime CO areas), 
there is general agreement that gasoline meeting the RFG 
requirements can be made without oxygenates and EPA's Blue 
Ribbon Panel on Oxygenates confirmed this result. However, an 
unforeseen benefit from the use of oxygenates has been a 
reduction in toxic air pollution; environmentalists have sought 
to capture this benefit by seeking ``anti-backsliding'' 
provisions to ensure that the removal of the 2% oxygenate 
requirement for RFG will not result in increases in toxic air 
emissions.
    The House bill includes a repeal of the 2% standard and 
anti-backsliding requirements, which is both necessary and 
commendable.
    Other features of the bill, however, are far less 
meritorious and are either bad for the environment, anti-
consumer or tamper with existing case-law in ways that benefit 
special interests groups at the expense of public drinking 
water systems. In addition, some of these features could lead 
to substantial fuel supply disruption, inequitable distribution 
of costs among various regions of the United States, and call 
for Congress to expend almost a billion taxpayer dollars on 
unnecessary transition assistance for MTBE manufacturers. The 
ultimate and combined effect of these provisions is to create 
legislation that is fundamentally illogical, aids special 
interests at the expense of the public and includes the worst 
aspects of proposed legislation without solving the fundamental 
national problem--MTBE use in gasoline--which provides the only 
legitimate impetus for legislation at all.
Problems With an Ethanol Mandate
    Title IX of this bill contains an ethanol mandate requiring 
the United States to use annually 5 billion gallons of ethanol 
by 2015. The need for, and effects of, this mandate, which was 
created last year on the floor of the Senate, has not been 
carefully examined by the Committee. In fact, Title IX was not 
even added to the bill until after the Energy and Air Quality 
Subcommittee mark-up. At Subcommittee, we had nothing before us 
to guide our deliberations and as a result, no amendments 
regarding ethanol or MTBE were offered or considered. The 
record for a program of this magnitude is exceedingly thin.
    When Congress enacted the RFG provisions in 1990, and 
required the use of 2% oxygenates, it did so on the basis of 
air quality concerns--it did not mandate use of either ethanol 
or MTBE. Congress let the markets determine where and to what 
extent each oxygenate should be used. Congress preserved the 
federal/state balance set by the Clean Air Act and let states 
decide how to meet the federal requirement.
    We now know that we can meet clean air requirements without 
the use of oxygenates. Because of groundwater concerns, many 
states have already banned MTBE, or are planning to do so soon. 
As a result, there seems to be general agreement that we should 
repeal the 2% oxygenate requirement, which is the single 
meritorious aspect of this legislation. However, repeal of the 
2% oxygenate requirement does not, and cannot, justify an 
ethanol mandate by itself.
    To the contrary, ethanol provides a source of clean octane 
and since many states are banning MTBE, even if we repeal the 
2% oxygenate standard ethanol use will inevitably increase. Yet 
under the proposed ethanol mandate, usage will be required to 
nearly triple. In essence, we are being held hostage by an 
ethanol industry that seeks to permanently codify its current 
market position. There is no basis for this result.
    Some have argued that this is a renewable fuels mandate and 
that ethanol will help us to decrease our dependence on foreign 
oil. This claim however, appears highly suspect. During 
consideration of last year's Senate bill, a Wall Street Journal 
editorial cited a Cornell University study indicating, ``it 
takes about 70% more energy (which comes from fossil fuels, by 
the way) to produce ethanol, than the energy ethanol creates.'' 
A USDA study indicated that ``the amount of energy needed to 
produce ethanol is roughly equal to the amount of energy 
obtained from its combustion, which could lead to little or no 
reductions in fossils energy use.'' Mandating a tripling in the 
amount of ethanol that we use appears to do little to reduce 
foreign oil dependence. More likely, it will have an opposite 
effect. In fact, it will also make the price of gasoline 
subject to even more variables--such as drought or other 
factors affecting the price of corn.
    Moreover, gasoline blended with ten volume percent ethanol 
currently receives a 5.3 cent per gallon tax credit on the 
standard gasoline excise tax of 18.4 cents per gallon. The 
ethanol tax subsidy currently costs U.S. taxpayers more than 
$1.1 billion/year. This reduces federal monies available for 
road maintenance and transportation systems. According to 
Department of Treasury officials, if ethanol-blended fuel use 
continues to increase, the Highway Account will forgo $13.72 
billion by 2012. Ethanol already receives substantial subsidies 
from the federal government--the ethanol mandate will increase 
this subsidy unnecessarily.
    The ethanol mandate could also increase gasoline prices and 
restrict gasoline supplies. Energy Information Agency (EIA) 
data indicates that the renewable fuels standard could cause 
gasoline prices to rise by 4 cents per gallon and RFG prices to 
rise by 9.75 cents per gallon. EIA has concluded that 
summertime gasoline supplies will shrink by 2.8% when ethanol 
is added to gasoline. That significant loss in gasoline volumes 
is caused when 10% ethanol is blended with 7.0 psi RVP 
gasoline. This EIAanalysis illustrates a major fallacy in the 
ethanol industry's argument that increased ethanol use helps reduce US 
reliance on crude. Because ethanol shrinks gasoline supplies, crude oil 
demand may actually increase.
    Moreover, ethanol is difficult and expensive to transport 
across the country. Because ethanol-blended gasoline cannot 
travel through common carrier petroleum pipelines, ethanol must 
be transported to its point of destination by truck, rail, or 
barge, where it can finally be blended into gasoline. 
Transportation costs for ethanol can run as high at 12 to 18 
cents per gallon. Additionally, the current transportation 
infrastructure for ethanol is lacking in enough barges and 
rail-cars to meet any new demand. And, if shipped by truck, 
added wear and tear on our highway infrastructure will be added 
while the mandate removes money from the Highway Trust Fund. 
And once ethanol is shipped around the country, it is difficult 
to store. Because it tends to separate from gasoline and 
attract water, ethanol must be blended with gasoline at the 
terminal as tanker trucks are being loaded for shipment to 
individual gasoline stations. States must account for these 
changes in blending at the terminal, as well as finding 
additional storage facilities to accommodate for the need to 
store ethanol in segregated tanks.
    In addition, the ethanol industry is a highly concentrated 
market. One company owns at least 45% of the production 
capability of ethanol. GAO found as recently as January 2002 
that the market concentration in the ethanol industry was 1,866 
on the HHI index. As a result, we have no assurance that price 
fixing will not occur in the ethanol industry.
    Some argue that mandating ethanol will provide increased 
air quality. In truth, while ethanol is useful in reducing 
wintertime carbon monoxide pollution, and has helped reduce 
toxic air emissions, ethanol also has a higher volatility than 
gasoline or MTBE, potentially leading to increased evaporative 
emissions that cause ozone pollution. The current law actually 
recognized this fact--CAA section 211(h)(4) specifically allows 
RFG containing ethanol to have a vapor pressure that is one 
pound higher than RFG without ethanol. In order to counteract 
this increased volatility, gasoline containing ethanol must be 
specially refined to have a lower vapor pressure--at an 
increased cost.
    According to the American Lung Association, ethanol has 
higher rate of evaporation during driving and refueling, 
especially in the summer driving season when there are more 
motorist on the roads, releasing higher levels of harmful 
emissions leading to ozone pollution than other gasoline 
blends. In addition, EPA has acknowledged that the expanded use 
of ethanol, as through an ethanol mandate, will result in 
increased NOX and VOC emissions. Increased air 
emissions translate to dirtier air for all Americans--
particularly smog that, according to recent studies, leads to 
increased cases of asthma.
    Finally, there is a question of equities. Midwestern corn 
growing states can choose to use a lot of ethanol. But Title IX 
contains a banking and credit system for ethanol. Under this 
system, areas outside the Midwest that choose not to use 
ethanol, (including most of the East and West Coasts) must pay 
to purchase ethanol credits--even as they must also suffer from 
increased costs associated with further refining their gasoline 
to meet air quality goals. This is nothing more than a hidden 
subsidy for ethanol-producing states that forces consumers to 
pay for the privilege of not using ethanol.

Lack of an MTBE Ban

    Equally, if not more important, the Motor Fuels title of 
the Energy Policy Act fails to address the serious problem of 
the contamination of underground sources of drinking water by 
MTBE and in fact, includes provisions that will almost 
certainly worsen the problem, by making MTBE manufacturers 
immune from past and future liability. Without an MTBE ban, 
such provisions will provide an incentive for additional, 
irresponsible MTBE use, at a time when it is no longer arguable 
that MTBE is a defective product when used in gasoline. This 
result in untenable for anyone that cares about protecting 
public drinking water supplies.
    MTBE is a petroleum byproduct that has long been used as a 
gasoline additive, even before the 2% oxygenate requirement. 
However, it has contaminated a growing number of drinking water 
sources across the nation, through leaking underground storage 
tanks, spills and other incidents. It is extremely soluble in 
water and even when present at fairly low levels--as little as 
20 to 40 parts per billion, according to the EPA--it makes 
water undrinkable, giving it the smell and taste of kerosene.
    MTBE has been banned in 17 states because of groundwater 
concerns. But a national ban is needed both to protect drinking 
water and to ensure uninterrupted fuel supplies. The New York 
Mercantile Exchange (NYMEX), the world's largest energy 
marketplace, has concluded that ``failure to arise at a uniform 
standard and approach to banning MTBE will subject their [the 
states] respective citizens to inefficient, fragmented gasoline 
``markets'' which, if the fragmentation leads to the NYMEX 
gasoline contract being de-listed, does further damage by 
removing that market from the federal oversight of commodity 
markets provided by the Commodity Futures Trading Commission.''

Liability Protection

    The bill also contains a ``safe harbor'' from defective 
product liability lawsuits for ethanol producers. This 
provision is being advocated, nominally because the federal 
government is requiring their product be used, even though the 
ethanol industry has publicly sought (and indeed, insisted on) 
an ethanol mandate. Given all of these problems, the ethanol 
mandate should be dropped and liability protection should not 
be provided for ethanol.
    Presently, we simply do not know enough about the health or 
environmental effects of ethanol to approve a liability safe 
harbor. There are some indications that ethanol may inhibit the 
breakdown of other, more toxic components in gasoline and 
increase the spread of benzene and other hydrocarbons around 
leaking storage tanks. Moreover, as research on existing fuels 
goes forward and new renewable fuel technologies develop,new 
and unanticipated public health and environmental hazards may well 
emerge. In 1999 an EPA Blue Ribbon Panel that studied this issue said:

          No national monitoring of ethanol in ground water, 
        surface water or drinking water has been completed at 
        this time.

    But one analysis presented to the EPA estimated that the 
addition of ethanol to gasoline would extend the pollution 
plumes of carcinogens like benzene, toluene and xylene by 25 to 
45 percent from leaking underground storage tanks.
    In light of the possibility that ethanol might have adverse 
health or environmental effects, and the lack of any 
comprehensive field studies of the effects of ethanol on 
drinking water supplies, we should not be rushing to pass this 
safe harbor.
    We note that the bill also gives the MTBE industry the same 
``safe harbor'' protections. This is completely unjustified and 
will prevent the MTBE industry from being held accountable for 
the damage it has caused to the drinking water in thousands of 
communities across the country, including those that do not yet 
know their groundwater is contaminated or will be in the future 
by MTBE in gasoline.
    The proponents of this liability waiver argue this 
protection is warranted because the government ``forced'' MTBE 
to be used through the 1990 Clean Air Act 2% oxygenate 
standard. This is incorrect.
    There is no requirement in the Clean Air Act for MTBE use. 
The Act does call for oxygenates, but MTBE use is not mandated. 
In fact, MTBE was in use long before enactment of the Clean Air 
Act. According to the Environmental Working Group, by 1986, 
some 54,000 barrels of MTBE were being added to gasoline every 
day. By 1991--a year before the EPA regulations went into 
effect--the industry was using more than 100,000 barrels of 
MTBE per day in reformulated gasoline.
    More to the point, documents from recent court cases reveal 
that the industry knew MTBE could cause severe harm to 
groundwater supplies, as early as the mid 1980's. These cases--
pursued by a California-based public interest group, 
Communities for a Better Environment, and by the South Lake 
Tahoe Water District--have revealed that the industry knew that 
their product could quickly and disastrously damage 
groundwater. Providing this protection for an industry that 
knowingly caused widespread groundwater contamination is simply 
indefensible.
    Moreover, some argue that the liability protection is 
limited and that actions for negligence and other liability 
theories will remain. This ignores the fact that MTBE producers 
knowingly produced a defective product, that the liability 
theory being statutorily eliminated has already been 
successfully used, and that negligence and other theories of 
action against gasoline retailers will likely result in 
insolvency for those parties and insufficient funds to pay for 
substitute drinking water supplies and contamination clean-up. 
The end result will be that public drinking water supply 
systems, and hence the public, will be forced to bear the costs 
of MTBE contamination, which rightfully belongs to those that 
produced the product initially and profited substantially from 
its use.
    And finally, the bill contains a $750 million fund for MTBE 
producers to help them transition to other business 
opportunities. Yet the bill also allows MTBE manufacturers to 
continue in business. If MTBE were to be banned, this provision 
might make sense. Without an MTBE ban, it simply provides funds 
for MTBE manufacturers. This is not a wise use of taxpayer 
funds and this provision should be dropped or substantially 
reduced. Instead of further subsidizing those manufacturers 
that profited from MTBE, these funds could be much better spent 
to fund MTBE contamination clean-up from Leaking Underground 
Storage Tanks.
    We are disappointed that amendments offered during 
committee markup to address these and other concerns were 
defeated. The legislation falls woefully short of solving the 
basic problem of ending groundwater contamination by MTBE and 
ensuring reliable fuel supplies at the lowest cost to consumers 
and taxpayers. In reality, it moves almost entirely in the 
opposite direction and should be opposed.

                                   Lois Capps.
                                   Eliot L. Engel.
                                   Edward J. Markey.
                                   Anna G. Eshoo.
                                   Frank Pallone, Jr.
                                   Thomas H. Allen.
                                   Jim Davis.
                                   Michael F. Doyle.
                                   Hilda L. Solis.
                                   Henry A. Waxman.

                      ADDITIONAL DISSENTING VIEWS

    During Committee consideration of the Energy Policy Act, I 
offered an amendment to provide natural gas consumers with a 
way to obtain refunds when they are charged excessive rates by 
interstate natural gas pipelines. Unfortunately, that amendment 
was not included in the final bill.
    Under current law, natural gas pipelines are required to 
charge their customers ``just and reasonable'' rates. However, 
the reality is that pipelines are free to charge unreasonable 
rates with impunity and are never required to refund past 
overcharges.
    That structure makes it difficult for customers to 
successfully petition the Federal Energy Regulatory Commission 
for relief because the cost of rate cases is prohibitive.
    This same problem used to exist for consumers of 
electricity. However, Congress, recognizing the importance of 
consumers having the right not to be overcharged, changed the 
law in 1988 to make it easier for electricity consumers to 
secure refunds. This was an important step for electricity 
consumers, and the bill passed by the Energy and Commerce 
Committee actually seeks to give that group even more 
protections and a greater opportunity to go after providers who 
overcharge for electricity services.
    My amendment would have simply given natural gas consumers 
those same rights. It provided identical refund options to 
those given electricity consumers under current law and it was 
absolutely consistent with the proposal for expanded consumer 
protections in the underlying bill.
    This effort makes sense. In almost any business 
relationship that exists, when an overcharge takes place, a 
refund is provided to the consumer.
    By rejecting the Schakowsky amendment the Committee refused 
to address the current shortcoming in the law and sent a 
message to our constituents and natural gas consumers across 
the country that it is acceptable for pipelines that overcharge 
them to keep those illegitimate profits.
    This is a simple fairness issue for natural gas customers 
who prevail in rate cases and are entitled to refunds. They 
should be able to collect refunds from pipelines that 
overcharge from the date the complaint is filed.
    Bipartisan members of the FERC agree that Natural gas 
consumers are entitled to protections from overcharges that are 
equal to those which electricity consumers enjoy.
    In March 27, 2003 testimony before the Senate Energy and 
Natural Resources Committee concerning pending legislative 
proposals to restructure electric power regulation, FERC 
Chairman Wood stated:

          Several of the legislative proposals would change the 
        refund effective date under FPA section 206, so that 
        refunds would be allowed from the date on which a 
        complaint is filed, instead of 60 days later. I support 
        this change, and would support allowing refunds to the 
        same extent under the Natural Gas Act.

    In March 5, 2003 testimony before the House Energy and Air 
Quality Subcommittee concerning national energy policy and a 
discussion draft of energy policy legislation released by 
Chairman Barton on 02/28/03, Chairman Wood stated with respect 
to Section 7091 of the Barton bill:

          This section would eliminate the 60-day wait at the 
        beginning of the refund period under the FPA, so that 
        refunds would be allowed from the date a complaint is 
        filed, instead of only 60 days later. I support this 
        change, and also recommend including a similar 
        provision in the NGA.

    At the same hearing, Commissioner Massey's testimony 
stated:

          Section 7091 of the discussion draft would expand the 
        refund protection under section 206 of the Federal 
        Power Act by eliminating the 60-day delay in the refund 
        effective date. I support this provision but would 
        recommend additional protections * * * During the time 
        that it takes to detect the market flaws or misbehavior 
        and to file a complaint, unjust and unreasonable rates 
        are charged. The Federal Power Act states that such 
        rates are absolutely unlawful * * * I recommend clear 
        statutory language that would allow the Commission to 
        orer refunds for past periods if the rates charged are 
        determined to be unjust and unreasonable * * *.
          Section 7084 of the discussion draft should be 
        modified to provide penalties for prohibited behavior 
        under the Natural Gas Act. I also recommend that the 
        Natural Gas Act be amended to include the refund 
        effective date provisions of Section 7091 (with 
        modifications I mentioned earlier).

    My amendment took the comments of concerned natural gas 
customers and the FERC into account. It provided the exact same 
refund options currently available to electricity consumers and 
included the expanded consumer protection proposal contained in 
section 7091 of the committee print.
    Members considering the merits of this measure only had to 
ask themselves one question: Do natural gas consumers have a 
right to refunds when they have been overcharged for services?
    A vote in favor of the amendment would have allowed the 
overcharges collected by monopoly pipeline providers to be 
refunded to their customers; while a vote against was a vote to 
allow those pipelines to continue collecting and pocketing 
those overcharges.
    It is clear that the FERC needs additional authority to 
protect the rights of natural gas consumers and that, by not 
providing that authority, we will subject natural gas consumers 
to excessive payments.

                                                    Jan Schakowsky.

                  Exchange of Committee Correspondence

                          House of Representatives,
            Committee on Transportation and Infrastructure,
                                     Washington, DC, April 4, 2003.
Hon. W. J. ``Billy'' Tauzin,
Chairman, Committee on Energy and Commerce, House of Representatives, 
        Rayburn House Office Building, Washington, DC.
    Dear Chairman Tauzin: I am writing with regard to H.R. 
1644, the Energy Policy Act of 2003, a committee print of which 
was ordered reported by the Committee on Energy and Commerce on 
April 2, 2003. As you know, the Committee on Transportation and 
Infrastructure was named as an additional Committee of 
jurisdiction on similar energy legislation that passed the 
House in the 107th Congress. I expect that the Speaker will 
refer the legislation that your Committee just reported in the 
same way.
    I recognize you desire to bring this bill before the House 
in an expeditious manner. Accordingly, I will not exercise my 
Committee's right to a sequential referral of the legislation. 
However, this is conditional on the removal of sec. 5066, 
Hybrid Vehicles, either by a manager's amendment or a self-
executing rule when the bill is considered on the Floor. As you 
know, this provision allows states to permit single occupant 
hybrid vehicles to operate in high occupancy vehicle highway 
lanes. This is a matter within the jurisdiction of the 
Transportation and Infrastructure Committee and will be 
addressed in the context of the reauthorization of TEA 21. That 
effort is currently underway.
    By agreeing to waive its consideration of the bill, 
however, the Committee on Transportation and Infrastructure 
does not waive its jurisdiction over the bill. In addition, the 
Transportation and Infrastructure Committee reserves its 
authority to seek conferees on provisions of the bill that are 
within its jurisdiction during any House-Senate conference that 
may be convened on this legislation. I ask for your commitment 
to support any request by the Transportation and Infrastructure 
Committee for conferees on the legislation.
    I request that you include a copy of our exchange of 
letters in your Committee's report on the bill and in the 
Congressional Record during consideration on the House Floor. 
Thank you.
            Sincerely,
                                                 Don Young,
                                                          Chairman.
                                ------                                

                          House of Representatives,
                          Committee on Energy and Commerce,
                                     Washington, DC, April 8, 2003.
Hon. Don Young,
Chairman, Committee on Transportation and Infrastructure, House of 
        Representatives, Rayburn House Office Building, Washington, DC.
    Dear Chairman Young: Thank you for your letter regarding 
H.R. 1644, the Energy Policy Act of 2003.
    The Committee on Energy and Commerce will file a report on 
H.R. 1644, which includes section 5066 on hybrid vehicles, to 
reflect the Committee's action on the Committee Print ordered 
reported by the Committee on April 3, 2002. While H.R. 1644 and 
the Committee's report on that bill contain section 5066, this 
section will not be included in the comprehensive energy 
legislation, H.R. 6, that will be considered by the House in 
the 108th Congress.
    I appreciate your willingness not to seek a referral on 
H.R. 1644. I agree that your decision to forego action on the 
bill will not prejudice the Committee on Transportation and 
Infrastructure with respect to its jurisdictional prerogatives 
on this or similar legislation.
    I will include your letter and this response in the 
Committee's report on H.R. 1644, and I look forward to working 
with you as we bring comprehensive energy legislation to the 
Floor.
            Sincerely,
                                     W.J. ``Billy'' Tauzin,
                                                          Chairman.

                                
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