[United States Statutes at Large, Volume 119, 109th Congress, 1st Session]
[From the U.S. Government Publishing Office, www.gpo.gov]

119 STAT. 594

Public Law 109-58
109th Congress

An Act


 
To ensure jobs for our future with secure, affordable, and reliable
energy. NOTE: Aug. 8, 2005 -  [H.R. 6]

Be it enacted by the Senate and House of Representatives of the
United States of America in NOTE: Energy Policy Act of 2005. 42 USC
15801 note. Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Energy Policy Act
of 2005''.
(b) Table of Contents.--The table of contents for this Act is as
follows:

Sec. 1. Short title; table of contents.

TITLE I--ENERGY EFFICIENCY

Subtitle A--Federal Programs

Sec. 101. Energy and water saving measures in congressional buildings.
Sec. 102. Energy management requirements.
Sec. 103. Energy use measurement and accountability.
Sec. 104. Procurement of energy efficient products.
Sec. 105. Energy savings performance contracts.
Sec. 106. Voluntary commitments to reduce industrial energy intensity.
Sec. 107. Advanced Building Efficiency Testbed.
Sec. 108. Increased use of recovered mineral component in federally
funded projects involving procurement of cement or concrete.
Sec. 109. Federal building performance standards.
Sec. 110. Daylight savings.
Sec. 111. Enhancing energy efficiency in management of Federal lands.

Subtitle B--Energy Assistance and State Programs

Sec. 121. Low-income home energy assistance program.
Sec. 122. Weatherization assistance.
Sec. 123. State energy programs.
Sec. 124. Energy efficient appliance rebate programs.
Sec. 125. Energy efficient public buildings.
Sec. 126. Low income community energy efficiency pilot program.
Sec. 127. State Technologies Advancement Collaborative.
Sec. 128. State building energy efficiency codes incentives.

Subtitle C--Energy Efficient Products

Sec. 131. Energy Star program.
Sec. 132. HVAC maintenance consumer education program.
Sec. 133. Public energy education program.
Sec. 134. Energy efficiency public information initiative.
Sec. 135. Energy conservation standards for additional products.
Sec. 136. Energy conservation standards for commercial equipment.
Sec. 137. Energy labeling.
Sec. 138. Intermittent escalator study.
Sec. 139. Energy efficient electric and natural gas utilities study.
Sec. 140. Energy efficiency pilot program.
Sec. 141. Report on failure to comply with deadlines for new or revised
energy
conservation standards.

Subtitle D--Public Housing

Sec. 151. Public housing capital fund.

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119 STAT. 595

Sec. 152. Energy-efficient appliances.
Sec. 153. Energy efficiency standards.
Sec. 154. Energy strategy for HUD.

TITLE II--RENEWABLE ENERGY

Subtitle A--General Provisions

Sec. 201. Assessment of renewable energy resources.
Sec. 202. Renewable energy production incentive.
Sec. 203. Federal purchase requirement.
Sec. 204. Use of photovoltaic energy in public buildings.
Sec. 205. Biobased products.
Sec. 206. Renewable energy security.
Sec. 207. Installation of photovoltaic system.
Sec. 208. Sugar cane ethanol program.
Sec. 209. Rural and remote community electrification grants.
Sec. 210. Grants to improve the commercial value of forest biomass for
electric energy, useful heat, transportation fuels, and other
commercial purposes.
Sec. 211. Sense of Congress regarding generation capacity of electricity
from renewable energy resources on public lands.

Subtitle B--Geothermal Energy

Sec. 221. Short title.
Sec. 222. Competitive lease sale requirements.
Sec. 223. Direct use.
Sec. 224. Royalties and near-term production incentives.
Sec. 225. Coordination of geothermal leasing and permitting on Federal
lands.
Sec. 226. Assessment of geothermal energy potential.
Sec. 227. Cooperative or unit plans.
Sec. 228. Royalty on byproducts.
Sec. 229. Authorities of Secretary to readjust terms, conditions,
rentals, and royalties.
Sec. 230. Crediting of rental toward royalty.
Sec. 231. Lease duration and work commitment requirements.
Sec. 232. Advanced royalties required for cessation of production.
Sec. 233. Annual rental.
Sec. 234. Deposit and use of geothermal lease revenues for 5 fiscal
years.
Sec. 235. Acreage limitations.
Sec. 236. Technical amendments.
Sec. 237. Intermountain West Geothermal Consortium.

Subtitle C--Hydroelectric

Sec. 241. Alternative conditions and fishways.
Sec. 242. Hydroelectric production incentives.
Sec. 243. Hydroelectric efficiency improvement.
Sec. 244. Alaska State jurisdiction over small hydroelectric projects.
Sec. 245. Flint Creek hydroelectric project.
Sec. 246. Small hydroelectric power projects.

Subtitle D--Insular Energy

Sec. 251. Insular areas energy security.
Sec. 252. Projects enhancing insular energy independence.

TITLE III--OIL AND GAS

Subtitle A--Petroleum Reserve and Home Heating Oil

Sec. 301. Permanent authority to operate the Strategic Petroleum Reserve
and other energy programs.
Sec. 302. National Oilheat Research Alliance.
Sec. 303. Site selection.

Subtitle B--Natural Gas

Sec. 311. Exportation or importation of natural gas.
Sec. 312. New natural gas storage facilities.
Sec. 313. Process coordination; hearings; rules of procedure.
Sec. 314. Penalties.
Sec. 315. Market manipulation.
Sec. 316. Natural gas market transparency rules.
Sec. 317. Federal-State liquefied natural gas forums.
Sec. 318. Prohibition of trading and serving by certain individuals.

Subtitle C--Production

Sec. 321. Outer Continental Shelf provisions.

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Sec. 322. Hydraulic fracturing.
Sec. 323. Oil and gas exploration and production defined.

Subtitle D--Naval Petroleum Reserve

Sec. 331. Transfer of administrative jurisdiction and environmental
remediation, Naval Petroleum Reserve Numbered 2, Kern County,
California.
Sec. 332. Naval Petroleum Reserve Numbered 2 Lease Revenue Account.
Sec. 333. Land conveyance, portion of Naval Petroleum Reserve Numbered
2, to City of Taft, California.
Sec. 334. Revocation of land withdrawal.

Subtitle E--Production Incentives

Sec. 341. Definition of Secretary.
Sec. 342. Program on oil and gas royalties in-kind.
Sec. 343. Marginal property production incentives.
Sec. 344. Incentives for natural gas production from deep wells in the
shallow waters of the Gulf of Mexico.
Sec. 345. Royalty relief for deep water production.
Sec. 346. Alaska offshore royalty suspension.
Sec. 347. Oil and gas leasing in the National Petroleum Reserve in
Alaska.
Sec. 348. North Slope Science Initiative.
Sec. 349. Orphaned, abandoned, or idled wells on Federal land.
Sec. 350. Combined hydrocarbon leasing.
Sec. 351. Preservation of geological and geophysical data.
Sec. 352. Oil and gas lease acreage limitations.
Sec. 353. Gas hydrate production incentive.
Sec. 354. Enhanced oil and natural gas production through carbon dioxide
injection.
Sec. 355. Assessment of dependence of State of Hawaii on oil.
Sec. 356. Denali Commission.
Sec. 357. Comprehensive inventory of OCS oil and natural gas resources.

Subtitle F--Access to Federal Lands

Sec. 361. Federal onshore oil and gas leasing and permitting practices.
Sec. 362. Management of Federal oil and gas leasing programs.
Sec. 363. Consultation regarding oil and gas leasing on public land.
Sec. 364. Estimates of oil and gas resources underlying onshore Federal
land.
Sec. 365. Pilot project to improve Federal permit coordination.
Sec. 366. Deadline for consideration of applications for permits.
Sec. 367. Fair market value determinations for linear rights-of-way
across public lands and National Forests.
Sec. 368. Energy right-of-way corridors on Federal land.
Sec. 369. Oil shale, tar sands, and other strategic unconventional
fuels.
Sec. 370. Finger Lakes withdrawal.
Sec. 371. Reinstatement of leases.
Sec. 372. Consultation regarding energy rights-of-way on public land.
Sec. 373. Sense of Congress regarding development of minerals under
Padre Island National Seashore.
Sec. 374. Livingston Parish mineral rights transfer.

Subtitle G--Miscellaneous

Sec. 381. Deadline for decision on appeals of consistency determination
under the Coastal Zone Management Act of 1972.
Sec. 382. Appeals relating to offshore mineral development.
Sec. 383. Royalty payments under leases under the Outer Continental
Shelf Lands Act.
Sec. 384. Coastal impact assistance program.
Sec. 385. Study of availability of skilled workers.
Sec. 386. Great Lakes oil and gas drilling ban.
Sec. 387. Federal coalbed methane regulation.
Sec. 388. Alternate energy-related uses on the Outer Continental Shelf.
Sec. 389. Oil Spill Recovery Institute.
Sec. 390. NEPA review.

Subtitle H--Refinery Revitalization

Sec. 391. Findings and definitions.
Sec. 392. Federal-State regulatory coordination and assistance.

TITLE IV--COAL

Subtitle A--Clean Coal Power Initiative

Sec. 401. Authorization of appropriations.

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Sec. 402. Project criteria.
Sec. 403. Report.
Sec. 404. Clean coal centers of excellence.

Subtitle B--Clean Power Projects

Sec. 411. Integrated coal/renewable energy system.
Sec. 412. Loan to place Alaska clean coal technology facility in
service.
Sec. 413. Western integrated coal gasification demonstration project.
Sec. 414. Coal gasification.
Sec. 415. Petroleum coke gasification.
Sec. 416. Electron scrubbing demonstration.
Sec. 417. Department of Energy transportation fuels from Illinois basin
coal.

Subtitle C--Coal and Related Programs

Sec. 421. Amendment of the Energy Policy Act of 1992.

Subtitle D--Federal Coal Leases

Sec. 431. Short title.
Sec. 432. Repeal of the 160-acre limitation for coal leases.
Sec. 433. Approval of logical mining units.
Sec. 434. Payment of advance royalties under coal leases.
Sec. 435. Elimination of deadline for submission of coal lease operation
and reclamation plan.
Sec. 436. Amendment relating to financial assurances with respect to
bonus bids.
Sec. 437. Inventory requirement.
Sec. 438. Application of amendments.

TITLE V--INDIAN ENERGY

Sec. 501. Short title.
Sec. 502. Office of Indian Energy Policy and Programs.
Sec. 503. Indian energy.
Sec. 504. Consultation with Indian tribes.
Sec. 505. Four Corners transmission line project and electrification.
Sec. 506. Energy efficiency in federally assisted housing.

TITLE VI--NUCLEAR MATTERS

Subtitle A--Price-Anderson Act Amendments

Sec. 601. Short title.
Sec. 602. Extension of indemnification authority.
Sec. 603. Maximum assessment.
Sec. 604. Department liability limit.
Sec. 605. Incidents outside the United States.
Sec. 606. Reports.
Sec. 607. Inflation adjustment.
Sec. 608. Treatment of modular reactors.
Sec. 609. Applicability.
Sec. 610. Civil penalties.

Subtitle B--General Nuclear Matters

Sec. 621. Licenses.
Sec. 622. Nuclear Regulatory Commission scholarship and fellowship
program.
Sec. 623. Cost recovery from Government agencies.
Sec. 624. Elimination of pension offset for certain rehired Federal
retirees.
Sec. 625. Antitrust review.
Sec. 626. Decommissioning.
Sec. 627. Limitation on legal fee reimbursement.
Sec. 628. Decommissioning pilot program.
Sec. 629. Whistleblower protection.
Sec. 630. Medical isotope production.
Sec. 631. Safe disposal of greater-than-Class C radioactive waste.
Sec. 632. Prohibition on nuclear exports to countries that sponsor
terrorism.
Sec. 633. Employee benefits.
Sec. 634. Demonstration hydrogen production at existing nuclear power
plants.
Sec. 635. Prohibition on assumption by United States Government of
liability for certain foreign incidents.
Sec. 636. Authorization of appropriations.
Sec. 637. Nuclear Regulatory Commission user fees and annual charges.
Sec. 638. Standby support for certain nuclear plant delays.
Sec. 639. Conflicts of interest relating to contracts and other
arrangements.

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Subtitle C--Next Generation Nuclear Plant Project

Sec. 641. Project establishment.
Sec. 642. Project management.
Sec. 643. Project organization.
Sec. 644. Nuclear Regulatory Commission.
Sec. 645. Project timelines and authorization of appropriations.

Subtitle D--Nuclear Security

Sec. 651. Nuclear facility and materials security.
Sec. 652. Fingerprinting and criminal history record checks.
Sec. 653. Use of firearms by security personnel.
Sec. 654. Unauthorized introduction of dangerous weapons.
Sec. 655. Sabotage of nuclear facilities, fuel, or designated material.
Sec. 656. Secure transfer of nuclear materials.
Sec. 657. Department of Homeland Security consultation.

TITLE VII--VEHICLES AND FUELS

Subtitle A--Existing Programs

Sec. 701. Use of alternative fuels by dual fueled vehicles.
Sec. 702. Incremental cost allocation.
Sec. 703. Alternative compliance and flexibility.
Sec. 704. Review of Energy Policy Act of 1992 programs.
Sec. 705. Report concerning compliance with alternative fueled vehicle
purchasing requirements.
Sec. 706. Joint flexible fuel/hybrid vehicle commercialization
initiative.
Sec. 707. Emergency exemption.

Subtitle B--Hybrid Vehicles, Advanced Vehicles, and Fuel Cell Buses

Part 1--Hybrid Vehicles

Sec. 711. Hybrid vehicles.
Sec. 712. Efficient hybrid and advanced diesel vehicles.

Part 2--Advanced Vehicles

Sec. 721. Pilot program.
Sec. 722. Reports to Congress.
Sec. 723. Authorization of appropriations.

Part 3--Fuel Cell Buses

Sec. 731. Fuel cell transit bus demonstration.

Subtitle C--Clean School Buses

Sec. 741. Clean school bus program.
Sec. 742. Diesel truck retrofit and fleet modernization program.
Sec. 743. Fuel cell school buses.

Subtitle D--Miscellaneous

Sec. 751. Railroad efficiency.
Sec. 752. Mobile emission reductions trading and crediting.
Sec. 753. Aviation fuel conservation and emissions.
Sec. 754. Diesel fueled vehicles.
Sec. 755. Conserve by Bicycling Program.
Sec. 756. Reduction of engine idling.
Sec. 757. Biodiesel engine testing program.
Sec. 758. Ultra-efficient engine technology for aircraft.
Sec. 759. Fuel economy incentive requirements.

Subtitle E--Automobile Efficiency

Sec. 771. Authorization of appropriations for implementation and
enforcement of fuel economy standards.
Sec. 772. Extension of maximum fuel economy increase for alternative
fueled vehicles.
Sec. 773. Study of feasibility and effects of reducing use of fuel for
automobiles.
Sec. 774. Update testing procedures.

Subtitle F--Federal and State Procurement

Sec. 781. Definitions.
Sec. 782. Federal and State procurement of fuel cell vehicles and
hydrogen energy systems.

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Sec. 783. Federal procurement of stationary, portable, and micro fuel
cells.

Subtitle G--Diesel Emissions Reduction

Sec. 791. Definitions.
Sec. 792. National grant and loan programs.
Sec. 793. State grant and loan programs.
Sec. 794. Evaluation and report.
Sec. 795. Outreach and incentives.
Sec. 796. Effect of subtitle.
Sec. 797. Authorization of appropriations.

TITLE VIII--HYDROGEN

Sec. 801. Hydrogen and fuel cell program.
Sec. 802. Purposes.
Sec. 803. Definitions.
Sec. 804. Plan.
Sec. 805. Programs.
Sec. 806. Hydrogen and Fuel Cell Technical Task Force.
Sec. 807. Technical Advisory Committee.
Sec. 808. Demonstration.
Sec. 809. Codes and standards.
Sec. 810. Disclosure.
Sec. 811. Reports.
Sec. 812. Solar and wind technologies.
Sec. 813. Technology transfer.
Sec. 814. Miscellaneous provisions.
Sec. 815. Cost sharing.
Sec. 816. Savings clause.

TITLE IX--RESEARCH AND DEVELOPMENT

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

Subtitle A--Energy Efficiency

Sec. 911. Energy efficiency.
Sec. 912. Next Generation Lighting Initiative.
Sec. 913. National Building Performance Initiative.
Sec. 914. Building standards.
Sec. 915. Secondary electric vehicle battery use program.
Sec. 916. Energy Efficiency Science Initiative.
Sec. 917. Advanced Energy Efficiency Technology Transfer Centers.

Subtitle B--Distributed Energy and Electric Energy Systems

Sec. 921. Distributed energy and electric energy systems.
Sec. 922. High power density industry program.
Sec. 923. Micro-cogeneration energy technology.
Sec. 924. Distributed energy technology demonstration programs.
Sec. 925. Electric transmission and distribution programs.

Subtitle C--Renewable Energy

Sec. 931. Renewable energy.
Sec. 932. Bioenergy program.
Sec. 933. Low-cost renewable hydrogen and infrastructure for vehicle
propulsion.
Sec. 934. Concentrating solar power research program.
Sec. 935. Renewable energy in public buildings.

Subtitle D--Agricultural Biomass Research and Development Programs

Sec. 941. Amendments to the Biomass Research and Development Act of
2000.
Sec. 942. Production incentives for cellulosic biofuels.
Sec. 943. Procurement of biobased products.
Sec. 944. Small business bioproduct marketing and certification grants.
Sec. 945. Regional bioeconomy development grants.
Sec. 946. Preprocessing and harvesting demonstration grants.
Sec. 947. Education and outreach.
Sec. 948. Reports.

Subtitle E--Nuclear Energy

Sec. 951. Nuclear energy.
Sec. 952. Nuclear energy research programs.

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119 STAT. 600

Sec. 953. Advanced fuel cycle initiative.
Sec. 954. University nuclear science and engineering support.
Sec. 955. Department of Energy civilian nuclear infrastructure and
facilities.
Sec. 956. Security of nuclear facilities.
Sec. 957. Alternatives to industrial radioactive sources.

Subtitle F--Fossil Energy

Sec. 961. Fossil energy.
Sec. 962. Coal and related technologies program.
Sec. 963. Carbon capture research and development program.
Sec. 964. Research and development for coal mining technologies.
Sec. 965. Oil and gas research programs.
Sec. 966. Low-volume oil and gas reservoir research program.
Sec. 967. Complex well technology testing facility.
Sec. 968. Methane hydrate research.

Subtitle G--Science

Sec. 971. Science.
Sec. 972. Fusion energy sciences program.
Sec. 973. Catalysis research program.
Sec. 974. Hydrogen.
Sec. 975. Solid state lighting.
Sec. 976. Advanced scientific computing for energy missions.
Sec. 977. Systems biology program.
Sec. 978. Fission and fusion energy materials research program.
Sec. 979. Energy and water supplies.
Sec. 980. Spallation Neutron Source.
Sec. 981. Rare isotope accelerator.
Sec. 982. Office of Scientific and Technical Information.
Sec. 983. Science and engineering education pilot program.
Sec. 984. Energy research fellowships.
Sec. 984A. Science and technology scholarship program.

Subtitle H--International Cooperation

Sec. 985. Western Hemisphere energy cooperation.
Sec. 986. Cooperation between United States and Israel.
Sec. 986A. International energy training.

Subtitle I--Research Administration and Operations

Sec. 987. Availability of funds.
Sec. 988. Cost sharing.
Sec. 989. Merit review of proposals.
Sec. 990. External technical review of Departmental programs.
Sec. 991. National Laboratory designation.
Sec. 992. Report on equal employment opportunity practices.
Sec. 993. Strategy and plan for science and energy facilities and
infrastructure.
Sec. 994. Strategic research portfolio analysis and coordination plan.
Sec. 995. Competitive award of management contracts.
Sec. 996. Western Michigan demonstration project.
Sec. 997. Arctic Engineering Research Center.
Sec. 998. Barrow Geophysical Research Facility.

Subtitle J--Ultra-Deepwater and Unconventional Natural Gas and Other
Petroleum Resources

Sec. 999A. Program authority.
Sec. 999B. Ultra-deepwater and unconventional onshore natural gas and
other petroleum research and development program.
Sec. 999C. Additional requirements for awards.
Sec. 999D. Advisory committees.
Sec. 999E. Limits on participation.
Sec. 999F. Sunset.
Sec. 999G. Definitions.
Sec. 999H. Funding.

TITLE X--DEPARTMENT OF ENERGY MANAGEMENT

Sec. 1001. Improved technology transfer of energy technologies.
Sec. 1002. Technology Infrastructure Program.
Sec. 1003. Small business advocacy and assistance.
Sec. 1004. Outreach.
Sec. 1005. Relationship to other laws.

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Sec. 1006. Improved coordination and management of civilian science and
technology programs.
Sec. 1007. Other transactions authority.
Sec. 1008. Prizes for achievement in grand challenges of science and
technology.
Sec. 1009. Technical corrections.
Sec. 1010. University collaboration.
Sec. 1011. Sense of Congress.

TITLE XI--PERSONNEL AND TRAINING

Sec. 1101. Workforce trends and traineeship grants.
Sec. 1102. Educational programs in science and mathematics.
Sec. 1103. Training guidelines for nonnuclear electric energy industry
personnel.
Sec. 1104. National Center for Energy Management and Building
Technologies.
Sec. 1105. Improved access to energy-related scientific and technical
careers.
Sec. 1106. National Power Plant Operations Technology and Educational
Center.

TITLE XII--ELECTRICITY

Sec. 1201. Short title.

Subtitle A--Reliability Standards

Sec. 1211. Electric reliability standards.

Subtitle B--Transmission Infrastructure Modernization

Sec. 1221. Siting of interstate electric transmission facilities.
Sec. 1222. Third-party finance.
Sec. 1223. Advanced transmission technologies.
Sec. 1224. Advanced Power System Technology Incentive Program.

Subtitle C--Transmission Operation Improvements

Sec. 1231. Open nondiscriminatory access.
Sec. 1232. Federal utility participation in Transmission Organizations.
Sec. 1233. Native load service obligation.
Sec. 1234. Study on the benefits of economic dispatch.
Sec. 1235. Protection of transmission contracts in the Pacific
Northwest.
Sec. 1236. Sense of Congress regarding locational installed capacity
mechanism.

Subtitle D--Transmission Rate Reform

Sec. 1241. Transmission infrastructure investment.
Sec. 1242. Funding new interconnection and transmission upgrades.

Subtitle E--Amendments to PURPA

Sec. 1251. Net metering and additional standards.
Sec. 1252. Smart metering.
Sec. 1253. Cogeneration and small power production purchase and sale
requirements.
Sec. 1254. Interconnection.

Subtitle F--Repeal of PUHCA

Sec. 1261. Short title.
Sec. 1262. Definitions.
Sec. 1263. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 1264. Federal access to books and records.
Sec. 1265. State access to books and records.
Sec. 1266. Exemption authority.
Sec. 1267. Affiliate transactions.
Sec. 1268. Applicability.
Sec. 1269. Effect on other regulations.
Sec. 1270. Enforcement.
Sec. 1271. Savings provisions.
Sec. 1272. Implementation.
Sec. 1273. Transfer of resources.
Sec. 1274. Effective date.
Sec. 1275. Service allocation.
Sec. 1276. Authorization of appropriations.
Sec. 1277. Conforming amendments to the Federal Power Act.

Subtitle G--Market Transparency, Enforcement, and Consumer Protection

Sec. 1281. Electricity market transparency.
Sec. 1282. False statements.

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Sec. 1283. Market manipulation.
Sec. 1284. Enforcement.
Sec. 1285. Refund effective date.
Sec. 1286. Refund authority.
Sec. 1287. Consumer privacy and unfair trade practices.
Sec. 1288. Authority of court to prohibit individuals from serving as
officers, directors, and energy traders.
Sec. 1289. Merger review reform.
Sec. 1290. Relief for extraordinary violations.

Subtitle H--Definitions

Sec. 1291. Definitions.

Subtitle I--Technical and Conforming Amendments

Sec. 1295. Conforming amendments.

Subtitle J--Economic Dispatch

Sec. 1298. Economic dispatch.

TITLE XIII--ENERGY POLICY TAX INCENTIVES

Sec. 1300. Short title; amendment to 1986 Code.

Subtitle A--Electricity Infrastructure

Sec. 1301. Extension and modification of renewable electricity
production credit.
Sec. 1302. Application of section 45 credit to agricultural
cooperatives.
Sec. 1303. Clean renewable energy bonds.
Sec. 1304. Treatment of income of certain electric cooperatives.
Sec. 1305. Dispositions of transmission property to implement FERC
restructuring policy.
Sec. 1306. Credit for production from advanced nuclear power facilities.
Sec. 1307. Credit for investment in clean coal facilities.
Sec. 1308. Electric transmission property treated as 15-year property.
Sec. 1309. Expansion of amortization for certain atmospheric pollution
control facilities in connection with plants first placed in
service after 1975.
Sec. 1310. Modifications to special rules for nuclear decommissioning
costs.
Sec. 1311. Five-year net operating loss carryover for certain losses.

Subtitle B--Domestic Fossil Fuel Security

Sec. 1321. Extension of credit for producing fuel from a nonconventional
source for facilities producing coke or coke gas.
Sec. 1322. Modification of credit for producing fuel from a
nonconventional source.
Sec. 1323. Temporary expensing for equipment used in refining of liquid
fuels.
Sec. 1324. Pass through to owners of deduction for capital costs
incurred by small refiner cooperatives in complying with
Environmental Protection Agency sulfur regulations.
Sec. 1325. Natural gas distribution lines treated as 15-year property.
Sec. 1326. Natural gas gathering lines treated as 7-year property.
Sec. 1327. Arbitrage rules not to apply to prepayments for natural gas.
Sec. 1328. Determination of small refiner exception to oil depletion
deduction.
Sec. 1329. Amortization of geological and geophysical expenditures.

Subtitle C--Conservation and Energy Efficiency Provisions

Sec. 1331. Energy efficient commercial buildings deduction.
Sec. 1332. Credit for construction of new energy efficient homes.
Sec. 1333. Credit for certain nonbusiness energy property.
Sec. 1334. Credit for energy efficient appliances.
Sec. 1335. Credit for residential energy efficient property.
Sec. 1336. Credit for business installation of qualified fuel cells and
stationary microturbine power plants.
Sec. 1337. Business solar investment tax credit.

Subtitle D--Alternative Motor Vehicles and Fuels Incentives

Sec. 1341. Alternative motor vehicle credit.
Sec. 1342. Credit for installation of alternative fueling stations.
Sec. 1343. Reduced motor fuel excise tax on certain mixtures of diesel
fuel.
Sec. 1344. Extension of excise tax provisions and income tax credit for
biodiesel.
Sec. 1345. Small agri-biodiesel producer credit.
Sec. 1346. Renewable diesel.
Sec. 1347. Modification of small ethanol producer credit.
Sec. 1348. Sunset of deduction for clean-fuel vehicles and certain
refueling property.

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Subtitle E--Additional Energy Tax Incentives

Sec. 1351. Expansion of research credit.
Sec. 1352. National Academy of Sciences study and report.
Sec. 1353. Recycling study.

Subtitle F--Revenue Raising Provisions

Sec. 1361. Oil Spill Liability Trust Fund financing rate.
Sec. 1362. Extension of Leaking Underground Storage Tank Trust Fund
financing rate.
Sec. 1363. Modification of recapture rules for amortizable section 197
intangibles.
Sec. 1364. Clarification of tire excise tax.

TITLE XIV--MISCELLANEOUS

Subtitle A--In General

Sec. 1401. Sense of Congress on risk assessments.
Sec. 1402. Energy production incentives.
Sec. 1403. Regulation of certain oil used in transformers.
Sec. 1404. Petrochemical and oil refinery facility health assessment.
Sec. 1405. National Priority Project Designation.
Sec. 1406. Cold cracking.
Sec. 1407. Oxygen-fuel.

Subtitle B--Set America Free

Sec. 1421. Short title.
Sec. 1422. Purpose.
Sec. 1423. United States Commission on North American Energy Freedom.
Sec. 1424. North American energy freedom policy.

TITLE XV--ETHANOL AND MOTOR FUELS

Subtitle A--General Provisions

Sec. 1501. Renewable content of gasoline.
Sec. 1502. Findings.
Sec. 1503. Claims filed after enactment.
Sec. 1504. Elimination of oxygen content requirement for reformulated
gasoline.
Sec. 1505. Public health and environmental impacts of fuels and fuel
additives.
Sec. 1506. Analyses of motor vehicle fuel changes.
Sec. 1507. Additional opt-in areas under reformulated gasoline program.
Sec. 1508. Data collection.
Sec. 1509. Fuel system requirements harmonization study.
Sec. 1510. Commercial byproducts from municipal solid waste and
cellulosic biomass loan guarantee program.
Sec. 1511. Renewable fuel.
Sec. 1512. Conversion assistance for cellulosic biomass, waste-derived
ethanol, approved renewable fuels.
Sec. 1513. Blending of compliant reformulated gasolines.
Sec. 1514. Advanced biofuel technologies program.
Sec. 1515. Waste-derived ethanol and biodiesel.
Sec. 1516. Sugar ethanol loan guarantee program.

Subtitle B--Underground Storage Tank Compliance

Sec. 1521. Short title.
Sec. 1522. Leaking underground storage tanks.
Sec. 1523. Inspection of underground storage tanks.
Sec. 1524. Operator training.
Sec. 1525. Remediation from oxygenated fuel additives.
Sec. 1526. Release prevention, compliance, and enforcement.
Sec. 1527. Delivery prohibition.
Sec. 1528. Federal facilities.
Sec. 1529. Tanks on tribal lands.
Sec. 1530. Additional measures to protect groundwater.
Sec. 1531. Authorization of appropriations.
Sec. 1532. Conforming amendments.
Sec. 1533. Technical amendments.

Subtitle C--Boutique Fuels

Sec. 1541. Reducing the proliferation of boutique fuels.

TITLE XVI--CLIMATE CHANGE

Subtitle A--National Climate Change Technology Deployment

Sec. 1601. Greenhouse gas intensity reducing technology strategies.

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Subtitle B--Climate Change Technology Deployment in Developing Countries

Sec. 1611. Climate change technology deployment in developing countries.

TITLE XVII--INCENTIVES FOR INNOVATIVE TECHNOLOGIES

Sec. 1701. Definitions.
Sec. 1702. Terms and conditions.
Sec. 1703. Eligible projects.
Sec. 1704. Authorization of appropriations.

TITLE XVIII--STUDIES

Sec. 1801. Study on inventory of petroleum and natural gas storage.
Sec. 1802. Study of energy efficiency standards.
Sec. 1803. Telecommuting study.
Sec. 1804. LIHEAP Report.
Sec. 1805. Oil bypass filtration technology.
Sec. 1806. Total integrated thermal systems.
Sec. 1807. Report on energy integration with Latin America.
Sec. 1808. Low-volume gas reservoir study.
Sec. 1809. Investigation of gasoline prices.
Sec. 1810. Alaska natural gas pipeline.
Sec. 1811. Coal bed methane study.
Sec. 1812. Backup fuel capability study.
Sec. 1813. Indian land rights-of-way.
Sec. 1814. Mobility of scientific and technical personnel.
Sec. 1815. Interagency review of competition in the wholesale and retail
markets for electric energy.
Sec. 1816. Study of rapid electrical grid restoration.
Sec. 1817. Study of distributed generation.
Sec. 1818. Natural gas supply shortage report.
Sec. 1819. Hydrogen participation study.
Sec. 1820. Overall employment in a hydrogen economy.
Sec. 1821. Study of best management practices for energy research and
development programs.
Sec. 1822. Effect of electrical contaminants on reliability of energy
production systems.
Sec. 1823. Alternative fuels reports.
Sec. 1824. Final action on refunds for excessive charges.
Sec. 1825. Fuel cell and hydrogen technology study.
Sec. 1826. Passive solar technologies.
Sec. 1827. Study of link between energy security and increases in
vehicle miles traveled.
Sec. 1828. Science study on cumulative impacts of multiple offshore
liquefied natural gas facilities.
Sec. 1829. Energy and water saving measures in congressional buildings.
Sec. 1830. Study of availability of skilled workers.
Sec. 1831. Review of Energy Policy Act of 1992 programs.
Sec. 1832. Study on the benefits of economic dispatch.
Sec. 1833. Renewable energy on Federal land.
Sec. 1834. Increased hydroelectric generation at existing Federal
facilities.
Sec. 1835. Split-estate Federal oil and gas leasing and development
practices.
Sec. 1836. Resolution of Federal resource development conflicts in the
Powder River Basin.
Sec. 1837. National security review of international energy
requirements.
Sec. 1838. Used oil re-refining study.
Sec. 1839. Transmission system monitoring.
Sec. 1840. Report identifying and describing the status of potential
hydropower facilities.

SEC. 2. NOTE: 42 USC 15801. DEFINITIONS.

Except as otherwise provided, in this Act:
(1) Department.--The term ``Department'' means the
Department of Energy.
(2) Institution of higher education.--
(A) In general.--The term ``institution of higher
education'' has the meaning given the term in section
101(a) of the Higher Education Act of 1065 (20 U.S.C.
1001(a)).
(B) Inclusion.--The term ``institution of higher
education'' includes an organization that--

[[Page 605]]
119 STAT. 605

(i) is organized, and at all times thereafter
operated, exclusively for the benefit of, to
perform the functions of, or to carry out the
functions of one or more organizations referred to
in subparagraph (A); and
(ii) is operated, supervised, or controlled by
or in connection with one or more of those
organizations.
(3) National laboratory.--The term ``National Laboratory''
means any of the following laboratories owned by the Department:
(A) Ames Laboratory.
(B) Argonne National Laboratory.
(C) Brookhaven National Laboratory.
(D) Fermi National Accelerator Laboratory.
(E) Idaho National 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) Savannah River National Laboratory.
(P) Stanford Linear Accelerator Center.
(Q) Thomas Jefferson National Accelerator Facility.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(5) Small business concern.--The term ``small business
concern'' has the meaning given the term in section 3 of the
Small Business Act (15 U.S.C. 632).

TITLE I--ENERGY EFFICIENCY

Subtitle A--Federal Programs

SEC. 101. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL BUILDINGS.

(a) In General.--Part 3 of title V of the National Energy
Conservation Policy Act (42 U.S.C. 8251 et seq.) is amended by adding at
the end the following:

``SEC. 552. NOTE: 42 USC 8259a. ENERGY AND WATER SAVINGS MEASURES IN
CONGRESSIONAL BUILDINGS.

``(a) In General.--The Architect of the Capitol--
``(1) shall develop, update, and implement a cost-effective
energy conservation and management plan (referred to in this
section as the `plan') for all facilities administered by
Congress (referred to in this section as `congressional
buildings') to meet the energy performance requirements for
Federal buildings established under section 543(a)(1); and
``(2) NOTE: Deadline. 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--

[[Page 606]]
119 STAT. 606

``(1) a description of the life cycle cost analysis used to
determine the cost-effectiveness of proposed energy efficiency
projects;
``(2) a schedule of energy surveys to ensure complete
surveys of all congressional buildings every 5 years to
determine the cost and payback period of energy and water
conservation measures;
``(3) a strategy for installation of life cycle cost-
effective energy and water conservation measures;
``(4) the results of a study of the costs and benefits of
installation of submetering in congressional buildings; and
``(5) information packages and `how-to' guides for each
Member and employing authority of Congress that detail simple,
cost-effective methods to save energy and taxpayer dollars in
the workplace.

``(c) Annual Report.--The Architect of the Capitol shall submit to
Congress annually a report on congressional energy management and
conservation programs required under this section that describes in
detail--
``(1) energy expenditures and savings estimates for each
facility;
``(2) energy management and conservation projects; and
``(3) future priorities to ensure compliance with this
section.''.

(b) Table of Contents Amendment.--The table of contents of the
National Energy Conservation Policy Act is amended by adding at the end
of the items relating to part 3 of title V the following new item:

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

(c) Repeal.--Section 310 of the Legislative Branch Appropriations
Act, 1999 (2 U.S.C. 1815), is repealed.

SEC. 102. ENERGY MANAGEMENT REQUIREMENTS.

(a) Energy Reduction Goals.--
(1) Amendment.--Section 543(a)(1) of the National Energy
Conservation Policy Act (42 U.S.C. 8253(a)(1)) is amended by
striking ``its Federal buildings so that'' and all that follows
through the end and inserting ``the Federal buildings of the
agency (including each industrial or laboratory facility) so
that the energy consumption per gross square foot of the Federal
buildings of the agency in fiscal years 2006 through 2015 is
reduced, as compared with the energy consumption per gross
square foot of the Federal buildings of the agency in fiscal
year 2003, by the percentage specified in the following table:

``Fiscal Year           Percentage reduction......................
2006........................................     2
2007........................................     4
2008........................................     6
2009........................................     8
2010........................................    10
2011........................................    12
2012........................................    14
2013........................................    16
2014........................................    18
2015........................................  20.''.

(2) Reporting baseline.--The NOTE: 42 USC 8253
note. energy reduction goals and baseline established in
paragraph (1) of section 543(a) of the

[[Page 607]]
119 STAT. 607

National Energy Conservation Policy Act (42 U.S.C. 8253(a)(1)),
as amended by this subsection, supersede all previous goals and
baselines under such paragraph, and related reporting
requirements.

(b) Review and Revision of Energy Performance Requirement.--Section
543(a) of the National Energy Conservation Policy Act (42 U.S.C.
8253(a)) is further amended by adding at the end the following:
``(3) NOTE: Deadline. Not later than December 31, 2014, 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 2016 through 2025.''.

(c) Exclusions.--Section 543(c)(1) of the National Energy
Conservation Policy Act (42 U.S.C. 8253(c)(1)) is amended by striking
``An agency may exclude'' and all that follows through the end and
inserting ``(A) An agency may exclude, from the energy performance
requirement for a fiscal year established under subsection (a) and the
energy management requirement established under subsection (b), any
Federal building or collection of Federal buildings, if the head of the
agency finds that--
``(i) compliance with those requirements would be
impracticable;
``(ii) the agency has completed and submitted all federally
required energy management reports;
``(iii) the agency has achieved compliance with the energy
efficiency requirements of this Act, the Energy Policy Act of
1992, Executive orders, and other Federal law; and
``(iv) the agency has implemented all practicable, life
cycle cost-effective projects with respect to the Federal
building or collection of Federal buildings to be excluded.

``(B) A finding of impracticability under subparagraph (A)(i) shall
be based on--
``(i) the energy intensiveness of activities carried out in
the Federal building or collection of Federal buildings; or
``(ii) the fact that the Federal building or collection of
Federal buildings is used in the performance of a national
security function.''.

(d) Review by Secretary.--Section 543(c)(2) of the National Energy
Conservation Policy Act (42 U.S.C. 8253(c)(2)) is amended--
(1) by striking ``impracticability standards'' and inserting
``standards for exclusion'';
(2) by striking ``a finding of impracticability'' and
inserting ``the exclusion''; and
(3) by striking ``energy consumption requirements'' and
inserting ``requirements of subsections (a) and (b)(1)''.

(e) Criteria.--Section 543(c) of the National Energy Conservation
Policy Act (42 U.S.C. 8253(c)) is further amended by adding at the end
the following:
``(3) NOTE: Deadline. Guidelines. Not later than 180 days after
the date of enactment of this paragraph, the Secretary shall issue
guidelines that establish criteria for exclusions under paragraph
(1).''.

(f) Retention of Energy and Water Savings.--Section 546 of the
National Energy Conservation Policy Act (42 U.S.C. 8256) is amended by
adding at the end the following new subsection:
``(e) Retention of Energy and Water Savings.--An agency may retain
any funds appropriated to that agency for energy

[[Page 608]]
119 STAT. 608

expenditures, water expenditures, or wastewater treatment expenditures,
at buildings subject to the requirements of section 543(a) and (b), that
are not made because of energy savings or water savings. Except as
otherwise provided by law, such funds may be used only for energy
efficiency, water conservation, or unconventional and renewable energy
resources projects. Such projects shall be subject to the requirements
of section 3307 of title 40, United States Code.''.
(g) Reports.--Section 548(b) of the National Energy Conservation
Policy Act (42 U.S.C. 8258(b)) is amended--
(1) in the subsection heading, by inserting ``the President
and'' before ``Congress''; and
(2) by inserting ``President and'' before ``Congress''.

(h) Conforming Amendment.--Section 550(d) of the National Energy
Conservation Policy Act (42 U.S.C. 8258b(d)) is amended in the second
sentence by striking ``the 20 percent reduction goal established under
section 543(a) of the National Energy Conservation Policy Act (42 U.S.C.
8253(a)).'' and inserting ``each of the energy reduction goals
established under section 543(a).''.

SEC. 103. ENERGY USE MEASUREMENT AND ACCOUNTABILITY.

Section 543 of the National Energy Conservation Policy Act (42
U.S.C. 8253) is further amended by adding at the end the following:
``(e) Metering of Energy Use.--
``(1) Deadline.--By October 1, 2012, 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. 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 managers.
``(2) Guidelines.--
``(A) In general.--Not NOTE: Deadline. later
than 180 days after the date of enactment of this
subsection, the Secretary, in consultation with the
Department of Defense, the General Services
Administration, representatives from the metering
industry, utility industry, energy services industry,
energy efficiency industry, energy efficiency advocacy
organizations, national laboratories, universities, and
Federal facility 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 the
reduced cost of operation and
maintenance expected to result from
metering;
``(II) the extent to which metering
is expected to result in increased
potential for energy management,
increased potential for energy savings
and energy efficiency improvement, and
cost and

[[Page 609]]
119 STAT. 609

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 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.--Not NOTE: Deadline. later than 6 months
after the date guidelines are established under paragraph (2),
in a report submitted by the agency under section 548(a), each
agency shall submit to the Secretary a plan describing how the
agency will implement the requirements of paragraph (1),
including (A) how the agency will designate personnel primarily
responsible for achieving the requirements and (B) demonstration
by the agency, complete with documentation, of any finding that
advanced meters or advanced metering devices, as defined in
paragraph (1), are not practicable.''.

SEC. 104. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

(a) Requirements.--Part 3 of title V of the National Energy
Conservation Policy Act (42 U.S.C. 8251 et seq.), as amended by section
101, is amended by adding at the end the following:

``SEC. 553. NOTE: 42 USC 8259b. FEDERAL PROCUREMENT OF ENERGY
EFFICIENT PRODUCTS.

``(a) Definitions.--In this section:
``(1) Agency.--The term `agency' has the meaning given that
term in section 7902(a) of title 5, United States Code.
``(2) Energy star product.--The term `Energy Star product'
means a product that is rated for energy efficiency under an
Energy Star program.
``(3) Energy star program.--The term `Energy Star program'
means the program established by section 324A of the Energy
Policy and Conservation Act.
``(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.
``(5) Product.--The term `product' does not include any
energy consuming product or system designed or procured for
combat or combat-related missions.

``(b) Procurement of Energy Efficient Products.--
``(1) Requirement.--To meet the requirements of an agency
for an energy consuming product, the head of the agency shall,
except as provided in paragraph (2), procure--
``(A) an Energy Star product; or

[[Page 610]]
119 STAT. 610

``(B) a FEMP designated product.
``(2) Exceptions.--The head of an agency is not required to
procure an Energy Star product or FEMP designated product under
paragraph (1) if the head of the 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 agency.
``(3) Procurement planning.--The head of an agency shall
incorporate into the specifications for all procurements
involving energy consuming products and systems, including guide
specifications, project specifications, and construction,
renovation, and services contracts that include provision of
energy consuming products and systems, and into the factors for
the evaluation of offers received for the procurement, criteria
for energy efficiency that are consistent with the criteria used
for rating Energy Star products and for rating FEMP designated
products.

``(c) Listing of Energy Efficient Products in Federal Catalogs.--
Energy Star products and FEMP designated products shall be clearly
identified and prominently displayed in any inventory or listing of
products by the General Services Administration or the Defense Logistics
Agency. The General Services Administration or the Defense Logistics
Agency shall supply only Energy Star products or FEMP designated
products for all product categories covered by the Energy Star program
or the Federal Energy Management Program, except in cases where the
agency ordering a product specifies in writing that no Energy Star
product or FEMP designated product is available to meet the buyer's
functional requirements, or that no Energy Star product or FEMP
designated product is cost-effective for the intended application over
the life of the product, taking energy cost savings into account.
``(d) Specific Products.--(1) In NOTE: Standards. the case of
electric motors of 1 to 500 horsepower, agencies shall select only
premium efficient motors that meet a standard designated by
the NOTE: Deadline. Secretary. The Secretary shall designate such a
standard not later than 120 days after the date of the enactment of this
section, after considering the recommendations of associated electric
motor manufacturers and energy efficiency groups.

``(2) All Federal agencies are encouraged to take actions to
maximize the efficiency of air conditioning and refrigeration equipment,
including appropriate cleaning and maintenance, including the use of any
system treatment or additive that will reduce the electricity consumed
by air conditioning and refrigeration equipment. Any such treatment or
additive must be--
``(A) determined by the Secretary to be effective in
increasing the efficiency of air conditioning and refrigeration
equipment without having an adverse impact on air conditioning
performance (including cooling capacity) or equipment useful
life;
``(B) determined by the Administrator of the Environmental
Protection Agency to be environmentally safe; and
``(C) shown to increase seasonal energy efficiency ratio
(SEER) or energy efficiency ratio (EER) when tested by the

[[Page 611]]
119 STAT. 611

National Institute of Standards and Technology according to
Department of Energy test procedures without causing any adverse
impact on the system, system components, the refrigerant or
lubricant, or other materials in the system.
Results of NOTE: Federal Register, publication. testing
described in subparagraph (C) shall be published in the Federal
Register for public review and comment. For purposes of this
section, a hardware device or primary refrigerant shall not be
considered an additive.

``(e) Regulations.--Not later than 180 days after the date of the
enactment of this section, the Secretary shall issue guidelines to carry
out this section.''.
(b) Conforming Amendment.--The table of contents of the National
Energy Conservation Policy Act is further amended by inserting after the
item relating to section 552 the following new item:

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

SEC. 105. ENERGY SAVINGS PERFORMANCE CONTRACTS.

(a) Extension.--Section 801(c) of the National Energy Conservation
Policy Act (42 U.S.C. 8287(c)) is amended by striking ``2006'' and
inserting ``2016''.
(b) Extension of Authority.--Any NOTE: 42 USC 8257 note. energy
savings performance contract entered into under section 801 of the
National Energy Conservation Policy Act (42 U.S.C. 8287) after October
1, 2003, and before the date of enactment of this Act, shall be
considered to have been entered into under that section.

SEC. 106. NOTE: 42 USC 15811. VOLUNTARY COMMITMENTS TO REDUCE
INDUSTRIAL ENERGY INTENSITY.

(a) Definition of Energy Intensity.--In this section, the term
``energy intensity'' means the primary energy consumed for each unit of
physical output in an industrial process.
(b) Voluntary Agreements.--The Secretary may enter into voluntary
agreements with one or more persons in industrial sectors that consume
significant quantities of primary energy for each unit of physical
output to reduce the energy intensity of the production activities of
the persons.
(c) Goal.--Voluntary agreements under this section shall have as a
goal the reduction of energy intensity by not less than 2.5 percent each
year during the period of calendar years 2007 through 2016.
(d) Recognition.--The Secretary, in cooperation with other
appropriate Federal agencies, shall develop mechanisms to recognize and
publicize the achievements of participants in voluntary agreements under
this section.
(e) Technical Assistance.--A person 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 each of June 30, 2012, and June 30,
2017, the Secretary shall submit to Congress a report that--
(1) evaluates the success of the voluntary agreements under
this section; and
(2) provides independent verification of a sample of the
energy savings estimates provided by participating firms.

[[Page 612]]
119 STAT. 612

SEC. 107. NOTE: 42 USC 15812. ADVANCED BUILDING EFFICIENCY TESTBED.

(a) Establishment.--The Secretary, in consultation with the
Administrator of General Services, shall establish an Advanced Building
Efficiency Testbed program for the development, testing, and
demonstration of advanced engineering systems, components, and materials
to enable innovations in building technologies. The program shall
evaluate efficiency concepts for government and industry buildings, and
demonstrate the ability of next generation buildings to support
individual and organizational productivity and health (including by
improving indoor air quality) as well as flexibility and technological
change to improve environmental sustainability. Such program shall
complement and not duplicate existing national programs.
(b) Participants.--The program established under subsection (a)
shall be led by a university with the ability to combine the expertise
from numerous academic fields including, at a minimum, intelligent
workplaces and advanced building systems and engineering, electrical and
computer engineering, computer science, architecture, urban design, and
environmental and mechanical engineering. Such university shall partner
with other universities and entities who have established programs and
the capability of advancing innovative building efficiency technologies.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section $6,000,000 for
each of the fiscal years 2006 through 2008, 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. 108. 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:


``INCREASED NOTE: 42 USC 6966. 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 any 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.

[[Page 613]]
119 STAT. 613

``(3) Recovered mineral component.--The term `recovered
mineral component' means--
``(A) ground granulated blast furnace slag,
excluding lead 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 NOTE: Deadline. 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) Federal procurement requirements.--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
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--
``(i) the extent to which recovered mineral
components are being substituted for Portland
cement, particularly as a result of procurement
requirements; and
``(ii) the energy savings and environmental
benefits associated with the substitution;
``(B) identify all barriers in procurement
requirements to greater realization of energy savings
and environmental benefits, including barriers resulting
from exceptions from the 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

[[Page 614]]
119 STAT. 614

``(iii) identify any potential environmental or
economic effects that may result from greater
substitution of recovered mineral component in those
cement or concrete projects.
``(3) Report.--Not later than 30 months after the date of
enactment of this section, the Administrator shall submit to
Congress a report on the study.

``(d) Additional NOTE: Deadline. Procurement Requirements.--
Unless the study conducted under subsection (c) identifies any effects
or other problems described in subsection (c)(2)(C)(iii) that warrant
further review or delay, the Administrator and each agency head shall,
not later than 1 year after the date on which the report under
subsection (c)(3) is submitted, take additional actions 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--
``(1) to realize more fully the energy savings and
environmental benefits associated with increased substitution;
and
``(2) to eliminate barriers identified under subsection
(c)(2)(B).

``(e) Effect of Section.--Nothing in this section affects the
requirements of section 6002 (including the guidelines and
specifications for implementing those requirements).''.
(b) Conforming Amendment.--The table of contents of the Solid Waste
Disposal Act is amended by adding after the item relating to section
6004 the following:

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

SEC. 109. FEDERAL BUILDING PERFORMANCE STANDARDS.

Section 305(a) of the Energy Conservation and Production Act (42
U.S.C. 6834(a)) is amended--
(1) in paragraph (2)(A), by striking ``CABO Model Energy
Code, 1992 (in the case of residential buildings) or ASHRAE
Standard 90.1-1989'' and inserting ``the 2004 International
Energy Conservation Code (in the case of residential buildings)
or ASHRAE Standard 90.1-2004''; and
(2) by adding at the end the following:

``(3)(A) NOTE: Deadline. Regulations. Not later than 1 year
after the date of enactment of this paragraph, the Secretary shall
establish, by rule, revised Federal building energy efficiency
performance standards that require that--
``(i) if life-cycle cost-effective for new Federal
buildings--
``(I) the buildings be designed to achieve energy
consumption levels that are at least 30 percent below
the levels established in the version of the ASHRAE
Standard or the International Energy Conservation Code,
as appropriate, that is in effect as of the date of
enactment of this paragraph; and
``(II) sustainable design principles are applied to
the siting, design, and construction of all new and
replacement buildings; and
``(ii) if water is used to achieve energy efficiency, water
conservation technologies shall be applied to the extent that
the technologies are life-cycle cost-effective.

[[Page 615]]
119 STAT. 615

``(B) NOTE: Deadline. Not later than 1 year after the date of
approval of each subsequent revision of the ASHRAE Standard or the
International Energy Conservation Code, as appropriate, the Secretary
shall determine, based on the cost-effectiveness of the requirements
under the amendment, whether the revised standards established under
this paragraph should be updated to reflect the amendment.

``(C) 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 specifying whether the Federal buildings
meet or exceed the revised standards established under this
paragraph.''.

SEC. 110. DAYLIGHT SAVINGS.

(a) Amendment.--Section 3(a) of the Uniform Time Act of 1966 (15
U.S.C. 260a(a)) is amended--
(1) by striking ``first Sunday of April'' and inserting
``second Sunday of March''; and
(2) by striking ``last Sunday of October'' and inserting
``first Sunday of November''.

(b) Effective Date.--Subsection (a) NOTE: 15 USC 260a
note. shall take effect 1 year after the date of enactment of this Act
or March 1, 2007, whichever is later.

(c) Report to Congress.--Not NOTE: 15 USC 260a note. later than
9 months after the effective date stated in subsection (b), the
Secretary shall report to Congress on the impact of this section on
energy consumption in the United States.

(d) Right to Revert.--Congress retains the right to revert the
Daylight Saving Time back to the 2005 time schedules once the Department
study is complete.

SEC. 111. NOTE: 42 USC 15813. ENHANCING ENERGY EFFICIENCY IN
MANAGEMENT OF FEDERAL LANDS.

(a) Sense of the Congress.--It is the sense of the Congress that
Federal agencies should enhance the use of energy efficient technologies
in the management of natural resources.
(b) Energy Efficient Buildings.--To the extent practicable, the
Secretary of the Interior, the Secretary of Commerce, and the Secretary
of Agriculture shall seek to incorporate energy efficient technologies
in public and administrative buildings associated with management of the
National Park System, National Wildlife Refuge System, National Forest
System, National Marine Sanctuaries System, and other public lands and
resources managed by the Secretaries.
(c) Energy Efficient Vehicles.--To the extent practicable, the
Secretary of the Interior, the Secretary of Commerce, and the Secretary
of Agriculture shall seek to use energy efficient motor vehicles,
including vehicles equipped with biodiesel or hybrid engine
technologies, in the management of the National Park System, National
Wildlife Refuge System, National Forest System, National Marine
Sanctuaries System, and other public lands and resources managed by the
Secretaries.

[[Page 616]]
119 STAT. 616

Subtitle B--Energy Assistance and State Programs

SEC. 121. LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM.

(a) Authorization of Appropriations.--Section 2602(b) of the Low-
Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621(b)) is amended
by striking ``and $2,000,000,000 for each of fiscal years 2002 through
2004'' and inserting ``and $5,100,000,000 for each of fiscal years 2005
through 2007''.
(b) Renewable Fuels.--The Low-Income Home Energy Assistance Act of
1981 (42 U.S.C. 8621 et seq.) is amended by adding at the end the
following new section:


``RENEWABLE FUELS


``Sec. 2612. NOTE: 42 USC 8630. In providing assistance pursuant
to this title, a State, or any other person with which the State makes
arrangements to carry out the purposes of this title, may purchase
renewable fuels, including biomass.''.

(c) Report to Congress.--The NOTE: 42 USC 8630 note. Secretary
shall report to Congress on the use of renewable fuels in providing
assistance under the Low-Income Home Energy Assistance Act of 1981 (42
U.S.C. 8621 et seq.).

SEC. 122. WEATHERIZATION ASSISTANCE.

(a) Authorization of Appropriations.--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 ``$500,000,000 for fiscal year 2006, $600,000,000 for fiscal
year 2007, and $700,000,000 for fiscal year 2008''.
(b) Eligibility.--Section 412(7) of the Energy Conservation and
Production Act (42 U.S.C. 6862(7)) is amended by striking ``125
percent'' both places it appears and inserting ``150 percent''.

SEC. 123. STATE ENERGY PROGRAMS.

(a) State Energy Conservation Plans.--Section 362 of the Energy
Policy and Conservation Act (42 U.S.C. 6322) is amended by inserting at
the end the following new subsection:
``(g) The Secretary shall, at least once every 3 years, invite the
Governor of each State to review and, if necessary, revise the energy
conservation plan of such State submitted under subsection (b) or (e).
Such reviews should consider the energy conservation plans of other
States within the region, and identify opportunities and actions carried
out in pursuit of common energy conservation goals.''.
(b) State Energy Efficiency Goals.--Section 364 of the Energy Policy
and Conservation Act (42 U.S.C. 6324) is amended to read as follows:


``STATE ENERGY EFFICIENCY GOALS


``Sec. 364. Each State energy conservation plan with respect to
which assistance is made available under this part on or after the date
of enactment of the Energy Policy Act of 2005 shall contain a goal,
consisting of an improvement of 25 percent or more in the efficiency of
use of energy in the State concerned

[[Page 617]]
119 STAT. 617

in calendar year 2012 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 2006 and 2007 and
$125,000,000 for fiscal year 2008''.

SEC. 124. NOTE: 42 USC 15821. 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.

[[Page 618]]
119 STAT. 618

The amount of a rebate shall be determined by the State energy office,
taking into consideration--
(1) the amount of the allocation to the State energy office
under subsection (c);
(2) the amount of any Federal or State tax incentive
available for the purchase of the residential Energy Star
product; and
(3) the difference between the cost of the residential
Energy Star product and the cost of an appliance that is not a
residential Energy Star product, but is of the same type as, and
is the nearest capacity, performance, and other relevant
characteristics (as determined by the State energy office) to,
the residential Energy Star product.

(f) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section $50,000,000 for
each of the fiscal years 2006 through 2010.

SEC. 125. NOTE: 42 USC 15822. ENERGY EFFICIENT PUBLIC BUILDINGS.

(a) Grants.--The Secretary may make grants to the State agency
responsible for developing State energy conservation plans under section
362 of the Energy Policy and Conservation Act (42 U.S.C. 6322), or, if
no such agency exists, a State agency designated by the Governor of the
State, to assist units of local government in the State in improving the
energy efficiency of public buildings and facilities--
(1) through construction of new energy efficient public
buildings that use at least 30 percent less energy than a
comparable public building constructed in compliance with
standards prescribed in the most recent version of the
International Energy Conservation Code, or a similar State code
intended to achieve substantially equivalent efficiency levels;
or
(2) through renovation of existing public buildings to
achieve reductions in energy use of at least 30 percent as
compared to the baseline energy use in such buildings prior to
renovation, assuming a 3-year, weather-normalized average for
calculating such baseline.

(b) Administration.--State energy offices receiving grants under
this section shall--
(1) NOTE: Records. 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
$30,000,000 for each of fiscal years 2006 through 2010. Not more than 10
percent of appropriated funds shall be used for administration.

SEC. 126. NOTE: 42 USC 15823. LOW INCOME COMMUNITY ENERGY EFFICIENCY
PILOT PROGRAM.

(a) Grants.--The Secretary 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.

[[Page 619]]
119 STAT. 619

(b) Purpose of Grants.--The Secretary may make grants on a
competitive basis for--
(1) investments that develop alternative, renewable, and
distributed energy supplies;
(2) energy efficiency projects and energy conservation
programs;
(3) studies and other activities that improve energy
efficiency in low income rural and urban communities;
(4) planning and development assistance for increasing the
energy efficiency of buildings and facilities; and
(5) technical and financial assistance to local government
and private entities on developing new renewable and distributed
sources of power or combined heat and power generation.

(c) Definition.--For purposes of this section, the term ``Indian
tribe'' means any Indian tribe, band, nation, or other organized group
or community, including any Alaskan Native village or regional or
village corporation as defined in or established pursuant to the Alaska
Native Claims Settlement Act (43 U.S.C. 1601 et seq.), that is
recognized as eligible for the special programs and services provided by
the United States to Indians because of their status as Indians.
(d) Authorization of Appropriations.--For the purposes of this
section there are authorized to be appropriated to the Secretary
$20,000,000 for each of fiscal years 2006 through 2008.

SEC. 127. NOTE: 42 USC 15824. STATE TECHNOLOGIES ADVANCEMENT
COLLABORATIVE.

(a) In General.--The Secretary, in cooperation with the States,
shall establish a cooperative program for research, development,
demonstration, and deployment of technologies in which there is a common
Federal and State energy efficiency, renewable energy, and fossil energy
interest, to be known as the ``State Technologies Advancement
Collaborative'' (referred to in this section as the ``Collaborative'').
(b) Duties.--The Collaborative shall--
(1) leverage Federal and State funding through cost-shared
activity;
(2) reduce redundancies in Federal and State funding; and
(3) create multistate projects to be awarded through a
competitive process.

(c) Administration.--The Collaborative shall be administered through
an agreement between the Department and appropriate State-based
organizations.
(d) Funding Sources.--Funding for the Collaborative may be provided
from--
(1) amounts specifically appropriated for the Collaborative;
or
(2) amounts that may be allocated from other appropriations
without changing the purpose for which the amounts are
appropriated.

(e) Authorization of Appropriations.--There are authorized to carry
out this section such sums as are necessary for each of fiscal years
2006 through 2010.

SEC. 128. STATE BUILDING ENERGY EFFICIENCY CODES INCENTIVES.

Section 304(e) of the Energy Conservation and Production Act (42
U.S.C. 6833(e)) is amended--

[[Page 620]]
119 STAT. 620

(1) in paragraph (1), by inserting before the period at the
end of the first sentence the following: ``, including
increasing and verifying compliance with such codes''; and
(2) by striking paragraph (2) and inserting the following:

``(2) Additional funding shall be provided under this subsection for
implementation of a plan to achieve and document at least a 90 percent
rate of compliance with residential and commercial building energy
efficiency codes, based on energy performance--
``(A) to a State that has adopted and is implementing, on a
statewide basis--
``(i) a residential building energy efficiency code
that meets or exceeds the requirements of the 2004
International Energy Conservation Code, or any
succeeding version of that code that has received an
affirmative determination from the Secretary under
subsection (a)(5)(A); and
``(ii) a commercial building energy efficiency code
that meets or exceeds the requirements of the ASHRAE
Standard 90.1-2004, or any succeeding version of that
standard that has received an affirmative determination
from the Secretary under subsection (b)(2)(A); or
``(B) in a State in which there is no statewide energy code
either for residential buildings or for commercial buildings, to
a local government that has adopted and is implementing
residential and commercial building energy efficiency codes, as
described in subparagraph (A).

``(3) Of the amounts made available under this subsection, the
Secretary may use $500,000 for each fiscal year to train State and local
officials to implement codes described in paragraph (2).
``(4)(A) NOTE: Appropriation authorization. There are authorized
to be appropriated to carry out this subsection--
``(i) $25,000,000 for each of fiscal years 2006 through
2010; and
``(ii) such sums as are necessary for fiscal year 2011 and
each fiscal year thereafter.

``(B) Funding provided to States under paragraph (2) for each fiscal
year shall not exceed one-half of the excess of funding under this
subsection over $5,000,000 for the fiscal year.''.

Subtitle C--Energy Efficient Products

SEC. 131. ENERGY STAR PROGRAM.

(a) In General.--The Energy Policy and Conservation Act is amended
by inserting after section 324 (42 U.S.C. 6294) the following:


``ENERGY STAR PROGRAM


``Sec. 324A. (a) In General.--There is NOTE: 42 USC
6294a. established within the Department of Energy and the
Environmental Protection Agency a voluntary program to identify and
promote energy-efficient products and buildings in order to reduce
energy consumption, improve energy security, and reduce pollution
through voluntary labeling of, or other forms of communication about,
products and buildings that meet the highest energy conservation
standards.

``(b) Division of Responsibilities.--Responsibilities under the
program shall be divided between the Department of Energy and

[[Page 621]]
119 STAT. 621

the Environmental Protection Agency in accordance with the terms of
applicable agreements between those agencies.
``(c) Duties.--The Administrator and the Secretary shall--
``(1) promote Energy Star compliant technologies as the
preferred technologies in the marketplace for--
``(A) achieving energy efficiency; and
``(B) reducing pollution;
``(2) work to enhance public awareness of the Energy Star
label, including by providing special outreach to small
businesses;
``(3) preserve the integrity of the Energy Star label;
``(4) regularly update Energy Star product criteria for
product categories;
``(5) solicit comments from interested parties prior to
establishing or revising an Energy Star product category,
specification, or criterion (or prior to effective dates for any
such product category, specification, or criterion);
``(6) on adoption of a new or revised product category,
specification, or criterion, provide reasonable notice to
interested parties of any changes (including effective dates) in
product categories, specifications, or criteria, along with--
``(A) an explanation of the changes; and
``(B) as appropriate, responses to comments
submitted by interested parties; and
``(7) provide appropriate lead time (which shall be 270
days, unless the Agency or Department specifies otherwise) prior
to the applicable effective date for a new or a significant
revision to a product category, specification, or criterion,
taking into account the timing requirements of the
manufacturing, product marketing, and distribution process for
the specific product addressed.

``(d) Deadlines.--The Secretary shall establish new qualifying
levels--
``(1) not later than January 1, 2006, for clothes washers
and dishwashers, effective beginning January 1, 2007; and
``(2) not later than January 1, 2008, for clothes washers,
effective beginning January 1, 2010.''.

(b) Table of Contents Amendment.--The table of contents of the
Energy Policy and Conservation Act (42 U.S.C. prec. 6201) is amended by
inserting after the item relating to section 324 the following:

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

SEC. 132. HVAC MAINTENANCE CONSUMER EDUCATION PROGRAM.

Section 337 of the Energy Policy and Conservation Act (42 U.S.C.
6307) is amended by adding at the end the following:
``(c) HVAC Maintenance.--(1) NOTE: Deadline. To ensure that
installed air conditioning and heating systems operate at maximum rated
efficiency levels, the Secretary shall, not later than 180 days after
the date of enactment of this subsection, carry out a program to educate
homeowners and small business owners concerning the energy savings from
properly conducted maintenance of air conditioning, heating, and
ventilating systems.

``(2) The Secretary shall carry out the program under paragraph (1),
on a cost-shared basis, in cooperation with the Administrator of the
Environmental Protection Agency and any other entities that the
Secretary determines to be appropriate, including industry

[[Page 622]]
119 STAT. 622

trade associations, industry members, and energy efficiency
organizations.
``(d) Small Business Education and Assistance.--(1) The
Administrator of the Small Business Administration, in consultation with
the Secretary and the Administrator of the Environmental Protection
Agency, shall develop and coordinate a Government-wide program, building
on the Energy Star for Small Business Program, to assist small
businesses in--
``(A) becoming more energy efficient;
``(B) understanding the cost savings from improved energy
efficiency;
``(C) understanding and accessing Federal procurement
opportunities with regard to Energy Star technologies and
products; and
``(D) identifying financing options for energy efficiency
upgrades.

``(2) The Secretary, the Administrator of the Environmental
Protection Agency, and the Administrator of the Small Business
Administration shall--
``(A) make program information available to small business
concerns directly through the district offices and resource
partners of the Small Business Administration, including small
business development centers, women's business centers, and the
Service Corps of Retired Executives (SCORE), and through other
Federal agencies, including the Federal Emergency Management
Agency and the Department of Agriculture; and
``(B) coordinate assistance with the Secretary of Commerce
for manufacturing-related efforts, including the Manufacturing
Extension Partnership Program.

``(3) The Secretary, on a cost shared basis in cooperation with the
Administrator of the Environmental Protection Agency, shall provide to
the Small Business Administration all advertising, marketing, and other
written materials necessary for the dissemination of information under
paragraph (2).
``(4) The Secretary, the Administrator of the Environmental
Protection Agency, and the Administrator of the Small Business
Administration, as part of the outreach to small business concerns under
the Energy Star Program for Small Business Program, may enter into
cooperative agreements with qualified resources partners (including the
National Center for Appropriate Technology) to establish, maintain, and
promote a Small Business Energy Clearinghouse (in this subsection
referred to as the `Clearinghouse').
``(5) The Secretary, the Administrator of the Environmental
Protection Agency, and the Administrator of the Small Business
Administration shall ensure that the Clearinghouse provides a
centralized resource where small business concerns may access,
telephonically and electronically, technical information and advice to
help increase energy efficiency and reduce energy costs.
``(6) NOTE: Appropriation authorization. There are authorized to
be appropriated such sums as are necessary to carry out this subsection,
to remain available until expended.''.

SEC. 133. NOTE: 42 USC 15831. PUBLIC ENERGY EDUCATION PROGRAM.

(a) In General.--Not NOTE: Deadline. later than 180 days after
the date of enactment of this Act, the Secretary shall convene an
organizational conference for the purpose of establishing an ongoing,
self-sustaining national public energy education program.

[[Page 623]]
119 STAT. 623

(b) Participants.--The Secretary shall invite to participate in the
conference individuals and entities representing all aspects of energy
production and distribution, including--
(1) industrial firms;
(2) professional societies;
(3) educational organizations;
(4) trade associations; and
(5) governmental agencies.

(c) Purpose, Scope, and Structure.--
(1) Purpose.--The purpose of the conference shall be to
establish an ongoing, self-sustaining national public energy
education program to examine and recognize interrelationships
between energy sources in all forms, including--
(A) conservation and energy efficiency;
(B) the role of energy use in the economy; and
(C) the impact of energy use on the environment.
(2) Scope and structure.--Taking into consideration the
purpose described in paragraph (1), the participants in the
conference invited under subsection (b) shall design the scope
and structure of the program described in subsection (a).

(d) Technical Assistance.--The Secretary shall provide technical
assistance and other guidance necessary to carry out the program
described in subsection (a).
(e) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.

SEC. 134. NOTE: 42 USC 15832. ENERGY EFFICIENCY PUBLIC INFORMATION
INITIATIVE.

(a) In General.--The Secretary shall carry out a comprehensive
national program, including advertising and media awareness, to inform
consumers about--
(1) the need to reduce energy consumption during the 4-year
period beginning on the date of enactment of this Act;
(2) the benefits to consumers of reducing consumption of
electricity, natural gas, and petroleum, particularly during
peak use periods;
(3) the importance of low energy costs to economic growth
and preserving manufacturing jobs in the United States; and
(4) practical, cost-effective measures that consumers can
take to reduce consumption of electricity, natural gas, and
gasoline, including--
(A) maintaining and repairing heating and cooling
ducts and equipment;
(B) weatherizing homes and buildings;
(C) purchasing energy efficient products; and
(D) proper tire maintenance.

(b) Cooperation.--The program carried out under subsection (a)
shall--
(1) include collaborative efforts with State and local
government officials and the private sector; and
(2) incorporate, to the maximum extent practicable,
successful State and local public education programs.

(c) Report.--Not later than July 1, 2009, the Secretary shall submit
to Congress a report describing the effectiveness of the program under
this section.
(d) Termination of Authority.--The program carried out under this
section shall terminate on December 31, 2010.

[[Page 624]]
119 STAT. 624

(e) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $90,000,000 for each of fiscal
years 2006 through 2010.

SEC. 135. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL PRODUCTS.

(a) Definitions.--Section 321 of the Energy Policy and Conservation
Act (42 U.S.C. 6291) is amended--
(1) in paragraph (29)--
(A) in subparagraph (D)--
(i) in clause (i), by striking ``C78.1-
1978(R1984)'' and inserting ``C78.81-2003 (Data
Sheet 7881-ANSI-1010-1)'';
(ii) in clause (ii), by striking ``C78.1-
1978(R1984)'' and inserting ``C78.81-2003 (Data
Sheet 7881-ANSI-3007-1)''; and
(iii) in clause (iii), by striking ``C78.1-
1978(R1984)'' and inserting ``C78.81-2003 (Data
Sheet 7881-ANSI-1019-1)''; and
(B) by adding at the end the following:
``(M) The term `F34T12 lamp' (also known as a `F40T12/ES
lamp') means a nominal 34 watt tubular fluorescent lamp that is
48 inches in length and 1\1/2\ inches in diameter, and conforms
to ANSI standard C78.81-2003 (Data Sheet 7881-ANSI-1006-1).
``(N) The term `F96T12/ES lamp' means a nominal 60 watt
tubular fluorescent lamp that is 96 inches in length and 1\1/2\
inches in diameter, and conforms to ANSI standard C78.81-2003
(Data Sheet 7881-ANSI-3006-1).
``(O) The term `F96T12HO/ES lamp' means a nominal 95 watt
tubular fluorescent lamp that is 96 inches in length and 1\1/2\
inches in diameter, and conforms to ANSI standard C78.81-2003
(Data Sheet 7881-ANSI-1017-1).
``(P) The term `replacement ballast' means a ballast that--
``(i) is designed for use to replace an existing
ballast in a previously installed luminaire;
``(ii) is marked `FOR REPLACEMENT USE ONLY';
``(iii) is shipped by the manufacturer in packages
containing not more than 10 ballasts; and
``(iv) has output leads that when fully extended are
a total length that is less than the length of the lamp
with which the ballast is intended to be operated.'';
(2) in paragraph (30)(S)--
(A) by inserting ``(i)'' before ``The term''; and
(B) by adding at the end the following:
``(ii) The term `medium base compact fluorescent
lamp' does not include--
``(I) any lamp that is--
``(aa) specifically designed to be
used for special purpose applications;
and
``(bb) unlikely to be used in
general purpose applications, such as
the applications described in
subparagraph (D); or
``(II) any lamp not described in subparagraph
(D) that is excluded by the Secretary, by rule,
because the lamp is--
``(aa) designed for special
applications; and

[[Page 625]]
119 STAT. 625

``(bb) unlikely to be used in
general purpose applications.''; and
(3) by adding at the end the following:
``(32) The term `battery charger' means a device that
charges batteries for consumer products, including battery
chargers embedded in other consumer products.
``(33)(A) The term `commercial prerinse spray valve' means a
handheld device designed and marketed for use with commercial
dishwashing and ware washing equipment that sprays water on
dishes, flatware, and other food service items for the purpose
of removing food residue before cleaning the items.
``(B) The Secretary may modify the definition of `commercial
prerinse spray valve' by rule--
``(i) to include products--
``(I) that are extensively used in conjunction
with commercial dishwashing and ware washing
equipment;
``(II) the application of standards to which
would result in significant energy savings; and
``(III) the application of standards to which
would meet the criteria specified in section
325(o)(4); and
``(ii) to exclude products--
``(I) that are used for special food service
applications;
``(II) that are unlikely to be widely used in
conjunction with commercial dishwashing and ware
washing equipment; and
``(III) the application of standards to which
would not result in significant energy savings.
``(34) The term `dehumidifier' means a self-contained,
electrically operated, and mechanically encased assembly
consisting of--
``(A) a refrigerated surface (evaporator) that
condenses moisture from the atmosphere;
``(B) a refrigerating system, including an electric
motor;
``(C) an air-circulating fan; and
``(D) means for collecting or disposing of the
condensate.
``(35)(A) The term `distribution transformer' means a
transformer that--
``(i) has an input voltage of 34.5 kilovolts or
less;
``(ii) has an output voltage of 600 volts or less;
and
``(iii) is rated for operation at a frequency of 60
Hertz.
``(B) The term `distribution transformer' does not include--
``(i) a transformer with multiple voltage taps, the
highest of which equals at least 20 percent more than
the lowest;
``(ii) a transformer that is designed to be used in
a special purpose application and is unlikely to be used
in general purpose applications, such as a drive
transformer, rectifier transformer, auto-transformer,
Uninterruptible Power System transformer, impedance
transformer, regulating transformer, sealed and
nonventilating transformer, machine tool transformer,
welding transformer, grounding transformer, or testing
transformer; or
``(iii) any transformer not listed in clause (ii)
that is excluded by the Secretary by rule because--
``(I) the transformer is designed for a
special application;

[[Page 626]]
119 STAT. 626

``(II) the transformer is unlikely to be used
in general purpose applications; and
``(III) the application of standards to the
transformer would not result in significant energy
savings.
``(36) The term `external power supply' means an external
power supply circuit that is used to convert household electric
current into DC current or lower-voltage AC current to operate a
consumer product.
``(37) The term `illuminated exit sign' means a sign that--
``(A) is designed to be permanently fixed in place
to identify an exit; and
``(B) consists of an electrically powered integral
light source that--
``(i) illuminates the legend `EXIT' and any
directional indicators; and
``(ii) provides contrast between the legend,
any directional indicators, and the background.
``(38) The term `low-voltage dry-type distribution
transformer' means a distribution transformer that--
``(A) has an input voltage of 600 volts or less;
``(B) is air-cooled; and
``(C) does not use oil as a coolant.
``(39) The term `pedestrian module' means a light signal
used to convey movement information to pedestrians.
``(40) The term `refrigerated bottled or canned beverage
vending machine' means a commercial refrigerator that cools
bottled or canned beverages and dispenses the bottled or canned
beverages on payment.
``(41) The term `standby mode' means the lowest power
consumption mode, as established on an individual product basis
by the Secretary, that--
``(A) cannot be switched off or influenced by the
user; and
``(B) may persist for an indefinite time when an
appliance is--
``(i) connected to the main electricity
supply; and
``(ii) used in accordance with the
instructions of the manufacturer.
``(42) The term `torchiere' means a portable electric lamp
with a reflector bowl that directs light upward to give indirect
illumination.
``(43) The term `traffic signal module' means a standard 8-
inch (200mm) or 12-inch (300mm) traffic signal indication that--
``(A) consists of a light source, a lens, and all
other parts necessary for operation; and
``(B) communicates movement messages to drivers
through red, amber, and green colors.
``(44) The term `transformer' means a device consisting of 2
or more coils of insulated wire that transfers alternating
current by electromagnetic induction from 1 coil to another to
change the original voltage or current value.
``(45)(A) The term `unit heater' means a self-contained fan-
type heater designed to be installed within the heated space.
``(B) The term `unit heater' does not include a warm air
furnace.

[[Page 627]]
119 STAT. 627

``(46)(A) The term `high intensity discharge lamp' means an
electric-discharge lamp in which--
``(i) the light-producing arc is stabilized by bulb
wall temperature; and
``(ii) the arc tube has a bulb wall loading in
excess of 3 Watts/cm SUP 2 /SUP.
``(B) The term `high intensity discharge lamp' includes
mercury vapor, metal halide, and high-pressure sodium lamps
described in subparagraph (A).
``(47)(A) The term `mercury vapor lamp' means a high
intensity discharge lamp in which the major portion of the light
is produced by radiation from mercury operating at a partial
pressure in excess of 100,000 Pa (approximately 1 atm).
``(B) The term `mercury vapor lamp' includes clear,
phosphor-coated, and self-ballasted lamps described in
subparagraph (A).
``(48) The term `mercury vapor lamp ballast' means a device
that is designed and marketed to start and operate mercury vapor
lamps by providing the necessary voltage and current.
``(49) The term `ceiling fan' means a nonportable device
that is suspended from a ceiling for circulating air via the
rotation of fan blades.
``(50) The term `ceiling fan light kit' means equipment
designed to provide light from a ceiling fan that can be--
``(A) integral, such that the equipment is attached
to the ceiling fan prior to the time of retail sale; or
``(B) attachable, such that at the time of retail
sale the equipment is not physically attached to the
ceiling fan, but may be included inside the ceiling fan
at the time of sale or sold separately for subsequent
attachment to the fan.
``(51) The term `medium screw base' means an Edison screw
base identified with the prefix E-26 in the `American National
Standard for Electric Lamp Bases', ANSI/IEC C81.61-2003,
published by the American National Standards Institute.''.

(b) Test Procedures.--Section 323 of the Energy Policy and
Conservation Act (42 U.S.C. 6293) is amended--
(1) in subsection (b), by adding at the end the following:

``(9) Test procedures for illuminated exit signs shall be based on
the test method used under version 2.0 of the Energy Star program of the
Environmental Protection Agency for illuminated exit signs.
``(10)(A) Test procedures for distribution transformers and low
voltage dry-type distribution transformers shall be based on the
`Standard Test Method for Measuring the Energy Consumption of
Distribution Transformers' prescribed by the National Electrical
Manufacturers Association (NEMA TP 2-1998).
``(B) The Secretary may review and revise the test procedures
established under subparagraph (A).
``(C) For purposes of section 346(a), the test procedures
established under subparagraph (A) shall be considered to be the testing
requirements prescribed by the Secretary under section 346(a)(1) for
distribution transformers for which the Secretary makes a determination
that energy conservation standards would--
``(i) be technologically feasible and economically
justified; and
``(ii) result in significant energy savings.

[[Page 628]]
119 STAT. 628

``(11) Test procedures for traffic signal modules and pedestrian
modules shall be based on the test method used under the Energy Star
program of the Environmental Protection Agency for traffic signal
modules, as in effect on the date of enactment of this paragraph.
``(12)(A) Test procedures for medium base compact fluorescent lamps
shall be based on the test methods for compact fluorescent lamps used
under the August 9, 2001, version of the Energy Star program of the
Environmental Protection Agency and the Department of Energy.
``(B) Except as provided in subparagraph (C), medium base compact
fluorescent lamps shall meet all test requirements for regulated
parameters of section 325(cc).
``(C) Notwithstanding subparagraph (B), if manufacturers document
engineering predictions and analysis that support expected attainment of
lumen maintenance at 40 percent rated life and lamp lifetime, medium
base compact fluorescent lamps may be marketed before completion of the
testing of lamp life and lumen maintenance at 40 percent of rated life.
``(13) Test procedures for dehumidifiers shall be based on the test
criteria used under the Energy Star Program Requirements for
Dehumidifiers developed by the Environmental Protection Agency, as in
effect on the date of enactment of this paragraph unless revised by the
Secretary pursuant to this section.
``(14) The test procedure for measuring flow rate for commercial
prerinse spray valves shall be based on American Society for Testing and
Materials Standard F2324, entitled `Standard Test Method for Pre-Rinse
Spray Valves'.
``(15) The test procedure for refrigerated bottled or canned
beverage vending machines shall be based on American National Standards
Institute/American Society of Heating, Refrigerating and Air-
Conditioning Engineers Standard 32.1-2004, entitled `Methods of Testing
for Rating Vending Machines for Bottled, Canned or Other Sealed
Beverages'.
``(16)(A)(i) Test procedures for ceiling fans shall be based on the
`Energy Star Testing Facility Guidance Manual: Building a Testing
Facility and Performing the Solid State Test Method for ENERGY STAR
Qualified Ceiling Fans, Version 1.1' published by the Environmental
Protection Agency.
``(ii) Test procedures for ceiling fan light kits shall be based on
the test procedures referenced in the Energy Star specifications for
Residential Light Fixtures and Compact Fluorescent Light Bulbs, as in
effect on the date of enactment of this paragraph.
``(B) The Secretary may review and revise the test procedures
established under subparagraph (A).''; and
(2) by adding at the end the following:

``(f) Additional NOTE: Deadline. Requirements. Consumer and
Commercial Products.--(1) Not later than 2 years after the date of
enactment of this subsection, the Secretary shall prescribe testing
requirements for refrigerated bottled or canned beverage vending
machines.

``(2) To the maximum extent practicable, the testing requirements
prescribed under paragraph (1) shall be based on existing test
procedures used in industry.''.
(c) Standard Setting Authority.--Section 325 of the Energy Policy
and Conservation Act (42 U.S.C. 6295) is amended--
(1) in subsection (f)(3), by adding at the end the
following:

[[Page 629]]
119 STAT. 629

``(D) Notwithstanding any other provision of this Act, if the
requirements of subsection (o) are met, the Secretary may consider and
prescribe energy conservation standards or energy use standards for
electricity used for purposes of circulating air through duct work.'';
(2) in subsection (g)--
(A) in paragraph (6)(B), by inserting ``and
labeled'' after ``designed''; and
(B) by adding at the end the following:

``(8)(A) Each fluorescent lamp ballast (other than replacement
ballasts or ballasts described in subparagraph (C))--
``(i)(I) manufactured on or after July 1, 2009;
``(II) sold by the manufacturer on or after October 1, 2009;
or
``(III) incorporated into a luminaire by a luminaire
manufacturer on or after July 1, 2010; and
``(ii) designed--
``(I) to operate at nominal input voltages of 120 or
277 volts;
``(II) to operate with an input current frequency of
60 Hertz; and
``(III) for use in connection with F34T12 lamps,
F96T12/ES lamps, or F96T12HO/ES lamps;
shall have a power factor of 0.90 or greater and shall have a
ballast efficacy factor of not less than the following:

...................  Total              .....................
``Applica  Ballast              nominal            Ballast
tion for  input                lamp               efficacy
operatio  voltage              watts              factor
n of
One        120/277              34                 2.61
F34T12
lamp
Two        120/277              68                 1.35
F34T12
lamps
Two        120/277              120                0.77
F96T12/
ES lamps
Two        120/277              190                0.42.
F96T12HO/
ES lamps


``(B) NOTE: Applicability. The standards described in
subparagraph (A) shall apply to all ballasts covered by subparagraph
(A)(ii) that are manufactured on or after July 1, 2010, or sold by the
manufacturer on or after October 1, 2010.

``(C) The standards described in subparagraph (A) do not apply to--
``(i) a ballast that is designed for dimming to 50 percent
or less of the maximum output of the ballast;
``(ii) a ballast that is designed for use with 2 F96T12HO
lamps at ambient temperatures of 20F or less and for use in an
outdoor sign; or
``(iii) a ballast that has a power factor of less than 0.90
and is designed and labeled for use only in residential
applications.'';
(3) in subsection (o), by adding at the end the following:

``(5) The Secretary may set more than 1 energy conservation standard
for products that serve more than 1 major function by setting 1 energy
conservation standard for each major function.''; and
(4) by adding at the end the following:

``(u) Battery NOTE: Deadline. Notice. Regulations. Charger and
External Power Supply Electric Energy Consumption.--(1)(A) Not later
than 18 months after the date of enactment of this subsection, the
Secretary shall, after providing notice and an opportunity for comment,
prescribe, by

[[Page 630]]
119 STAT. 630

rule, definitions and test procedures for the power use of battery
chargers and external power supplies.
``(B) In establishing the test procedures under subparagraph (A),
the Secretary shall--
``(i) consider existing definitions and test procedures used
for measuring energy consumption in standby mode and other
modes; and
``(ii) assess the current and projected future market for
battery chargers and external power supplies.

``(C) The assessment under subparagraph (B)(ii) shall include--
``(i) estimates of the significance of potential energy
savings from technical improvements to battery chargers and
external power supplies; and
``(ii) suggested product classes for energy conservation
standards.

``(D) NOTE: Deadline. Not later than 18 months after the date of
enactment of this subsection, the Secretary shall hold a scoping
workshop to discuss and receive comments on plans for developing energy
conservation standards for energy use for battery chargers and external
power supplies.

``(E)(i) NOTE: Deadline. Regulations. Not later than 3 years
after the date of enactment of this subsection, the Secretary shall
issue a final rule that determines whether energy conservation standards
shall be issued for battery chargers and external power supplies or
classes of battery chargers and external power supplies.

``(ii) For each product class, any energy conservation standards
issued under clause (i) shall be set at the lowest level of energy use
that--
``(I) meets the criteria and procedures of subsections (o),
(p), (q), (r), (s), and (t); and
``(II) would result in significant overall annual energy
savings, considering standby mode and other operating modes.

``(2) In determining under section 323 whether test procedures and
energy conservation standards under this section should be revised with
respect to covered products that are major sources of standby mode
energy consumption, the Secretary shall consider whether to incorporate
standby mode into the test procedures and energy conservation standards,
taking into account standby mode power consumption compared to overall
product energy consumption.
``(3) The Secretary shall not propose an energy conservation
standard under this section, unless the Secretary has issued applicable
test procedures for each product under section 323.
``(4) NOTE: Applicability. Effective date. Any energy
conservation standard issued under this subsection shall be applicable
to products manufactured or imported beginning on the date that is 3
years after the date of issuance.

``(5) The Secretary and the Administrator shall collaborate and
develop programs (including programs under section 324A and other
voluntary industry agreements or codes of conduct) that are designed to
reduce standby mode energy use.
``(v) Ceiling NOTE: Deadline. Regulations. Fans and Refrigerated
Beverage Vending Machines.--(1) Not later than 1 year after the date of
enactment of this subsection, the Secretary shall prescribe, by rule,
test procedures and energy conservation standards for ceiling fans and
ceiling fan light kits. If the Secretary sets such standards, the
Secretary shall consider exempting or setting different standards for
certain product classes for which the primary standards are not
technically

[[Page 631]]
119 STAT. 631

feasible or economically justified, and establishing separate or
exempted product classes for highly decorative fans for which air
movement performance is a secondary design feature.
``(2) NOTE: Deadline. Regulations. Not later than 4 years after
the date of enactment of this subsection, the Secretary shall prescribe,
by rule, energy conservation standards for refrigerated bottle or canned
beverage vending machines.

``(3) In establishing energy conservation standards under this
subsection, the Secretary shall use the criteria and procedures
prescribed under subsections (o) and (p).
``(4) NOTE: Applicability. Any energy conservation standard
prescribed under this subsection shall apply to products manufactured 3
years after the date of publication of a final rule establishing the
energy conservation standard.

``(w) Illuminated Exit Signs.--An illuminated exit sign manufactured
on or after January 1, 2006, shall meet the version 2.0 Energy Star
Program performance requirements for illuminated exit signs prescribed
by the Environmental Protection Agency.
``(x) Torchieres.--A torchiere manufactured on or after January 1,
2006--
``(1) shall consume not more than 190 watts of power; and
``(2) shall not be capable of operating with lamps that
total more than 190 watts.

``(y) Low Voltage Dry-Type Distribution Transformers.--The
efficiency of a low voltage dry-type distribution transformer
manufactured on or after January 1, 2007, shall be the Class I
Efficiency Levels for distribution transformers specified in table 4-2
of the `Guide for Determining Energy Efficiency for Distribution
Transformers' published by the National Electrical Manufacturers
Association (NEMA TP-1-2002).
``(z) Traffic Signal Modules and Pedestrian Modules.--Any traffic
signal module or pedestrian module manufactured on or after January 1,
2006, shall--
``(1) meet the performance requirements used under the
Energy Star program of the Environmental Protection Agency for
traffic signals, as in effect on the date of enactment of this
subsection; and
``(2) be installed with compatible, electrically connected
signal control interface devices and conflict monitoring
systems.

``(aa) Unit Heaters.--A unit heater manufactured on or after the
date that is 3 years after the date of enactment of this subsection
shall--
``(1) be equipped with an intermittent ignition device; and
``(2) have power venting or an automatic flue damper.

``(bb) Medium Base Compact Fluorescent Lamps.--(1) A bare lamp and
covered lamp (no reflector) medium base compact fluorescent lamp
manufactured on or after January 1, 2006, shall meet the following
requirements prescribed by the August 9, 2001, version of the Energy
Star Program Requirements for Compact Fluorescent Lamps, Energy Star
Eligibility Criteria, Energy-Efficiency Specification issued by the
Environmental Protection Agency and Department of Energy:
``(A) Minimum initial efficacy.
``(B) Lumen maintenance at 1000 hours.
``(C) Lumen maintenance at 40 percent of rated life.
``(D) Rapid cycle stress test.

[[Page 632]]
119 STAT. 632

``(E) Lamp life.

``(2) The Secretary may, by rule, establish requirements for color
quality (CRI), power factor, operating frequency, and maximum allowable
start time based on the requirements prescribed by the August 9, 2001,
version of the Energy Star Program Requirements for Compact Fluorescent
Lamps.
``(3) The Secretary may, by rule--
``(A) revise the requirements established under paragraph
(2); or
``(B) establish other requirements, after considering energy
savings, cost effectiveness, and consumer satisfaction.

``(cc) Dehumidifiers.--(1) Dehumidifiers manufactured on or after
October 1, 2007, shall have an Energy Factor that meets or exceeds the
following values:

``Product Capacity (pints/day)Minimum Energy Factor (Liters/kWh)........
25.00 or less                                                      1.00
25.01 - 35.00                                                      1.20
35.01 - 54.00                                                      1.30
54.01 - 74.99                                                      1.50
75.00 or more                                                      2.25.

``(2)(A) NOTE: Deadline. Publication. Regulations. Not later
than October 1, 2009, the Secretary shall publish a final rule in
accordance with subsections (o) and (p), to determine whether the energy
conservation standards established under paragraph (1) should be
amended.

``(B) The final rule published under subparagraph (A) shall--
``(i) contain any amendment by the Secretary; and
``(ii) NOTE: Applicability. provide that the amendment
applies to products manufactured on or after October 1, 2012.

``(C) If the Secretary does not publish an amendment that takes
effect by October 1, 2012, dehumidifiers manufactured on or after
October 1, 2012, shall have an Energy Factor that meets or exceeds the
following values:

``Product Capacity (pints/day)Minimum Energy Factor (Liters/kWh)........
25.00 or less                                                      1.20
25.01 - 35.00                                                      1.30
35.01 - 45.00                                                      1.40
45.01 - 54.00                                                      1.50
54.01 - 74.99                                                      1.60
75.00 or more                                                       2.5.

``(dd) Commercial Prerinse Spray Valves.--Commercial prerinse spray
valves manufactured on or after January 1, 2006, shall have a flow rate
of not more than 1.6 gallons per minute.
``(ee) Mercury Vapor Lamp Ballasts.--Mercury vapor lamp ballasts
shall not be manufactured or imported after January 1, 2008.
``(ff) Ceiling Fans and Ceiling Fan Light Kits.--(1)(A) All ceiling
fans manufactured on or after January 1, 2007, shall have the following
features:
``(i) Fan speed controls separate from any lighting
controls.
``(ii) Adjustable speed controls (either more than 1 speed
or variable speed).
``(iii) Adjustable speed controls (either more than 1 speed
or variable speed).
``(iv) The capability of reversible fan action, except for--

[[Page 633]]
119 STAT. 633

``(I) fans sold for industrial applications;
``(II) outdoor applications; and
``(III) cases in which safety standards would be
violated by the use of the reversible mode.

``(B) The Secretary may define the exceptions described in clause
(iv) in greater detail, but shall not substantively expand the
exceptions.
``(2)(A) Ceiling fan light kits with medium screw base sockets
manufactured on or after January 1, 2007, shall be packaged with screw-
based lamps to fill all screw base sockets.
``(B) The screw-based lamps required under subparagraph (A) shall--
``(i) meet the Energy Star Program Requirements for Compact
Fluorescent Lamps, version 3.0, issued by the Department of
Energy; or
``(ii) use light sources other than compact fluorescent
lamps that have lumens per watt performance at least equivalent
to comparably configured compact fluorescent lamps meeting the
Energy Star Program Requirements described in clause (i).

``(3) Ceiling fan light kits with pin-based sockets for fluorescent
lamps manufactured on or after January 1, 2007 shall--
``(A) meet the Energy Star Program Requirements for
Residential Light Fixtures version 4.0 issued by the
Environmental Protection Agency; and
``(B) be packaged with lamps to fill all sockets.

``(4)(A) NOTE: Deadline. Requirements. By January 1, 2007, the
Secretary shall consider and issue requirements for any ceiling fan
lighting kits other than those covered in paragraphs (2) and (3),
including candelabra screw base sockets.

``(B) The requirements issued under subparagraph (A) shall be
effective for products manufactured 2 years after the date of the final
rule.
``(C) If the Secretary fails to issue a final rule by the date
specified in subparagraph (B), any type of ceiling fan lighting kit
described in subparagraph (A) that is manufactured after January 1,
2009--
``(i) shall not be capable of operating with lamps that
total more than 190 watts; and
``(ii) shall include the lamps described in clause (i) in
the ceiling fan lighting kits.

``(5)(A) After January 1, 2010, the Secretary may consider, and
issue, if the requirements of subsections (o) and (p) are met, amended
energy efficiency standards for ceiling fan light kits.
``(B) NOTE: Applicability. Any amended standards issued under
subparagraph (A) shall apply to products manufactured not earlier than 2
years after the date of publication of the final rule establishing the
amended standard.

``(6)(A) Notwithstanding any other provision of this Act, the
Secretary may consider, and issue, if the requirements of subsections
(o) and (p) are met, energy efficiency or energy use standards for
electricity used by ceiling fans to circulate air in a room.
``(B) In issuing the standards under subparagraph (A), the Secretary
shall consider--
``(C) exempting, or setting different standards for, certain
product classes for which the primary standards are not
technically feasible or economically justified; and

[[Page 634]]
119 STAT. 634

``(D) establishing separate exempted product classes for
highly decorative fans for which air movement performance is a
secondary design feature.

``(7) NOTE: Applicability. Section 327 shall apply to the
products covered in paragraphs (1) through (4) beginning on the date of
enactment of this subsection, except that any State or local labeling
requirement for ceiling fans prescribed or enacted before the date of
enactment of this subsection shall not be preempted until the labeling
requirements applicable to ceiling fans established under section 327
take effect.

``(gg) Application Date.--Section 327 applies--
``(1) to products for which energy conservation standards
are to be established under subsection (l), (u), or (v)
beginning on the date on which a final rule is issued by the
Secretary, except that any State or local standard prescribed or
enacted for the product before the date on which the final rule
is issued shall not be preempted until the energy conservation
standard established under subsection (l), (u), or (v) for the
product takes effect; and
``(2) to products for which energy conservation standards
are established under subsections (w) through (ff) on the date
of enactment of those subsections, except that any State or
local standard prescribed or enacted before the date of
enactment of those subsections shall not be preempted until the
energy conservation standards established under subsections (w)
through (ff) take effect.''.

(d) General Rule of Preemption.--Section 327(c) of the Energy Policy
and Conservation Act (42 U.S.C. 6297(c)) is amended--
(1) in paragraph (5), by striking ``or'' at the end;
(2) in paragraph (6), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(7)(A) is a regulation concerning standards for commercial
prerinse spray valves adopted by the California Energy
Commission before January 1, 2005; or
``(B) is an amendment to a regulation described in
subparagraph (A) that was developed to align California
regulations with changes in American Society for Testing and
Materials Standard F2324;
``(8)(A) is a regulation concerning standards for pedestrian
modules adopted by the California Energy Commission before
January 1, 2005; or
``(B) is an amendment to a regulation described in
subparagraph (A) that was developed to align California
regulations to changes in the Institute for Transportation
Engineers standards, entitled `Performance Specification:
Pedestrian Traffic Control Signal Indications'.''.

SEC. 136. ENERGY CONSERVATION STANDARDS FOR COMMERCIAL EQUIPMENT.

(a) Definitions.--Section 340 of the Energy Policy and Conservation
Act (42 U.S.C. 6311) is amended--
(1) in paragraph (1)--
(A) by redesignating subparagraphs (D) through (G)
as subparagraphs (H) through (K), respectively; and
(B) by inserting after subparagraph (C) the
following:

[[Page 635]]
119 STAT. 635

``(D) Very large commercial package air conditioning
and heating equipment.
``(E) Commercial refrigerators, freezers, and
refrigerator-freezers.
``(F) Automatic commercial ice makers.
``(G) Commercial clothes washers.'';
(2) in paragraph (2)(B), by striking ``small and large
commercial package air conditioning and heating equipment'' and
inserting ``commercial package air conditioning and heating
equipment, commercial refrigerators, freezers, and refrigerator-
freezers, automatic commercial ice makers, commercial clothes
washers'';
(3) by striking paragraphs (8) and (9) and inserting the
following:
``(8)(A) The term `commercial package air conditioning and
heating equipment' means air-cooled, water-cooled,
evaporatively-cooled, or water source (not including ground
water source) electrically operated, unitary central air
conditioners and central air conditioning heat pumps for
commercial application.
``(B) The term `small commercial package air conditioning
and heating equipment' means commercial package air conditioning
and heating equipment that is rated below 135,000 Btu per hour
(cooling capacity).
``(C) The term `large commercial package air conditioning
and heating equipment' means commercial package air conditioning
and heating equipment that is rated--
``(i) at or above 135,000 Btu per hour; and
``(ii) below 240,000 Btu per hour (cooling
capacity).
``(D) The term `very large commercial package air
conditioning and heating equipment' means commercial package air
conditioning and heating equipment that is rated--
``(i) at or above 240,000 Btu per hour; and
``(ii) below 760,000 Btu per hour (cooling
capacity).
``(9)(A) The term `commercial refrigerator, freezer, and
refrigerator-freezer' means refrigeration equipment that--
``(i) is not a consumer product (as defined in
section 321);
``(ii) is not designed and marketed exclusively for
medical, scientific, or research purposes;
``(iii) operates at a chilled, frozen, combination
chilled and frozen, or variable temperature;
``(iv) displays or stores merchandise and other
perishable materials horizontally, semivertically, or
vertically;
``(v) has transparent or solid doors, sliding or
hinged doors, a combination of hinged, sliding,
transparent, or solid doors, or no doors;
``(vi) is designed for pull-down temperature
applications or holding temperature applications; and
``(vii) is connected to a self-contained condensing
unit or to a remote condensing unit.
``(B) The term `holding temperature application' means a use
of commercial refrigeration equipment other than a pull-down
temperature application, except a blast chiller or freezer.
``(C) The term `integrated average temperature' means the
average temperature of all test package measurements taken
during the test.

[[Page 636]]
119 STAT. 636

``(D) The term `pull-down temperature application' means a
commercial refrigerator with doors that, when fully loaded with
12 ounce beverage cans at 90 degrees F, can cool those beverages
to an average stable temperature of 38 degrees F in 12 hours or
less.
``(E) The term `remote condensing unit' means a factory-made
assembly of refrigerating components designed to compress and
liquefy a specific refrigerant that is remotely located from the
refrigerated equipment and consists of one or more refrigerant
compressors, refrigerant condensers, condenser fans and motors,
and factory supplied accessories.
``(F) The term `self-contained condensing unit' means a
factory-made assembly of refrigerating components designed to
compress and liquefy a specific refrigerant that is an integral
part of the refrigerated equipment and consists of one or more
refrigerant compressors, refrigerant condensers, condenser fans
and motors, and factory supplied accessories.''; and
(4) by adding at the end the following:
``(19) The term `automatic commercial ice maker' means a
factory-made assembly (not necessarily shipped in one package)
that--
``(A) consists of a condensing unit and ice-making
section operating as an integrated unit, with means for
making and harvesting ice; and
``(B) may include means for storing ice, dispensing
ice, or storing and dispensing ice.
``(20) The term `commercial clothes washer' means a soft-
mount front-loading or soft-mount top-loading clothes washer
that--
``(A) has a clothes container compartment that--
``(i) for horizontal-axis clothes washers, is
not more than 3.5 cubic feet; and
``(ii) for vertical-axis clothes washers, is
not more than 4.0 cubic feet; and
``(B) is designed for use in--
``(i) applications in which the occupants of
more than one household will be using the clothes
washer, such as multi-family housing common areas
and coin laundries; or
``(ii) other commercial applications.
``(21) The term `harvest rate' means the amount of ice (at
32 degrees F) in pounds produced per 24 hours.''.

(b) Standards for Commercial Package Air Conditioning and Heating
Equipment.--Section 342(a) of the Energy Policy and Conservation Act (42
U.S.C. 6313(a)) is amended--
(1) in the subsection heading, by striking ``Small and
Large'' and inserting ``Small, Large, and Very Large'';
(2) in paragraph (1), by inserting ``but before January 1,
2010,'' after ``January 1, 1994,'';
(3) in paragraph (2), by inserting ``but before January 1,
2010,'' after ``January 1, 1995,''; and
(4) in paragraph (6)--
(A) in subparagraph (A)--
(i) by inserting ``(i)'' after ``(A)'';
(ii) by striking ``the date of enactment of
the Energy Policy Act of 1992'' and inserting
``January 1, 2010'';

[[Page 637]]
119 STAT. 637

(iii) by inserting after ``large commercial
package air conditioning and heating equipment,''
the following: ``and very large commercial package
air conditioning and heating equipment, or if
ASHRAE/IES Standard 90.1, as in effect on October
24, 1992, is amended with respect to any''; and
(iv) by adding at the end the following:

``(ii) If ASHRAE/IES Standard 90.1 is not amended with respect to
small commercial package air conditioning and heating equipment, large
commercial package air conditioning and heating equipment, and very
large commercial package air conditioning and heating equipment during
the 5-year period beginning on the effective date of a standard, the
Secretary may initiate a rulemaking to determine whether a more
stringent standard--
``(I) would result in significant additional conservation of
energy; and
``(II) is technologically feasible and economically
justified.''; and
(B) in subparagraph (C)(ii), by inserting ``and very
large commercial package air conditioning and heating
equipment'' after ``large commercial package air
conditioning and heating equipment''; and
(5) by adding at the end the following:

``(7) Small commercial package air conditioning and heating
equipment manufactured on or after January 1, 2010, shall meet the
following standards:
``(A) The minimum energy efficiency ratio of air-cooled
central air conditioners at or above 65,000 Btu per hour
(cooling capacity) and less than 135,000 Btu per hour (cooling
capacity) shall be--
``(i) 11.2 for equipment with no heating or electric
resistance heating; and
``(ii) 11.0 for equipment with all other heating
system types that are integrated into the equipment (at
a standard rating of 95 degrees F db).
``(B) The minimum energy efficiency ratio of air-cooled
central air conditioner heat pumps at or above 65,000 Btu per
hour (cooling capacity) and less than 135,000 Btu per hour
(cooling capacity) shall be--
``(i) 11.0 for equipment with no heating or electric
resistance heating; and
``(ii) 10.8 for equipment with all other heating
system types that are integrated into the equipment (at
a standard rating of 95 degrees F db).
``(C) The minimum coefficient of performance in the heating
mode of air-cooled central air conditioning heat pumps at or
above 65,000 Btu per hour (cooling capacity) and less than
135,000 Btu per hour (cooling capacity) shall be 3.3 (at a high
temperature rating of 47 degrees F db).

``(8) Large commercial package air conditioning and heating
equipment manufactured on or after January 1, 2010, shall meet the
following standards:
``(A) The minimum energy efficiency ratio of air-cooled
central air conditioners at or above 135,000 Btu per hour
(cooling capacity) and less than 240,000 Btu per hour (cooling
capacity) shall be--

[[Page 638]]
119 STAT. 638

``(i) 11.0 for equipment with no heating or electric
resistance heating; and
``(ii) 10.8 for equipment with all other heating
system types that are integrated into the equipment (at
a standard rating of 95 degrees F db).
``(B) The minimum energy efficiency ratio of air-cooled
central air conditioner heat pumps at or above 135,000 Btu per
hour (cooling capacity) and less than 240,000 Btu per hour
(cooling capacity) shall be--
``(i) 10.6 for equipment with no heating or electric
resistance heating; and
``(ii) 10.4 for equipment with all other heating
system types that are integrated into the equipment (at
a standard rating of 95 degrees F db).
``(C) The minimum coefficient of performance in the heating
mode of air-cooled central air conditioning heat pumps at or
above 135,000 Btu per hour (cooling capacity) and less than
240,000 Btu per hour (cooling capacity) shall be 3.2 (at a high
temperature rating of 47 degrees F db).

``(9) Very large commercial package air conditioning and heating
equipment manufactured on or after January 1, 2010, shall meet the
following standards:
``(A) The minimum energy efficiency ratio of air-cooled
central air conditioners at or above 240,000 Btu per hour
(cooling capacity) and less than 760,000 Btu per hour (cooling
capacity) shall be--
``(i) 10.0 for equipment with no heating or electric
resistance heating; and
``(ii) 9.8 for equipment with all other heating
system types that are integrated into the equipment (at
a standard rating of 95 degrees F db).
``(B) The minimum energy efficiency ratio of air-cooled
central air conditioner heat pumps at or above 240,000 Btu per
hour (cooling capacity) and less than 760,000 Btu per hour
(cooling capacity) shall be--
``(i) 9.5 for equipment with no heating or electric
resistance heating; and
``(ii) 9.3 for equipment with all other heating
system types that are integrated into the equipment (at
a standard rating of 95 degrees F db).
``(C) The minimum coefficient of performance in the heating
mode of air-cooled central air conditioning heat pumps at or
above 240,000 Btu per hour (cooling capacity) and less than
760,000 Btu per hour (cooling capacity) shall be 3.2 (at a high
temperature rating of 47 degrees F db).''.

(c) Standards for Commercial Refrigerators, Freezers, and
Refrigerator-Freezers.--Section 342 of the Energy Policy and
Conservation Act (42 U.S.C. 6313) is amended by adding at the end the
following:
``(c) Commercial Refrigerators, Freezers, and Refrigerator-
Freezers.--(1) In this subsection:
``(A) The term `AV' means the adjusted volume
(ft SUP 3 /SUP ) (defined as 1.63 x frozen temperature
compartment volume (ft SUP 3 /SUP ) + chilled temperature
compartment volume (ft SUP 3 /SUP )) with compartment volumes
measured in accordance with the Association of Home Appliance
Manufacturers Standard HRF1-1979.

[[Page 639]]
119 STAT. 639

``(B) The term `V' means the chilled or frozen compartment
volume (ft SUP 3 /SUP ) (as defined in the Association of Home
Appliance Manufacturers Standard HRF1-1979).
``(C) Other terms have such meanings as may be established
by the Secretary, based on industry-accepted definitions and
practice.

``(2) Each commercial refrigerator, freezer, and refrigerator-
freezer with a self-contained condensing unit designed for holding
temperature applications manufactured on or after January 1, 2010, shall
have a daily energy consumption (in kilowatt hours per day) that does
not exceed the following:




Refrigerators with solid doors..  0.10 V + 2.04
Refrigerators with transparent    0.12 V + 3.34
doors.
Freezers with solid doors.......  0.40 V + 1.38
Freezers with transparent doors.  0.75 V + 4.10
Refrigerators/freezers with       0.27 AV - 0.71 or 0.70.
solid doors the greater of.


``(3) Each commercial refrigerator with a self-contained condensing
unit designed for pull-down temperature applications and transparent
doors manufactured on or after January 1, 2010, shall have a daily
energy consumption (in kilowatt hours per day) of not more than 0.126 V
+ 3.51.
``(4)(A) NOTE: Deadline. Regulations. Not later than January 1,
2009, the Secretary shall issue, by rule, standard levels for ice-cream
freezers, self-contained commercial refrigerators, freezers, and
refrigerator-freezers without doors, and remote condensing commercial
refrigerators, freezers, and refrigerator-freezers, with the standard
levels effective for equipment manufactured on or after January 1, 2012.

``(B) The Secretary may issue, by rule, standard levels for other
types of commercial refrigerators, freezers, and refrigerator-freezers
not covered by paragraph (2)(A) with the standard levels effective for
equipment manufactured 3 or more years after the date on which the final
rule is published.
``(5)(A) NOTE: Deadlines. Regulations. Not later than January 1,
2013, the Secretary shall issue a final rule to determine whether the
standards established under this subsection should be amended.

``(B) Not later than 3 years after the effective date of any amended
standards under subparagraph (A) or the publication of a final rule
determining that the standards should not be amended, the Secretary
shall issue a final rule to determine whether the standards established
under this subsection or the amended standards, as applicable, should be
amended.
``(C) NOTE: Applicability. If the Secretary issues a final rule
under subparagraph (A) or (B) establishing amended standards, the final
rule shall provide that the amended standards apply to products
manufactured on or after the date that is--
``(i) 3 years after the date on which the final amended
standard is published; or
``(ii) if the Secretary determines, by rule, that 3 years is
inadequate, not later than 5 years after the date on which the
final rule is published.''.

(d) Standards for Automatic Commercial Ice Makers.--Section 342 of
the Energy Policy and Conservation Act (42 U.S.C.

[[Page 640]]
119 STAT. 640

6313) (as amended by subsection (c)) is amended by adding at the end the
following:
``(d) Automatic Commercial Ice Makers.--(1) Each automatic
commercial ice maker that produces cube type ice with capacities between
50 and 2500 pounds per 24-hour period when tested according to the test
standard established in section 343(a)(7) and is manufactured on or
after January 1, 2010, shall meet the following standard levels:


----------------------------------------------------------------------------------------------------------------
Maximum Condenser
Equipment Type             Type of     Harvest Rate (lbs ice/   Maximum Energy Use   Water Use (gal/100
Cooling           24 hours)           (kWh/100 lbs Ice)        lbs Ice)
----------------------------------------------------------------------------------------------------------------
Ice Making Head                  Water          500                     7.80-0.0055H          200-0.022H
------------------------------------------------------------------
500 and  1436            5.58-0.0011H          200-0.022H
------------------------------------------------------------------
1436                     4.0                   200-0.022H
----------------------------------------------------------------------------------------------------------------
Ice Making Head                  Air            450                     10.26-0.0086H         Not Applicable
------------------------------------------------------------------
450                      6.89-0.0011H          Not Applicable
----------------------------------------------------------------------------------------------------------------
Remote Condensing                Air            1000                    8.85-0.0038H          Not Applicable
(but not remote
compressor)
------------------------------------------------------------------
1000                     5.10                  Not Applicable
----------------------------------------------------------------------------------------------------------------
Remote Condensing                Air            934                     8.85-0.0038H          Not Applicable
and Remote
Compressor
------------------------------------------------------------------
934                      5.3                   Not Applicable
----------------------------------------------------------------------------------------------------------------
Self Contained                   Water          200                     11.40-0.019H          191-0.0315H
------------------------------------------------------------------
200                      7.60                  191-0.0315H
----------------------------------------------------------------------------------------------------------------
Self Contained                   Air            175                     18.0-0.0469H          Not Applicable
------------------------------------------------------------------
175                      9.80                  Not Applicable
----------------------------------------------------------------------------------------------------------------
H = Harvest rate in pounds per 24 hours.
Water use is for the condenser only and does not include potable water used to make ice.

``(2)(A) The Secretary may issue, by rule, standard levels for types
of automatic commercial ice makers that are not covered by paragraph
(1).
``(B) NOTE: Applicability. The standards established under
subparagraph (A) shall apply to products manufactured on or after the
date that is--
``(i) 3 years after the date on which the rule is published
under subparagraph (A); or

[[Page 641]]
119 STAT. 641

``(ii) NOTE: Deadline. if the Secretary determines, by
rule, that 3 years is inadequate, not later than 5 years after
the date on which the final rule is published.

``(3)(A) NOTE: Deadlines. Regulations. Not later than January 1,
2015, with respect to the standards established under paragraph (1),
and, with respect to the standards established under paragraph (2), not
later than 5 years after the date on which the standards take effect,
the Secretary shall issue a final rule to determine whether amending the
applicable standards is technologically feasible and economically
justified.

``(B) Not later than 5 years after the effective date of any amended
standards under subparagraph (A) or the publication of a final rule
determining that amending the standards is not technologically feasible
or economically justified, the Secretary shall issue a final rule to
determine whether amending the standards established under paragraph (1)
or the amended standards, as applicable, is technologically feasible or
economically justified.
``(C) NOTE: Applicability. If the Secretary issues a final rule
under subparagraph (A) or (B) establishing amended standards, the final
rule shall provide that the amended standards apply to products
manufactured on or after the date that is--
``(i) 3 years after the date on which the final amended
standard is published; or
``(ii) if the Secretary determines, by rule, that 3 years is
inadequate, not later than 5 years after the date on which the
final amended standard is published.

``(4) A final rule issued under paragraph (2) or (3) shall establish
standards at the maximum level that is technically feasible and
economically justified, as provided in subsections (o) and (p) of
section 325.''.
(e) Standards for Commercial Clothes Washers.--Section 342 of the
Energy Policy and Conservation Act (42 U.S.C. 6313) (as amended by
subsection (d)) is amended by adding at the end the following:
``(e) Commercial Clothes Washers.--(1) Each commercial clothes
washer manufactured on or after January 1, 2007, shall have--
``(A) a Modified Energy Factor of at least 1.26; and
``(B) a Water Factor of not more than 9.5.

``(2)(A)(i) NOTE: Deadlines. Publication. Regulations. Not later
than January 1, 2010, the Secretary shall publish a final rule to
determine whether the standards established under paragraph (1) should
be amended.

``(ii) NOTE: Applicability. The rule published under clause (i)
shall provide that any amended standard shall apply to products
manufactured 3 years after the date on which the final amended standard
is published.

``(B)(i) Not later than January 1, 2015, the Secretary shall publish
a final rule to determine whether the standards established under
paragraph (1) should be amended.
``(ii) NOTE: Applicability. The rule published under clause (i)
shall provide that any amended standard shall apply to products
manufactured 3 years after the date on which the final amended standard
is published.''.

(f) Test Procedures.--Section 343 of the Energy Policy and
Conservation Act (42 U.S.C. 6314) is amended--
(1) in subsection (a)--
(A) in paragraph (4)--

[[Page 642]]
119 STAT. 642

(i) in subparagraph (A), by inserting ``very
large commercial package air conditioning and
heating equipment,'' after ``large commercial
package air conditioning and heating equipment,'';
and
(ii) in subparagraph (B), by inserting ``very
large commercial package air conditioning and
heating equipment,'' after ``large commercial
package air conditioning and heating equipment,'';
and
(B) by adding at the end the following:

``(6)(A)(i) In the case of commercial refrigerators, freezers, and
refrigerator-freezers, the test procedures shall be--
``(I) the test procedures determined by the Secretary to be
generally accepted industry testing procedures; or
``(II) rating procedures developed or recognized by the
ASHRAE or by the American National Standards Institute.

``(ii) In the case of self-contained refrigerators, freezers, and
refrigerator-freezers to which standards are applicable under paragraphs
(2) and (3) of section 342(c), the initial test procedures shall be the
ASHRAE 117 test procedure that is in effect on January 1, 2005.
``(B)(i) In the case of commercial refrigerators, freezers, and
refrigerator-freezers with doors covered by the standards adopted in
February 2002, by the California Energy Commission, the rating
temperatures shall be the integrated average temperature of 38 degrees F
(  plus-minus   2 degrees F) for refrigerator compartments and 0 degrees
F (  plus-minus   2 degrees F) for freezer compartments.
``(C) NOTE: Regulations. The Secretary shall issue a rule in
accordance with paragraphs (2) and (3) to establish the appropriate
rating temperatures for the other products for which standards will be
established under section 342(c)(4).

``(D) In establishing the appropriate test temperatures under this
subparagraph, the Secretary shall follow the procedures and meet the
requirements under section 323(e).
``(E)(i) NOTE: Deadline. Regulations. Not later than 180 days
after the publication of the new ASHRAE 117 test procedure, if the
ASHRAE 117 test procedure for commercial refrigerators, freezers, and
refrigerator-freezers is amended, the Secretary shall, by rule, amend
the test procedure for the product as necessary to ensure that the test
procedure is consistent with the amended ASHRAE 117 test procedure,
unless the Secretary makes a determination, by rule, and supported by
clear and convincing evidence, that to do so would not meet the
requirements for test procedures under paragraphs (2) and (3).

``(ii) NOTE: Notice. Federal Register, publication. If the
Secretary determines that 180 days is an insufficient period during
which to review and adopt the amended test procedure or rating procedure
under clause (i), the Secretary shall publish a notice in the Federal
Register stating the intent of the Secretary to wait not longer than 1
additional year before putting into effect an amended test procedure or
rating procedure.

``(F)(i) NOTE: Regulations. If a test procedure other than the
ASHRAE 117 test procedure is approved by the American National Standards
Institute, the Secretary shall, by rule--
``(I) review the relative strengths and weaknesses of the
new test procedure relative to the ASHRAE 117 test procedure;
and
``(II) based on that review, adopt one new test procedure
for use in the standards program.

``(ii) NOTE: Applicability. If a new test procedure is adopted
under clause (i)--

[[Page 643]]
119 STAT. 643

``(I) section 323(e) shall apply; and
``(II) subparagraph (B) shall apply to the adopted test
procedure.

``(7)(A) In the case of automatic commercial ice makers, the test
procedures shall be the test procedures specified in Air-Conditioning
and Refrigeration Institute Standard 810-2003, as in effect on January
1, 2005.
``(B)(i) NOTE: Regulations. Federal Register, publication. If
Air-Conditioning and Refrigeration Institute Standard 810-2003 is
amended, the Secretary shall amend the test procedures established in
subparagraph (A) as necessary to be consistent with the amended Air-
Conditioning and Refrigeration Institute Standard, unless the Secretary
determines, by rule, published in the Federal Register and supported by
clear and convincing evidence, that to do so would not meet the
requirements for test procedures under paragraphs (2) and (3).

``(ii) If the Secretary issues a rule under clause (i) containing a
determination described in clause (ii), the rule may establish an
amended test procedure for the product that meets the requirements of
paragraphs (2) and (3).
``(C) The Secretary shall comply with section 323(e) in establishing
any amended test procedure under this paragraph.
``(8) With respect to commercial clothes washers, the test
procedures shall be the same as the test procedures established by the
Secretary for residential clothes washers under section 325(g).''; and
(2) in subsection (d)(1), by inserting ``very large
commercial package air conditioning and heating equipment,
commercial refrigerators, freezers, and refrigerator-freezers,
automatic commercial ice makers, commercial clothes washers,''
after ``large commercial package air conditioning and heating
equipment,''.

(g) Labeling.--Section 344(e) of the Energy Policy and Conservation
Act (42 U.S.C. 6315(e)) is amended by inserting ``very large commercial
package air conditioning and heating equipment, commercial
refrigerators, freezers, and refrigerator-freezers, automatic commercial
ice makers, commercial clothes washers,'' after ``large commercial
package air conditioning and heating equipment,'' each place it appears.
(h) Administration, NOTE: Applicability. Penalties, Enforcement,
and Preemption.--Section 345 of the Energy Policy and Conservation Act
(42 U.S.C. 6316) is amended--
(1) in subsection (a)--
(A) in paragraph (7), by striking ``and'' at the
end;
(B) in paragraph (8), by striking the period at the
end and inserting ``; and''; and
(C) by adding at the end the following:
``(9) in the case of commercial clothes washers, section
327(b)(1) shall be applied as if the National Appliance Energy
Conservation Act of 1987 was the Energy Policy Act of 2005.'';
(2) in the first sentence of subsection (b)(1), by striking
``part B'' and inserting ``part A''; and
(3) by adding at the end the following:

``(d)(1) Except as provided in paragraphs (2) and (3), section 327
shall apply with respect to very large commercial package air
conditioning and heating equipment to the same extent and in the same
manner as section 327 applies under part A on the date of enactment of
this subsection.

[[Page 644]]
119 STAT. 644

``(2) NOTE: Effective date. Any State or local standard issued
before the date of enactment of this subsection shall not be preempted
until the standards established under section 342(a)(9) take effect on
January 1, 2010.

``(e)(1)(A) NOTE: Applicability. Subsections (a), (b), and (d)
of section 326, subsections (m) through (s) of section 325, and sections
328 through 336 shall apply with respect to commercial refrigerators,
freezers, and refrigerator-freezers to the same extent and in the same
manner as those provisions apply under part A.

``(B) In applying those provisions to commercial refrigerators,
freezers, and refrigerator-freezers, paragraphs (1), (2), (3), and (4)
of subsection (a) shall apply.
``(2)(A) Section 327 shall apply to commercial refrigerators,
freezers, and refrigerator-freezers for which standards are established
under paragraphs (2) and (3) of section 342(c) to the same extent and in
the same manner as those provisions apply under part A on the date of
enactment of this subsection, except that any State or local standard
issued before the date of enactment of this subsection shall not be
preempted until the standards established under paragraphs (2) and (3)
of section 342(c) take effect.
``(B) In applying section 327 in accordance with subparagraph (A),
paragraphs (1), (2), and (3) of subsection (a) shall apply.
``(3)(A) Section 327 shall apply to commercial refrigerators,
freezers, and refrigerator-freezers for which standards are established
under section 342(c)(4) to the same extent and in the same manner as the
provisions apply under part A on the date of publication of the final
rule by the Secretary, except that any State or local standard issued
before the date of publication of the final rule by the Secretary shall
not be preempted until the standards take effect.
``(B) In applying section 327 in accordance with subparagraph (A),
paragraphs (1), (2), and (3) of subsection (a) shall apply.
``(4)(A) If the Secretary does not issue a final rule for a specific
type of commercial refrigerator, freezer, or refrigerator-freezer within
the time frame specified in section 342(c)(5), subsections (b) and (c)
of section 327 shall not apply to that specific type of refrigerator,
freezer, or refrigerator-freezer for the period beginning on the date
that is 2 years after the scheduled date for a final rule and ending on
the date on which the Secretary publishes a final rule covering the
specific type of refrigerator, freezer, or refrigerator-freezer.
``(B) Any State or local standard issued before the date of
publication of the final rule shall not be preempted until the final
rule takes effect.
``(5)(A) NOTE: Certification. In the case of any commercial
refrigerator, freezer, or refrigerator-freezer to which standards are
applicable under paragraphs (2) and (3) of section 342(c), the Secretary
shall require manufacturers to certify, through an independent,
nationally recognized testing or certification program, that the
commercial refrigerator, freezer, or refrigerator-freezer meets the
applicable standard.

``(B) The Secretary shall, to the maximum extent practicable,
encourage the establishment of at least 2 independent testing and
certification programs.
``(C) NOTE: Records. As part of certification, information on
equipment energy use and interior volume shall be made available to the
Secretary.

``(f)(1)(A)(i) NOTE: Applicability. Except as provided in clause
(ii), section 327 shall apply to automatic commercial ice makers for
which standards

[[Page 645]]
119 STAT. 645

have been established under section 342(d)(1) to the same extent and in
the same manner as the section applies under part A on the date of
enactment of this subsection.
``(ii) Any State standard issued before the date of enactment of
this subsection shall not be preempted until the standards established
under section 342(d)(1) take effect.
``(B) In applying section 327 to the equipment under subparagraph
(A), paragraphs (1), (2), and (3) of subsection (a) shall apply.
``(2)(A)(i) Except as provided in clause (ii), section 327 shall
apply to automatic commercial ice makers for which standards have been
established under section 342(d)(2) to the same extent and in the same
manner as the section applies under part A on the date of publication of
the final rule by the Secretary.
``(ii) Any State standard issued before the date of publication of
the final rule by the Secretary shall not be preempted until the
standards established under section 342(d)(2) take effect.
``(B) In applying section 327 in accordance with subparagraph (A),
paragraphs (1), (2), and (3) of subsection (a) shall apply.
``(3)(A) If the Secretary does not issue a final rule for a specific
type of automatic commercial ice maker within the time frame specified
in section 342(d), subsections (b) and (c) of section 327 shall no
longer apply to the specific type of automatic commercial ice maker for
the period beginning on the day after the scheduled date for a final
rule and ending on the date on which the Secretary publishes a final
rule covering the specific type of automatic commercial ice maker.
``(B) Any State standard issued before the publication of the final
rule shall not be preempted until the standards established in the final
rule take effect.
``(4)(A) The Secretary shall monitor whether manufacturers are
reducing harvest rates below tested values for the purpose of bringing
non-complying equipment into compliance.
``(B) If the Secretary finds that there has been a substantial
amount of manipulation with respect to harvest rates under subparagraph
(A), the Secretary shall take steps to minimize the manipulation, such
as requiring harvest rates to be within 5 percent of tested values.
``(g)(1)(A) If the Secretary does not issue a final rule for
commercial clothes washers within the timeframe specified in section
342(e)(2), subsections (b) and (c) of section 327 shall not apply to
commercial clothes washers for the period beginning on the day after the
scheduled date for a final rule and ending on the date on which the
Secretary publishes a final rule covering commercial clothes washers.
``(B) Any State or local standard issued before the date on which
the Secretary publishes a final rule shall not be preempted until the
standards established under section 342(e)(2) take effect.
``(2) The Secretary shall undertake an educational program to inform
owners of laundromats, multifamily housing, and other sites where
commercial clothes washers are located about the new standard, including
impacts on washer purchase costs and options for recovering those costs
through coin collection.''.

SEC. 137. ENERGY LABELING.

(a) Rulemaking on Effectiveness of Consumer Product Labeling.--
Section 324(a)(2) of the Energy Policy and Conservation

[[Page 646]]
119 STAT. 646

Act (42 U.S.C. 6294(a)(2)) is amended by adding at the end the
following:
``(F)(i) NOTE: Deadlines. Not later than 90 days after the date
of enactment of this subparagraph, the Commission shall initiate a
rulemaking to consider--
``(I) the effectiveness of the consumer products labeling
program in assisting consumers in making purchasing decisions
and improving energy efficiency; and
``(II) changes to the labeling rules (including categorical
labeling) that would improve the effectiveness of consumer
product labels.

``(ii) Not later than 2 years after the date of enactment of this
subparagraph, the Commission shall complete the rulemaking initiated
under clause (i).
``(G)(i) NOTE: Deadline. Not later than 18 months after the date
of enactment of this subparagraph, the Commission shall issue by rule,
in accordance with this section, labeling requirements for the
electricity used by ceiling fans to circulate air in a room.

``(ii) NOTE: Applicability. The rule issued under clause (i)
shall apply to products manufactured after the later of--
``(I) January 1, 2009; or
``(II) the date that is 60 days after the final rule is
issued.''.

(b) Rulemaking on Labeling for Additional Products.--Section 324(a)
of the Energy Policy and Conservation Act (42 U.S.C. 6294(a)) is amended
by adding at the end the following:
``(5)(A) For covered products described in subsections (u) through
(ff) of section 325, after a test procedure has been prescribed under
section 323, the Secretary or the Commission, as appropriate, may
prescribe, by rule, under this section labeling requirements for the
products.
``(B) In the case of products to which TP-1 standards under section
325(y) apply, labeling requirements shall be based on the `Standard for
the Labeling of Distribution Transformer Efficiency' prescribed by the
National Electrical Manufacturers Association (NEMA TP-3) as in effect
on the date of enactment of this paragraph.
``(C) In the case of dehumidifiers covered under section 325(dd),
the Commission shall not require an `Energy Guide' label.''.

SEC. 138. INTERMITTENT ESCALATOR STUDY.

(a) In General.--The Administrator of General Services shall conduct
a study on the advantages and disadvantages of employing intermittent
escalators in the United States.
(b) Contents.--Such study shall include an analysis of--
(1) the energy end-cost savings derived from the use of
intermittent escalators;
(2) the cost savings derived from reduced maintenance
requirements; and
(3) such other issues as the Administrator considers
appropriate.

(c) Report to Congress.--Not later than 1 year after the date of
enactment of this Act, the Administrator shall transmit to Congress a
report on the results of the study.
(d) Definition.--For purposes of this section, the term
``intermittent escalator'' means an escalator that remains in a
stationary

[[Page 647]]
119 STAT. 647

position until it automatically operates at the approach of a passenger,
returning to a stationary position after the passenger completes
passage.

SEC. 139. ENERGY EFFICIENT ELECTRIC AND NATURAL GAS UTILITIES STUDY.

(a) In General.--Not NOTE: Deadline. later than 1 year after the
date of enactment of this Act, the Secretary, in consultation with the
National Association of Regulatory Utility Commissioners and the
National Association of State Energy Officials, shall conduct a study of
State and regional policies that promote cost-effective programs to
reduce energy consumption (including energy efficiency programs) that
are carried out by--
(1) utilities that are subject to State regulation; and
(2) nonregulated utilities.

(b) Consideration.--In conducting the study under subsection (a),
the Secretary shall take into consideration--
(1) performance standards for achieving energy use and
demand reduction targets;
(2) funding sources, including rate surcharges;
(3) infrastructure planning approaches (including energy
efficiency programs) and infrastructure improvements;
(4) the costs and benefits of consumer education programs
conducted by State and local governments and local utilities to
increase consumer awareness of energy efficiency technologies
and measures; and
(5) methods of--
(A) removing disincentives for utilities to
implement energy efficiency programs;
(B) encouraging utilities to undertake voluntary
energy efficiency programs; and
(C) ensuring appropriate returns on energy
efficiency programs.

(c) Report.--Not later than 1 year after the date of enactment of
this Act, the Secretary shall submit to Congress a report that
includes--
(1) the findings of the study; and
(2) any recommendations of the Secretary, including
recommendations on model policies to promote energy efficiency
programs.

SEC. 140. NOTE: 42 USC 15833. ENERGY EFFICIENCY PILOT PROGRAM.

(a) In General.--The Secretary shall establish a pilot program under
which the Secretary provides financial assistance to at least 3, but not
more than 7, States to carry out pilot projects in the States for--
(1) planning and adopting statewide programs that encourage,
for each year in which the pilot project is carried out--
(A) energy efficiency; and
(B) reduction of consumption of electricity or
natural gas in the State by at least 0.75 percent, as
compared to a baseline determined by the Secretary for
the period preceding the implementation of the program;
or
(2) for any State that has adopted a statewide program as of
the date of enactment of this Act, activities that reduce energy
consumption in the State by expanding and improving the program.

[[Page 648]]
119 STAT. 648

(b) Verification.--A State that receives financial assistance under
subsection (a)(1) shall submit to the Secretary independent verification
of any energy savings achieved through the statewide program.
(c) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $5,000,000 for each of fiscal
years 2006 through 2010, to remain available until expended.

SEC. 141. NOTE: 42 USC 15834. REPORT ON FAILURE TO COMPLY WITH
DEADLINES FOR NEW OR REVISED ENERGY CONSERVATION STANDARDS.

(a) Initial Report.--The Secretary shall submit a report to Congress
regarding each new or revised energy conservation or water use standard
which the Secretary has failed to issue in conformance with the
deadlines established in the Energy Policy and Conservation Act. Such
report shall state the reasons why the Secretary has failed to comply
with the deadline for issuances of the new or revised standard and set
forth the Secretary's plan for expeditiously prescribing such new or
revised standard. The Secretary's initial report shall be submitted not
later than 6 months following enactment of this Act and subsequent
reports shall be submitted whenever the Secretary determines that
additional deadlines for issuance of new or revised standards have been
missed.
(b) Implementation Report.--Every 6 months following the submission
of a report under subsection (a) until the adoption of a new or revised
standard described in such report, the Secretary shall submit to the
Congress an implementation report describing the Secretary's progress in
implementing the Secretary's plan or the issuance of the new or revised
standard.

Subtitle D--Public Housing

SEC. 151. PUBLIC HOUSING CAPITAL FUND.

Section 9 of the United States Housing Act of 1937 (42 U.S.C. 1437g)
is amended--
(1) in subsection (d)(1)--
(A) in subparagraph (I), by striking ``and'' at the
end;
(B) in subparagraph (J), by striking the period at
the end and inserting a semicolon; and
(C) by adding at the end the following new
subparagraphs:
``(K) improvement of energy and water-use efficiency
by installing fixtures and fittings that conform to the
American Society of Mechanical Engineers/American
National Standards Institute standards A112.19.2-1998
and A112.18.1-2000, or any revision thereto, applicable
at the time of installation, and by increasing energy
efficiency and water conservation by such other means as
the Secretary determines are appropriate; and
``(L) integrated utility management and capital
planning to maximize energy conservation and efficiency
measures.''; and
(2) in subsection (e)(2)(C)--
(A) by striking ``The'' and inserting the following:
``(i) In general.--The''; and
(B) by adding at the end the following:

[[Page 649]]
119 STAT. 649

``(ii) Third party contracts.--Contracts
described in clause (i) may include contracts for
equipment conversions to less costly utility
sources, projects with resident-paid utilities,
and adjustments to frozen base year consumption,
including systems repaired to meet applicable
building and safety codes and adjustments for
occupancy rates increased by rehabilitation.
``(iii) Term of contract.--The total term of a
contract described in clause (i) shall not exceed
20 years to allow longer payback periods for
retrofits, including windows, heating system
replacements, wall insulation, site-based
generation, advanced energy savings technologies,
including renewable energy generation, and other
such retrofits.''.

SEC. 152. NOTE: 42 USC 15841. ENERGY-EFFICIENT APPLIANCES.

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

SEC. 153. ENERGY EFFICIENCY STANDARDS.

Section 109 of the Cranston-Gonzalez National Affordable Housing Act
(42 U.S.C. 12709) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by striking ``1 year after the date of the
enactment of the Energy Policy Act of 1992'' and
inserting ``September 30, 2006'';
(ii) in subparagraph (A), by striking ``and''
at the end;
(iii) in subparagraph (B), by striking the
period at the end and inserting ``; and''; and
(iv) by adding at the end the following:
``(C) rehabilitation and new construction of public
and assisted housing funded by HOPE VI revitalization
grants under section 24 of the United States Housing Act
of 1937 (42 U.S.C. 1437v), where such standards are
determined to be cost effective by the Secretary of
Housing and Urban Development.''; and
(B) in paragraph (2), by inserting ``, and, with
respect to rehabilitation and new construction of public
and assisted housing funded by HOPE VI revitalization
grants under section 24 of the United States Housing Act
of 1937 (42 U.S.C. 1437v), the 2003 International Energy
Conservation Code'' after ``90.1-1989')'';
(2) in subsection (b)--
(A) by striking ``within 1 year after the date of
the enactment of the Energy Policy Act of 1992'' and
inserting ``by September 30, 2006''; and
(B) by inserting ``, and, with respect to
rehabilitation and new construction of public and
assisted housing funded by HOPE VI revitalization grants
under section 24 of the United States Housing Act of
1937 (42 U.S.C. 1437v), the 2003 International Energy
Conservation Code'' before the period at the end; and

[[Page 650]]
119 STAT. 650

(3) in subsection (c)--
(A) in the heading, by inserting ``and the
International Energy Conservation Code'' after ``Model
Energy Code''; and
(B) by inserting ``, or, with respect to
rehabilitation and new construction of public and
assisted housing funded by HOPE VI revitalization grants
under section 24 of the United States Housing Act of
1937 (42 U.S.C. 1437v), the 2003 International Energy
Conservation Code'' after ``1989''.

SEC. 154. NOTE: 42 USC 15842. ENERGY STRATEGY FOR HUD.

The Secretary of Housing and Urban Development shall develop and
implement an integrated strategy to reduce utility expenses through
cost-effective energy conservation and efficiency measures and energy
efficient design and construction of public and assisted housing. The
energy strategy shall include the development of energy reduction goals
and incentives for public housing agencies.
The NOTE: Reports. Deadlines. Secretary shall submit a report to
Congress, not later than 1 year after the date of the enactment of this
Act, on the energy strategy and the actions taken by the Department of
Housing and Urban Development to monitor the energy usage of public
housing agencies and shall submit an update every 2 years thereafter on
progress in implementing the strategy.

TITLE II--RENEWABLE ENERGY

Subtitle A--General Provisions

SEC. 201. NOTE: 42 USC 15851. ASSESSMENT OF RENEWABLE ENERGY
RESOURCES.

(a) Resource Assessment.--Not NOTE: Deadlines. later than 6
months after the date of enactment of this Act, and each year
thereafter, the Secretary shall review the available assessments of
renewable energy resources within the United States, including solar,
wind, biomass, ocean (including tidal, wave, current, and thermal),
geothermal, and hydroelectric energy resources, and undertake new
assessments as necessary, taking into account changes in market
conditions, available technologies, and other relevant factors.

(b) Contents of Reports.--Not later than 1 year after the date of
enactment of this Act, and each year thereafter, the Secretary shall
publish a report based on the assessment under subsection (a). The
report shall contain--
(1) a detailed inventory describing the available amount and
characteristics of the renewable energy resources; and
(2) such other information as the Secretary believes would
be useful in developing such renewable energy resources,
including descriptions of surrounding terrain, population and
load centers, nearby energy infrastructure, location of energy
and water resources, and available estimates of the costs needed
to develop each resource, together with an identification of any
barriers to providing adequate transmission for remote sources
of renewable energy resources to current and emerging markets,
recommendations for removing or addressing such barriers, and
ways to provide access to the grid that do not unfairly
disadvantage renewable or other energy producers.

[[Page 651]]
119 STAT. 651

(c) Authorization of Appropriations.--For NOTE: 42 USC 13311
note. the purposes of this section, there are authorized to be
appropriated to the Secretary $10,000,000 for each of fiscal years 2006
through 2010.

SEC. 202. RENEWABLE ENERGY PRODUCTION INCENTIVE.

(a) Incentive Payments.--Section 1212(a) of the Energy Policy Act of
1992 (42 U.S.C. 13317(a)) is amended--
(1) by striking the last sentence;
(2) by designating the first, second, and third sentences as
paragraphs (1), (2), and (3), respectively;
(3) in paragraph (3) (as so designated), by striking ``and
which satisfies'' and all that follows through ``deems
necessary''; and
(4) by adding at the end the following:

``(4)(A) Subject to subparagraph (B), if there are insufficient
appropriations to make full payments for electric production from all
qualified renewable energy facilities for a fiscal year, the Secretary
shall assign--
``(i) 60 percent of appropriated funds for the fiscal year
to facilities that use solar, wind, ocean (including tidal,
wave, current, and thermal), geothermal, or closed-loop
(dedicated energy crops) biomass technologies to generate
electricity; and
``(ii) 40 percent of appropriated funds for the fiscal year
to other projects.

``(B) After submitting to Congress an explanation of the reasons for
the alteration, the Secretary may alter the percentage requirements of
subparagraph (A).''.
(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, an Indian tribal government or subdivision
thereof, or a Native Corporation (as defined in section 3 of the
Alaska Native Claims Settlement Act (43 U.S.C. 1602)),''; and
(2) by inserting ``landfill gas, livestock methane, ocean
(including tidal, wave, current, and thermal),'' 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 ``before October 1,
2016''.
(d) Payment Period.--Section 1212(d) of the Energy Policy Act of
1992 (42 U.S.C. 13317(d)) is amended in the second sentence by inserting
``, or in which the Secretary determines that all necessary Federal and
State authorizations have been obtained to begin construction of the
facility'' after ``eligible for such payments''.
(e) Amount of Payment.--Section 1212(e)(1) of the Energy Policy Act
of 1992 (42 U.S.C. 13317(e)(1)) is amended in the first sentence by
inserting ``landfill gas, livestock methane, ocean (including tidal,
wave, current, and thermal),'' after ``wind, biomass,''.

[[Page 652]]
119 STAT. 652

(f) Termination of Authority.--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, 2026''.
(g) Authorization of Appropriations.--Section 1212 of the Energy
Policy Act of 1992 (42 U.S.C. 13317) is amended by striking subsection
(g) and inserting the following:
``(g) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section for
each of fiscal years 2006 through 2026, to remain available until
expended.''.

SEC. 203. NOTE: 42 USC 15852. FEDERAL PURCHASE REQUIREMENT.

(a) Requirement.--The NOTE: President. President, acting through
the Secretary, shall seek to ensure that, to the extent economically
feasible and technically practicable, of the total amount of electric
energy the Federal Government consumes during any fiscal year, the
following amounts shall be renewable energy:
(1) Not less than 3 percent in fiscal years 2007 through
2009.
(2) Not less than 5 percent in fiscal years 2010 through
2012.
(3) Not less than 7.5 percent in fiscal year 2013 and each
fiscal year thereafter.

(b) Definitions.--In this section:
(1) Biomass.--The term ``biomass'' means any lignin waste
material that is segregated from other waste materials and is
determined to be nonhazardous by the Administrator of the
Environmental Protection Agency and any solid, nonhazardous,
cellulosic material that is derived from--
(A) any of the following forest-related resources:
mill residues, precommercial thinnings, slash, and
brush, or nonmerchantable material;
(B) solid wood waste materials, including waste
pallets, crates, dunnage, manufacturing and construction
wood wastes (other than pressure-treated, chemically-
treated, or painted wood wastes), and landscape or
right-of-way tree trimmings, but not including municipal
solid waste (garbage), gas derived from the
biodegradation of solid waste, or paper that is commonly
recycled;
(C) agriculture wastes, including orchard tree
crops, vineyard, grain, legumes, sugar, and other crop
by-products or residues, and livestock waste nutrients;
or
(D) a plant that is grown exclusively as a fuel for
the production of electricity.
(2) Renewable energy.--The term ``renewable energy'' means
electric energy generated from solar, wind, biomass, landfill
gas, ocean (including tidal, wave, current, and thermal),
geothermal, municipal solid waste, or new hydroelectric
generation capacity achieved from increased efficiency or
additions of new capacity at an existing hydroelectric project.

(c) Calculation.--For purposes of determining compliance with the
requirement of this section, the amount of renewable energy shall be
doubled if--
(1) the renewable energy is produced and used on-site at a
Federal facility;

[[Page 653]]
119 STAT. 653

(2) the renewable energy is produced on Federal lands and
used at a Federal facility; or
(3) the renewable energy is produced on Indian land as
defined in title XXVI of the Energy Policy Act of 1992 (25
U.S.C. 3501 et seq.) and used at a Federal facility.

(d) Report.--Not later than April 15, 2007, and every 2 years
thereafter, the Secretary shall provide a report to Congress on the
progress of the Federal Government in meeting the goals established by
this section.

SEC. 204. USE OF PHOTOVOLTAIC ENERGY IN PUBLIC BUILDINGS.

(a) In General.--Subchapter VI of chapter 31 of title 40, United
States Code, is amended by adding at the end the following:

``Sec. 3177. Use of photovoltaic energy in public buildings

``(a) Photovoltaic Energy Commercialization Program.--
``(1) In general.--The Administrator of General Services may
establish a photovoltaic energy commercialization program for
the procurement and installation of photovoltaic solar electric
systems for electric production in new and existing public
buildings.
``(2) Purposes.--The purposes of the program shall be to
accomplish the following:
``(A) To accelerate the growth of a commercially
viable photovoltaic industry to make this energy system
available to the general public as an option which can
reduce the national consumption of fossil fuel.
``(B) To reduce the fossil fuel consumption and
costs of the Federal Government.
``(C) To attain the goal of installing solar energy
systems in 20,000 Federal buildings by 2010, as
contained in the Federal Government's Million Solar Roof
Initiative of 1997.
``(D) To stimulate the general use within the
Federal Government of life-cycle costing and innovative
procurement methods.
``(E) To develop program performance data to support
policy decisions on future incentive programs with
respect to energy.
``(3) Acquisition of photovoltaic solar electric systems.--
``(A) In general.--The program shall provide for the
acquisition of photovoltaic solar electric systems and
associated storage capability for use in public
buildings.
``(B) Acquisition levels.--The acquisition of
photovoltaic electric systems shall be at a level
substantial enough to allow use of low-cost production
techniques with at least 150 megawatts (peak) cumulative
acquired during the 5 years of the program.
``(4) Administration.--The Administrator shall administer
the program and shall--
``(A) issue such rules and regulations as may be
appropriate to monitor and assess the performance and
operation of photovoltaic solar electric systems
installed pursuant to this subsection;
``(B) NOTE: Reports. develop innovative
procurement strategies for the acquisition of such
systems; and

[[Page 654]]
119 STAT. 654

``(C) transmit to Congress an annual report on the
results of the program.

``(b) Photovoltaic Systems Evaluation Program.--
``(1) In general.--Not NOTE: Deadline. later than 60
days after the date of enactment of this section, the
Administrator shall establish a photovoltaic solar energy
systems evaluation program to evaluate such photovoltaic solar
energy systems as are required in public buildings.
``(2) Program requirement.--In evaluating photovoltaic solar
energy systems under the program, the Administrator shall ensure
that such systems reflect the most advanced technology.

``(c) Authorization of Appropriations.--
``(1) Photovoltaic energy commercialization program.--There
are authorized to be appropriated to carry out subsection (a)
$50,000,000 for each of fiscal years 2006 through 2010. Such
sums shall remain available until expended.
``(2) Photovoltaic systems evaluation program.--There are
authorized to be appropriated to carry out subsection (b)
$10,000,000 for each of fiscal years 2006 through 2010. Such
sums shall remain available until expended.''.

(b) Conforming Amendment.--The table of sections for the National
Energy Conservation Policy Act is amended by inserting after the item
relating to section 569 the following:

``Sec. 570. Use of photovoltaic energy in public buildings.''.

SEC. 205. BIOBASED PRODUCTS.

Section 9002(c)(1) of the Farm Security and Rural Investment Act of
2002 (7 U.S.C. 8102(c)(1)) is amended by inserting ``or such items that
comply with the regulations issued under section 103 of Public Law 100-
556 (42 U.S.C. 6914b-1)'' after ``practicable''.

SEC. 206. RENEWABLE ENERGY SECURITY.

(a) Weatherization Assistance.--Section 415(c) of the Energy
Conservation and Production Act (42 U.S.C. 6865(c)) is amended--
(1) in paragraph (1), by striking ``in paragraph (3)'' and
inserting ``in paragraphs (3) and (4)'';
(2) in paragraph (3), by striking ``$2,500 per dwelling unit
average provided in paragraph (1)'' and inserting ``dwelling
unit averages provided in paragraphs (1) and (4)''; and
(3) by adding at the end the following new paragraphs:

``(4) The expenditure of financial assistance provided under this
part for labor, weatherization materials, and related matters for a
renewable energy system shall not exceed an average of $3,000 per
dwelling unit.
``(5)(A) NOTE: Regulations. The Secretary shall by regulations--
``(i) establish the criteria which are to be used in
prescribing performance and quality standards under paragraph
(6)(A)(ii) or in specifying any form of renewable energy under
paragraph (6)(A)(i)(I); and
``(ii) establish a procedure under which a manufacturer of
an item may request the Secretary to certify that the item will
be treated, for purposes of this paragraph, as a renewable
energy system.

``(B) The Secretary shall make a final determination with respect to
any request filed under subparagraph (A)(ii) within 1

[[Page 655]]
119 STAT. 655

year after the filing of the request, together with any information
required to be filed with such request under subparagraph (A)(ii).
``(C) NOTE: Reports. Each month the Secretary shall publish a
report of any request under subparagraph (A)(ii) which has been denied
during the preceding month and the reasons for the denial.

``(D) The Secretary shall not specify any form of renewable energy
under paragraph (6)(A)(i)(I) unless the Secretary determines that--
``(i) there will be a reduction in oil or natural gas
consumption as a result of such specification;
``(ii) such specification will not result in an increased
use of any item which is known to be, or reasonably suspected to
be, environmentally hazardous or a threat to public health or
safety; and
``(iii) available Federal subsidies do not make such
specification unnecessary or inappropriate (in the light of the
most advantageous allocation of economic resources).

``(6) In this subsection--
``(A) the term `renewable energy system' means a system
which--
``(i) when installed in connection with a dwelling,
transmits or uses--
``(I) solar energy, energy derived from the
geothermal deposits, energy derived from biomass,
or any other form of renewable energy which the
Secretary specifies by regulations, for the
purpose of heating or cooling such dwelling or
providing hot water or electricity for use within
such dwelling; or
``(II) wind energy for nonbusiness residential
purposes;
``(ii) meets the performance and quality standards
(if any) which have been prescribed by the Secretary by
regulations;
``(iii) in the case of a combustion rated system,
has a thermal efficiency rating of at least 75 percent;
and
``(iv) in the case of a solar system, has a thermal
efficiency rating of at least 15 percent; and
``(B) the term `biomass' means any organic matter that is
available on a renewable or recurring basis, including
agricultural crops and trees, wood and wood wastes and residues,
plants (including aquatic plants), grasses, residues, fibers,
and animal wastes, municipal wastes, and other waste
materials.''.

(b) District Heating and Cooling Programs.--Section 172 of the
Energy Policy Act of 1992 (42 U.S.C. 13451 note) is amended--
(1) in subsection (a)--
(A) by striking ``and'' at the end of paragraph (3);
(B) by striking the period at the end of paragraph
(4) and inserting ``; and''; and
(C) by adding at the end the following new
paragraph:
``(5) evaluate the use of renewable energy systems (as such
term is defined in section 415(c) of the Energy Conservation and
Production Act (42 U.S.C. 6865(c))) in residential buildings.'';
and
(2) in subsection (b), by striking ``this Act'' and
inserting ``the Energy Policy Act of 2005''.

(c) Rebate NOTE: 42 USC 15853. Program.--

[[Page 656]]
119 STAT. 656

(1) Establishment.--The Secretary shall establish a program
providing rebates for consumers for expenditures made for the
installation of a renewable energy system in connection with a
dwelling unit or small business.
(2) Amount of rebate.--Rebates provided under the program
established under paragraph (1) shall be in an amount not to
exceed the lesser of--
(A) 25 percent of the expenditures described in
paragraph (1) made by the consumer; or
(B) $3,000.
(3) Definition.--For purposes of this subsection, the term
``renewable energy system'' has the meaning given that term in
section 415(c)(6)(A) of the Energy Conservation and Production
Act (42 U.S.C. 6865(c)(6)(A)), as added by subsection (a)(3) of
this section.
(4) Authorization of appropriations.--There are authorized
to be appropriated to the Secretary for carrying out this
subsection, to remain available until expended--
(A) $150,000,000 for fiscal year 2006;
(B) $150,000,000 for fiscal year 2007;
(C) $200,000,000 for fiscal year 2008;
(D) $250,000,000 for fiscal year 2009; and
(E) $250,000,000 for fiscal year 2010.

(d) Renewable Fuel Inventory.--
Not NOTE: Deadline. Reports. later than 180 days after the date of
enactment of this Act, the Secretary shall transmit to Congress a report
containing--
(1) an inventory of renewable fuels available for consumers;
and
(2) a projection of future inventories of renewable fuels
based on the incentives provided in this section.

SEC. 207. INSTALLATION OF PHOTOVOLTAIC SYSTEM.

There NOTE: Appropriation authorization. is authorized to be
appropriated to the General Services Administration to install a
photovoltaic system, as set forth in the Sun Wall Design Project, for
the headquarters building of the Department of Energy located at 1000
Independence Avenue Southwest in the District of Columbia, commonly know
as the Forrestal Building, $20,000,000 for fiscal year 2006. Such sums
shall remain available until expended.

SEC. 208. NOTE: 42 USC 15854. SUGAR CANE ETHANOL PROGRAM.

(a) Definition of Program.--In this section, the term ``program''
means the Sugar Cane Ethanol Program established by subsection (b).
(b) Establishment.--There is established within the Environmental
Protection Agency a program to be known as the ``Sugar Cane Ethanol
Program''.
(c) Project.--
(1) In general.--Subject to the availability of
appropriations under subsection (d), in carrying out the
program, the Administrator of the Environmental Protection
Agency shall establish a project that is--
(A) carried out in multiple States--
(i) in each of which is produced cane sugar
that is eligible for loans under section 156 of
the Federal Agriculture Improvement and Reform Act
of 1996 (7 U.S.C. 7272), or a similar subsequent
authority; and

[[Page 657]]
119 STAT. 657

(ii) at the option of each such State, that
have an incentive program that requires the use of
ethanol in the State; and
(B) designed to study the production of ethanol from
cane sugar, sugarcane, and sugarcane byproducts.
(2) Requirements.--A project described in paragraph (1)
shall--
(A) be limited to sugar producers and the production
of ethanol in the States of Florida, Louisiana, Texas,
and Hawaii, divided equally among the States, to
demonstrate that the process may be applicable to cane
sugar, sugarcane, and sugarcane byproducts;
(B) include information on the ways in which the
scale of production may be replicated once the sugar
cane industry has located sites for, and constructed,
ethanol production facilities; and
(C) not last more than 3 years.

(d) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $36,000,000, to remain available
until expended.

SEC. 209. RURAL AND REMOTE COMMUNITY ELECTRIFICATION GRANTS.

The Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601
et seq.) is amended in title VI by adding at the end the following:

``SEC. 609. NOTE: 7 USC 918c. RURAL AND REMOTE COMMUNITIES
ELECTRIFICATION GRANTS.

``(a) Definitions.--In this section:
``(1) The term `eligible grantee' means a local government
or municipality, peoples' utility district, irrigation district,
and cooperative, nonprofit, or limited-dividend association in a
rural area.
``(2) The term `incremental hydropower' means additional
generation achieved from increased efficiency after January 1,
2005, at a hydroelectric dam that was placed in service before
January 1, 2005.
``(3) The term `renewable energy' means electricity
generated from--
``(A) a renewable energy source; or
``(B) hydrogen, other than hydrogen produced from a
fossil fuel, that is produced from a renewable energy
source.
``(4) The term `renewable energy source' means--
``(A) wind;
``(B) ocean waves;
``(C) biomass;
``(D) solar;
``(E) landfill gas;
``(F) incremental hydropower;
``(G) livestock methane; or
``(H) geothermal energy.
``(5) The term `rural area' means a city, town, or
unincorporated area that has a population of not more than
10,000 inhabitants.

``(b) Grants.--The Secretary, in consultation with the Secretary of
Agriculture and the Secretary of the Interior, may provide grants under
this section to eligible grantees for the purpose of--

[[Page 658]]
119 STAT. 658

``(1) increasing energy efficiency, siting or upgrading
transmission and distribution lines serving rural areas; or
``(2) providing or modernizing electric generation
facilities that serve rural areas.

``(c) Grant Administration.--(1) The Secretary shall make grants
under this section based on a determination of cost-effectiveness and
the most effective use of the funds to achieve the purposes described in
subsection (b).
``(2) For each fiscal year, the Secretary shall allocate grant funds
under this section equally between the purposes described in paragraphs
(1) and (2) of subsection (b).
``(3) In making grants for the purposes described in subsection
(b)(2), the Secretary shall give preference to renewable energy
facilities.
``(d) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary to carry out this section $20,000,000 for
each of fiscal years 2006 through 2012.''.

SEC. 210. NOTE: 42 USC 15855. GRANTS TO IMPROVE THE COMMERCIAL VALUE
OF FOREST BIOMASS FOR ELECTRIC ENERGY, USEFUL HEAT,
TRANSPORTATION FUELS, AND OTHER COMMERCIAL PURPOSES.

(a) Definitions.--In this section:
(1) Biomass.--The term ``biomass'' means nonmerchantable
materials or precommercial thinnings that are byproducts of
preventive treatments, such as trees, wood, brush, thinnings,
chips, and slash, that are removed--
(A) to reduce hazardous fuels;
(B) to reduce or contain disease or insect
infestation; or
(C) to restore forest health.
(2) Indian tribe.--The term ``Indian tribe'' has the meaning
given the term in section 4(e) of the Indian Self-Determination
and Education Assistance Act (25 U.S.C. 450b(e)).
(3) Nonmerchantable.--For purposes of subsection (b), the
term ``nonmerchantable'' means that portion of the byproducts of
preventive treatments that would not otherwise be used for
higher value products.
(4) Person.--The term ``person'' includes--
(A) an individual;
(B) a community (as determined by the Secretary
concerned);
(C) an Indian tribe;
(D) a small business or a corporation that is
incorporated in the United States; and
(E) a nonprofit organization.
(5) Preferred community.--The term ``preferred community''
means--
(A) any Indian tribe;
(B) any town, township, municipality, or other
similar unit of local government (as determined by the
Secretary concerned) that--
(i) has a population of not more than 50,000
individuals; and
(ii) the Secretary concerned, in the sole
discretion of the Secretary concerned, determines
contains or is located near Federal or Indian
land, the condition of

[[Page 659]]
119 STAT. 659

which is at significant risk of catastrophic
wildfire, disease, or insect infestation or which
suffers from disease or insect infestation; or
(C) any county that--
(i) is not contained within a metropolitan
statistical area; and
(ii) the Secretary concerned, in the sole
discretion of the Secretary concerned, determines
contains or is located near Federal or Indian
land, the condition of which is at significant
risk of catastrophic wildfire, disease, or insect
infestation or which suffers from disease or
insect infestation.
(6) Secretary concerned.--The term ``Secretary concerned''
means the Secretary of Agriculture or the Secretary of the
Interior.

(b) Biomass Commercial Use Grant Program.--
(1) In general.--The Secretary concerned may make grants to
any person in a preferred community that owns or operates a
facility that uses biomass as a raw material to produce electric
energy, sensible heat, or transportation fuels to offset the
costs incurred to purchase biomass for use by such facility.
(2) Grant amounts.--A grant under this subsection may not
exceed $20 per green ton of biomass delivered.
(3) Monitoring of grant recipient activities.--As a
condition of a grant under this subsection, the grant recipient
shall keep such records as the Secretary concerned may require
to fully and correctly disclose the use of the grant funds and
all transactions involved in the purchase of biomass. Upon
notice by a representative of the Secretary concerned, the grant
recipient shall afford the representative reasonable access to
the facility that purchases or uses biomass and an opportunity
to examine the inventory and records of the facility.

(c) Improved Biomass Use Grant Program.--
(1) In general.--The Secretary concerned may make grants to
persons to offset the cost of projects to develop or research
opportunities to improve the use of, or add value to, biomass.
In making such grants, the Secretary concerned shall give
preference to persons in preferred communities.
(2) Selection.--The Secretary concerned shall select a grant
recipient under paragraph (1) after giving consideration to--
(A) the anticipated public benefits of the project,
including the potential to develop thermal or electric
energy resources or affordable energy;
(B) opportunities for the creation or expansion of
small businesses and micro-businesses;
(C) the potential for new job creation;
(D) the potential for the project to improve
efficiency or develop cleaner technologies for biomass
utilization; and
(E) the potential for the project to reduce the
hazardous fuels from the areas in greatest need of
treatment.
(3) Grant amount.--A grant under this subsection may not
exceed $500,000.

(d) Authorization of Appropriations.--There are authorized to be
appropriated $50,000,000 for each of the fiscal years 2006 through 2016
to carry out this section.

[[Page 660]]
119 STAT. 660

(e) Report.--Not later than October 1, 2010, the Secretary of
Agriculture, in consultation with the Secretary of the Interior, shall
submit to the Committee on Energy and Natural Resources and the
Committee on Agriculture, Nutrition, and Forestry of the Senate, and the
Committee on Resources, the Committee on Energy and Commerce, and the
Committee on Agriculture of the House of Representatives, a report
describing the results of the grant programs authorized by this section.
The report shall include the following:
(1) An identification of the size, type, and use of biomass
by persons that receive grants under this section.
(2) The distance between the land from which the biomass was
removed and the facility that used the biomass.
(3) The economic impacts, particularly new job creation,
resulting from the grants to and operation of the eligible
operations.

SEC. 211. SENSE OF CONGRESS REGARDING GENERATION CAPACITY OF ELECTRICITY
FROM RENEWABLE ENERGY RESOURCES ON PUBLIC LANDS.

It is the sense of the Congress that the Secretary of the Interior
should, before the end of the 10-year period beginning on the date of
enactment of this Act, seek to have approved non-hydropower renewable
energy projects located on the public lands with a generation capacity
of at least 10,000 megawatts of electricity.

Subtitle B--Geothermal NOTE: John Rishel Geothermal Steam Act
Amendments of 2005. Energy

SEC. 221. NOTE: 30 USC 1001 note. SHORT TITLE.

This subtitle may be cited as the ``John Rishel Geothermal Steam Act
Amendments of 2005''.

SEC. 222. COMPETITIVE LEASE SALE REQUIREMENTS.

Section 4 of the Geothermal Steam Act of 1970 (30 U.S.C. 1003) is
amended to read as follows:

``SEC. 4. LEASING PROCEDURES.

``(a) Nominations.--The Secretary shall accept nominations of land
to be leased at any time from qualified companies and individuals under
this Act.
``(b) Competitive Lease Sale Required.--
``(1) In general.--Except as otherwise specifically provided
by this Act, all land to be leased that is not subject to
leasing under subsection (c) shall be leased as provided in this
subsection to the highest responsible qualified bidder, as
determined by the Secretary.
``(2) Competitive lease sales.--The Secretary shall hold a
competitive lease sale at least once every 2 years for land in a
State that has nominations pending under subsection (a) if the
land is otherwise available for leasing.
``(3) Lands subject to mining claims.--Lands that are
subject to a mining claim for which a plan of operations has
been approved by the relevant Federal land management agency may
be available for noncompetitive leasing under this section to
the mining claim holder.

``(c) Noncompetitive Leasing.--The Secretary shall make available
for a period of 2 years for noncompetitive leasing any

[[Page 661]]
119 STAT. 661

tract for which a competitive lease sale is held, but for which the
Secretary does not receive any bids in a competitive lease sale.
``(d) Pending Lease Applications.--
``(1) In general.--It shall be a priority for the Secretary,
and for the Secretary of Agriculture with respect to National
Forest Systems land, to ensure timely completion of
administrative actions, including amendments to applicable
forest plans and resource management plans, necessary to process
applications for geothermal leasing pending on the date of
enactment of this subsection. All future forest plans and
resource management plans for areas with high geothermal
resource potential shall consider geothermal leasing and
development.
``(2) Administration.--An application described in paragraph
(1) and any lease issued pursuant to the application--
``(A) except as provided in subparagraph (B), shall
be subject to this section as in effect on the day
before the date of enactment of this paragraph; or
``(B) at the election of the applicant, shall be
subject to this section as in effect on the effective
date of this paragraph.

``(e) Leases Sold as a Block.--If information is available to the
Secretary indicating a geothermal resource that could be produced as 1
unit can reasonably be expected to underlie more than 1 parcel to be
offered in a competitive lease sale, the parcels for such a resource may
be offered for bidding as a block in the competitive lease sale.''.

SEC. 223. DIRECT USE.

(a) Fees for Direct Use.--Section 5 of the Geothermal Steam Act of
1970 (30 U.S.C. 1004) is amended--
(1) in subsection (c), by redesignating paragraphs (1) and
(2) as subparagraphs (A) and (B), respectively;
(2) by redesignating subsections (a) through (d) as
paragraphs (1) through (4), respectively;
(3) by inserting ``(a) In General.--'' after ``Sec. 5.'';
and
(4) by adding at the end the following:

``(b) Direct Use.--
``(1) In general.--
Notwithstanding NOTE: Fees. subsection (a)(1), the Secretary
shall establish a schedule of fees, in lieu of royalties for
geothermal resources, that a lessee or its affiliate--
``(A) uses for a purpose other than the commercial
generation of electricity; and
``(B) does not sell.
``(2) Schedule of fees.--The schedule of fees--
``(A) may be based on the quantity or thermal
content, or both, of geothermal resources used;
``(B) shall ensure a fair return to the United
States for use of the resource; and
``(C) shall encourage development of the resource.
``(3) State, tribal, or local governments.--If a State,
tribal, or local government is the lessee and uses geothermal
resources without sale and for public purposes other than
commercial generation of electricity, the Secretary shall charge
only a nominal fee for use of the resource.

[[Page 662]]
119 STAT. 662

``(4) Final regulation.--In issuing any final regulation
establishing a schedule of fees under this subsection, the
Secretary shall seek--
``(A) to provide lessees with a simplified
administrative system;
``(B) to facilitate development of direct use of
geothermal resources; and
``(C) to contribute to sustainable economic
development opportunities in the area.''.

(b) Leasing for Direct Use.--Section 4 of the Geothermal Steam Act
of 1970 (30 U.S.C. 1003) (as amended by section 222) is further amended
by adding at the end the following:
``(f) Leasing for Direct Use of Geothermal Resources.--
Notwithstanding subsection (b), the Secretary may identify areas in
which the land to be leased under this Act exclusively for direct use of
geothermal resources, without sale for purposes other than commercial
generation of electricity, may be leased to any qualified applicant that
first applies for such a lease under regulations issued by the
Secretary, if the Secretary--
``(1) NOTE: Notice. Deadline. publishes a notice of the
land proposed for leasing not later than 90 days before the date
of the issuance of the lease;
``(2) does not receive during the 90-day period beginning on
the date of the publication any nomination to include the land
concerned in the next competitive lease sale; and
``(3) determines there is no competitive interest in the
geothermal resources in the land to be leased.

``(g) Area Subject to Lease for Direct Use.--
``(1) In general.--Subject to paragraph (2), a geothermal
lease for the direct use of geothermal resources shall cover not
more than the quantity of acreage determined by the Secretary to
be reasonably necessary for the proposed use.
``(2) Limitations.--The quantity of acreage covered by the
lease shall not exceed the limitations established under section
7.''.

(c) Application of New Lease Terms.--The NOTE: 30 USC 1004
note. schedule of fees established under the amendment made by
subsection (a)(4) shall apply with respect to payments under a lease
converted under this subsection that are due and owing, and have been
paid, on or after July 16, 2003. This subsection shall not require the
refund of royalties paid to a State under section 20 of the Geothermal
Steam Act of 1970 (30 U.S.C. 1019) prior to the date of enactment of
this Act.

SEC. 224. ROYALTIES AND NEAR-TERM PRODUCTION INCENTIVES.

(a) Royalty.--Section 5 of the Geothermal Steam Act of 1970 (30
U.S.C. 1004) is further amended--
(1) in subsection (a) by striking paragraph (1) and
inserting the following:
``(1) a royalty on electricity produced using geothermal
resources, other than direct use of geothermal resources, that
shall be--
``(A) not less than 1 percent and not more than 2.5
percent of the gross proceeds from the sale of
electricity produced from such resources during the
first 10 years of production under the lease; and

[[Page 663]]
119 STAT. 663

``(B) not less than 2 and not more than 5 percent of
the gross proceeds from the sale of electricity produced
from such resources during each year after such 10-year
period;''; and
(2) by adding at the end the following:

``(c) Final Regulation Establishing Royalty Rates.--In issuing any
final regulation establishing royalty rates under this section, the
Secretary shall seek--
``(1) to provide lessees a simplified administrative system;
``(2) to encourage new development; and
``(3) to achieve the same level of royalty revenues over a
10-year period as the regulation in effect on the date of
enactment of this subsection.

``(d) Credits for In-Kind Payments of Electricity.--The Secretary
may provide to a lessee a credit against royalties owed under this Act,
in an amount equal to the value of electricity provided under contract
to a State or county government that is entitled to a portion of such
royalties under section 20 of this Act, section 35 of the Mineral
Leasing Act (30 U.S.C. 191), except as otherwise provided by this
section, or section 6 of the Mineral Leasing Act for Acquired Lands (30
U.S.C. 355), if--
``(1) the Secretary has approved in advance the contract
between the lessee and the State or county government for such
in-kind payments;
``(2) the contract establishes a specific methodology to
determine the value of such credits; and
``(3) the maximum credit will be equal to the royalty value
owed to the State or county that is a party to the contract and
the electricity received will serve as the royalty payment from
the Federal Government to that entity.''.

(b) Disposal of Moneys From Sales, Bonuses, Royalties, and Rents.--
Section 20 of the Geothermal Steam Act of 1970 (30 U.S.C. 1019) is
amended to read as follows:

``SEC. 20. DISPOSAL OF MONEYS FROM SALES, BONUSES, RENTALS, AND
ROYALTIES.

``(a) In General.--Except with respect to lands in the State of
Alaska, all monies received by the United States from sales, bonuses,
rentals, and royalties under this Act shall be paid into the Treasury of
the United States. Of amounts deposited under this subsection, subject
to the provisions of subsection (b) of section 35 of the Mineral Leasing
Act (30 U.S.C. 191(b)) and section 5(a)(2) of this Act--
``(1) 50 percent shall be paid to the State within the
boundaries of which the leased lands or geothermal resources are
or were located; and
``(2) 25 percent shall be paid to the county within the
boundaries of which the leased lands or geothermal resources are
or were located.

``(b) Use of Payments.--Amounts paid to a State or county under
subsection (a) shall be used consistent with the terms of section 35 of
the Mineral Leasing Act (30 U.S.C. 191).''.
(c) Near-Term Production NOTE: 30 USC 1004 note. Incentive for
Existing Leases.--
(1) In general.--Notwithstanding section 5(a) of the
Geothermal Steam Act of 1970, the royalty required to be paid
shall be 50 percent of the amount of the royalty otherwise
required, on any lease issued before the date of enactment

[[Page 664]]
119 STAT. 664

of this Act that does not convert to new royalty terms under
subsection (e)--
(A) with respect to commercial production of energy
from a facility that begins such production in the 6-
year period beginning on the date of enactment of this
Act; or
(B) on qualified expansion geothermal energy.
(2) 4-year application.--Paragraph (1) applies only to new
commercial production of energy from a facility in the first 4
years of such production.

(d) Definition of Qualified Expansion Geothermal Energy.--In this
section, the term ``qualified expansion geothermal energy'' means
geothermal energy produced from a generation facility for which--
(1) the production is increased by more than 10 percent as a
result of expansion of the facility carried out in the 6-year
period beginning on the date of enactment of this Act; and
(2) such production increase is greater than 10 percent of
the average production by the facility during the 5-year period
preceding the expansion of the facility (as such average is
adjusted to reflect any trend in changes in production during
that period).

(e) Royalty Under Existing Leases.--
(1) In general.--Any lessee under a lease issued under the
Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) before the
date of enactment of this Act may, within the time period
specified in paragraph (2), submit to the Secretary of the
Interior a request to modify the terms of the lease relating to
payment of royalties to provide--
(A) in the case of a lease that meets the
requirements of subsection (b) of section 5 of the
Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as
amended by section 223), that royalties be based on the
schedule of fees established under that section; and
(B) in the case of any other lease, that royalties
be computed on a percentage of the gross proceeds from
the sale of electricity, at a royalty rate that is
expected to yield total royalty payments equivalent to
payments that would have been received for comparable
production under the royalty rate in effect for the
lease before the date of enactment of this subsection.
(2) Timing.--A NOTE: Deadlines. request for a
modification under paragraph (1) shall be submitted to the
Secretary of the Interior by the date that is not later than--
(A) in the case of a lease for direct use, 18 months
after the effective date of the schedule of fees
established by the Secretary of the Interior under
section 5 of the Geothermal Steam Act of 1970 (30 U.S.C.
1004); or
(B) in the case of any other lease, 18 months after
the effective date of the final regulation issued under
subsection (a).
(3) Application of modification.--If the lessee requests
modification of a lease under paragraph (1)--
(A) NOTE: Deadline. the Secretary of the
Interior shall, within 180 days after the receipt of the
request for modification, modify the lease to comply
with--

[[Page 665]]
119 STAT. 665

(i) in the case of a lease for direct use, the
schedule of fees established by the Secretary
under section 5 of the Geothermal Steam Act of
1970 (30 U.S.C. 1004); or
(ii) in the case of any other lease, the
royalty for the lease established under paragraph
(1)(B); and
(B) the modification shall apply to any use of
geothermal resources to which subsection (a) applies
that occurs after the date of the modification.
(4) Consultation.--The Secretary of the Interior shall
consult with the State and local governments affected by any
proposed changes in lease royalty terms under this subsection.

SEC. 225. NOTE: 42 USC 15871. COORDINATION OF GEOTHERMAL LEASING AND
PERMITTING ON FEDERAL LANDS.

(a) In General.--Not NOTE: Deadline. Memorandum. later than 180
days after the date of enactment of this section, the Secretary of the
Interior and the Secretary of Agriculture shall enter into and submit to
Congress a memorandum of understanding in accordance with this section,
the Geothermal Steam Act of 1970 (as amended by this Act), and other
applicable laws, regarding coordination of leasing and permitting for
geothermal development of public lands and National Forest System lands
under their respective jurisdictions.

(b) Lease and Permit Applications.--The memorandum of understanding
shall--
(1) establish an administrative procedure for processing
geothermal lease applications, including lines of authority,
steps in application processing, and time limits for application
procession;
(2) establish a 5-year program for geothermal leasing of
lands in the National Forest System, and a process for updating
that program every 5 years; and
(3) NOTE: Effective date. establish a program for
reducing the backlog of geothermal lease application pending on
January 1, 2005, by 90 percent within the 5-year period
beginning on the date of enactment of this Act, including, as
necessary, by issuing leases, rejecting lease applications for
failure to comply with the provisions of the regulations under
which they were filed, or determining that an original applicant
(or the applicant's assigns, heirs, or estate) is no longer
interested in pursuing the lease application.

(c) Data Retrieval System.--The memorandum of understanding shall
establish a joint data retrieval system that is capable of tracking
lease and permit applications and providing to the applicant information
as to their status within the Departments of the Interior and
Agriculture, including an estimate of the time required for
administrative action.

SEC. 226. NOTE: Deadline. 42 USC 15872. ASSESSMENT OF GEOTHERMAL
ENERGY POTENTIAL.

Not later than 3 years after the date of enactment of this Act and
thereafter as the availability of data and developments in technology
warrants, the Secretary of the Interior, acting through the Director of
the United States Geological Survey and in cooperation with the States,
shall--
(1) update the Assessment of Geothermal Resources made
during 1978; and
(2) submit to Congress the updated assessment.

[[Page 666]]
119 STAT. 666

SEC. 227. COOPERATIVE OR UNIT PLANS.

Section 18 of the Geothermal Steam Act of 1970 (30 U.S.C. 1017) is
amended to read as follows:

``SEC. 18. UNIT AND COMMUNITIZATION AGREEMENTS.

``(a) Adoption of Units by Lessees.--
``(1) In general.--For the purpose of more properly
conserving the natural resources of any geothermal reservoir,
field, or like area, or any part thereof (whether or not any
part of the geothermal reservoir, field, or like area, is
subject to any cooperative plan of development or operation
(referred to in this section as a `unit agreement')), lessees
thereof and their representatives may unite with each other, or
jointly or separately with others, in collectively adopting and
operating under a unit agreement for the reservoir, field, or
like area, or any part thereof, including direct use resources,
if determined and certified by the Secretary to be necessary or
advisable in the public interest.
``(2) Majority interest of single leases.--A majority
interest of owners of any single lease shall have the authority
to commit the lease to a unit agreement.
``(3) Initiative of secretary.--The Secretary may also
initiate the formation of a unit agreement, or require an
existing Federal lease to commit to a unit agreement, if in the
public interest.
``(4) Modification of lease requirements by secretary.--
``(A) In general.--The Secretary may, in the
discretion of the Secretary and with the consent of the
holders of leases involved, establish, alter, change, or
revoke rates of operations (including drilling,
operations, production, and other requirements) of the
leases and make conditions with respect to the leases,
with the consent of the lessees, in connection with the
creation and operation of any such unit agreement as the
Secretary may consider necessary or advisable to secure
the protection of the public interest.
``(B) Unlike terms or rates.--Leases with unlike
lease terms or royalty rates shall not be required to be
modified to be in the same unit.

``(b) Requirement of Plans Under New Leases.--The Secretary may--
``(1) provide that geothermal leases issued under this Act
shall contain a provision requiring the lessee to operate under
a unit agreement; and
``(2) prescribe the unit agreement under which the lessee
shall operate, which shall adequately protect the rights of all
parties in interest, including the United States.

``(c) Modification of Rate of Prospecting, Development, and
Production.--The Secretary may require that any unit agreement
authorized by this section that applies to land owned by the United
States contain a provision under which authority is vested in the
Secretary, or any person, committee, or State or Federal officer or
agency as may be designated in the unit agreement to alter or modify,
from time to time, the rate of prospecting and development and the
quantity and rate of production under the unit agreement.

[[Page 667]]
119 STAT. 667

``(d) Exclusion From Determination of Holding or Control.--Any land
that is subject to a unit agreement approved or prescribed by the
Secretary under this section shall not be considered in determining
holdings or control under section 7.
``(e) Pooling of Certain Land.--If separate tracts of land cannot be
independently developed and operated to use geothermal resources
pursuant to any section of this Act--
``(1) the land, or a portion of the land, may be pooled with
other land, whether or not owned by the United States, for
purposes of development and operation under a communitization
agreement providing for an apportionment of production or
royalties among the separate tracts of land comprising the
production unit, if the pooling is determined by the Secretary
to be in the public interest; and
``(2) operation or production pursuant to the
communitization agreement shall be treated as operation or
production with respect to each tract of land that is subject to
the communitization agreement.

``(f) Unit Agreement Review.--
``(1) In general.--Not NOTE: Deadlines. later than 5
years after the date of approval of any unit agreement and at
least every 5 years thereafter, the Secretary shall--
``(A) review each unit agreement; and
``(B) after notice and opportunity for comment,
eliminate from inclusion in the unit agreement any land
that the Secretary determines is not reasonably
necessary for unit operations under the unit agreement.
``(2) Basis for elimination.--The elimination shall--
``(A) be based on scientific evidence; and
``(B) occur only if the elimination is determined by
the Secretary to be for the purpose of conserving and
properly managing the geothermal resource.
``(3) Extension.--Any land eliminated under this subsection
shall be eligible for an extension under section 6(g) if the
land meets the requirements for the extension.

``(g) Drilling or Development Contracts.--
``(1) In general.--The Secretary may, on such conditions as
the Secretary may prescribe, approve drilling or development
contracts made by one or more lessees of geothermal leases, with
one or more persons, associations, or corporations if, in the
discretion of the Secretary, the conservation of natural
resources or the public convenience or necessity may require or
the interests of the United States may be best served by the
approval.
``(2) Holdings or control.--Each lease operated under an
approved drilling or development contract, and interest under
the contract, shall be excepted in determining holdings or
control under section 7.

``(h) Coordination With State Governments.--The Secretary shall
coordinate unitization and pooling activities with appropriate State
agencies.''.

SEC. 228. ROYALTY ON BYPRODUCTS.

Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as
amended by section 223(a)) is further amended in subsection (a) by
striking paragraph (2) and inserting the following:

[[Page 668]]
119 STAT. 668

``(2) a royalty on any byproduct that is a mineral specified
in the first section of the Mineral Leasing Act (30 U.S.C. 181),
and that is derived from production under the lease, at the rate
of the royalty that applies under that Act to production of the
mineral under a lease under that Act;''.

SEC. 229. AUTHORITIES OF SECRETARY TO READJUST TERMS, CONDITIONS,
RENTALS, AND ROYALTIES.

Section 8(b) of the Geothermal Steam Act of 1970 (30 U.S.C. 1006) is
amended in the NOTE: 30 USC 1007. second sentence by striking
``period, and in no event'' and all that follows through the end of the
sentence and inserting ``period''.

SEC. 230. CREDITING OF RENTAL TOWARD ROYALTY.

Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as
amended by sections 223 and 224) is further amended--
(1) in subsection (a)(2) by inserting ``and'' after the
semicolon at the end;
(2) in subsection (a)(3) by striking ``; and'' and inserting
a period;
(3) by striking paragraph (4) of subsection (a); and
(4) by adding at the end the following:

``(e) Crediting of Rental Toward Royalty.--Any annual rental under
this section that is paid with respect to a lease before the first day
of the year for which the annual rental is owed shall be credited to the
amount of royalty that is required to be paid under the lease for that
year.''.

SEC. 231. LEASE DURATION AND WORK COMMITMENT REQUIREMENTS.

Section 6 of the Geothermal Steam Act of 1970 (30 U.S.C. 1005) is
amended--
(1) by striking so much as precedes subsection (c), and
striking subsections (e), (g), (h), (i), and (j);
(2) by redesignating subsections (c), (d), and (f) in order
as subsections (g), (h), and (i); and
(3) by inserting before subsection (g), as so redesignated,
the following:

``SEC. 6. NOTE: Regulations. LEASE TERM AND WORK COMMITMENT
REQUIREMENTS.

``(a) In General.--
``(1) Primary term.--A geothermal lease shall be for a
primary term of 10 years.
``(2) Initial extension.--The Secretary shall extend the
primary term of a geothermal lease for 5 years if, for each year
after the 10th year of the lease--
``(A) the Secretary determined under subsection (b)
that the lessee satisfied the work commitment
requirements that applied to the lease for that year; or
``(B) the lessee paid in annual payments accordance
with subsection (c).
``(3) Additional extension.--The Secretary shall extend the
primary term of a geothermal lease (after an initial extension
under paragraph (2)) for an additional 5 years if, for each year
of the initial extension under paragraph (2), the Secretary
determined under subsection (b) that the lessee satisfied the
minimum work requirements that applied to the lease for that
year.

[[Page 669]]
119 STAT. 669

``(b) Requirement to Satisfy Annual Minimum Work Requirement.--
``(1) In general.--The lessee for a geothermal lease shall,
for each year after the 10th year of the lease, satisfy minimum
work requirements prescribed by the Secretary that apply to the
lease for that year.
``(2) Prescription of minimum work requirements.--The
Secretary shall issue regulations prescribing minimum work
requirements for geothermal leases, that--
``(A) establish a geothermal potential; and
``(B) if a geothermal potential has been
established, confirm the existence of producible
geothermal resources.

``(c) Payments in Lieu of Minimum Work Requirements.--In lieu of the
minimum work requirements set forth in subsection (b)(2), the Secretary
shall by regulation establish minimum annual payments which may be made
by the lessee for a limited number of years that the Secretary
determines will not impair achieving diligent development of the
geothermal resource, but in no event shall the number of years exceed
the duration of the extension period provided in subsection (a).
``(d) Transition Rules for Leases Issued Prior to Enactment of
Energy Policy Act of 2005.--The Secretary shall by regulation establish
transition rules for leases issued before the date of the enactment of
this subsection, including terms under which a lease that is near the
end of its term on the date of enactment of this subsection may be
extended for up to 2 years--
``(1) to allow achievement of production under the lease; or
``(2) to allow the lease to be included in a producing unit.

``(e) Geothermal Lease Overlying Mining Claim.--
``(1) Exemption.--The lessee for a geothermal lease of an
area overlying an area subject to a mining claim for which a
plan of operations has been approved by the relevant Federal
land management agency is exempt from annual work requirements
established under this Act, if development of the geothermal
resource subject to the lease would interfere with the mining
operations under such claim.
``(2) Termination of exemption.--An exemption under this
paragraph expires upon the termination of the mining operations.

``(f) Termination of Application of Requirements.--Minimum work
requirements prescribed under this section shall not apply to a
geothermal lease after the date on which the geothermal resource is
utilized under the lease in commercial quantities.''.

SEC. 232. ADVANCED ROYALTIES REQUIRED FOR CESSATION OF PRODUCTION.

Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as
amended by sections 223, 224, and 230) is further amended by adding at
the end the following:
``(f) Advanced Royalties Required for Cessation of Production.--
``(1) In general.--Subject to paragraphs (2) and (3), if, at
any time after commercial production under a lease is achieved,
production ceases for any reason, the lease shall remain in full
force and effect for a period of not more than

[[Page 670]]
119 STAT. 670

an aggregate number of 10 years beginning on the date production
ceases, if, during the period in which production is ceased, the
lessee pays royalties in advance at the monthly average rate at
which the royalty was paid during the period of production.
``(2) Reduction.--The amount of any production royalty paid
for any year shall be reduced (but not below 0) by the amount of
any advanced royalties paid under the lease to the extent that
the advance royalties have not been used to reduce production
royalties for a prior year.
``(3) Exceptions.--Paragraph (1) shall not apply if the
cessation in production is required or otherwise caused by--
``(A) the Secretary;
``(B) the Secretary of the Air Force;
``(C) the Secretary of the Army;
``(D) the Secretary of the Navy;
``(E) a State or a political subdivision of a State;
or
``(F) a force majeure.''.

SEC. 233. ANNUAL RENTAL.

(a) Annual Rental Rate.--Section 5 of the Geothermal Steam Act of
1970 (30 U.S.C. 1004) (as amended by section 223(a)) is further amended
in subsection (a) by striking paragraph (3) and inserting the following:
``(3) payment in advance of an annual rental of not less
than--
``(A) for each of the 1st through 10th years of the
lease--
``(i) in the case of a lease awarded in a
noncompetitive lease sale, $1 per acre or fraction
thereof; or
``(ii) in the case of a lease awarded in a
competitive lease sale, $2 per acre or fraction
thereof for the 1st year and $3 per acre or
fraction thereof for each of the 2nd through 10th
years; and
``(B) for each year after the 10th year of the
lease, $5 per acre or fraction thereof;''.

(b) Termination of Lease for Failure to Pay Rental.--Section 5 of
the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as amended by
sections 223, 224, 230, and 232) is further amended by adding at the end
the following:
``(g) Termination of Lease for Failure to Pay Rental.--
``(1) In general.--The Secretary shall terminate any lease
with respect to which rental is not paid in accordance with this
Act and the terms of the lease under which the rental is
required, on the expiration of the 45-day period beginning on
the date of the failure to pay the rental.
``(2) Notification.--The Secretary shall promptly notify a
lessee that has not paid rental required under the lease that
the lease will be terminated at the end of the period referred
to in paragraph (1).
``(3) Reinstatement.--A lease that would otherwise terminate
under paragraph (1) shall not terminate under that paragraph if
the lessee pays to the Secretary, before the end of the period
referred to in paragraph (1), the amount of rental due plus a
late fee equal to 10 percent of the amount.''.

[[Page 671]]
119 STAT. 671

SEC. 234. NOTE: 42 USC 15873. DEPOSIT AND USE OF GEOTHERMAL LEASE
REVENUES FOR 5 FISCAL YEARS.

(a) Deposit of Geothermal Resources Leases.--Notwithstanding any
other provision of law, amounts received by the United States in the
first 5 fiscal years beginning after the date of enactment of this Act
as rentals, royalties, and other payments required under leases under
the Geothermal Steam Act of 1970, excluding funds required to be paid to
State and county governments, shall be deposited into a separate account
in the Treasury.
(b) Use of Deposits.--Amounts deposited under subsection (a) shall
be available to the Secretary of the Interior for expenditure, without
further appropriation and without fiscal year limitation, to implement
the Geothermal Steam Act of 1970 and this Act.
(c) Transfer of Funds.--For the purposes of coordination and
processing of geothermal leases and geothermal use authorizations on
Federal land the Secretary of the Interior may authorize the expenditure
or transfer of such funds as are necessary to the Forest Service.

SEC. 235. ACREAGE LIMITATIONS.

Section 7 of the Geothermal Steam Act of 1970 (30 U.S.C. 1006) is
amended--
(1) by striking ``sec. 7.'', and by inserting immediately
before and above the first paragraph the following:

``SEC. 7. ACREAGE LIMITATIONS.'';

(2) in the first paragraph--
(A) by striking ``two thousand five hundred and
sixty acres'' and inserting ``5,120 acres''; and
(B) by striking ``twenty thousand four hundred and
eighty acres'' and inserting ``51,200 acres''; and
(3) by striking the second paragraph.

SEC. 236. TECHNICAL AMENDMENTS.

The Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) is further
amended as follows:
(1) NOTE: 30 USC 1001, 1002, 1005, 1020, 1022, 1024-
1026. By striking ``geothermal steam and associated geothermal
resources'' each place it appears and inserting ``geothermal
resources''.
(2) Section 2 (30 U.S.C. 1001) is amended by adding at the
end the following:
``(g) `direct use' means utilization of geothermal resources
for commercial, residential, agricultural, public facilities, or
other energy needs other than the commercial production of
electricity; and''.
(3) Section 21 (30 U.S.C. 1020) is amended by striking ``(a)
Within one hundred'' and all that follows through ``(b)
Geothermal'' and inserting ``Geothermal''.
(4) The first section (30 U.S.C. 1001 note) is amended by
striking ``That this'' and inserting the following:

``SEC. 1. SHORT TITLE.

``This''.
(5) Section 2 (30 U.S.C. 1001) is amended by striking ``sec.
2.  As'' and inserting the following:

``SEC. 2. DEFINITIONS.

``As''.

[[Page 672]]
119 STAT. 672

(6) Section 3 (30 U.S.C. 1002) is amended by striking ``sec.
3. Subject'' and inserting the following:

``SEC. 3. LANDS SUBJECT TO GEOTHERMAL LEASING.

``Subject''.
(7) Section 5 (30 U.S.C. 1004) is further amended by
striking ``sec. 5.'', and by inserting immediately before and
above subsection (a) the following:

``SEC. 5. RENTS AND ROYALTIES.''.

(8) Section 8 (30 U.S.C. 1007) is amended by striking ``sec.
8. (a) The'' and inserting the following:

``SEC. 8. READJUSTMENT OF LEASE TERMS AND CONDITIONS.

``(a) The''.
(9) Section 9 (30 U.S.C. 1008) is amended by striking ``sec.
9. If'' and inserting the following:

``SEC. 9. BYPRODUCTS.

``If''.
(10) Section 10 (30 U.S.C. 1009) is amended by striking
``sec. 10. The'' and inserting the following:

``SEC. 10. RELINQUISHMENT OF GEOTHERMAL RIGHTS.

``The''.
(11) Section 11 (30 U.S.C. 1010) is amended by striking
``sec. 11. The'' and inserting the following:

``SEC. 11. SUSPENSION OF OPERATIONS AND PRODUCTION.

``The''.
(12) Section 12 (30 U.S.C. 1011) is amended by striking
``sec. 12. Leases'' and inserting the following:

``SEC. 12. TERMINATION OF LEASES.

``Leases''.
(13) Section 13 (30 U.S.C. 1012) is amended by striking
``sec. 13. The'' and inserting the following:

``SEC. 13. WAIVER, SUSPENSION, OR REDUCTION OF RENTAL OR ROYALTY.

``The''.
(14) Section 14 (30 U.S.C. 1013) is amended by striking
``sec. 14. Subject'' and inserting the following:

``SEC. 14. SURFACE LAND USE.

``Subject''.
(15) Section 15 (30 U.S.C. 1014) is amended by striking
``sec. 15. (a) Geothermal'' and inserting the following:

``SEC. 15. LANDS SUBJECT TO GEOTHERMAL LEASING.

``(a) Geothermal''.
(16) Section 16 (30 U.S.C. 1015) is amended by striking
``sec. 16. Leases'' and inserting the following:

``SEC. 16. REQUIREMENT FOR LESSEES.

``Leases''.
(17) Section 17 (30 U.S.C. 1016) is amended by striking
``sec. 17. Administration'' and inserting the following:

[[Page 673]]
119 STAT. 673

``SEC. 17. ADMINISTRATION.

``Administration''.
(18) Section 19 (30 U.S.C. 1018) is amended by striking
``sec. 19. Upon'' and inserting the following:

``SEC. 19. DATA FROM FEDERAL AGENCIES.

``Upon''.
(19) Section 21 (30 U.S.C. 1020) is further amended by
striking ``sec. 21.'', and by inserting immediately before and
above the remainder of that section the following:

``SEC. 21. PUBLICATION IN FEDERAL REGISTER; RESERVATION OF MINERAL
RIGHTS.''.

(20) Section 22 (30 U.S.C. 1021) is amended by striking
``sec. 22. Nothing'' and inserting the following:

``SEC. 22. FEDERAL EXEMPTION FROM STATE WATER LAWS.

``Nothing''.
(21) Section 23 (30 U.S.C. 1022) is amended by striking
``sec. 23. (a) All'' and inserting the following:

``SEC. 23. PREVENTION OF WASTE; EXCLUSIVITY.

``(a) All''.
(22) Section 24 (30 U.S.C. 1023) is amended by striking
``sec. 24. The'' and inserting the following:

``SEC. 24. RULES AND REGULATIONS.

``The''.
(23) Section 25 (30 U.S.C. 1024) is amended by striking
``sec. 25. As'' and inserting the following:

``SEC. 25. INCLUSION OF GEOTHERMAL LEASING UNDER CERTAIN OTHER LAWS.

``As''.
(24) Section 26 NOTE: 30 USC 530. is amended by striking
``sec. 26. The'' and inserting the following:

``SEC. 26. AMENDMENT.

``The''.
(25) Section 27 (30 U.S.C. 1025) is amended by striking
``sec. 27. The'' and inserting the following:

``SEC. 27. FEDERAL RESERVATION OF CERTAIN MINERAL RIGHTS.

``The''.
(26) Section 28 (30 U.S.C. 1026) is amended by striking
``sec. 28. (a)(1) The'' and inserting the following:

``SEC. 28. SIGNIFICANT THERMAL FEATURES.

``(a)(1) The''.
(27) Section 29 (30 U.S.C. 1027) is amended by striking
``sec. 29. The'' and inserting the following:

``SEC. 29. LAND SUBJECT TO PROHIBITION ON LEASING.

``The''.

SEC. 237. INTERMOUNTAIN WEST GEOTHERMAL CONSORTIUM.

(a) Participation Authorized.--The Secretary, acting through the
Idaho National Laboratory, may participate in a consortium described in
subsection (b) to address science and science policy

[[Page 674]]
119 STAT. 674

issues surrounding the expanded discovery and use of geothermal energy,
including from geothermal resources on public lands.
(b) Members.--The NOTE: Establishment. consortium referred to in
subsection (a) shall--
(1) be known as the ``Intermountain West Geothermal
Consortium'';
(2) be a regional consortium of institutions and government
agencies that focuses on building collaborative efforts among
the universities in the State of Idaho, other regional
universities, State agencies, and the Idaho National Laboratory;
(3) include Boise State University, the University of Idaho
(including the Idaho Water Resources Research Institute), the
Oregon Institute of Technology, the Desert Research Institute
with the University and Community College System of Nevada, and
the Energy and Geoscience Institute at the University of Utah;
(4) be hosted and managed by Boise State University; and
(5) have a director appointed by Boise State University, and
associate directors appointed by each participating institution.

(c) Financial Assistance.--The Secretary, acting through the Idaho
National Laboratory and subject to the availability of appropriations,
will provide financial assistance to Boise State University for
expenditure under contracts with members of the consortium to carry out
the activities of the consortium.

Subtitle C--Hydroelectric

SEC. 241. 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 and any party to the proceeding shall
be entitled to a determination on the record, after opportunity for an
agency trial-type hearing of no more than 90 days, on any disputed
issues of material fact with respect to such conditions. All disputed
issues of material fact raised by any party shall be determined in a
single trial-type hearing to be conducted by the relevant resource
agency in accordance with the regulations promulgated under this
subsection and within the time frame established by the Commission for
each license proceeding.
Within NOTE: Deadline. Regulations. Procedures. 90 days of the date
of enactment of the Energy Policy Act of 2005, the Secretaries of the
Interior, Commerce, and Agriculture shall establish jointly, by rule,
the procedures for such expedited trial-type hearing, including the
opportunity to undertake discovery and cross-examine witnesses, in
consultation with the Federal Energy Regulatory Commission.''.

(b) Fishways.--Section 18 of the Federal Power Act (16 U.S.C. 811)
is amended by inserting after ``and such fishways as may be prescribed
by the Secretary of Commerce.'' the NOTE: Deadline. following: ``The
license applicant and any party to the proceeding shall be entitled to a
determination on the record, after opportunity for an agency trial-type
hearing of no more than 90 days, on any disputed issues of material fact
with respect to such fishways. All disputed issues of material fact
raised by any party shall be determined in a

[[Page 675]]
119 STAT. 675

single trial-type hearing to be conducted by the relevant resource
agency in accordance with the regulations promulgated under this
subsection and within the time frame established by the Commission for
each license
proceeding. NOTE: Deadline. Regulations. Procedures. Within 90 days
of the date of enactment of the Energy Policy Act of 2005, the
Secretaries of the Interior, Commerce, and Agriculture shall establish
jointly, by rule, the procedures for such expedited trial-type hearing,
including the opportunity to undertake discovery and cross-examine
witnesses, in consultation with the Federal Energy Regulatory
Commission.''.

(c) Alternative Conditions and Prescriptions.--Part I of the Federal
Power Act (16 U.S.C. 791a et seq.) is amended by adding the following
new section at the end thereof:

``SEC. 33. NOTE: 16 USC 823d. 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 or any other party to the
license proceeding 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, any other party to the
proceeding, 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, as compared to the condition initially by
the Secretary--
``(i) cost significantly less to implement; or
``(ii) result in improved operation of the project
works for electricity production.

``(3) In making a determination under paragraph (2), the Secretary
shall consider evidence provided for the record by any party to a
licensing proceeding, or otherwise available to the Secretary, including
any evidence provided by the Commission, on the implementation costs or
operational impacts for electricity production of a proposed
alternative.
``(4) NOTE: Public information. Records. The Secretary concerned
shall submit into the public record of the Commission proceeding with
any condition under section 4(e) or alternative condition it accepts
under this section, a written statement explaining the basis for such
condition, and reason for not accepting any alternative condition under
this section. The written statement must demonstrate that the Secretary
gave equal consideration to the effects of the condition adopted and
alternatives not accepted on energy supply, distribution, cost, and use;
flood control; navigation; water supply; and air quality (in addition to
the preservation of other aspects of environmental quality); based on
such information as may be available to the Secretary, including
information voluntarily provided in a timely manner by the applicant and
others. The Secretary shall also submit, together with the
aforementioned written statement, all studies, data, and

[[Page 676]]
119 STAT. 676

other factual information available to the Secretary and relevant to the
Secretary's decision.
``(5) If the Commission finds that the Secretary's final 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. NOTE: Deadline. 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. NOTE: Records. 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 any other party to the license proceeding
may propose an alternative to such prescription to construct, maintain,
or operate a fishway.
``(2) Notwithstanding section 18, the Secretary of the Interior or
the Secretary of Commerce, as appropriate, shall accept and prescribe,
and the Commission shall require, the proposed alternative referred to
in paragraph (1), if the Secretary of the appropriate department
determines, based on substantial evidence provided by the license
applicant, any other party to the proceeding, or otherwise available to
the Secretary, that such alternative--
``(A) will be no less protective than the fishway initially
prescribed by the Secretary; and
``(B) will either, as compared to the fishway initially
prescribed by the Secretary--
``(i) cost significantly less to implement; or
``(ii) result in improved operation of the project
works for electricity production.

``(3) In making a determination under paragraph (2), the Secretary
shall consider evidence provided for the record by any party to a
licensing proceeding, or otherwise available to the Secretary, including
any evidence provided by the Commission, on the implementation costs or
operational impacts for electricity production of a proposed
alternative.
``(4) NOTE: Public information. Records. 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 prescription
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.

``(5) If the Commission finds that the Secretary's final
prescription would be inconsistent with the purposes of this part, or
other applicable law, the Commission may refer the dispute to the

[[Page 677]]
119 STAT. 677

Commission's Dispute Resolution Service. NOTE: Deadline. 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. NOTE: Records. The Secretary shall submit the advisory
and the Secretary's final written determination into the record of the
Commission's proceeding.''.

SEC. 242. NOTE: 42 USC 15881. HYDROELECTRIC PRODUCTION INCENTIVES.

(a) Incentive Payments.--For electric energy generated and sold by a
qualified hydroelectric 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) of this section. Payments under this
section may only be made upon receipt by the Secretary of an incentive
payment application which establishes that the applicant is eligible to
receive such payment and which satisfies such other requirements as the
Secretary deems necessary. Such application shall be in such form, and
shall be submitted at such time, as the Secretary shall establish.
(b) Definitions.--For purposes of this section:
(1) Qualified hydroelectric facility.--The term ``qualified
hydroelectric facility'' means a turbine or other generating
device owned or solely operated by a non-Federal entity which
generates hydroelectric energy for sale and which is added to an
existing dam or conduit.
(2) Existing dam or conduit.--The term ``existing dam or
conduit'' means any dam or conduit the construction of which was
completed before the date of the enactment of this section and
which does not require any construction or enlargement of
impoundment or diversion structures (other than repair or
reconstruction) in connection with the installation of a turbine
or other generating device.
(3) Conduit.--The term ``conduit'' has the same meaning as
when used in section 30(a)(2) of the Federal Power Act (16
U.S.C. 823a(a)(2)).

The NOTE: Applicability. 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

[[Page 678]]
119 STAT. 678

facility shall be based on the number of kilowatt hours of
hydroelectric energy generated by the facility during the
incentive period. For any such facility, the amount of such
payment shall be 1.8 cents per kilowatt hour (adjusted as
provided in paragraph (2)), subject to the availability of
appropriations under subsection (g), except that no facility may
receive more than $750,000 in 1 calendar year.
(2) Adjustments.--The amount of the payment made to any
person under this section as provided in paragraph (1) shall be
adjusted for inflation for each fiscal year beginning after
calendar year 2005 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 2005 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 2006 through 2015.

SEC. 243. NOTE: 42 USC 15882. HYDROELECTRIC EFFICIENCY IMPROVEMENT.

(a) Incentive Payments.--The Secretary shall make incentive payments
to the owners or operators of hydroelectric facilities at existing dams
to be used to make capital improvements in the facilities that are
directly related to improving the efficiency of such facilities by at
least 3 percent.
(b) Limitations.--Incentive payments under this section shall not
exceed 10 percent of the costs of the capital improvement concerned and
not more than 1 payment may be made with respect to improvements at a
single facility. No payment in excess of $750,000 may be made with
respect to improvements at a single facility.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section not more than $10,000,000 for
each of the fiscal years 2006 through 2015.

SEC. 244. ALASKA STATE JURISDICTION OVER SMALL HYDROELECTRIC PROJECTS.

Section 32 of the Federal Power Act (16 U.S.C. 823c) is amended--
(1) in subsection (a)(3)(C), by inserting ``except as
provided in subsection (j),'' before ``conditions''; and
(2) by adding at the end the following:

``(j) Fish and Wildlife.--If the State of Alaska determines that a
recommendation under subsection (a)(3)(C) is inconsistent with
paragraphs (1) and (2) of subsection (a), the State of Alaska may
decline to adopt all or part of the recommendations in accordance with
the procedures established under section 10(j)(2).''.

SEC. 245. NOTE: Montana. FLINT CREEK HYDROELECTRIC PROJECT.

(a) Extension of Time.--
Notwithstanding NOTE: Applicability. Effective dates. the time
period specified in section 5 of the Federal Power Act (16 U.S.C. 798)

[[Page 679]]
119 STAT. 679

that would otherwise apply to the Federal Energy Regulatory Commission
(referred to in this section as the ``Commission'') project numbered
12107, the Commission shall--
(1) if the preliminary permit is in effect on the date of
enactment of this Act, extend the preliminary permit for a
period of 3 years beginning on the date on which the preliminary
permit expires; or
(2) if the preliminary permit expired before the date of
enactment of this Act, on request of the permittee, reinstate
the preliminary permit for an additional 3-year period beginning
on the date of enactment of this Act.

(b) Limitation on Certain Fees.--Notwithstanding section 10(e)(1) of
the Federal Power Act (16 U.S.C. 803(e)(1)) or any other provision of
Federal law providing for the payment to the United States of charges
for the use of Federal land for the purposes of operating and
maintaining a hydroelectric development licensed by the Commission, any
political subdivision of the State of Montana that holds a Commission
license for the Commission project numbered 12107 in Granite and Deer
Lodge Counties, Montana, shall be required to pay to the United States
for the use of that land for each year during which the political
subdivision continues to hold the license for the project, the lesser
of--
(1) $25,000; or
(2) such annual charge as the Commission or any other
department or agency of the Federal Government may assess.

SEC. 246. SMALL HYDROELECTRIC POWER PROJECTS.

Section 408(a)(6) of the Public Utility Regulatory Policies Act of
1978 (16 U.S.C. 2708(a)(6)) is amended by striking ``April 20, 1977''
and inserting ``July 22, 2005''.

Subtitle D--Insular Energy

SEC. 251. INSULAR AREAS ENERGY SECURITY.

Section 604 of the Act entitled ``An Act to authorize appropriations
for certain insular areas of the United States, and for other
purposes'', approved December 24, 1980 (48 U.S.C. 1492), is amended--
(1) in subsection (a)(4) by striking the period and
inserting a semicolon;
(2) by adding at the end of subsection (a) the following new
paragraphs:
``(5) electric power transmission and distribution lines in
insular areas are inadequate to withstand damage caused by the
hurricanes and typhoons which frequently occur in insular areas
and such damage often costs millions of dollars to repair; and
``(6) the refinement of renewable energy technologies since
the publication of the 1982 Territorial Energy Assessment
prepared pursuant to subsection (c) reveals the need to reassess
the state of energy production, consumption, infrastructure,
reliance on imported energy, opportunities for energy
conservation and increased energy efficiency, and indigenous
sources in regard to the insular areas.'';
(3) by amending subsection (e) to read as follows:

[[Page 680]]
119 STAT. 680

``(e)(1) The Secretary of the Interior, in consultation with the
Secretary of Energy and the head of government of each insular area,
shall update the plans required under subsection (c) by--
``(A) updating the contents required by subsection (c);
``(B) drafting long-term energy plans for such insular areas
with the objective of reducing, to the extent feasible, their
reliance on energy imports by the year 2012, increasing energy
conservation and energy efficiency, and maximizing, to the
extent feasible, use of indigenous energy sources; and
``(C) drafting long-term energy transmission line plans for
such insular areas with the objective that the maximum
percentage feasible of electric power transmission and
distribution lines in each insular area be protected from damage
caused by hurricanes and typhoons.

``(2) In carrying out this subsection, the Secretary of Energy shall
identify and evaluate the strategies or projects with the greatest
potential for reducing the dependence on imported fossil fuels as used
for the generation of electricity, including strategies and projects
for--
``(A) improved supply-side efficiency of centralized
electrical generation, transmission, and distribution systems;
``(B) improved demand-side management through--
``(i) the application of established standards for
energy efficiency for appliances;
``(ii) the conduct of energy audits for business and
industrial customers; and
``(iii) the use of energy savings performance
contracts;
``(C) increased use of renewable energy, including--
``(i) solar thermal energy for electric generation;
``(ii) solar thermal energy for water heating in
large buildings, such as hotels, hospitals, government
buildings, and residences;
``(iii) photovoltaic energy;
``(iv) wind energy;
``(v) hydroelectric energy;
``(vi) wave energy;
``(vii) energy from ocean thermal resources,
including ocean thermal-cooling for community air
conditioning;
``(viii) water vapor condensation for the production
of potable water;
``(ix) fossil fuel and renewable hybrid electrical
generation systems; and
``(x) other strategies or projects that the
Secretary may identify as having significant potential;
and
``(D) fuel substitution and minimization with indigenous
biofuels, such as coconut oil.

``(3) In carrying out this subsection, for each insular area with a
significant need for distributed generation, the Secretary of Energy
shall identify and evaluate the most promising strategies and projects
described in subparagraphs (C) and (D) of paragraph (2) for meeting that
need.
``(4) In assessing the potential of any strategy or project under
paragraphs (2) and (3), the Secretary of Energy shall consider--
``(A) the estimated cost of the power or energy to be
produced, including--
``(i) any additional costs associated with the
distribution of the generation; and

[[Page 681]]
119 STAT. 681

``(ii) the long-term availability of the generation
source;
``(B) the capacity of the local electrical utility to
manage, operate, and maintain any project that may be
undertaken; and
``(C) other factors the Secretary of Energy considers to be
appropriate.

``(5) NOTE: Deadline. Not later than 1 year after the date of
enactment of this subsection, the Secretary of the Interior shall submit
to the Committee on Energy and Natural Resources of the Senate, the
Committee on Resources of the House of Representatives, and the
Committee on Energy and Commerce of the House of Representatives, the
updated plans for each insular area required by this subsection.''; and
(4) by amending subsection (g)(4) to read as follows:
``(4) Power line grants for insular areas.--
``(A) In general.--The Secretary of the Interior is
authorized to make grants to governments of insular
areas of the United States to carry out eligible
projects to protect electric power transmission and
distribution lines in such insular areas from damage
caused by hurricanes and typhoons.
``(B) Eligible projects.--The Secretary of the
Interior may award grants under subparagraph (A) only to
governments of insular areas of the United States that
submit written project plans to the Secretary for
projects that meet the following criteria:
``(i) The project is designed to protect
electric power transmission and distribution lines
located in 1 or more of the insular areas of the
United States from damage caused by hurricanes and
typhoons.
``(ii) The project is likely to substantially
reduce the risk of future damage, hardship, loss,
or suffering.
``(iii) The project addresses 1 or more
problems that have been repetitive or that pose a
significant risk to public health and safety.
``(iv) The project is not likely to cost more
than the value of the reduction in direct damage
and other negative impacts that the project is
designed to prevent or mitigate. The cost benefit
analysis required by this criterion shall be
computed on a net present value basis.
``(v) The project design has taken into
consideration long-term changes to the areas and
persons it is designed to protect and has
manageable future maintenance and modification
requirements.
``(vi) The project plan includes an analysis
of a range of options to address the problem it is
designed to prevent or mitigate and a
justification for the selection of the project in
light of that analysis.
``(vii) The applicant has demonstrated to the
Secretary that the matching funds required by
subparagraph (D) are available.
``(C) Priority.--When making grants under this
paragraph, the Secretary of the Interior shall give
priority to grants for projects which are likely to--
``(i) have the greatest impact on reducing
future disaster losses; and

[[Page 682]]
119 STAT. 682

``(ii) best conform with plans that have been
approved by the Federal Government or the
government of the insular area where the project
is to be carried out for development or hazard
mitigation for that insular area.
``(D) Matching requirement.--The Federal share of
the cost for a project for which a grant is provided
under this paragraph shall not exceed 75 percent of the
total cost of that project. The non-Federal share of the
cost may be provided in the form of cash or services.
``(E) Treatment of funds for certain purposes.--
Grants provided under this paragraph shall not be
considered as income, a resource, or a duplicative
program when determining eligibility or benefit levels
for Federal major disaster and emergency assistance.
``(F) Authorization of appropriations.--There are
authorized to be appropriated to carry out this
paragraph $6,000,000 for each fiscal year beginning
after the date of the enactment of this paragraph.''.

SEC. 252. NOTE: 42 USC 15891. PROJECTS ENHANCING INSULAR ENERGY
INDEPENDENCE.

(a) Project Feasibilty Studies.--
(1) In general.--On a request described in paragraph (2),
the Secretary shall conduct a feasibility study of a project to
implement a strategy or project identified in the plans
submitted to Congress pursuant to section 604 of the Act
entitled ``An Act to authorize appropriations for certain
insular areas of the United States, and for other purposes'',
approved December 24, 1980 (48 U.S.C. 1492), as having the
potential to--
(A) significantly reduce the dependence of an
insular area on imported fossil fuels; or
(B) provide needed distributed generation to an
insular area.
(2) Request.--The Secretary shall conduct a feasibility
study under paragraph (1) on--
(A) the request of an electric utility located in an
insular area that commits to fund at least 10 percent of
the cost of the study; and
(B) if the electric utility is located in the
Federated States of Micronesia, the Republic of the
Marshall Islands, or the Republic of Palau, written
support for that request by the President or the
Ambassador of the affected freely associated state.
(3) Consultation.--The Secretary shall consult with regional
utility organizations in--
(A) conducting feasibility studies under paragraph
(1); and
(B) determining the feasibility of potential
projects.
(4) Feasibility.--For the purpose of a feasibility study
under paragraph (1), a project shall be determined to be
feasible if the project would significantly reduce the
dependence of an insular area on imported fossil fuels, or
provide needed distributed generation to an insular area, at a
reasonable cost.

(b) Implementation.--
(1) In general.--On a determination by the Secretary (in
consultation with the Secretary of the Interior) that a project

[[Page 683]]
119 STAT. 683

is feasible under subsection (a) and a commitment by an electric
utility to operate and maintain the project, the Secretary may
provide such technical and financial assistance as the Secretary
determines is appropriate for the implementation of the project.
(2) Regional utility organizations.--In providing assistance
under paragraph (1), the Secretary shall consider providing the
assistance through regional utility organizations.

(c) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
the Secretary--
(A) $500,000 for each fiscal year for project
feasibility studies under subsection (a); and
(B) $4,000,000 for each fiscal year for project
implementation under subsection (b).
(2) Limitation of funds received by insular areas.--No
insular area may receive, during any 3-year period, more than 20
percent of the total funds made available during that 3-year
period under subparagraphs (A) and (B) of paragraph (1) unless
the Secretary determines that providing funding in excess of
that percentage best advances existing opportunities to meet the
objectives of this section.

TITLE III--OIL AND GAS

Subtitle A--Petroleum Reserve and Home Heating Oil

SEC. 301. PERMANENT AUTHORITY TO OPERATE THE STRATEGIC PETROLEUM RESERVE
AND OTHER ENERGY PROGRAMS.

(a) Amendment to Title I of the Energy Policy and Conservation
Act.--Title I of the Energy Policy and Conservation Act (42 U.S.C. 6212
et seq.) is amended--
(1) by striking section 166 (42 U.S.C. 6246) and inserting
the following:


``AUTHORIZATION OF APPROPRIATIONS


``Sec. 166. There are authorized to be appropriated to the Secretary
such sums as are 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).

(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)); and
(3) by striking part D (42 U.S.C. 6285).

(c) Technical Amendments.--The table of contents for the Energy
Policy and Conservation Act is amended--

[[Page 684]]
119 STAT. 684

(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 striking ``by more'' and all that follows
through ``mid-October through March'' and inserting ``by more than 60
percent over its 5-year rolling average for the months of mid-October
through March (considered as a heating season average)''.
(e) Fill NOTE: 42 USC 6240 note. Strategic Petroleum Reserve to
Capacity.--
(1) In general.--The Secretary shall, as expeditiously as
practicable, without incurring excessive cost or appreciably
affecting the price of petroleum products to consumers, acquire
petroleum in quantities sufficient to fill the Strategic
Petroleum Reserve to the 1,000,000,000-barrel capacity
authorized under section 154(a) of the Energy Policy and
Conservation Act (42 U.S.C. 6234(a)), in accordance with the
sections 159 and 160 of that Act (42 U.S.C. 6239, 6240).
(2) Procedures.--
(A) Amendment.--Section 160 of the Energy Policy and
Conservation Act (42 U.S.C. 6240) is amended by
inserting after subsection (b) the following new
subsection:

``(c) Procedures.--The NOTE: Public
information. Notice. Secretary shall develop, with public notice and
opportunity for comment, procedures consistent with the objectives of
this section to acquire petroleum for the Reserve. Such procedures shall
take into account the need to--
``(1) maximize overall domestic supply of crude oil
(including quantities stored in private sector inventories);
``(2) avoid incurring excessive cost or appreciably
affecting the price of petroleum products to consumers;
``(3) minimize the costs to the Department of the Interior
and the Department of Energy in acquiring such petroleum
products (including foregone revenues to the Treasury when
petroleum products for the Reserve are obtained through the
royalty-in-kind program);
``(4) protect national security;
``(5) avoid adversely affecting current and futures prices,
supplies, and inventories of oil; and
``(6) address other factors that the Secretary determines to
be appropriate.''.
(B) Review of NOTE: 42 USC 6240 note. requests
for deferrals of scheduled deliveries.--The procedures
developed under section 160(c) of the Energy Policy and
Conservation Act, as added by subparagraph (A), shall
include procedures and criteria

[[Page 685]]
119 STAT. 685

for the review of requests for the deferrals of
scheduled deliveries.
(C) Deadlines.--The Secretary shall--
(i) propose the procedures required under the
amendment made by subparagraph (A) not later than
120 days after the date of enactment of this Act;
(ii) promulgate the procedures not later than
180 days after the date of enactment of this Act;
and
(iii) comply with the procedures in acquiring
petroleum for the Reserve effective beginning on
the date that is 180 days after the date of
enactment of this Act.

SEC. 302. NATIONAL OILHEAT RESEARCH ALLIANCE.

Section 713 of the Energy Act of 2000 (Public Law 106-469; 42 U.S.C.
6201 note) is amended by striking ``4'' and inserting ``9''.

SEC. 303. NOTE: Deadline. SITE SELECTION.

Not later than 1 year after the date of enactment of this Act, the
Secretary shall complete a proceeding to select, from sites that the
Secretary has previously studied, sites necessary to enable acquisition
by the Secretary of the full authorized volume of the Strategic
Petroleum Reserve. In such proceeding, the Secretary shall first
consider and give preference to the five sites which the Secretary
previously assessed in the Draft Environmental Impact Statement, DOE/
EIS-0165-D. However, the Secretary in his discretion may select other
sites as proposed by a State where a site has been previously studied by
the Secretary to meet the full authorized volume of the Strategic
Petroleum Reserve.

Subtitle B--Natural Gas

SEC. 311. EXPORTATION OR IMPORTATION OF NATURAL GAS.

(a) Scope of Natural Gas Act.--Section 1(b) of the Natural Gas Act
(15 U.S.C. 717(b)) is amended by inserting ``and to the importation or
exportation of natural gas in foreign commerce and to persons engaged in
such importation or exportation,'' after ``such transportation or
sale,''.
(b) Definition.--Section 2 of the Natural Gas Act (15 U.S.C. 717a)
is amended by adding at the end the following new paragraph:
``(11) `LNG terminal' includes all natural gas facilities
located onshore or in State waters that are used to receive,
unload, load, store, transport, gasify, liquefy, or process
natural gas that is imported to the United States from a foreign
country, exported to a foreign country from the United States,
or transported in interstate commerce by waterborne vessel, but
does not include--
``(A) waterborne vessels used to deliver natural gas
to or from any such facility; or
``(B) any pipeline or storage facility subject to
the jurisdiction of the Commission under section 7.''.

(c) Authorization for Siting, Construction, Expansion, or Operation
of LNG Terminals.--(1) The title for section 3 of the Natural Gas Act
(15 U.S.C. 717b) is amended by inserting ``; lng terminals'' after
``exportation or importation of natural gas''.

[[Page 686]]
119 STAT. 686

(2) Section 3 of the Natural Gas Act (15 U.S.C. 717b) is amended by
adding at the end the following:
``(d) Except as specifically provided in this Act, nothing in this
Act affects the rights of States under--
``(1) the Coastal Zone Management Act of 1972 (16 U.S.C.
1451 et seq.);
``(2) the Clean Air Act (42 U.S.C. 7401 et seq.); or
``(3) the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.).

``(e)(1) The Commission shall have the exclusive authority to
approve or deny an application for the siting, construction, expansion,
or operation of an LNG terminal. Except as specifically provided in this
Act, nothing in this Act is intended to affect otherwise applicable law
related to any Federal agency's authorities or responsibilities related
to LNG terminals.
``(2) Upon the filing of any application to site, construct, expand,
or operate an LNG terminal, the Commission shall--
``(A) set the matter for hearing;
``(B) NOTE: Notice. give reasonable notice of the
hearing to all interested persons, including the State
commission of the State in which the LNG terminal is located
and, if not the same, the Governor-appointed State agency
described in section 3A;
``(C) decide the matter in accordance with this subsection;
and
``(D) issue or deny the appropriate order accordingly.

``(3)(A) Except as provided in subparagraph (B), the Commission may
approve an application described in paragraph (2), in whole or part,
with such modifications and upon such terms and conditions as the
Commission find necessary or appropriate.
``(B) Before January 1, 2015, the Commission shall not--
``(i) deny an application solely on the basis that the
applicant proposes to use the LNG terminal exclusively or
partially for gas that the applicant or an affiliate of the
applicant will supply to the facility; or
``(ii) condition an order on--
``(I) a requirement that the LNG terminal offer
service to customers other than the applicant, or any
affiliate of the applicant, securing the order;
``(II) any regulation of the rates, charges, terms,
or conditions of service of the LNG terminal; or
``(III) a requirement to file with the Commission
schedules or contracts related to the rates, charges,
terms, or conditions of service of the LNG terminal.

``(C) NOTE: Termination date. Subparagraph (B) shall cease to
have effect on January 1, 2030.

``(4) An order issued for an LNG terminal that also offers service
to customers on an open access basis shall not result in subsidization
of expansion capacity by existing customers, degradation of service to
existing customers, or undue discrimination against existing customers
as to their terms or conditions of service at the facility, as all of
those terms are defined by the Commission.
``(f)(1) In this subsection, the term `military installation'--
``(A) means a base, camp, post, range, station, yard,
center, or homeport facility for any ship or other activity
under the jurisdiction of the Department of Defense, including
any leased facility, that is located within a State, the
District of Columbia, or any territory of the United States; and

[[Page 687]]
119 STAT. 687

``(B) does not include any facility used primarily for civil
works, rivers and harbors projects, or flood control projects,
as determined by the Secretary of Defense.

``(2) NOTE: Memorandum. The Commission shall enter into a
memorandum of understanding with the Secretary of Defense for the
purpose of ensuring that the Commission coordinate and consult with the
Secretary of Defense on the siting, construction, expansion, or
operation of liquefied natural gas facilities that may affect an active
military installation.

``(3) The Commission shall obtain the concurrence of the Secretary
of Defense before authorizing the siting, construction, expansion, or
operation of liquefied natural gas facilities affecting the training or
activities of an active military installation.''.
(d) LNG Terminal State and Local Safety Concerns.--After section 3
of the Natural Gas Act (15 U.S.C. 717b) insert the following:


``STATE AND LOCAL SAFETY CONSIDERATIONS


``Sec. 3A. (a) NOTE: Regulations. Deadline. 15 USC 717b-1. The
Commission shall promulgate regulations on the National Environmental
Policy Act of 1969 (42 U.S.C. 4321 et seq.) pre-filing process within 60
days after the date of enactment of this section. An applicant shall
comply with pre-filing process required under the National Environmental
Policy Act of 1969 prior to filing an application with the Commission.
The regulations shall require that the pre-filing process commence at
least 6 months prior to the filing of an application for authorization
to construct an LNG terminal and encourage applicants to cooperate with
State and local officials.

``(b) The Governor of a State in which an LNG terminal is proposed
to be located shall designate the appropriate State agency for the
purposes of consulting with the Commission regarding an application
under section 3. The Commission shall consult with such State agency
regarding State and local safety considerations prior to issuing an
order pursuant to section 3. For the purposes of this section, State and
local safety considerations include--
``(1) the kind and use of the facility;
``(2) the existing and projected population and demographic
characteristics of the location;
``(3) the existing and proposed land use near the location;
``(4) the natural and physical aspects of the location;
``(5) the emergency response capabilities near the facility
location; and
``(6) the need to encourage remote siting.

``(c) The State agency may furnish an advisory report on State and
local safety considerations to the Commission with respect to an
application no later than 30 days after the application was filed with
the Commission. Before issuing an order authorizing an applicant to
site, construct, expand, or operate an LNG terminal, the Commission
shall review and respond specifically to the issues raised by the State
agency described in subsection (b) in the advisory
report. NOTE: Applicability. This subsection shall apply to any
application filed after the date of enactment of the Energy Policy Act
of 2005. A NOTE: Deadline. Reports. State agency has 30 days after
such date of enactment to file an advisory report related to any
applications pending at the Commission as of such date of enactment.

``(d) The State commission of the State in which an LNG terminal is
located may, after the terminal is operational, conduct

[[Page 688]]
119 STAT. 688

safety inspections in conformance with Federal regulations and
guidelines with respect to the LNG terminal upon written notice to the
Commission. The State commission may notify the Commission of any
alleged safety violations. NOTE: Notification. The Commission shall
transmit information regarding such allegations to the appropriate
Federal agency, which shall take appropriate action and notify the State
commission.

``(e)(1) In any order authorizing an LNG terminal the Commission
shall require the LNG terminal operator to develop an Emergency Response
Plan. The Emergency Response Plan shall be prepared in consultation with
the United States Coast Guard and State and local agencies and be
approved by the Commission prior to any final approval to begin
construction. The Plan shall include a cost-sharing plan.
``(2) A cost-sharing plan developed under paragraph (1) shall
include a description of any direct cost reimbursements that the
applicant agrees to provide to any State and local agencies with
responsibility for security and safety--
``(A) at the LNG terminal; and
``(B) in proximity to vessels that serve the facility.''.

SEC. 312. NEW NATURAL GAS STORAGE FACILITIES.

Section 4 of the Natural Gas Act (15 U.S.C. 717c) is amended by
adding at the end the following:
``(f)(1) In exercising its authority under this Act or the Natural
Gas Policy Act of 1978 (15 U.S.C. 3301 et seq.), the Commission may
authorize a natural gas company (or any person that will be a natural
gas company on completion of any proposed construction) to provide
storage and storage-related services at market-based rates for new
storage capacity related to a specific facility placed in service after
the date of enactment of the Energy Policy Act of 2005, notwithstanding
the fact that the company is unable to demonstrate that the company
lacks market power, if the Commission determines that--
``(A) market-based rates are in the public interest and
necessary to encourage the construction of the storage capacity
in the area needing storage services; and
``(B) customers are adequately protected.

``(2) The Commission shall ensure that reasonable terms and
conditions are in place to protect consumers.
``(3) If the Commission authorizes a natural gas company to charge
market-based rates under this subsection, the Commission shall review
periodically whether the market-based rate is just, reasonable, and not
unduly discriminatory or preferential.''.

SEC. 313. PROCESS COORDINATION; HEARINGS; RULES OF PROCEDURE.

(a) In General.--Section 15 of the Natural Gas Act (15 U.S.C. 717n)
is amended--
(1) by striking the section heading and inserting ``process
coordination; hearings; rules of procedure'';
(2) by redesignating subsections (a) and (b) as subsections
(e) and (f), respectively; and
(3) by striking ``sec. 15.'' and inserting the following:

``Sec. 15.(a) In this section, the term `Federal authorization'--
``(1) means any authorization required under Federal law
with respect to an application for authorization under section

[[Page 689]]
119 STAT. 689

3 or a certificate of public convenience and necessity under
section 7; and
``(2) includes any permits, special use authorizations,
certifications, opinions, or other approvals as may be required
under Federal law with respect to an application for
authorization under section 3 or a certificate of public
convenience and necessity under section 7.

``(b) Designation as Lead Agency.--
``(1) In general.--The Commission shall act as the lead
agency for the purposes of coordinating all applicable Federal
authorizations and for the purposes of complying with the
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.).
``(2) Other agencies.--Each Federal and State agency
considering an aspect of an application for Federal
authorization shall cooperate with the Commission and comply
with the deadlines established by the Commission.

``(c) Schedule.--
``(1) Commission authority to set schedule.--The Commission
shall establish a schedule for all Federal authorizations. In
establishing the schedule, the Commission shall--
``(A) ensure expeditious completion of all such
proceedings; and
``(B) comply with applicable schedules established
by Federal law.
``(2) Failure to meet schedule.--If a Federal or State
administrative agency does not complete a proceeding for an
approval that is required for a Federal authorization in
accordance with the schedule established by the Commission, the
applicant may pursue remedies under section 19(d).

``(d) Consolidated Record.--The Commission shall, with the
cooperation of Federal and State administrative agencies and officials,
maintain a complete consolidated record of all decisions made or actions
taken by the Commission or by a Federal administrative agency or officer
(or State administrative agency or officer acting under delegated
Federal authority) with respect to any Federal authorization. Such
record shall be the record for--
``(1) appeals or reviews under the Coastal Zone Management
Act of 1972 (16 U.S.C. 1451 et seq.), provided that the record
may be supplemented as expressly provided pursuant to section
319 of that Act; or
``(2) judicial review under section 19(d) of decisions made
or actions taken of Federal and State administrative agencies
and officials, provided that, if the Court determines that the
record does not contain sufficient information, the Court may
remand the proceeding to the Commission for further development
of the consolidated record.''.

(b) Judicial Review.--Section 19 of the Natural Gas Act (15 U.S.C.
717r) is amended by adding at the end the following:
``(d) Judicial Review.--
``(1) In general.--The United States Court of Appeals for
the circuit in which a facility subject to section 3 or section
7 is proposed to be constructed, expanded, or operated shall
have original and exclusive jurisdiction over any civil action
for the review of an order or action of a Federal agency (other
than the Commission) or State administrative agency acting
pursuant to Federal law to issue, condition, or deny any permit,

[[Page 690]]
119 STAT. 690

license, concurrence, or approval (hereinafter collectively
referred to as `permit') required under Federal law, other than
the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et
seq.).
``(2) Agency delay.--The United States Court of Appeals for
the District of Columbia shall have original and exclusive
jurisdiction over any civil action for the review of an alleged
failure to act by a Federal agency (other than the Commission)
or State administrative agency acting pursuant to Federal law to
issue, condition, or deny any permit required under Federal law,
other than the Coastal Zone Management Act of 1972 (16 U.S.C.
1451 et seq.), for a facility subject to section 3 or section 7.
The failure of an agency to take action on a permit required
under Federal law, other than the Coastal Zone Management Act of
1972, in accordance with the Commission schedule established
pursuant to section 15(c) shall be considered inconsistent with
Federal law for the purposes of paragraph (3).
``(3) Court action.--If the Court finds that such order or
action is inconsistent with the Federal law governing such
permit and would prevent the construction, expansion, or
operation of the facility subject to section 3 or section 7, the
Court shall remand the proceeding to the agency to take
appropriate action consistent with the order of the Court. If
the Court remands the order or action to the Federal or State
agency, the Court shall set a reasonable schedule and deadline
for the agency to act on remand.
``(4) Commission action.--For any action described in this
subsection, the Commission shall file with the Court the
consolidated record of such order or action to which the appeal
hereunder relates.
``(5) Expedited review.--The Court shall set any action
brought under this subsection for expedited consideration.''.

SEC. 314. PENALTIES.

(a) Criminal Penalties.--
(1) Natural gas act.--Section 21 of the Natural Gas Act (15
U.S.C. 717t) is amended--
(A) in subsection (a)--
(i) by striking ``$5,000'' and inserting
``$1,000,000''; and
(ii) by striking ``two years'' and inserting
``5 years''; and
(B) in subsection (b), by striking ``$500'' and
inserting ``$50,000''.
(2) Natural gas policy act of 1978.--Section 504(c) of the
Natural Gas Policy Act of 1978 (15 U.S.C. 3414(c)) is amended--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking
``$5,000'' and inserting ``$1,000,000''; and
(ii) in subparagraph (B), by striking ``two
years'' and inserting ``5 years''; and
(B) in paragraph (2), by striking ``$500 for each
violation'' and inserting ``$50,000 for each day on
which the offense occurs''.

(b) Civil Penalties.--

[[Page 691]]
119 STAT. 691

(1) Natural gas act.--The Natural Gas Act (15 U.S.C. 717 et
seq.) is amended--
(A) NOTE: 15 USC 717u-717w. by redesignating
sections 22 through 24 as sections 24 through 26,
respectively; and
(B) by inserting after section 21 (15 U.S.C. 717t)
the following:


``CIVIL PENALTY AUTHORITY


``Sec. 22. (a) NOTE: 15 USC 717t-1. Any person that violates
this Act, or any rule, regulation, restriction, condition, or order made
or imposed by the Commission under authority of this Act, shall be
subject to a civil penalty of not more than $1,000,000 per day per
violation for as long as the violation continues.

``(b) The penalty shall be assessed by the Commission after notice
and opportunity for public hearing.
``(c) In determining the amount of a proposed penalty, the
Commission shall take into consideration the nature and seriousness of
the violation and the efforts to remedy the violation.''.
(2) Natural gas policy act of 1978.--Section 504(b)(6)(A) of
the Natural Gas Policy Act of 1978 (15 U.S.C. 3414(b)(6)(A)) is
amended--
(A) in clause (i), by striking ``$5,000'' and
inserting ``$1,000,000''; and
(B) in clause (ii), by striking ``$25,000'' and
inserting ``$1,000,000''.

SEC. 315. MARKET MANIPULATION.

The Natural Gas Act is amended by inserting after section 4 (15
U.S.C. 717c) the following:


``PROHIBITION ON MARKET MANIPULATION


``Sec. 4A. NOTE: 15 USC 717c-1. It shall be unlawful for any
entity, directly or indirectly, to use or employ, in connection with the
purchase or sale of natural gas or the purchase or sale of
transportation services subject to the jurisdiction of the Commission,
any manipulative or deceptive device or contrivance (as those terms are
used in section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C.
78j(b))) in contravention of such rules and regulations as the
Commission may prescribe as necessary in the public interest or for the
protection of natural gas ratepayers. Nothing in this section shall be
construed to create a private right of action.''.

SEC. 316. NATURAL GAS MARKET TRANSPARENCY RULES.

The Natural Gas Act (15 U.S.C. 717 et seq.) is amended by inserting
after section 22 the following:


``NATURAL GAS MARKET TRANSPARENCY RULES


``Sec. 23. (a)(1) NOTE: 15 USC 717t-2. The Commission is
directed to facilitate price transparency in markets for the sale or
transportation of physical natural gas in interstate commerce, having
due regard for the public interest, the integrity of those markets, fair
competition, and the protection of consumers.

``(2) The Commission may prescribe such rules as the Commission
determines necessary and appropriate to carry out the purposes of this
section. The rules shall provide for the dissemination, on a timely
basis, of information about the availability and prices

[[Page 692]]
119 STAT. 692

of natural gas sold at wholesale and in interstate commerce to the
Commission, State commissions, buyers and sellers of wholesale natural
gas, and the public.
``(3) The Commission may--
``(A) obtain the information described in paragraph (2) from
any market participant; and
``(B) rely on entities other than the Commission to receive
and make public the information, subject to the disclosure rules
in subsection (b).

``(4) In carrying out this section, the Commission shall consider
the degree of price transparency provided by existing price publishers
and providers of trade processing services, and shall rely on such
publishers and services to the maximum extent possible. The Commission
may establish an electronic information system if it determines that
existing price publications are not adequately providing price discovery
or market transparency.
``(b)(1) Rules described in subsection (a)(2), if adopted, shall
exempt from disclosure information the Commission determines would, if
disclosed, be detrimental to the operation of an effective market or
jeopardize system security.
``(2) In determining the information to be made available under this
section and the time to make the information available, the Commission
shall seek to ensure that consumers and competitive markets are
protected from the adverse effects of potential collusion or other
anticompetitive behaviors that can be facilitated by untimely public
disclosure of transaction-specific information.
``(c)(1) NOTE: Deadline. Memorandum. Within 180 days of
enactment of this section, the Commission shall conclude a memorandum of
understanding with the Commodity Futures Trading Commission relating to
information sharing, which shall include, among other things, provisions
ensuring that information requests to markets within the respective
jurisdiction of each agency are properly coordinated to minimize
duplicative information requests, and provisions regarding the treatment
of proprietary trading information.

``(2) Nothing in this section may be construed to limit or affect
the exclusive jurisdiction of the Commodity Futures Trading Commission
under the Commodity Exchange Act (7 U.S.C. 1 et seq.).
``(d)(1) The Commission shall not condition access to interstate
pipeline transportation on the reporting requirements of this section.
``(2) The Commission shall not require natural gas producers,
processors, or users who have a de minimis market presence to comply
with the reporting requirements of this section.
``(e)(1) Except as provided in paragraph (2), no person shall be
subject to any civil penalty under this section with respect to any
violation occurring more than 3 years before the date on which the
person is provided notice of the proposed penalty under section 22(b).
``(2) Paragraph (1) shall not apply in any case in which the
Commission finds that a seller that has entered into a contract for the
transportation or sale of natural gas subject to the jurisdiction of the
Commission has engaged in fraudulent market manipulation activities
materially affecting the contract in violation of section 4A.''.

[[Page 693]]
119 STAT. 693

SEC. 317. FEDERAL-STATE LIQUEFIED NATURAL GAS FORUMS.

(a) In General.--Not NOTE: Deadline. later than 1 year after the
date of enactment of this Act, the Secretary, in cooperation and
consultation with the Secretary of Transportation, the Secretary of
Homeland Security, the Federal Energy Regulatory Commission, and the
Governors of the Coastal States, shall convene not less than 3 forums on
liquefied natural gas.

(b) Requirements.--The forums shall--
(1) be located in areas where liquefied natural gas
facilities are under consideration;
(2) be designed to foster dialogue among Federal officials,
State and local officials, the general public, independent
experts, and industry representatives; and
(3) at a minimum, provide an opportunity for public
education and dialogue on--
(A) the role of liquefied natural gas in meeting
current and future United States energy supply
requirements and demand, in the context of the full
range of energy supply options;
(B) the Federal and State siting and permitting
processes;
(C) the potential risks and rewards associated with
importing liquefied natural gas;
(D) the Federal safety and environmental
requirements (including regulations) applicable to
liquefied natural gas;
(E) prevention, mitigation, and response strategies
for liquefied natural gas hazards; and
(F) additional issues as appropriate.

(c) Purpose.--The purpose of the forums shall be to identify and
develop best practices for addressing the issues and challenges
associated with liquefied natural gas imports, building on existing
cooperative efforts.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.

SEC. 318. PROHIBITION OF TRADING AND SERVING BY CERTAIN INDIVIDUALS.

Section 20 of the Natural Gas Act (15 U.S.C. 717s) is amended by
adding at the end the following:
``(d) In any proceedings under subsection (a), the court may
prohibit, conditionally or unconditionally, and permanently or for such
period of time as the court determines, any individual who is engaged or
has engaged in practices constituting a violation of section 4A
(including related rules and regulations) from--
``(1) acting as an officer or director of a natural gas
company; or
``(2) engaging in the business of--
``(A) the purchasing or selling of natural gas; or
``(B) the purchasing or selling of transmission
services subject to the jurisdiction of the
Commission.''.

[[Page 694]]
119 STAT. 694

Subtitle C--Production

SEC. 321. OUTER CONTINENTAL SHELF PROVISIONS.

(a) Storage on the Outer Continental Shelf.--Section 5(a)(5) of the
Outer Continental Shelf Lands Act (43 U.S.C. 1334(a)(5)) is amended by
inserting ``from any source'' after ``oil and gas''.
(b) Natural Gas Defined.--Section 3(13) of the Deepwater Port Act of
1974 (33 U.S.C. 1502(13)) is amended by adding at the end before the
semicolon the following: ``, natural gas liquids, liquefied petroleum
gas, and condensate recovered from natural gas''.

SEC. 322. HYDRAULIC FRACTURING.

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

SEC. 323. OIL AND GAS EXPLORATION AND PRODUCTION DEFINED.

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

Subtitle D--Naval Petroleum Reserve

SEC. 331. NOTE: 10 USC 7420 note. TRANSFER OF ADMINISTRATIVE
JURISDICTION AND ENVIRONMENTAL REMEDIATION, NAVAL PETROLEUM
RESERVE NUMBERED 2, KERN COUNTY, CALIFORNIA.

(a) Administration NOTE: Effective date. Jurisdiction Transfer
to Secretary of the Interior.--Effective on the date of the enactment of
this Act, administrative jurisdiction and control over all public domain
lands included within Naval Petroleum Reserve Numbered 2 located in Kern
County, California (other than the lands specified in subsection (b)),
are transferred from the Secretary to the Secretary of the Interior for
management, subject to subsection (c), in accordance with the laws
governing management of the public lands, and the regulations
promulgated under such laws, including the

[[Page 695]]
119 STAT. 695

Mineral Leasing Act (30 U.S.C. 181 et seq.) and the Federal Land Policy
and Management Act of 1976 (43 U.S.C. 1701 et seq.).
(b) Exclusion of Certain Reserve Lands.--The transfer of
administrative jurisdiction made by subsection (a) does not include the
following lands:
(1) That portion of Naval Petroleum Reserve Numbered 2
authorized for disposal under section 3403(a) of the Strom
Thurmond National Defense Authorization Act for Fiscal Year 1999
(Public Law 105-261; 10 U.S.C. 7420 note).
(2) That portion of the surface estate of Naval Petroleum
Reserve Numbered 2 conveyed to the City of Taft, California, by
section 333.

(c) Purpose of Transfer.--
(1) Production of hydrocarbon resources.--Notwithstanding
any other provision of law, the principal purpose of the lands
subject to transfer under subsection (a) is the production of
hydrocarbon resources, and the Secretary of the Interior shall
manage the lands in a fashion consistent with this purpose. In
managing the lands, the Secretary of the Interior shall regulate
operations to prevent unnecessary degradation and to provide for
ultimate economic recovery of the resources.
(2) Disposal authority and surface use.--The Secretary of
the Interior may make disposals of lands subject to transfer
under subsection (a), or allow commercial or non-profit surface
use of such lands, not to exceed 10 acres each, so long as the
disposals or surface uses do not materially interfere with the
ultimate economic recovery of the hydrocarbon resources of such
lands. All revenues received from the disposal of lands under
this paragraph or from allowing the surface use of such lands
shall be deposited in the Naval Petroleum Reserve Numbered 2
Lease Revenue Account established by section 332.

(d) Conforming Amendment.--Section 3403 of the Strom Thurmond
National Defense Authorization Act for Fiscal Year 1999 (Public Law 105-
261; 10 U.S.C. 7420 note) is amended by striking subsection (b).

SEC. 332. NOTE: 10 USC 7420 note. NAVAL PETROLEUM RESERVE NUMBERED 2
LEASE REVENUE ACCOUNT.

(a) Establishment.--There is established in the Treasury a special
deposit account to be known as the ``Naval Petroleum Reserve Numbered 2
Lease Revenue Account'' (in this section referred to as the ``lease
revenue account''). The lease revenue account is a revolving account,
and amounts in the lease revenue account shall be available to the
Secretary of the Interior, without further appropriation, for the
purposes specified in subsection (b).
(b) Purposes of Account.--
(1) Environmental-related costs.--The lease revenue account
shall be the sole and exclusive source of funds to pay for any
and all costs and expenses incurred by the United States for--
(A) environmental investigations (other than any
environmental investigations that were conducted by the
Secretary before the transfer of the Naval Petroleum
Reserve Numbered 2 lands under section 331),
remediation, compliance actions, response, waste
management, impediments, fines or penalties, or any
other costs or expenses

[[Page 696]]
119 STAT. 696

of any kind arising from, or relating to, conditions
existing on or below the Naval Petroleum Reserve
Numbered 2 lands, or activities occurring or having
occurred on such lands, on or before the date of the
transfer of such lands; and
(B) any future remediation necessitated as a result
of pre-transfer and leasing activities on such lands.
(2) Transition costs.--The lease revenue account shall also
be available for use by the Secretary of the Interior to pay for
transition costs incurred by the Department of the Interior
associated with the transfer and leasing of the Naval Petroleum
Reserve Numbered 2 lands.

(c) Funding.--The lease revenue account shall consist of the
following:
(1) Notwithstanding any other provision of law, for a period
of three years after the date of the transfer of the Naval
Petroleum Reserve Numbered 2 lands under section 331, the sum of
$500,000 per year of revenue from leases entered into before
that date, including bonuses, rents, royalties, and interest
charges collected pursuant to the Federal Oil and Gas Royalty
Management Act of 1982 (30 U.S.C. 1701 et. seq.), derived from
the Naval Petroleum Reserve Numbered 2 lands, shall be deposited
into the lease revenue account.
(2) Subject to subsection (d), all revenues derived from
leases on Naval Petroleum Reserve Numbered 2 lands issued on or
after the date of the transfer of such lands, including bonuses,
rents, royalties, and interest charges collected pursuant to the
Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C.
1701 et seq.), shall be deposited into the lease revenue
account.

(d) Limitation.--Funds in the lease revenue account shall not exceed
$3,000,000 at any one time. Whenever funds in the lease revenue account
are obligated or expended so that the balance in the account falls below
that amount, lease revenues referred to in subsection (c)(2) shall be
deposited in the account to maintain a balance of $3,000,000.
(e) Termination of Account.--At NOTE: Certification. such time
as the Secretary of the Interior certifies that remediation of all
environmental contamination of Naval Petroleum Reserve Numbered 2 lands
in existence as of the date of the transfer of such lands under section
331 has been successfully completed, that all costs and expenses of
investigation, remediation, compliance actions, response, waste
management, impediments, fines, or penalties associated with
environmental contamination of such lands in existence as of the date of
the transfer have been paid in full, and that the transition costs of
the Department of the Interior referred to in subsection (b)(2) have
been paid in full, the lease revenue account shall be terminated and any
remaining funds shall be distributed in accordance with subsection (f).

(f) Distribution of NOTE: Applicability. Remaining Funds.--
Section 35 of the Mineral Leasing Act (30 U.S.C. 191) shall apply to the
payment and distribution of all funds remaining in the lease revenue
account upon its termination under subsection (e).

[[Page 697]]
119 STAT. 697

SEC. 333. NOTE: 10 USC 7420 note. LAND CONVEYANCE, PORTION OF NAVAL
PETROLEUM RESERVE NUMBERED 2, TO CITY OF TAFT, CALIFORNIA.

(a) Conveyance.--Effective NOTE: Effective date. on the date of
the enactment of this Act, there is conveyed to the City of Taft,
California (in this section referred to as the ``City''), all surface
right, title, and interest of the United States in and to a parcel of
real property consisting of approximately 220 acres located in the NE\1/
4\, the NE\1/4\ of the NW\1/4\, and the N\1/2\ of the SE\1/4\ of the
NW\1/4\ of section 18, township 32 south, range 24 east, Mount Diablo
meridian, Kern County, California.

(b) Consideration.--The conveyance under subsection (a) is made
without the payment of consideration by the City.
(c) Treatment of Existing Rights.--The conveyance under subsection
(a) is subject to valid existing rights, including Federal oil and gas
lease SAC-019577.
(d) Treatment of Minerals.--All coal, oil, gas, and other minerals
within the lands conveyed under subsection (a) are reserved to the
United States, except that the United States and its lessees, licensees,
permittees, or assignees shall have no right of surface use or occupancy
of the lands. Nothing in this subsection shall be construed to require
the United States or its lessees, licensees, permittees, or assignees to
support the surface of the conveyed lands.
(e) Indemnify and Hold Harmless.--The City shall indemnify, defend,
and hold harmless the United States for, from, and against, and the City
shall assume all responsibility for, any and all liability of any kind
or nature, including all loss, cost, expense, or damage, arising from
the City's use or occupancy of, or operations on, the land conveyed
under subsection (a), whether such use or occupancy of, or operations
on, occurred before or occur after the date of the enactment of this
Act.
(f) Instrument of Conveyance.--
Not NOTE: Deadline. Records. later than 1 year after the date of the
enactment of this Act, the Secretary shall execute, file, and cause to
be recorded in the appropriate office a deed or other appropriate
instrument documenting the conveyance made by this section.

SEC. 334. NOTE: Effective date. 10 USC 7420 note. REVOCATION OF LAND
WITHDRAWAL.

Effective on the date of the enactment of this Act, the Executive
Order of December 13, 1912, which created Naval Petroleum Reserve
Numbered 2, is revoked in its entirety.

Subtitle E--Production Incentives

SEC. 341. NOTE: 42 USC 15901. DEFINITION OF SECRETARY.

In this subtitle, the term ``Secretary'' means the Secretary of the
Interior.

SEC. 342. NOTE: 42 USC 15902. PROGRAM ON OIL AND GAS ROYALTIES IN-
KIND.

(a) Applicability of Section.--Notwithstanding any other provision
of law, this section applies to all royalty in-kind accepted by the
Secretary on or after the date of enactment of this Act under any
Federal oil or gas lease or permit under--
(1) section 36 of the Mineral Leasing Act (30 U.S.C. 192);
(2) section 27 of the Outer Continental Shelf Lands Act (43
U.S.C. 1353); or

[[Page 698]]
119 STAT. 698

(3) any other Federal law governing leasing of Federal land
for oil and gas development.

(b) Terms and Conditions.--All royalty accruing to the United States
shall, on the demand of the Secretary, be paid in-kind. If the Secretary
makes such a demand, the following provisions apply to the payment:
(1) Satisfaction of royalty obligation.--Delivery by, or on
behalf of, the lessee of the royalty amount and quality due
under the lease satisfies royalty obligation of the lessee for
the amount delivered, except that transportation and processing
reimbursements paid to, or deductions claimed by, the lessee
shall be subject to review and audit.
(2) Marketable condition.--
(A) Definition of marketable condition.--In this
paragraph, the term ``in marketable condition'' means
sufficiently free from impurities and otherwise in a
condition that the royalty production will be accepted
by a purchaser under a sales contract typical of the
field or area in which the royalty production was
produced.
(B) Requirement.--Royalty production shall be placed
in marketable condition by the lessee at no cost to the
United States.
(3) Disposition by the secretary.--The Secretary may--
(A) sell or otherwise dispose of any royalty
production taken in-kind (other than oil or gas
transferred under section 27(a)(3) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1353(a)(3)) for
not less than the market price; and
(B) transport or process (or both) any royalty
production taken in-kind.
(4) Retention by the secretary.--The Secretary may,
notwithstanding section 3302 of title 31, United States Code,
retain and use a portion of the revenues from the sale of oil
and gas taken in-kind that otherwise would be deposited to
miscellaneous receipts, without regard to fiscal year
limitation, or may use oil or gas received as royalty taken in-
kind (referred to in this paragraph as ``royalty production'')
to pay the cost of--
(A) transporting the royalty production;
(B) processing the royalty production;
(C) disposing of the royalty production; or
(D) any combination of transporting, processing, and
disposing of the royalty production.
(5) Limitation.--
(A) In general.--Except as provided in subparagraph
(B), the Secretary may not use revenues from the sale of
oil and gas taken in-kind to pay for personnel, travel,
or other administrative costs of the Federal Government.
(B) Exception.--Notwithstanding subparagraph (A),
the Secretary may use a portion of the revenues from
royalty in-kind sales, without fiscal year limitation,
to pay salaries and other administrative costs directly
related to the royalty in-kind program.

(c) Reimbursement of Cost.--If the lessee, pursuant to an agreement
with the United States or as provided in the lease, processes the
royalty gas or delivers the royalty oil or gas at a point not on or
adjacent to the lease area, the Secretary shall--

[[Page 699]]
119 STAT. 699

(1) reimburse the lessee for the reasonable costs of
transportation (not including gathering) from the lease to the
point of delivery or for processing costs; or
(2) allow the lessee to deduct the transportation or
processing costs in reporting and paying royalties in-value for
other Federal oil and gas leases.

(d) Benefit to the United States Required.--The Secretary may
receive oil or gas royalties in-kind only if the Secretary determines
that receiving royalties in-kind provides benefits to the United States
that are greater than or equal to the benefits that are likely to have
been received had royalties been taken in-value.
(e) Reports.--
(1) In general.--Not later than September 30, 2006, the
Secretary shall submit to Congress a report that addresses--
(A) actions taken to develop business processes and
automated systems to fully support the royalty-in-kind
capability to be used in tandem with the royalty-in-
value approach in managing Federal oil and gas revenue;
and
(B) future royalty-in-kind businesses operation
plans and objectives.
(2) Reports on oil or gas royalties taken in-kind.--For each
of fiscal years 2006 through 2015 in which the United States
takes oil or gas royalties in-kind from production in any State
or from the outer Continental Shelf, excluding royalties taken
in-kind and sold to refineries under subsection (h), the
Secretary shall submit to Congress a report that describes--
(A) the 1 or more methodologies used by the
Secretary to determine compliance with subsection (d),
including the performance standard for comparing amounts
received by the United States derived from royalties in-
kind to amounts likely to have been received had
royalties been taken in-value;
(B) an explanation of the evaluation that led the
Secretary to take royalties in-kind from a lease or
group of leases, including the expected revenue effect
of taking royalties in-kind;
(C) actual amounts received by the United States
derived from taking royalties in-kind and costs and
savings incurred by the United States associated with
taking royalties in-kind, including administrative
savings and any new or increased administrative costs;
and
(D) an evaluation of other relevant public benefits
or detriments associated with taking royalties in-kind.

(f) Deduction of Expenses.--
(1) In general.--Before making payments under section 35 of
the Mineral Leasing Act (30 U.S.C. 191) or section 8(g) of the
Outer Continental Shelf Lands Act (43 U.S.C. 1337(g)) of
revenues derived from the sale of royalty production taken in-
kind from a lease, the Secretary shall deduct amounts paid or
deducted under subsections (b)(4) and (c) and deposit the amount
of the deductions in the miscellaneous receipts of the Treasury.
(2) Accounting for deductions.--When the Secretary allows
the lessee to deduct transportation or processing costs under
subsection (c), the Secretary may not reduce any payments to
recipients of revenues derived from any other Federal oil and
gas lease as a consequence of that deduction.

[[Page 700]]
119 STAT. 700

(g) Consultation With States.--The Secretary--
(1) shall consult with a State before conducting a royalty
in-kind program under this subtitle within the State;
(2) may delegate management of any portion of the Federal
royalty in-kind program to the State except as otherwise
prohibited by Federal law; and
(3) shall consult annually with any State from which Federal
oil or gas royalty is being taken in-kind to ensure, to the
maximum extent practicable, that the royalty in-kind program
provides revenues to the State greater than or equal to the
revenues likely to have been received had royalties been taken
in-value.

(h) Small Refineries.--
(1) Preference.--If the Secretary finds that sufficient
supplies of crude oil are not available in the open market to
refineries that do not have their own source of supply for crude
oil, the Secretary may grant preference to those refineries in
the sale of any royalty oil accruing or reserved to the United
States under Federal oil and gas leases issued under any mineral
leasing law, for processing or use in those refineries at
private sale at not less than the market price.
(2) Proration among refineries in production area.--In
disposing of oil under this subsection, the Secretary may, at
the discretion of the Secretary, prorate the oil among
refineries described in paragraph (1) in the area in which the
oil is produced.

(i) Disposition to Federal Agencies.--
(1) Onshore royalty.--Any royalty oil or gas taken by the
Secretary in-kind from onshore oil and gas leases may be sold at
not less than the market price to any Federal agency.
(2) Offshore royalty.--Any royalty oil or gas taken in-kind
from a Federal oil or gas lease on the outer Continental Shelf
may be disposed of only under section 27 of the Outer
Continental Shelf Lands Act (43 U.S.C. 1353).

(j) Federal Low-Income Energy Assistance Programs.--
(1) Preference.--In disposing of royalty oil or gas taken
in-kind under this section, the Secretary may grant a preference
to any person, including any Federal or State agency, for the
purpose of providing additional resources to any Federal low-
income energy assistance program.
(2) Report.--Not later than 3 years after the date of
enactment of this Act, the Secretary shall submit a report to
Congress--
(A) assessing the effectiveness of granting
preferences specified in paragraph (1); and
(B) providing a specific recommendation on the
continuation of authority to grant preferences.

SEC. 343. NOTE: 42 USC 15903. MARGINAL PROPERTY PRODUCTION
INCENTIVES.

(a) Definition of Marginal Property.--Until such time as the
Secretary issues regulations under subsection (e) that prescribe a
different definition, in this section, the term ``marginal property''
means an onshore unit, communitization agreement, or lease not within a
unit or communitization agreement, that produces on average the combined
equivalent of less than 15 barrels of oil per well per day or 90,000,000
British thermal units of gas per

[[Page 701]]
119 STAT. 701

well per day calculated based on the average over the 3 most recent
production months, including only wells that produce on more than half
of the days during those 3 production months.
(b) Conditions for Reduction of Royalty Rate.--Until such time as
the Secretary issues regulations under subsection (e) that prescribe
different standards or requirements, the Secretary shall reduce the
royalty rate on--
(1) oil production from marginal properties as prescribed in
subsection (c) if the spot price of West Texas Intermediate
crude oil at Cushing, Oklahoma, is, on average, less than $15
per barrel (adjusted in accordance with the Consumer Price Index
for all-urban consumers, United States city average, as
published by the Bureau of Labor Statistics) for 90 consecutive
trading days; and
(2) gas production from marginal properties as prescribed in
subsection (c) if the spot price of natural gas delivered at
Henry Hub, Louisiana, is, on average, less than $2.00 per
million British thermal units (adjusted in accordance with the
Consumer Price Index for all-urban consumers, United States city
average, as published by the Bureau of Labor Statistics) for 90
consecutive trading days.

(c) Reduced Royalty Rate.--
(1) In general.--When a marginal property meets the
conditions specified in subsection (b), the royalty rate shall
be the lesser of--
(A) 5 percent; or
(B) the applicable rate under any other statutory or
regulatory royalty relief provision that applies to the
affected production.
(2) Period of effectiveness.--The reduced royalty rate under
this subsection shall be effective beginning on the first day of
the production month following the date on which the applicable
condition specified in subsection (b) is met.

(d) Termination of Reduced Royalty Rate.--A royalty rate prescribed
in subsection (c)(1) shall terminate--
(1) with respect to oil production from a marginal property,
on the first day of the production month following the date on
which--
(A) the spot price of West Texas Intermediate crude
oil at Cushing, Oklahoma, on average, exceeds $15 per
barrel (adjusted in accordance with the Consumer Price
Index for all-urban consumers, United States city
average, as published by the Bureau of Labor Statistics)
for 90 consecutive trading days; or
(B) the property no longer qualifies as a marginal
property; and
(2) with respect to gas production from a marginal property,
on the first day of the production month following the date on
which--
(A) the spot price of natural gas delivered at Henry
Hub, Louisiana, on average, exceeds $2.00 per million
British thermal units (adjusted in accordance with the
Consumer Price Index for all-urban consumers, United
States city average, as published by the Bureau of Labor
Statistics) for 90 consecutive trading days; or
(B) the property no longer qualifies as a marginal
property.

[[Page 702]]
119 STAT. 702

(e) Regulations Prescribing Different Relief.--
(1) Discretionary regulations.--The Secretary may by
regulation prescribe different parameters, standards, and
requirements for, and a different degree or extent of, royalty
relief for marginal properties in lieu of those prescribed in
subsections (a) through (d).
(2) Mandatory regulations.--Unless
a NOTE: Deadline. determination is made under paragraph (3),
not later than 18 months after the date of enactment of this
Act, the Secretary shall by regulation--
(A) prescribe standards and requirements for, and
the extent of royalty relief for, marginal properties
for oil and gas leases on the outer Continental Shelf;
and
(B) define what constitutes a marginal property on
the outer Continental Shelf for purposes of this
section.
(3) Report.--To the extent the Secretary determines that it
is not practicable to issue the regulations referred to in
paragraph (2), the Secretary shall provide a report to Congress
explaining such determination by not later than 18 months after
the date of enactment of this Act.
(4) Considerations.--In issuing regulations under this
subsection, the Secretary may consider--
(A) oil and gas prices and market trends;
(B) production costs;
(C) abandonment costs;
(D) Federal and State tax provisions and the effects
of those provisions on production economics;
(E) other royalty relief programs;
(F) regional differences in average wellhead prices;
(G) national energy security issues; and
(H) other relevant matters, as determined by the
Secretary.

(f) Savings Provision.--Nothing in this section prevents a lessee
from receiving royalty relief or a royalty reduction pursuant to any
other law (including a regulation) that provides more relief than the
amounts provided by this section.

SEC. 344. NOTE: 42 USC 15904. INCENTIVES FOR NATURAL GAS PRODUCTION
FROM DEEP WELLS IN THE SHALLOW WATERS OF THE GULF OF MEXICO.

(a) Royalty Incentive Regulations for Ultra Deep Gas Wells.--
(1) In general.--Not NOTE: Deadline. later than 180 days
after the date of enactment of this Act, in addition to any
other regulations that may provide royalty incentives for
natural gas produced from deep wells on oil and gas leases
issued pursuant to the Outer Continental Shelf Lands Act (43
U.S.C. 1331 et seq.), the Secretary shall issue regulations
granting royalty relief suspension volumes of not less than 35
billion cubic feet with respect to the production of natural gas
from ultra deep wells on leases issued in shallow waters less
than 400 meters deep located in the Gulf of Mexico wholly west
of 87 degrees, 30 minutes west longitude. NOTE: Effective
date. Notices. Federal Register, publication. Regulations
issued under this subsection shall be retroactive to the date
that the notice of proposed rulemaking is published in the
Federal Register.

[[Page 703]]
119 STAT. 703

(2) Suspension volumes.--The Secretary may grant suspension
volumes of not less than 35 billion cubic feet in any case in
which--
(A) the ultra deep well is a sidetrack; or
(B) the lease has previously produced from wells
with a perforated interval the top of which is at least
15,000 feet true vertical depth below the datum at mean
sea level.
(3) Definitions.--In this subsection:
(A) Ultra deep well.--The term ``ultra deep well''
means a well drilled with a perforated interval, the top
of which is at least 20,000 true vertical depth below
the datum at mean sea level.
(B) Sidetrack.--
(i) In general.--The term ``sidetrack'' means
a well resulting from drilling an additional hole
to a new objective bottom-hole location by leaving
a previously drilled hole.
(ii) Inclusion.--The term ``sidetrack''
includes--
(I) drilling a well from a platform
slot reclaimed from a previously drilled
well;
(II) re-entering and deepening a
previously drilled well; and
(III) a bypass from a sidetrack,
including drilling around material
blocking a hole or drilling to
straighten a crooked hole.

(b) Royalty NOTE: Deadline. Incentive Regulations for Deep Gas
Wells.--Not later than 180 days after the date of enactment of this Act,
in addition to any other regulations that may provide royalty incentives
for natural gas produced from deep wells on oil and gas leases issued
pursuant to the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et
seq.), the Secretary shall issue regulations granting royalty relief
suspension volumes with respect to production of natural gas from deep
wells on leases issued in waters more than 200 meters but less than 400
meters deep located in the Gulf of Mexico wholly west of 87 degrees, 30
minutes west longitude. The suspension volumes for deep wells within 200
to 400 meters of water depth shall be calculated using the same
methodology used to calculate the suspension volumes for deep wells in
the shallower waters of the Gulf of Mexico, and in no case shall the
suspension volumes for deep wells within 200 to 400 meters of water
depth be lower than those for deep wells in shallower
waters. NOTE: Effective date. Notices. Federal
Register, publication. Regulations issued under this subsection shall
be retroactive to the date that the notice of proposed rulemaking is
published in the Federal Register.

(c) Limitations.--The Secretary may place limitations on the royalty
relief granted under this section based on market price. The royalty
relief granted under this section shall not apply to a lease for which
deep water royalty relief is available.

SEC. 345. NOTE: 42 USC 15905. ROYALTY RELIEF FOR DEEP WATER
PRODUCTION.

(a) In General.--Subject to NOTE: Effective date. subsections
(b) and (c), for each tract located in water depths of greater than 400
meters in the Western and Central Planning Area of the Gulf of Mexico
(including the portion of the Eastern Planning Area of the Gulf of
Mexico encompassing whole lease blocks lying west of 87 degrees, 30
minutes West longitude), any oil or gas lease sale under the Outer

[[Page 704]]
119 STAT. 704

Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) occurring during
the 5-year period beginning on the date of enactment of this Act shall
use the bidding system authorized under section 8(a)(1)(H) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1337(a)(1)(H)).
(b) Suspension of Royalties.--The suspension of royalties under
subsection (a) shall be established at a volume of not less than--
(1) 5,000,000 barrels of oil equivalent for each lease in
water depths of 400 to 800 meters;
(2) 9,000,000 barrels of oil equivalent for each lease in
water depths of 800 to 1,600 meters;
(3) 12,000,000 barrels of oil equivalent for each lease in
water depths of 1,600 to 2,000 meters; and
(4) 16,000,000 barrels of oil equivalent for each lease in
water depths greater than 2,000 meters.

(c) Limitation.--The Secretary may place limitations on royalty
relief granted under this section based on market price.

SEC. 346. ALASKA OFFSHORE ROYALTY SUSPENSION.

Section 8(a)(3)(B) of the Outer Continental Shelf Lands Act (43
U.S.C. 1337(a)(3)(B)) is amended by inserting ``and in the Planning
Areas offshore Alaska'' after ``West longitude''.

SEC. 347. OIL AND GAS LEASING IN THE NATIONAL PETROLEUM RESERVE IN
ALASKA.

(a) Transfer of Authority.--
(1) Redesignation.--The Naval Petroleum Reserves Production
Act of 1976 (42 U.S.C. 6501 et seq.) is amended by redesignating
section 107 (42 U.S.C. 6507) as section 108.
(2) Transfer.--The NOTE: 42 USC 6506a. matter under the
heading ``exploration of national petroleum reserve in alaska''
under the heading ``energy and minerals'' of title I of Public
Law 96-514 (42 U.S.C. 6508) is--
(A) transferred to the Naval Petroleum Reserves
Production Act of 1976 (42 U.S.C. 6501 et seq.);
(B) redesignated as section 107 of that Act; and
(C) moved so as to appear after section 106 of that
Act (42 U.S.C. 6506).

(b) Competitive Leasing.--Section 107 of the Naval Petroleum
Reserves Production Act of 1976 (as amended by subsection (a)(2)) is
amended--
(1) by striking the heading and all that follows through
``Provided, That (1) activities'' and inserting the following:

``SEC. 107. COMPETITIVE LEASING OF OIL AND GAS.

``(a) In General.--The Secretary shall conduct an expeditious
program of competitive leasing of oil and gas in the Reserve in
accordance with this Act.
``(b) Mitigation of Adverse Effects.--Activities'';
(2) by striking ``Alaska (the Reserve); (2) the'' and
inserting ``Alaska''.

``(c) Land Use Planning; BLM Wilderness Study.--The'';
(3) by striking ``Reserve; (3) the'' and inserting
``Reserve''.

``(d) First Lease Sale.--The;'';
(4) by striking ``4332); (4) the'' and inserting ``4321 et
seq.)''.

``(e) Withdrawals.--The'';

[[Page 705]]
119 STAT. 705

(5) by striking ``herein; (5) bidding'' and inserting
``under this section''.

``(f) Bidding Systems.--Bidding'';
(6) by striking ``629); (6) lease'' and inserting ``629)''.

``(g) Geological Structures.--Lease'';
(7) by striking ``structures; (7) the'' and inserting
``structures''.

``(h) Size of Lease Tracts.--The'';
(8) by striking ``Secretary; (8)'' and all that follows
through ``Drilling, production,'' and inserting ``Secretary''.

``(i) NOTE: Deadlines. Terms.--
``(1) In general.--Each lease shall be issued for an initial
period of not more than 10 years, and shall be extended for so
long thereafter as oil or gas is produced from the lease in
paying quantities, oil or gas is capable of being produced in
paying quantities, or drilling or reworking operations, as
approved by the Secretary, are conducted on the leased land.
``(2) Renewal of leases with discoveries.--At the end of the
primary term of a lease the Secretary shall renew for an
additional 10-year term a lease that does not meet the
requirements of paragraph (1) if the lessee submits to the
Secretary an application for renewal not later than 60 days
before the expiration of the primary lease and the lessee
certifies, and the Secretary agrees, that hydrocarbon resources
were discovered on one or more wells drilled on the leased land
in such quantities that a prudent operator would hold the lease
for potential future development.
``(3) Renewal of leases without discoveries.--At the end of
the primary term of a lease the Secretary shall renew for an
additional 10-year term a lease that does not meet the
requirements of paragraph (1) if the lessee submits to the
Secretary an application for renewal not later than 60 days
before the expiration of the primary lease and pays the
Secretary a renewal fee of $100 per acre of leased land, and--
``(A) the lessee provides evidence, and the
Secretary agrees that, the lessee has diligently pursued
exploration that warrants continuation with the intent
of continued exploration or future potential development
of the leased land; or
``(B) all or part of the lease--
``(i) is part of a unit agreement covering a
lease described in subparagraph (A); and
``(ii) has not been previously contracted out
of the unit.
``(4) Applicability.--This subsection applies to a lease
that is in effect on or after the date of enactment of the
Energy Policy Act of 2005.
``(5) Expiration for NOTE: Deadline. failure to
produce.--Notwithstanding any other provision of this Act, if no
oil or gas is produced from a lease within 30 years after the
date of the issuance of the lease the lease shall expire.
``(6) Termination.--No lease issued under this section
covering lands capable of producing oil or gas in paying
quantities shall expire because the lessee fails to produce the
same due to circumstances beyond the control of the lessee.

``(j) Unit Agreements.--

[[Page 706]]
119 STAT. 706

``(1) In general.--For the purpose of conservation of the
natural resources of all or part of any oil or gas pool, field,
reservoir, or like area, lessees (including representatives) of
the pool, field, reservoir, or like area may unite with each
other, or jointly or separately with others, in collectively
adopting and operating under a unit agreement for all or part of
the pool, field, reservoir, or like area (whether or not any
other part of the oil or gas pool, field, reservoir, or like
area is already subject to any cooperative or unit plan of
development or operation), if the Secretary determines the
action to be necessary or advisable in the public interest. In
determining the public interest, the Secretary should consider,
among other things, the extent to which the unit agreement will
minimize the impact to surface resources of the leases and will
facilitate consolidation of facilities.
``(2) Consultation.--In making a determination under
paragraph (1), the Secretary shall consult with and provide
opportunities for participation by the State of Alaska or a
Regional Corporation (as defined in section 3 of the Alaska
Native Claims Settlement Act (43 U.S.C. 1602)) with respect to
the creation or expansion of units that include acreage in which
the State of Alaska or the Regional Corporation has an interest
in the mineral estate.
``(3) Production allocation methodology.--(A) The Secretary
may use a production allocation methodology for each
participating area within a unit that includes solely Federal
land in the Reserve.
``(B) The Secretary shall use a production allocation
methodology for each participating area within a unit that
includes Federal land in the Reserve and non-Federal land based
on the characteristics of each specific oil or gas pool, field,
reservoir, or like area to take into account reservoir
heterogeneity and area variation in reservoir producibility
across diverse leasehold interests. The implementation of the
foregoing production allocation methodology shall be controlled
by agreement among the affected lessors and lessees.
``(4) Benefit of operations.--Drilling, production,'';
(9) by striking ``When separate'' and inserting the
following:
``(5) Pooling.--If separate'';
(10) by inserting ``(in consultation with the owners of the
other land)'' after ``determined by the Secretary of the
Interior'';
(11) by striking ``thereto; (10) to'' and all that follows
through ``the terms provided therein'' and inserting ``to the
agreement.

``(k) Exploration Incentives.--
``(1) In general.--
``(A) Waiver, suspension, or reduction.--To
encourage the greatest ultimate recovery of oil or gas
or in the interest of conservation, the Secretary may
waive, suspend, or reduce the rental fees or minimum
royalty, or reduce the royalty on an entire leasehold
(including on any lease operated pursuant to a unit
agreement), whenever (after consultation with the State
of Alaska and the North Slope Borough of Alaska and the
concurrence of any Regional Corporation for leases that
include land that was made available for acquisition by
the Regional Corporation under the provisions of section
1431(o) of the Alaska National

[[Page 707]]
119 STAT. 707

Interest Lands Conservation Act (16 U.S.C. 3101 et
seq.)) in the judgment of the Secretary it is necessary
to do so to promote development, or whenever in the
judgment of the Secretary the leases cannot be
successfully operated under the terms provided therein.
``(B) Applicability.--This paragraph applies to a
lease that is in effect on or after the date of
enactment of the Energy Policy Act of 2005.'';
(12) by striking ``The Secretary is authorized to'' and
inserting the following:
``(2) Suspension of operations and production.--The
Secretary may'';
(13) by striking ``In the event'' and inserting the
following:
``(3) Suspension of payments.--If'';
(14) by striking ``thereto; and (11) all'' and inserting
``to the lease.

``(l) Receipts.--All'';
(15) by redesignating subparagraphs (A), (B), and (C) as
paragraphs (1), (2), and (3), respectively;
(16) by striking ``Any agency'' and inserting the following:

``(m) Explorations.--Any agency'';
(17) by striking ``Any action'' and inserting the following:

``(n) Environmental Impact Statements.--
``(1) Judicial review.--Any action'';
(18) by striking ``The detailed'' and inserting the
following:
``(2) Initial lease sales.--The detailed'';
(19) by striking ``section 104(b) of the Naval Petroleum
Reserves Production Act of 1976 (90 Stat. 304; 42 U.S.C. 6504)''
and inserting ``section 104(a)''; and
(20) by adding at the end the following:

``(o) Regulations.--As soon as practicable after the date of
enactment of the Energy Policy Act of 2005, the Secretary shall issue
regulations to implement this section.
``(p) Waiver of Administration for Conveyed Lands.--
``(1) In general.--Notwithstanding section 14(g) of the
Alaska Native Claims Settlement Act (43 U.S.C. 1613(g))--
``(A) the Secretary of the Interior shall waive
administration of any oil and gas lease to the extent
that the lease covers any land in the Reserve in which
all of the subsurface estate is conveyed to the Arctic
Slope Regional Corporation (referred to in this
subsection as the `Corporation');
``(B)(i) in a case in which a conveyance of a
subsurface estate described in subparagraph (A) does not
include all of the land covered by the oil and gas
lease, the person that owns the subsurface estate in any
particular portion of the land covered by the lease
shall be entitled to all of the revenues reserved under
the lease as to that portion, including, without
limitation, all the royalty payable with respect to oil
or gas produced from or allocated to that portion;
``(ii) in a case described in clause (i), the
Secretary of the Interior shall--
``(I) segregate the lease into 2
leases, 1 of which shall cover only the
subsurface estate conveyed to the
Corporation; and

[[Page 708]]
119 STAT. 708

``(II) waive administration of the
lease that covers the subsurface estate
conveyed to the Corporation; and
``(iii) the segregation of the lease described
in clause (ii)(I) has no effect on the obligations
of the lessee under either of the resulting
leases, including obligations relating to
operations, production, or other circumstances
(other than payment of rentals or royalties); and
``(C) nothing in this subsection limits the
authority of the Secretary of the Interior to manage the
federally-owned surface estate within the Reserve.''.

(c) Conforming Amendments.--Section 104 of the Naval Petroleum
Reserves Production Act of 1976 (42 U.S.C. 6504) is amended--
(1) by striking subsection (a); and
(2) by redesignating subsections (b) through (d) as
subsections (a) through (c), respectively.

SEC. 348. NOTE: Alaska. 42 USC 15906. NORTH SLOPE SCIENCE
INITIATIVE.

(a) Establishment.--
(1) In general.--The Secretary of the Interior shall
establish a long-term initiative to be known as the ``North
Slope Science Initiative'' (referred to in this section as the
``Initiative'').
(2) Purpose.--The purpose of the Initiative shall be to
implement efforts to coordinate collection of scientific data
that will provide a better understanding of the terrestrial,
aquatic, and marine ecosystems of the North Slope of Alaska.

(b) Objectives.--To ensure that the Initiative is conducted through
a comprehensive science strategy and implementation plan, the Initiative
shall, at a minimum--
(1) identify and prioritize information needs for inventory,
monitoring, and research activities to address the individual
and cumulative effects of past, ongoing, and anticipated
development activities and environmental change on the North
Slope;
(2) develop an understanding of information needs for
regulatory and land management agencies, local governments, and
the public;
(3) focus on prioritization of pressing natural resource
management and ecosystem information needs, coordination, and
cooperation among agencies and organizations;
(4) coordinate ongoing and future inventory, monitoring, and
research activities to minimize duplication of effort, share
financial resources and expertise, and assure the collection of
quality information;
(5) identify priority needs not addressed by agency science
programs in effect on the date of enactment of this Act and
develop a funding strategy to meet those needs;
(6) provide a consistent approach to high caliber science,
including inventory, monitoring, and research;
(7) maintain and improve public and agency access to--
(A) accumulated and ongoing research; and
(B) contemporary and traditional local knowledge;
and

[[Page 709]]
119 STAT. 709

(8) ensure through appropriate peer review that the science
conducted by participating agencies and organizations is of the
highest technical quality.

(c) Membership.--
(1) In general.--To ensure comprehensive collection of
scientific data, in carrying out the Initiative, the Secretary
shall consult and coordinate with Federal, State, and local
agencies that have responsibilities for land and resource
management across the North Slope.
(2) Cooperative agreements.--The Secretary shall enter into
cooperative agreements with the State of Alaska, the North Slope
Borough, the Arctic Slope Regional Corporation, and other
Federal agencies as appropriate to coordinate efforts, share
resources, and fund projects under this section.

(d) Science NOTE: Establishment. Technical Advisory Panel.--
(1) In general.--The Initiative shall include a panel to
provide advice on proposed inventory, monitoring, and research
functions.
(2) Membership.--The panel described in paragraph (1) shall
consist of a representative group of not more than 15 scientists
and technical experts from diverse professions and interests,
including the oil and gas industry, subsistence users, Native
Alaskan entities, conservation organizations, wildlife
management organizations, and academia, as determined by the
Secretary.

(e) Reports.--Not later than 3 years after the date of enactment of
this section and each year thereafter, the Secretary shall publish a
report that describes the studies and findings of the Initiative.
(f) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.

SEC. 349. NOTE: 42 USC 15907. ORPHANED, ABANDONED, OR IDLED WELLS ON
FEDERAL LAND.

(a) In General.--The NOTE: Deadline. Secretary, in cooperation
with the Secretary of Agriculture, shall establish a program not later
than 1 year after the date of enactment of this Act to remediate,
reclaim, and close orphaned, abandoned, or idled oil and gas wells
located on land administered by the land management agencies within the
Department of the Interior and the Department of Agriculture.

(b) Activities.--The program under subsection (a) shall--
(1) include a means of ranking orphaned, abandoned, or idled
wells sites for priority in remediation, reclamation, and
closure, based on public health and safety, potential
environmental harm, and other land use priorities;
(2) provide for identification and recovery of the costs of
remediation, reclamation, and closure from persons or other
entities currently providing a bond or other financial assurance
required under State or Federal law for an oil or gas well that
is orphaned, abandoned, or idled; and
(3) provide for recovery from the persons or entities
identified under paragraph (2), or their sureties or guarantors,
of the costs of remediation, reclamation, and closure of such
wells.

(c) Cooperation and Consultations.--In carrying out the program
under subsection (a), the Secretary shall--

[[Page 710]]
119 STAT. 710

(1) work cooperatively with the Secretary of Agriculture and
the States within which Federal land is located; and
(2) consult with the Secretary of Energy and the Interstate
Oil and Gas Compact Commission.

(d) Plan.--Not NOTE: Deadline. later than 1 year after the date
of enactment of this Act, the Secretary, in cooperation with the
Secretary of Agriculture, shall submit to Congress a plan for carrying
out the program under subsection (a).

(e) Idled Well.--For the purposes of this section, a well is idled
if--
(1) the well has been nonoperational for at least 7 years;
and
(2) there is no anticipated beneficial use for the well.

(f) Federal Reimbursement for Orphaned Well Reclamation Pilot
Program.--
(1) Reimbursement for remediating, reclaiming, and closing
wells on land subject to a new lease.--The Secretary shall carry
out a pilot program under which, in issuing a new oil and gas
lease on federally owned land on which 1 or more orphaned wells
are located, the Secretary--
(A) may require, other than as a condition of the
lease, that the lessee remediate, reclaim, and close in
accordance with standards established by the Secretary,
all orphaned wells on the land leased; and
(B) shall develop a program to reimburse a lessee,
through a royalty credit against the Federal share of
royalties owed or other means, for the reasonable actual
costs of remediating, reclaiming, and closing the
orphaned wells pursuant to that requirement.
(2) Reimbursement for reclaiming orphaned wells on other
land.--In carrying out this subsection, the Secretary--
(A) may authorize any lessee under an oil and gas
lease on federally owned land to reclaim in accordance
with the Secretary's standards--
(i) an orphaned well on unleased federally
owned land; or
(ii) an orphaned well located on an existing
lease on federally owned land for the reclamation
of which the lessee is not legally responsible;
and
(B) shall develop a program to provide reimbursement
of 100 percent of the reasonable actual costs of
remediating, reclaiming, and closing the orphaned well,
through credits against the Federal share of royalties
or other means.
(3) Regulations.--The Secretary may issue such regulations
as are appropriate to carry out this subsection.

(g) Technical Assistance Program for Non-Federal Land.--
(1) In general.--The Secretary of Energy shall establish a
program to provide technical and financial assistance to oil and
gas producing States to facilitate State efforts over a 10-year
period to ensure a practical and economical remedy for
environmental problems caused by orphaned or abandoned oil and
gas exploration or production well sites on State or private
land.
(2) Assistance.--The Secretary of Energy shall work with the
States, through the Interstate Oil and Gas Compact Commission,
to assist the States in quantifying and mitigating

[[Page 711]]
119 STAT. 711

environmental risks of onshore orphaned or abandoned oil or gas
wells on State and private land.
(3) Activities.--The program under paragraph (1) shall
include--
(A) mechanisms to facilitate identification, if
feasible, of the persons currently providing a bond or
other form of financial assurance required under State
or Federal law for an oil or gas well that is orphaned
or abandoned;
(B) criteria for ranking orphaned or abandoned well
sites based on factors such as public health and safety,
potential environmental harm, and other land use
priorities;
(C) information and training programs on best
practices for remediation of different types of sites;
and
(D) funding of State mitigation efforts on a cost-
shared basis.

(h) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
carry out this section $25,000,000 for each of fiscal years 2006
through 2010.
(2) Use.--Of the amounts authorized under paragraph (1),
$5,000,000 are authorized for each fiscal year for activities
under subsection (f).

SEC. 350. COMBINED HYDROCARBON LEASING.

(a) Special Provisions Regarding Leasing.--Section 17(b)(2) of the
Mineral Leasing Act (30 U.S.C. 226(b)(2)) is amended--
(1) by inserting ``(A)'' after ``(2)''; and
(2) by adding at the end the following:

``(B) For any area that contains any combination of tar sand and oil
or gas (or both), the Secretary may issue under this Act, separately--
``(i) a lease for exploration for and extraction of tar
sand; and
``(ii) a lease for exploration for and development of oil
and gas.

``(C) A lease issued for tar sand shall be issued using the same
bidding process, annual rental, and posting period as a lease issued for
oil and gas, except that the minimum acceptable bid required for a lease
issued for tar sand shall be $2 per acre.
``(D) The Secretary may waive, suspend, or alter any requirement
under section 26 that a permittee under a permit authorizing prospecting
for tar sand must exercise due diligence, to promote any resource
covered by a combined hydrocarbon lease.''.
(b) Conforming Amendment.--Section 17(b)(1)(B) of the Mineral
Leasing Act (30 U.S.C. 226(b)(1)(B)) is amended in the second sentence
by inserting ``, subject to paragraph (2)(B),'' after ``Secretary''.
(c) Regulations.--Not NOTE: Deadline. 30 USC 226 note. later
than 45 days after the date of enactment of this Act, the Secretary
shall issue final regulations to implement this section.

SEC. 351. NOTE: National Geological and Geophysical Data Preservation
Program Act of 2005. 42 USC 15908. PRESERVATION OF
GEOLOGICAL AND GEOPHYSICAL DATA.

(a) Short Title.--This section may be cited as the ``National
Geological and Geophysical Data Preservation Program Act of 2005''.

[[Page 712]]
119 STAT. 712

(b) Program.--The Secretary shall carry out a National Geological
and Geophysical Data Preservation Program in accordance with this
section--
(1) to archive geologic, geophysical, and engineering data,
maps, well logs, and samples;
(2) to provide a national catalog of such archival material;
and
(3) to provide technical and financial assistance related to
the archival material.

(c) Plan.--Not NOTE: Deadline. later than 1 year after the date
of enactment of this Act, the Secretary shall submit to Congress a plan
for the implementation of the Program.

(d) Data Archive System.--
(1) Establishment.--The Secretary shall establish, as a
component of the Program, a data archive system to provide for
the storage, preservation, and archiving of subsurface, surface,
geological, geophysical, and engineering data and samples. The
Secretary, in consultation with the Advisory Committee, shall
develop guidelines relating to the data archive system,
including the types of data and samples to be preserved.
(2) System components.--The system shall be comprised of
State agencies that elect to be part of the system and agencies
within the Department of the Interior that maintain geological
and geophysical data and samples that are designated by the
Secretary in accordance with this subsection. The Program shall
provide for the storage of data and samples through data
repositories operated by such agencies.
(3) Limitation of designation.--The Secretary may not
designate a State agency as a component of the data archive
system unless that agency is the agency that acts as the
geological survey in the State.
(4) Data from federal land.--The data archive system shall
provide for the archiving of relevant subsurface data and
samples obtained from Federal land--
(A) in the most appropriate repository designated
under paragraph (2), with preference being given to
archiving data in the State in which the data were
collected; and
(B) consistent with all applicable law and
requirements relating to confidentiality and proprietary
data.

(e) National Catalog.--
(1) In general.--As soon as practicable after the date of
enactment of this Act, the Secretary shall develop and maintain,
as a component of the Program, a national catalog that
identifies--
(A) data and samples available in the data archive
system established under subsection (d);
(B) the repository for particular material in the
system; and
(C) the means of accessing the material.
(2) Availability.--The Secretary shall make the national
catalog accessible to the public on the site of the Survey on
the Internet, consistent with all applicable requirements
related to confidentiality and proprietary data.

(f) Advisory Committee.--
(1) In general.--The Advisory Committee shall advise the
Secretary on planning and implementation of the Program.

[[Page 713]]
119 STAT. 713

(2) New duties.--In addition to its duties under the
National Geologic Mapping Act of 1992 (43 U.S.C. 31a et seq.),
the Advisory Committee shall perform the following duties:
(A) Advise the Secretary on developing guidelines
and procedures for providing assistance for facilities
under subsection (g)(1).
(B) Review and critique the draft implementation
plan prepared by the Secretary under subsection (c).
(C) Identify useful studies of data archived under
the Program that will advance understanding of the
Nation's energy and mineral resources, geologic hazards,
and engineering geology.
(D) Review the progress of the Program in archiving
significant data and preventing the loss of such data,
and the scientific progress of the studies funded under
the Program.
(E) Include in the annual report to the Secretary
required under section 5(b)(3) of the National Geologic
Mapping Act of 1992 (43 U.S.C. 31d(b)(3)) an evaluation
of the progress of the Program toward fulfilling the
purposes of the Program under subsection (b).

(g) Financial Assistance.--
(1) Archive facilities.--Subject to the availability of
appropriations, the Secretary shall provide financial assistance
to a State agency that is designated under subsection (d)(2) for
providing facilities to archive energy material.
(2) Studies.--Subject to the availability of appropriations,
the Secretary shall provide financial assistance to any State
agency designated under subsection (d)(2) for studies and
technical assistance activities that enhance understanding,
interpretation, and use of materials archived in the data
archive system established under subsection (d).
(3) Federal share.--The Federal share of the cost of an
activity carried out with assistance under this subsection shall
be not more than 50 percent of the total cost of the activity.
(4) Private contributions.--
The NOTE: Applicability. Secretary shall apply to the non-
Federal share of the cost of an activity carried out with
assistance under this subsection the value of private
contributions of property and services used for that activity.

(h) Report.--The Secretary shall include in each report under
section 8 of the National Geologic Mapping Act of 1992 (43 U.S.C. 31g)--
(1) a description of the status of the Program;
(2) an evaluation of the progress achieved in developing the
Program during the period covered by the report; and
(3) any recommendations for legislative or other action the
Secretary considers necessary and appropriate to fulfill the
purposes of the Program under subsection (b).

(i) Maintenance of State Effort.--It is the intent of Congress that
the States not use this section as an opportunity to reduce State
resources applied to the activities that are the subject of the Program.
(j) Definitions.--In this section:
(1) Advisory committee.--The term ``Advisory Committee''
means the advisory committee established under section 5 of the
National Geologic Mapping Act of 1992 (43 U.S.C. 31d).

[[Page 714]]
119 STAT. 714

(2) Program.--The term ``Program'' means the National
Geological and Geophysical Data Preservation Program carried out
under this section.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Interior, acting through the Director of the United
States Geological Survey.
(4) Survey.--The term ``Survey'' means the United States
Geological Survey.

(k) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $30,000,000 for each of fiscal
years 2006 through 2010.

SEC. 352. OIL AND GAS LEASE ACREAGE LIMITATIONS.

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

SEC. 353. NOTE: 42 USC 15909. GAS HYDRATE PRODUCTION INCENTIVE.

(a) Purpose.--The purpose of this section is to promote natural gas
production from the natural gas hydrate resources on the outer
Continental Shelf and Federal lands in Alaska by providing royalty
incentives.
(b) Suspension of Royalties.--
(1) In general.--The Secretary may grant royalty relief in
accordance with this section for natural gas produced from gas
hydrate resources under an eligible lease.
(2) Eligible leases.--A lease shall be an eligible lease for
purposes of this section if--
(A) it is issued under the Outer Continental Shelf
Lands Act (43 U.S.C. 1331 et seq.), or is an oil and gas
lease issued for onshore Federal lands in Alaska;
(B) it is issued prior to January 1, 2016; and
(C) production under the lease of natural gas from
gas hydrate resources commences prior to January 1,
2018.
(3) Amount of relief.--The Secretary shall conduct a
rulemaking and grant royalty relief under this section as a
suspension volume if the Secretary determines that such royalty
relief would encourage production of natural gas from gas
hydrate resources from an eligible lease. The maximum suspension
volume shall be 30 billion cubic feet of natural gas per lease.
Such relief shall be in addition to any other royalty relief
under any other provision applicable to the lease that does not
specifically grant a gas hydrate production incentive. Such
royalty suspension volume shall be applied to any eligible
production occurring on or after the date of publication of the
advanced notice of proposed rulemaking.
(4) Limitation.--The Secretary may place limitations on
royalty relief granted under this section based on market price.

(c) Application.--This section shall apply to any eligible lease
issued before, on, or after the date of enactment of this Act.
(d) Rulemakings.--
(1) Requirement.--
The NOTE: Publication. Notices. Deadlines. Secretary shall
publish the advanced notice of proposed rulemaking within 180
days after the date of enactment of this Act and complete the
rulemaking

[[Page 715]]
119 STAT. 715

implementing this section within 365 days after the date of
enactment of this Act.
(2) Gas hydrate resources defined.--Such regulations shall
define the term ``gas hydrate resources'' to include both the
natural gas content of gas hydrates within the hydrate stability
zone and free natural gas trapped by and beneath the hydrate
stability zone.

(e) Review.--Not NOTE: Deadline. Reports. later than 365 days
after the date of enactment of this Act, the Secretary, in consultation
with the Secretary of Energy, shall carry out a review of, and submit to
Congress a report on, further opportunities to enhance production of
natural gas from gas hydrate resources on the outer Continental Shelf
and on Federal lands in Alaska through the provision of other production
incentives or through technical or financial assistance.

SEC. 354. NOTE: 42 USC 15910. ENHANCED OIL AND NATURAL GAS
PRODUCTION THROUGH CARBON DIOXIDE INJECTION.

(a) Production Incentive.--
(1) Findings.--Congress finds the following:
(A) Approximately two-thirds of the original oil in
place in the United States remains unproduced.
(B) Enhanced oil and natural gas production from the
sequestering of carbon dioxide and other appropriate
gases has the potential to increase oil and natural gas
production.
(C) Capturing and productively using carbon dioxide
would help reduce the carbon intensity of the economy.
(2) Purpose.--The purpose of this section is--
(A) to promote the capturing, transportation, and
injection of produced carbon dioxide, natural carbon
dioxide, and other appropriate gases or other matter for
sequestration into oil and gas fields; and
(B) to promote oil and natural gas production from
the outer Continental Shelf and onshore Federal lands
under lease by providing royalty incentives to use
enhanced recovery techniques using injection of the
substances referred to in subparagraph (A).

(b) Suspension of Royalties.--
(1) In general.--If the Secretary determines that reduction
of the royalty under a Federal oil and gas lease that is an
eligible lease is in the public interest and promotes the
purposes of this section, the Secretary shall undertake a
rulemaking to provide for such reduction for an eligible lease.
(2) Rulemakings.--
The NOTE: Publication. Notices. Deadlines. Secretary shall
publish the advanced notice of proposed rulemaking within 180
days after the date of enactment of this Act and complete the
rulemaking implementing this section within 365 days after the
date of enactment of this Act.
(3) Eligible leases.--A lease shall be an eligible lease for
purposes of this section if--
(A) it is a lease for production of oil and gas from
the outer Continental Shelf or Federal onshore lands;
(B) the injection of the substances referred to in
subsection (a)(2)(A) will be used as an enhanced
recovery technique on such lease; and
(C) the Secretary determines that the lease contains
oil or gas that would not likely be produced without the
royalty reduction provided under this section.

[[Page 716]]
119 STAT. 716

(4) Amount of relief.--The rulemaking shall provide for a
suspension volume, which shall not exceed 5,000,000 barrels of
oil equivalent for each eligible lease. Such suspension volume
shall be applied to any production from an eligible lease
occurring on or after the date of publication of any advanced
notice of proposed rulemaking under this subsection.
(5) Limitation.--The Secretary may place limitations on the
royalty reduction granted under this section based on market
price.
(6) Application.--This section shall apply to any eligible
lease issued before, on, or after the date of enactment of this
Act.

(c) Demonstration Program.--
(1) Establishment.--
(A) In general.--The Secretary of Energy shall
establish a competitive grant program to provide grants
to producers of oil and gas to carry out projects to
inject carbon dioxide for the purpose of enhancing
recovery of oil or natural gas while increasing the
sequestration of carbon dioxide.
(B) Projects.--The demonstration program shall
provide for--
(i) not more than 10 projects in the Willistin
Basin in North Dakota and Montana; and
(ii) 1 project in the Cook Inlet Basin in
Alaska.
(2) Requirements.--
(A) In general.--The Secretary of Energy shall issue
requirements relating to applications for grants under
paragraph (1).
(B) Rulemaking.--The issuance of requirements under
subparagraph (A) shall not require a rulemaking.
(C) Minimum requirements.--At a minimum, the
Secretary shall require under subparagraph (A) that an
application for a grant include--
(i) a description of the project proposed in
the application;
(ii) an estimate of the production increase
and the duration of the production increase from
the project, as compared to conventional recovery
techniques, including water flooding;
(iii) an estimate of the carbon dioxide
sequestered by project, over the life of the
project;
(iv) a plan to collect and disseminate data
relating to each project to be funded by the
grant;
(v) a description of the means by which the
project will be sustainable without Federal
assistance after the completion of the term of the
grant;
(vi) a complete description of the costs of
the project, including acquisition, construction,
operation, and maintenance costs over the expected
life of the project;
(vii) a description of which costs of the
project will be supported by Federal assistance
under this section; and
(viii) a description of any secondary or
tertiary recovery efforts in the field and the
efficacy of water flood recovery techniques used.

[[Page 717]]
119 STAT. 717

(3) Partners.--An applicant for a grant under paragraph (1)
may carry out a project under a pilot program in partnership
with 1 or more other public or private entities.
(4) Selection criteria.--In evaluating applications under
this subsection, the Secretary of Energy shall--
(A) consider the previous experience with similar
projects of each applicant; and
(B) give priority consideration to applications
that--
(i) are most likely to maximize production of
oil and gas in a cost-effective manner;
(ii) sequester significant quantities of
carbon dioxide from anthropogenic sources;
(iii) demonstrate the greatest commitment on
the part of the applicant to ensure funding for
the proposed project and the greatest likelihood
that the project will be maintained or expanded
after Federal assistance under this section is
completed; and
(iv) minimize any adverse environmental
effects from the project.
(5) Demonstration program requirements.--
(A) Maximum amount.--The Secretary of Energy shall
not provide more than $3,000,000 in Federal assistance
under this subsection to any applicant.
(B) Cost sharing.--The Secretary of Energy shall
require cost-sharing under this subsection in accordance
with section 988.
(C) Period of grants.--
(i) In general.--A NOTE: Deadline. project
funded by a grant under this subsection shall
begin construction not later than 2 years after
the date of provision of the grant, but in any
case not later than December 31, 2010.
(ii) Term.--The Secretary shall not provide
grant funds to any applicant under this subsection
for a period of more than 5 years.
(6) Transfer of NOTE: Procedures. information and
knowledge.--The Secretary of Energy shall establish mechanisms
to ensure that the information and knowledge gained by
participants in the program under this subsection are
transferred among other participants and interested persons,
including other applicants that submitted applications for a
grant under this subsection.
(7) Schedule.--
(A) Publication.--Not NOTE: Deadline. Federal
Register, publication. later than 180 days after the
date of enactment of this Act, the Secretary of Energy
shall publish in the Federal Register, and elsewhere, as
appropriate, a request for applications to carry out
projects under this subsection.
(B) Date for applications.--
An NOTE: Deadline. application for a grant under
this subsection shall be submitted not later than 180
days after the date of publication of the request under
subparagraph (A).
(C) Selection.--After the date by which applications
for grants are required to be submitted under
subparagraph (B), the Secretary of Energy, in a timely
manner, shall select, after peer review and based on the
criteria under paragraph (4), those projects to be
awarded a grant under this subsection.

[[Page 718]]
119 STAT. 718

(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.

SEC. 355. ASSESSMENT OF DEPENDENCE OF STATE OF HAWAII ON OIL.

(a) Assessment.--The Secretary of Energy shall assess the economic
implications of the dependence of the State of Hawaii on oil as the
principal source of energy for the State, including--
(1) the short- and long-term prospects for crude oil supply
disruption and price volatility and potential impacts on the
economy of Hawaii;
(2) the economic relationship between oil-fired generation
of electricity from residual fuel and refined petroleum products
consumed for ground, marine, and air transportation;
(3) the technical and economic feasibility of increasing the
contribution of renewable energy resources for generation of
electricity, on an island-by-island basis, including--
(A) siting and facility configuration;
(B) environmental, operational, and safety
considerations;
(C) the availability of technology;
(D) the effects on the utility system, including
reliability;
(E) infrastructure and transport requirements;
(F) community support; and
(G) other factors affecting the economic impact of
such an increase and any effect on the economic
relationship described in paragraph (2);
(4) the technical and economic feasibility of using
liquefied natural gas to displace residual fuel oil for electric
generation, including neighbor island opportunities, and the
effect of the displacement on the economic relationship
described in paragraph (2), including--
(A) the availability of supply;
(B) siting and facility configuration for onshore
and offshore liquefied natural gas receiving terminals;
(C) the factors described in subparagraphs (B)
through (F) of paragraph (3); and
(D) other economic factors;
(5) the technical and economic feasibility of using
renewable energy sources (including hydrogen) for ground,
marine, and air transportation energy applications to displace
the use of refined petroleum products, on an island-by-island
basis, and the economic impact of the displacement on the
relationship described in paragraph (2); and
(6) an island-by-island approach to--
(A) the development of hydrogen from renewable
resources; and
(B) the application of hydrogen to the energy needs
of Hawaii.

(b) Contracting Authority.--The Secretary of Energy may carry out
the assessment under subsection (a) directly or, in whole or in part,
through 1 or more contracts with qualified public or private entities.

[[Page 719]]
119 STAT. 719

(c) Report.--Not later than 300 days after the date of enactment of
this Act, the Secretary of Energy shall prepare (in consultation with
agencies of the State of Hawaii and other stakeholders, as appropriate),
and submit to Congress, a report describing the findings, conclusions,
and recommendations resulting from the assessment.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.

SEC. 356. NOTE: 42 USC 15911. DENALI COMMISSION.

(a) Definition of Commission.--In this section, the term
``Commission'' means the Denali Commission established by the Denali
Commission Act of 1998 (42 U.S.C. 3121 note; Public Law 105-277).
(b) Energy Programs.--The Commission shall use amounts made
available under subsection (d) to carry out energy programs, including--
(1) energy generation and development, including--
(A) fuel cells, hydroelectric, solar, wind, wave,
and tidal energy; and
(B) alternative energy sources;
(2) the construction of energy transmission, including
interties;
(3) the replacement and cleanup of fuel tanks;
(4) the construction of fuel transportation networks and
related facilities;
(5) power cost equalization programs; and
(6) projects using coal as a fuel, including coal
gasification projects.

(c) Open Meetings.--
(1) In general.--Except as provided in paragraph (2), a
meeting of the Commission shall be open to the public if--
(A) the Commission members take action on behalf of
the Commission; or
(B) the deliberations of the Commission determine,
or result in the joint conduct or disposition of,
official Commission business.
(2) Exceptions.--Paragraph (1) shall not apply to any
portion of a Commission meeting for which the Commission, in
public session, votes to close the meeting for the reasons
described in paragraph (2), (4), (5), or (6) of subsection (c)
of section 552b of title 5, United States Code.
(3) Public notice.--
(A) In general.--At NOTE: Deadline. least 1 week
before a meeting of the Commission, the Commission shall
make a public announcement of the meeting that
describes--
(i) the time, place, and subject matter of the
meeting;
(ii) whether the meeting is to be open or
closed to the public; and
(iii) the name and telephone number of an
appropriate person to respond to requests for
information about the meeting.
(B) Additional notice.--The Commission shall make a
public announcement of any change to the information

[[Page 720]]
119 STAT. 720

made available under subparagraph (A) at the earliest
practicable time.
(4) Minutes.--The Commission shall keep, and make available
to the public, a transcript, electronic recording, or minutes
from each Commission meeting, except for portions of the meeting
closed under paragraph (2).

(d) Authorization of Appropriations.--There is authorized to be
appropriated to the Commission not more than $55,000,000 for each of
fiscal years 2006 through 2015 to carry out subsection (b).

SEC. 357. NOTE: 42 USC 15912. COMPREHENSIVE INVENTORY OF OCS OIL AND
NATURAL GAS RESOURCES.

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

(b) Reports.--The Secretary shall submit a report to Congress on the
inventory of estimates and the analysis of restrictions or impediments,
together with any recommendations, within 6 months of the date of
enactment of the section. NOTE: Public information. The report shall
be publicly available and updated at least every 5 years.

Subtitle F--Access to Federal Lands

SEC. 361. FEDERAL ONSHORE OIL AND GAS LEASING AND PERMITTING PRACTICES.

(a) Review of Onshore Oil and Gas Leasing Practices.--
(1) In general.--The Secretary of the Interior, in
consultation with the Secretary of Agriculture with respect to
National Forest System lands under the jurisdiction of the
Department of Agriculture, shall perform an internal review of
current Federal onshore oil and gas leasing and permitting
practices.
(2) Inclusions.--The review shall include the process for--
(A) accepting or rejecting offers to lease;

[[Page 721]]
119 STAT. 721

(B) administrative appeals of decisions or orders of
officers or employees of the Bureau of Land Management
with respect to a Federal oil or gas lease;
(C) considering surface use plans of operation,
including the timeframes in which the plans are
considered, and any recommendations for improving and
expediting the process; and
(D) identifying stipulations to address site-
specific concerns and conditions, including those
stipulations relating to the environment and resource
use conflicts.

(b) Report.--Not later than 180 days after the date of enactment of
this Act, the Secretary of the Interior and the Secretary of Agriculture
shall transmit a report to Congress that describes--
(1) actions taken under section 3 of Executive Order No.
13212 (42 U.S.C. 13201 note); and
(2) actions taken or any plans to improve the Federal
onshore oil and gas leasing program.

SEC. 362. NOTE: 42 USC 15921. MANAGEMENT OF FEDERAL OIL AND GAS
LEASING PROGRAMS.

(a) Timely Action on Leases and Permits.--
(1) Secretary of the interior.--To ensure timely action on
oil and gas leases and applications for permits to drill on land
otherwise available for leasing, the Secretary of the Interior
(referred to in this section as the ``Secretary'') shall--
(A) ensure expeditious compliance with section
102(2)(C) of the National Environmental Policy Act of
1969 (42 U.S.C. 4332(2)(C)) and any other applicable
environmental and cultural resources laws;
(B) improve consultation and coordination with the
States and the public; and
(C) improve the collection, storage, and retrieval
of information relating to the oil and gas leasing
activities.
(2) Secretary of agriculture.--To ensure timely action on
oil and gas lease applications for permits to drill on land
otherwise available for leasing, the Secretary of Agriculture
shall--
(A) ensure expeditious compliance with all
applicable environmental and cultural resources laws;
and
(B) improve the collection, storage, and retrieval
of information relating to the oil and gas leasing
activities.

(b) Best Management Practices.--
(1) In general.--Not NOTE: Deadline. later than 18
months after the date of enactment of this Act, the Secretary
shall develop and implement best management practices to--
(A) improve the administration of the onshore oil
and gas leasing program under the Mineral Leasing Act
(30 U.S.C. 181 et seq.); and
(B) ensure timely action on oil and gas leases and
applications for permits to drill on land otherwise
available for leasing.
(2) Considerations.--In developing the best management
practices under paragraph (1), the Secretary shall consider any
recommendations from the review under section 361.
(3) Regulations.--Not NOTE: Deadline. later than 180
days after the development of the best management practices
under paragraph (1), the Secretary shall publish, for public
comment,

[[Page 722]]
119 STAT. 722

proposed regulations that set forth specific timeframes for
processing leases and applications in accordance with the best
management practices, including deadlines for--
(A) approving or disapproving--
(i) resource management plans and related
documents;
(ii) lease applications;
(iii) applications for permits to drill; and
(iv) surface use plans; and
(B) related administrative appeals.

(c) Improved Enforcement.--The Secretary and the Secretary of
Agriculture shall improve inspection and enforcement of oil and gas
activities, including enforcement of terms and conditions in permits to
drill on land under the jurisdiction of the Secretary and the Secretary
of Agriculture, respectively.
(d) Authorization of Appropriations.--In addition to amounts made
available to carry out activities relating to oil and gas leasing on
public land administered by the Secretary and National Forest System
land administered by the Secretary of Agriculture, there are authorized
to be appropriated for each of fiscal years 2006 through 2010--
(1) to the Secretary, acting through the Director of the
Bureau of Land Management--
(A) $40,000,000 to carry out subsections (a)(1) and
(b); and
(B) $20,000,000 to carry out subsection (c);
(2) to the Secretary, acting through the Director of the
United States Fish and Wildlife Service, $5,000,000 to carry out
subsection (a)(1); and
(3) to the Secretary of Agriculture, acting through the
Chief of the Forest Service, $5,000,000 to carry out subsections
(a)(2) and (c).

SEC. 363. NOTE: 42 USC 15922. CONSULTATION REGARDING OIL AND GAS
LEASING ON PUBLIC LAND.

(a) In General.--Not NOTE: Deadline. Memorandum. later than 180
days after the date of enactment of this Act, the Secretary of the
Interior and the Secretary of Agriculture shall enter into a memorandum
of understanding regarding oil and gas leasing on--
(1) public land under the jurisdiction of the Secretary of
the Interior; and
(2) National Forest System land under the jurisdiction of
the Secretary of Agriculture.

(b) Contents.--The memorandum of understanding shall include
provisions that--
(1) establish administrative procedures and lines of
authority that ensure timely processing of--
(A) oil and gas lease applications;
(B) surface use plans of operation, including steps
for processing surface use plans; and
(C) applications for permits to drill consistent
with applicable timelines;
(2) eliminate duplication of effort by providing for
coordination of planning and environmental compliance efforts;
(3) ensure that lease stipulations are--
(A) applied consistently;
(B) coordinated between agencies; and

[[Page 723]]
119 STAT. 723

(C) only as restrictive as necessary to protect the
resource for which the stipulations are applied;
(4) establish a joint data retrieval system that is capable
of--
(A) tracking applications and formal requests made
in accordance with procedures of the Federal onshore oil
and gas leasing program; and
(B) providing information regarding the status of
the applications and requests within the Department of
the Interior and the Department of Agriculture; and
(5) establish a joint geographic information system mapping
system for use in--
(A) tracking surface resource values to aid in
resource management; and
(B) processing surface use plans of operation and
applications for permits to drill.

SEC. 364. ESTIMATES OF OIL AND GAS RESOURCES UNDERLYING ONSHORE FEDERAL
LAND.

(a) Assessment.--Section 604 of the Energy Act of 2000 (42 U.S.C.
6217) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by striking ``reserve''; and
(ii) by striking ``and'' after the semicolon;
and
(B) by striking paragraph (2) and inserting the
following:
``(2) the extent and nature of any restrictions or
impediments to the development of the resources, including--
``(A) impediments to the timely granting of leases;
``(B) post-lease restrictions, impediments, or
delays on development for conditions of approval,
applications for permits to drill, or processing of
environmental permits; and
``(C) permits or restrictions associated with
transporting the resources for entry into commerce; and
``(3) the quantity of resources not produced or introduced
into commerce because of the restrictions.'';
(2) in subsection (b)--
(A) by striking ``reserve'' and inserting
``resource''; and
(B) by striking ``publically'' and inserting
``publicly''; and
(3) by striking subsection (d) and inserting the following:

``(d) Assessments.--Using the inventory, the Secretary of Energy
shall make periodic assessments of economically recoverable resources
accounting for a range of parameters such as current costs, commodity
prices, technology, and regulations.''.
(b) Methodology.--The NOTE: 42 USC 15923. Secretary of the
Interior shall use the same assessment methodology across all geological
provinces, areas, and regions in preparing and issuing national
geological assessments to ensure accurate comparisons of geological
resources.

SEC. 365. NOTE: 42 USC 15924. PILOT PROJECT TO IMPROVE FEDERAL
PERMIT COORDINATION.

(a) Establishment.--The Secretary of the Interior (referred to in
this section as the ``Secretary'') shall establish a Federal Permit
Streamlining Pilot Project (referred to in this section as the ``Pilot
Project'').

[[Page 724]]
119 STAT. 724

(b) Memorandum of Understanding.--
(1) In general.--Not NOTE: Deadline. later than 90 days
after the date of enactment of this Act, the Secretary shall
enter into a memorandum of understanding for purposes of this
section with--
(A) the Secretary of Agriculture;
(B) the Administrator of the Environmental
Protection Agency; and
(C) the Chief of Engineers.
(2) State participation.--The Secretary may request that the
Governors of Wyoming, Montana, Colorado, Utah, and New Mexico be
signatories to the memorandum of understanding.

(c) Designation of Qualified Staff.--
(1) In general.--Not NOTE: Deadline. later than 30 days
after the date of the signing of the memorandum of understanding
under subsection (b), all Federal signatory parties shall, if
appropriate, assign to each of the field offices identified in
subsection (d) an employee who has expertise in the regulatory
issues relating to the office in which the employee is employed,
including, as applicable, particular expertise in--
(A) the consultations and the preparation of
biological opinions under section 7 of the Endangered
Species Act of 1973 (16 U.S.C. 1536);
(B) permits under section 404 of Federal Water
Pollution Control Act (33 U.S.C. 1344);
(C) regulatory matters under the Clean Air Act (42
U.S.C. 7401 et seq.);
(D) planning under the National Forest Management
Act of 1976 (16 U.S.C. 472a et seq.); and
(E) the preparation of analyses under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.).
(2) Duties.--Each employee assigned under paragraph (1)
shall--
(A) NOTE: Deadline. not later than 90 days after
the date of assignment, report to the Bureau of Land
Management Field Managers in the office to which the
employee is assigned;
(B) be responsible for all issues relating to the
jurisdiction of the home office or agency of the
employee; and
(C) participate as part of the team of personnel
working on proposed energy projects, planning, and
environmental analyses.

(d) Field Offices.--The following Bureau of Land Management Field
Offices shall serve as the Pilot Project offices:
(1) Rawlins, Wyoming.
(2) Buffalo, Wyoming.
(3) Miles City, Montana.
(4) Farmington, New Mexico.
(5) Carlsbad, New Mexico.
(6) Grand Junction/Glenwood Springs, Colorado.
(7) Vernal, Utah.

(e) Reports.--Not later than 3 years after the date of enactment of
this Act, the Secretary shall submit to Congress a report that--
(1) outlines the results of the Pilot Project to date; and
(2) makes a recommendation to the President regarding
whether the Pilot Project should be implemented throughout the
United States.

[[Page 725]]
119 STAT. 725

(f) Additional Personnel.--The Secretary shall assign to each field
office identified in subsection (d) any additional personnel that are
necessary to ensure the effective implementation of--
(1) the Pilot Project; and
(2) other programs administered by the field offices,
including inspection and enforcement relating to energy
development on Federal land, in accordance with the multiple use
mandate of the Federal Land Policy and Management Act of 1976
(43 U.S.C. 1701 et seq.).

(g) Permit Processing Improvement Fund.--Section 35 of the Mineral
Leasing Act (30 U.S.C. 191) is amended by adding at the end the
following:
``(c)(1) Notwithstanding the first sentence of subsection (a), any
rentals received from leases in any State (other than the State of
Alaska) on or after the date of enactment of this subsection shall be
deposited in the Treasury, to be allocated in accordance with paragraph
(2).
``(2) Of the amounts deposited in the Treasury under paragraph (1)--
``(A) 50 percent shall be paid by the Secretary of the
Treasury to the State within the boundaries of which the leased
land is located or the deposits were derived; and
``(B) 50 percent shall be deposited in a special fund in the
Treasury, to be known as the `BLM Permit Processing Improvement
Fund' (referred to in this subsection as the `Fund').

``(3) For each of fiscal years 2006 through 2015, the Fund shall be
available to the Secretary of the Interior for expenditure, without
further appropriation and without fiscal year limitation, for the
coordination and processing of oil and gas use authorizations on onshore
Federal land under the jurisdiction of the Pilot Project offices
identified in section 365(d) of the Energy Policy Act of 2005.''.
(h) Transfer of Funds.--For the purposes of coordination and
processing of oil and gas use authorizations on Federal land under the
administration of the Pilot Project offices identified in subsection
(d), the Secretary may authorize the expenditure or transfer of such
funds as are necessary to--
(1) the United States Fish and Wildlife Service;
(2) the Bureau of Indian Affairs;
(3) the Forest Service;
(4) the Environmental Protection Agency;
(5) the Corps of Engineers; and
(6) the States of Wyoming, Montana, Colorado, Utah, and New
Mexico.

(i) Fees.--During the period in which the Pilot Project is
authorized, the Secretary shall not implement a rulemaking that would
enable an increase in fees to recover additional costs related to
processing drilling-related permit applications and use authorizations.
(j) Savings Provision.--Nothing in this section affects--
(1) the operation of any Federal or State law; or
(2) any delegation of authority made by the head of a
Federal agency whose employees are participating in the Pilot
Project.

[[Page 726]]
119 STAT. 726

SEC. 366. DEADLINE FOR CONSIDERATION OF APPLICATIONS FOR PERMITS.

Section 17 of the Mineral Leasing Act (30 U.S.C. 226) is amended by
adding at the end the following:
``(p) Deadlines for Consideration of Applications for Permits.--
``(1) In general.--Not NOTE: Notification. later than 10
days after the date on which the Secretary receives an
application for any permit to drill, the Secretary shall--
``(A) notify the applicant that the application is
complete; or
``(B) notify the applicant that information is
missing and specify any information that is required to
be submitted for the application to be complete.
``(2) Issuance or deferral.--Not later than 30 days after
the applicant for a permit has submitted a complete application,
the Secretary shall--
``(A) issue the permit, if the requirements under
the National Environmental Policy Act of 1969 and other
applicable law have been completed within such
timeframe; or
``(B) NOTE: Notice. defer the decision on the
permit and provide to the applicant a notice--
``(i) that specifies any steps that the
applicant could take for the permit to be issued;
and
``(ii) a list of actions that need to be taken
by the agency to complete compliance with
applicable law together with timelines and
deadlines for completing such actions.
``(3) Requirements for deferred applications.--
``(A) In general.--If the Secretary provides notice
under paragraph (2)(B), the applicant shall have a
period of 2 years from the date of receipt of the notice
in which to complete all requirements specified by the
Secretary, including providing information needed for
compliance with the National Environmental Policy Act of
1969.
``(B) Issuance of decision on permit.--If the
applicant completes the requirements within the period
specified in subparagraph (A), the Secretary shall issue
a decision on the permit not later than 10 days after
the date of completion of the requirements described in
subparagraph (A), unless compliance with the National
Environmental Policy Act of 1969 and other applicable
law has not been completed within such timeframe.
``(C) Denial of permit.--If the applicant does not
complete the requirements within the period specified in
subparagraph (A) or if the applicant does not comply
with applicable law, the Secretary shall deny the
permit.''.

SEC. 367. NOTE: 42 USC 15925. FAIR MARKET VALUE DETERMINATIONS FOR
LINEAR RIGHTS-OF-WAY ACROSS PUBLIC LANDS AND NATIONAL
FORESTS.

(a) Update of Fee Schedule.--Not NOTE: Deadline. later than 1
year after the date of enactment of this section--
(1) the Secretary of the Interior shall update section
2806.20 of title 43, Code of Federal Regulations, as in effect
on the date of enactment of this section, to revise the per

[[Page 727]]
119 STAT. 727

acre rental fee zone value schedule by State, county, and type
of linear right-of-way use to reflect current values of land in
each zone; and
(2) the Secretary of Agriculture shall make the same
revision for linear rights-of-way granted, issued, or renewed
under title V of the Federal Lands Policy and Management Act of
1976 (43 U.S.C. 1761 et seq.) on National Forest System land.

(b) Fair Market Value Rental Determination for Linear Rights-of-
way.--The fair market value rent of a linear right-of-way across public
lands or National Forest System lands issued under section 504 of the
Federal Land Policy and Management Act of 1976 (43 U.S.C. 1764) or
section 28 of the Mineral Leasing Act (30 U.S.C. 185) shall be
determined in accordance with subpart 2806 of title 43, Code of Federal
Regulations, as in effect on the date of enactment of this section
(including the annual or periodic updates specified in the regulations)
and as updated in accordance with subsection (a).

SEC. 368. NOTE: 42 USC 15926. ENERGY RIGHT-OF-WAY CORRIDORS ON
FEDERAL LAND.

(a) Western States.--Not NOTE: Deadline. later than 2 years
after the date of enactment of this Act, the Secretary of Agriculture,
the Secretary of Commerce, the Secretary of Defense, the Secretary of
Energy, and the Secretary of the Interior (in this section referred to
collectively as ``the Secretaries''), in consultation with the Federal
Energy Regulatory Commission, States, tribal or local units of
governments as appropriate, affected utility industries, and other
interested persons, shall consult with each other and shall--
(1) designate, under their respective authorities, corridors
for oil, gas, and hydrogen pipelines and electricity
transmission and distribution facilities on Federal land in the
eleven contiguous Western States (as defined in section 103(o)
of the Federal Land Policy and Management Act of 1976 (43 U.S.C.
1702(o));
(2) perform any environmental reviews that may be required
to complete the designation of such corridors; and
(3) incorporate the designated corridors into the relevant
agency land use and resource management plans or equivalent
plans.

(b) Other States.--Not NOTE: Deadline. later than 4 years after
the date of enactment of this Act, the Secretaries, in consultation with
the Federal Energy Regulatory Commission, affected utility industries,
and other interested persons, shall jointly--
(1) identify corridors for oil, gas, and hydrogen pipelines
and electricity transmission and distribution facilities on
Federal land in States other than those described in subsection
(a); and
(2) schedule prompt action to identify, designate, and
incorporate the corridors into the applicable land use plans.

(c) Ongoing Responsibilities.--
The NOTE: Procedures. Secretaries, in consultation with the Federal
Energy Regulatory Commission, affected utility industries, and other
interested parties, shall establish procedures under their respective
authorities that--
(1) ensure that additional corridors for oil, gas, and
hydrogen pipelines and electricity transmission and distribution
facilities on Federal land are promptly identified and
designated as necessary; and

[[Page 728]]
119 STAT. 728

(2) expedite applications to construct or modify oil, gas,
and hydrogen pipelines and electricity transmission and
distribution facilities within such corridors, taking into
account prior analyses and environmental reviews undertaken
during the designation of such corridors.

(d) Considerations.--In carrying out this section, the Secretaries
shall take into account the need for upgraded and new electricity
transmission and distribution facilities to--
(1) improve reliability;
(2) relieve congestion; and
(3) enhance the capability of the national grid to deliver
electricity.

(e) Specifications of Corridor.--A corridor designated under this
section shall, at a minimum, specify the centerline, width, and
compatible uses of the corridor.

SEC. 369. NOTE: Oil Shale, Tar Sands, and Other Strategic
Unconventional Fuels Act of 2005. Deadlines. 42 USC
15927. OIL SHALE, TAR SANDS, AND OTHER STRATEGIC
UNCONVENTIONAL FUELS.

(a) Short Title.--This section may be cited as the ``Oil Shale, Tar
Sands, and Other Strategic Unconventional Fuels Act of 2005''.
(b) Declaration of Policy.--Congress declares that it is the policy
of the United States that--
(1) United States oil shale, tar sands, and other
unconventional fuels are strategically important domestic
resources that should be developed to reduce the growing
dependence of the United States on politically and economically
unstable sources of foreign oil imports;
(2) the development of oil shale, tar sands, and other
strategic unconventional fuels, for research and commercial
development, should be conducted in an environmentally sound
manner, using practices that minimize impacts; and
(3) development of those strategic unconventional fuels
should occur, with an emphasis on sustainability, to benefit the
United States while taking into account affected States and
communities.

(c) Leasing Program for Research and Development of Oil Shale and
Tar Sands.--In accordance with section 21 of the Mineral Leasing Act (30
U.S.C. 241) and any other applicable law, except as provided in this
section, not later than 180 days after the date of enactment of this
Act, from land otherwise available for leasing, the Secretary of the
Interior (referred to in this section as the ``Secretary'') shall make
available for leasing such land as the Secretary considers to be
necessary to conduct research and development activities with respect to
technologies for the recovery of liquid fuels from oil shale and tar
sands resources on public lands. Prospective public lands within each of
the States of Colorado, Utah, and Wyoming shall be made available for
such research and development leasing.
(d) Programmatic Environmental Impact Statement and Commercial
Leasing Program for Oil Shale and Tar Sands.--
(1) Programmatic environmental impact statement.--Not later
than 18 months after the date of enactment of this Act, in
accordance with section 102(2)(C) of the National Environmental
Policy Act of 1969 (42 U.S.C. 4332(2)(C)), the Secretary shall
complete a programmatic environmental impact statement for a
commercial leasing program for oil shale and tar sands resources
on public lands, with an emphasis on

[[Page 729]]
119 STAT. 729

the most geologically prospective lands within each of the
States of Colorado, Utah, and Wyoming.
(2) Final regulation.--Not later than 6 months after the
completion of the programmatic environmental impact statement
under this subsection, the Secretary shall publish a final
regulation establishing such program.

(e) Commencement of Commercial Leasing of Oil Shale and Tar Sands.--
Not later than 180 days after publication of the final regulation
required by subsection (d), the Secretary shall consult with the
Governors of States with significant oil shale and tar sands resources
on public lands, representatives of local governments in such States,
interested Indian tribes, and other interested persons, to determine the
level of support and interest in the States in the development of tar
sands and oil shale resources. If the Secretary finds sufficient support
and interest exists in a State, the Secretary may conduct a lease sale
in that State under the commercial leasing program regulations. Evidence
of interest in a lease sale under this subsection shall include, but not
be limited to, appropriate areas nominated for leasing by potential
lessees and other interested parties.
(f) Diligent Development Requirements.--
The NOTE: Regulations. Secretary shall, by regulation, designate
work requirements and milestones to ensure the diligent development of
the lease.

(g) Initial Report by the Secretary of the Interior.--Within 90 days
after the date of enactment of this Act, the Secretary of the Interior
shall report to the Committee on Resources of the House of
Representatives and the Committee on Energy and Natural Resources of the
Senate on--
(1) the interim actions necessary to--
(A) develop the program, complete the programmatic
environmental impact statement, and promulgate the final
regulation as required by subsection (d); and
(B) conduct the first lease sales under the program
as required by subsection (e); and
(2) a schedule to complete such actions within the time
limits mandated by this section.

(h) Task Force.--
(1) Establishment.--The Secretary of Energy, in cooperation
with the Secretary of the Interior and the Secretary of Defense,
shall establish a task force to develop a program to coordinate
and accelerate the commercial development of strategic
unconventional fuels, including but not limited to oil shale and
tar sands resources within the United States, in an integrated
manner.
(2) Composition.--The Task Force shall be composed of--
(A) the Secretary of Energy (or the designee of the
Secretary);
(B) the Secretary of the Interior (or the designee
of the Secretary of the Interior);
(C) the Secretary of Defense (or the designee of the
Secretary of Defense);
(D) the Governors of affected States; and
(E) representatives of local governments in affected
areas.
(3) Recommendations.--The Task Force shall make such
recommendations regarding promoting the development of the

[[Page 730]]
119 STAT. 730

strategic unconventional fuels resources within the United
States as it may deem appropriate.
(4) Partnerships.--The Task Force shall make recommendations
with respect to initiating a partnership with the Province of
Alberta, Canada, for purposes of sharing information relating to
the development and production of oil from tar sands, and
similar partnerships with other nations that contain significant
oil shale resources.
(5) Reports.--
(A) Initial report.--Not later than 180 days after
the date of enactment of this Act, the Task Force shall
submit to the President and Congress a report that
describes the analysis and recommendations of the Task
Force.
(B) Subsequent reports.--The Secretary shall provide
an annual report describing the progress in developing
the strategic unconventional fuels resources within the
United States for each of the 5 years following
submission of the report provided for in subparagraph
(A).

(i) Office of NOTE: Establishment. Petroleum Reserves.--
(1) In general.--The Office of Petroleum Reserves of the
Department of Energy shall--
(A) coordinate the creation and implementation of a
commercial strategic fuel development program for the
United States;
(B) evaluate the strategic importance of
unconventional sources of strategic fuels to the
security of the United States;
(C) promote and coordinate Federal Government
actions that facilitate the development of strategic
fuels in order to effectively address the energy supply
needs of the United States;
(D) identify, assess, and recommend appropriate
actions of the Federal Government required to assist in
the development and manufacturing of strategic fuels;
and
(E) coordinate and facilitate appropriate
relationships between private industry and the Federal
Government to promote sufficient and timely private
investment to commercialize strategic fuels for domestic
and military use.
(2) Consultation and coordination.--The Office of Petroleum
Reserves shall work closely with the Task Force and coordinate
its staff support.
(3) Annual reports.--Not later than 180 days after the date
of enactment of this Act and annually thereafter, the Secretary
shall submit to Congress a report that describes the activities
of the Office of Petroleum Reserves carried out under this
subsection.

(j) Mineral Leasing Act Amendments.--
(1) Section 17.--Section 17(b)(2) of the Mineral Leasing Act
(30 U.S.C. 226(b)(2)), as amended by section 350, is further
amended--
(A) in subparagraph (A) (as designated by the
amendment made by subsection (a)(1) of that section) by
designating the first, second, and third sentences as
clauses (i), (ii), and (iii), respectively;
(B) by moving clause (ii), as so designated, so as
to begin immediately after and below clause (i);

[[Page 731]]
119 STAT. 731

(C) by moving clause (iii), as so designated, so as
to begin immediately after and below clause (ii);
(D) in clause (i) of subparagraph (A) (as designated
by subparagraph (A) of this paragraph) by striking
``five thousand one hundred and twenty'' and inserting
``5,760''; and
(E) by adding at the end the following:
``(iv) No lease issued under this paragraph shall be
included in any chargeability limitation associated with oil and
gas leases.''.
(2) Section 21.--Section 21(a) of the Mineral Leasing Act
(30 U.S.C. 241(a)) is amended--
(A) by striking ``(a) That the Secretary'' and
inserting the following:

``(a)(1) The Secretary'';
(B) by striking ``; that no lease'' and inserting a
period, followed by the following:
``(2) No lease'';
(C) by striking ``Leases may be for'' and inserting
the following:
``(3) Leases may be for'';
(D) by striking ``For the privilege'' and inserting
the following:
``(4) For the privilege'';
(E) in paragraph (2) (as designated by subparagraph
(B) of this paragraph) by striking ``five thousand one
hundred and twenty'' and inserting ``5,760'';
(F) in paragraph (4) (as designated by subparagraph
(D) of this paragraph) by striking ``rate of 50 cents
per acre'' and inserting ``rate of $2.00 per acre'';
(G)(i) by striking ``: Provided further, That not
more than one lease shall be granted under this section
to any'' and inserting ``: Provided further, That no'';
and
(ii) by striking ``except that with respect to
leases for'' and inserting ``shall acquire or hold more
than 50,000 acres of oil shale leases in any one State.
For''; and
(H) by adding at the end the following:
``(5) No lease issued under this section shall be included
in any chargeability limitation associated with oil and gas
leases.''.

(k) Interagency Coordination and Expeditious Review of Permitting
Process.--
(1) Department of the interior as lead agency.--Upon written
request of a prospective applicant for Federal authorization to
develop a proposed oil shale or tar sands project, the
Department of the Interior shall act as the lead Federal agency
for the purposes of coordinating all applicable Federal
authorizations and environmental reviews. To the maximum extent
practicable under applicable Federal law, the Secretary shall
coordinate this Federal authorization and review process with
any Indian tribes and State and local agencies responsible for
conducting any separate permitting and environmental reviews.
(2) Implementing regulations.--Not later than 6 months after
the date of enactment of this Act, the Secretary shall issue any
regulations necessary to implement this subsection.

(l) Cost-shared Demonstration Technologies.--

[[Page 732]]
119 STAT. 732

(1) Identification.--The Secretary of Energy shall identify
technologies for the development of oil shale and tar sands
that--
(A) are ready for demonstration at a commercially-
representative scale; and
(B) have a high probability of leading to commercial
production.
(2) Assistance.--For each technology identified under
paragraph (1), the Secretary of Energy may provide--
(A) technical assistance;
(B) assistance in meeting environmental and
regulatory requirements; and
(C) cost-sharing assistance.

(m) National Oil Shale and Tar Sands Assessment.--
(1) Assessment.--
(A) In general.--The Secretary shall carry out a
national assessment of oil shale and tar sands resources
for the purposes of evaluating and mapping oil shale and
tar sands deposits, in the geographic areas described in
subparagraph (B). In conducting such an assessment, the
Secretary shall make use of the extensive geological
assessment work for oil shale and tar sands already
conducted by the United States Geological Survey.
(B) Geographic areas.--The geographic areas referred
to in subparagraph (A), listed in the order in which the
Secretary shall assign priority, are--
(i) the Green River Region of the States of
Colorado, Utah, and Wyoming;
(ii) the Devonian oil shales and other
hydrocarbon-bearing rocks having the nomenclature
of ``shale'' located east of the Mississippi
River; and
(iii) any remaining area in the central and
western United States (including the State of
Alaska) that contains oil shale and tar sands, as
determined by the Secretary.
(2) Use of state surveys and universities.--In carrying out
the assessment under paragraph (1), the Secretary may request
assistance from any State-administered geological survey or
university.

(n) Land Exchanges.--
(1) In general.--To facilitate the recovery of oil shale and
tar sands, especially in areas where Federal, State, and private
lands are intermingled, the Secretary shall consider the use of
land exchanges where appropriate and feasible to consolidate
land ownership and mineral interests into manageable areas.
(2) Identification and priority of public lands.--The
Secretary shall identify public lands containing deposits of oil
shale or tar sands within the Green River, Piceance Creek,
Uintah, and Washakie geologic basins, and shall give priority to
implementing land exchanges within those basins. The Secretary
shall consider the geology of the respective basin in
determining the optimum size of the lands to be consolidated.
(3) Compliance with section 206 of flpma.--A land exchange
undertaken in furtherance of this subsection shall be
implemented in accordance with section 206 of the Federal Land
Policy and Management Act of 1976 (43 U.S.C. 1716).

[[Page 733]]
119 STAT. 733

(o) Royalty Rates for Leases.--The Secretary shall establish
royalties, fees, rentals, bonus, or other payments for leases under this
section that shall--
(1) encourage development of the oil shale and tar sands
resource; and
(2) ensure a fair return to the United States.

(p) Heavy Oil Technical and Economic Assessment.--The Secretary of
Energy shall update the 1987 technical and economic assessment of
domestic heavy oil resources that was prepared by the Interstate Oil and
Gas Compact Commission. Such an update should include all of North
America and cover all unconventional oil, including heavy oil, tar sands
(oil sands), and oil shale.
(q) Procurement of Unconventional Fuels by the Department of
Defense.--
(1) In general.--Chapter 141 of title 10, United States
Code, is amended by inserting after section 2398 the following:

``Sec. 2398a. Procurement of fuel derived from coal, oil shale, and tar
sands

``(a) Use of Fuel to Meet Department of Defense Needs.--The
Secretary of Defense shall develop a strategy to use fuel produced, in
whole or in part, from coal, oil shale, and tar sands (referred to in
this section as a `covered fuel') that are extracted by either mining or
in-situ methods and refined or otherwise processed in the United States
in order to assist in meeting the fuel requirements of the Department of
Defense when the Secretary determines that it is in the national
interest.
``(b) Authority to Procure.--The Secretary of Defense may enter into
1 or more contracts or other agreements (that meet the requirements of
this section) to procure a covered fuel to meet 1 or more fuel
requirements of the Department of Defense.
``(c) Clean Fuel Requirements.--A covered fuel may be procured under
subsection (b) only if the covered fuel meets such standards for clean
fuel produced from domestic sources as the Secretary of Defense shall
establish for purposes of this section in consultation with the
Department of Energy.
``(d) Multiyear Contract Authority.--Subject to applicable
provisions of law, any contract or other agreement for the procurement
of covered fuel under subsection (b) may be for 1 or more years at the
election of the Secretary of Defense.
``(e) Fuel Source Analysis.--In order to facilitate the procurement
by the Department of Defense of covered fuel under subsection (b), the
Secretary of Defense may carry out a comprehensive assessment of current
and potential locations in the United States for the supply of covered
fuel to the Department.''.
(2) Clerical amendment.--The table of sections for chapter
141 of title 10, United States Code, is amended by inserting
after the item relating to section 2398 the following:

``2398a. Procurement of fuel derived from coal, oil shale, and tar
sands.''.

(r) State Water Rights.--Nothing in this section preempts or affects
any State water law or interstate compact relating to water.
(s) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.

[[Page 734]]
119 STAT. 734

SEC. 370. FINGER LAKES WITHDRAWAL.

All Federal land within the boundary of Finger Lakes National Forest
in the State of New York is withdrawn from--
(1) all forms of entry, appropriation, or disposal under the
public land laws; and
(2) disposition under all laws relating to oil and gas
leasing.

SEC. 371. NOTE: 30 USC 188 note. REINSTATEMENT OF LEASES.

(a) Leases NOTE: Effective date. Termination date. Terminated
for Certain Failure to Pay Rental.--Notwithstanding section 31(d)(2)(B)
of the Mineral Leasing Act (30 U.S.C. 188(d)(2)(B)) as in effect before
the effective date of this section, and notwithstanding the amendment
made by subsection (b) of this section, the Secretary of the Interior
may reinstate any oil and gas lease issued under that Act that was
terminated for failure of a lessee to pay the full amount of rental on
or before the anniversary date of the lease, during the period beginning
on September 1, 2001, and ending on June 30, 2004, if--
(1) NOTE: Deadline. not later than 120 days after the
date of enactment of this Act, the lessee--
(A) files a petition for reinstatement of the lease;
(B) complies with the conditions of section 31(e) of
the Mineral Leasing Act (30 U.S.C. 188(e)); and
(C) NOTE: Certification. certifies that the
lessee did not receive a notice of termination by the
date that was 13 months before the date of termination;
and
(2) the land is available for leasing.

(b) Deadline for Petitions, Generally.--Section 31(d)(2) of the
Mineral Leasing Act (30 U.S.C. 188(d)(2)) is amended by striking
subparagraphs (A) and (B) and inserting the following:
``(A) with respect to any lease that terminated
under subsection (b) on or before the date of the
enactment of the Energy Policy Act of 2005, a petition
for reinstatement (together with the required back
rental and royalty accruing after the date of
termination) is filed on or before the earlier of--
``(i) 60 days after the lessee receives from
the Secretary notice of termination, whether by
return of check or by any other form of actual
notice; or
``(ii) 15 months after the termination of the
lease; or
``(B) with respect to any lease that terminates
under subsection (b) after the date of the enactment of
the Energy Policy Act of 2005, a petition for
reinstatement (together with the required back rental
and royalty accruing after the date of termination) is
filed on or before the earlier of--
``(i) 60 days after receipt of the notice of
termination sent by the Secretary by certified
mail to all lessees of record; or
``(ii) 24 months after the termination of the
lease.''.

SEC. 372. NOTE: 42 USC 15928. CONSULTATION REGARDING ENERGY RIGHTS-
OF-WAY ON PUBLIC LAND.

(a) Memorandum of Understanding.--

[[Page 735]]
119 STAT. 735

(1) In general.--Not NOTE: Deadline. later than 6 months
after the date of enactment of this Act, the Secretary of
Energy, in consultation with the Secretary of the Interior, the
Secretary of Agriculture, and the Secretary of Defense with
respect to lands under their respective jurisdictions, shall
enter into a memorandum of understanding to coordinate all
applicable Federal authorizations and environmental reviews
relating to a proposed or existing utility facility. To the
maximum extent practicable under applicable law, the Secretary
of Energy shall, to ensure timely review and permit decisions,
coordinate such authorizations and reviews with any Indian
tribes, multi-State entities, and State agencies that are
responsible for conducting any separate permitting and
environmental reviews of the affected utility facility.
(2) Contents.--The memorandum of understanding shall include
provisions that--
(A) establish--
(i) a unified right-of-way application form;
and
(ii) an administrative procedure for
processing right-of-way applications, including
lines of authority, steps in application
processing, and timeframes for application
processing;
(B) provide for coordination of planning relating to
the granting of the rights-of-way;
(C) provide for an agreement among the affected
Federal agencies to prepare a single environmental
review document to be used as the basis for all Federal
authorization decisions; and
(D) provide for coordination of use of right-of-way
stipulations to achieve consistency.

(b) Natural Gas Pipelines.--
(1) In general.--With respect to permitting activities for
interstate natural gas pipelines, the May 2002 document entitled
``Interagency Agreement On Early Coordination Of Required
Environmental And Historic Preservation Reviews Conducted In
Conjunction With The Issuance Of Authorizations To Construct And
Operate Interstate Natural Gas Pipelines Certificated By The
Federal Energy Regulatory Commission'' shall constitute
compliance with subsection (a).
(2) Report.--
(A) In general.--Not later than 1 year after the
date of enactment of this Act, and every 2 years
thereafter, agencies that are signatories to the
document referred to in paragraph (1) shall transmit to
Congress a report on how the agencies under the
jurisdiction of the Secretaries are incorporating and
implementing the provisions of the document referred to
in paragraph (1).
(B) Contents.--The report shall address--
(i) efforts to implement the provisions of the
document referred to in paragraph (1);
(ii) whether the efforts have had a
streamlining effect;
(iii) further improvements to the permitting
process of the agency; and
(iv) recommendations for inclusion of State
and tribal governments in a coordinated permitting
process.

[[Page 736]]
119 STAT. 736

(c) Definition of Utility Facility.--In this section, the term
``utility facility'' means any privately, publicly, or cooperatively
owned line, facility, or system--
(1) for the transportation of--
(A) oil, natural gas, synthetic liquid fuel, or
gaseous fuel;
(B) any refined product produced from oil, natural
gas, synthetic liquid fuel, or gaseous fuel; or
(C) products in support of the production of
material referred to in subparagraph (A) or (B);
(2) for storage and terminal facilities in connection with
the production of material referred to in paragraph (1); or
(3) for the generation, transmission, and distribution of
electric energy.

SEC. 373. SENSE OF CONGRESS REGARDING DEVELOPMENT OF MINERALS UNDER
PADRE ISLAND NATIONAL SEASHORE.

(a) Findings.--Congress finds the following:
(1) Pursuant to Public Law 87-712 (16 U.S.C. 459d et seq.;
popularly known as the ``Federal Enabling Act'') and various
deeds and actions under that Act, the United States is the owner
of only the surface estate of certain lands constituting the
Padre Island National Seashore.
(2) Ownership of the oil, gas, and other minerals in the
subsurface estate of the lands constituting the Padre Island
National Seashore was never acquired by the United States, and
ownership of those interests is held by the State of Texas and
private parties.
(3) Public Law 87-712 (16 U.S.C. 459d et seq.)--
(A) expressly contemplated that the United States
would recognize the ownership and future development of
the oil, gas, and other minerals in the subsurface
estate of the lands constituting the Padre Island
National Seashore by the owners and their mineral
lessees; and
(B) recognized that approval of the State of Texas
was required to create Padre Island National Seashore.
(4) Approval was given for the creation of Padre Island
National Seashore by the State of Texas through Tex. Rev. Civ.
Stat. Ann. Art. 6077(t) (Vernon 1970), which expressly
recognized that development of the oil, gas, and other minerals
in the subsurface of the lands constituting Padre Island
National Seashore would be conducted with full rights of ingress
and egress under the laws of the State of Texas.

(b) Sense of Congress.--It is the sense of Congress that with regard
to Federal law, any regulation of the development of oil, gas, or other
minerals in the subsurface of the lands constituting Padre Island
National Seashore should be made as if those lands retained the status
that the lands had on September 27, 1962.

SEC. 374. NOTE: Louisiana. LIVINGSTON PARISH MINERAL RIGHTS
TRANSFER.

Section 102 of Public Law 102-562 (106 Stat. 4234) is amended by
striking subsection (b) and inserting the following:
``(b) Reservation of Oil and Gas Rights and Conveyance of Remaining
Mineral Rights.--Subject to the limitations set forth in subsection (c),
the United States hereby excepts and reserves from the provisions of
subsection (a), all rights to oil and gas underlying such lands, along
with the right to explore

[[Page 737]]
119 STAT. 737

for, and produce the oil and gas under applicable law and such
regulations as the Secretary of the Interior may prescribe. Not later
than 180 days after the date of enactment of the Energy Policy Act of
2005, the Secretary of the Interior shall convey the remaining mineral
rights to the parties who as of the date of enactment of the Energy
Policy Act of 2005 would be recognized as holders of a right, title, or
interest to any portion of such minerals under the laws of the State of
Louisiana, but for the interest of the United States in such minerals.
``(c) Oil and Gas NOTE: Deadlines. Resource Assessment and
Report.--The United States Geological Survey shall conduct a resource
assessment and publish a report of the findings of such resource
assessment (`USGS Assessment and Report') within 1 year of the date of
enactment of the Energy Policy Act of 2005. The USGS Assessment and
Report shall provide an assessment of all oil and gas resources
underlying the certain lands in Livingston Parish, Louisiana, as
described in section 103 (the `Livingston Parish lands'). Upon a finding
by the Secretary of the Interior based upon the USGS Assessment and
Report that it is unlikely that economically recoverable oil and gas
resources are present, the Secretary shall convey all rights to oil and
gas underlying such lands to the recipients, or their successors, heirs,
or assigns, of the conveyances under subsection (b). Such further
conveyances shall be made within 180 days after a finding by the
Secretary that it is unlikely that economically recoverable oil and gas
resources are present.''.

Subtitle G--Miscellaneous

SEC. 381. DEADLINE FOR DECISION ON APPEALS OF CONSISTENCY DETERMINATION
UNDER THE COASTAL ZONE MANAGEMENT ACT OF 1972.

Section 319 of the Coastal Zone Management Act of 1972 (16 U.S.C.
1465) is amended to read as follows:


``APPEALS TO THE SECRETARY


``Sec. 319. (a) Notice.--Not NOTE: Federal
Register, publication. later than 30 days after the date of the filing
of an appeal to the Secretary of a consistency determination under
section 307, the Secretary shall publish an initial notice in the
Federal Register.

``(b) Closure of Record.--
``(1) In general.--Not later than the end of the 160-day
period beginning on the date of publication of an initial notice
under subsection (a), except as provided in paragraph (3), the
Secretary shall immediately close the decision record and
receive no more filings on the appeal.
``(2) Notice.--After NOTE: Federal
Register, publication. closing the administrative record, the
Secretary shall immediately publish a notice in the Federal
Register that the administrative record has been closed.
``(3) Exception.--
``(A) In general.--Subject to subparagraph (B),
during the 160-day period described in paragraph (1),
the Secretary may stay the closing of the decision
record--
``(i) for a specific period mutually agreed to
in writing by the appellant and the State agency;
or
``(ii) as the Secretary determines necessary
to receive, on an expedited basis--

[[Page 738]]
119 STAT. 738

``(I) any supplemental information
specifically requested by the Secretary
to complete a consistency review under
this Act; or
``(II) any clarifying information
submitted by a party to the proceeding
related to information in the
consolidated record compiled by the lead
Federal permitting agency.
``(B) Applicability.--The Secretary may only stay
the 160-day period described in paragraph (1) for a
period not to exceed 60 days.

``(c) Deadline for Decision.--
``(1) In general.--Not NOTE: Notices. Federal
Register, publication. later than 60 days after the date of
publication of a Federal Register notice stating when the
decision record for an appeal has been closed, the Secretary
shall issue a decision or publish a notice in the Federal
Register explaining why a decision cannot be issued at that
time.
``(2) Subsequent decision.--Not later than 15 days after the
date of publication of a Federal Register notice explaining why
a decision cannot be issued within the 60-day period, the
Secretary shall issue a decision.''.

SEC. 382. NOTE: 16 USC 1466. APPEALS RELATING TO OFFSHORE MINERAL
DEVELOPMENT.

For any Federal administrative agency proceeding that is an appeal
or review under section 319 of the Coastal Zone Management Act of 1972
(16 U.S.C. 1465), as amended by this Act, related to any Federal
authorization for the permitting, approval, or other authorization of an
energy project, the lead Federal permitting agency for the project
shall, with the cooperation of Federal and State administrative
agencies, maintain a consolidated record of all decisions made or
actions taken by the lead agency or by another Federal or State
administrative agency or officer. Such record shall be the initial
record for appeals or reviews under that Act, provided that the record
may be supplemented as expressly provided pursuant to section 319 of
that Act.

SEC. 383. ROYALTY PAYMENTS UNDER LEASES UNDER THE OUTER CONTINENTAL
SHELF LANDS ACT.

(a) Royalty Relief.--
(1) In general.--For purposes of providing compensation for
lessees and a State for which amounts are authorized by section
6004(c) of the Oil Pollution Act of 1990 (Public Law 101-380), a
lessee may withhold from payment any royalty due and owing to
the United States under any leases under the Outer Continental
Shelf Lands Act (43 U.S.C. 1301 et seq.) for offshore oil or gas
production from a covered lease tract if, on or before the date
that the payment is due and payable to the United States, the
lessee makes a payment to the State of 44 cents for every $1 of
royalty withheld.
(2) Treatment of amounts.--Any royalty withheld by a lessee
in accordance with this section (including any portion thereof
that is paid to the State under paragraph (1)) shall be treated
as paid for purposes of satisfaction of the royalty obligations
of the lessee to the United States.
(3) Certification of withheld amounts.--The Secretary of the
Treasury shall--
(A) determine the amount of royalty withheld by a
lessee under this section; and

[[Page 739]]
119 STAT. 739

(B) NOTE: Publication. promptly publish a
certification when the total amount of royalty withheld
by the lessee under this section is equal to--
(i) the dollar amount stated at page 47 of
Senate Report number 101-534, which is designated
therein as the total drainage claim for the West
Delta field; plus
(ii) interest as described at page 47 of that
Report.

(b) Period of Royalty Relief.--Subsection
(a) NOTE: Applicability. Effective date. Termination date. shall
apply to royalty amounts that are due and payable in the period
beginning on October 1, 2006, and ending on the date on which the
Secretary of the Treasury publishes a certification under subsection
(a)(3)(B).

(c) Definitions.--As used in this section:
(1) Covered lease tract.--The term ``covered lease tract''
means a leased tract (or portion of a leased tract)--
(A) lying seaward of the zone defined and governed
by section 8(g) of the Outer Continental Shelf Lands Act
(43 U.S.C. 1337(g)); or
(B) lying within such zone but to which such section
does not apply.
(2) Lessee.--The term ``lessee''--
(A) means a person or entity that, on the date of
the enactment of the Oil Pollution Act of 1990, was a
lessee referred to in section 6004(c) of that Act (as in
effect on that date of the enactment), but did not hold
lease rights in Federal offshore lease OCS-G-5669; and
(B) includes successors and affiliates of a person
or entity described in subparagraph (A).

SEC. 384. COASTAL IMPACT ASSISTANCE PROGRAM.

Section 31 of the Outer Continental Shelf Lands Act (43 U.S.C.
1356a) is amended to read as follows:

``SEC. 31. COASTAL IMPACT ASSISTANCE PROGRAM.

``(a) Definitions.--In this section:
``(1) Coastal political subdivision.--The term `coastal
political subdivision' means a political subdivision of a
coastal State any part of which political subdivision is--
``(A) within the coastal zone (as defined in section
304 of the Coastal Zone Management Act of 1972 (16
U.S.C. 1453)) of the coastal State as of the date of
enactment of the Energy Policy Act of 2005; and
``(B) not more than 200 nautical miles from the
geographic center of any leased tract.
``(2) Coastal population.--The term `coastal population'
means the population, as determined by the most recent official
data of the Census Bureau, of each political subdivision any
part of which lies within the designated coastal boundary of a
State (as defined in a State's coastal zone management program
under the Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et
seq.)).
``(3) Coastal state.--The term `coastal State' has the
meaning given the term in section 304 of the Coastal Zone
Management Act of 1972 (16 U.S.C. 1453).
``(4) Coastline.--The term `coastline' has the meaning given
the term `coast line' in section 2 of the Submerged Lands Act
(43 U.S.C. 1301).

[[Page 740]]
119 STAT. 740

``(5) Distance.--The term `distance' means the minimum great
circle distance, measured in statute miles.
``(6) Leased tract.--The term `leased tract' means a tract
that is subject to a lease under section 6 or 8 for the purpose
of drilling for, developing, and producing oil or natural gas
resources.
``(7) Leasing moratoria.--The term `leasing moratoria' means
the prohibitions on preleasing, leasing, and related activities
on any geographic area of the outer Continental Shelf as
contained in sections 107 through 109 of division E of the
Consolidated Appropriations Act, 2005 (Public Law 108-447; 118
Stat. 3063).
``(8) Political subdivision.--The term `political
subdivision' means the local political jurisdiction immediately
below the level of State government, including counties,
parishes, and boroughs.
``(9) Producing state.--
``(A) In general.--The term `producing State' means
a coastal State that has a coastal seaward boundary
within 200 nautical miles of the geographic center of a
leased tract within any area of the outer Continental
Shelf.
``(B) Exclusion.--The term `producing State' does
not include a producing State, a majority of the
coastline of which is subject to leasing moratoria,
unless production was occurring on January 1, 2005, from
a lease within 10 nautical miles of the coastline of
that State.
``(10) Qualified outer continental shelf revenues.--
``(A) In general.--The term `qualified Outer
Continental Shelf revenues' means all amounts received
by the United States from each leased tract or portion
of a leased tract--
``(i) lying--
``(I) seaward of the zone covered by
section 8(g); or
``(II) within that zone, but to
which section 8(g) does not apply; and
``(ii) the geographic center of which lies
within a distance of 200 nautical miles from any
part of the coastline of any coastal State.
``(B) Inclusions.--The term `qualified Outer
Continental Shelf revenues' includes bonus bids, rents,
royalties (including payments for royalty taken in kind
and sold), net profit share payments, and related late-
payment interest from natural gas and oil leases issued
under this Act.
``(C) Exclusion.--The term `qualified Outer
Continental Shelf revenues' does not include any
revenues from a leased tract or portion of a leased
tract that is located in a geographic area subject to a
leasing moratorium on January 1, 2005, unless the lease
was in production on January 1, 2005.

``(b) Payments to Producing States and Coastal Political
Subdivisions.--
``(1) In general.--The Secretary shall, without further
appropriation, disburse to producing States and coastal
political subdivisions in accordance with this section
$250,000,000 for each of fiscal years 2007 through 2010.

[[Page 741]]
119 STAT. 741

``(2) Disbursement.--In each fiscal year, the Secretary
shall disburse to each producing State for which the Secretary
has approved a plan under subsection (c), and to coastal
political subdivisions under paragraph (4), such funds as are
allocated to the producing State or coastal political
subdivision, respectively, under this section for the fiscal
year.
``(3) Allocation among producing states.--
``(A) In general.--Except as provided in
subparagraph (C) and subject to subparagraph (D), the
amounts available under paragraph (1) shall be allocated
to each producing State based on the ratio that--
``(i) the amount of qualified outer
Continental Shelf revenues generated off the
coastline of the producing State; bears to
``(ii) the amount of qualified outer
Continental Shelf revenues generated off the
coastline of all producing States.
``(B) Amount of outer continental shelf revenues.--
For purposes of subparagraph (A)--
``(i) the amount of qualified outer
Continental Shelf revenues for each of fiscal
years 2007 and 2008 shall be determined using
qualified outer Continental Shelf revenues
received for fiscal year 2006; and
``(ii) the amount of qualified outer
Continental Shelf revenues for each of fiscal
years 2009 and 2010 shall be determined using
qualified outer Continental Shelf revenues
received for fiscal year 2008.
``(C) Multiple producing states.--In a case in which
more than one producing State is located within 200
nautical miles of any portion of a leased tract, the
amount allocated to each producing State for the leased
tract shall be inversely proportional to the distance
between--
``(i) the nearest point on the coastline of
the producing State; and
``(ii) the geographic center of the leased
tract.
``(D) Minimum allocation.--The amount allocated to a
producing State under subparagraph (A) shall be at least
1 percent of the amounts available under paragraph (1).
``(4) Payments to coastal political subdivisions.--
``(A) In general.--The Secretary shall pay 35
percent of the allocable share of each producing State,
as determined under paragraph (3) to the coastal
political subdivisions in the producing State.
``(B) Formula.--Of the amount paid by the Secretary
to coastal political subdivisions under subparagraph
(A)--
``(i) 25 percent shall be allocated to each
coastal political subdivision in the proportion
that--
``(I) the coastal population of the
coastal political subdivision; bears to
``(II) the coastal population of all
coastal political subdivisions in the
producing State;
``(ii) 25 percent shall be allocated to each
coastal political subdivision in the proportion
that--
``(I) the number of miles of
coastline of the coastal political
subdivision; bears to

[[Page 742]]
119 STAT. 742

``(II) the number of miles of
coastline of all coastal political
subdivisions in the producing State; and
``(iii) 50 percent shall be allocated in
amounts that are inversely proportional to the
respective distances between the points in each
coastal political subdivision that are closest to
the geographic center of each leased tract, as
determined by the Secretary.
``(C) Exception for the state of louisiana.--For the
purposes of subparagraph (B)(ii), the coastline for
coastal political subdivisions in the State of Louisiana
without a coastline shall be considered to be \1/3\ the
average length of the coastline of all coastal political
subdivisions with a coastline in the State of Louisiana.
``(D) Exception for the state of alaska.--For the
purposes of carrying out subparagraph (B)(iii) in the
State of Alaska, the amounts allocated shall be divided
equally among the two coastal political subdivisions
that are closest to the geographic center of a leased
tract.
``(E) Exclusion of certain leased tracts.--For
purposes of subparagraph (B)(iii), a leased tract or
portion of a leased tract shall be excluded if the tract
or portion of a leased tract is located in a geographic
area subject to a leasing moratorium on January 1, 2005,
unless the lease was in production on that date.
``(5) No approved plan.--
``(A) In general.--Subject to subparagraph (B) and
except as provided in subparagraph (C), in a case in
which any amount allocated to a producing State or
coastal political subdivision under paragraph (4) or (5)
is not disbursed because the producing State does not
have in effect a plan that has been approved by the
Secretary under subsection (c), the Secretary shall
allocate the undisbursed amount equally among all other
producing States.
``(B) Retention of allocation.--The Secretary shall
hold in escrow an undisbursed amount described in
subparagraph (A) until such date as the final appeal
regarding the disapproval of a plan submitted under
subsection (c) is decided.
``(C) Waiver.--The Secretary may waive subparagraph
(A) with respect to an allocated share of a producing
State and hold the allocable share in escrow if the
Secretary determines that the producing State is making
a good faith effort to develop and submit, or update, a
plan in accordance with subsection (c).

``(c) Coastal Impact Assistance Plan.--
``(1) Submission of state plans.--
``(A) In general.--Not NOTE: Deadline. later
than July 1, 2008, the Governor of a producing State
shall submit to the Secretary a coastal impact
assistance plan.
``(B) Public participation.--In carrying out
subparagraph (A), the Governor shall solicit local input
and provide for public participation in the development
of the plan.
``(2) Approval.--
``(A) In general.--The Secretary shall approve a
plan of a producing State submitted under paragraph (1)
before disbursing any amount to the producing State, or
to a

[[Page 743]]
119 STAT. 743

coastal political subdivision located in the producing
State, under this section.
``(B) Components.--The Secretary shall approve a
plan submitted under paragraph (1) if--
``(i) the Secretary determines that the plan
is consistent with the uses described in
subsection (d); and
``(ii) the plan contains--
``(I) the name of the State agency
that will have the authority to
represent and act on behalf of the
producing State in dealing with the
Secretary for purposes of this section;
``(II) a program for the
implementation of the plan that
describes how the amounts provided under
this section to the producing State will
be used;
``(III) for each coastal political
subdivision that receives an amount
under this section--
``(aa) the name of a contact
person; and
``(bb) a description of how
the coastal political
subdivision will use amounts
provided under this section;
``(IV) NOTE: Certification. a
certification by the Governor that ample
opportunity has been provided for public
participation in the development and
revision of the plan; and
``(V) a description of measures that
will be taken to determine the
availability of assistance from other
relevant Federal resources and programs.
``(3) Amendment.--Any amendment to a plan submitted under
paragraph (1) shall be--
``(A) developed in accordance with this subsection;
and
``(B) submitted to the Secretary for approval or
disapproval under paragraph (4).
``(4) Procedure.--Not NOTE: Deadline. later than 90 days
after the date on which a plan or amendment to a plan is
submitted under paragraph (1) or (3), the Secretary shall
approve or disapprove the plan or amendment.

``(d) Authorized Uses.--
``(1) In general.--A producing State or coastal political
subdivision shall use all amounts received under this section,
including any amount deposited in a trust fund that is
administered by the State or coastal political subdivision and
dedicated to uses consistent with this section, in accordance
with all applicable Federal and State laws, only for one or more
of the following purposes:
``(A) Projects and activities for the conservation,
protection, or restoration of coastal areas, including
wetland.
``(B) Mitigation of damage to fish, wildlife, or
natural resources.
``(C) Planning assistance and the administrative
costs of complying with this section.
``(D) Implementation of a federally-approved marine,
coastal, or comprehensive conservation management plan.
``(E) Mitigation of the impact of outer Continental
Shelf activities through funding of onshore
infrastructure projects and public service needs.

[[Page 744]]
119 STAT. 744

``(2) Compliance with authorized uses.--If the Secretary
determines that any expenditure made by a producing State or
coastal political subdivision is not consistent with this
subsection, the Secretary shall not disburse any additional
amount under this section to the producing State or the coastal
political subdivision until such time as all amounts obligated
for unauthorized uses have been repaid or reobligated for
authorized uses.
``(3) Limitation.--Not more than 23 percent of amounts
received by a producing State or coastal political subdivision
for any 1 fiscal year shall be used for the purposes described
in subparagraphs (C) and (E) of paragraph (1).''.

SEC. 385. STUDY OF AVAILABILITY OF SKILLED WORKERS.

(a) In General.--The NOTE: Contracts. Secretary shall enter into
an arrangement with the National Academy of Sciences under which the
National Academy of Sciences shall conduct a study of the short-term and
long-term availability of skilled workers to meet the energy and mineral
security requirements of the United States.

(b) Inclusions.--The study shall include an analysis of--
(1) the need for and availability of workers for the oil,
gas, and mineral industries;
(2) the availability of skilled labor at both entry level
and more senior levels; and
(3) recommendations for future actions needed to meet future
labor requirements.

(c) Report.--Not later than 2 years after the date of enactment of
this Act, the Secretary shall submit to Congress a report that describes
the results of the study.

SEC. 386. NOTE: 42 USC 15941. GREAT LAKES OIL AND GAS DRILLING BAN.

No Federal or State permit or lease shall be issued for new oil and
gas slant, directional, or offshore drilling in or under one or more of
the Great Lakes.

SEC. 387. NOTE: Deadline. 42 USC 13368 note. FEDERAL COALBED METHANE
REGULATION.

Any State currently on the list of Affected States established under
section 1339(b) of the Energy Policy Act of 1992 (42 U.S.C. 13368(b))
shall be removed from the list if, not later than 3 years after the date
of enactment of this Act, the State takes, or prior to the date of
enactment has taken, any of the actions required for removal from the
list under such section 1339(b).

SEC. 388. ALTERNATE ENERGY-RELATED USES ON THE OUTER CONTINENTAL SHELF.

(a) Amendment to Outer Continental Shelf Lands Act.--Section 8 of
the Outer Continental Shelf Lands Act (43 U.S.C. 1337) is amended by
adding at the end the following:
``(p) Leases, Easements, or Rights-of-way for Energy and Related
Purposes.--
``(1) In general.--The Secretary, in consultation with the
Secretary of the Department in which the Coast Guard is
operating and other relevant departments and agencies of the
Federal Government, may grant a lease, easement, or right-of-way
on the outer Continental Shelf for activities not otherwise
authorized in this Act, the Deepwater Port Act of 1974 (33
U.S.C. 1501 et seq.), the Ocean Thermal Energy Conversion

[[Page 745]]
119 STAT. 745

Act of 1980 (42 U.S.C. 9101 et seq.), or other applicable law,
if those activities--
``(A) support exploration, development, production,
or storage of oil or natural gas, except that a lease,
easement, or right-of-way shall not be granted in an
area in which oil and gas preleasing, leasing, and
related activities are prohibited by a moratorium;
``(B) support transportation of oil or natural gas,
excluding shipping activities;
``(C) produce or support production, transportation,
or transmission of energy from sources other than oil
and gas; or
``(D) use, for energy-related purposes or for other
authorized marine-related purposes, facilities currently
or previously used for activities authorized under this
Act, except that any oil and gas energy-related uses
shall not be authorized in areas in which oil and gas
preleasing, leasing, and related activities are
prohibited by a moratorium.
``(2) Payments and revenues.--(A) The Secretary shall
establish royalties, fees, rentals, bonuses, or other payments
to ensure a fair return to the United States for any lease,
easement, or right-of-way granted under this subsection.
``(B) The Secretary shall provide for the payment of 27
percent of the revenues received by the Federal Government as a
result of payments under this section from projects that are
located wholly or partially within the area extending three
nautical miles seaward of State submerged
lands. NOTE: Regulations. Deadline. Payments shall be made
based on a formula established by the Secretary by rulemaking no
later than 180 days after the date of enactment of this section
that provides for equitable distribution, based on proximity to
the project, among coastal states that have a coastline that is
located within 15 miles of the geographic center of the project.
``(3) Competitive or noncompetitive basis.--Except with
respect to projects that meet the criteria established under
section 388(d) of the Energy Policy Act of 2005, the Secretary
shall issue a lease, easement, or right-of-way under paragraph
(1) on a competitive basis unless the Secretary determines after
public notice of a proposed lease, easement, or right-of-way
that there is no competitive interest.
``(4) Requirements.--The Secretary shall ensure that any
activity under this subsection is carried out in a manner that
provides for--
``(A) safety;
``(B) protection of the environment;
``(C) prevention of waste;
``(D) conservation of the natural resources of the
outer Continental Shelf;
``(E) coordination with relevant Federal agencies;
``(F) protection of national security interests of
the United States;
``(G) protection of correlative rights in the outer
Continental Shelf;
``(H) a fair return to the United States for any
lease, easement, or right-of-way under this subsection;

[[Page 746]]
119 STAT. 746

``(I) prevention of interference with reasonable
uses (as determined by the Secretary) of the exclusive
economic zone, the high seas, and the territorial seas;
``(J) consideration of--
``(i) the location of, and any schedule
relating to, a lease, easement, or right-of-way
for an area of the outer Continental Shelf; and
``(ii) any other use of the sea or seabed,
including use for a fishery, a sealane, a
potential site of a deepwater port, or navigation;
``(K) public notice and comment on any proposal
submitted for a lease, easement, or right-of-way under
this subsection; and
``(L) oversight, inspection, research, monitoring,
and enforcement relating to a lease, easement, or right-
of-way under this subsection.
``(5) Lease duration, suspension, and cancellation.--The
Secretary shall provide for the duration, issuance, transfer,
renewal, suspension, and cancellation of a lease, easement, or
right-of-way under this subsection.
``(6) Security.--The Secretary shall require the holder of a
lease, easement, or right-of-way granted under this subsection
to--
``(A) furnish a surety bond or other form of
security, as prescribed by the Secretary;
``(B) comply with such other requirements as the
Secretary considers necessary to protect the interests
of the public and the United States; and
``(C) provide for the restoration of the lease,
easement, or right-of-way.
``(7) Coordination and consultation with affected state and
local governments.--The Secretary shall provide for coordination
and consultation with the Governor of any State or the executive
of any local government that may be affected by a lease,
easement, or right-of-way under this subsection.
``(8) Regulations.--Not NOTE: Deadline. later than 270
days after the date of enactment of the Energy Policy Act of
2005, the Secretary, in consultation with the Secretary of
Defense, the Secretary of the Department in which the Coast
Guard is operating, the Secretary of Commerce, heads of other
relevant departments and agencies of the Federal Government, and
the Governor of any affected State, shall issue any necessary
regulations to carry out this subsection.
``(9) Effect of subsection.--Nothing in this subsection
displaces, supersedes, limits, or modifies the jurisdiction,
responsibility, or authority of any Federal or State agency
under any other Federal law.
``(10) Applicability.--This subsection does not apply to any
area on the outer Continental Shelf within the exterior
boundaries of any unit of the National Park System, National
Wildlife Refuge System, or National Marine Sanctuary System, or
any National Monument.''.

(b) Coordinated NOTE: 43 USC 1337 note. OCS Mapping
Initiative.--
(1) In general.--The Secretary of the Interior, in
cooperation with the Secretary of Commerce, the Commandant of
the Coast Guard, and the Secretary of Defense, shall establish

[[Page 747]]
119 STAT. 747

an interagency comprehensive digital mapping initiative for the
outer Continental Shelf to assist in decisionmaking relating to
the siting of activities under subsection (p) of section 8 of
the Outer Continental Shelf Lands Act (43 U.S.C. 1337) (as added
by subsection (a)).
(2) Use of data.--The mapping initiative shall use, and
develop procedures for accessing, data collected before the date
on which the mapping initiative is established, to the maximum
extent practicable.
(3) Inclusions.--Mapping carried out under the mapping
initiative shall include an indication of the locations on the
outer Continental Shelf of--
(A) Federally-permitted activities;
(B) obstructions to navigation;
(C) submerged cultural resources;
(D) undersea cables;
(E) offshore aquaculture projects; and
(F) any area designated for the purpose of safety,
national security, environmental protection, or
conservation and management of living marine resources.

(c) Conforming Amendment.--Section 8 of the Outer Continental Shelf
Lands Act (43 U.S.C. 1337) is amended by striking the section heading
and inserting the following: ``Leases, Easements, and Rights-of-way on
the Outer Continental
Shelf.--''.
(d) Savings Provision.--Nothing NOTE: 43 USC 1337 note. in the
amendment made by subsection (a) requires the resubmittal of any
document that was previously submitted or the reauthorization of any
action that was previously authorized with respect to a project for
which, before the date of enactment of this Act--
(1) an offshore test facility has been constructed; or
(2) a request for a proposal has been issued by a public
authority.

(e) State NOTE: 43 USC 1337 note. Claims to Jurisdiction Over
Submerged Lands.--Nothing in this section shall be construed to alter,
limit, or modify any claim of any State to any jurisdiction over, or any
right, title, or interest in, any submerged lands.

SEC. 389. OIL SPILL RECOVERY INSTITUTE.

Title V of the Oil Pollution Act of 1990 (33 U.S.C. 2731 et seq.) is
amended--
(1) NOTE: 33 USC 2731. in section 5001(i), by striking
``September 30, 2012'' and inserting ``1 year after the date on
which the Secretary, in consultation with the Secretary of the
Interior, determines that oil and gas exploration, development,
and production in the State of Alaska have ceased''; and
(2) NOTE: 33 USC 2736. in section 5006(c), by striking
``October 1, 2012'' and inserting ``1 year after the date on
which the Secretary, in consultation with the Secretary of the
Interior, determines that oil and gas exploration, development,
and production in the State of Alaska have ceased,''.

SEC. 390. NOTE: 42 USC 15942. NEPA REVIEW.

(a) NEPA Review.--Action by the Secretary of the Interior in
managing the public lands, or the Secretary of Agriculture in managing
National Forest System Lands, with respect to any of the activities
described in subsection (b) shall be subject to a rebuttable presumption
that the use of a categorical exclusion under

[[Page 748]]
119 STAT. 748

the National Environmental Policy Act of 1969 (NEPA) would apply if the
activity is conducted pursuant to the Mineral Leasing Act for the
purpose of exploration or development of oil or gas.
(b) Activities Described.--The activities referred to in subsection
(a) are the following:
(1) Individual surface disturbances of less than 5 acres so
long as the total surface disturbance on the lease is not
greater than 150 acres and site-specific analysis in a document
prepared pursuant to NEPA has been previously completed.
(2) Drilling an oil or gas well at a location or well pad
site at which drilling has occurred previously within 5 years
prior to the date of spudding the well.
(3) Drilling an oil or gas well within a developed field for
which an approved land use plan or any environmental document
prepared pursuant to NEPA analyzed such drilling as a reasonably
foreseeable activity, so long as such plan or document was
approved within 5 years prior to the date of spudding the well.
(4) Placement of a pipeline in an approved right-of-way
corridor, so long as the corridor was approved within 5 years
prior to the date of placement of the pipeline.
(5) Maintenance of a minor activity, other than any
construction or major renovation or a building or facility.

Subtitle H--Refinery Revitalization

SEC. 391. NOTE: 42 USC 15951. FINDINGS AND DEFINITIONS.

(a) Findings.--Congress finds that--
(1) it serves the national interest to increase petroleum
refining capacity for gasoline, heating oil, diesel fuel, jet
fuel, kerosene, and petrochemical feedstocks wherever located
within the United States, to bring more supply to the markets
for the use of the American people;
(2) United States demand for refined petroleum products
currently exceeds the country's petroleum refining capacity to
produce such products;
(3) this excess demand has been met with increased imports;
(4) due to lack of capacity, refined petroleum product
imports are expected to grow from 7.9 percent to 10.7 percent of
total refined product by 2025;
(5) refiners are still subject to significant environmental
and other regulations and face several new requirements under
the Clean Air Act (42 U.S.C. 7401 et seq.) over the next decade;
and
(6) better coordination of Federal and State regulatory
reviews may help facilitate siting and construction of new
refineries to meet the demand in the United States for refined
products.

(b) Definitions.--In this subtitle:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) State.--The term ``State'' means--
(A) a State;
(B) the Commonwealth of Puerto Rico; and

[[Page 749]]
119 STAT. 749

(C) any other territory or possession of the United
States.

SEC. 392. NOTE: 42 USC 15952. FEDERAL-STATE REGULATORY COORDINATION
AND ASSISTANCE.

(a) In General.--At the request of the Governor of a State, the
Administrator may enter into a refinery permitting cooperative agreement
with the State, under which each party to the agreement identifies
steps, including timelines, that it will take to streamline the
consideration of Federal and State environmental permits for a new
refinery.
(b) Authority Under Agreement.--The Administrator shall be
authorized to--
(1) accept from a refiner a consolidated application for all
permits required from the Environmental Protection Agency, to
the extent consistent with other applicable law;
(2) enter into memoranda of agreement with other Federal
agencies to coordinate consideration of refinery applications
and permits among Federal agencies; and
(3) enter into memoranda of agreement with a State, under
which Federal and State review of refinery permit applications
will be coordinated and concurrently considered, to the extent
practicable.

(c) State Assistance.--The Administrator is authorized to provide
financial assistance to State governments to facilitate the hiring of
additional personnel with expertise in fields relevant to consideration
of refinery permits.
(d) Other Assistance.--The Administrator is authorized to provide
technical, legal, or other assistance to State governments to facilitate
their review of applications to build new refineries.

TITLE IV--COAL

Subtitle A--Clean Coal Power Initiative

SEC. 401. NOTE: 42 USC 15961. AUTHORIZATION OF APPROPRIATIONS.

(a) Clean Coal Power Initiative.--There are authorized to be
appropriated to the Secretary to carry out the activities authorized by
this subtitle $200,000,000 for each of fiscal years 2006 through 2014,
to remain available until expended.
(b) Report.--The Secretary shall submit to Congress the report
required by this subsection not later than March 31, 2007. The report
shall include, with respect to subsection (a), a 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 Government Accountability Office

[[Page 750]]
119 STAT. 750

reports on the Clean Coal Technology Program, including problems
that have resulted in unspent funds and projects that failed
either financially or scientifically.

SEC. 402. NOTE: 42 USC 15962. PROJECT CRITERIA.

(a) In General.--To be eligible to receive assistance under this
subtitle, a project shall advance efficiency, environmental performance,
and cost competitiveness well beyond the level of technologies that are
in commercial service or have been demonstrated on a scale that the
Secretary determines is sufficient to demonstrate that commercial
service is viable as of the date of enactment of this Act.
(b) Technical Criteria for Clean Coal Power Initiative.--
(1) Gasification projects.--
(A) In general.--In allocating the funds made
available under section 401(a), the Secretary shall
ensure that at least 70 percent of the funds are used
only to fund projects on coal-based gasification
technologies, including--
(i) gasification combined cycle;
(ii) gasification fuel cells and turbine
combined cycle;
(iii) gasification coproduction;
(iv) hybrid gasification and combustion; and
(v) other advanced coal based technologies
capable of producing a concentrated stream of
carbon dioxide.
(B) Technical milestones.--
(i) Periodic determination.--
(I) In general.--The Secretary shall
periodically set technical milestones
specifying the emission and thermal
efficiency levels that coal gasification
projects under this subtitle shall be
designed, and reasonably expected, to
achieve.
(II) Prescriptive milestones.--The
technical milestones shall become more
prescriptive during the period of the
clean coal power initiative.
(ii) 2020 goals.--The Secretary shall
establish the periodic milestones so as to achieve
by the year 2020 coal gasification projects able--
(I) to remove at least 99 percent of
sulfur dioxide;
(II) to emit not more than .05 lbs
of NO INF x /INF  per million Btu;
(III) to achieve at least 95 percent
reductions in mercury emissions; and
(IV) to achieve a thermal efficiency
of at least--
(aa) 50 percent for coal of
more than 9,000 Btu;
(bb) 48 percent for coal of
7,000 to 9,000 Btu; and
(cc) 46 percent for coal of
less than 7,000 Btu.
(2) Other projects.--
(A) Allocation of funds.--The Secretary shall ensure
that up to 30 percent of the funds made available under
section 401(a) are used to fund projects other than
those described in paragraph (1).

[[Page 751]]
119 STAT. 751

(B) Technical milestones.--
(i) Periodic determination.--
(I) In general.--The Secretary shall
periodically establish technical
milestones specifying the emission and
thermal efficiency levels that projects
funded under this paragraph shall be
designed, and reasonably expected, to
achieve.
(II) Prescriptive milestones.--The
technical milestones shall become more
prescriptive during the period of the
clean coal power initiative.
(ii) 2020 goals.--The Secretary shall set the
periodic milestones so as to achieve by the year
2020 projects able--
(I) to remove at least 97 percent of
sulfur dioxide;
(II) to emit no more than .08 lbs of
NO INF x /INF  per million Btu;
(III) to achieve at least 90 percent
reductions in mercury emissions; and
(IV) to achieve a thermal efficiency
of at least--
(aa) 43 percent for coal of
more than 9,000 Btu;
(bb) 41 percent for coal of
7,000 to 9,000 Btu; and
(cc) 39 percent for coal of
less than 7,000 Btu.
(3) Consultation.--Before setting the technical milestones
under paragraphs (1)(B) and (2)(B), the Secretary shall consult
with--
(A) the Administrator of the Environmental
Protection Agency; and
(B) interested entities, including--
(i) coal producers;
(ii) industries using coal;
(iii) organizations that promote coal or
advanced coal technologies;
(iv) environmental organizations;
(v) organizations representing workers; and
(vi) organizations representing consumers.
(4) Existing units.--In the case of projects at units in
existence on the date of enactment of this Act, in lieu of the
thermal efficiency requirements described in paragraphs
(1)(B)(ii)(IV) and (2)(B)(ii)(IV), the milestones shall be
designed to achieve an overall thermal design efficiency
improvement, compared to the efficiency of the unit as operated,
of not less than--
(A) 7 percent for coal of more than 9,000 Btu;
(B) 6 percent for coal of 7,000 to 9,000 Btu; or
(C) 4 percent for coal of less than 7,000 Btu.
(5) Administration.--
(A) Elevation of site.--In evaluating project
proposals to achieve thermal efficiency levels
established under paragraphs (1)(B)(i) and (2)(B)(i) and
in determining progress towards thermal efficiency
milestones under paragraphs (1)(B)(ii)(IV),
(2)(B)(ii)(IV), and (4), the Secretary

[[Page 752]]
119 STAT. 752

shall take into account and make adjustments for the
elevation of the site at which a project is proposed to
be constructed.
(B) Applicability of milestones.--In applying the
thermal efficiency milestones under paragraphs
(1)(B)(ii)(IV), (2)(B)(ii)(IV), and (4) to projects that
separate and capture at least 50 percent of the
potential emissions of carbon dioxide by a facility, the
energy used for separation and capture of carbon dioxide
shall not be counted in calculating the thermal
efficiency.
(C) Permitted uses.--In carrying out this section,
the Secretary may give priority to projects that
include, as part of the project--
(i) the separation or capture of carbon
dioxide; or
(ii) the reduction of the demand for natural
gas if deployed.

(c) Financial Criteria.--The Secretary shall not provide financial
assistance under this subtitle for a project unless the recipient
documents to the satisfaction of the Secretary that--
(1) the recipient is financially responsible;
(2) the recipient will provide sufficient information to the
Secretary to enable the Secretary to ensure that the 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, as determined by the Secretary--
(1) meet the requirements of subsections (a), (b), and (c);
and
(2) are likely--
(A) to achieve overall cost reductions in the use of
coal to generate useful forms of energy or chemical
feedstocks;
(B) to 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
(C) to demonstrate methods and equipment that are
applicable to 25 percent of the electricity generating
facilities, using various types of coal, that use coal
as the primary feedstock as of the date of enactment of
this Act.

(e) Cost-Sharing.--In carrying out this subtitle, the Secretary
shall require cost sharing in accordance with section 988.
(f) Scheduled Completion of Selected Projects.--
(1) In general.--In selecting a project for financial
assistance under this section, the Secretary shall establish a
reasonable period of time during which the owner or operator of
the project shall complete the construction or demonstration
phase of the project, as the Secretary determines to be
appropriate.
(2) Condition of financial assistance.--The Secretary shall
require as a condition of receipt of any financial assistance
under this subtitle that the recipient of the assistance enter

[[Page 753]]
119 STAT. 753

into an agreement with the Secretary not to request an extension
of the time period established for the project by the Secretary
under paragraph (1).
(3) Extension of time period.--
(A) In general.--Subject to subparagraph (B), the
Secretary may extend the time period established under
paragraph (1) if the Secretary determines, in the sole
discretion of the Secretary, that the owner or operator
of the project cannot complete the construction or
demonstration phase of the project within the time
period due to circumstances beyond the control of the
owner or operator.
(B) Limitation.--The Secretary shall not extend a
time period under subparagraph (A) by more than 4 years.

(g) Fee Title.--The Secretary may vest fee title or other property
interests acquired under cost-share clean coal power initiative
agreements under this subtitle in any entity, including the United
States.
(h) Data Protection.--For a period not exceeding 5 years after
completion of the operations phase of a cooperative agreement, the
Secretary may provide appropriate protections (including exemptions from
subchapter II of chapter 5 of title 5, United States Code) against the
dissemination of information that--
(1) results from demonstration activities carried out under
the clean coal power initiative program; and
(2) would be a trade secret or commercial or financial
information that is privileged or confidential if the
information had been obtained from and first produced by a non-
Federal party participating in a clean coal power initiative
project.

(i) Applicability.--No technology, or level of emission reduction,
solely by reason of the use of the technology, or the achievement of the
emission reduction, by 1 or more facilities receiving assistance under
this Act, shall be considered to be--
(1) adequately demonstrated for purposes of section 111 of
the Clean Air Act (42 U.S.C. 7411);
(2) achievable for purposes of section 169 of that Act (42
U.S.C. 7479); or
(3) achievable in practice for purposes of section 171 of
that Act (42 U.S.C. 7501).

SEC. 403. NOTE: 42 USC 15963. REPORT.

Not later than 1 year after the date of enactment of this Act, and
once every 2 years thereafter through 2014, the Secretary, in
consultation with other appropriate Federal agencies, shall submit to
Congress a report describing--
(1) the technical milestones set forth in section 402 and
how those milestones ensure progress toward meeting the
requirements of subsections (b)(1)(B) and (b)(2) of section 402;
and
(2) the status of projects funded under this subtitle.

SEC. 404. NOTE: 42 USC 15964. CLEAN COAL CENTERS OF EXCELLENCE.

(a) In General.--As part of the clean coal power initiative, the
Secretary shall award competitive, merit-based grants to institutions of
higher education for the establishment of centers of excellence for
energy systems of the future.
(b) Basis for Grants.--The Secretary shall award grants under this
section to institutions of higher education that show the greatest
potential for advancing new clean coal technologies.

[[Page 754]]
119 STAT. 754

Subtitle B--Clean Power Projects

SEC. 411. NOTE: 42 USC 15971. INTEGRATED COAL/RENEWABLE ENERGY
SYSTEM.

(a) In General.--Subject to the availability of appropriations, the
Secretary may provide loan guarantees for a project to produce energy
from coal of less than 7,000 Btu/lb. using appropriate advanced
integrated gasification combined cycle technology, including repowering
of existing facilities, that--
(1) is combined with wind and other renewable sources;
(2) minimizes and offers the potential to sequester carbon
dioxide emissions; and
(3) provides a ready source of hydrogen for near-site fuel
cell demonstrations.

(b) Requirements.--The facility--
(1) may be built in stages;
(2) shall have a combined output of at least 200 megawatts
at successively more competitive rates; and
(3) shall be located in the Upper Great Plains.

(c) Technical Criteria.--Technical NOTE: Applicability. criteria
described in section 402(b) shall apply to the facility.

(d) Investment Tax Credits.--
(1) In general.--The loan guarantees provided under this
section do not preclude the facility from receiving an
allocation for investment tax credits under section 48A of the
Internal Revenue Code of 1986.
(2) Other funding.--Use of the investment tax credit
described in paragraph (1) does not prohibit the use of other
clean coal program funding.

SEC. 412. NOTE: 42 USC 15972. LOAN TO PLACE ALASKA CLEAN COAL
TECHNOLOGY FACILITY IN SERVICE.

(a) Definitions.--In this section:
(1) Borrower.--The term ``borrower'' means the owner of the
clean coal technology plant.
(2) Clean coal technology plant.--The term ``clean coal
technology plant'' means the plant located near Healy, Alaska,
constructed under Department cooperative agreement number DE-FC-
22-91PC90544.
(3) Cost of a direct loan.--The term ``cost of a direct
loan'' has the meaning given the term in section 502(5)(B) of
the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(B)).

(b) Authorization.--Subject to subsection (c), the Secretary shall
use amounts made available under subsection (e) to provide the cost of a
direct loan to the borrower for purposes of placing the clean coal
technology plant into reliable operation for the generation of
electricity.
(c) Requirements.--
(1) Maximum loan amount.--The amount of the direct loan
provided under subsection (b) shall not exceed $80,000,000.
(2) Determinations by secretary.--Before providing the
direct loan to the borrower under subsection (b), the Secretary
shall determine that--
(A) the plan of the borrower for placing the clean
coal technology plant in reliable operation has a
reasonable prospect of success;

[[Page 755]]
119 STAT. 755

(B) the amount of the loan (when combined with
amounts available to the borrower from other sources)
will be sufficient to carry out the project; and
(C) there is a reasonable prospect that the borrower
will repay the principal and interest on the loan.
(3) Interest; term.--The direct loan provided under
subsection (b) shall bear interest at a rate and for a term that
the Secretary determines appropriate, after consultation with
the Secretary of the Treasury, taking into account the needs and
capacities of the borrower and the prevailing rate of interest
for similar loans made by public and private lenders.
(4) Additional terms and conditions.--The Secretary may
require any other terms and conditions that the Secretary
determines to be appropriate.

(d) Use of Payments.--The Secretary shall retain any payments of
principal and interest on the direct loan provided under subsection (b)
to support energy research and development activities, to remain
available until expended, subject to any other conditions in an
applicable appropriations Act.
(e) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to provide the cost of a direct
loan under subsection (b).

SEC. 413. NOTE: 42 USC 15973. WESTERN INTEGRATED COAL GASIFICATION
DEMONSTRATION PROJECT.

(a) In General.--Subject to the availability of appropriations, the
Secretary shall carry out a project to demonstrate production of energy
from coal mined in the western United States using integrated
gasification combined cycle technology (referred to in this section as
the ``demonstration project'').
(b) Components.--The demonstration project--
(1) may include repowering of existing facilities;
(2) shall be designed to demonstrate the ability to use coal
with an energy content of not more than 9,000 Btu/lb.; and
(3) shall be capable of removing and sequestering carbon
dioxide emissions.

(c) All Types of Western Coals.--Notwithstanding the foregoing, and
to the extent economically feasible, the demonstration project shall
also be designed to demonstrate the ability to use a variety of types of
coal (including subbituminous and bituminous coal with an energy content
of up to 13,000 Btu/lb.) mined in the western United States.
(d) Location.--The demonstration project shall be located in a
western State at an altitude of greater than 4,000 feet above sea level.
(e) Cost Sharing.--The Federal share of the cost of the
demonstration project shall be determined in accordance with section
988.
(f) Loan Guarantees.--Notwithstanding title XIV, the demonstration
project shall not be eligible for Federal loan guarantees.

SEC. 414. NOTE: 42 USC 15974. 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

[[Page 756]]
119 STAT. 756

energy generation markets and that does not receive any subsidy (direct
or indirect) from ratepayers.

SEC. 415. NOTE: 42 USC 15975. PETROLEUM COKE GASIFICATION.

The Secretary is authorized to provide loan guarantees for at least
5 petroleum coke gasification projects.

SEC. 416. NOTE: 42 USC 15976. ELECTRON SCRUBBING DEMONSTRATION.

The Secretary shall use $5,000,000 from amounts appropriated to
initiate, through the Chicago Operations Office, a project to
demonstrate the viability of high-energy electron scrubbing technology
on commercial-scale electrical generation using high-sulfur coal.

SEC. 417. NOTE: 42 USC 15977. DEPARTMENT OF ENERGY TRANSPORTATION
FUELS FROM ILLINOIS BASIN COAL.

(a) In General.--The Secretary shall carry out a program to evaluate
the commercial and technical viability of advanced technologies for the
production of Fischer-Tropsch transportation fuels, and other
transportation fuels, manufactured from Illinois basin coal, including
the capital modification of existing facilities and the construction of
testing facilities under subsection (b).
(b) Facilities.--For the purpose of evaluating the commercial and
technical viability of different processes for producing Fischer-Tropsch
transportation fuels, and other transportation fuels, from Illinois
basin coal, the Secretary shall support the use and capital modification
of existing facilities and the construction of new facilities at--
(1) Southern Illinois University Coal Research Center;
(2) University of Kentucky Center for Applied Energy
Research; and
(3) Energy Center at Purdue University.

(c) Gasification Products Test Center.--In conjunction with the
activities described in subsections (a) and (b), the Secretary shall
construct a test center to evaluate and confirm liquid and gas products
from syngas catalysis in order that the system has an output of at least
500 gallons of Fischer-Tropsch transportation fuel per day in a 24-hour
operation.
(d) NOTE: Deadlines. Milestones.--
(1) Selection of processes.--Not later than 180 days after
the date of enactment of this Act, the Secretary shall select
processes for evaluating the commercial and technical viability
of different processes of producing Fischer-Tropsch
transportation fuels, and other transportation fuels, from
Illinois basin coal.
(2) Agreements.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall offer to enter into
agreements--
(A) to carry out the activities described in this
section, at the facilities described in subsection (b);
and
(B) for the capital modifications or construction of
the facilities at the locations described in subsection
(b).
(3) Evaluations.--Not later than 3 years after the date of
enactment of the Act, the Secretary shall begin, at the
facilities described in subsection (b), evaluation of the
technical and commercial viability of different processes of
producing Fischer-Tropsch transportation fuels, and other
transportation fuels, from Illinois basin coal.

[[Page 757]]
119 STAT. 757

(4) Construction of facilities.--
(A) In general.--The Secretary shall construct the
facilities described in subsection (b) at the lowest
cost practicable.
(B) Grants or agreements.--The Secretary may make
grants or enter into agreements or contracts with the
institutions of higher education described in subsection
(b).

(e) Cost Sharing.--The cost of making grants under this section
shall be shared in accordance with section 988.
(f) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $85,000,000 for the period of
fiscal years 2006 through 2010.

Subtitle C--Coal and Related Programs

SEC. 421. AMENDMENT OF THE ENERGY POLICY ACT OF 1992.

(a) Amendment.--The Energy Policy Act of 1992 (42 U.S.C. 13201 et
seq.) is amended by adding at the end the following:

``TITLE XXXI--CLEAN AIR COAL PROGRAM

``SEC. 3101. NOTE: 42 USC 13571. PURPOSES.

``The purposes of this title are to--
``(1) promote national energy policy and energy security,
diversity, and economic competitiveness benefits that result
from the increased use of coal;
``(2) mitigate financial risks, reduce the cost of clean
coal generation, and increase the marketplace acceptance of
clean coal generation and pollution control equipment and
processes; and
``(3) facilitate the environmental performance of clean coal
generation.

``SEC. 3102. NOTE: 42 USC 13572. AUTHORIZATION OF PROGRAM.

``(a) In General.--The Secretary shall carry out a program of
financial assistance to--
``(1) facilitate the production and generation of coal-based
power, through the deployment of clean coal electric generating
equipment and processes that, compared to equipment or processes
that are in operation on a full scale--
``(A) improve--
``(i) energy efficiency; or
``(ii) environmental performance consistent
with relevant Federal and State clean air
requirements, including those promulgated under
the Clean Air Act (42 U.S.C. 7401 et seq.); and
``(B) are not yet cost competitive; and
``(2) facilitate the utilization of existing coal-based
electricity generation plants through projects that--
``(A) deploy advanced air pollution control
equipment and processes; and
``(B) are designed to voluntarily enhance
environmental performance above current applicable
obligations under the

[[Page 758]]
119 STAT. 758

Clean Air Act and State implementation efforts pursuant
to such Act.

``(b) Financial Criteria.--As determined by the Secretary for a
particular project, financial assistance under this title shall be in
the form of--
``(1) cost-sharing of an appropriate percentage of the total
project cost, not to exceed 50 percent as calculated under
section 988 of the Energy Policy Act of 2005; or
``(2) financial assistance, including grants, cooperative
agreements, or loans as authorized under this Act or other
statutory authority of the Secretary.

``SEC. 3103. NOTE: 42 USC 13573. GENERATION PROJECTS.

``(a) Eligible Projects.--Projects supported under section
3102(a)(1) may include--
``(1) equipment or processes previously supported by a
Department of Energy program;
``(2) advanced combustion equipment and processes that the
Secretary determines will be cost-effective and could
substantially contribute to meeting environmental or energy
needs, including gasification, gasification fuel cells,
gasification coproduction, oxidation combustion techniques,
ultra-supercritical boilers, and chemical looping; and
``(3) hybrid gasification/combustion systems, including
systems integrating fuel cells with gasification or combustion
units.

``(b) Criteria.--The Secretary shall establish criteria for the
selection of generation projects under section 3102(a)(1). The Secretary
may modify the criteria as appropriate to reflect improvements in
equipment, except that the criteria shall not be modified to be less
stringent. The selection criteria shall include--
``(1) prioritization of projects whose installation is
likely to result in significant air quality improvements in
nonattainment air quality areas;
``(2) prioritization of projects whose installation is
likely to result in lower emission rates of pollution;
``(3) prioritization of projects that result in the
repowering or replacement of older, less efficient units;
``(4) documented broad interest in the procurement of the
equipment and utilization of the processes used in the projects
by owners or operators of facilities for electricity generation;
``(5) equipment and processes beginning in 2006 through 2011
that are projected to achieve a thermal efficiency of--
``(A) 40 percent for coal of more than 9,000 Btu per
pound based on higher heating values;
``(B) 38 percent for coal of 7,000 to 9,000 Btu per
pound passed on higher heating values; and
``(C) 36 percent for coal of less than 7,000 Btu per
pound based on higher heating values;
except that energy used for coproduction or cogeneration shall
not be counted in calculating the thermal efficiency under this
paragraph; and
``(6) equipment and processes beginning in 2012 and 2013
that are projected to achieve a thermal efficiency of--
``(A) 45 percent for coal of more than 9,000 Btu per
pound based on higher heating values;
``(B) 44 percent for coal of 7,000 to 9,000 Btu per
pound passed on higher heating values; and

[[Page 759]]
119 STAT. 759

``(C) 40 percent for coal of less than 7,000 Btu per
pound based on higher heating values;
except that energy used for coproduction or cogeneration shall
not be counted in calculating the thermal efficiency under this
paragraph.

``(c) Program Balance and Priority.--In carrying out the program
under section 3102(a)(1), the Secretary shall ensure, to the extent
practicable, that--
``(1) between 25 percent and 75 percent of the projects
supported are for the sole purpose of electrical generation; and
``(2) priority is given to projects that use electrical
generation equipment and processes that have been developed and
demonstrated and applied in actual production of electricity,
but are not yet cost-competitive, and that achieve greater
efficiency and environmental performance.

``(d) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out section 3102(a)(1)--
``(1) $250,000,000 for fiscal year 2007;
``(2) $350,000,000 for fiscal year 2008;
``(3) $400,000,000 for each of fiscal years 2009 through
2012; and
``(4) $300,000,000 for fiscal year 2013.

``(e) Applicability.--No technology, or level of emission reduction,
shall be treated as adequately demonstrated for purpose of section 111
of the Clean Air Act (42 U.S.C. 7411), achievable for purposes of
section 169 of that Act (42 U.S.C. 7479), or achievable in practice for
purposes of section 171 of that Act (42 U.S.C. 7501) solely by reason of
the use of such technology, or the achievement of such emission
reduction, by one or more facilities receiving assistance under section
3102(a)(1).

``SEC. 3104. NOTE: 42 USC 13574. AIR QUALITY ENHANCEMENT PROGRAM.

``(a) Eligible Projects.--Projects supported under section
3102(a)(2) shall--
``(1) utilize technologies that meet relevant Federal and
State clean air requirements applicable to the unit or facility,
including being adequately demonstrated for purposes of section
111 of the Clean Air Act (42 U.S.C. 7411), achievable for
purposes of section 169 of that Act (42 U.S.C. 7479), or
achievable in practice for purposes of section 171 of that Act
(42 U.S.C. 7501); or
``(2) utilize equipment or processes that exceed relevant
Federal or State clean air requirements applicable to the unit
or facilities included in the projects by achieving greater
efficiency or environmental performance.

``(b) Priority in Project Selection.--In making an award under
section 3102(a)(2), the Secretary shall give priority to--
``(1) projects whose installation is likely to result in
significant air quality improvements in nonattainment air
quality areas or substantially reduce the emission level of
criteria pollutants and mercury air emissions;
``(2) projects for pollution control that result in the
mitigation or collection of more than 1 pollutant; and
``(3) projects designed to allow the use of the waste
byproducts or other byproducts of the equipment.

[[Page 760]]
119 STAT. 760

``(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out section 3102(a)(2)--
``(1) $300,000,000 for fiscal year 2007;
``(2) $100,000,000 for fiscal year 2008;
``(3) $40,000,000 for fiscal year 2009;
``(4) $30,000,000 for fiscal year 2010; and
``(5) $30,000,000 for fiscal year 2011.

``(d) Applicability.--No technology, or level of emission reduction
under subsection (a)(2) shall be treated as adequately demonstrated for
purpose of Section 111 of the Clean Air Act (42 U.S.C. 7411), achievable
for purposes of section 169 of that Act (42 U.S.C. 7479), or achievable
in practice for purposes of section 171 of that Act (42 U.S.C. 7501)
solely by reason of the use of such technology, or the achievement of
such emission reduction, by one or more facilities receiving assistance
under section 3102(a)(2).''.
(b) Table of Contents Amendment.--The table of contents of the
Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is amended by adding
at the end the following:

``TITLE XXXI--CLEAN AIR COAL PROGRAM

``Sec. 3101. Purposes.
``Sec. 3102. Authorization of program.
``Sec. 3103. Generation projects.
``Sec. 3104. Air quality enhancement program.''.

Subtitle D--Federal NOTE: Coal Leasing Amendments Act of 2005. Coal
Leases

SEC. 431. NOTE: 42 USC 15801. SHORT TITLE.

This subtitle may be cited as the ``Coal Leasing Amendments Act of
2005''.

SEC. 432. REPEAL OF THE 160-ACRE LIMITATION FOR COAL LEASES.

Section 3 of the Mineral Leasing Act (30 U.S.C. 203) is amended--
(1) in the first sentence, by striking ``Any person'' and
inserting the following: ``(a)(1) Except as provided in
paragraph (3), on a finding by the Secretary under paragraph
(2), any person'';
(2) in the second sentence, by striking ``The Secretary''
and inserting the following:

``(b) The Secretary'';
(3) in the third sentence, by striking ``The minimum'' and
inserting the following:

``(c) The minimum'';
(4) in subsection (a) (as designated by paragraph (1))--
(A) by striking ``upon'' and all that follows and
inserting the following: ``secure modifications of the
original coal lease by including additional coal lands
or coal deposits contiguous or cornering to those
embraced in the lease.''; and
(B) by adding at the end the following:

``(2) A finding referred to in paragraph (1) is a finding by the
Secretary that the modifications--
``(A) would be in the interest of the United States;
``(B) would not displace a competitive interest in the
lands; and

[[Page 761]]
119 STAT. 761

``(C) would not include lands or deposits that can be
developed as part of another potential or existing operation.

``(3) In no case shall the total area added by modifications to an
existing coal lease under paragraph (1)--
``(A) exceed 960 acres; or
``(B) add acreage larger than that in the original lease.''.

SEC. 433. APPROVAL OF LOGICAL MINING UNITS.

Section 2(d)(2) of the Mineral Leasing Act (30 U.S.C. 202a(2)) is
amended--
(1) by inserting ``(A)'' after ``(2)''; and
(2) by adding at the end the following:

``(B) The Secretary may establish a period of more than 40 years if
the Secretary determines that the longer period--
``(i) will ensure the maximum economic recovery of a coal
deposit; or
``(ii) the longer period is in the interest of the orderly,
efficient, or economic development of a coal resource.''.

SEC. 434. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.

Section 7(b) of the Mineral Leasing Act (30 U.S.C. 207(b)) is
amended--
(1) in the first sentence, by striking ``Each lease'' and
inserting the following: ``(1) Each lease'';
(2) in the second sentence, by striking ``The Secretary''
and inserting the following:

``(2) The Secretary'';
(3) in the third sentence, by striking ``Such advance
royalties'' and inserting the following:

``(3) Advance royalties described in paragraph (2)'';
(4) in the seventh sentence, by striking ``The Secretary''
and inserting the following:

``(6) The Secretary'';
(5) in the last sentence, by striking ``Nothing'' and
inserting the following:

``(7) Nothing'';
(6) by striking the fourth, fifth, and sixth sentences; and
(7) by inserting after paragraph (3) (as designated by
paragraph (3)) the following:

``(4) Advance royalties described in paragraph (2) shall be
computed--
``(A) based on--
``(i) the average price in the spot market for sales
of comparable coal from the same region during the last
month of each applicable continued operation year; or
``(ii) in the absence of a spot market for
comparable coal from the same region, by using a
comparable method established by the Secretary of the
Interior to capture the commercial value of coal; and
``(B) based on commercial quantities, as defined by
regulation by the Secretary of the Interior.

``(5) The aggregate number of years during the period of any lease
for which advance royalties may be accepted in lieu of the condition of
continued operation shall not exceed 20 years.
``(6) The amount of any production royalty paid for any year shall
be reduced (but not below 0) by the amount of any advance royalties paid
under a lease described in paragraph (5) to the

[[Page 762]]
119 STAT. 762

extent that the advance royalties have not been used to reduce
production royalties for a prior year.''.

SEC. 435. ELIMINATION OF DEADLINE FOR SUBMISSION OF COAL LEASE OPERATION
AND RECLAMATION PLAN.

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

SEC. 436. AMENDMENT RELATING TO FINANCIAL ASSURANCES WITH RESPECT TO
BONUS BIDS.

Section 2(a) of the Mineral Leasing Act (30 U.S.C. 201(a)) is
amended by adding at the end the following:
``(4)(A) The Secretary shall not require a surety bond or any other
financial assurance to guarantee payment of deferred bonus bid
installments with respect to any coal lease issued on a cash bonus bid
to a lessee or successor in interest having a history of a timely
payment of noncontested coal royalties and advanced coal royalties in
lieu of production (where applicable) and bonus bid installment
payments.
``(B) The Secretary may waive any requirement that a lessee provide
a surety bond or other financial assurance to guarantee payment of
deferred bonus bid installment with respect to any coal lease issued
before the date of the enactment of the Energy Policy Act of 2005 only
if the Secretary determines that the lessee has a history of making
timely payments referred to in subparagraph (A).
``(5) NOTE: Deadline. Notices. Notwithstanding any other
provision of law, if the lessee under a coal lease fails to pay any
installment of a deferred cash bonus bid within 10 days after the
Secretary provides written notice that payment of the installment is
past due--
``(A) the lease shall automatically terminate; and
``(B) any bonus payments already made to the United States
with respect to the lease shall not be returned to the lessee or
credited in any future lease sale.''.

SEC. 437. NOTE: 42 USC 15991. INVENTORY REQUIREMENT.

(a) Review of Assessments.--
(1) In general.--The Secretary of the Interior, in
consultation with the Secretary of Agriculture and the
Secretary, shall review coal assessments and other available
data to identify--
(A) Federal lands with coal resources that are
available for development;
(B) the extent and nature of any restrictions on the
development of coal resources on Federal lands
identified under paragraph (1); and
(C) with respect to areas of such lands for which
sufficient data exists, resources of compliant coal and
supercompliant coal.
(2) Definitions.--For purposes of this subsection--
(A) the term ``compliant coal'' means coal that
contains not less than 1.0 and not more than 1.2 pounds
of sulfur dioxide per million Btu; and
(B) the term ``supercompliant coal'' means coal that
contains less than 1.0 pounds of sulfur dioxide per
million Btu.

(b) Completion and Updating of the Inventory.--The Sec- retary--

[[Page 763]]
119 STAT. 763

(1) NOTE: Deadline. shall complete the inventory under
subsection (a) by not later than 2 years after the date of
enactment of this Act; and
(2) shall update the inventory as the availability of data
and developments in technology warrant.

(c) Report.--The Secretary shall submit to the Committee on
Resources of the House of Representatives and to the Committee on Energy
and Natural Resources of the Senate and make publicly available--
(1) a report containing the inventory under this section, by
not later than 2 years after the effective date of this section;
and
(2) each update of such inventory.

SEC. 438. NOTE: 30 USC 201 note. APPLICATION OF AMENDMENTS.

The amendments made by this subtitle apply with respect to any coal
lease issued before, on, or after the date of the enactment of this Act.

TITLE V--INDIAN NOTE: Indian Tribal Energy Development and Self-
Determination Act of 2005. ENERGY

SEC. 501. NOTE: 42 USC 15801 note. SHORT TITLE.

This title may be cited as the ``Indian Tribal Energy Development
and Self-Determination Act of 2005''.

SEC. 502. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS.

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


``OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS


``Sec. 217. (a) Establishment.--There NOTE: 42 USC 7144e. is
established within the Department an Office of Indian Energy Policy and
Programs (referred to in this section as the `Office'). The Office shall
be headed by a Director, who shall be appointed by the Secretary and
compensated at a rate equal to that of level IV of the Executive
Schedule under section 5315 of title 5, United States Code.

``(b) Duties of Director.--The Director, in accordance with Federal
policies promoting Indian self-determination and the purposes of this
Act, shall provide, direct, foster, coordinate, and implement energy
planning, education, management, conservation, and delivery programs of
the Department that--
``(1) promote Indian tribal energy development, efficiency,
and use;
``(2) reduce or stabilize energy costs;
``(3) enhance and strengthen Indian tribal energy and
economic infrastructure relating to natural resource development
and electrification; and
``(4) bring electrical power and service to Indian land and
the homes of tribal members located on Indian lands or acquired,
constructed, or improved (in whole or in part) with Federal
funds.''.

(b) Conforming Amendments.--
(1) The table of contents of the Department of Energy
Organization Act (42 U.S.C. prec. 7101) is amended--

[[Page 764]]
119 STAT. 764

(A) in the item relating to section 209, by striking
``Section'' and inserting ``Sec.''; and
(B) by striking the items relating to sections 213
through 216 and inserting the following:

``Sec. 213. Establishment of policy for National Nuclear Security
Administration.
``Sec. 214. Establishment of security, counterintelligence, and
intelligence policies.
``Sec. 215. Office of Counterintelligence.
``Sec. 216. Office of Intelligence.
``Sec. 217. Office of Indian Energy Policy and Programs.''.

(2) Section 5315 of title 5, United States Code, is amended
by inserting after the item related to the Inspector General,
Department of Energy the following new item:
``Director, Office of Indian Energy Policy and Programs,
Department of Energy.''.

SEC. 503. INDIAN ENERGY.

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

``TITLE XXVI--INDIAN ENERGY

``SEC. 2601. NOTE: 25 USC 3501. DEFINITIONS.

``In this title:
``(1) The term `Director' means the Director of the Office
of Indian Energy Policy and Programs, Department of Energy.
``(2) The term `Indian land' means--
``(A) any land located within the boundaries of an
Indian reservation, pueblo, or rancheria;
``(B) any land not located within the boundaries of
an Indian reservation, pueblo, or rancheria, the title
to which is held--
``(i) in trust by the United States for the
benefit of an Indian tribe or an individual
Indian;
``(ii) by an Indian tribe or an individual
Indian, subject to restriction against alienation
under laws of the United States; or
``(iii) by a dependent Indian community; and
``(C) land that is owned by an Indian tribe and was
conveyed by the United States to a Native Corporation
pursuant to the Alaska Native Claims Settlement Act (43
U.S.C. 1601 et seq.), or that was conveyed by the United
States to a Native Corporation in exchange for such
land.
``(3) The term `Indian reservation' includes--
``(A) an Indian reservation in existence in any
State or States as of the date of enactment of this
paragraph;
``(B) a public domain Indian allotment; and
``(C) a dependent Indian community located within
the borders of the United States, regardless of whether
the community is located--
``(i) on original or acquired territory of the
community; or
``(ii) within or outside the boundaries of any
State or States.
``(4)(A) The term `Indian tribe' has the meaning given the
term in section 4 of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450b).

[[Page 765]]
119 STAT. 765

``(B) For the purpose of paragraph (12) and sections
2603(b)(1)(C) and 2604, the term `Indian tribe' does not include
any Native Corporation.
``(5) The term `integration of energy resources' means any
project or activity that promotes the location and operation of
a facility (including any pipeline, gathering system,
transportation system or facility, or electric transmission or
distribution facility) on or near Indian land to process,
refine, generate electricity from, or otherwise develop energy
resources on, Indian land.
``(6) The term `Native Corporation' has the meaning given
the term in section 3 of the Alaska Native Claims Settlement Act
(43 U.S.C. 1602).
``(7) The term `organization' means a partnership, joint
venture, limited liability company, or other unincorporated
association or entity that is established to develop Indian
energy resources.
``(8) The term `Program' means the Indian energy resource
development program established under section 2602(a).
``(9) The term `Secretary' means the Secretary of the
Interior.
``(10) The term `sequestration' means the long-term
separation, isolation, or removal of greenhouse gases from the
atmosphere, including through a biological or geologic method
such as reforestation or an underground reservoir.
``(11) The term `tribal energy resource development
organization' means an organization of two or more entities, at
least one of which is an Indian tribe, that has the written
consent of the governing bodies of all Indian tribes
participating in the organization to apply for a grant, loan, or
other assistance under section 2602.
``(12) The term `tribal land' means any land or interests in
land owned by any Indian tribe, title to which is held in trust
by the United States, or is subject to a restriction against
alienation under laws of the United States.

``SEC. 2602. NOTE: 25 USC 3502. INDIAN TRIBAL ENERGY RESOURCE
DEVELOPMENT.

``(a) Department of the Interior Program.--
``(1) To assist Indian tribes in the development of energy
resources and further the goal of Indian self-determination, the
Secretary shall establish and implement an Indian energy
resource development program to assist consenting Indian tribes
and tribal energy resource development organizations in
achieving the purposes of this title.
``(2) NOTE: Grants. In carrying out the Program, the
Secretary shall--
``(A) provide development grants to Indian tribes
and tribal energy resource development organizations for
use in developing or obtaining the managerial and
technical capacity needed to develop energy resources on
Indian land, and to properly account for resulting
energy production and revenues;
``(B) provide grants to Indian tribes and tribal
energy resource development organizations for use in
carrying out projects to promote the integration of
energy resources, and to process, use, or develop those
energy resources, on Indian land;

[[Page 766]]
119 STAT. 766

``(C) NOTE: Loans. provide low-interest loans to
Indian tribes and tribal energy resource development
organizations for use in the promotion of energy
resource development on Indian land and integration of
energy resources; and
``(D) provide grants and technical assistance to an
appropriate tribal environmental organization, as
determined by the Secretary, that represents multiple
Indian tribes to establish a national resource center to
develop tribal capacity to establish and carry out
tribal environmental programs in support of energy-
related programs and activities under this title,
including--
``(i) training programs for tribal
environmental officials, program managers, and
other governmental representatives;
``(ii) the development of model environmental
policies and tribal laws, including tribal
environmental review codes, and the creation and
maintenance of a clearinghouse of best
environmental management practices; and
``(iii) recommended standards for reviewing
the implementation of tribal environmental laws
and policies within tribal judicial or other
tribal appeals systems.
``(3) NOTE: Appropriation authorization. There are
authorized to be appropriated to carry out this subsection such
sums as are necessary for each of fiscal years 2006 through
2016.

``(b) Department of Energy Indian Energy Education Planning and
Management Assistance Program.--
``(1) The Director shall establish programs to assist
consenting Indian tribes in meeting energy education, research
and development, planning, and management needs.
``(2) In carrying out this subsection, the Director may
provide grants, on a competitive basis, to an Indian tribe or
tribal energy resource development organization for use in
carrying out--
``(A) energy, energy efficiency, and energy
conservation programs;
``(B) studies and other activities supporting tribal
acquisitions of energy supplies, services, and
facilities, including the creation of tribal utilities
to assist in securing electricity to promote
electrification of homes and businesses on Indian land;
``(C) planning, construction, development,
operation, maintenance, and improvement of tribal
electrical generation, transmission, and distribution
facilities located on Indian land; and
``(D) development, construction, and interconnection
of electric power transmission facilities located on
Indian land with other electric transmission facilities.
``(3)(A) The Director shall develop a program to support and
implement research projects that provide Indian tribes with
opportunities to participate in carbon sequestration practices
on Indian land, including--
``(i) geologic sequestration;
``(ii) forest sequestration;
``(iii) agricultural sequestration; and

[[Page 767]]
119 STAT. 767

``(iv) any other sequestration opportunities the
Director considers to be appropriate.
``(B) The activities carried out under subparagraph (A)
shall be--
``(i) coordinated with other carbon sequestration
research and development programs conducted by the
Secretary of Energy;
``(ii) conducted to determine methods consistent
with existing standardized measurement protocols to
account and report the quantity of carbon dioxide or
other greenhouse gases sequestered in projects that may
be implemented on Indian land; and
``(iii) reviewed periodically to collect and
distribute to Indian tribes information on carbon
sequestration practices that will increase the
sequestration of carbon without threatening the social
and economic well-being of Indian tribes.
``(4)(A) The Director, in consultation with Indian tribes,
may develop a formula for providing grants under this
subsection.
``(B) In providing a grant under this subsection, the
Director shall give priority to any application received from an
Indian tribe with inadequate electric service (as determined by
the Director).
``(C) In providing a grant under this subsection for an
activity to provide, or expand the provision of, electricity on
Indian land, the Director shall encourage cooperative
arrangements between Indian tribes and utilities that provide
service to Indian tribes, as the Director determines to be
appropriate.
``(5) The Secretary of Energy may issue such regulations as
the Secretary determines to be necessary to carry out this
subsection.
``(6) NOTE: Appropriation authorization. There is
authorized to be appropriated to carry out this subsection
$20,000,000 for each of fiscal years 2006 through 2016.

``(c) Department of Energy Loan Guarantee Program.--
``(1) Subject to paragraphs (2) and (4), the Secretary of
Energy may provide loan guarantees (as defined in section 502 of
the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) for an
amount equal to not more than 90 percent of the unpaid principal
and interest due on any loan made to an Indian tribe for energy
development.
``(2) In providing a loan guarantee under this subsection
for an activity to provide, or expand the provision of,
electricity on Indian land, the Secretary of Energy shall
encourage cooperative arrangements between Indian tribes and
utilities that provide service to Indian tribes, as the
Secretary determines to be appropriate.
``(3) A loan guarantee under this subsection shall be made
by--
``(A) a financial institution subject to examination
by the Secretary of Energy; or
``(B) an Indian tribe, from funds of the Indian
tribe.
``(4) The aggregate outstanding amount guaranteed by the
Secretary of Energy at any time under this subsection shall not
exceed $2,000,000,000.

[[Page 768]]
119 STAT. 768

``(5) NOTE: Appropriation authorization. The Secretary
of Energy may issue such regulations as the Secretary of Energy
determines are necessary to carry out this subsection.
``(6) There are authorized to be appropriated such sums as
are necessary to carry out this subsection, to remain available
until expended.
``(7) NOTE: Deadline. Reports. Not later than 1 year
after the date of enactment of this section, the Secretary of
Energy shall submit to Congress a report on the financing
requirements of Indian tribes for energy development on Indian
land.

``(d) Preference.--
``(1) In purchasing electricity or any other energy product
or byproduct, a Federal agency or department may give preference
to an energy and resource production enterprise, partnership,
consortium, corporation, or other type of business organization
the majority of the interest in which is owned and controlled by
1 or more Indian tribes.
``(2) In carrying out this subsection, a Federal agency or
department shall not--
``(A) pay more than the prevailing market price for
an energy product or byproduct; or
``(B) obtain less than prevailing market terms and
conditions.

``SEC. 2603. NOTE: 25 USC 3503. INDIAN TRIBAL ENERGY RESOURCE
REGULATION.

``(a) Grants.--The Secretary may provide to Indian tribes, on an
annual basis, grants for use in accordance with subsection (b).
``(b) Use of Funds.--Funds from a grant provided under this section
may be used--
``(1)(A) by an Indian tribe for the development of a tribal
energy resource inventory or tribal energy resource on Indian
land;
``(B) by an Indian tribe for the development of a
feasibility study or other report necessary to the development
of energy resources on Indian land;
``(C) by an Indian tribe (other than an Indian Tribe in the
State of Alaska, except the Metlakatla Indian Community) for--
``(i) the development and enforcement of tribal laws
(including regulations) relating to tribal energy
resource development; and
``(ii) the development of technical infrastructure
to protect the environment under applicable law; or
``(D) by a Native Corporation for the development and
implementation of corporate policies and the development of
technical infrastructure to protect the environment under
applicable law; and
``(2) by an Indian tribe for the training of employees
that--
``(A) are engaged in the development of energy
resources on Indian land; or
``(B) are responsible for protecting the
environment.

``(c) Other Assistance.--
``(1) In carrying out the obligations of the United States
under this title, the Secretary shall ensure, to the maximum
extent practicable and to the extent of available resources,
that on the request of an Indian tribe, the Indian tribe shall

[[Page 769]]
119 STAT. 769

have available scientific and technical information and
expertise, for use in the regulation, development, and
management of energy resources of the Indian tribe on Indian
land.
``(2) The Secretary may carry out paragraph (1)--
``(A) directly, through the use of Federal
officials; or
``(B) indirectly, by providing financial assistance
to an Indian tribe to secure independent assistance.

``SEC. 2604. NOTE: 25 USC 3504. LEASES, BUSINESS AGREEMENTS, AND
RIGHTS-OF-WAY INVOLVING ENERGY DEVELOPMENT OR TRANSMISSION.

``(a) Leases and Business Agreements.--In accordance with this
section--
``(1) an Indian tribe may, at the discretion of the Indian
tribe, enter into a lease or business agreement for the purpose
of energy resource development on tribal land, including a lease
or business agreement for--
``(A) exploration for, extraction of, processing of,
or other development of the energy mineral resources of
the Indian tribe located on tribal land; or
``(B) construction or operation of--
``(i) an electric generation, transmission, or
distribution facility located on tribal land; or
``(ii) a facility to process or refine energy
resources developed on tribal land; and
``(2) a lease or business agreement described in paragraph
(1) shall not require review by or the approval of the Secretary
under section 2103 of the Revised Statutes (25 U.S.C. 81), or
any other provision of law, if--
``(A) the lease or business agreement is executed
pursuant to a tribal energy resource agreement approved
by the Secretary under subsection (e);
``(B) the term of the lease or business agreement
does not exceed--
``(i) 30 years; or
``(ii) in the case of a lease for the
production of oil resources, gas resources, or
both, 10 years and as long thereafter as oil or
gas is produced in paying quantities; and
``(C) the Indian tribe has entered into a tribal
energy resource agreement with the Secretary, as
described in subsection (e), relating to the development
of energy resources on tribal land (including the
periodic review and evaluation of the activities of the
Indian tribe under the agreement, to be conducted
pursuant to subsection (e)(2)(D)(i)).

``(b) Rights-of-Way for Pipelines or Electric Transmission or
Distribution Lines.--An Indian tribe may grant a right-of-way over
tribal land for a pipeline or an electric transmission or distribution
line without review or approval by the Secretary if--
``(1) the right-of-way is executed in accordance with a
tribal energy resource agreement approved by the Secretary under
subsection (e);
``(2) the term of the right-of-way does not exceed 30 years;
``(3) the pipeline or electric transmission or distribution
line serves--

[[Page 770]]
119 STAT. 770

``(A) an electric generation, transmission, or
distribution facility located on tribal land; or
``(B) a facility located on tribal land that
processes or refines energy resources developed on
tribal land; and
``(4) the Indian tribe has entered into a tribal energy
resource agreement with the Secretary, as described in
subsection (e), relating to the development of energy resources
on tribal land (including the periodic review and evaluation of
the activities of the Indian tribe under an agreement described
in subparagraphs (D) and (E) of subsection (e)(2)).

``(c) Renewals.--A lease or business agreement entered into, or a
right-of-way granted, by an Indian tribe under this section may be
renewed at the discretion of the Indian tribe in accordance with this
section.
``(d) Validity.--No lease, business agreement, or right-of-way
relating to the development of tribal energy resources under this
section shall be valid unless the lease, business agreement, or right-
of-way is authorized by a tribal energy resource agreement approved by
the Secretary under subsection (e)(2).
``(e) Tribal Energy Resource Agreements.--
``(1) On the date on which regulations are promulgated under
paragraph (8), an Indian tribe may submit to the Secretary for
approval a tribal energy resource agreement governing leases,
business agreements, and rights-of-way under this section.
``(2)(A) NOTE: Deadlines. Not later than 270 days after
the date on which the Secretary receives a tribal energy
resource agreement from an Indian tribe under paragraph (1), or
not later than 60 days after the Secretary receives a revised
tribal energy resource agreement from an Indian tribe under
paragraph (4)(C) (or a later date, as agreed to by the Secretary
and the Indian tribe), the Secretary shall approve or disapprove
the tribal energy resource agreement.
``(B) The Secretary shall approve a tribal energy resource
agreement submitted under paragraph (1) if--
``(i) the Secretary determines that the Indian tribe
has demonstrated that the Indian tribe has sufficient
capacity to regulate the development of energy resources
of the Indian tribe;
``(ii) the tribal energy resource agreement includes
provisions required under subparagraph (D); and
``(iii) the tribal energy resource agreement
includes provisions that, with respect to a lease,
business agreement, or right-of-way under this section--
``(I) ensure the acquisition of necessary
information from the applicant for the lease,
business agreement, or right-of-way;
``(II) address the term of the lease or
business agreement or the term of conveyance of
the right-of-way;
``(III) address amendments and renewals;
``(IV) address the economic return to the
Indian tribe under leases, business agreements,
and rights-of-way;
``(V) address technical or other relevant
requirements;

[[Page 771]]
119 STAT. 771

``(VI) establish requirements for
environmental review in accordance with
subparagraph (C);
``(VII) ensure compliance with all applicable
environmental laws, including a requirement that
each lease, business agreement, and right-of-way
state that the lessee, operator, or right-of-way
grantee shall comply with all such laws;
``(VIII) identify final approval authority;
``(IX) provide for public notification of
final approvals;
``(X) establish a process for consultation
with any affected States regarding off-reservation
impacts, if any, identified under subparagraph
(C)(i);
``(XI) describe the remedies for breach of the
lease, business agreement, or right-of-way;
``(XII) require each lease, business
agreement, and right-of-way to include a statement
that, if any of its provisions violates an express
term or requirement of the tribal energy resource
agreement pursuant to which the lease, business
agreement, or right-of-way was executed--
``(aa) the provision shall be null
and void; and
``(bb) if the Secretary determines
the provision to be material, the
Secretary may suspend or rescind the
lease, business agreement, or right-of-
way or take other appropriate action
that the Secretary determines to be in
the best interest of the Indian tribe;
``(XIII) require each lease, business
agreement, and right-of-way to provide that it
will become effective on the date on which a copy
of the executed lease, business agreement, or
right-of-way is delivered to the Secretary in
accordance with regulations promulgated under
paragraph (8);
``(XIV) include citations to tribal laws,
regulations, or procedures, if any, that set out
tribal remedies that must be exhausted before a
petition may be submitted to the Secretary under
paragraph (7)(B);
``(XV) specify the financial assistance, if
any, to be provided by the Secretary to the Indian
tribe to assist in implementation of the tribal
energy resource agreement, including environmental
review of individual projects; and
``(XVI) in accordance with the regulations
promulgated by the Secretary under paragraph (8),
require that the Indian tribe, as soon as
practicable after receipt of a notice by the
Indian tribe, give written notice to the Secretary
of--
``(aa) any breach or other violation
by another party of any provision in a
lease, business agreement, or right-of-
way entered into under the tribal energy
resource agreement; and
``(bb) any activity or occurrence
under a lease, business agreement, or
right-of-way that constitutes a
violation of Federal or tribal
environmental laws.

[[Page 772]]
119 STAT. 772

``(C) Tribal energy resource agreements submitted
under paragraph (1) shall establish, and include
provisions to ensure compliance with, an environmental
review process that, with respect to a lease, business
agreement, or right-of-way under this section, provides
for, at a minimum--
``(i) the identification and evaluation of all
significant environmental effects (as compared to
a no-action alternative), including effects on
cultural resources;
``(ii) the identification of proposed
mitigation measures, if any, and incorporation of
appropriate mitigation measures into the lease,
business agreement, or right-of-way;
``(iii) a process for ensuring that--
``(I) the public is informed of, and
has an opportunity to comment on, the
environmental impacts of the proposed
action; and
``(II) responses to relevant and
substantive comments are provided,
before tribal approval of the lease,
business agreement, or right-of-way;
``(iv) sufficient administrative support and
technical capability to carry out the
environmental review process; and
``(v) oversight by the Indian tribe of energy
development activities by any other party under
any lease, business agreement, or right-of-way
entered into pursuant to the tribal energy
resource agreement, to determine whether the
activities are in compliance with the tribal
energy resource agreement and applicable Federal
environmental laws.
``(D) A tribal energy resource agreement between the
Secretary and an Indian tribe under this subsection
shall include--
``(i) provisions requiring the Secretary to
conduct a periodic review and evaluation to
monitor the performance of the activities of the
Indian tribe associated with the development of
energy resources under the tribal energy resource
agreement; and
``(ii) if a periodic review and evaluation, or
an investigation, by the Secretary of any breach
or violation described in a notice provided by the
Indian tribe to the Secretary in accordance with
subparagraph (B)(iii)(XVI), results in a finding
by the Secretary of imminent jeopardy to a
physical trust asset arising from a violation of
the tribal energy resource agreement or applicable
Federal laws, provisions authorizing the Secretary
to take actions determined by the Secretary to be
necessary to protect the asset, including
reassumption of responsibility for activities
associated with the development of energy
resources on tribal land until the violation and
any condition that caused the jeopardy are
corrected.
``(E) Periodic review and evaluation under
subparagraph (D) shall be conducted on an annual basis,
except that, after the third annual review and
evaluation, the Secretary and the Indian tribe may
mutually agree to amend the tribal energy resource
agreement to authorize

[[Page 773]]
119 STAT. 773

the review and evaluation under subparagraph (D) to be
conducted once every 2 years.
``(3) NOTE: Notice. Public information. The Secretary
shall provide notice and opportunity for public comment on
tribal energy resource agreements submitted for approval under
paragraph (1). The Secretary's review of a tribal energy
resource agreement shall be limited to activities specified by
the provisions of the tribal energy resource agreement.
``(4) NOTE: Deadline. If the Secretary disapproves a
tribal energy resource agreement submitted by an Indian tribe
under paragraph (1), the Secretary shall, not later than 10 days
after the date of disapproval--
``(A) NOTE: Notification. notify the Indian
tribe in writing of the basis for the disapproval;
``(B) identify what changes or other actions are
required to address the concerns of the Secretary; and
``(C) provide the Indian tribe with an opportunity
to revise and resubmit the tribal energy resource
agreement.
``(5) If an Indian tribe executes a lease or business
agreement, or grants a right-of-way, in accordance with a tribal
energy resource agreement approved under this subsection, the
Indian tribe shall, in accordance with the process and
requirements under regulations promulgated under paragraph (8),
provide to the Secretary--
``(A) NOTE: Records. a copy of the lease,
business agreement, or right-of-way document (including
all amendments to and renewals of the document); and
``(B) in the case of a tribal energy resource
agreement or a lease, business agreement, or right-of-
way that permits payments to be made directly to the
Indian tribe, information and documentation of those
payments sufficient to enable the Secretary to discharge
the trust responsibility of the United States to enforce
the terms of, and protect the rights of the Indian tribe
under, the lease, business agreement, or right-of-way.
``(6)(A) In carrying out this section, the Secretary shall--
``(i) act in accordance with the trust
responsibility of the United States relating to mineral
and other trust resources; and
``(ii) act in good faith and in the best interests
of the Indian tribes.
``(B) Subject to the provisions of subsections (a)(2), (b),
and (c) waiving the requirement of Secretarial approval of
leases, business agreements, and rights-of-way executed pursuant
to tribal energy resource agreements approved under this
section, and the provisions of subparagraph (D), nothing in this
section shall absolve the United States from any responsibility
to Indians or Indian tribes, including, but not limited to,
those which derive from the trust relationship or from any
treaties, statutes, and other laws of the United States,
Executive orders, or agreements between the United States and
any Indian tribe.
``(C) The Secretary shall continue to fulfill the trust
obligation of the United States to ensure that the rights and
interests of an Indian tribe are protected if--
``(i) any other party to a lease, business
agreement, or right-of-way violates any applicable
Federal law or the

[[Page 774]]
119 STAT. 774

terms of any lease, business agreement, or right-of-way
under this section; or
``(ii) any provision in a lease, business agreement,
or right-of-way violates the tribal energy resource
agreement pursuant to which the lease, business
agreement, or right-of-way was executed.
``(D)(i) In this subparagraph, the term `negotiated term'
means any term or provision that is negotiated by an Indian
tribe and any other party to a lease, business agreement, or
right-of-way entered into pursuant to an approved tribal energy
resource agreement.
``(ii) Notwithstanding subparagraph (B), the United States
shall not be liable to any party (including any Indian tribe)
for any negotiated term of, or any loss resulting from the
negotiated terms of, a lease, business agreement, or right-of-
way executed pursuant to and in accordance with a tribal energy
resource agreement approved by the Secretary under paragraph
(2).
``(7)(A) In this paragraph, the term `interested party'
means any person (including an entity) that has demonstrated
that an interest of the person has sustained, or will sustain,
an adverse environmental impact as a result of the failure of an
Indian tribe to comply with a tribal energy resource agreement
of the Indian tribe approved by the Secretary under paragraph
(2).
``(B) After exhaustion of any tribal remedy, and in
accordance with regulations promulgated by the Secretary under
paragraph (8), an interested party may submit to the Secretary a
petition to review the compliance by an Indian tribe with a
tribal energy resource agreement of the Indian tribe approved by
the Secretary under paragraph (2).
``(C)(i) NOTE: Deadline. Not later than 20 days after
the date on which the Secretary receives a petition under
subparagraph (B), the Secretary shall--
``(I) NOTE: Records. provide to the Indian tribe
a copy of the petition; and
``(II) consult with the Indian tribe regarding any
noncompliance alleged in the petition.
``(ii) NOTE: Deadline. Claims. Not later than 45 days
after the date on which a consultation under clause (i)(II)
takes place, the Indian tribe shall respond to any claim made in
a petition under subparagraph (B).
``(iii) The Secretary shall act in accordance with
subparagraphs (D) and (E) only if the Indian tribe--
``(I) denies, or fails to respond to, each claim
made in the petition within the period described in
clause (ii); or
``(II) fails, refuses, or is unable to cure or
otherwise resolve each claim made in the petition within
a reasonable period, as determined by the Secretary,
after the expiration of the period described in clause
(ii).
``(D)(i) NOTE: Deadline. Not later than 120 days after
the date on which the Secretary receives a petition under
subparagraph (B), the Secretary shall determine whether the
Indian tribe is not in compliance with the tribal energy
resource agreement.
``(ii) The Secretary may adopt procedures under paragraph
(8) authorizing an extension of time, not to exceed 120 days,

[[Page 775]]
119 STAT. 775

for making the determination under clause (i) in any case in
which the Secretary determines that additional time is necessary
to evaluate the allegations of the petition.
``(iii) Subject to subparagraph (E), if the Secretary
determines that the Indian tribe is not in compliance with the
tribal energy resource agreement, the Secretary shall take such
action as the Secretary determines to be necessary to ensure
compliance with the tribal energy resource agreement,
including--
``(I) temporarily suspending any activity under a
lease, business agreement, or right-of-way under this
section until the Indian tribe is in compliance with the
approved tribal energy resource agreement; or
``(II) rescinding approval of all or part of the
tribal energy resource agreement, and if all of the
agreement is rescinded, reassuming the responsibility
for approval of any future leases, business agreements,
or rights-of-way described in subsection (a) or (b).
``(E) Before taking an action described in subparagraph
(D)(iii), the Secretary shall--
``(i) make a written determination that describes
the manner in which the tribal energy resource agreement
has been violated;
``(ii) NOTE: Notice. provide the Indian tribe
with a written notice of the violations together with
the written determination; and
``(iii) before taking any action described in
subparagraph (D)(iii) or seeking any other remedy,
provide the Indian tribe with a hearing and a reasonable
opportunity to attain compliance with the tribal energy
resource agreement.
``(F) An Indian tribe described in subparagraph (E) shall
retain all rights to appeal under any regulation promulgated by
the Secretary.
``(8) NOTE: Deadline. Regulations. Not later than 1 year
after the date of enactment of the Energy Policy Act of 2005,
the Secretary shall promulgate regulations that implement this
subsection, including--
``(A) criteria to be used in determining the
capacity of an Indian tribe under paragraph (2)(B)(i),
including the experience of the Indian tribe in managing
natural resources and financial and administrative
resources available for use by the Indian tribe in
implementing the approved tribal energy resource
agreement of the Indian tribe;
``(B) a process and requirements in accordance with
which an Indian tribe may--
``(i) voluntarily rescind a tribal energy
resource agreement approved by the Secretary under
this subsection; and
``(ii) return to the Secretary the
responsibility to approve any future lease,
business agreement, or right-of-way under this
subsection;
``(C) provisions establishing the scope of, and
procedures for, the periodic review and evaluation
described in subparagraphs (D) and (E) of paragraph (2),
including

[[Page 776]]
119 STAT. 776

provisions for review of transactions, reports, site
inspections, and any other review activities the
Secretary determines to be appropriate; and
``(D) provisions describing final agency actions
after exhaustion of administrative appeals from
determinations of the Secretary under paragraph (7).

``(f) No Effect on Other Law.--Nothing in this section affects the
application of--
``(1) any Federal environmental law;
``(2) the Surface Mining Control and Reclamation Act of 1977
(30 U.S.C. 1201 et seq.); or
``(3) except as otherwise provided in this title, the Indian
Mineral Development Act of 1982 (25 U.S.C. 2101 et seq.).

``(g) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary such sums as are necessary for each of
fiscal years 2006 through 2016 to carry out this section and to make
grants or provide other appropriate assistance to Indian tribes to
assist the Indian tribes in developing and implementing tribal energy
resource agreements in accordance with this section.

``SEC. 2605. NOTE: 25 USC 3505. FEDERAL POWER MARKETING
ADMINISTRATIONS.

``(a) Definitions.--In this section:
``(1) The term `Administrator' means the Administrator of
the Bonneville Power Administration and the Administrator of the
Western Area Power Administration.
``(2) The term `power marketing administration' means--
``(A) the Bonneville Power Administration;
``(B) the Western Area Power Administration; and
``(C) any other power administration the power
allocation of which is used by or for the benefit of an
Indian tribe located in the service area of the
administration.

``(b) Encouragement of Indian Tribal Energy Development.--Each
Administrator shall encourage Indian tribal energy development by taking
such actions as the Administrators determine to be appropriate,
including administration of programs of the power marketing
administration, in accordance with this section.
``(c) Action by Administrators.--In carrying out this section, in
accordance with laws in existence on the date of enactment of the Energy
Policy Act of 2005--
``(1) each Administrator shall consider the unique
relationship that exists between the United States and Indian
tribes;
``(2) power allocations from the Western Area Power
Administration to Indian tribes may be used to meet firming and
reserve needs of Indian-owned energy projects on Indian land;
``(3) the Administrator of the Western Area Power
Administration may purchase non-federally generated power from
Indian tribes to meet the firming and reserve requirements of
the Western Area Power Administration; and
``(4) each Administrator shall not--
``(A) pay more than the prevailing market price for
an energy product; or
``(B) obtain less than prevailing market terms and
conditions.

``(d) Assistance for Transmission System Use.--

[[Page 777]]
119 STAT. 777

``(1) An Administrator may provide technical assistance to
Indian tribes seeking to use the high-voltage transmission
system for delivery of electric power.
``(2) The costs of technical assistance provided under
paragraph (1) shall be funded--
``(A) by the Secretary of Energy using
nonreimbursable funds appropriated for that purpose; or
``(B) by any appropriate Indian tribe.

``(e) Power Allocation Study.--
Not NOTE: Deadline. Reports. later than 2 years after the date of
enactment of the Energy Policy Act of 2005, the Secretary of Energy
shall submit to Congress a report that--
``(1) describes the use by Indian tribes of Federal power
allocations of the power marketing administration (or power sold
by the Southwestern Power Administration) to or for the benefit
of Indian tribes in a service area of the power marketing
administration; and
``(2) identifies--
``(A) the quantity of power allocated to, or used
for the benefit of, Indian tribes by the Western Area
Power Administration;
``(B) the quantity of power sold to Indian tribes by
any other power marketing administration; and
``(C) barriers that impede tribal access to and use
of Federal power, including an assessment of
opportunities to remove those barriers and improve the
ability of power marketing administrations to deliver
Federal power.

``(f) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $750,000, non-reimbursable, to
remain available until expended.

``SEC. 2606. NOTE: 25 USC 3506. WIND AND HYDROPOWER FEASIBILITY
STUDY.

``(a) Study.--The Secretary of Energy, in coordination with the
Secretary of the Army and the Secretary, shall conduct a study of the
cost and feasibility of developing a demonstration project that uses
wind energy generated by Indian tribes and hydropower generated by the
Army Corps of Engineers on the Missouri River to supply firming power to
the Western Area Power Administration.
``(b) Scope of Study.--The study shall--
``(1) determine the economic and engineering feasibility of
blending wind energy and hydropower generated from the Missouri
River dams operated by the Army Corps of Engineers, including an
assessment of the costs and benefits of blending wind energy and
hydropower compared to current sources used for firming power to
the Western Area Power Administration;
``(2) review historical and projected requirements for,
patterns of availability and use of, and reasons for historical
patterns concerning the availability of firming power;
``(3) assess the wind energy resource potential on tribal
land and projected cost savings through a blend of wind and
hydropower over a 30-year period;
``(4) determine seasonal capacity needs and associated
transmission upgrades for integration of tribal wind generation
and identify costs associated with these activities;
``(5) include an independent tribal engineer and a Western
Area Power Administration customer representative as study team
members; and

[[Page 778]]
119 STAT. 778

``(6) incorporate, to the extent appropriate, the results of
the Dakotas Wind Transmission study prepared by the Western Area
Power Administration.

``(c) Report.--Not later than 1 year after the date of enactment of
the Energy Policy Act of 2005, the Secretary of Energy, the Secretary,
and the Secretary of the Army shall submit to Congress a report that
describes the results of the study, including--
``(1) an analysis and comparison of the potential energy
cost or benefits to the customers of the Western Area Power
Administration through the use of combined wind and hydropower;
``(2) an economic and engineering evaluation of whether a
combined wind and hydropower system can reduce reservoir
fluctuation, enhance efficient and reliable energy production,
and provide Missouri River management flexibility;
``(3) if found feasible, recommendations for a demonstration
project to be carried out by the Western Area Power
Administration, in partnership with an Indian tribal government
or tribal energy resource development organization, and Western
Area Power Administration customers to demonstrate the
feasibility and potential of using wind energy produced on
Indian land to supply firming energy to the Western Area Power
Administration; and
``(4) an identification of--
``(A) the economic and environmental costs of, or
benefits to be realized through, a Federal-tribal-
customer partnership; and
``(B) the manner in which a Federal-tribal-customer
partnership could contribute to the energy security of
the United States.

``(d) Funding.--
``(1) Authorization of appropriations.--There is authorized
to be appropriated to carry out this section $1,000,000, to
remain available until expended.
``(2) Nonreimbursability.--Costs incurred by the Secretary
in carrying out this section shall be nonreimbursable.''.

(b) Conforming Amendments.--The table of contents for the Energy
Policy Act of 1992 is amended by striking the items relating to title
XXVI and inserting the following:

``Sec. 2601. Definitions.
``Sec. 2602. Indian tribal energy resource development.
``Sec. 2603. Indian tribal energy resource regulation.
``Sec. 2604. Leases, business agreements, and rights-of-way involving
energy development or transmission.
``Sec. 2605. Federal Power Marketing Administrations.
``Sec. 2606. Wind and hydropower feasibility study.''.

SEC. 504. NOTE: 25 USC 3501 note. CONSULTATION WITH INDIAN TRIBES.

In carrying out this title and the amendments made by this title,
the Secretary and the Secretary of the Interior shall, as appropriate
and to the maximum extent practicable, involve and consult with Indian
tribes.

SEC. 505. FOUR CORNERS TRANSMISSION LINE PROJECT AND ELECTRIFICATION.

(a) Transmission Line Project.--The Dine Power Authority, an
enterprise of the Navajo Nation, shall be eligible to receive grants and
other assistance under section 217 of the Department of Energy
Organization Act, as added by section 502, and section

[[Page 779]]
119 STAT. 779

2602 of the Energy Policy Act of 1992, as amended by this Act, for
activities associated with the development of a transmission line from
the Four Corners Area to southern Nevada, including related power
generation opportunities.
(b) Navajo Electrification.--Section 602 of Public Law 106-511 (114
Stat. 2376) is amended--
(1) in subsection (a)--
(A) in the first sentence, by striking ``5-year''
and inserting ``10-year''; and
(B) in the third sentence, by striking ``2006'' and
inserting ``2011''; and
(2) in the first sentence of subsection (e) by striking
``2006'' and inserting ``2011''.

SEC. 506. NOTE: 42 USC 16001. ENERGY EFFICIENCY IN FEDERALLY
ASSISTED HOUSING.

(a) In General.--The Secretary of Housing and Urban Development
shall promote energy conservation in housing that is located on Indian
land and assisted with Federal resources through--
(1) the use of energy-efficient technologies and innovations
(including the procurement of energy-efficient refrigerators and
other appliances);
(2) the promotion of shared savings contracts; and
(3) the use and implementation of such other similar
technologies and innovations as the Secretary of Housing and
Urban Development considers to be appropriate.

(b) Amendment.--Section 202(2) of the Native American Housing and
Self-Determination Act of 1996 (25 U.S.C. 4132(2)) is amended by
inserting ``improvement to achieve greater energy efficiency,'' after
``planning,''.

TITLE VI--NUCLEAR MATTERS

Subtitle A--Price-Anderson NOTE: Price-Anderson Amendments Act of
2005. Act Amendments

SEC. 601. NOTE: 42 USC 2011 note. SHORT TITLE.

This subtitle may be cited as the ``Price-Anderson Amendments Act of
2005''.

SEC. 602. EXTENSION OF INDEMNIFICATION AUTHORITY.

(a) Indemnification of Nuclear Regulatory Commission Licensees.--
Section 170 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(c)) is
amended--
(1) in the subsection heading, by striking ``Licenses'' and
inserting ``Licensees''; and
(2) by striking ``December 31, 2003'' each place it appears
and inserting ``December 31, 2025''.

(b) Indemnification of Department 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, 2006'' and inserting ``December 31, 2025''.
(c) Indemnification of Nonprofit Educational Institutions.--Section
170 k. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(k)) is amended
by striking ``August 1, 2002'' each place it appears and inserting
``December 31, 2025''.

[[Page 780]]
119 STAT. 780

SEC. 603. MAXIMUM ASSESSMENT.

Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is
amended--
(1) in the second proviso of the third sentence of
subsection b.(1)--
(A) by striking ``$63,000,000'' and inserting
``$95,800,000''; and
(B) by striking ``$10,000,000 in any 1 year'' and
inserting ``$15,000,000 in any 1 year (subject to
adjustment for inflation under subsection t.)''; and
(2) in subsection t.(1)--
(A) by inserting ``total and annual'' after ``amount
of the maximum'';
(B) by striking ``the date of the enactment of the
Price-Anderson Amendments Act of 1988'' and inserting
``August 20, 2003''; and
(C) in subparagraph (A), by striking ``such date of
enactment'' and inserting ``August 20, 2003''.

SEC. 604. DEPARTMENT LIABILITY LIMIT.

(a) Indemnification of Department Contractors.--Section 170 d. of
the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) is amended by striking
paragraph (2) and inserting the following:
``(2) In an agreement of indemnification entered into under
paragraph (1), the Secretary--
``(A) may require the contractor to provide and maintain
financial protection of such a type and in such amounts as the
Secretary shall determine to be appropriate to cover public
liability arising out of or in connection with the contractual
activity; and
``(B) shall indemnify the persons indemnified against such
liability above the amount of the financial protection required,
in the amount of $10,000,000,000 (subject to adjustment for
inflation under subsection t.), in the aggregate, for all
persons indemnified in connection with the contract and for each
nuclear incident, including such legal costs of the contractor
as are approved by the Secretary.''.

(b) Contract Amendments.--Section 170 d. of the Atomic Energy Act of
1954 (42 U.S.C. 2210(d)) is further amended by striking paragraph (3)
and inserting the following--
``(3) All agreements of indemnification under which the Department
of Energy (or its predecessor agencies) may be required to indemnify any
person under this section shall be deemed to be amended, on the date of
enactment of the Price-Anderson Amendments Act of 2005, 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.''.

[[Page 781]]
119 STAT. 781

SEC. 605. INCIDENTS OUTSIDE THE UNITED STATES.

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

SEC. 606. REPORTS.

Section 170 p. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(p))
is amended by striking ``August 1, 1998'' and inserting ``December 31,
2021''.

SEC. 607. INFLATION ADJUSTMENT.

Section 170 t. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(t))
is amended--
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by inserting after paragraph (1) the following:

``(2) The Secretary shall adjust the amount of indemnification
provided under an agreement of indemnification under subsection d. not
less than once during each 5-year period following July 1, 2003, in
accordance with the aggregate percentage change in the Consumer Price
Index since--
``(A) that date, in the case of the first adjustment under
this paragraph; or
``(B) the previous adjustment under this paragraph.''.

SEC. 608. TREATMENT OF MODULAR REACTORS.

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

SEC. 609. NOTE: 42 USC 2210 note. APPLICABILITY.

The amendments made by sections 603, 604, and 605 do not apply to a
nuclear incident that occurs before the date of the enactment of this
Act.

SEC. 610. CIVIL PENALTIES.

(a) Repeal of Automatic Remission.--Section 234A b.(2) of the Atomic
Energy Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by striking the
last sentence.
(b) Limitation for Not-for-Profit Institutions.--Subsection d. of
section 234A of the Atomic Energy Act of 1954 (42 U.S.C. 2282a(d)) is
amended to read as follows:
``d.(1) Notwithstanding subsection a., in the case of any not-for-
profit contractor, subcontractor, or supplier, the total amount of civil
penalties paid under subsection a. may not exceed the total amount of
fees paid within any 1-year period (as determined by the Secretary)
under the contract under which the violation occurs.

[[Page 782]]
119 STAT. 782

``(2) For purposes of this section, the term `not-for-profit' means
that no part of the net earnings of the contractor, subcontractor, or
supplier inures to the benefit of any natural person or for-profit
artificial person.''.
(c) Effective Date.--The NOTE: 42 USC 2282a note. amendments
made by this section shall not apply to any violation of the Atomic
Energy Act of 1954 (42 U.S.C. 2011 et seq.) occurring under a contract
entered into before the date of enactment of this section.

Subtitle B--General Nuclear Matters

SEC. 621. LICENSES.

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

SEC. 622. NUCLEAR REGULATORY COMMISSION SCHOLARSHIP AND FELLOWSHIP
PROGRAM.

(a) In General.--Chapter 19 of the Atomic Energy Act of 1954 is
amended by inserting after section 242 (42 U.S.C. 2015a) the following:

``SEC. 243. NOTE: 42 USC 2015b. SCHOLARSHIP AND FELLOWSHIP PROGRAM.

``a. Scholarship Program.--To enable students to study, for at least
1 academic semester or equivalent term, science, engineering, or another
field of study that the Commission determines is in a critical skill
area related to the regulatory mission of the Commission, the Commission
may carry out a program to--
``(1) award scholarships to undergraduate students who--
``(A) are United States citizens; and
``(B) enter into an agreement under subsection c. to
be employed by the Commission in the area of study for
which the scholarship is awarded.

``b. Fellowship Program.--To enable students to pursue education in
science, engineering, or another field of study that the Commission
determines is in a critical skill area related to its regulatory
mission, in a graduate or professional degree program offered by an
institution of higher education in the United States, the Commission may
carry out a program to--
``(1) award fellowships to graduate students who--
``(A) are United States citizens; and
``(B) enter into an agreement under subsection c. to
be employed by the Commission in the area of study for
which the fellowship is awarded.

``c. Requirements.--
``(1) In general.--As a condition of receiving a scholarship
or fellowship under subsection a. or b., a recipient of the
scholarship or fellowship shall enter into an agreement with the
Commission under which, in return for the assistance, the
recipient shall--
``(A) maintain satisfactory academic progress in the
studies of the recipient, as determined by criteria
established by the Commission;
``(B) agree that failure to maintain satisfactory
academic progress shall constitute grounds on which the
Commission may terminate the assistance;

[[Page 783]]
119 STAT. 783

``(C) on completion of the academic course of study
in connection with which the assistance was provided,
and in accordance with criteria established by the
Commission, engage in employment by the Commission for a
period specified by the Commission, that shall be not
less than 1 time and not more than 3 times the period
for which the assistance was provided; and
``(D) if the recipient fails to meet the
requirements of subparagraph (A), (B), or (C), reimburse
the United States Government for--
``(i) the entire amount of the assistance
provided the recipient under the scholarship or
fellowship; and
``(ii) interest at a rate determined by the
Commission.
``(2) Waiver or suspension.--The Commission may establish
criteria for the partial or total waiver or suspension of any
obligation of service or payment incurred by a recipient of a
scholarship or fellowship under this section.

``d. Competitive Process.--Recipients of scholarships or fellowships
under this section shall be selected through a competitive process
primarily on the basis of academic merit and such other criteria as the
Commission may establish, with consideration given to financial need and
the goal of promoting the participation of individuals identified in
section 33 or 34 of the Science and Engineering Equal Opportunities Act
(42 U.S.C. 1885a, 1885b).
``e. Direct Appointment.--The Commission may appoint directly, with
no further competition, public notice, or consideration of any other
potential candidate, an individual who has--
``(1) received a scholarship or fellowship awarded by the
Commission under this section; and
``(2) completed the academic program for which the
scholarship or fellowship was awarded.''.

(b) Conforming Amendment.--The table of sections of the Atomic
Energy Act of 1954 (42 U.S.C. prec. 2011) is amended by adding after the
item relating to section 242 the following:

``Sec. 243. Scholarship and fellowship program.''.

SEC. 623. COST RECOVERY FROM GOVERNMENT AGENCIES.

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

SEC. 624. ELIMINATION OF PENSION OFFSET FOR CERTAIN REHIRED FEDERAL
RETIREES.

(a) In General.--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:

[[Page 784]]
119 STAT. 784

``SEC. 170C. NOTE: 42 USC 2210c. ELIMINATION OF PENSION OFFSET FOR
CERTAIN REHIRED FEDERAL RETIREES.

``a. In General.--The Commission may waive the application of
section 8344 or 8468 of title 5, United States Code, on a case-by-case
basis for employment of an annuitant--
``(1) in a position of the Commission for which there is
exceptional difficulty in recruiting or retaining a qualified
employee; or
``(2) when a temporary emergency hiring need exists.

``b. Procedures.--The Commission shall prescribe procedures for the
exercise of authority under this section, including--
``(1) criteria for any exercise of authority; and
``(2) procedures for a delegation of authority.

``c. Effect of Waiver.--An employee as to whom a waiver under this
section is in effect shall not be considered an employee for purposes of
subchapter II of chapter 83, or chapter 84, of title 5, United States
Code.''.
(b) Conforming Amendment.--The table of sections of the Atomic
Energy Act of 1954 (42 U.S.C. prec. 2011) is amended by adding at the
end of the items relating to chapter 14 the following:

``Sec. 170C. Elimination of pension offset for certain rehired Federal
retirees.''.

SEC. 625. ANTITRUST REVIEW.

Section 105 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2135(c))
is amended by adding at the end the following:
``(9) Applicability.--This subsection does not apply to an
application for a license to construct or operate a utilization facility
or production facility under section 103 or 104 b. that is filed on or
after the date of enactment of this paragraph.''.

SEC. 626. DECOMMISSIONING.

Section 161 i. of the Atomic Energy Act of 1954 (42 U.S.C. 2201(i))
is amended--
(1) by striking ``and (3)'' and inserting ``(3)''; and
(2) by inserting before the semicolon at the end the
following: ``, and (4) to ensure that sufficient funds will be
available for the decommissioning of any production or
utilization facility licensed under section 103 or 104 b.,
including standards and restrictions governing the control,
maintenance, use, and disbursement by any former licensee under
this Act that has control over any fund for the decommissioning
of the facility''.

SEC. 627. LIMITATION ON LEGAL FEE REIMBURSEMENT.

Title II of the Energy Reorganization Act of 1974 (42 U.S.C. 5841 et
seq.) is amended by adding at the end the following new section:


``LIMITATION ON LEGAL FEE REIMBURSEMENT


``Sec. 212. NOTE: 42 USC 5853. The Department of Energy shall
not, except as required under a contract entered into before the date of
enactment of this section, 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

[[Page 785]]
119 STAT. 785

and Appeals pursuant to part 708 of title 10, Code of Federal
Regulations, or by a Department of Labor Administrative Law
Judge pursuant to section 211 of this Act; 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 this Act, or any comparable
State law,

unless the adverse determination or final judgment is reversed upon
further administrative or judicial review.''.

SEC. 628. DECOMMISSIONING PILOT PROGRAM.

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

SEC. 629. WHISTLEBLOWER PROTECTION.

(a) Definition of Employer.--Section 211(a)(2) of the Energy
Reorganization Act of 1974 (42 U.S.C. 5851(a)(2)) is amended--
(1) in subparagraph (C), by striking ``and'' at the end;
(2) in subparagraph (D), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following:
``(E) a contractor or subcontractor of the
Commission;
``(F) the Commission; and
``(G) the Department of Energy.''.

(b) De Novo Review.--Subsection (b) of such section 211 is amended
by adding at the end the following new paragraph:
``(4) NOTE: Deadline. If the Secretary has not issued a
final decision within 1 year after the filing of a complaint
under paragraph (1), and there is no showing that such delay is
due to the bad faith of the person seeking relief under this
paragraph, such person may bring an action at law or equity for
de novo review in the appropriate district court of the United
States, which shall have jurisdiction over such an action
without regard to the amount in controversy.''.

SEC. 630. MEDICAL ISOTOPE PRODUCTION.

Section 134 of the Atomic Energy Act of 1954 (42 U.S.C. 2160d) is
amended--
(1) in subsection a., by striking ``a. The Commission'' and
inserting ``a. In General.--Except as provided in subsection b.,
the Commission'';
(2) by redesignating subsection b. as subsection c.; and
(3) by inserting after subsection a. the following:

``b. Medical Isotope Production.--
``(1) Definitions.--In this subsection:
``(A) Highly enriched uranium.--The term `highly
enriched uranium' means uranium enriched to include
concentration of U-235 above 20 percent.

[[Page 786]]
119 STAT. 786

``(B) Medical isotope.--The term `medical isotope'
includes Molybdenum 99, Iodine 131, Xenon 133, and other
radioactive materials used to produce a
radiopharmaceutical for diagnostic, therapeutic
procedures or for research and development.
``(C) Radiopharmaceutical.--The term
`radiopharmaceutical' means a radioactive isotope that--
``(i) contains byproduct material combined
with chemical or biological material; and
``(ii) is designed to accumulate temporarily
in a part of the body for therapeutic purposes or
for enabling the production of a useful image for
use in a diagnosis of a medical condition.
``(D) Recipient country.--The term `recipient
country' means Canada, Belgium, France, Germany, and the
Netherlands.
``(2) Licenses.--The Commission may issue a license
authorizing the export (including shipment to and use at
intermediate and ultimate consignees specified in the license)
to a recipient country of highly enriched uranium for medical
isotope production if, in addition to any other requirements of
this Act (except subsection a.), the Commission determines
that--
``(A) a recipient country that supplies an assurance
letter to the United States Government in connection
with the consideration by the Commission of the export
license application has informed the United States
Government that any intermediate consignees and the
ultimate consignee specified in the application are
required to use the highly enriched uranium solely to
produce medical isotopes; and
``(B) the highly enriched uranium for medical
isotope production will be irradiated only in a reactor
in a recipient country that--
``(i) uses an alternative nuclear reactor
fuel; or
``(ii) is the subject of an agreement with the
United States Government to convert to an
alternative nuclear reactor fuel when alternative
nuclear reactor fuel can be used in the reactor.
``(3) Review of physical protection requirements.--
``(A) In general.--The Commission shall review the
adequacy of physical protection requirements that, as of
the date of an application under paragraph (2), are
applicable to the transportation and storage of highly
enriched uranium for medical isotope production or
control of residual material after irradiation and
extraction of medical isotopes.
``(B) Imposition of additional requirements.--If the
Commission determines that additional physical
protection requirements are necessary (including a limit
on the quantity of highly enriched uranium that may be
contained in a single shipment), the Commission shall
impose such requirements as license conditions or
through other appropriate means.
``(4) First report to congress.--

[[Page 787]]
119 STAT. 787

``(A) NAS study.--The NOTE: Contracts. Secretary
shall enter into an arrangement with the National
Academy of Sciences to conduct a study to determine--
``(i) the feasibility of procuring supplies of
medical isotopes from commercial sources that do
not use highly enriched uranium;
``(ii) the current and projected demand and
availability of medical isotopes in regular
current domestic use;
``(iii) the progress that is being made by the
Department of Energy and others to eliminate all
use of highly enriched uranium in reactor fuel,
reactor targets, and medical isotope production
facilities; and
``(iv) the potential cost differential in
medical isotope production in the reactors and
target processing facilities if the products were
derived from production systems that do not
involve fuels and targets with highly enriched
uranium.
``(B) Feasibility.--For the purpose of this
subsection, the use of low enriched uranium to produce
medical isotopes shall be determined to be feasible if--
``(i) low enriched uranium targets have been
developed and demonstrated for use in the reactors
and target processing facilities that produce
significant quantities of medical isotopes to
serve United States needs for such isotopes;
``(ii) sufficient quantities of medical
isotopes are available from low enriched uranium
targets and fuel to meet United States domestic
needs; and
``(iii) the average anticipated total cost
increase from production of medical isotopes in
such facilities without use of highly enriched
uranium is less than 10 percent.
``(C) Report by the secretary.--Not later than 5
years after the date of enactment of the Energy Policy
Act of 2005, the Secretary shall submit to Congress a
report that--
``(i) contains the findings of the National
Academy of Sciences made in the study under
subparagraph (A); and
``(ii) discloses the existence of any
commitments from commercial producers to provide
domestic requirements for medical isotopes without
use of highly enriched uranium consistent with the
feasibility criteria described in subparagraph (B)
not later than the date that is 4 years after the
date of submission of the report.
``(5) Second report to congress.--If the study of the
National Academy of Sciences determines under paragraph
(4)(A)(i) that the procurement of supplies of medical isotopes
from commercial sources that do not use highly enriched uranium
is feasible, but the Secretary is unable to report the existence
of commitments under paragraph (4)(C)(ii), not later than the
date that is 6 years after the date of enactment of the Energy
Policy Act of 2005, the Secretary shall submit to Congress a
report that describes options for developing domestic supplies
of medical isotopes in quantities that are

[[Page 788]]
119 STAT. 788

adequate to meet domestic demand without the use of highly
enriched uranium consistent with the cost increase described in
paragraph (4)(B)(iii).
``(6) Certification.--At such time as commercial facilities
that do not use highly enriched uranium are capable of meeting
domestic requirements for medical isotopes, within the cost
increase described in paragraph (4)(B)(iii) and without
impairing the reliable supply of medical isotopes for domestic
utilization, the Secretary shall submit to Congress a
certification to that effect.
``(7) Sunset provision.--After the Secretary submits a
certification under paragraph (6), the Commission shall, by
rule, terminate its review of export license applications under
this subsection.''.

SEC. 631. SAFE DISPOSAL OF GREATER-THAN-CLASS C RADIOACTIVE WASTE.

(a) Responsibility for NOTE: Notification. Activities To Provide
Storage Facility.--The Secretary shall provide to Congress official
notification of the final designation of an entity within the Department
to have the responsibility of completing activities needed to provide a
facility for safely disposing of all greater-than-Class C low-level
radioactive waste.

(b) Reports and Plans.--
(1) Report on permanent disposal facility.--
(A) Plan regarding cost and schedule for completion
of eis and rod.--Not later than 1 year after the date of
enactment of this Act, the Secretary, in consultation
with Congress, shall submit to Congress a report
containing an estimate of the cost and a proposed
schedule to complete an environmental impact statement
and record of decision for a permanent disposal facility
for greater-than-Class C radioactive waste.
(B) Analysis of alternatives.--Before the Secretary
makes a final decision on the disposal alternative or
alternatives to be implemented, the Secretary shall--
(i) submit to Congress a report that describes
all alternatives under consideration, including
all information required in the comprehensive
report making recommendations for ensuring the
safe disposal of all greater-than-Class C low-
level radioactive waste that was submitted by the
Secretary to Congress in February 1987; and
(ii) await action by Congress.
(2) Short-term plan for recovery and storage.--
(A) In general.--Not NOTE: Deadline. later than
180 days after the date of enactment of this Act, the
Secretary shall submit to Congress a plan to ensure the
continued recovery and storage of greater-than-Class C
low-level radioactive sealed sources that pose a
security threat until a permanent disposal facility is
available.
(B) Contents.--The plan shall address estimated
cost, resource, and facility needs.

SEC. 632. PROHIBITION ON NUCLEAR EXPORTS TO COUNTRIES THAT SPONSOR
TERRORISM.

(a) In General.--Section 129 of the Atomic Energy Act of 1954 (42
U.S.C. 2158) is amended--

[[Page 789]]
119 STAT. 789

(1) by inserting ``a.'' before ``No nuclear materials and
equipment''; and
(2) by adding at the end the following new subsection:

``b.(1) Notwithstanding any other provision of law, including
specifically section 121 of this Act, and except as provided in
paragraphs (2) and (3), no nuclear materials and equipment or sensitive
nuclear technology, including items and assistance authorized by section
57 b. of this Act and regulated under part 810 of title 10, Code of
Federal Regulations, and nuclear-related items on the Commerce Control
List maintained under part 774 of title 15 of the Code of Federal
Regulations, shall be exported or reexported, or transferred or
retransferred whether directly or indirectly, and no Federal agency
shall issue any license, approval, or authorization for the export or
reexport, or transfer, or retransfer, whether directly or indirectly, of
these items or assistance (as defined in this paragraph) to any country
whose government has been identified by the Secretary of State as
engaged in state sponsorship of terrorist activities (specifically
including any country the government of which has been determined by the
Secretary of State under section 620A(a) of the Foreign Assistance Act
of 1961 (22 U.S.C. 2371(a)), section 6(j)(1) of the Export
Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)), or section 40(d)
of the Arms Export Control Act (22 U.S.C. 2780(d)) to have repeatedly
provided support for acts of international terrorism).
``(2) This subsection shall not apply to exports, reexports,
transfers, or retransfers of radiation monitoring technologies,
surveillance equipment, seals, cameras, tamper-indication devices,
nuclear detectors, monitoring systems, or equipment necessary to safely
store, transport, or remove hazardous materials, whether such items,
services, or information are regulated by the Department of Energy, the
Department of Commerce, or the Commission, except to the extent that
such technologies, equipment, seals, cameras, devices, detectors, or
systems are available for use in the design or construction of nuclear
reactors or nuclear weapons.
``(3) The President may waive the application of paragraph (1) to a
country if the President determines and certifies to Congress that the
waiver will not result in any increased risk that the country receiving
the waiver will acquire nuclear weapons, nuclear reactors, or any
materials or components of nuclear weapons and--
``(A) the government of such country has not within the
preceding 12-month period willfully aided or abetted the
international proliferation of nuclear explosive devices to
individuals or groups or willfully aided and abetted an
individual or groups in acquiring unsafeguarded nuclear
materials;
``(B) in the judgment of the President, the government of
such country has provided adequate, verifiable assurances that
it will cease its support for acts of international terrorism;
``(C) the waiver of that paragraph is in the vital national
security interest of the United States; or
``(D) such a waiver is essential to prevent or respond to a
serious radiological hazard in the country receiving the waiver
that may or does threaten public health and safety.''.

(b) Applicability to NOTE: 42 USC 2158 note. Exports Approved
for Transfer but Not Transferred.--Subsection b. of section 129 of
Atomic Energy Act of 1954, as added by subsection (a) of this section,
shall apply with respect to exports that have been approved for transfer
as

[[Page 790]]
119 STAT. 790

of the date of the enactment of this Act but have not yet been
transferred as of that date.

SEC. 633. EMPLOYEE BENEFITS.

Section 3110(a) of the USEC Privatization Act (42 U.S.C. 2297h-8(a))
is amended by adding at the end the following new paragraph:
``(8) Continuity of benefits.--
To NOTE: Deadline. Ohio. Kentucky. the extent appropriations are
provided in advance for this purpose or are otherwise available, not
later than 30 days after the date of enactment of this paragraph, the
Secretary shall implement such actions as are necessary to ensure that
any employee who--
``(A) is involved in providing infrastructure or
environmental remediation services at the Portsmouth, Ohio, or
the Paducah, Kentucky, Gaseous Diffusion Plant;
``(B) has been an employee of the Department of Energy's
predecessor management and integrating contractor (or its first
or second tier subcontractors), or of the Corporation, at the
Portsmouth, Ohio, or the Paducah, Kentucky, facility; and
``(C) was eligible as of April 1, 2005, to participate in or
transfer into the Multiple Employer Pension Plan or the
associated multiple employer retiree health care benefit plans,
as defined in those plans,

shall continue to be eligible to participate in or transfer into such
pension or health care benefit plans.''.

SEC. 634. NOTE: 42 USC 16011. DEMONSTRATION HYDROGEN PRODUCTION AT
EXISTING NUCLEAR POWER PLANTS.

(a) Demonstration Projects.--The Secretary shall provide for the
establishment of 2 projects in geographic areas that are regionally and
climatically diverse to demonstrate the commercial production of
hydrogen at existing nuclear power plants.
(b) Economic Analysis.--Prior to making an award under subsection
(a), the Secretary shall determine whether the use of existing nuclear
power plants is a cost-effective means of producing hydrogen.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for the purposes of carrying out this
section not more than $100,000,000.

SEC. 635. NOTE: 42 USC 16012. PROHIBITION ON ASSUMPTION BY UNITED
STATES GOVERNMENT OF LIABILITY FOR CERTAIN FOREIGN
INCIDENTS.

(a) In General.--Notwithstanding any other provision of law, no
officer of the United States or of any department, agency, or
instrumentality of the United States Government may enter into any
contract or other arrangement, or into any amendment or modification of
a contract or other arrangement, the purpose or effect of which would be
to directly or indirectly impose liability on the United States
Government, or any department, agency, or instrumentality of the United
States Government, or to otherwise directly or indirectly require an
indemnity by the United States Government, for nuclear incidents
occurring in connection with the design, construction, or operation of a
production facility or utilization facility in any country whose
government has been identified by the Secretary of State as engaged in
state sponsorship of terrorist activities (specifically including any
country the government of which, as of September 11, 2001, had been
determined by the Secretary of State under section 620A(a) of the
Foreign

[[Page 791]]
119 STAT. 791

Assistance Act of 1961 (22 U.S.C. 2371(a)), section 6(j)(1) of the
Export Administration Act of 1979 (50 U.S.C. App. 2405(j)(1)), or
section 40(d) of the Arms Export Control Act (22 U.S.C. 2780(d)) to have
repeatedly provided support for acts of international terrorism). This
section shall not apply to nuclear incidents occurring as a result of
missions, carried out under the direction of the Secretary, the
Secretary of Defense, or the Secretary of State, that are necessary to
safely secure, store, transport, or remove nuclear materials for nuclear
safety or nonproliferation purposes.
(b) Definitions.--The terms used in this section shall have the same
meaning as those terms have under section 11 of the Atomic Energy Act of
1954 (42 U.S.C. 2014), unless otherwise expressly provided in this
section.

SEC. 636. NOTE: 42 USC 16013. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as are necessary
to carry out this subtitle and the amendments made by this subtitle.

SEC. 637. NUCLEAR REGULATORY COMMISSION USER FEES AND ANNUAL CHARGES.

(a) In General.--Section 6101 of the Omnibus Budget Reconciliation
Act of 1990 (42 U.S.C. 2214) is amended--
(1) in subsection (a)--
(A) by striking ``Except as provided in paragraph
(3), the'' and inserting ``The'' in paragraph (1); and
(B) by striking paragraph (3); and
(2) in subsection (c)--
(A) by striking ``and'' at the end of paragraph
(2)(A)(i);
(B) by striking the period at the end of paragraph
(2)(A)(ii) and inserting a semicolon;
(C) by adding at the end of paragraph (2)(A) the
following new clauses:
``(iii) amounts appropriated to the Commission
for the fiscal year for implementation of section
3116 of the Ronald W. Reagan National Defense
Authorization Act for Fiscal Year 2005; and
``(iv) amounts appropriated to the Commission
for homeland security activities of the Commission
for the fiscal year, except for the costs of
fingerprinting and background checks required by
section 149 of the Atomic Energy Act of 1954 (42
U.S.C. 2169) and the costs of conducting security
inspections.''; and
(D) by amending paragraph (2)(B)(v) to read as
follows:
``(v) 90 percent for fiscal year 2005 and each
fiscal year thereafter.''.

(b) Repeal.--Section 7601 of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (42 U.S.C. 2213) is repealed.
(c) Effective Date.--The NOTE: 42 USC 2214 note. amendments made
by this section take effect on October 1, 2006.

SEC. 638. NOTE: 42 USC 16014. STANDBY SUPPORT FOR CERTAIN NUCLEAR
PLANT DELAYS.

(a) Definitions.--In this section:
(1) Advanced nuclear facility.--The term ``advanced nuclear
facility'' means any nuclear facility the reactor design for
which is approved after December 31, 1993, by the Commission
(and such design or a substantially similar design of comparable
capacity was not approved on or before that date).

[[Page 792]]
119 STAT. 792

(2) Combined license.--The term ``combined license'' means a
combined construction and operating license for an advanced
nuclear facility issued by the Commission.
(3) Commission.--The term ``Commission'' means the Nuclear
Regulatory Commission.
(4) Sponsor.--The term ``sponsor'' means a person who has
applied for or been granted a combined license.

(b) Contract Authority.--
(1) In general.--The Secretary may enter into contracts
under this section with sponsors of an advanced nuclear facility
that cover a total of 6 reactors, with the 6 reactors consisting
of not more than 3 different reactor designs, in accordance with
paragraph (2).
(2) Requirement for contracts.--
(A) Definition of loan cost.--In this paragraph, the
term ``loan cost'' has the meaning given the term ``cost
of a loan guarantee'' under section 502(5)(C) of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(C)).
(B) Establishment of accounts.--There is established
in the Department 2 separate accounts, which shall be
known as the--
(i) ``Standby Support Program Account''; and
(ii) ``Standby Support Grant Account''.
(C) Requirement.--The Secretary shall not enter into
a contract under this section unless the Secretary
deposits--
(i) in the Standby Support Program Account
established under subparagraph (B), funds
appropriated to the Secretary in advance of the
contract or a combination of appropriated funds
and loan guarantee fees that are in an amount
sufficient to cover the loan costs described in
subsection (d)(5)(A); and
(ii) in the Standby Support Grant Account
established under subparagraph (B), funds
appropriated to the Secretary in advance of the
contract, paid to the Secretary by the sponsor of
the advanced nuclear facility, or a combination of
appropriations and payments that are in an amount
sufficient cover the costs described in
subparagraphs (B), (C), and (D) of subsection
(d)(5).

(c) Covered Delays.--
(1) Inclusions.--Under each contract authorized by this
section, the Secretary shall pay the costs specified in
subsection (d), using funds appropriated or collected for the
covered costs, if full power operation of the advanced nuclear
facility is delayed by--
(A) the failure of the Commission to comply with
schedules for review and approval of inspections, tests,
analyses, and acceptance criteria established under the
combined license or the conduct of preoperational
hearings by the Commission for the advanced nuclear
facility; or
(B) litigation that delays the commencement of full-
power operations of the advanced nuclear facility.
(2) Exclusions.--The Secretary may not enter into any
contract under this section that would obligate the Secretary to
pay any costs resulting from--

[[Page 793]]
119 STAT. 793

(A) the failure of the sponsor to take any action
required by law or regulation;
(B) events within the control of the sponsor; or
(C) normal business risks.

(d) Covered Costs.--
(1) In general.--Subject to paragraphs (2), (3), and (4),
the costs that shall be paid by the Secretary pursuant to a
contract entered into under this section are the costs that
result from a delay covered by the contract.
(2) Initial 2 reactors.--In the case of the first 2 reactors
that receive combined licenses and on which construction is
commenced, the Secretary shall pay--
(A) 100 percent of the covered costs of delay; but
(B) not more than $500,000,000 per contract.
(3) Subsequent 4 reactors.--In the case of the next 4
reactors that receive a combined license and on which
construction is commenced, the Secretary shall pay--
(A) 50 percent of the covered costs of delay that
occur after the initial 180-day period of covered delay;
but
(B) not more than $250,000,000 per contract.
(4) Conditions on payment of certain covered costs.--
(A) In general.--The obligation of the Secretary to
pay the covered costs described in subparagraph (B) of
paragraph (5) is subject to the Secretary receiving from
appropriations or payments from other non-Federal
sources amounts sufficient to pay the covered costs.
(B) Non-federal sources.--The Secretary may receive
and accept payments from any non-Federal source, which
shall be made available without further appropriation
for the payment of the covered costs.
(5) Types of covered costs.--Subject to paragraphs (2), (3),
and (4), the contract entered into under this section for an
advanced nuclear facility shall include as covered costs those
costs that result from a delay during construction and in
gaining approval for fuel loading and full-power operation,
including--
(A) principal or interest on any debt obligation of
an advanced nuclear facility owned by a non-Federal
entity; and
(B) the incremental difference between--
(i) the fair market price of power purchased
to meet the contractual supply agreements that
would have been met by the advanced nuclear
facility but for the delay; and
(ii) the contractual price of power from the
advanced nuclear facility subject to the delay.

(e) Requirements.--Any contract between a sponsor and the Secretary
covering an advanced nuclear facility under this section shall require
the sponsor to use due diligence to shorten, and to end, the delay
covered by the contract.
(f) Reports.--For each advanced nuclear facility that is covered by
a contract under this section, the Commission shall submit to Congress
and the Secretary quarterly reports summarizing the status of licensing
actions associated with the advanced nuclear facility.
(g) Regulations.--

[[Page 794]]
119 STAT. 794

(1) In general.--Subject to paragraphs (2) and (3), the
Secretary shall issue such regulations as are necessary to carry
out this section.
(2) Interim final rulemaking.--Not NOTE: Deadline. Public
information. later than 270 days after the date of enactment
of this Act, the Secretary shall issue for public comment an
interim final rule regulating contracts authorized by this
section.
(3) Notice of final rulemaking.--
Not NOTE: Deadline. later than 1 year after the date of
enactment of this Act, the Secretary shall issue a notice of
final rulemaking regulating the contracts.

(h) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.

SEC. 639. CONFLICTS OF INTEREST RELATING TO CONTRACTS AND OTHER
ARRANGEMENTS.

Section 170A b. of the Atomic Energy Act of 1954 (42 U.S.C.
2210a(b)) is amended--
(1) by redesignating paragraphs (1) and (2) as subparagraphs
(A) and (B), respectively, and indenting appropriately;
(2) by striking ``b. The Commission'' and inserting the
following:

``b. Evaluation.--
``(1) In general.--Except as provided in paragraph (2), the
Nuclear Regulatory Commission''; and
(3) by adding at the end the following:
``(2) Nuclear regulatory commission.--Notwithstanding any
conflict of interest, the Nuclear Regulatory Commission may
enter into a contract, agreement, or arrangement with the
Department of Energy or the operator of a Department of Energy
facility, if the Nuclear Regulatory Commission determines that--
``(A) the conflict of interest cannot be mitigated;
and
``(B) adequate justification exists to proceed
without mitigation of the conflict of interest.''.

Subtitle C--Next Generation Nuclear Plant Project

SEC. 641. NOTE: 42 USC 16021. PROJECT ESTABLISHMENT.

(a) Establishment.--The Secretary shall establish a project to be
known as the ``Next Generation Nuclear Plant Project'' (referred to in
this subtitle as the ``Project'').
(b) Content.--The Project shall consist of the research,
development, design, construction, and operation of a prototype plant,
including a nuclear reactor that--
(1) is based on research and development activities
supported by the Generation IV Nuclear Energy Systems Initiative
under section 942(d); and
(2) shall be used--
(A) to generate electricity;
(B) to produce hydrogen; or
(C) both to generate electricity and to produce
hydrogen.

[[Page 795]]
119 STAT. 795

SEC. 642. NOTE: 42 USC 16022. PROJECT MANAGEMENT.

(a) Departmental Management.--
(1) In general.--The Project shall be managed in the
Department by the Office of Nuclear Energy, Science, and
Technology.
(2) Generation iv nuclear energy systems program.--The
Secretary may combine the Project with the Generation IV Nuclear
Energy Systems Initiative.
(3) Existing doe project management expertise.--The
Secretary may utilize capabilities for review of construction
projects for advanced scientific facilities within the Office of
Science to track the progress of the Project.

(b) Laboratory Management.--
(1) Lead laboratory.--The Idaho National Laboratory shall be
the lead National Laboratory for the Project and shall
collaborate with other National Laboratories, institutions of
higher education, other research institutes, industrial
researchers, and international researchers to carry out the
Project.
(2) Industrial partnerships.--
(A) In general.--The Idaho National Laboratory shall
organize a consortium of appropriate industrial partners
that will carry out cost-shared research, development,
design, and construction activities, and operate
research facilities, on behalf of the Project.
(B) Cost-sharing.--Activities of industrial partners
funded by the Project shall be cost-shared in accordance
with section 988.
(C) Preference.--Preference in determining the final
structure of the consortium or any partnerships under
this subtitle shall be given to a structure (including
designating as a lead industrial partner an entity
incorporated in the United States) that retains United
States technological leadership in the Project while
maximizing cost sharing opportunities and minimizing
Federal funding responsibilities.
(3) Prototype plant siting.--The prototype nuclear reactor
and associated plant shall be sited at the Idaho National
Laboratory in Idaho.
(4) Reactor test capabilities.--The Project shall use, if
appropriate, reactor test capabilities at the Idaho National
Laboratory.
(5) Other laboratory capabilities.--The Project may use, if
appropriate, facilities at other National Laboratories.

SEC. 643. NOTE: 42 USC 16023. PROJECT ORGANIZATION.

(a) Major Project Elements.--The Project shall consist of the
following major program elements:
(1) High-temperature hydrogen production technology
development and validation.
(2) Energy conversion technology development and validation.
(3) Nuclear fuel development, characterization, and
qualification.
(4) Materials selection, development, testing, and
qualification.

[[Page 796]]
119 STAT. 796

(5) Reactor and balance-of-plant design, engineering, safety
analysis, and qualification.

(b) Project Phases.--The Project shall be conducted in the following
phases:
(1) First project phase.--A first project phase shall be
conducted to--
(A) select and validate the appropriate technology
under subsection (a)(1);
(B) carry out enabling research, development, and
demonstration activities on technologies and components
under paragraphs (2) through (4) of subsection (a);
(C) determine whether it is appropriate to combine
electricity generation and hydrogen production in a
single prototype nuclear reactor and plant; and
(D) carry out initial design activities for a
prototype nuclear reactor and plant, including
development of design methods and safety analytical
methods and studies under subsection (a)(5).
(2) Second project phase.--A second project phase shall be
conducted to--
(A) continue appropriate activities under paragraphs
(1) through (5) of subsection (a);
(B) develop, through a competitive process, a final
design for the prototype nuclear reactor and plant;
(C) apply for licenses to construct and operate the
prototype nuclear reactor from the Nuclear Regulatory
Commission; and
(D) construct and start up operations of the
prototype nuclear reactor and its associated hydrogen or
electricity production facilities.

(c) Project Requirements.--
(1) In general.--The Secretary shall ensure that the Project
is structured so as to maximize the technical interchange and
transfer of technologies and ideas into the Project from other
sources of relevant expertise, including--
(A) the nuclear power industry, including nuclear
powerplant construction firms, particularly with respect
to issues associated with plant design, construction,
and operational and safety issues;
(B) the chemical processing industry, particularly
with respect to issues relating to--
(i) the use of process energy for production
of hydrogen; and
(ii) the integration of technologies developed
by the Project into chemical processing
environments; and
(C) international efforts in areas related to the
Project, particularly with respect to hydrogen
production technologies.
(2) International collaboration.--
(A) In general.--The Secretary shall seek
international cooperation, participation, and financial
contributions for the Project.
(B) Assistance from international partners.--The
Secretary, through the Idaho National Laboratory, may
contract for assistance from specialists or facilities
from member countries of the Generation IV International

[[Page 797]]
119 STAT. 797

Forum, the Russian Federation, or other international
partners if the specialists or facilities provide access
to cost-effective and relevant skills or test
capabilities.
(C) Partner nations.--The Project may involve
demonstration of selected project objectives in a
partner country.
(D) Generation iv international forum.--The
Secretary shall ensure that international activities of
the Project are coordinated with the Generation IV
International Forum.
(3) Review by nuclear energy research advisory committee.--
(A) In general.--The Nuclear Energy Research
Advisory Committee of the Department (referred to in
this paragraph as the ``NERAC'') shall--
(i) review all program plans for the Project
and all progress under the Project on an ongoing
basis; and
(ii) ensure that important scientific,
technical, safety, and program management issues
receive attention in the Project and by the
Secretary.
(B) Additional expertise.--The NERAC shall
supplement the expertise of the NERAC or appoint
subpanels to incorporate into the review by the NERAC
the relevant sources of expertise described under
paragraph (1).
(C) Initial review.--Not NOTE: Deadline. later
than 180 days after the date of enactment of this Act,
the NERAC shall--
(i) review existing program plans for the
Project in light of the recommendations of the
document entitled ``Design Features and Technology
Uncertainties for the Next Generation Nuclear
Plant,'' dated June 30, 2004; and
(ii) address any recommendations of the
document not incorporated in program plans for the
Project.
(D) First project phase review.--On a determination
by the Secretary that the appropriate activities under
the first project phase under subsection (b)(1) are
nearly complete, the Secretary shall request the NERAC
to conduct a comprehensive review of the Project and to
report to the Secretary the recommendation of the NERAC
concerning whether the Project is ready to proceed to
the second project phase under subsection (b)(2).
(E) Transmittal of reports to congress.--Not later
than 60 days after receiving any report from the NERAC
related to the Project, the Secretary shall submit to
the appropriate committees of the Senate and the House
of Representatives a copy of the report, along with any
additional views of the Secretary that the Secretary may
consider appropriate.

SEC. 644. NOTE: 42 USC 16024. NUCLEAR REGULATORY COMMISSION.

(a) In General.--In accordance with section 202 of the Energy
Reorganization Act of 1974 (42 U.S.C. 5842), the Nuclear Regulatory
Commission shall have licensing and regulatory authority for any reactor
authorized under this subtitle.
(b) Licensing Strategy.--Not NOTE: Deadline. later than 3 years
after the date of enactment of this Act, the Secretary and the Chairman

[[Page 798]]
119 STAT. 798

of the Nuclear Regulatory Commission shall jointly submit to the
appropriate committees of the Senate and the House of Representatives a
licensing strategy for the prototype nuclear reactor, including--
(1) a description of ways in which current licensing
requirements relating to light-water reactors need to be adapted
for the types of prototype nuclear reactor being considered by
the Project;
(2) a description of analytical tools that the Nuclear
Regulatory Commission will have to develop to independently
verify designs and performance characteristics of components,
equipment, systems, or structures associated with the prototype
nuclear reactor;
(3) other research or development activities that may be
required on the part of the Nuclear Regulatory Commission in
order to review a license application for the prototype nuclear
reactor; and
(4) an estimate of the budgetary requirements associated
with the licensing strategy.

(c) Ongoing Interaction.--The Secretary shall seek the active
participation of the Nuclear Regulatory Commission throughout the
duration of the Project to--
(1) avoid design decisions that will compromise adequate
safety margins in the design of the reactor or impair the
accessibility of nuclear safety-related components of the
prototype reactor for inspection and maintenance;
(2) develop tools to facilitate inspection and maintenance
needed for safety purposes; and
(3) develop risk-based criteria for any future commercial
development of a similar reactor architectures.

SEC. 645. NOTE: 42 USC 16025. PROJECT TIMELINES AND AUTHORIZATION OF
APPROPRIATIONS.

(a) Target NOTE: Deadline. Date to Complete the First Project
Phase.--Not later than September 30, 2011, the Secretary shall--
(1) select the technology to be used by the Project for
high-temperature hydrogen production and the initial design
parameters for the prototype nuclear plant; or
(2) NOTE: Reports. submit to Congress a report
establishing an alternative date for making the selection.

(b) Design Competition for Second Project Phase.--
(1) In general.--The Secretary, acting through the Idaho
National Laboratory, shall fund not more than 4 teams for not
more than 2 years to develop detailed proposals for competitive
evaluation and selection of a single proposal for a final design
of the prototype nuclear reactor.
(2) Systems integration.--The Secretary may structure
Project activities in the second project phase to use the lead
industrial partner of the competitively selected design under
paragraph (1) in a systems integration role for final design and
construction of the Project.

(c) Target NOTE: Deadline. Date to Complete Project
Construction.--Not later than September 30, 2021, the Secretary shall--
(1) complete construction and begin operations of the
prototype nuclear reactor and associated energy or hydrogen
facilities; or

[[Page 799]]
119 STAT. 799

(2) NOTE: Reports. submit to Congress a report
establishing an alternative date for completion.

(d) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary for research and construction activities
under this subtitle (including for transfer to the Nuclear Regulatory
Commission for activities under section 644 as appropriate)--
(1) $1,250,000,000 for the period of fiscal years 2006
through 2015; and
(2) such sums as are necessary for each of fiscal years 2016
through 2021.

Subtitle D--Nuclear Security

SEC. 651. NOTE: 42 USC 16041. NUCLEAR FACILITY AND MATERIALS
SECURITY.

(a) Security Evaluations; Design Basis Threat Rulemaking.--
(1) In general.--Chapter 14 of the Atomic Energy Act of 1954
(42 U.S.C. 2201 et seq.) (as amended by section 624(a)) is
amended by adding at the end the following:

``SEC. 170D. NOTE: 42 USC 2210d. SECURITY EVALUATIONS.

``a. Security Response Evaluations.--Not NOTE: Deadline. less
often than once every 3 years, the Commission shall conduct security
evaluations at each licensed facility that is part of a class of
licensed facilities, as the Commission considers to be appropriate, to
assess the ability of a private security force of a licensed facility to
defend against any applicable design basis threat.

``b. Force-on-Force Exercises.--(1) The security evaluations shall
include force-on-force exercises.
``(2) The force-on-force exercises shall, to the maximum extent
practicable, simulate security threats in accordance with any design
basis threat applicable to a facility.
``(3) In conducting a security evaluation, the Commission shall
mitigate any potential conflict of interest that could influence the
results of a force-on-force exercise, as the Commission determines to be
necessary and appropriate.
``c. Action by Licensees.--The Commission shall ensure that an
affected licensee corrects those material defects in performance that
adversely affect the ability of a private security force at that
facility to defend against any applicable design basis threat.
``d. Facilities Under Heightened Threat Levels.--The Commission may
suspend a security evaluation under this section if the Commission
determines that the evaluation would compromise security at a nuclear
facility under a heightened threat level.
``e. Report.--Not less often than once each year, the Commission
shall submit to the Committee on Environment and Public Works of the
Senate and the Committee on Energy and Commerce of the House of
Representatives a report, in classified form and unclassified form, that
describes the results of each security response evaluation conducted and
any relevant corrective action taken by a licensee during the previous
year.

``SEC. 170E. NOTE: 42 USC 2210e. DESIGN BASIS THREAT RULEMAKING.

``a. Rulemaking.--The NOTE: Deadlines. Commission shall--

[[Page 800]]
119 STAT. 800

``(1) not later than 90 days after the date of enactment of
this section, initiate a rulemaking proceeding, including notice
and opportunity for public comment, to be completed not later
than 18 months after that date, to revise the design basis
threats of the Commission; or
``(2) not later than 18 months after the date of enactment
of this section, complete any ongoing rulemaking to revise the
design basis threats.

``b. Factors.--When conducting its rulemaking, the Commission shall
consider the following, 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;
``(10) the potential for attacks on spent fuel shipments by
multiple coordinated teams of a large number of individuals;
``(11) the adequacy of planning to protect the public health
and safety at and around nuclear facilities, as appropriate, in
the event of a terrorist attack against a nuclear facility; and
``(12) the potential for theft and diversion of nuclear
materials from such facilities.''.
(2) Conforming amendment.--The table of sections of the
Atomic Energy Act of 1954 (42 U.S.C. prec. 2011) (as amended by
section 624(b)) is amended by adding at the end of the items
relating to chapter 14 the following:

``Sec. 170D. Security evaluations.
``Sec. 170E. Design basis threat rulemaking.''.

(3) Federal security coordinators.--
(A) Regional offices.--Not NOTE: Deadline. later
than 18 months after the date of enactment of this Act,
the Nuclear Regulatory Commission (referred to in this
section as the ``Commission'') shall assign a Federal
security coordinator, under the employment of the
Commission, to each region of the Commission.
(B) Responsibilities.--The Federal security
coordinator shall be responsible for--
(i) communicating with the Commission and
other Federal, State, and local authorities
concerning threats, including threats against such
classes of facilities as the Commission determines
to be appropriate;
(ii) monitoring such classes of facilities as
the Commission determines to be appropriate to
ensure that they maintain security consistent with
the security plan in accordance with the
appropriate threat level; and

[[Page 801]]
119 STAT. 801

(iii) assisting in the coordination of
security measures among the private security
forces at such classes of facilities as the
Commission determines to be appropriate and
Federal, State, and local authorities, as
appropriate.

(b) Backup NOTE: Deadline. Power for Certain Emergency
Notification Systems.--For any licensed nuclear power plants located
where there is a permanent population, as determined by the 2000
decennial census, in excess of 15,000,000 within a 50-mile radius of the
power plant, not later than 18 months after enactment of this Act, the
Commission shall require that backup power to be available for the
emergency notification system of the power plant, including the
emergency siren warning system, if the alternating current supply within
the 10-mile emergency planning zone of the power plant is lost.

(c) Additional Provisions.--
(1) Provision of support to university nuclear safety,
security, and environmental protection programs.--Section 31 b.
of the Atomic Energy Act of 1954 (42 U.S.C. 2051(b)) is
amended--
(A) by striking ``b. The Commission is further
authorized to make'' and inserting the following:

``b. Grants and Contributions.--The Commission is authorized--
``(1) to make'';
(B) in paragraph (1) (as designated by subparagraph
(A)) by striking the period at the end and inserting ``;
and''; and
(C) by adding at the end the following:
``(2) to provide grants, loans, cooperative agreements,
contracts, and equipment to institutions of higher education (as
defined in section 102 of the Higher Education Act of 1965 (20
U.S.C. 1002)) to support courses, studies, training, curricula,
and disciplines pertaining to nuclear safety, security, or
environmental protection, or any other field that the Commission
determines to be critical to the regulatory mission of the
Commission.''.
(2) Recruitment tools.--Chapter 14 of the Atomic Energy Act
of 1954 (42 U.S.C. 2201 et seq.) (as amended by subsection
(a)(1)) is amended by adding at the end the following:

``SEC. 170F. NOTE: 42 USC 2210f. RECRUITMENT TOOLS.

``The Commission may purchase promotional items of nominal value for
use in the recruitment of individuals for employment.''.
(3) Expenses authorized to be paid by the commission.--
Chapter 14 of the Atomic Energy Act of 1954 (42 U.S.C. 2201 et
seq.) (as amended by paragraph (2)) is amended by adding at the
end the following:

``SEC. 170G. NOTE: 42 USC 2210g. EXPENSES AUTHORIZED TO BE PAID BY
THE COMMISSION.

``The Commission may--
``(1) pay transportation, lodging, and subsistence expenses
of employees who--
``(A) assist scientific, professional,
administrative, or technical employees of the
Commission; and
``(B) are students in good standing at an
institution of higher education (as defined in section
102 of the Higher Education Act of 1965 (20 U.S.C.
1002)) pursuing courses

[[Page 802]]
119 STAT. 802

related to the field in which the students are employed
by the Commission; and
``(2) pay the costs of health and medical services
furnished, pursuant to an agreement between the Commission and
the Department of State, to employees of the Commission and
dependents of the employees serving in foreign countries.''.
(4) Partnership program with institutions of higher
education.--
(A) In general.--Chapter 19 of the Atomic Energy Act
of 1954 (42 U.S.C. 2015 et seq.) (as amended by section
622(a)) is amended by inserting after section 243 the
following:

``SEC. 244. NOTE: 42 USC 2015c. PARTNERSHIP PROGRAM WITH
INSTITUTIONS OF HIGHER EDUCATION.

``a. Definitions.--In this section:
``(1) Hispanic-serving institution.--The term `Hispanic-
serving institution' has the meaning given the term in section
502(a) of the Higher Education Act of 1965 (20 U.S.C. 1101a(a)).
``(2) Historically black college and university.--The term
`historically Black college or university' has the meaning given
the term `part B institution' in section 322 of the Higher
Education Act of 1965 (20 U.S.C. 1061).
``(3) Tribal college.--The term `Tribal college' has the
meaning given the term `tribally controlled college or
university' in section 2(a) of the Tribally Controlled College
or University Assistance Act of 1978 (25 U.S.C. 1801(a)).

``b. Partnership Program.--The Commission may establish and
participate in activities relating to research, mentoring, instruction,
and training with institutions of higher education, including Hispanic-
serving institutions, historically Black colleges or universities, and
Tribal colleges, to strengthen the capacity of the institutions--
``(1) to educate and train students (including present or
potential employees of the Commission); and
``(2) to conduct research in the field of science,
engineering, or law, or any other field that the Commission
determines is important to the work of the Commission.''.
(5) Conforming amendments.--The table of sections of the
Atomic Energy Act of 1954 (42 U.S.C. prec. 2011) (as amended by
subsection (a)(2)) is amended--
(A) by adding at the end of the items relating to
chapter 14 the following:

``Sec. 170F. Recruitment tools.
``Sec. 170G. Expenses authorized to be paid by the Commission.'';

and
(B) by inserting after the item relating to section
243 the following:

``Sec. 244. Partnership program with institutions of higher
education.''.

(d) Radiation Source Protection.--
(1) Amendment.--Chapter 14 of the Atomic Energy Act of 1954
(42 U.S.C. 2201 et seq.) (as amended by subsection (c)(3)) is
amended by adding at the end the following:

``SEC. 170H. NOTE: 42 USC 2210h. RADIATION SOURCE PROTECTION.

``a. Definitions.--In this section:

[[Page 803]]
119 STAT. 803

``(1) Code of conduct.--The term `Code of Conduct' means the
code entitled the `Code of Conduct on the Safety and Security of
Radioactive Sources', approved by the Board of Governors of the
International Atomic Energy Agency and dated September 8, 2003.
``(2) Radiation source.--The term `radiation source' means--
``(A) a Category 1 Source or a Category 2 Source, as
defined in the Code of Conduct; and
``(B) any other material that poses a threat such
that the material is subject to this section, as
determined by the Commission, by regulation, other than
spent nuclear fuel and special nuclear materials.

``b. Commission Approval.--
Not NOTE: Deadline. Regulations. later than 180 days after the date
of enactment of this section, the Commission shall issue regulations
prohibiting a person from--
``(1) exporting a radiation source, unless the Commission
has specifically determined under section 57 or 82, consistent
with the Code of Conduct, with respect to the exportation,
that--
``(A) the recipient of the radiation source may
receive and possess the radiation source under the laws
and regulations of the country of the recipient;
``(B) the recipient country has the appropriate
technical and administrative capability, resources, and
regulatory structure to ensure that the radiation source
will be managed in a safe and secure manner; and
``(C) NOTE: Deadline. Notification. before the
date on which the radiation source is shipped--
``(i) a notification has been provided to the
recipient country; and
``(ii) a notification has been received from
the recipient country;
as the Commission determines to be appropriate;
``(2) importing a radiation source, unless the Commission
has determined, with respect to the importation, that--
``(A) the proposed recipient is authorized by law to
receive the radiation source; and
``(B) the shipment will be made in accordance with
any applicable Federal or State law or regulation; and
``(3) selling or otherwise transferring ownership of a
radiation source, unless the Commission--
``(A) has determined that the licensee has verified
that the proposed recipient is authorized under law to
receive the radiation source; and
``(B) has required that the transfer shall be made
in accordance with any applicable Federal or State law
or regulation.

``c. Tracking System.--(1)(A)
Not NOTE: Deadline. Regulations. later than 1 year after the date of
enactment of this section, the Commission shall issue regulations
establishing a mandatory tracking system for radiation sources in the
United States.

``(B) In establishing the tracking system under subparagraph (A),
the Commission shall coordinate with the Secretary of Transportation to
ensure compatibility, to the maximum extent

[[Page 804]]
119 STAT. 804

practicable, between the tracking system and any system established by
the Secretary of Transportation to track the shipment of radiation
sources.
``(2) The tracking system under paragraph (1) shall--
``(A) enable the identification of each radiation source by
serial number or other unique identifier;
``(B) require reporting within 7 days of any change of
possession of a radiation source;
``(C) require reporting within 24 hours of any loss of
control of, or accountability for, a radiation source; and
``(D) provide for reporting under subparagraphs (B) and (C)
through a secure Internet connection.

``d. Penalty.--A violation of a regulation issued under subsection
a. or b. shall be punishable by a civil penalty not to exceed
$1,000,000.
``e. National NOTE: Deadline. Contracts. Academy of Sciences
Study.--(1) Not later than 60 days after the date of enactment of this
section, the Commission shall enter into an arrangement with the
National Academy of Sciences under which the National Academy of
Sciences shall conduct a study of industrial, research, and commercial
uses for radiation sources.

``(2) The study under paragraph (1) shall include a review of uses
of radiation sources in existence on the date on which the study is
conducted, including an identification of any industrial or other
process that--
``(A) uses a radiation source that could be replaced with an
economically and technically equivalent (or improved) process
that does not require the use of a radiation source; or
``(B) may be used with a radiation source that would pose a
lower risk to public health and safety in the event of an
accident or attack involving the radiation source.

``(3) NOTE: Deadline. Not later than 2 years after the date of
enactment of this section, the Commission shall submit to Congress the
results of the study under paragraph (1).

``f. Task NOTE: Establishment. Force on Radiation Source
Protection and Security.--(1) There is established a task force on
radiation source protection and security (referred to in this section as
the `task force').

``(2)(A) The chairperson of the task force shall be the Chairperson
of the Commission (or a designee).
``(B) The membership of the task force shall consist of the
following:
``(i) The Secretary of Homeland Security (or a designee).
``(ii) The Secretary of Defense (or a designee).
``(iii) The Secretary of Energy (or a designee).
``(iv) The Secretary of Transportation (or a designee).
``(v) The Attorney General (or a designee).
``(vi) The Secretary of State (or a designee).
``(vii) The Director of National Intelligence (or a
designee).
``(viii) The Director of the Central Intelligence Agency (or
a designee).
``(ix) The Director of the Federal Emergency Management
Agency (or a designee).
``(x) The Director of the Federal Bureau of Investigation
(or a designee).

[[Page 805]]
119 STAT. 805

``(xi) The Administrator of the Environmental Protection
Agency (or a designee).

``(3)(A) The task force, in consultation with Federal, State, and
local agencies, the Conference of Radiation Control Program Directors,
and the Organization of Agreement States, and after public notice and an
opportunity for comment, shall evaluate, and provide recommendations
relating to, the security of radiation sources in the United States from
potential terrorist threats, including acts of sabotage, theft, or use
of a radiation source in a radiological dispersal device.
``(B) NOTE: Deadlines. Reports. Not later than 1 year after the
date of enactment of this section, and not less than once every 4 years
thereafter, the task force shall submit to Congress and the President a
report, in unclassified form with a classified annex if necessary,
providing recommendations, including recommendations for appropriate
regulatory and legislative changes, for--
``(i) a list of additional radiation sources that should be
required to be secured under this Act, based on the potential
attractiveness of the sources to terrorists and the extent of
the threat to public health and safety of the sources, taking
into consideration--
``(I) radiation source radioactivity levels;
``(II) radioactive half-life of a radiation source;
``(III) dispersability;
``(IV) chemical and material form;
``(V) for radioactive materials with a medical use,
the availability of the sources to physicians and
patients for medical treatment; and
``(VI) any other factor that the Chairperson of the
Commission determines to be appropriate;
``(ii) the establishment of, or modifications to, a national
system for recovery of lost or stolen radiation sources;
``(iii) the storage of radiation sources that are not used
in a safe and secure manner as of the date on which the report
is submitted;
``(iv) modifications to the national tracking system for
radiation sources;
``(v) the establishment of, or modifications to, a national
system (including user fees and other methods) to provide for
the proper disposal of radiation sources secured under this Act;
``(vi) modifications to export controls on radiation sources
to ensure that foreign recipients of radiation sources are able
and willing to adequately control radiation sources from the
United States;
``(vii)(I) any alternative technologies available as of the
date on which the report is submitted that may perform some or
all of the functions performed by devices or processes that
employ radiation sources; and
``(II) the establishment of appropriate regulations and
incentives for the replacement of the devices and processes
described in subclause (I)--
``(aa) with alternative technologies in order to
reduce the number of radiation sources in the United
States; or
``(bb) with radiation sources that would pose a
lower risk to public health and safety in the event of
an accident or attack involving the radiation source;
and

[[Page 806]]
119 STAT. 806

``(viii) the creation of, or modifications to, procedures
for improving the security of use, transportation, and storage
of radiation sources, including--
``(I) periodic audits or inspections by the
Commission to ensure that radiation sources are properly
secured and can be fully accounted for;
``(II) evaluation of the security measures by the
Commission;
``(III) increased fines for violations of Commission
regulations relating to security and safety measures
applicable to licensees that possess radiation sources;
``(IV) criminal and security background checks for
certain individuals with access to radiation sources
(including individuals involved with transporting
radiation sources);
``(V) requirements for effective and timely
exchanges of information relating to the results of
criminal and security background checks between the
Commission and any State with which the Commission has
entered into an agreement under section 274 b.;
``(VI) assurances of the physical security of
facilities that contain radiation sources (including
facilities used to temporarily store radiation sources
being transported); and
``(VII) the screening of shipments to facilities
that the Commission determines to be particularly at
risk for sabotage of radiation sources to ensure that
the shipments do not contain explosives.

``g. Action by Commission.--Not NOTE: Deadline. later than 60
days after the date of receipt by Congress and the President of a report
under subsection f.(3)(B), the Commission, in accordance with the
recommendations of the task force, shall--
``(1) take any action the Commission determines to be
appropriate, including revising the system of the Commission for
licensing radiation sources; and
``(2) ensure that States that have entered into agreements
with the Commission under section 274 b. take similar action in
a timely manner.''.
(2) Conforming amendment.--The table of sections of the
Atomic Energy Act of 1954 (42 U.S.C. prec. 2011) (as amended by
subsection (c)(5)(A)) is amended by adding at the end of the
items relating to chapter 14 the following:

``Sec. 170H. Radiation source protection.''.

(e) Treatment of Accelerator-produced and Other Radioactive Material
as Byproduct Material.--
(1) Definition of byproduct material.--Section 11 e. of the
Atomic Energy Act of 1954 (42 U.S.C. 2014(e)) is amended--
(A) by striking ``means (1) any radioactive'' and
inserting the following: ``means--
``(1) any radioactive''.
(B) by striking ``material, and (2) the tailings''
and inserting the following: ``material;
``(2) the tailings''.
(C) by striking ``content.'' and inserting the
following: ``content;
``(3)(A) any discrete source of radium-226 that is produced,
extracted, or converted after extraction, before, on, or after

[[Page 807]]
119 STAT. 807

the date of enactment of this paragraph for use for a
commercial, medical, or research activity; or
``(B) any material that--
``(i) has been made radioactive by use of a particle
accelerator; and
``(ii) is produced, extracted, or converted after
extraction, before, on, or after the date of enactment
of this paragraph for use for a commercial, medical, or
research activity; and
``(4) any discrete source of naturally occurring radioactive
material, other than source material, that--
``(A) the Commission, in consultation with the
Administrator of the Environmental Protection Agency,
the Secretary of Energy, the Secretary of Homeland
Security, and the head of any other appropriate Federal
agency, determines would pose a threat similar to the
threat posed by a discrete source of radium-226 to the
public health and safety or the common defense and
security; and
``(B) before, on, or after the date of enactment of
this paragraph is extracted or converted after
extraction for use in a commercial, medical, or research
activity.''.
(2) Agreements with governors.--Section 274 b. of the Atomic
Energy Act of 1954 (42 U.S.C. 2021(b)) is amended by striking
``State--'' and all that follows through paragraph (4) and
inserting the following: ``State:
``(1) Byproduct materials (as defined in section 11 e.).
``(2) Source materials.
``(3) Special nuclear materials in quantities not sufficient
to form a critical mass.''.
(3) Waste disposal.--
(A) Domestic distribution.--Section 81 of the Atomic
Energy Act of 1954 (42 U.S.C. 2111) is amended--
(i) by striking ``No person may'' and
inserting the following:

``a. In General.--No person may''.
(ii) by adding at the end the following:

``b. Requirements.--
``(1) In general.--Except as provided in paragraph (2),
byproduct material, as defined in paragraphs (3) and (4) of
section 11 e., may only be transferred to and disposed of in a
disposal facility that--
``(A) is adequate to protect public health and
safety; and
``(B)(i) is licensed by the Commission; or
``(ii) is licensed by a State that has entered into
an agreement with the Commission under section 274 b.,
if the licensing requirements of the State are
compatible with the licensing requirements of the
Commission.
``(2) Effect of subsection.--Nothing in this subsection
affects the authority of any entity to dispose of byproduct
material, as defined in paragraphs (3) and (4) of section 11 e.,
at a disposal facility in accordance with any Federal or State
solid or hazardous waste law, including the Solid Waste Disposal
Act (42 U.S.C. 6901 et seq.).

``c. Treatment as Low-level Radioactive Waste.--Byproduct material,
as defined in paragraphs (3) and (4) of section 11 e.,

[[Page 808]]
119 STAT. 808

disposed of under this section shall not be considered to be low-level
radioactive waste for the purposes of--
``(1) section 2 of the Low-Level Radioactive Waste Policy
Act (42 U.S.C. 2021b); or
``(2) carrying out a compact that is--
``(A) entered into in accordance with that Act (42
U.S.C. 2021b et seq.); and
``(B) approved by Congress.''.
(B) Definition of low-level radioactive waste.--
Section 2(9) of the Low-Level Radioactive Waste Policy
Act (42 U.S.C. 2021b(9)) is amended--
(i) by redesignating subparagraphs (A) and (B)
as clauses (i) and (ii), respectively, and
indenting the clauses appropriately;
(ii) in the matter preceding clause (i) (as
redesignated by subparagraph (A)) by striking
``The term'' and inserting the following:
``(A) In general.--The term''; and
(iii) by adding at the end the following:
``(B) Exclusion.--The term `low-level radioactive
waste' does not include byproduct material (as defined
in paragraphs (3) and (4) of section 11 e. of the Atomic
Energy Act of 1954 (42 U.S.C. 2014(e)).''.
(4) Final regulations.--
(A) Regulations.--
(i) In general.--Not NOTE: Deadline. later
than 18 months after the date of enactment of this
Act, the Commission, after consultation with
States and other stakeholders, shall issue final
regulations establishing such requirements as the
Commission determines to be necessary to carry out
this section and the amendments made by this
section.
(ii) Inclusions.--The regulations shall
include a definition of the term ``discrete
source'' for purposes of paragraphs (3) and (4) of
section 11 e. of the Atomic Energy Act of 1954 (42
U.S.C. 2014(e)) (as amended by paragraph (1)).
(B) Cooperation.--In promulgating regulations under
paragraph (1), the Commission shall, to the maximum
extent practicable--
(i) cooperate with States; and
(ii) use model State standards in existence on
the date of enactment of this Act.
(C) Transition plan.--
(i) Definition of byproduct material.--In this
paragraph, the term ``byproduct material'' has the
meaning given the term in paragraphs (3) and (4)
of section 11 e. of the Atomic Energy Act of 1954
(42 U.S.C. 2014(e)) (as amended by paragraph (1)).
(ii) Preparation and publication.--To
facilitate an orderly transition of regulatory
authority with respect to byproduct material, the
Commission, in issuing regulations under
subparagraph (A), shall prepare and publish a
transition plan for--
(I) States that have not, before the
date on which the plan is published,
entered into an agreement with the
Commission under section 274 b.

[[Page 809]]
119 STAT. 809

of the Atomic Energy Act of 1954 (42
U.S.C. 2021(b)); and
(II) States that have entered into
an agreement with the Commission under
that section before the date on which
the plan is published.
(iii) Inclusions.--The transition plan under
clause (ii) shall include--
(I) a description of the conditions
under which a State may exercise
authority over byproduct material; and
(II) a statement of the Commission
that any agreement covering byproduct
material, as defined in paragraph (1) or
(2) of section 11e. of the Atomic Energy
Act of 1954 (42 U.S.C. 2014(e)), entered
into between the Commission and a State
under section 274 b. of that Act (42
U.S.C. 2021(b)) before the date of
publication of the transition plan shall
be considered to include byproduct
material, as defined in paragraph (3) or
(4) of section 11e. of that Act (42
U.S.C. 2014(e)) (as amended by paragraph
(1)), if the Governor of the State
certifies to the Commission on the date
of publication of the transition plan
that--
(aa) the State has a program
for licensing byproduct
material, as defined in
paragraph (3) or (4) of section
11e. of the Atomic Energy Act of
1954, that is adequate to
protect the public health and
safety, as determined by the
Commission; and
(bb) the State intends to
continue to implement the
regulatory responsibility of the
State with respect to the
byproduct material.
(D) Availability of radiopharmaceuticals.--In
promulgating regulations under subparagraph (A), the
Commission shall consider the impact on the availability
of radiopharmaceuticals to--
(i) physicians; and
(ii) patients the medical treatment of which
relies on radiopharmaceuticals.
(5) Waivers.--
(A) In general.--Except as provided in subparagraph
(B), the Commission may grant a waiver to any entity of
any requirement under this section or an amendment made
by this section with respect to a matter relating to
byproduct material (as defined in paragraphs (3) and (4)
of section 11 e. of the Atomic Energy Act of 1954 (42
U.S.C. 2014(e)) (as amended by paragraph (1))) if the
Commission determines that the waiver is in accordance
with the protection of the public health and safety and
the promotion of the common defense and security.
(B) Exceptions.--
(i) In general.--The Commission may not grant
a waiver under subparagraph (A) with respect to--
(I) any requirement under the
amendments made by subsection (c)(1);
(II) a matter relating to an
importation into, or exportation from,
the United States for a period

[[Page 810]]
119 STAT. 810

ending after the date that is 1 year
after the date of enactment of this Act;
or
(III) any other matter for a period
ending after the date that is 4 years
after the date of enactment of this Act.
(ii) Waivers to states.--The Commission shall
terminate any waiver granted to a State under
subparagraph (A) if the Commission determines
that--
(I) the State has entered into an
agreement with the Commission under
section 274 b. of the Atomic Energy Act
of 1954 (42 U.S.C. 2021(b));
(II) the agreement described in
subclause (I) covers byproduct material
(as described in paragraph (3) or (4) of
section 11 e. of the Atomic Energy Act
of 1954 (42 U.S.C. 2014(e)) (as amended
by paragraph (1))); and
(III) the program of the State for
licensing such byproduct material is
adequate to protect the public health
and safety.
(C) Publication.--The NOTE: Federal
Register, publication. Notice. Commission shall
publish in the Federal Register a notice of any waiver
granted under this subsection.

SEC. 652. FINGERPRINTING AND CRIMINAL HISTORY RECORD CHECKS.

Section 149 of the Atomic Energy Act of 1954 (42 U.S.C. 2169) is
amended--
(1) in subsection a.--
(A) by striking ``a. The Nuclear'' and all that
follows through ``section 147.'' and inserting the
following:

``a.(1)(A)(i) The Commission shall require each individual or entity
described in clause (ii) to fingerprint each individual described in
subparagraph (B) before the individual described in subparagraph (B) is
permitted access under subparagraph (B).
``(ii) The individuals and entities referred to in clause (i) are
individuals and entities that, on or before the date on which an
individual is permitted access under subparagraph (B)--
``(I) are licensed or certified to engage in an activity
subject to regulation by the Commission;
``(II) have filed an application for a license or
certificate to engage in an activity subject to regulation by
the Commission; or
``(III) NOTE: Notification. have notified the Commission
in writing of an intent to file an application for licensing,
certification, permitting, or approval of a product or activity
subject to regulation by the Commission.

``(B) The Commission shall require to be fingerprinted any
individual who--
``(i) is permitted unescorted access to--
``(I) a utilization facility; or
``(II) radioactive material or other property
subject to regulation by the Commission that the
Commission determines to be of such significance to the
public health and safety or the common defense and
security as to warrant fingerprinting and background
checks; or
``(ii) is permitted access to safeguards information under
section 147.'';

[[Page 811]]
119 STAT. 811

(B) by striking ``All fingerprints obtained by a
licensee or applicant as required in the preceding
sentence'' and inserting the following:

``(2) All fingerprints obtained by an individual or entity as
required in paragraph (1)'';
(C) by striking ``The costs of any identification
and records check conducted pursuant to the preceding
sentence shall be paid by the licensee or applicant.''
and inserting the following:

``(3) The costs of an identification or records check under
paragraph (2) shall be paid by the individual or entity required to
conduct the fingerprinting under paragraph (1)(A).''; and
(D) by striking ``Notwithstanding any other
provision of law, the Attorney General may provide all
the results of the search to the Commission, and, in
accordance with regulations prescribed under this
section, the Commission may provide such results to
licensee or applicant submitting such fingerprints.''
and inserting the following:

``(4) Notwithstanding any other provision of law--
``(A) the Attorney General may provide any result of an
identification or records check under paragraph (2) to the
Commission; and
``(B) the Commission, in accordance with regulations
prescribed under this section, may provide the results to the
individual or entity required to conduct the fingerprinting
under paragraph (1)(A).'';
(2) in subsection c.--
(A) by striking ``, subject to public notice and
comment, regulations--'' and inserting ``requirements--
''; and
(B) in paragraph (2)(B), by striking ``unescorted
access to the facility of a licensee or applicant'' and
inserting ``unescorted access to a utilization facility,
radioactive material, or other property described in
subsection a.(1)(B)'';
(3) by redesignating subsection d. as subsection e.; and
(4) by inserting after subsection c. the following:

``d. The Commission may require a person or individual to conduct
fingerprinting under subsection a.(1) by authorizing or requiring the
use of any alternative biometric method for identification that has been
approved by--
``(1) the Attorney General; and
``(2) the Commission, by regulation.''.

SEC. 653. USE OF FIREARMS BY SECURITY PERSONNEL.

The Atomic Energy Act of 1954 is amended by inserting after section
161 (42 U.S.C. 2201) the following:

``SEC. 161A. NOTE: 42 USC 2201a. USE OF FIREARMS BY SECURITY
PERSONNEL.

``a. Definitions.--In this section, the terms `handgun', `rifle',
`shotgun', `firearm', `ammunition', `machinegun', `short-barreled
shotgun', and `short-barreled rifle' have the meanings given the terms
in section 921(a) of title 18, United States Code.
``b. Authorization.--Notwithstanding subsections (a)(4), (a)(5),
(b)(2), (b)(4), and (o) of section 922 of title 18, United States Code,
section 925(d)(3) of title 18, United States Code, section 5844 of the
Internal Revenue Code of 1986, and any law (including regulations) of a
State or a political subdivision of a State that prohibits the transfer,
receipt, possession, transportation, importation, or use of a handgun, a
rifle, a shotgun, a short-barreled shotgun, a short-

[[Page 812]]
119 STAT. 812

barreled rifle, a machinegun, a semiautomatic assault weapon, ammunition
for any such gun or weapon, or a large capacity ammunition feeding
device, in carrying out the duties of the Commission, the Commission may
authorize the security personnel of any licensee or certificate holder
of the Commission (including an employee of a contractor of such a
licensee or certificate holder) to transfer, receive, possess,
transport, import, and use 1 or more such guns, weapons, ammunition, or
devices, if the Commission determines that--
``(1) the authorization is necessary to the discharge of the
official duties of the security personnel; and
``(2) the security personnel--
``(A) are not otherwise prohibited from possessing
or receiving a firearm under Federal or State laws
relating to possession of firearms by a certain category
of persons;
``(B) have successfully completed any requirement
under this section for training in the use of firearms
and tactical maneuvers;
``(C) are engaged in the protection of--
``(i) a facility owned or operated by a
licensee or certificate holder of the Commission
that is designated by the Commission; or
``(ii) radioactive material or other property
owned or possessed by a licensee or certificate
holder of the Commission, or that is being
transported to or from a facility owned or
operated by such a licensee or certificate holder,
and that has been determined by the Commission to
be of significance to the common defense and
security or public health and safety; and
``(D) are discharging the official duties of the
security personnel in transferring, receiving,
possessing, transporting, or importing the weapons,
ammunition, or devices.

``c. Background Checks.--A person that receives, possesses,
transports, imports, or uses a weapon, ammunition, or a device under
subsection (b) shall be subject to a background check by the Attorney
General, based on fingerprints and including a background check under
section 103(b) of the Brady Handgun Violence Prevention Act (Public Law
103-159; 18 U.S.C. 922 note) to determine whether the person is
prohibited from possessing or receiving a firearm under Federal or State
law.
``d. Effective Date.--This section takes effect on the date on which
guidelines are issued by the Commission, with the approval of the
Attorney General, to carry out this section.''.

SEC. 654. UNAUTHORIZED INTRODUCTION OF DANGEROUS WEAPONS.

Section 229 of the Atomic Energy Act of 1954 (42 U.S.C. 2278a) is
amended--
(1) by striking ``Sec. 229, Trespass Upon Commission
Installations.--'' and inserting the following:

``SEC. 229. TRESPASS ON COMMISSION INSTALLATIONS.'';

(2) by adjusting the indentations of subsections a., b., and
c. so as to reflect proper subsection indentations; and
(3) in subsection a.--
(A) in the first sentence, by striking ``a. The''
and inserting the following:

``a.(1) The'';

[[Page 813]]
119 STAT. 813

(B) in the second sentence, by striking ``Every''
and inserting the following:

``(2) Every''; and
(C) in paragraph (1) (as designated by subparagraph
(A))--
(i) by striking ``or in the custody'' and
inserting ``in the custody''; and
(ii) by inserting ``, or subject to the
licensing authority of the Commission or
certification by the Commission under this Act or
any other Act'' before the period.

SEC. 655. SABOTAGE OF NUCLEAR FACILITIES, FUEL, OR DESIGNATED MATERIAL.

(a) In General.--Section 236a. of the Atomic Energy Act of 1954 (42
U.S.C. 2284(a)) is amended--
(1) in paragraph (2), by striking ``storage facility'' and
inserting ``treatment, storage, or disposal facility'';
(2) in paragraph (3)--
(A) by striking ``such a utilization facility'' and
inserting ``a utilization facility licensed under this
Act''; and
(B) by striking ``or'' at the end;
(3) in paragraph (4)--
(A) by striking ``facility licensed'' and inserting
``, uranium conversion, or nuclear fuel fabrication
facility licensed or certified''; and
(B) by striking the comma at the end and inserting a
semicolon; and
(4) by inserting after paragraph (4) the following:
``(5) any production, utilization, waste storage, waste
treatment, waste disposal, uranium enrichment, uranium
conversion, or nuclear fuel fabrication facility subject to
licensing or certification under this Act during construction of
the facility, if the destruction or damage caused or attempted
to be caused could adversely affect public health and safety
during the operation of the facility;
``(6) any primary facility or backup facility from which a
radiological emergency preparedness alert and warning system is
activated; or
``(7) any radioactive material or other property subject to
regulation by the Commission that, before the date of the
offense, the Commission determines, by order or regulation
published in the Federal Register, is of significance to the
public health and safety or to common defense and security;''.

(b) Conforming Amendment.--Section 236 of the Atomic Energy Act of
1954 (42 U.S.C. 2284) is amended by striking ``intentionally and
willfully'' each place it appears and inserting ``knowingly''.

SEC. 656. SECURE TRANSFER OF NUCLEAR MATERIALS.

(a) Amendment.--Chapter 14 of the Atomic Energy Act of 1954 (42
U.S.C. 2201-2210b) (as amended by section 651(d)(1)) is amended by
adding at the end the following new section:

``SEC. 170I. NOTE: 42 USC 2210i. SECURE TRANSFER OF NUCLEAR
MATERIALS.

``a. NOTE: Procedures. The Commission shall establish a system
to ensure that materials described in subsection b., when transferred or
received in the United States by any party pursuant to an import or
export

[[Page 814]]
119 STAT. 814

license issued pursuant to this Act, are accompanied by a manifest
describing the type and amount of materials being transferred or
received. Each individual receiving or accompanying the transfer of such
materials shall be subject to a security background check conducted by
appropriate Federal entities.
``b. Except as otherwise provided by the Commission by regulation,
the materials referred to in subsection a. are byproduct materials,
source materials, special nuclear materials, high-level radioactive
waste, spent nuclear fuel, transuranic waste, and low-level radioactive
waste (as defined in section 2(16) of the Nuclear Waste Policy Act of
1982 (42 U.S.C. 10101(16))).''.
(b) Regulations.--Not NOTE: Deadline. 42 USC 2210i note. later
than 1 year after the date of the enactment of this Act, and from time
to time thereafter as it considers necessary, the Nuclear Regulatory
Commission shall issue regulations identifying radioactive materials or
classes of individuals that, consistent with the protection of public
health and safety and the common defense and security, are appropriate
exceptions to the requirements of section 170D of the Atomic Energy Act
of 1954, as added by subsection (a) of this section.

(c) Effective Date.--The NOTE: 42 USC 2210i note. amendment made
by subsection (a) shall take effect upon the issuance of regulations
under subsection (b), except that the background check requirement shall
become effective on a date established by the Commission.

(d) Effect on Other Law.--Nothing NOTE: 42 USC 2210i note. 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) Conforming Amendment.--The table of sections of the Atomic
Energy Act of 1954 (42 U.S.C. prec. 2011) (as amended by subsection (a))
is amended by adding at the end of the items relating to chapter 14 the
following:

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

SEC. 657. NOTE: 42 USC 16042. DEPARTMENT OF HOMELAND SECURITY
CONSULTATION.

Before issuing a license for a utilization facility, the Nuclear
Regulatory Commission shall consult with the Department of Homeland
Security concerning the potential vulnerabilities of the location of the
proposed facility to terrorist attack.

TITLE VII--VEHICLES AND FUELS

Subtitle A--Existing Programs

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

Section 400AA(a)(3)(E) of the Energy Policy and Conservation Act (42
U.S.C. 6374(a)(3)(E)) is amended to read as follows:
``(E)(i) Dual fueled vehicles acquired pursuant to this section
shall be operated on alternative fuels unless the Secretary determines
that an agency qualifies for a waiver of such requirement for vehicles
operated by the agency in a particular geographic area in which--
``(I) the alternative fuel otherwise required to be used in
the vehicle is not reasonably available to retail purchasers

[[Page 815]]
119 STAT. 815

of the fuel, as certified to the Secretary by the head of the
agency; or
``(II) the cost of the alternative fuel otherwise required
to be used in the vehicle is unreasonably more expensive
compared to gasoline, as certified to the Secretary by the head
of the agency.

``(ii) NOTE: Reports. The Secretary shall monitor compliance
with this subparagraph by all such fleets and shall report annually to
Congress on the extent to which the requirements of this subparagraph
are being achieved. The report shall include information on annual
reductions achieved from the use of petroleum-based fuels and the
problems, if any, encountered in acquiring alternative fuels.''.

SEC. 702. INCREMENTAL COST ALLOCATION.

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

SEC. 703. ALTERNATIVE COMPLIANCE AND FLEXIBILITY.

(a) Alternative Compliance.--Title V of the Energy Policy Act of
1992 (42 U.S.C. 13251 et seq.) is amended--
(1) by redesignating section 514 (42 U.S.C. 13264) as
section 515; and
(2) by inserting after section 513 (42 U.S.C. 13263) the
following:

``SEC. 514. NOTE: 42 USC 13263a. ALTERNATIVE COMPLIANCE.

``(a) Application for Waiver.--Any covered person subject to section
501 and any State subject to section 507(o) may petition the Secretary
for a waiver of the applicable requirements of section 501 or 507(o).
``(b) Grant of Waiver.--The Secretary shall grant a waiver of the
requirements of section 501 or 507(o) on a showing that the fleet owned,
operated, leased, or otherwise controlled by the State or covered
person--
``(1) will achieve a reduction in the annual consumption of
petroleum fuels by the fleet equal to--
``(A) the reduction in consumption of petroleum that
would result from 100 percent cumulative compliance with
the fuel use requirements of section 501; or
``(B) in the case of an entity covered under section
507(o), a reduction equal to the annual consumption by
the State entity of alternative fuels if all of the
cumulative alternative fuel vehicles of the State entity
given credit under section 508 were to use alternative
fuel 100 percent of the time; and
``(2) is in compliance with all applicable vehicle emission
standards established by the Administrator of the Environmental
Protection Agency under the Clean Air Act (42 U.S.C. 7401 et
seq.).

``(c) Reporting Requirement.--Not later than December 31 of a model
year, any State or covered person granted a waiver under this section
for the preceding model year shall submit to the Secretary an annual
report that--
``(1) NOTE: Certification. certifies the quantity of the
petroleum motor fuel reduction of the State or covered person
during the preceding model year; and

[[Page 816]]
119 STAT. 816

``(2) projects the baseline quantity of the petroleum motor
fuel reduction of the State or covered person during the
following model year.

``(d) Revocation of Waiver.--If a State or covered person that
receives a waiver under this section fails to comply with this section,
the Secretary--
``(1) shall revoke the waiver; and
``(2) may impose on the State or covered person a penalty
under section 512.''.

(b) Conforming Amendment.--Section 511 of the Energy Policy Act of
1992 (42 U.S.C. 13261) is amended by striking ``or 507'' and inserting
``507, or 514''.
(c) Table of Contents Amendment.--The table of contents of the
Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is amended by striking
the item relating to section 514 and inserting the following:

``Sec. 514. Alternative compliance.
``Sec. 515. Authorization of appropriations.''.

SEC. 704. REVIEW OF ENERGY POLICY ACT OF 1992 PROGRAMS.

(a) In General.--Not NOTE: Deadline. later than 180 days after
the date of enactment of this section, the Secretary shall complete a
study to determine the effect that titles III, IV, and V of the Energy
Policy Act of 1992 (42 U.S.C. 13211 et seq.) have had on--
(1) the development of alternative fueled vehicle
technology;
(2) the availability of that technology in the market; and
(3) the cost of alternative fueled vehicles.

(b) Topics.--As part of the study under subsection (a), the
Secretary shall specifically identify--
(1) the number of alternative fueled vehicles acquired by
fleets or covered persons required to acquire alternative fueled
vehicles;
(2) the quantity, by type, of alternative fuel actually used
in alternative fueled vehicles acquired by fleets or covered
persons;
(3) the quantity of petroleum displaced by the use of
alternative fuels in alternative fueled vehicles acquired by
fleets or covered persons;
(4) the direct and indirect costs of compliance with
requirements under titles III, IV, and V of the Energy Policy
Act of 1992 (42 U.S.C. 13211 et seq.), including--
(A) vehicle acquisition requirements imposed on
fleets or covered persons;
(B) administrative and recordkeeping expenses;
(C) fuel and fuel infrastructure costs;
(D) associated training and employee expenses; and
(E) any other factors or expenses the Secretary
determines to be necessary to compile reliable estimates
of the overall costs and benefits of complying with
programs under those titles for fleets, covered persons,
and the national economy;
(5) the existence of obstacles preventing compliance with
vehicle acquisition requirements and increased use of
alternative fuel in alternative fueled vehicles acquired by
fleets or covered persons; and
(6) the projected impact of amendments to the Energy Policy
Act of 1992 made by this title.

[[Page 817]]
119 STAT. 817

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

SEC. 705. REPORT CONCERNING COMPLIANCE WITH ALTERNATIVE FUELED VEHICLE
PURCHASING REQUIREMENTS.

Section 310(b)(1) of the Energy Policy Act of 1992 (42 U.S.C.
13218(b)(1)) is amended by striking ``1 year after the date of enactment
of this subsection'' and inserting ``February 15, 2006''.

SEC. 706. NOTE: 42 USC 16051. JOINT FLEXIBLE FUEL/HYBRID VEHICLE
COMMERCIALIZATION INITIATIVE.

(a) Definitions.--In this section:
(1) Eligible entity.--The term ``eligible entity'' means--
(A) a for-profit corporation;
(B) a nonprofit corporation; or
(C) an institution of higher education.
(2) Program.--The term ``program'' means a program
established under subsection (b).

(b) Establishment.--The Secretary shall establish a program to
improve technologies for the commercialization of--
(1) a combination hybrid/flexible fuel vehicle; or
(2) a plug-in hybrid/flexible fuel vehicle.

(c) Grants.--In carrying out the program, the Secretary shall
provide grants that give preference to proposals that--
(1) achieve the greatest reduction in miles per gallon of
petroleum fuel consumption;
(2) achieve not less than 250 miles per gallon of petroleum
fuel consumption; and
(3) have the greatest potential of commercialization to the
general public within 5 years.

(d) Verification.--Not NOTE: Deadline. Federal
Register, publication. Procedures. later than 90 days after the date
of enactment of this Act, the Secretary shall publish in the Federal
Register procedures to verify--
(1) the hybrid/flexible fuel vehicle technologies to be
demonstrated; and
(2) that grants are administered in accordance with this
section.

(e) Report.--Not later than 260 days after the date of enactment of
this Act, and annually thereafter, the Secretary shall submit to
Congress a report that--
(1) identifies the grant recipients;
(2) describes the technologies to be funded under the
program;
(3) assesses the feasibility of the technologies described
in paragraph (2) in meeting the goals described in subsection
(c);
(4) identifies applications submitted for the program that
were not funded; and
(5) makes recommendations for Federal legislation to achieve
commercialization of the technology demonstrated.

(f) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, to remain available until
expended--
(1) $3,000,000 for fiscal year 2006;

[[Page 818]]
119 STAT. 818

(2) $7,000,000 for fiscal year 2007;
(3) $10,000,000 for fiscal year 2008; and
(4) $20,000,000 for fiscal year 2009.

SEC. 707. EMERGENCY EXEMPTION.

Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211) is
amended in paragraph (9)(E) by inserting before the semicolon at the end
``, including vehicles directly used in the emergency repair of
transmission lines and in the restoration of electricity service
following power outages, as determined by the Secretary''.

Subtitle B--Hybrid Vehicles, Advanced Vehicles, and Fuel Cell Buses

PART 1--HYBRID VEHICLES

SEC. 711. NOTE: 42 USC 16061. HYBRID VEHICLES.

The Secretary shall accelerate efforts directed toward the
improvement of batteries and other rechargeable energy storage systems,
power electronics, hybrid systems integration, and other technologies
for use in hybrid vehicles.

SEC. 712. NOTE: 42 USC 16062. EFFICIENT HYBRID AND ADVANCED DIESEL
VEHICLES.

(a) Program.--The Secretary shall establish a program to encourage
domestic production and sales of efficient hybrid and advanced diesel
vehicles. The program shall include grants to automobile manufacturers
to encourage domestic production of efficient hybrid and advanced diesel
vehicles.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for carrying out this section such sums as
may be necessary for each of the fiscal years 2006 through 2015.

PART 2--ADVANCED VEHICLES

SEC. 721. NOTE: 42 USC 16071. PILOT PROGRAM.

(a) Establishment.--The Secretary, in consultation with the
Secretary of Transportation, shall establish a competitive grant pilot
program (referred to in this part as the ``pilot program''), to be
administered through the Clean Cities Program of the Department, to
provide not more than 30 geographically dispersed project grants to
State governments, local governments, or metropolitan transportation
authorities to carry out a project or projects for the purposes
described in subsection (b).
(b) Grant Purposes.--A grant under this section may be used for the
following purposes:
(1) The acquisition of alternative fueled vehicles or fuel
cell vehicles, including--
(A) passenger vehicles (including neighborhood
electric vehicles); and
(B) motorized 2-wheel bicycles 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--

[[Page 819]]
119 STAT. 819

(A) buses used for public transportation or
transportation to and from schools;
(B) delivery vehicles for goods or services; and
(C) ground support vehicles at public airports
(including vehicles to carry baggage or push or pull
airplanes toward or away from terminal gates).
(3) The acquisition of ultra-low sulfur diesel vehicles.
(4) Installation or acquisition of infrastructure necessary
to directly support an alternative fueled vehicle, fuel cell
vehicle, or hybrid vehicle project funded by the grant,
including fueling and other support equipment.
(5) Operation and maintenance of vehicles, infrastructure,
and equipment acquired as part of a project funded by the grant.

(c) Applications.--
(1) Requirements.--
(A) In general.--The Secretary shall issue
requirements for applying for grants under the pilot
program.
(B) Minimum requirements.--At a minimum, the
Secretary shall require that an application for a
grant--
(i) be submitted by the head of a State or
local government or a metropolitan transportation
authority, or any combination thereof, and a
registered participant in the Clean Cities Program
of the Department; and
(ii) include--
(I) a description of the project
proposed in the application, including
how the project meets the requirements
of this part;
(II) an estimate of the ridership or
degree of use of the project;
(III) an estimate of the air
pollution emissions reduced and fossil
fuel displaced as a result of the
project, and a plan to collect and
disseminate environmental data, related
to the project to be funded under the
grant, over the life of the project;
(IV) a description of how the
project will be sustainable without
Federal assistance after the completion
of the term of the grant;
(V) a complete description of the
costs of the project, including
acquisition, construction, operation,
and maintenance costs over the expected
life of the project;
(VI) a description of which costs of
the project will be supported by Federal
assistance under this part; and
(VII) documentation to the
satisfaction of the Secretary that
diesel fuel containing sulfur at not
more than 15 parts per million is
available for carrying out the project,
and a commitment by the applicant to use
such fuel in carrying out the project.
(2) Partners.--An applicant under paragraph (1) may carry
out a project under the pilot program in partnership with public
and private entities.

(d) Selection Criteria.--In evaluating applications under the pilot
program, the Secretary shall--

[[Page 820]]
119 STAT. 820

(1) consider each applicant's previous experience with
similar projects; and
(2) give priority consideration to applications that--
(A) are most likely to maximize protection of the
environment;
(B) demonstrate the greatest commitment on the part
of the applicant to ensure funding for the proposed
project and the greatest likelihood that the project
will be maintained or expanded after Federal assistance
under this part is completed; and
(C) exceed the minimum requirements of subsection
(c)(1)(B)(ii).

(e) Pilot Project Requirements.--
(1) Maximum amount.--The Secretary shall not provide more
than $15,000,000 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 NOTE: Procedures. 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) NOTE: Deadlines. Schedule.--
(1) Publication.--Not NOTE: Federal
Register, publication. Commerce Business Daily,
publication. later than 90 days after the date of enactment of
this Act, the Secretary shall publish in the Federal Register,
Commerce Business Daily, and elsewhere as appropriate, a request
for applications to undertake projects under the pilot program.
Applications shall be due not later than 180 days after the date
of publication of the notice.
(2) Selection.--Not later than 180 days after the date by
which applications for grants are due, the Secretary shall
select by competitive, peer reviewed proposal, all applications
for projects to be awarded a grant under the pilot program.

(g) Definitions.--For NOTE: Regulations. purposes of carrying
out the pilot program, the Secretary shall issue regulations defining
any term, as the Secretary determines to be necessary.

SEC. 722. NOTE: 42 USC 16072. REPORTS TO CONGRESS.

(a) Initial Report.--Not later than 60 days after the date on which
grants are awarded under this part, the Secretary shall submit to
Congress a report containing--
(1) an identification of the grant recipients and a
description of the projects to be funded;
(2) an identification of other applicants that submitted
applications for the pilot program; and
(3) a description of the mechanisms used by the Secretary to
ensure that the information and knowledge gained by participants
in the pilot program are transferred among the pilot

[[Page 821]]
119 STAT. 821

program participants and to other interested parties, including
other applicants that submitted applications.

(b) Evaluation.--Not later than 3 years after the date of enactment
of this Act, and annually thereafter until the pilot program ends, the
Secretary shall submit to Congress a report containing an evaluation of
the effectiveness of the pilot program, including--
(1) an assessment of the benefits to the environment derived
from the projects included in the pilot program; and
(2) an estimate of the potential benefits to the environment
to be derived from widespread application of alternative fueled
vehicles and ultra-low sulfur diesel vehicles.

SEC. 723. NOTE: 42 USC 16073. AUTHORIZATION OF APPROPRIATIONS.

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

PART 3--FUEL CELL BUSES

SEC. 731. NOTE: 42 USC 16081. FUEL CELL TRANSIT BUS DEMONSTRATION.

(a) In General.--The Secretary, in consultation with the Secretary
of Transportation, shall establish a transit bus demonstration program
to make competitive, merit-based awards for 5-year projects to
demonstrate not more than 25 fuel cell transit buses (and necessary
infrastructure) in 5 geographically dispersed localities.
(b) Preference.--In selecting projects under this section, the
Secretary shall give preference to projects that are most likely to
mitigate congestion and improve air quality.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section $10,000,000 for
each of fiscal years 2006 through 2010.

Subtitle C--Clean School Buses

SEC. 741. NOTE: 42 USC 16091. CLEAN SCHOOL BUS PROGRAM.

(a) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Alternative fuel.--The term ``alternative fuel'' means--
(A) liquefied natural gas, compressed natural gas,
liquefied petroleum gas, hydrogen, or propane;
(B) methanol or ethanol at no less than 85 percent
by volume; or
(C) biodiesel conforming with standards published by
the American Society for Testing and Materials as of the
date of enactment of this Act.
(3) Clean school bus.--The term ``clean school bus'' means a
school bus with a gross vehicle weight of greater than 14,000
pounds that--
(A) is powered by a heavy duty engine; and
(B) is operated solely on an alternative fuel or
ultra-low sulfur diesel fuel.
(4) Eligible recipient.--

[[Page 822]]
119 STAT. 822

(A) In general.--Subject to subparagraph (B), the
term ``eligible recipient'' means--
(i) 1 or more local or State governmental
entities responsible for--
(I) providing school bus service to
1 or more public school systems; or
(II) the purchase of school buses;
(ii) 1 or more contracting entities that
provide school bus service to 1 or more public
school systems; or
(iii) a nonprofit school transportation
association.
(B) Special requirements.--In the case of eligible
recipients identified under clauses (ii) and (iii), the
Administrator shall establish timely and appropriate
requirements for notice and may establish timely and
appropriate requirements for approval by the public
school systems that would be served by buses purchased
or retrofit using grant funds made available under this
section.
(5) Retrofit technology.--The term ``retrofit technology''
means a particulate filter or other emissions control equipment
that is verified or certified by the Administrator or the
California Air Resources Board as an effective emission
reduction technology when installed on an existing school bus.
(6) Ultra-low sulfur diesel fuel.--The term ``ultra-low
sulfur diesel fuel'' means diesel fuel that contains sulfur at
not more than 15 parts per million.

(b) Program for Retrofit or Replacement of Certain Existing School
Buses With Clean School Buses.--
(1) Establishment.--
(A) In general.--The Administrator, in consultation
with the Secretary and other appropriate Federal
departments and agencies, shall establish a program for
awarding grants on a competitive basis to eligible
recipients for the replacement, or retrofit (including
repowering, aftertreatment, and remanufactured engines)
of, certain existing school buses.
(B) Balancing.--In awarding grants under this
section, the Administrator shall, to the maximum extent
practicable, achieve an appropriate balance between
awarding grants--
(i) to replace school buses; and
(ii) to install retrofit technologies.
(2) Priority of grant applications.--
(A) Replacement.--In the case of grant applications
to replace school buses, the Administrator shall give
priority to applicants that propose to replace school
buses manufactured before model year 1977.
(B) Retrofitting.--In the case of grant applications
to retrofit school buses, the Administrator shall give
priority to applicants that propose to retrofit school
buses manufactured in or after model year 1991.
(3) Use of school bus fleet.--
(A) In general.--All school buses acquired or
retrofitted with funds provided under this section shall
be operated as part of the school bus fleet for which
the grant was made for not less than 5 years.

[[Page 823]]
119 STAT. 823

(B) Maintenance, operation, and fueling.--New school
buses and retrofit technology shall be maintained,
operated, and fueled according to manufacturer
recommendations or State requirements.
(4) Retrofit grants.--The Administrator may award grants for
up to 100 percent of the retrofit technologies and installation
costs.
(5) Replacement grants.--
(A) Eligibility for 50 percent grants.--The
Administrator may award grants for replacement of school
buses in the amount of up to one-half of the acquisition
costs (including fueling infrastructure) for--
(i) clean school buses with engines
manufactured in model year 2005 or 2006 that emit
not more than--
(I) 1.8 grams per brake horsepower-
hour of non-methane hydrocarbons and
oxides of nitrogen; and
(II) .01 grams per brake horsepower-
hour of particulate matter; or
(ii) clean school buses with engines
manufactured in model year 2007, 2008, or 2009
that satisfy regulatory requirements established
by the Administrator for emissions of oxides of
nitrogen and particulate matter to be applicable
for school buses manufactured in model year 2010.
(B) Eligibility for 25 percent grants.--The
Administrator may award grants for replacement of school
buses in the amount of up to one-fourth of the
acquisition costs (including fueling infrastructure)
for--
(i) clean school buses with engines
manufactured in model year 2005 or 2006 that emit
not more than--
(I) 2.5 grams per brake horsepower-
hour of non-methane hydrocarbons and
oxides of nitrogen; and
(II) .01 grams per brake horsepower-
hour of particulate matter; or
(ii) clean school buses with engines
manufactured in model year 2007 or thereafter that
satisfy regulatory requirements established by the
Administrator for emissions of oxides of nitrogen
and particulate matter from school buses
manufactured in that model year.
(6) Ultra-low sulfur diesel fuel.--
(A) In general.--In the case of a grant recipient
receiving a grant for the acquisition of ultra-low
sulfur diesel fuel school buses with engines
manufactured in model year 2005 or 2006, the grant
recipient shall provide, to the satisfaction of the
Administrator--
(i) documentation that diesel fuel containing
sulfur at not more than 15 parts per million is
available for carrying out the purposes of the
grant; and
(ii) a commitment by the applicant to use that
fuel in carrying out the purposes of the grant.
(7) Deployment and distribution.--The Administrator shall,
to the maximum extent practicable--
(A) achieve nationwide deployment of clean school
buses through the program under this section; and

[[Page 824]]
119 STAT. 824

(B) ensure a broad geographic distribution of grant
awards, with no State receiving more than 10 percent of
the grant funding made available under this section
during a fiscal year.
(8) Annual report.--
(A) In general.--Not later than January 31 of each
year, the Administrator shall submit to Congress a
report that--
(i) evaluates the implementation of this
section; and
(ii) describes--
(I) the total number of grant
applications received;
(II) the number and types of
alternative fuel school buses, ultra-low
sulfur diesel fuel school buses, and
retrofitted buses requested in grant
applications;
(III) grants awarded and the
criteria used to select the grant
recipients;
(IV) certified engine emission
levels of all buses purchased or
retrofitted under this section;
(V) an evaluation of the in-use
emission level of buses purchased or
retrofitted under this section; and
(VI) any other information the
Administrator considers appropriate.

(c) Education.--
(1) In general.--Not NOTE: Deadline. later than 90 days
after the date of enactment of this Act, the Administrator shall
develop an education outreach program to promote and explain the
grant program.
(2) Coordination with stakeholders.--The outreach program
shall be designed and conducted in conjunction with national
school bus transportation associations and other stakeholders.
(3) Components.--The outreach program shall--
(A) inform potential grant recipients on the process
of applying for grants;
(B) describe the available technologies and the
benefits of the technologies;
(C) explain the benefits of participating in the
grant program; and
(D) include, as appropriate, information from the
annual report required under subsection (b)(8).

(d) Authorization of Appropriations.--There are authorized to be
appropriated to the Administrator to carry out this section, to remain
available until expended--
(1) $55,000,000 for each of fiscal years 2006 and 2007; and
(2) such sums as are necessary for each of fiscal years
2008, 2009, and 2010.

SEC. 742. NOTE: 42 USC 16092. DIESEL TRUCK RETROFIT AND FLEET
MODERNIZATION PROGRAM.

(a) Establishment.--The Administrator, in consultation with the
Secretary, shall establish a program for awarding grants on

[[Page 825]]
119 STAT. 825

a competitive basis to public agencies and entities for fleet
modernization programs including installation of retrofit technologies
for diesel trucks.
(b) Eligible Recipients.--A grant shall be awarded under this
section only to a State or local government or an agency or
instrumentality of a State or local government or of two or more State
or local governments who will allocate funds, with preference to ports
and other major hauling operations.
(c) Awards.--
(1) In general.--The Administrator shall seek, to the
maximum extent practicable, to ensure a broad geographic
distribution of grants under this section.
(2) Preferences.--In making awards of grants under this
section, the Administrator shall give preference to proposals
that--
(A) will achieve the greatest reductions in
emissions of nonmethane hydrocarbons, oxides of
nitrogen, and/or particulate matter per proposal or per
truck; or
(B) involve the use of Environmental Protection
Agency or California Air Resources Board verified
emissions control retrofit technology on diesel trucks
that operate solely on ultra-low sulfur diesel fuel
after September 2006.

(d) Conditions of Grant.--A grant shall be provided under this
section on the conditions that--
(1) trucks which are replacing scrapped trucks and on which
retrofit emissions-control technology are to be demonstrated--
(A) will operate on ultra-low sulfur diesel fuel
where such fuel is reasonably available or required for
sale by State or local law or regulation;
(B) were manufactured in model year 1998 and before;
and
(C) will be used for the transportation of cargo
goods especially in port areas or used in goods movement
and major hauling operations;
(2) grant funds will be used for the purchase of emission
control retrofit technology, including State taxes and contract
fees; and
(3) grant recipients will provide at least 50 percent of the
total cost of the retrofit, including the purchase of emission
control retrofit technology and all necessary labor for
installation of the retrofit, from any source other than this
section.

(e) Verification.--Not NOTE: Deadline. Federal
Register, publication. Procedures. later than 90 days after the date
of enactment of this Act, the Administrator shall publish in the Federal
Register procedures to--
(1) make grants pursuant to this section;
(2) verify that trucks powered by ultra-low sulfur diesel
fuel on which retrofit emissions-control technology are to be
demonstrated will operate on diesel fuel containing not more
than 15 parts per million of sulfur after September 2006; and
(3) verify that grants are administered in accordance with
this section.

(f) Authorization of Appropriations.--There are authorized to be
appropriated to the Administrator to carry out this section, to remain
available until expended the following sums:
(1) $20,000,000 for fiscal year 2006.
(2) $35,000,000 for fiscal year 2007.

[[Page 826]]
119 STAT. 826

(3) $45,000,000 for fiscal year 2008.
(4) Such sums as are necessary for each of fiscal years 2009
and 2010.

SEC. 743. NOTE: 42 USC 16093. FUEL CELL SCHOOL BUSES.

(a) Establishment.--The Secretary shall establish a program for
entering into cooperative agreements--
(1) with private sector fuel cell bus developers for the
development of fuel cell-powered school buses; and
(2) subsequently, with not less than 2 units of local
government using natural gas-powered school buses and such
private sector fuel cell bus developers to demonstrate the use
of fuel cell-powered school buses.

(b) Cost Sharing.--The non-Federal contribution for activities
funded under this section shall be not less than--
(1) 20 percent for fuel infrastructure development
activities; and
(2) 50 percent for demonstration activities and for
development activities not described in paragraph (1).

(c) Reports to Congress.--Not later than 3 years after the date of
enactment of this Act, the Secretary shall transmit to Congress a report
that--
(1) evaluates the process of converting natural gas
infrastructure to accommodate fuel cell-powered school buses;
and
(2) assesses the results of the development and
demonstration program under this section.

(d) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section $25,000,000 for
the period of fiscal years 2006 through 2009.

Subtitle D--Miscellaneous

SEC. 751. NOTE: 42 USC 16101. RAILROAD EFFICIENCY.

(a) Establishment.--The Secretary shall (in cooperation with the
Secretary of Transportation and the Administrator of the Environmental
Protection Agency) establish a cost-shared, public-private research
partnership involving the Federal Government, railroad carriers,
locomotive manufacturers and equipment suppliers, and the Association of
American Railroads, to develop and demonstrate railroad locomotive
technologies that increase fuel economy, reduce emissions, and lower
costs of operation.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section--
(1) $15,000,000 for fiscal year 2006;
(2) $20,000,000 for fiscal year 2007; and
(3) $30,000,000 for fiscal year 2008.

SEC. 752. MOBILE EMISSION REDUCTIONS TRADING AND CREDITING.

(a) In General.--Not NOTE: Deadline. Reports. later than 180
days after the date of enactment of this Act, the Administrator of the
Environmental Protection Agency shall submit to Congress a report on the
experience of the Administrator with the trading of mobile source
emission reduction credits for use by owners and operators of stationary
source emission sources to meet emission offset requirements within a
nonattainment area.

(b) Contents.--The report shall describe--

[[Page 827]]
119 STAT. 827

(1) projects approved by the Administrator that include the
trading of mobile source emission reduction credits for use by
stationary sources in complying with offset requirements,
including a description of--
(A) project and stationary sources location;
(B) volumes of emissions offset and traded;
(C) the sources of mobile emission reduction
credits; and
(D) if available, the cost of the credits;
(2) the significant issues identified by the Administrator
in consideration and approval of trading in the projects;
(3) the requirements for monitoring and assessing the air
quality benefits of any approved project;
(4) the statutory authority on which the Administrator has
based approval of the projects;
(5) an evaluation of how the resolution of issues in
approved projects could be used in other projects and whether
the emission reduction credits may be considered to be
additional in relation to other requirements;
(6) the potential, for attainment purposes, of emission
reduction credits relating to transit and land use policies; and
(7) any other issues that the Administrator considers
relevant to the trading and generation of mobile source emission
reduction credits for use by stationary sources or for other
purposes.

SEC. 753. AVIATION FUEL CONSERVATION AND EMISSIONS.

(a) In General.--Not NOTE: Deadline. later than 60 days after
the date of enactment of this Act, the Administrator of the Federal
Aviation Administration and the Administrator of the Environmental
Protection Agency shall jointly initiate a study to identify--
(1) the impact of aircraft emissions on air quality in
nonattainment areas;
(2) ways to promote fuel conservation measures for aviation
to enhance fuel efficiency and reduce emissions; and
(3) opportunities to reduce air traffic inefficiencies that
increase fuel burn and emissions.

(b) Focus.--The study under subsection (a) shall focus on how air
traffic management inefficiencies, such as aircraft idling at airports,
result in unnecessary fuel burn and air emissions.
(c) Report.--Not later than 1 year after the date of the initiation
of the study under subsection (a), the Administrator of the Federal
Aviation Administration and the Administrator of the Environmental
Protection Agency shall jointly submit to the Committee on Energy and
Commerce and the Committee on Transportation and Infrastructure of the
House of Representatives and the Committee on Environment and Public
Works and the Committee on Commerce, Science, and Transportation of the
Senate a report that--
(1) describes the results of the study; and
(2) includes any recommendations on ways in which
unnecessary fuel use and emissions affecting air quality may be
reduced--
(A) without adversely affecting safety and security
and increasing individual aircraft noise; and
(B) while taking into account all aircraft emissions
and the impact of those emissions on the human health.

[[Page 828]]
119 STAT. 828

(d) Risk Assessments.--Any assessment of risk to human health and
the environment prepared by the Administrator of the Federal Aviation
Administration or the Administrator of the Environmental Protection
Agency to support the report in this section shall be based on sound and
objective scientific practices, shall consider the best available
science, and shall present the weight of the scientific evidence
concerning such risks.

SEC. 754. NOTE: 42 USC 16102. DIESEL FUELED VEHICLES.

(a) Definition of Tier 2 Emission Standards.--In this section, the
term ``tier 2 emission standards'' means the motor vehicle emission
standards that apply to passenger cars, light trucks, and larger
passenger vehicles manufactured after the 2003 model year, as issued on
February 10, 2000, by the Administrator of the Environmental Protection
Agency under sections 202 and 211 of the Clean Air Act (42 U.S.C. 7521,
7545).
(b) Diesel Combustion and After-Treatment Technologies.--The
Secretary shall accelerate efforts to improve diesel combustion and
after-treatment technologies for use in diesel fueled motor vehicles.
(c) Goals.--The Secretary shall carry out subsection (b) with a view
toward achieving the following goals:
(1) Developing and demonstrating diesel technologies that,
not later than 2010, meet the following standards:
(A) Tier 2 emission standards.
(B) The heavy-duty emissions standards of 2007 that
are applicable to heavy-duty vehicles under regulations
issued by the Administrator of the Environmental
Protection Agency as of the date of enactment of this
Act.
(2) Developing the next generation of low-emission, high
efficiency diesel engine technologies, including homogeneous
charge compression ignition technology.

SEC. 755. NOTE: 42 USC 16103. CONSERVE BY BICYCLING PROGRAM.

(a) Definitions.--In this section:
(1) Program.--The term ``program'' means the Conserve by
Bicycling Program established by subsection (b).
(2) Secretary.--The term ``Secretary'' means the Secretary
of Transportation.

(b) Establishment.--There is established within the Department of
Transportation a program to be known as the ``Conserve by Bicycling
Program''.
(c) Projects.--
(1) In general.--In carrying out the program, the Secretary
shall establish not more than 10 pilot projects that are--
(A) dispersed geographically throughout the United
States; and
(B) designed to conserve energy resources by
encouraging the use of bicycles in place of motor
vehicles.
(2) Requirements.--A pilot project described in paragraph
(1) shall--
(A) use education and marketing to convert motor
vehicle trips to bicycle trips;
(B) document project results and energy savings (in
estimated units of energy conserved);
(C) facilitate partnerships among interested parties
in at least 2 of the fields of--

[[Page 829]]
119 STAT. 829

(i) transportation;
(ii) law enforcement;
(iii) education;
(iv) public health;
(v) environment; and
(vi) energy;
(D) maximize bicycle facility investments;
(E) demonstrate methods that may be used in other
regions of the United States; and
(F) facilitate the continuation of ongoing programs
that are sustained by local resources.
(3) Cost sharing.--At least 20 percent of the cost of each
pilot project described in paragraph (1) shall be provided from
non-Federal sources.

(d) Energy and Bicycling Research Study.--
(1) In general.--
Not NOTE: Deadline. Contracts. Reports. later than 2 years
after the date of enactment of this Act, the Secretary shall
enter into a contract with the National Academy of Sciences for,
and the National Academy of Sciences shall conduct and submit to
Congress a report on, a study on the feasibility of converting
motor vehicle trips to bicycle trips.
(2) Components.--The study shall--
(A) document the results or progress of the pilot
projects under subsection (c);
(B) determine the type and duration of motor vehicle
trips that people in the United States may feasibly make
by bicycle, taking into consideration factors such as--
(i) weather;
(ii) land use and traffic patterns;
(iii) the carrying capacity of bicycles; and
(iv) bicycle infrastructure;
(C) determine any energy savings that would result
from the conversion of motor vehicle trips to bicycle
trips;
(D) include a cost-benefit analysis of bicycle
infrastructure investments; and
(E) include a description of any factors that would
encourage more motor vehicle trips to be replaced with
bicycle trips.

(e) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary to carry out this section $6,200,000, to
remain available until expended, of which--
(1) $5,150,000 shall be used to carry out pilot projects
described in subsection (c);
(2) $300,000 shall be used by the Secretary to coordinate,
publicize, and disseminate the results of the program; and
(3) $750,000 shall be used to carry out subsection (d).

SEC. 756. NOTE: 42 USC 16104. REDUCTION OF ENGINE IDLING.

(a) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Advanced truck stop electrification system.--The term
``advanced truck stop electrification system'' means a
stationary system that delivers heat, air conditioning,
electricity, or communications, and is capable of providing
verifiable and auditable evidence of use of those services, to a
heavy-duty vehicle and any occupants of the heavy-duty vehicle
with or

[[Page 830]]
119 STAT. 830

without relying on components mounted onboard the heavy-duty
vehicle for delivery of those services.
(3) Auxiliary power unit.--The term ``auxiliary power unit''
means an integrated system that--
(A) provides heat, air conditioning, engine warming,
or electricity to components on a heavy-duty vehicle;
and
(B) is certified by the Administrator under part 89
of title 40, Code of Federal Regulations (or any
successor regulation), as meeting applicable emission
standards.
(4) Heavy-duty vehicle.--The term ``heavy-duty vehicle''
means a vehicle that--
(A) has a gross vehicle weight rating greater than
8,500 pounds; and
(B) is powered by a diesel engine.
(5) Idle reduction technology.--The term ``idle reduction
technology'' means an advanced truck stop electrification
system, auxiliary power unit, or other technology that--
(A) is used to reduce long-duration idling; and
(B) allows for the main drive engine or auxiliary
refrigeration engine to be shut down.
(6) Energy conservation technology.--the term ``energy
conservation technology'' means any device, system of devices,
or equipment that improves the fuel economy.
(7) Long-duration idling.--
(A) In general.--The term ``long-duration idling''
means the operation of a main drive engine or auxiliary
refrigeration engine, for a period greater than 15
consecutive minutes, at a time at which the main drive
engine is not engaged in gear.
(B) Exclusions.--The term ``long-duration idling''
does not include the operation of a main drive engine or
auxiliary refrigeration engine during a routine stoppage
associated with traffic movement or congestion.

(b) Idle Reduction Technology Benefits, Programs, and Studies.--
(1) In general.--Not NOTE: Deadline. later than 90 days
after the date of enactment of this Act, the Administrator
shall--
(A)(i) commence a review of the mobile source air
emission models of the Environmental Protection Agency
used under the Clean Air Act (42 U.S.C. 7401 et seq.) to
determine whether the models accurately reflect the
emissions resulting from long-duration idling of heavy-
duty vehicles and other vehicles and engines; and
(ii) update those models as the Administrator
determines to be appropriate; and
(B)(i) commence a review of the emission reductions
achieved by the use of idle reduction technology; and
(ii) complete such revisions of the regulations and
guidance of the Environmental Protection Agency as the
Administrator determines to be appropriate.
(2) Deadline for completion.--Not later than 180 days after
the date of enactment of this Act, the Administrator shall--
(A) complete the reviews under subparagraphs (A)(i)
and (B)(i) of paragraph (1); and
(B) prepare and make publicly available one or more
reports on the results of the reviews.

[[Page 831]]
119 STAT. 831

(3) Discretionary inclusions.--The reviews under
subparagraphs (A)(i) and (B)(i) of paragraph (1) and the reports
under paragraph (2)(B) may address the potential fuel savings
resulting from use of idle reduction technology.
(4) Idle reduction and energy conservation deployment
program.--
(A) Establishment.--
(i) In general.--Not NOTE: Deadline. later
than 90 days after the date of enactment of this
Act, the Administrator, in consultation with the
Secretary of Transportation shall, through the
Environmental Protection Agency's SmartWay
Transport Partnership, establish a program to
support deployment of idle reduction and energy
conservation technologies.
(ii) Priority.--The Administrator shall give
priority to the deployment of idle reduction and
energy conservation technologies based on the
costs and beneficial effects on air quality and
ability to lessen the emission of criteria air
pollutants.
(B) Funding.--
(i) Authorization of appropriations.--There
are authorized to be appropriated to the
Administrator to carry out subparagraph (A) for
the purpose of reducing extended idling from
heavy-duty vehicles $19,500,000 for fiscal year
2006, $30,000,000 for fiscal year 2007, and
$45,000,000 for fiscal year 2008.
(ii) Locomotives.--There are authorized to be
appropriated to the administrator to carry out
subparagraph (A) for the purpose of reducing
extended idling from locomotives $10,000,000 for
fiscal year 2006, $15,000,000 for fiscal year
2007, and $20,000,000 for fiscal year 2008.
(iii) Cost sharing.--Subject to clause (iv),
the Administrator shall require at least 50
percent of the costs directly and specifically
related to any project under this section to be
provided from non-Federal sources.
(iv) Necessary and appropriate reductions.--
The Administrator may reduce the non-Federal
requirement under clause (iii) if the
Administrator determines that the reduction is
necessary and appropriate to meet the objectives
of this section.
(5) Idling location study.--
(A) In general.--Not NOTE: Deadline. later than
90 days after the date of enactment of this Act, the
Administrator, in consultation with the Secretary of
Transportation, shall commence a study to analyze all
locations at which heavy-duty vehicles stop for long-
duration idling, including--
(i) truck stops;
(ii) rest areas;
(iii) border crossings;
(iv) ports;
(v) transfer facilities; and
(vi) private terminals.
(B) Deadline for completion.--Not later than 180
days after the date of enactment of this Act, the
Administrator shall--

[[Page 832]]
119 STAT. 832

(i) complete the study under subparagraph (A);
and
(ii) prepare and make publicly available one
or more reports of the results of the study.

(c) Vehicle Weight Exemption.--Section 127(a) of title 23, United
States Code, is amended--
(1) by designating the first through eleventh sentences as
paragraphs (1) through (11), respectively; and
(2) by adding at the end the following:
``(12) Heavy duty vehicles.--
``(A) In general.--Subject to subparagraphs (B) and
(C), in order to promote reduction of fuel use and
emissions because of engine idling, the maximum gross
vehicle weight limit and the axle weight limit for any
heavy-duty vehicle equipped with an idle reduction
technology shall be increased by a quantity necessary to
compensate for the additional weight of the idle
reduction system.
``(B) Maximum weight increase.--The weight increase
under subparagraph (A) shall be not greater than 400
pounds.
``(C) Proof.--On request by a regulatory agency or
law enforcement agency, the vehicle operator shall
provide proof (through demonstration or certification)
that--
``(i) the idle reduction technology is fully
functional at all times; and
``(ii) the 400-pound gross weight increase is
not used for any purpose other than the use of
idle reduction technology described in
subparagraph (A).''.

(d) Report.--Not later than 60 days after the date on which funds
are initially awarded under this section, and on an annual basis
thereafter, the Administrator shall submit to Congress a report
containing--
(1) an identification of the grant recipients, a description
of the projects to be funded and the amount of funding provided;
and
(2) an identification of all other applicants that submitted
applications under the program.

SEC. 757. NOTE: 42 USC 16105. BIODIESEL ENGINE TESTING PROGRAM.

(a) In General.--Not NOTE: Deadline. later that 180 days after
the date of enactment of this Act, the Secretary shall initiate a
partnership with diesel engine, diesel fuel injection system, and diesel
vehicle manufacturers and diesel and biodiesel fuel providers, to
include biodiesel testing in advanced diesel engine and fuel system
technology.

(b) Scope.--The program shall provide for testing to determine the
impact of biodiesel from different sources on current and future
emission control technologies, with emphasis on--
(1) the impact of biodiesel on emissions warranty, in-use
liability, and antitampering provisions;
(2) the impact of long-term use of biodiesel on engine
operations;
(3) the options for optimizing these technologies for both
emissions and performance when switching between biodiesel and
diesel fuel; and
(4) the impact of using biodiesel in these fueling systems
and engines when used as a blend with 2006 Environmental

[[Page 833]]
119 STAT. 833

Protection Agency-mandated diesel fuel containing a maximum of
15-parts-per-million sulfur content.

(c) Report.--Not later than 2 years after the date of enactment of
this Act, the Secretary shall provide an interim report to Congress on
the findings of the program, including a comprehensive analysis of
impacts from biodiesel on engine operation for both existing and
expected future diesel technologies, and recommendations for ensuring
optimal emissions reductions and engine performance with biodiesel.
(d) Authorization of Appropriations.--There are authorized to be
appropriated $5,000,000 for each of fiscal years 2006 through 2010 to
carry out this section.
(e) Definition.--For purposes of this section, the term
``biodiesel'' means a diesel fuel substitute produced from nonpetroleum
renewable resources that meets the registration requirements for fuels
and fuel additives established by the Environmental Protection Agency
under section 211 of the Clean Air Act (42 U.S.C. 7545) and that meets
the American Society for Testing and Materials D6751-02a Standard
Specification for Biodiesel Fuel (B100) Blend Stock for Distillate
Fuels.

SEC. 758. NOTE: 42 USC 16106. ULTRA-EFFICIENT ENGINE TECHNOLOGY FOR
AIRCRAFT.

(a) Ultra-Efficient NOTE: Contracts. Engine Technology
Partnership.--The Secretary shall enter into a cooperative agreement
with the National Aeronautics and Space Administration for the
development of ultra-efficient engine technology for aircraft.

(b) Performance Objective.--The Secretary shall establish the
following performance objectives for the program set forth in subsection
(a):
(1) A fuel efficiency increase of at least 10 percent.
(2) A reduction in the impact of landing and takeoff
nitrogen oxides emissions on local air quality of 70 percent.
(3) Exploring advanced concepts, alternate propulsion, and
power configurations, including hybrid fuel cell powered
systems.
(4) Exploring the use of alternate fuel in conventional or
nonconventional turbine-based systems.

(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for carrying out this section $50,000,000
for each of the fiscal years 2006, 2007, 2008, 2009, and 2010.

SEC. 759. FUEL ECONOMY INCENTIVE REQUIREMENTS.

Section 32905 of title 49, United States Code, is amended by adding
the following new subsection at the end thereof:
``(h) Fuel Economy Incentive Requirements.--In order for any model
of dual fueled automobile to be eligible to receive the fuel economy
incentives included in section 32906(a) and (b), a label shall be
attached to the fuel compartment of each dual fueled automobile of that
model, notifying that the vehicle can be operated on an alternative fuel
and on gasoline or diesel, with the form of alternative fuel stated on
the notice. NOTE: Applicability. Effective date. This requirement
applies to dual fueled automobiles manufactured on or after September 1,
2006.''.

[[Page 834]]
119 STAT. 834

Subtitle E--Automobile Efficiency

SEC. 771. AUTHORIZATION OF APPROPRIATIONS FOR IMPLEMENTATION AND
ENFORCEMENT OF FUEL ECONOMY STANDARDS.

In addition to any other funds authorized by law, there are
authorized to be appropriated to the National Highway Traffic Safety
Administration to carry out its obligations with respect to average fuel
economy standards $3,500,000 for each of the fiscal years 2006 through
2010.

SEC. 772. EXTENSION OF MAXIMUM FUEL ECONOMY INCREASE FOR ALTERNATIVE
FUELED VEHICLES.

(a) Manufacturing Incentives.--Section 32905 of title 49, United
States Code, is amended--
(1) in each of subsections (b) and (d), by striking ``1993-
2004'' and inserting ``1993-2010'';
(2) in subsection (f), by striking ``2001'' and inserting
``2007''; and
(3) in subsection (f)(1), by striking ``2004'' and inserting
``2010''.

(b) Maximum Fuel Economy Increase.--Subsection (a)(1) of section
32906 of title 49, United States Code, is amended--
(1) in subparagraph (A), by striking ``the model years 1993-
2004'' and inserting ``model years 1993-2010''; and
(2) in subparagraph (B), by striking ``the model years 2005-
2008'' and inserting ``model years 2011-2014''.

SEC. 773. STUDY OF FEASIBILITY AND EFFECTS OF REDUCING USE OF FUEL FOR
AUTOMOBILES.

(a) In General.--Not NOTE: Deadline. later than 30 days after
the date of the enactment of this Act, the Administrator of the National
Highway Traffic Safety Administration shall initiate a study of the
feasibility and effects of reducing by model year 2014, by a significant
percentage, the amount of fuel consumed by automobiles.

(b) Subjects of Study.--The study under this section shall include--
(1) examination of, and recommendation of alternatives to,
the policy under current Federal law of establishing average
fuel economy standards for automobiles and requiring each
automobile manufacturer to comply with average fuel economy
standards that apply to the automobiles it manufactures;
(2) examination of how automobile manufacturers could
contribute toward achieving the reduction referred to in
subsection (a);
(3) examination of the potential of fuel cell technology in
motor vehicles in order to determine the extent to which such
technology may contribute to achieving the reduction referred to
in subsection (a); and
(4) examination of the effects of the reduction referred to
in subsection (a) on--
(A) gasoline supplies;
(B) the automobile industry, including sales of
automobiles manufactured in the United States;
(C) motor vehicle safety; and
(D) air quality.

[[Page 835]]
119 STAT. 835

(c) Report.--The Administrator shall submit to Congress a report on
the findings, conclusion, and recommendations of the study under this
section by not later than 1 year after the date of the enactment of this
Act.

SEC. 774. UPDATE TESTING PROCEDURES.

The Administrator of the Environmental Protection Agency shall
update or revise the adjustment factors in sections 600.209-85 and
600.209-95, of the Code of Federal Regulations, CFR Part 600 (1995) Fuel
Economy Regulations for 1977 and Later Model Year Automobiles to take
into consideration higher speed limits, faster acceleration rates,
variations in temperature, use of air conditioning, shorter city test
cycle lengths, current reference fuels, and the use of other fuel
depleting features.

Subtitle F--Federal and State Procurement

SEC. 781. NOTE: 42 USC 16121. DEFINITIONS.

In this subtitle:
(1) Fuel cell.--The term ``fuel cell'' means a device that
directly converts the chemical energy of a fuel and an oxidant
into electricity by electrochemical processes occurring at
separate electrodes in the device.
(2) Light-duty or heavy-duty vehicle fleet.--The term
``light-duty or heavy-duty vehicle fleet'' does not include any
vehicle designed or procured for combat or combat-related
missions.
(3) Stationary; portable.--The terms ``stationary'' and
``portable'', when used in reference to a fuel cell, include--
(A) continuous electric power; and
(B) backup electric power.
(4) Task force.--The term ``Task Force'' means the Hydrogen
and Fuel Cell Technical Task Force established under section 806
of this Act.
(5) Technical advisory committee.--The term ``Technical
Advisory Committee'' means the independent Technical Advisory
Committee selected under section 807 of this Act.

SEC. 782. NOTE: 42 USC 16122. FEDERAL AND STATE PROCUREMENT OF FUEL
CELL VEHICLES AND HYDROGEN ENERGY SYSTEMS.

(a) Purposes.--The purposes of this section are--
(1) to stimulate acceptance by the market of fuel cell
vehicles and hydrogen energy systems;
(2) to support development of technologies relating to fuel
cell vehicles, public refueling stations, and hydrogen energy
systems; and
(3) to require the Federal government, which is the largest
single user of energy in the United States, to adopt those
technologies as soon as practicable after the technologies are
developed, in conjunction with private industry partners.

(b) Federal Leases and Purchases.--
(1) Requirement.--
(A) In general.--Not NOTE: Deadline. later than
January 1, 2010, the head of any Federal agency that
uses a light-duty or heavy-duty vehicle fleet shall
lease or purchase fuel cell vehicles

[[Page 836]]
119 STAT. 836

and hydrogen energy systems to meet any applicable
energy savings goal described in subsection (c).
(B) Learning demonstration vehicles.--The Secretary
may lease or purchase appropriate vehicles developed
under subsections (a)(10) and (b)(1)(A) of section 808
to meet the requirement in subparagraph (A).
(2) Costs of leases and purchases.--
(A) In general.--The Secretary, in cooperation with
the Task Force and the Technical Advisory Committee,
shall pay to Federal agencies (or share the cost under
interagency agreements) the difference in cost between--
(i) the cost to the agencies of leasing or
purchasing fuel cell vehicles and hydrogen energy
systems under paragraph (1); and
(ii) the cost to the agencies of a feasible
alternative to leasing or purchasing fuel cell
vehicles and hydrogen energy systems, as
determined by the Secretary.
(B) Competitive costs and management structures.--In
carrying out subparagraph (A), the Secretary, in
consultation with the agency, may use the General
Services Administration or any commercial vendor to
ensure--
(i) a cost-effective purchase of a fuel cell
vehicle or hydrogen energy system; or
(ii) a cost-effective management structure of
the lease of a fuel cell vehicle or hydrogen
energy system.
(3) Exception.--
(A) In general.--If the Secretary determines that
the head of an agency described in paragraph (1) cannot
find an appropriately efficient and reliable fuel cell
vehicle or hydrogen energy system in accordance with
paragraph (1), that agency shall be excepted from
compliance with paragraph (1).
(B) Consideration.--In making a determination under
subparagraph (A), the Secretary shall consider--
(i) the needs of the agency; and
(ii) an evaluation performed by--
(I) the Task Force; or
(II) the Technical Advisory
Committee.

(c) Energy Savings Goals.--
(1) In NOTE: Deadlines. general.--
(A) Regulations.--Not later than December 31, 2006,
the Secretary shall--
(i) in cooperation with the Task Force,
promulgate regulations for the period of 2008
through 2010 that extend and augment energy
savings goals for each Federal agency, in
accordance with any Executive order issued after
March 2000; and
(ii) promulgate regulations to expand the
minimum Federal fleet requirement and credit
allowances for fuel cell vehicle systems under
section 303 of the Energy Policy Act of 1992 (42
U.S.C. 13212).
(B) Review, evaluation, and new regulations.--Not
later than December 31, 2010, the Secretary shall--
(i) review the regulations promulgated under
subparagraph (A);
(ii) evaluate any progress made toward
achieving energy savings by Federal agencies; and

[[Page 837]]
119 STAT. 837

(iii) promulgate new regulations for the
period of 2011 through 2015 to achieve additional
energy savings by Federal agencies relating to
technical and cost-performance standards.
(2) Offsetting energy savings goals.--An agency that leases
or purchases a fuel cell vehicle or hydrogen energy system in
accordance with subsection (b)(1) may use that lease or purchase
to count toward an energy savings goal of the agency.

(d) Cooperative Program With State Agencies.--
(1) In general.--The Secretary may establish a cooperative
program with State agencies managing motor vehicle fleets to
encourage purchase of fuel cell vehicles by the agencies.
(2) Incentives.--In carrying out the cooperative program,
the Secretary may offer incentive payments to a State agency to
assist with the cost of planning, differential purchases, and
administration.

(e) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section--
(1) $15,000,000 for fiscal year 2008;
(2) $25,000,000 for fiscal year 2009;
(3) $65,000,000 for fiscal year 2010; and
(4) such sums as are necessary for each of fiscal years 2011
through 2015.

SEC. 783. NOTE: 42 USC 16123. FEDERAL PROCUREMENT OF STATIONARY,
PORTABLE, AND MICRO FUEL CELLS.

(a) Purposes.--The purposes of this section are--
(1) to stimulate acceptance by the market of stationary,
portable, and micro fuel cells; and
(2) to support development of technologies relating to
stationary, portable, and micro fuel cells.

(b) Federal Leases and Purchases.--
(1) In general.--Not NOTE: Deadline. later than January
1, 2006, the head of any Federal agency that uses electrical
power from stationary, portable, or microportable devices shall
lease or purchase a stationary, portable, or micro fuel cell to
meet any applicable energy savings goal described in subsection
(c).
(2) Costs of leases and purchases.--
(A) In general.--The Secretary, in cooperation with
the Task Force and the Technical Advisory Committee,
shall pay the cost to Federal agencies (or share the
cost under interagency agreements) of leasing or
purchasing stationary, portable, and micro fuel cells
under paragraph (1).
(B) Competitive costs and management structures.--In
carrying out subparagraph (A), the Secretary, in
consultation with the agency, may use the General
Services Administration or any commercial vendor to
ensure--
(i) a cost-effective purchase of a stationary,
portable, or micro fuel cell; or
(ii) a cost-effective management structure of
the lease of a stationary, portable, or micro fuel
cell.
(3) Exception.--
(A) In general.--If the Secretary determines that
the head of an agency described in paragraph (1) cannot
find an appropriately efficient and reliable stationary,
portable,

[[Page 838]]
119 STAT. 838

or micro fuel cell in accordance with paragraph (1),
that agency shall be excepted from compliance with
paragraph (1).
(B) Consideration.--In making a determination under
subparagraph (A), the Secretary shall consider--
(i) the needs of the agency; and
(ii) an evaluation performed by--
(I) the Task Force; or
(II) the Technical Advisory
Committee of the Task Force.

(c) Energy Savings Goals.--An agency that leases or purchases a
stationary, portable, or micro fuel cell in accordance with subsection
(b)(1) may use that lease or purchase to count toward an energy savings
goal described in section 808 of this Act that is applicable to the
agency.
(d) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section--
(1) $20,000,000 for fiscal year 2006;
(2) $50,000,000 for fiscal year 2007;
(3) $75,000,000 for fiscal year 2008;
(4) $100,000,000 for fiscal year 2009;
(5) $100,000,000 for fiscal year 2010; and
(6) such sums as are necessary for each of fiscal years 2011
through 2015.

Subtitle G--Diesel Emissions Reduction

SEC. 791. NOTE: 42 USC 16131. DEFINITIONS.

In this subtitle:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Certified engine configuration.--The term ``certified
engine configuration'' means a new, rebuilt, or remanufactured
engine configuration--
(A) that has been certified or verified by--
(i) the Administrator; or
(ii) the California Air Resources Board;
(B) that meets or is rebuilt or remanufactured to a
more stringent set of engine emission standards, as
determined by the Administrator; and
(C) in the case of a certified engine configuration
involving the replacement of an existing engine or
vehicle, an engine configuration that replaced an engine
that was--
(i) removed from the vehicle; and
(ii) returned to the supplier for
remanufacturing to a more stringent set of engine
emissions standards or for scrappage.
(3) Eligible entity.--The term ``eligible entity'' means--
(A) a regional, State, local, or tribal agency or
port authority with jurisdiction over transportation or
air quality; and
(B) a nonprofit organization or institution that--
(i) represents or provides pollution reduction
or educational services to persons or
organizations that own or operate diesel fleets;
or

[[Page 839]]
119 STAT. 839

(ii) has, as its principal purpose, the
promotion of transportation or air quality.
(4) Emerging technology.--The term ``emerging technology''
means a technology that is not certified or verified by the
Administrator or the California Air Resources Board but for
which an approvable application and test plan has been submitted
for verification to the Administrator or the California Air
Resources Board.
(5) Fleet.--The term ``fleet'' means one or more diesel
vehicles or mobile or stationary diesel engines.
(6) Heavy-duty truck.--The term ``heavy-duty truck'' has the
meaning given the term ``heavy duty vehicle'' in section 202 of
the Clean Air Act (42 U.S.C. 7521).
(7) Medium-duty truck.--The term ``medium-duty truck'' has
such meaning as shall be determined by the Administrator, by
regulation.
(8) Verified technology.--The term ``verified technology''
means a pollution control technology, including a retrofit
technology, advanced truckstop electrification system, or
auxiliary power unit, that has been verified by--
(A) the Administrator; or
(B) the California Air Resources Board.

SEC. 792. NOTE: 42 USC 16132. NATIONAL GRANT AND LOAN PROGRAMS.

(a) In General.--The Administrator shall use 70 percent of the funds
made available to carry out this subtitle for each fiscal year to
provide grants and low-cost revolving loans, as determined by the
Administrator, on a competitive basis, to eligible entities to achieve
significant reductions in diesel emissions in terms of--
(1) tons of pollution produced; and
(2) diesel emissions exposure, particularly from fleets
operating in areas designated by the Administrator as poor air
quality areas.

(b) Distribution.--
(1) In general.--The Administrator shall distribute funds
made available for a fiscal year under this subtitle in
accordance with this section.
(2) Fleets.--The Administrator shall provide not less than
50 percent of funds available for a fiscal year under this
section to eligible entities for the benefit of public fleets.
(3) Engine configurations and technologies.--
(A) Certified engine configurations and verified
technologies.--The Administrator shall provide not less
than 90 percent of funds available for a fiscal year
under this section to eligible entities for projects
using--
(i) a certified engine configuration; or
(ii) a verified technology.
(B) Emerging technologies.--
(i) In general.--The Administrator shall
provide not more than 10 percent of funds
available for a fiscal year under this section to
eligible entities for the development and
commercialization of emerging technologies.
(ii) Application and test plan.--To receive
funds under clause (i), a manufacturer, in
consultation with an eligible entity, shall submit
for verification to the Administrator or the
California Air Resources Board

[[Page 840]]
119 STAT. 840

a test plan for the emerging technology, together
with the application under subsection (c).

(c) Applications.--
(1) In general.--To receive a grant or loan under this
section, an eligible entity shall submit to the Administrator an
application at a time, in a manner, and including such
information as the Administrator may require.
(2) Inclusions.--An application under this subsection shall
include--
(A) a description of the air quality of the area
served by the eligible entity;
(B) the quantity of air pollution produced by the
diesel fleets in the area served by the eligible entity;
(C) a description of the project proposed by the
eligible entity, including--
(i) any certified engine configuration,
verified technology, or emerging technology to be
used or funded by the eligible entity; and
(ii) the means by which the project will
achieve a significant reduction in diesel
emissions;
(D) an evaluation (using methodology approved by the
Administrator or the National Academy of Sciences) of
the quantifiable and unquantifiable benefits of the
emissions reductions of the proposed project;
(E) an estimate of the cost of the proposed project;
(F) a description of the age and expected lifetime
control of the equipment used or funded by the eligible
entity;
(G) a description of the diesel fuel available in
the areas to be served by the eligible entity, including
the sulfur content of the fuel; and
(H) provisions for the monitoring and verification
of the project.
(3) Priority.--In providing a grant or loan under this
section, the Administrator shall give priority to proposed
projects that, as determined by the Administrator--
(A) maximize public health benefits;
(B) are the most cost-effective;
(C) serve areas--
(i) with the highest population density;
(ii) that are poor air quality areas,
including areas identified by the Administrator
as--
(I) in nonattainment or maintenance
of national ambient air quality
standards for a criteria pollutant;
(II) Federal Class I areas; or
(III) areas with toxic air pollutant
concerns;
(iii) that receive a disproportionate quantity
of air pollution from a diesel fleets, including
truckstops, ports, rail yards, terminals, and
distribution centers; or
(iv) that use a community-based
multistakeholder collaborative process to reduce
toxic emissions;
(D) include a certified engine configuration,
verified technology, or emerging technology that has a
long expected useful life;

[[Page 841]]
119 STAT. 841

(E) will maximize the useful life of any certified
engine configuration, verified technology, or emerging
technology used or funded by the eligible entity;
(F) conserve diesel fuel; and
(G) use diesel fuel with a sulfur content of less
than or equal to 15 parts per million, as the
Administrator determines to be appropriate.

(d) Use of Funds.--
(1) In general.--An eligible entity may use a grant or loan
provided under this section to fund the costs of--
(A) a retrofit technology (including any incremental
costs of a repowered or new diesel engine) that
significantly reduces emissions through development and
implementation of a certified engine configuration,
verified technology, or emerging technology for--
(i) a bus;
(ii) a medium-duty truck or a heavy-duty
truck;
(iii) a marine engine;
(iv) a locomotive; or
(v) a nonroad engine or vehicle used in--
(I) construction;
(II) handling of cargo (including at
a port or airport);
(III) agriculture;
(IV) mining; or
(V) energy production; or
(B) programs or projects to reduce long-duration
idling using verified technology involving a vehicle or
equipment described in subparagraph (A).
(2) Regulatory programs.--
(A) In general.--Notwithstanding paragraph (1), no
grant or loan provided under this section shall be used
to fund the costs of emissions reductions that are
mandated under Federal, State or local law.
(B) Mandated.--For purposes of subparagraph (A),
voluntary or elective emission reduction measures shall
not be considered ``mandated'', regardless of whether
the reductions are included in the State implementation
plan of a State.

SEC. 793. NOTE: 42 USC 16133. STATE GRANT AND LOAN PROGRAMS.

(a) In General.--Subject to the availability of adequate
appropriations, the Administrator shall use 30 percent of the funds made
available for a fiscal year under this subtitle to support grant and
loan programs administered by States that are designed to achieve
significant reductions in diesel emissions.
(b) Applications.--The Administrator shall--
(1) NOTE: Guidelines. provide to States guidance for use
in applying for grant or loan funds under this section,
including information regarding--
(A) the process and forms for applications;
(B) permissible uses of funds received; and
(C) the cost-effectiveness of various emission
reduction technologies eligible to be carried out using
funds provided under this section; and
(2) NOTE: Procedures. establish, for applications
described in paragraph (1)--

[[Page 842]]
119 STAT. 842

(A) NOTE: Deadline. an annual deadline for
submission of the applications;
(B) a process by which the Administrator shall
approve or disapprove each application; and
(C) a streamlined process by which a State may renew
an application described in paragraph (1) for subsequent
fiscal years.

(c) Allocation of Funds.--
(1) In general.--For each fiscal year, the Administrator
shall allocate among States for which applications are approved
by the Administrator under subsection (b)(2)(B) funds made
available to carry out this section for the fiscal year.
(2) Allocation.--Using not more than 20 percent of the funds
made available to carry out this subtitle for a fiscal year, the
Administrator shall provide to each State described in paragraph
(1) for the fiscal year an allocation of funds that is equal
to--
(A) if each of the 50 States qualifies for an
allocation, an amount equal to 2 percent of the funds
made available to carry out this section; or
(B) if fewer than 50 States qualifies for an
allocation, an amount equal to the amount described in
subparagraph (A), plus an additional amount equal to the
product obtained by multiplying--
(i) the proportion that--
(I) the population of the State;
bears to
(II) the population of all States
described in paragraph (1); by
(ii) the amount of funds remaining after each
State described in paragraph (1) receives the 2-
percent allocation under this paragraph.
(3) State matching incentive.--
(A) In general.--If a State agrees to match the
allocation provided to the State under paragraph (2) for
a fiscal year, the Administrator shall provide to the
State for the fiscal year an additional amount equal to
50 percent of the allocation of the State under
paragraph (2).
(B) Requirements.--A State--
(i) may not use funds received under this
subtitle to pay a matching share required under
this subsection; and
(ii) shall not be required to provide a
matching share for any additional amount received
under subparagraph (A).
(4) Unclaimed funds.--Any funds that are not claimed by a
State for a fiscal year under this subsection shall be used to
carry out section 792.

(d) Administration.--
(1) In general.--Subject to paragraphs (2) and (3) and, to
the extent practicable, the priority areas listed in section
792(c)(3), a State shall use any funds provided under this
section to develop and implement such grant and low-cost
revolving loan programs in the State as are appropriate to meet
State needs and goals relating to the reduction of diesel
emissions.

[[Page 843]]
119 STAT. 843

(2) Apportionment of funds.--The Governor of a State that
receives funding under this section may determine the portion of
funds to be provided as grants or loans.
(3) Use of funds.--A grant or loan provided under this
section may be used for a project relating to--
(A) a certified engine configuration; or
(B) a verified technology.

SEC. 794. NOTE: 42 USC 16134. EVALUATION AND REPORT.

(a) In General.--Not later than 1 year after the date on which funds
are made available under this subtitle, and biennially thereafter, the
Administrator shall submit to Congress a report evaluating the
implementation of the programs under this subtitle.
(b) Inclusions.--The report shall include a description of--
(1) the total number of grant applications received;
(2) each grant or loan made under this subtitle, including
the amount of the grant or loan;
(3) each project for which a grant or loan is provided under
this subtitle, including the criteria used to select the grant
or loan recipients;
(4) the actual and estimated air quality and diesel fuel
conservation benefits, cost-effectiveness, and cost-benefits of
the grant and loan programs under this subtitle;
(5) the problems encountered by projects for which a grant
or loan is provided under this subtitle; and
(6) any other information the Administrator considers to be
appropriate.

SEC. 795. NOTE: 42 USC 16135. OUTREACH AND INCENTIVES.

(a) Definition of Eligible Technology.--In this section, the term
``eligible technology'' means--
(1) a verified technology; or
(2) an emerging technology.

(b) Technology Transfer Program.--
(1) In general.--The Administrator shall establish a program
under which the Administrator--
(A) informs stakeholders of the benefits of eligible
technologies; and
(B) develops nonfinancial incentives to promote the
use of eligible technologies.
(2) Eligible stakeholders.--Eligible stakeholders under this
section include--
(A) equipment owners and operators;
(B) emission and pollution control technology
manufacturers;
(C) engine and equipment manufacturers;
(D) State and local officials responsible for air
quality management;
(E) community organizations; and
(F) public health, educational, and environmental
organizations.

(c) State Implementation Plans.--
The NOTE: Guidelines. Administrator shall develop appropriate
guidance to provide credit to a State for emission reductions in the
State created by the use of eligible technologies through a State
implementation plan under section 110 of the Clean Air Act (42 U.S.C.
7410).

(d) International Markets.--The Administrator, in coordination with
the Department of Commerce and industry stakeholders,

[[Page 844]]
119 STAT. 844

shall inform foreign countries with air quality problems of the
potential of technology developed or used in the United States to
provide emission reductions in those countries.

SEC. 796. NOTE: 42 USC 16136. EFFECT OF SUBTITLE.

Nothing in this subtitle affects any authority under the Clean Air
Act (42 U.S.C. 7401 et seq.) in existence on the day before the date of
enactment of this Act.

SEC. 797. NOTE: 42 USC 16137. AUTHORIZATION OF APPROPRIATIONS.

There is authorized to be appropriated to carry out this subtitle
$200,000,000 for each of fiscal years 2007 through 2011, to remain
available until expended.

TITLE NOTE: Spark M. Matsunaga Hydrogen Act of 2005. VIII--HYDROGEN

SEC. 801. NOTE: 42 USC 15801 note. HYDROGEN AND FUEL CELL PROGRAM.

This title may be cited as the ``Spark M. Matsunaga Hydrogen Act of
2005''.

SEC. 802. NOTE: 42 USC 16151. PURPOSES.

The purposes of this title are--
(1) to enable and promote comprehensive development,
demonstration, and commercialization of hydrogen and fuel cell
technology in partnership with industry;
(2) to make critical public investments in building strong
links to private industry, institutions of higher education,
National Laboratories, and research institutions to expand
innovation and industrial growth;
(3) to build a mature hydrogen economy that creates fuel
diversity in the massive transportation sector of the United
States;
(4) to sharply decrease the dependency of the United States
on imported oil, eliminate most emissions from the
transportation sector, and greatly enhance our energy security;
and
(5) to create, strengthen, and protect a sustainable
national energy economy.

SEC. 803. NOTE: 42 USC 16152. DEFINITIONS.

In this title:
(1) Fuel cell.--The term ``fuel cell'' means a device that
directly converts the chemical energy of a fuel, which is
supplied from an external source, and an oxidant into
electricity by electrochemical processes occurring at separate
electrodes in the device.
(2) Heavy-duty vehicle.--The term ``heavy-duty vehicle''
means a motor vehicle that--
(A) is rated at more than 8,500 pounds gross vehicle
weight;
(B) has a curb weight of more than 6,000 pounds; or
(C) has a basic vehicle frontal area in excess of 45
square feet.
(3) Infrastructure.--The term ``infrastructure'' means the
equipment, systems, or facilities used to produce, distribute,
deliver, or store hydrogen (except for onboard storage).

[[Page 845]]
119 STAT. 845

(4) Light-duty vehicle.--The term ``light-duty vehicle''
means a motor vehicle that is rated at 8,500 or less pounds
gross vehicle weight.
(5) Stationary; portable.--The terms ``stationary'' and
``portable'', when used in reference to a fuel cell, include--
(A) continuous electric power; and
(B) backup electric power.
(6) Task force.--The term ``Task Force'' means the Hydrogen
and Fuel Cell Technical Task Force established under section
806.
(7) Technical advisory committee.--The term ``Technical
Advisory Committee'' means the independent Technical Advisory
Committee established under section 807.

SEC. 804. NOTE: Deadline. 42 USC 16153. PLAN.

Not later than 6 months after the date of enactment of this Act, the
Secretary shall transmit to Congress a coordinated plan for the programs
described in this title and any other programs of the Department that
are directly related to fuel cells or hydrogen. The plan shall describe,
at a minimum--
(1) the agenda for the next 5 years for the programs
authorized under this title, including the agenda for each
activity enumerated in section 805(e);
(2) the types of entities that will carry out the activities
under this title and what role each entity is expected to play;
(3) the milestones that will be used to evaluate the
programs for the next 5 years;
(4) the most significant technical and nontechnical hurdles
that stand in the way of achieving the goals described in
section 805, and how the programs will address those hurdles;
and
(5) the policy assumptions that are implicit in the plan,
including any assumptions that would affect the sources of
hydrogen or the marketability of hydrogen-related products.

SEC. 805. NOTE: 42 USC 16154. PROGRAMS.

(a) In General.--The Secretary, in consultation with other Federal
agencies and the private sector, shall conduct a research and
development program on technologies relating to the production,
purification, distribution, storage, and use of hydrogen energy, fuel
cells, and related infrastructure.
(b) Goal.--The goal of the program shall be to demonstrate and
commercialize the use of hydrogen for transportation (in light-duty
vehicles and heavy-duty vehicles), utility, industrial, commercial, and
residential applications.
(c) Focus.--In carrying out activities under this section, the
Secretary shall focus on factors that are common to the development of
hydrogen infrastructure and the supply of vehicle and electric power for
critical consumer and commercial applications, and that achieve
continuous technical evolution and cost reduction, particularly for
hydrogen production, the supply of hydrogen, storage of hydrogen, and
end uses of hydrogen that--
(1) steadily increase production, distribution, and end use
efficiency and reduce life-cycle emissions;
(2) resolve critical problems relating to catalysts,
membranes, storage, lightweight materials, electronic controls,
manufacturability, and other problems that emerge from the
program;

[[Page 846]]
119 STAT. 846

(3) enhance sources of renewable fuels and biofuels for
hydrogen production; and
(4) enable widespread use of distributed electricity
generation and storage.

(d) Public Education and Research.--In carrying out this section,
the Secretary shall support enhanced public education and research
conducted at institutions of higher education in fundamental sciences,
application design, and systems concepts (including education and
research relating to materials, subsystems, manufacturability,
maintenance, and safety) relating to hydrogen and fuel cells.
(e) Activities.--The Secretary, in partnership with the private
sector, shall conduct programs to address--
(1) production of hydrogen from diverse energy sources,
including--
(A) fossil fuels, which may include carbon capture
and sequestration;
(B) hydrogen-carrier fuels (including ethanol and
methanol);
(C) renewable energy resources, including biomass;
and
(D) nuclear energy;
(2) use of hydrogen for commercial, industrial, and
residential electric power generation;
(3) safe delivery of hydrogen or hydrogen-carrier fuels,
including--
(A) transmission by pipeline and other distribution
methods; and
(B) convenient and economic refueling of vehicles
either at central refueling stations or through
distributed onsite generation;
(4) advanced vehicle technologies, including--
(A) engine and emission control systems;
(B) energy storage, electric propulsion, and hybrid
systems;
(C) automotive materials; and
(D) other advanced vehicle technologies;
(5) storage of hydrogen or hydrogen-carrier fuels, including
development of materials for safe and economic storage in
gaseous, liquid, or solid form at refueling facilities and
onboard vehicles;
(6) development of safe, durable, affordable, and efficient
fuel cells, including fuel-flexible fuel cell power systems,
improved manufacturing processes, high-temperature membranes,
cost-effective fuel processing for natural gas, fuel cell stack
and system reliability, low temperature operation, and cold
start capability; and
(7) the ability of domestic automobile manufacturers to
manufacture commercially available competitive hybrid vehicle
technologies in the United States.

(f) Program Goals.--
(1) Vehicles.--For vehicles, the goals of the program are--
(A) to enable a commitment by automakers no later
than year 2015 to offer safe, affordable, and
technically viable hydrogen fuel cell vehicles in the
mass consumer market; and
(B) to enable production, delivery, and acceptance
by consumers of model year 2020 hydrogen fuel cell and
other

[[Page 847]]
119 STAT. 847

hydrogen-powered vehicles that will have, when compared
to light duty vehicles in model year 2005--
(i) fuel economy that is substantially higher;
(ii) substantially lower emissions of air
pollutants; and
(iii) equivalent or improved vehicle fuel
system crash integrity and occupant protection.
(2) Hydrogen energy and energy infrastructure.--For hydrogen
energy and energy infrastructure, the goals of the program are
to enable a commitment not later than 2015 that will lead to
infrastructure by 2020 that will provide--
(A) safe and convenient refueling;
(B) improved overall efficiency;
(C) widespread availability of hydrogen from
domestic energy sources through--
(i) production, with consideration of
emissions levels;
(ii) delivery, including transmission by
pipeline and other distribution methods for
hydrogen; and
(iii) storage, including storage in surface
transportation vehicles;
(D) hydrogen for fuel cells, internal combustion
engines, and other energy conversion devices for
portable, stationary, micro, critical needs facilities,
and transportation applications; and
(E) other technologies consistent with the
Department's plan.
(3) Fuel cells.--The goals for fuel cells and their
portable, stationary, and transportation applications are to
enable--
(A) safe, economical, and environmentally sound
hydrogen fuel cells;
(B) fuel cells for light duty and other vehicles;
and
(C) other technologies consistent with the
Department's plan.

(g) Funding.--
(1) In general.--The Secretary shall carry out the programs
under this section using a competitive, merit-based review
process and consistent with the generally applicable Federal
laws and regulations governing awards of financial assistance,
contracts, or other agreements.
(2) Research centers.--Activities under this section may be
carried out by funding nationally recognized university-based or
Federal laboratory research centers.

(h) Hydrogen Supply.--There are authorized to be appropriated to
carry out projects and activities relating to hydrogen production,
storage, distribution and dispensing, transport, education and
coordination, and technology transfer under this section--
(1) $160,000,000 for fiscal year 2006;
(2) $200,000,000 for fiscal year 2007;
(3) $220,000,000 for fiscal year 2008;
(4) $230,000,000 for fiscal year 2009;
(5) $250,000,000 for fiscal year 2010; and
(6) such sums as are necessary for each of fiscal years 2011
through 2020.

[[Page 848]]
119 STAT. 848

(i) Fuel Cell Technologies.--There are authorized to be appropriated
to carry out projects and activities relating to fuel cell technologies
under this section--
(1) $150,000,000 for fiscal year 2006;
(2) $160,000,000 for fiscal year 2007;
(3) $170,000,000 for fiscal year 2008;
(4) $180,000,000 for fiscal year 2009;
(5) $200,000,000 for fiscal year 2010; and
(6) such sums as are necessary for each of fiscal years 2011
through 2020.

SEC. 806. NOTE: 42 USC 16155. HYDROGEN AND FUEL CELL TECHNICAL TASK
FORCE.

(a) Establishment.--Not NOTE: Deadline. President. later than
120 days after the date of enactment of this Act, the President shall
establish an interagency task force chaired by the Secretary with
representatives from each of the following:
(1) The Office of Science and Technology Policy within the
Executive Office of the President.
(2) The Department of Transportation.
(3) The Department of Defense.
(4) The Department of Commerce (including the National
Institute of Standards and Technology).
(5) The Department of State.
(6) The Environmental Protection Agency.
(7) The National Aeronautics and Space Administration.
(8) Other Federal agencies as the Secretary determines
appropriate.

(b) Duties.--
(1) Planning.--The Task Force shall work toward--
(A) a safe, economical, and environmentally sound
fuel infrastructure for hydrogen and hydrogen-carrier
fuels, including an infrastructure that supports buses
and other fleet transportation;
(B) fuel cells in government and other applications,
including portable, stationary, and transportation
applications;
(C) distributed power generation, including the
generation of combined heat, power, and clean fuels
including hydrogen;
(D) uniform hydrogen codes, standards, and safety
protocols; and
(E) vehicle hydrogen fuel system integrity safety
performance.
(2) Activities.--The Task Force may organize workshops and
conferences, may issue publications, and may create databases to
carry out its duties. The Task Force shall--
(A) foster the exchange of generic, nonproprietary
information and technology among industry, academia, and
government;
(B) develop and maintain an inventory and assessment
of hydrogen, fuel cells, and other advanced
technologies, including the commercial capability of
each technology for the economic and environmentally
safe production, distribution, delivery, storage, and
use of hydrogen;
(C) integrate technical and other information made
available as a result of the programs and activities
under this title;

[[Page 849]]
119 STAT. 849

(D) promote the marketplace introduction of
infrastructure for hydrogen fuel vehicles; and
(E) conduct an education program to provide hydrogen
and fuel cell information to potential end-users.

(c) Agency Cooperation.--The heads of all agencies, including those
whose agencies are not represented on the Task Force, shall cooperate
with and furnish information to the Task Force, the Technical Advisory
Committee, and the Department.

SEC. 807. NOTE: 42 USC 16156. TECHNICAL ADVISORY COMMITTEE.

(a) Establishment.--The Hydrogen Technical and Fuel Cell Advisory
Committee is established to advise the Secretary on the programs and
activities under this title.
(b) Membership.--
(1) Members.--The Technical Advisory Committee shall be
comprised of not fewer than 12 nor more than 25 members. The
members shall be appointed by the Secretary to represent
domestic industry, academia, professional societies, government
agencies, Federal laboratories, previous advisory panels, and
financial, environmental, and other appropriate organizations
based on the Department's assessment of the technical and other
qualifications of Technical Advisory Committee members and the
needs of the Technical Advisory Committee.
(2) Terms.--The term of a member of the Technical Advisory
Committee shall not be more than 3 years. The Secretary may
appoint members of the Technical 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 Technical Advisory Committee. A member of the
Technical Advisory Committee whose term is expiring may be
reappointed.
(3) Chairperson.--The Technical Advisory Committee shall
have a chairperson, who shall be elected by the members from
among their number.

(c) Review.--The Technical Advisory Committee shall review and make
recommendations to the Secretary on--
(1) the implementation of programs and activities under this
title;
(2) the safety, economical, and environmental consequences
of technologies for the production, distribution, delivery,
storage, or use of hydrogen energy and fuel cells; and
(3) the plan under section 804.

(d) Response.--
(1) Consideration of recommendations.--The Secretary shall
consider, but need not adopt, any recommendations of the
Technical Advisory Committee under subsection (c).
(2) Biennial report.--The Secretary shall transmit a
biennial report to Congress describing any recommendations made
by the Technical Advisory Committee since the previous report.
The report shall include a description of how the Secretary has
implemented or plans to implement the recommendations, or an
explanation of the reasons that a recommendation will not be
implemented. The report shall be transmitted along with the
President's budget proposal.

(e) Support.--The Secretary shall provide resources necessary in the
judgment of the Secretary for the Technical Advisory Committee to carry
out its responsibilities under this title.

[[Page 850]]
119 STAT. 850

SEC. 808. NOTE: 42 USC 16157. DEMONSTRATION.

(a) In General.--In carrying out the programs under this section,
the Secretary shall fund a limited number of demonstration projects,
consistent with this title and a determination of the maturity, cost-
effectiveness, and environmental impacts of technologies supporting each
project. In selecting projects under this subsection, the Secretary
shall, to the extent practicable and in the public interest, select
projects that--
(1) involve using hydrogen and related products at existing
facilities or installations, such as existing office buildings,
military bases, vehicle fleet centers, transit bus authorities,
or units of the National Park System;
(2) depend on reliable power from hydrogen to carry out
essential activities;
(3) lead to the replication of hydrogen technologies and
draw such technologies into the marketplace;
(4) include vehicle, portable, and stationary demonstrations
of fuel cell and hydrogen-based energy technologies;
(5) address the interdependency of demand for hydrogen fuel
cell applications and hydrogen fuel infrastructure;
(6) raise awareness of hydrogen technology among the public;
(7) facilitate identification of an optimum technology among
competing alternatives;
(8) address distributed generation using renewable sources;
(9) carry out demonstrations of evolving hydrogen and fuel
cell technologies in national parks, remote island areas, and on
Indian tribal land, as selected by the Secretary;
(10) carry out a program to demonstrate developmental
hydrogen and fuel cell systems for mobile, portable, and
stationary uses, using improved versions of the learning
demonstrations program concept of the Department including
demonstrations involving--
(A) light-duty vehicles;
(B) heavy-duty vehicles;
(C) fleet vehicles;
(D) specialty industrial and farm vehicles; and
(E) commercial and residential portable, continuous,
and backup electric power generation;
(11) in accordance with any code or standards developed in a
region, fund prototype, pilot fleet, and infrastructure regional
hydrogen supply corridors along the interstate highway system in
varied climates across the United States; and
(12) fund demonstration programs that explore the use of
hydrogen blends, hybrid hydrogen, and hydrogen reformed from
renewable agricultural fuels, including the use of hydrogen in
hybrid electric, heavier duty, and advanced internal combustion-
powered vehicles.

The Secretary shall give preference to projects which address multiple
elements contained in paragraphs (1) through (12).
(b) System Demonstrations.--
(1) In general.--As a NOTE: Grants. component of the
demonstration program under this section, the Secretary shall
provide grants, on a cost share basis as appropriate, to
eligible entities (as determined by the Secretary) for use in--

[[Page 851]]
119 STAT. 851

(A) devising system design concepts that provide for
the use of advanced composite vehicles in programs under
section 782 that--
(i) have as a primary goal the reduction of
drive energy requirements;
(ii) after 2010, add another research and
development phase, as defined in subsection (c),
including the vehicle and infrastructure
partnerships developed under the learning
demonstrations program concept of the Department;
and
(iii) are managed through an enhanced
FreedomCAR program within the Department that
encourages involvement in cost-shared projects by
manufacturers and governments; and
(B) designing a local distributed energy system
that--
(i) incorporates renewable hydrogen
production, off-grid electricity production, and
fleet applications in industrial or commercial
service;
(ii) integrates energy or applications
described in clause (i), such as stationary,
portable, micro, and mobile fuel cells, into a
high-density commercial or residential building
complex or agricultural community; and
(iii) is managed in cooperation with industry,
State, tribal, and local governments, agricultural
organizations, and nonprofit generators and
distributors of electricity.

(c) Identification of New Program Requirements.--In carrying out the
demonstrations under subsection (a), the Secretary, in consultation with
the Task Force and the Technical Advisory Committee, shall--
(1) after 2008 for stationary and portable applications, and
after 2010 for vehicles, identify new requirements that refine
technological concepts, planning, and applications; and
(2) during the second phase of the learning demonstrations
under subsection (b)(1)(A)(ii), redesign subsequent program work
to incorporate those requirements.

(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section--
(1) $185,000,000 for fiscal year 2006;
(2) $200,000,000 for fiscal year 2007;
(3) $250,000,000 for fiscal year 2008;
(4) $300,000,000 for fiscal year 2009;
(5) $375,000,000 for fiscal year 2010; and
(6) such sums as are necessary for each of fiscal years 2011
through 2020.

SEC. 809. NOTE: 42 USC 16158. CODES AND STANDARDS.

(a) In General.--The NOTE: Grants. Contracts. Secretary, in
cooperation with the Task Force, shall provide grants to, or offer to
enter into contracts with, such professional organizations, public
service organizations, and government agencies as the Secretary
determines appropriate to support timely and extensive development of
safety codes and standards relating to fuel cell vehicles, hydrogen
energy systems, and stationary, portable, and micro fuel cells.

[[Page 852]]
119 STAT. 852

(b) Educational Efforts.--The Secretary shall support educational
efforts by organizations and agencies described in subsection (a) to
share information, including information relating to best practices,
among those organizations and agencies.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section--
(1) $4,000,000 for fiscal year 2006;
(2) $7,000,000 for fiscal year 2007;
(3) $8,000,000 for fiscal year 2008;
(4) $10,000,000 for fiscal year 2009;
(5) $9,000,000 for fiscal year 2010; and
(6) such sums as are necessary for each of fiscal years 2011
through 2020.

SEC. 810. NOTE: Applicability. 42 USC 16159. DISCLOSURE.

Section 623 of the Energy Policy Act of 1992 (42 U.S.C. 13293) shall
apply to any project carried out through a grant, cooperative agreement,
or contract under this title.

SEC. 811. NOTE: 42 USC 16160. REPORTS.

(a) Secretary.--Subject to subsection (c), not later than 2 years
after the date of enactment of this Act, and triennially thereafter, the
Secretary shall submit to Congress a report describing--
(1) activities carried out by the Department under this
title, for hydrogen and fuel cell technology;
(2) measures the Secretary has taken during the preceding 3
years to support the transition of primary industry (or a
related industry) to a fully commercialized hydrogen economy;
(3) any change made to the strategy relating to hydrogen and
fuel cell technology to reflect the results of a learning
demonstrations;
(4) progress, including progress in infrastructure, made
toward achieving the goal of producing and deploying not less
than--
(A) 100,000 hydrogen-fueled vehicles in the United
States by 2010; and
(B) 2,500,000 hydrogen-fueled vehicles in the United
States by 2020;
(5) progress made toward achieving the goal of supplying
hydrogen at a sufficient number of fueling stations in the
United States by 2010 including by integrating--
(A) hydrogen activities; and
(B) associated targets and timetables for the
development of hydrogen technologies;
(6) any problem relating to the design, execution, or
funding of a program under this title;
(7) progress made toward and goals achieved in carrying out
this title and updates to the developmental roadmap, including
the results of the reviews conducted by the National Academy of
Sciences under subsection (b) for the fiscal years covered by
the report; and
(8) any updates to strategic plans that are necessary to
meet the goals described in paragraph (4).

(b) External Review.--The NOTE: Deadlines. Secretary shall enter
into an arrangement with the National Academy of Sciences under which
the Academy will review the programs under sections 805 and 808 every
fourth year following the date of enactment of this Act. The Academy's
review shall include the program priorities and

[[Page 853]]
119 STAT. 853

technical milestones, and evaluate the progress toward achieving them.
The first review shall be completed not later than 5 years after the
date of enactment of this Act. Not later than 45 days after receiving
the review, the Secretary shall transmit the review to Congress along
with a plan to implement the review's recommendations or an explanation
for the reasons that a recommendation will not be implemented.
(c) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $1,500,000 for each of fiscal
years 2006 through 2020.

SEC. 812. NOTE: 42 USC 16161. SOLAR AND WIND TECHNOLOGIES.

(a) Solar Energy Technologies.--The Secretary shall--
(1) prepare a detailed roadmap for carrying out the
provisions in this title related to solar energy technologies
and for implementing the recommendations related to solar energy
technologies that are included in the report transmitted under
subsection (e);
(2) provide for the establishment of 5 projects in
geographic areas that are regionally and climatically diverse to
demonstrate the production of hydrogen at solar energy
facilities, including one demonstration project at a National
Laboratory or institution of higher education;
(3) establish a program--
(A) to develop optimized concentrating solar power
devices that may be used for the production of both
electricity and hydrogen; and
(B) to evaluate the use of thermochemical cycles for
hydrogen production at the temperatures attainable with
concentrating solar power devices;
(4) coordinate with activities sponsored by the Department's
Office of Nuclear Energy, Science, and Technology on high-
temperature materials, thermochemical cycles, and economic
issues related to solar energy;
(5) provide for the construction and operation of new
concentrating solar power devices or solar power cogeneration
facilities that produce hydrogen either concurrently with, or
independently of, the production of electricity;
(6) support existing facilities and programs of study
related to concentrating solar power devices; and
(7) establish a program--
(A) to develop methods that use electricity from
photovoltaic devices for the onsite production of
hydrogen, such that no intermediate transmission or
distribution infrastructure is required or used and
future demand growth may be accommodated;
(B) to evaluate the economics of small-scale
electrolysis for hydrogen production; and
(C) to study the potential of modular photovoltaic
devices for the development of a hydrogen
infrastructure, the security implications of a hydrogen
infrastructure, and the benefits potentially derived
from a hydrogen infrastructure.

(b) Wind Energy Technologies.--The Secretary shall--
(1) prepare a detailed roadmap for carrying out the
provisions in this title related to wind energy technologies and
for implementing the recommendations related to wind energy

[[Page 854]]
119 STAT. 854

technologies that are included in the report transmitted under
subsection (e); and
(2) provide for the establishment of 5 projects in
geographic areas that are regionally and climatically diverse to
demonstrate the production of hydrogen at existing wind energy
facilities, including one demonstration project at a National
Laboratory or institution of higher education.

(c) Program Support.--The Secretary shall support programs at
institutions of higher education for the development of solar energy
technologies and wind energy technologies for the production of
hydrogen. The programs supported under this subsection shall--
(1) enhance fellowship and faculty assistance programs;
(2) provide support for fundamental research;
(3) encourage collaborative research among industry,
National Laboratories, and institutions of higher education;
(4) support communication and outreach; and
(5) to the greatest extent possible--
(A) be located in geographic areas that are
regionally and climatically diverse; and
(B) be located at part B institutions, minority
institutions, and institutions of higher education
located in States participating in the Experimental
Program to Stimulate Competitive Research of the
Department.

(d) Institutions of Higher Education and National Laboratory
Interactions.--In conjunction with the programs supported under this
section, the Secretary shall develop sabbatical, fellowship, and
visiting scientist programs to encourage National Laboratories and
institutions of higher education to share and exchange personnel.
(e) Report.--The Secretary shall transmit to the Congress not later
than 120 days after the date of enactment of this Act a report
containing detailed summaries of the roadmaps prepared under subsections
(a)(1) and (b)(1), descriptions of the Secretary's progress in
establishing the projects and other programs required under this
section, and recommendations for promoting the availability of advanced
solar and wind energy technologies for the production of hydrogen.
(f) Definitions.--For purposes of this section--
(1) the term ``concentrating solar power devices'' means
devices that concentrate the power of the sun by reflection or
refraction to improve the efficiency of a photovoltaic or
thermal generation process;
(2) the term ``minority institution'' has the meaning given
to that term in section 365 of the Higher Education Act of 1965
(20 U.S.C. 1067k);
(3) the term ``part B institution'' has the meaning given to
that term in section 322 of the Higher Education Act of 1965 (20
U.S.C. 1061); and
(4) the term ``photovoltaic devices'' means devices that
convert light directly into electricity through a solid-state,
semiconductor process.

(g) Authorization of Appropriations.--There is authorized to be
appropriated such sums as are necessary for carrying out the activities
under this section for each of fiscal years 2006 through 2020.

[[Page 855]]
119 STAT. 855

SEC. 813. NOTE: 42 USC 16162. TECHNOLOGY TRANSFER.

In carrying out this title, the Secretary shall carry out programs
that--
(1) provide for the transfer of critical hydrogen and fuel
cell technologies to the private sector;
(2) accelerate wider application of those technologies in
the global market;
(3) foster the exchange of generic, nonproprietary
information; and
(4) assess technical and commercial viability of
technologies relating to the production, distribution, storage,
and use of hydrogen energy and fuel cells.

SEC. 814. NOTE: 42 USC 16163. MISCELLANEOUS PROVISIONS.

(a) Representation.--The Secretary may represent the United States
interests with respect to activities and programs under this title, in
coordination with the Department of Transportation, the National
Institute of Standards and Technology, and other relevant Federal
agencies, before governments and nongovernmental organizations
including--
(1) other Federal, State, regional, and local governments
and their representatives;
(2) industry and its representatives, including members of
the energy and transportation industries; and
(3) in consultation with the Department of State, foreign
governments and their representatives including international
organizations.

(b) Regulatory Authority.--Nothing in this title shall be construed
to alter the regulatory authority of the Department.

SEC. 815. NOTE: 42 USC 16164. COST SHARING.

The costs of carrying out projects and activities under this title
shall be shared in accordance with section 988.

SEC. 816. NOTE: 42 USC 16165. SAVINGS CLAUSE.

Nothing in this title shall be construed to affect the authority of
the Secretary of Transportation that may exist prior to the date of
enactment of this Act with respect to--
(1) research into, and regulation of, hydrogen-powered
vehicles fuel systems integrity, standards, and safety under
subtitle VI of title 49, United States Code;
(2) regulation of hazardous materials transportation under
chapter 51 of title 49, United States Code;
(3) regulation of pipeline safety under chapter 601 of title
49, United States Code;
(4) encouragement and promotion of research, development,
and deployment activities relating to advanced vehicle
technologies under section 5506 of title 49, United States Code;
(5) regulation of motor vehicle safety under chapter 301 of
title 49, United States Code;
(6) automobile fuel economy under chapter 329 of title 49,
United States Code; or
(7) representation of the interests of the United States
with respect to the activities and programs under the authority
of title 49, United States Code.

[[Page 856]]
119 STAT. 856

TITLE IX--RESEARCH NOTE: Energy Research, Development, Demonstration,
and Commercial Application Act of 2005. AND DEVELOPMENT

SEC. 901. NOTE: 42 USC 15801 note. SHORT TITLE.

This title may be cited as the ``Energy Research, Development,
Demonstration, and Commercial Application Act of 2005''.

SEC. 902. NOTE: 42 USC 16181. GOALS.

(a) In General.--In order to achieve the purposes of this title, the
Secretary shall conduct a balanced set of programs of energy research,
development, demonstration, and commercial application with the general
goals of--
(1) increasing the efficiency of all energy intensive
sectors through conservation and improved technologies;
(2) promoting diversity of energy supply;
(3) decreasing the dependence of the United States on
foreign energy supplies;
(4) improving the energy security of the United States; and
(5) decreasing the environmental impact of energy-related
activities.

(b) Goals.--The NOTE: Publication. Secretary shall publish
measurable cost and performance-based goals, comparable over time, with
each annual budget submission in at least the following areas:
(1) Energy efficiency for buildings, energy-consuming
industries, and vehicles.
(2) Electric energy generation (including distributed
generation), transmission, and storage.
(3) Renewable energy technologies, including wind power,
photovoltaics, solar thermal systems, geothermal energy,
hydrogen-fueled systems, biomass-based systems, biofuels, and
hydropower.
(4) Fossil energy, including power generation, onshore and
offshore oil and gas resource recovery, and transportation
fuels.
(5) Nuclear energy, including programs for existing and
advanced reactors, and education of future specialists.

(c) Public Comment.--The Secretary shall provide mechanisms for
input on the annually published goals from industry, institutions of
higher education, and other public sources.
(d) Effect of Goals.--Nothing in subsection (a) or the annually
published goals creates any new authority for any Federal agency, or may
be used by any Federal agency, to support the establishment of
regulatory standards or regulatory requirements.

SEC. 903. NOTE: 42 USC 16182. DEFINITIONS.

In this title:
(1) Departmental mission.--The term ``departmental mission''
means any of the functions vested in the Secretary by the
Department of Energy Organization Act (42 U.S.C. 7101 et seq.)
or other law.
(2) Hispanic-serving institution.--The term ``Hispanic-
serving institution'' has the meaning given the term in section
502(a) of the Higher Education Act of 1965 (20 U.S.C. 1101a(a)).
(3) Nonmilitary energy laboratory.--The term ``nonmilitary
energy laboratory'' means a National Laboratory other

[[Page 857]]
119 STAT. 857

than a National Laboratory listed in subparagraph (G), (H), or
(N) of section 2(3).
(4) Part b institution.--The term ``part B institution'' has
the meaning given the term in section 322 of the Higher
Education Act of 1965 (20 U.S.C. 1061).
(5) Single-purpose research facility.--The term ``single-
purpose research facility'' means--
(A) any of the primarily single-purpose entities
owned by the Department; or
(B) any other organization of the Department
designated by the Secretary.
(6) University.--The term ``university'' has the meaning
given the term ``institution of higher education'' in section
101 of the Higher Education Act of 1965 (20 U.S.C. 1001).

Subtitle A--Energy Efficiency

SEC. 911. NOTE: 42 USC 16191. ENERGY EFFICIENCY.

(a) In General.--
(1) Objectives.--The Secretary shall conduct programs of
energy efficiency research, development, demonstration, and
commercial application, including activities described in this
subtitle. Such programs shall take into consideration the
following objectives:
(A) Increasing the energy efficiency of vehicles,
buildings, and industrial processes.
(B) Reducing the demand of the United States for
energy, especially energy from foreign sources.
(C) Reducing the cost of energy and making the
economy more efficient and competitive.
(D) Improving the energy security of the United
States.
(E) Reducing the environmental impact of energy-
related activities.
(2) Programs.--Programs under this subtitle shall include
research, development, demonstration, and commercial application
of--
(A) advanced, cost-effective technologies to improve
the energy efficiency and environmental performance of
vehicles, including--
(i) hybrid and electric propulsion systems;
(ii) plug-in hybrid systems;
(iii) advanced combustion engines;
(iv) weight and drag reduction technologies;
(v) whole-vehicle design optimization; and
(vi) advanced drive trains;
(B) cost-effective technologies, for new
construction and retrofit, to improve the energy
efficiency and environmental performance of buildings,
using a whole-buildings approach, including onsite
renewable energy generation;
(C) advanced technologies to improve the energy
efficiency, environmental performance, and process
efficiency of energy-intensive and waste-intensive
industries; and
(D) advanced control devices to improve the energy
efficiency of electric motors, including those used in
industrial processes, heating, ventilation, and cooling.

[[Page 858]]
119 STAT. 858

(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out energy efficiency and
conservation research, development, demonstration, and commercial
application activities, including activities authorized under this
subtitle--
(1) $783,000,000 for fiscal year 2007;
(2) $865,000,000 for fiscal year 2008; and
(3) $952,000,000 for fiscal year 2009.

(c) Allocations.--From amounts authorized under subsection (b), the
following sums are authorized:
(1) For activities under section 912, $50,000,000 for each
of fiscal years 2007 through 2009.
(2) For activities under section 915, $7,000,000 for each of
fiscal years 2007 through 2009.
(3) For activities under subsection (a)(2)(A)--
(A) $200,000,000 for fiscal year 2007;
(B) $270,000,000 for fiscal year 2008; and
(C) $310,000,000 for fiscal year 2009.
(4) For activities under subsection (a)(2)(D), $2,000,000
for each of fiscal years 2007 and 2008.

(d) Extended Authorization.--There are authorized to be appropriated
to the Secretary to carry out section 912 $50,000,000 for each of fiscal
years 2010 through 2013.
(e) Limitations.--None of the funds authorized to be appropriated
under this section may be used for--
(1) the issuance or implementation of energy efficiency
regulations;
(2) the weatherization program established under part A of
title IV of the Energy Conservation and Production Act (42
U.S.C. 6861 et seq.);
(3) a State energy conservation plan established under part
D of title III of the Energy Policy and Conservation Act (42
U.S.C. 6321 et seq.); or
(4) a Federal energy management measure carried out under
part 3 of title V of the National Energy Conservation Policy Act
(42 U.S.C. 8251 et seq.).

SEC. 912. NOTE: 42 USC 16192. NEXT GENERATION LIGHTING INITIATIVE.

(a) Definitions.--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) Industry alliance.--The term ``Industry Alliance'' means
an entity selected by the Secretary under subsection (d).
(3) Initiative.--The term ``Initiative'' means the Next
Generation Lighting Initiative carried out under this section.
(4) Research.--The term ``research'' includes research on
the technologies, materials, and manufacturing processes
required for white light emitting diodes.
(5) White light emitting diode.--The term ``white light
emitting diode'' means a semiconducting package, using either
organic or inorganic materials, that produces white light using
externally applied voltage.

(b) Initiative.--The Secretary shall carry out a Next Generation
Lighting Initiative in accordance with this section to support

[[Page 859]]
119 STAT. 859

research, development, demonstration, and commercial application
activities related to advanced solid-state lighting technologies based
on white light emitting diodes.
(c) Objectives.--The objectives of the Initiative shall be to
develop advanced solid-state organic and inorganic lighting technologies
based on white light emitting diodes that, compared to incandescent and
fluorescent lighting technologies, are longer lasting, are more energy-
efficient and cost-competitive, and have less environmental impact.
(d) Industry Alliance.--Not NOTE: Deadline. later than 90 days
after the date of enactment of this Act, the Secretary shall
competitively select an Industry Alliance to represent participants who
are private, for-profit firms, open to large and small businesses, that,
as a group, are broadly representative of United States solid-state
lighting research, development, infrastructure, and manufacturing
expertise as a whole.

(e) Research.--
(1) Grants.--The Secretary shall carry out the research
activities of the Initiative through competitively awarded
grants to--
(A) researchers, including Industry Alliance
participants;
(B) small businesses;
(C) National Laboratories; and
(D) institutions of higher education.
(2) Industry alliance.--The Secretary shall annually solicit
from the Industry Alliance--
(A) comments to identify solid-state lighting
technology needs;
(B) an assessment of the progress of the research
activities of the Initiative; and
(C) assistance in annually updating solid-state
lighting technology roadmaps.
(3) Availability to public.--The information and roadmaps
under paragraph (2) shall be available to the public.

(f) Development, NOTE: Grants. Demonstration, and Commercial
Application.--
(1) In general.--The Secretary shall carry out a
development, demonstration, and commercial application program
for the Initiative through competitively selected awards.
(2) Preference.--In making the awards, the Secretary may
give preference to participants in the Industry Alliance.

(g) Cost Sharing.--In carrying out this section, the Secretary shall
require cost sharing in accordance with section 988.
(h) Intellectual Property.--The Secretary may require (in accordance
with section 202(a)(ii) of title 35, United States Code, section 152 of
the Atomic Energy Act of 1954 (42 U.S.C. 2182), and section 9 of the
Federal Nonnuclear Energy Research and Development Act of 1974 (42
U.S.C. 5908)) that for any new invention developed under subsection
(e)--
(1) that the Industry Alliance participants who are active
participants in research, development, and demonstration
activities related to the advanced solid-state lighting
technologies that are covered by this section shall be granted
the first option to negotiate with the invention owner, at least
in the field of solid-state lighting, nonexclusive licenses and
royalties on terms that are reasonable under the circumstances;

[[Page 860]]
119 STAT. 860

(2)(A) that, for 1 year after a United States patent is
issued for the invention, the patent holder shall not negotiate
any license or royalty with any entity that is not a participant
in the Industry Alliance described in paragraph (1); and
(B) that, during the year described in subparagraph (A), the
patent holder shall negotiate nonexclusive licenses and
royalties in good faith with any interested participant in the
Industry Alliance described in paragraph (1); and
(3) such other terms as the Secretary determines are
required to promote accelerated commercialization of inventions
made under the Initiative.

(i) National Academy Review.--The Secretary shall enter into an
arrangement with the National Academy of Sciences to conduct periodic
reviews of the Initiative.

SEC. 913. NOTE: 42 USC 16193. NATIONAL BUILDING PERFORMANCE
INITIATIVE.

(a) Interagency Group.--
(1) In general.--
Not NOTE: Deadline. Establishment. later than 90 days after
the date of enactment of this Act, the Director of the Office of
Science and Technology Policy shall establish an interagency
group to develop, in coordination with the advisory committee
established under subsection (e), a National Building
Performance Initiative (referred to in this section as the
``Initiative'').
(2) Cochairs.--The interagency group shall be co-chaired by
appropriate officials of the Department and the Department of
Commerce, who shall jointly arrange for the provision of
necessary administrative support to the group.

(b) Integration of Efforts.--The Initiative shall integrate Federal,
State, and voluntary private sector efforts to reduce the costs of
construction, operation, maintenance, and renovation of commercial,
industrial, institutional, and residential buildings.
(c) Plan.--
(1) In general.--Not NOTE: Deadline. later than 1 year
after the date of enactment of this Act, the interagency group
shall submit to Congress a plan for carrying out the appropriate
Federal role in the Initiative.
(2) Inclusions.--The plan shall include--
(A) research, development, demonstration, and
commercial application of energy technology systems and
materials for new construction and retrofit relating to
the building envelope and building system components;
(B) research, development, demonstration, and
commercial application of energy technology and
infrastructure enabling the energy efficient, automated
operation of buildings and building equipment; and
(C) the collection, analysis, and dissemination of
research results and other pertinent information on
enhancing building performance to industry, government
entities, and the public.

(d) Department of Energy Role.--Within the Federal portion of the
Initiative, the Department shall be the lead agency for all aspects of
building performance related to use and conservation of energy.
(e) Advisory Committee.--The NOTE: Establishment. Director of
the Office of Science and Technology Policy shall establish an advisory
committee to--
(1) analyze and provide recommendations on potential private
sector roles and participation in the Initiative; and

[[Page 861]]
119 STAT. 861

(2) review and provide recommendations on the plan described
in subsection (c).

(f) Administration.--Nothing in this section provides any Federal
agency with new authority to regulate building performance.

SEC. 914. NOTE: 42 USC 16194. BUILDING STANDARDS.

(a) Definition of High Performance Building.--In this section, the
term ``high performance building'' means a building that integrates and
optimizes all major high-performance building attributes, including
energy efficiency, durability, life-cycle performance, and occupant
productivity.
(b) Assessment.--Not NOTE: Deadline. Contracts. later than 120
days after the date of enactment of this Act, the Secretary shall enter
into an agreement with the National Institute of Building Sciences to--
(1) conduct an assessment (in cooperation with industry,
standards development organizations, and other entities, as
appropriate) of whether the current voluntary consensus
standards and rating systems for high performance buildings are
consistent with the current technological state of the art,
including relevant results from the research, development and
demonstration activities of the Department;
(2) determine if additional research is required, based on
the findings of the assessment; and
(3) recommend steps for the Secretary to accelerate the
development of voluntary consensus-based standards for high
performance buildings that are based on the findings of the
assessment.

(c) Grant and Technical Assistance Program.--Consistent with
subsection (b) and section 12(d) of the National Technology Transfer and
Advancement Act of 1995 (15 U.S.C. 272 note), the Secretary shall
establish a grant and technical assistance program to support the
development of voluntary consensus-based standards for high performance
buildings.

SEC. 915. NOTE: 42 USC 16195. SECONDARY ELECTRIC VEHICLE BATTERY USE
PROGRAM.

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

(b) Program.--
(1) In general.--The Secretary shall establish and conduct a
program of research, development, demonstration, and commercial
application of energy technology for the secondary use of
batteries, if the Secretary finds that there are sufficient
numbers of batteries to support the program.
(2) Administration.--The program shall be--
(A) designed to demonstrate the use of batteries in
secondary applications, including utility and commercial
power storage and power quality;
(B) structured to evaluate the performance,
including useful service life and costs, of such
batteries in field operations, and the necessary
supporting infrastructure, including reuse and disposal
of batteries; and

[[Page 862]]
119 STAT. 862

(C) coordinated with ongoing secondary battery use
programs at the National Laboratories and in industry.

(c) Solicitation.--
(1) In general.--Not NOTE: Deadline. later than 180 days
after the date of 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.
(2) Additional solicitations.--The Secretary may make
additional solicitations for proposals if the Secretary
determines that the solicitations are necessary to carry out
this section.

(d) Selection of Proposals.--
(1) In general.--Not NOTE: Deadline. later than 90 days
after the closing date established by the Secretary for receipt
of proposals under subsection (c), the Secretary shall select up
to five proposals that may receive financial assistance under
this section once the Department receives appropriated funds to
carry out this section.
(2) Factors.--In selecting proposals, the Secretary shall
consider--
(A) the diversity of battery type;
(B) geographic and climatic diversity; and
(C) life-cycle environmental effects of the
approaches.
(3) Limitation.--No one project selected under this section
shall receive more than 25 percent of the funds made available
to carry out the program under this section.
(4) Non-federal involvement.--In selecting proposals, the
Secretary shall consider the extent of involvement of State or
local government and other persons in each demonstration project
to optimize use of Federal resources.
(5) Other criteria.--In selecting proposals, the Secretary
may consider such other criteria as the Secretary considers
appropriate.

(e) Conditions.--In carrying out this section, the Secretary shall
require that--
(1) relevant information be provided to--
(A) the Department;
(B) the users of the batteries;
(C) the proposers of a project under this section;
and
(D) the battery manufacturers; and
(2) the costs of carrying out projects and activities under
this section are shared in accordance with section 988.

SEC. 916. NOTE: 42 USC 16196. ENERGY EFFICIENCY SCIENCE INITIATIVE.

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

[[Page 863]]
119 STAT. 863

SEC. 917. NOTE: 42 USC 16197. ADVANCED ENERGY EFFICIENCY TECHNOLOGY
TRANSFER CENTERS.

(a) Grants.--Not NOTE: Deadline. Establishment. later than 18
months after the date of enactment of this Act, the Secretary shall make
grants to nonprofit institutions, State and local governments, or
universities (or consortia thereof), to establish a geographically
dispersed network of Advanced Energy Efficiency Technology Transfer
Centers, to be located in areas the Secretary determines have the
greatest need of the services of such Centers. In establishing the
network, the Secretary shall consider the special needs and
opportunities for increased energy efficiency for manufactured and site-
built housing.

(b) Activities.--
(1) In general.--Each Center shall operate a program to
encourage demonstration and commercial application of advanced
energy methods and technologies through education and outreach
to building and industrial professionals, and to other
individuals and organizations with an interest in efficient
energy use.
(2) Advisory panel.--Each NOTE: Establishment. Center
shall establish an advisory panel to advise the Center on how
best to accomplish the activities under paragraph (1).

(c) Application.--A person seeking a grant under this section shall
submit to the Secretary an application in such form and containing such
information as the Secretary may require. The Secretary may award a
grant under this section to an entity already in existence if the entity
is otherwise eligible under this section.
(d) Selection Criteria.--The Secretary shall award grants under this
section on the basis of the following criteria, at a minimum:
(1) The ability of the applicant to carry out the activities
described in subsection (b)(1).
(2) The extent to which the applicant will coordinate the
activities of the Center with other entities, such as State and
local governments, utilities, and educational and research
institutions.

(e) Cost-Sharing.--In carrying out this section, the Secretary shall
require cost-sharing in accordance with the requirements of section 988
for commercial application activities.
(f) Advisory Committee.--The NOTE: Establishment. Secretary
shall establish an advisory committee to advise the Secretary on the
establishment of Centers under this section. The advisory committee
shall be composed of individuals with expertise in the area of advanced
energy methods and technologies, including at least one representative
from--
(1) State or local energy offices;
(2) energy professionals;
(3) trade or professional associations;
(4) architects, engineers, or construction professionals;
(5) manufacturers;
(6) the research community; and
(7) nonprofit energy or environmental organizations.

(g) Definitions.--For purposes of this section:
(1) Advanced energy methods and technologies.--The term
``advanced energy methods and technologies'' means all methods
and technologies that promote energy efficiency and
conservation, including distributed generation technologies, and
life-cycle analysis of energy use.

[[Page 864]]
119 STAT. 864

(2) Center.--The term ``Center'' means an Advanced Energy
Technology Transfer Center established pursuant to this section.
(3) Distributed generation.--The term ``distributed
generation'' means an electric power generation facility that is
designed to serve retail electric consumers at or near the
facility site.

(h) Authorization of Appropriations.--In addition to amounts
otherwise authorized to be appropriated in section 911, there are
authorized to be appropriated for the program under this section such
sums as may be appropriated.

Subtitle B--Distributed Energy and Electric Energy Systems

SEC. 921. NOTE: 42 USC 16211. DISTRIBUTED ENERGY AND ELECTRIC ENERGY
SYSTEMS.

(a) In General.--The Secretary shall carry out programs of research,
development, demonstration, and commercial application on distributed
energy resources and systems reliability and efficiency, to improve the
reliability and efficiency of distributed energy resources and systems,
integrating advanced energy technologies with grid connectivity,
including activities described in this subtitle. The programs shall
address advanced energy technologies and systems and advanced grid
reliability technologies.
(b) Authorization of Appropriations.--
(1) Distributed energy and electric energy systems
activities.--There are authorized to be appropriated to the
Secretary to carry out distributed energy and electric energy
systems activities, including activities authorized under this
subtitle--
(A) $240,000,000 for fiscal year 2007;
(B) $255,000,000 for fiscal year 2008; and
(C) $273,000,000 for fiscal year 2009.
(2) Power delivery research initiative.--There are
authorized to be appropriated to the Secretary to carry out the
Power Delivery Research Initiative under subsection 925(e) such
sums as may be necessary for each of fiscal years 2007 through
2009.

(c) Micro-Cogeneration Energy Technology.--From amounts authorized
under subsection (b), $20,000,000 for each of fiscal years 2007 and 2008
shall be available to carry out activities under section 923.
(d) High-Voltage Transmission Lines.--From amounts authorized under
subsection (b), $2,000,000 for fiscal year 2007 shall be available to
carry out activities under section 925(g).

SEC. 922. NOTE: 42 USC 16212. HIGH POWER DENSITY INDUSTRY PROGRAM.

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

[[Page 865]]
119 STAT. 865

SEC. 923. NOTE: 42 USC 16213. MICRO-COGENERATION ENERGY TECHNOLOGY.

(a) In General.--The Secretary shall make competitive, merit-based
grants to consortia for the development of micro-cogeneration energy
technology.
(b) Uses.--The consortia shall explore--
(1) the use of small-scale combined heat and power in
residential heating appliances;
(2) the use of excess power to operate other appliances
within the residence; and
(3) the supply of excess generated power to the power grid.

SEC. 924. NOTE: 42 USC 16214. DISTRIBUTED ENERGY TECHNOLOGY
DEMONSTRATION PROGRAMS.

(a) Coordinating Consortia Program.--The Secretary may provide
financial assistance to coordinating consortia of interdisciplinary
participants for demonstrations designed to accelerate the use of
distributed energy technologies (such as fuel cells, microturbines,
reciprocating engines, thermally activated technologies, and combined
heat and power systems) in high-energy intensive commercial
applications.
(b) Small-Scale Portable Power Program.--
(1) In general.--The Secretary shall--
(A) establish a research, development, and
demonstration program to develop working models of small
scale portable power devices; and
(B) to the fullest extent practicable, identify and
utilize the resources of universities that have shown
expertise with respect to advanced portable power
devices for either civilian or military use.
(2) Organization.--The universities identified and utilized
under paragraph (1)(B) are authorized to establish an
organization to promote small scale portable power devices.
(3) Definition.--For purposes of this subsection, the term
``small scale portable power device'' means a field-deployable
portable mechanical or electromechanical device that can be used
for applications such as communications, computation, mobility
enhancement, weapons systems, optical devices, cooling, sensors,
medical devices, and active biological agent detection systems.

SEC. 925. NOTE: 42 USC 16215. ELECTRIC TRANSMISSION AND DISTRIBUTION
PROGRAMS.

(a) Program.--The Secretary shall establish a comprehensive
research, development, and demonstration program to ensure the
reliability, efficiency, and environmental integrity of electrical
transmission and distribution systems, which shall include--
(1) advanced energy delivery technologies, energy storage
technologies, materials, and systems, giving priority to new
transmission technologies, including composite conductor
materials and other technologies that enhance reliability,
operational flexibility, or power-carrying capability;
(2) advanced grid reliability and efficiency technology
development;
(3) technologies contributing to significant load
reductions;
(4) advanced metering, load management, and control
technologies;
(5) technologies to enhance existing grid components;

[[Page 866]]
119 STAT. 866

(6) the development and use of high-temperature
superconductors to--
(A) enhance the reliability, operational
flexibility, or power-carrying capability of electric
transmission or distribution systems; or
(B) increase the efficiency of electric energy
generation, transmission, distribution, or storage
systems;
(7) integration of power systems, including systems to
deliver high-quality electric power, electric power reliability,
and combined heat and power;
(8) supply of electricity to the power grid by small scale,
distributed and residential-based power generators;
(9) the development and use of advanced grid design,
operation, and planning tools;
(10) any other infrastructure technologies, as appropriate;
and
(11) technology transfer and education.

(b) Program Plan.--
(1) In general.--Not NOTE: Deadline. later than 1 year
after the date of enactment of this Act, the Secretary, in
consultation with other appropriate Federal agencies, shall
prepare and submit to Congress a 5-year program plan to guide
activities under this section.
(2) Consultation.--In preparing the program plan, the
Secretary shall consult with--
(A) utilities;
(B) energy service providers;
(C) manufacturers;
(D) institutions of higher education;
(E) other appropriate State and local agencies;
(F) environmental organizations;
(G) professional and technical societies; and
(H) any other persons the Secretary considers
appropriate.

(c) Implementation.--The Secretary shall consider implementing the
program under this section using a consortium of participants from
industry, institutions of higher education, and National Laboratories.
(d) Report.--Not later than 2 years after the submission of the plan
under subsection (b), the Secretary shall submit to Congress a report--
(1) describing the progress made under this section; and
(2) identifying any additional resources needed to continue
the development and commercial application of transmission and
distribution of infrastructure technologies.

(e) Power Delivery Research Initiative.--
(1) In general.--The Secretary shall establish a research,
development, and demonstration initiative specifically focused
on power delivery using components incorporating high
temperature superconductivity.
(2) Goals.--The goals of the Initiative shall be--
(A) to establish world-class facilities to develop
high temperature superconductivity power applications in
partnership with manufacturers and utilities;
(B) to provide technical leadership for establishing
reliability for high temperature superconductivity power
applications, including suitable modeling and analysis;

[[Page 867]]
119 STAT. 867

(C) to facilitate the commercial transition toward
direct current power transmission, storage, and use for
high power systems using high temperature
superconductivity; and
(D) to facilitate the integration of very low
impedance high temperature superconducting wires and
cables in existing electric networks to improve system
performance, power flow control, and reliability.
(3) Inclusions.--The Initiative shall include--
(A) feasibility analysis, planning, research, and
design to construct demonstrations of superconducting
links in high power, direct current, and controllable
alternating current transmission systems;
(B) public-private partnerships to demonstrate
deployment of high temperature superconducting cable
into testbeds simulating a realistic transmission grid
and under varying transmission conditions, including
actual grid insertions; and
(C) testbeds developed in cooperation with National
Laboratories, industries, and institutions of higher
education to--
(i) demonstrate those technologies;
(ii) prepare the technologies for commercial
introduction; and
(iii) address cost or performance roadblocks
to successful commercial use.

(f) Transmission and Distribution Grid Planning and Operations
Initiative.--
(1) In general.--The Secretary shall establish a research,
development, and demonstration initiative specifically focused
on tools needed to plan, operate, and expand the transmission
and distribution grids in the presence of competitive market
mechanisms for energy, load demand, customer response, and
ancillary services.
(2) Goals.--The goals of the Initiative shall be--
(A)(i) to develop and use a geographically
distributed center, consisting of institutions of higher
education, and National Laboratories, with expertise and
facilities to develop the underlying theory and software
for power system application; and
(ii) to ensure commercial development in partnership
with software vendors and utilities;
(B) to provide technical leadership in engineering
and economic analysis for the reliability and efficiency
of power systems planning and operations in the presence
of competitive markets for electricity;
(C) to model, simulate, and experiment with new
market mechanisms and operating practices to understand
and optimize those new methods before actual use; and
(D) to provide technical support and technology
transfer to electric utilities and other participants in
the domestic electric industry and marketplace.

(g) High-voltage NOTE: Grants. Transmission Lines.--As part of
the program described in subsection (a), the Secretary shall award a
grant to a university research program to design and test, in
consultation with the Tennessee Valley Authority, state-of-the-art
optimization

[[Page 868]]
119 STAT. 868

techniques for power flow through existing high voltage transmission
lines.

Subtitle C--Renewable Energy

SEC. 931. NOTE: 42 USC 16231. RENEWABLE ENERGY.

(a) In General.--
(1) Objectives.--The Secretary shall conduct programs of
renewable energy research, development, demonstration, and
commercial application, including activities described in this
subtitle. Such programs shall take into consideration the
following objectives:
(A) Increasing the conversion efficiency of all
forms of renewable energy through improved technologies.
(B) Decreasing the cost of renewable energy
generation and delivery.
(C) Promoting the diversity of the energy supply.
(D) Decreasing the dependence of the United States
on foreign energy supplies.
(E) Improving United States energy security.
(F) Decreasing the environmental impact of energy-
related activities.
(G) Increasing the export of renewable generation
equipment from the United States.
(2) Programs.--
(A) Solar energy.--The Secretary shall conduct a
program of research, development, demonstration, and
commercial application for solar energy, including--
(i) photovoltaics;
(ii) solar hot water and solar space heating;
(iii) concentrating solar power;
(iv) lighting systems that integrate sunlight
and electrical lighting in complement to each
other in common lighting fixtures for the purpose
of improving energy efficiency;
(v) manufacturability of low cost, high
quality solar systems; and
(vi) development of products that can be
easily integrated into new and existing buildings.
(B) Wind energy.--The Secretary shall conduct a
program of research, development, demonstration, and
commercial application for wind energy, including--
(i) low speed wind energy;
(ii) offshore wind energy;
(iii) testing and verification (including
construction and operation of a research and
testing facility capable of testing wind
turbines); and
(iv) distributed wind energy generation.
(C) Geothermal.--The Secretary shall conduct a
program of research, development, demonstration, and
commercial application for geothermal energy. The
program shall focus on developing improved technologies
for reducing the costs of geothermal energy
installations, including technologies for--
(i) improving detection of geothermal
resources;
(ii) decreasing drilling costs;

[[Page 869]]
119 STAT. 869

(iii) decreasing maintenance costs through
improved materials;
(iv) increasing the potential for other
revenue sources, such as mineral production; and
(v) increasing the understanding of reservoir
life cycle and management.
(D) Hydropower.--The Secretary shall conduct a
program of research, development, demonstration, and
commercial application for cost competitive technologies
that enable the development of new and incremental
hydropower capacity, adding to the diversity of the
energy supply of the United States, including:
(i) Fish-friendly large turbines.
(ii) Advanced technologies to enhance
environmental performance and yield greater energy
efficiencies.
(E) Miscellaneous projects.--The Secretary shall
conduct research, development, demonstration, and
commercial application programs for--
(i) ocean energy, including wave energy;
(ii) the combined use of renewable energy
technologies with one another and with other
energy technologies, including the combined use of
wind power and coal gasification technologies;
(iii) renewable energy technologies for
cogeneration of hydrogen and electricity; and
(iv) kinetic hydro turbines.

(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out renewable energy research,
development, demonstration, and commercial application activities,
including activities authorized under this subtitle--
(1) $632,000,000 for fiscal year 2007;
(2) $743,000,000 for fiscal year 2008; and
(3) $852,000,000 for fiscal year 2009.

(c) Bioenergy.--From the amounts authorized under subsection (b),
there are authorized to be appropriated to carry out section 932--
(1) $213,000,000 for fiscal year 2007, of which $100,000,000
shall be for section 932(d);
(2) $251,000,000 for fiscal year 2008, of which $125,000,000
shall be for section 932(d); and
(3) $274,000,000 for fiscal year 2009, of which $150,000,000
shall be for section 932(d).

(d) Solar Power.--From amounts authorized under subsection (b),
there is authorized to be appropriated to carry out activities under
subsection (a)(2)(A)--
(1) $140,000,000 for fiscal year 2007, of which $40,000,000
shall be for activities under section 935;
(2) $200,000,000 for fiscal year 2008, of which $50,000,000
shall be for activities under section 935; and
(3) $250,000,000 for fiscal year 2009, of which $50,000,000
shall be for activities under section 935.

(e) Administration.--Of the funds authorized under subsection (c),
not less than $5,000,000 for each fiscal year shall be made available
for grants to--
(1) part B institutions;

[[Page 870]]
119 STAT. 870

(2) Tribal Colleges or Universities (as defined in section
316(b) of the Higher Education Act of 1965 (20 U.S.C.
1059c(b))); and
(3) Hispanic-serving institutions.

(f) Rural Demonstration Projects.--In carrying out this section, the
Secretary, in consultation with the Secretary of Agriculture, shall
demonstrate the use of renewable energy technologies to assist in
delivering electricity to rural and remote locations including --
(1) advanced wind power technology, including combined use
with coal gasification;
(2) biomass; and
(3) geothermal energy systems.

(g) Analysis and Evaluation.--
(1) In general.--The Secretary shall conduct analysis and
evaluation in support of the renewable energy programs under
this subtitle. These activities shall be used to guide budget
and program decisions, and shall include--
(A) economic and technical analysis of renewable
energy potential, including resource assessment;
(B) analysis of past program performance, both in
terms of technical advances and in market introduction
of renewable energy; and
(C) any other analysis or evaluation that the
Secretary considers appropriate.
(2) Funding.--The Secretary may designate up to 1 percent of
the funds appropriated for carrying out this subtitle for
analysis and evaluation activities under this subsection.

SEC. 932. NOTE: 42 USC 16232. BIOENERGY PROGRAM.

(a) Definitions.--In this section:
(1) Biomass.--The term ``biomass'' means--
(A) any organic material grown for the purpose of
being converted to energy;
(B) any organic byproduct of agriculture (including
wastes from food production and processing) that can be
converted into energy; or
(C) any waste material that can be converted to
energy, is segregated from other waste materials, and is
derived from--
(i) any of the following forest-related
resources: mill residues, precommercial thinnings,
slash, brush, or otherwise nonmerchantable
material; or
(ii) wood waste materials, including waste
pallets, crates, dunnage, manufacturing and
construction wood wastes (other than pressure-
treated, chemically-treated, or painted wood
wastes), and landscape or right-of-way tree
trimmings, but not including municipal solid
waste, gas derived from the biodegradation of
municipal solid waste, or paper that is commonly
recycled.
(2) Lignocellulosic feedstock.--The term ``lignocellulosic
feedstock'' means any portion of a plant or coproduct from
conversion, including crops, trees, forest residues, and
agricultural residues not specifically grown for food, including
from barley grain, grapeseed, rice bran, rice hulls, rice straw,
soybean matter, and sugarcane bagasse.

[[Page 871]]
119 STAT. 871

(b) Program.--The Secretary shall conduct a program of research,
development, demonstration, and commercial application for bioenergy,
including--
(1) biopower energy systems;
(2) biofuels;
(3) bioproducts;
(4) integrated biorefineries that may produce biopower,
biofuels, and bioproducts;
(5) cross-cutting research and development in feedstocks;
and
(6) economic analysis.

(c) Biofuels and Bioproducts.--The goals of the biofuels and
bioproducts programs shall be to develop, in partnership with industry
and institutions of higher education--
(1) advanced biochemical and thermochemical conversion
technologies capable of making fuels from lignocellulosic
feedstocks that are price-competitive with gasoline or diesel in
either internal combustion engines or fuel cell-powered
vehicles;
(2) advanced biotechnology processes capable of making
biofuels and bioproducts with emphasis on development of
biorefinery technologies using enzyme-based processing systems;
(3) advanced biotechnology processes capable of increasing
energy production from lignocellulosic feedstocks, with emphasis
on reducing the dependence of industry on fossil fuels in
manufacturing facilities; and
(4) other advanced processes that will enable the
development of cost-effective bioproducts, including biofuels.

(d) Integrated Biorefinery Demonstration Projects.--
(1) In general.--The Secretary shall carry out a program to
demonstrate the commercial application of integrated
biorefineries. The Secretary shall ensure geographical
distribution of biorefinery demonstrations under this
subsection. The Secretary shall not provide more than
$100,000,000 under this subsection for any single biorefinery
demonstration. In making awards under this subsection, the
Secretary shall encourage--
(A) the demonstration of a wide variety of
lignocellulosic feedstocks;
(B) the commercial application of biomass
technologies for a variety of uses, including--
(i) liquid transportation fuels;
(ii) high-value biobased chemicals;
(iii) substitutes for petroleum-based
feedstocks and products; and
(iv) energy in the form of electricity or
useful heat; and
(C) the demonstration of the collection and
treatment of a variety of biomass feedstocks.
(2) Proposals.--Not NOTE: Deadline. later than 6 months
after the date of enactment of this Act, the Secretary shall
solicit proposals for demonstration of advanced biorefineries.
The Secretary shall select only proposals that--
(A) demonstrate that the project will be able to
operate profitably without direct Federal subsidy after
initial construction costs are paid; and
(B) enable the biorefinery to be easily replicated.

(e) University Biodiesel Program.--The Secretary shall establish a
demonstration program to determine the feasibility of

[[Page 872]]
119 STAT. 872

the operation of diesel electric power generators, using biodiesel fuels
with ratings as high as B100, at electric generation facilities owned by
institutions of higher education. The program shall examine--
(1) heat rates of diesel fuels with large quantities of
cellulosic content;
(2) the reliability of operation of various fuel blends;
(3) performance in cold or freezing weather;
(4) stability of fuel after extended storage; and
(5) other criteria, as determined by the Secretary.

SEC. 933. NOTE: 42 USC 16233. LOW-COST RENEWABLE HYDROGEN AND
INFRASTRUCTURE FOR VEHICLE PROPULSION.

The Secretary shall--
(1) establish a research, development, and demonstration
program to determine the feasibility of using hydrogen
propulsion in light-weight vehicles and the integration of the
associated hydrogen production infrastructure using off-the-
shelf components; and
(2) identify universities and institutions that--
(A) have expertise in researching and testing
vehicles fueled by hydrogen, methane, and other fuels;
(B) have expertise in integrating off-the-shelf
components to minimize cost; and
(C) within 2 years can test a vehicle based on an
existing commercially available platform with a curb
weight of not less than 2,000 pounds before
modifications, that--
(i) operates solely on hydrogen;
(ii) qualifies as a light-duty passenger
vehicle; and
(iii) uses hydrogen produced from water using
only solar energy.

SEC. 934. NOTE: 42 USC 16234. CONCENTRATING SOLAR POWER RESEARCH
PROGRAM.

(a) In General.--The Secretary shall conduct a program of research
and development to evaluate the potential for concentrating solar power
for hydrogen production, including cogeneration approaches for both
hydrogen and electricity.
(b) Administration.--The program shall take advantage of existing
facilities to the extent practicable and shall include--
(1) development of optimized technologies that are common to
both electricity and hydrogen production;
(2) evaluation of thermochemical cycles for hydrogen
production at the temperatures attainable with concentrating
solar power;
(3) evaluation of materials issues for the thermochemical
cycles described in paragraph (2);
(4) cogeneration of solar thermal electric power and photo-
synthetic-based hydrogen production;
(5) system architectures and economics studies; and
(6) coordination with activities under the Next Generation
Nuclear Plant Project established under subtitle C of title VI
on high temperature materials, thermochemical cycles, and
economic issues.

(c) Assessment.--In carrying out the program under this section, the
Secretary shall--
(1) assess conflicting guidance on the economic potential of
concentrating solar power for electricity production received
from the National Research Council in the report entitled

[[Page 873]]
119 STAT. 873

``Renewable Power Pathways: A Review of the U.S. Department of
Energy's Renewable Energy Programs'' and dated 2000 and
subsequent reviews of that report funded by the Department; and
(2) provide an assessment of the potential impact of
technology used to concentrate solar power for electricity
before, or concurrent with, submission of the budget for fiscal
year 2008.

(d) Report.--Not later than 5 years after the date of enactment of
this Act, the Secretary shall provide to Congress a report on the
economic and technical potential for electricity or hydrogen production,
with or without cogeneration, with concentrating solar power, including
the economic and technical feasibility of potential construction of a
pilot demonstration facility suitable for commercial production of
electricity or hydrogen from concentrating solar power.

SEC. 935. NOTE: 42 USC 16235. RENEWABLE ENERGY IN PUBLIC BUILDINGS.

(a) Demonstration and Technology Transfer Program.--The Secretary
shall establish a program for the demonstration of innovative
technologies for solar and other renewable energy sources in buildings
owned or operated by a State or local government, and for the
dissemination of information resulting from such demonstration to
interested parties.
(b) Limit on Federal Funding.--Notwithstanding section 988, the
Secretary shall provide under this section no more than 40 percent of
the incremental costs of the solar or other renewable energy source
project funded.
(c) Requirements.--As part of the application for awards under this
section, the Secretary shall require all applicants---
(1) to demonstrate a continuing commitment to the use of
solar and other renewable energy sources in buildings they own
or operate; and
(2) to state how they expect any award to further their
transition to the significant use of renewable energy.

Subtitle D--Agricultural Biomass Research and Development Programs

SEC. 941. NOTE: 7 USC 8101 note. AMENDMENTS TO THE BIOMASS RESEARCH
AND DEVELOPMENT ACT OF 2000.

(a) Definitions.--Section 303 of the Biomass Research and
Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is
amended--
(1) by striking paragraphs (2), (9), and (10);
(2) by redesignating paragraphs (3), (4), (5), (6), (7), and
(8) as paragraphs (4), (5), (7), (8), (9), and (10),
respectively;
(3) by inserting after paragraph (1) the following:
``(2) Biobased fuel.--The term `biobased fuel' means any
transportation fuel produced from biomass.
``(3) Biobased product.--The term `biobased product' means
an industrial product (including chemicals, materials, and
polymers) produced from biomass, or a commercial or industrial
product (including animal feed and electric power) derived in
connection with the conversion of biomass to fuel.'';
(4) by inserting after paragraph (5) (as redesignated by
paragraph (2)) the following:

[[Page 874]]
119 STAT. 874

``(6) Demonstration.--The term `demonstration' means
demonstration of technology in a pilot plant or semi-works scale
facility.''; and
(5) by striking paragraph (9) (as redesignated by paragraph
(2)) and inserting the following:
``(9) National laboratory.--The term `National Laboratory'
has the meaning given that term in section 2 of the Energy
Policy Act of 2005.''

(b) Cooperation and Coordination in Biomass Research and
Development.--Section 304 of the Biomass Research and Development Act of
2000 (Public Law 106-224; 7 U.S.C. 8101 note) is amended--
(1) in subsections (a) and (d), by striking ``industrial
products'' each place it appears and inserting ``fuels and
biobased products'';
(2) by striking subsections (b) and (c); and
(3) by redesignating subsection (d) as subsection (b).

(c) Biomass Research and Development Board.--Section 305 of the
Biomass Research and Development Act of 2000 (Public Law 106-224; 7
U.S.C. 8101 note) is amended--
(1) in subsections (a) and (c), by striking ``industrial
products'' each place it appears and inserting ``fuels and
biobased products'';
(2) in subsection (b)--
(A) in paragraph (1), by striking ``304(d)(1)(B)''
and inserting ``304(b)(1)(B)''; and
(B) in paragraph (2), by striking ``304(d)(1)(A)''
and inserting ``304(b)(1)(A)''; and
(3) in subsection (c)--
(A) in paragraph (1)(B), by striking ``and'' at the
end;
(B) in paragraph (2), by striking the period at the
end and inserting a semicolon; and
(C) by adding at the end the following:
``(3) ensure that--
``(A) solicitations are open and competitive with
awards made annually; and
``(B) objectives and evaluation criteria of the
solicitations are clearly stated and minimally
prescriptive, with no areas of special interest; and
``(4) ensure that the panel of scientific and technical
peers assembled under section 307(g)(1)(C) to review proposals
is composed predominantly of independent experts selected from
outside the Departments of Agriculture and Energy.''.

(d) Biomass Research and Development Technical Advisory Committee.--
Section 306 of the Biomass Research and Development Act of 2000 (Public
Law 106-224; 7 U.S.C. 8101 note) is amended--
(1) in subsection (b)(1)--
(A) in subparagraph (A), by striking ``biobased
industrial products'' and inserting ``biofuels'';
(B) by redesignating subparagraphs (B) through (J)
as subparagraphs (C) through (K), respectively;
(C) by inserting after subparagraph (A) the
following:
``(B) an individual affiliated with the biobased
industrial and commercial products industry;'';

[[Page 875]]
119 STAT. 875

(D) in subparagraph (F) (as redesignated by
subparagraph (B)) by striking ``an individual has'' and
inserting ``2 individuals have'';
(E) in subparagraphs (C), (D), (G), and (I) (as
redesignated by subparagraph (B)) by striking
``industrial products'' each place it appears and
inserting ``fuels and biobased products''; and
(F) in subparagraph (H) (as redesignated by
subparagraph (B)), by inserting ``and environmental''
before ``analysis'';
(2) in subsection (c)(2)--
(A) in subparagraph (A), by striking ``goals'' and
inserting ``objectives, purposes, and considerations'';
(B) by redesignating subparagraphs (B) and (C) as
subparagraphs (C) and (D), respectively;
(C) by inserting after subparagraph (A) the
following:
``(B) solicitations are open and competitive with
awards made annually and that objectives and evaluation
criteria of the solicitations are clearly stated and
minimally prescriptive, with no areas of special
interest;''; and
(D) in subparagraph (C) (as redesignated by
subparagraph (B)) by inserting ``predominantly from
outside the Departments of Agriculture and Energy''
after ``technical peers''.

(e) Biomass Research and Development Initiative.--Section 307 of the
Biomass Research and Development Act of 2000 (Public Law 106-224; 7
U.S.C. 8101 note) is amended--
(1) in subsection (a), by striking ``research on biobased
industrial products'' and inserting ``research on, and
development and demonstration of, biobased fuels and biobased
products, and the methods, practices and technologies, for their
production''; and
(2) by striking subsections (b) through (e) and inserting
the following:

``(b) Objectives.--The objectives of the Initiative are to develop--
``(1) technologies and processes necessary for abundant
commercial production of biobased fuels at prices competitive
with fossil fuels;
``(2) high-value biobased products--
``(A) to enhance the economic viability of biobased
fuels and power; and
``(B) as substitutes for petroleum-based feedstocks
and products; and
``(3) a diversity of sustainable domestic sources of biomass
for conversion to biobased fuels and biobased products.

``(c) Purposes.--The purposes of the Initiative are--
``(1) to increase the energy security of the United States;
``(2) to create jobs and enhance the economic development of
the rural economy;
``(3) to enhance the environment and public health; and
``(4) to diversify markets for raw agricultural and forestry
products.

``(d) Technical Areas.--To advance the objectives and purposes of
the Initiative, the Secretary of Agriculture and the Secretary

[[Page 876]]
119 STAT. 876

of Energy, in consultation with the Administrator of the Environmental
Protection Agency and heads of other appropriate departments and
agencies (referred to in this section as the `Secretaries'), shall
direct research and development toward--
``(1) feedstock production through the development of crops
and cropping systems relevant to production of raw materials for
conversion to biobased fuels and biobased products, including--
``(A) development of advanced and dedicated crops
with desired features, including enhanced productivity,
broader site range, low requirements for chemical
inputs, and enhanced processing;
``(B) advanced crop production methods to achieve
the features described in subparagraph (A);
``(C) feedstock harvest, handling, transport, and
storage; and
``(D) strategies for integrating feedstock
production into existing managed land;
``(2) overcoming recalcitrance of cellulosic biomass through
developing technologies for converting cellulosic biomass into
intermediates that can subsequently be converted into biobased
fuels and biobased products, including--
``(A) pretreatment in combination with enzymatic or
microbial hydrolysis; and
``(B) thermochemical approaches, including
gasification and pyrolysis;
``(3) product diversification through technologies relevant
to production of a range of biobased products (including
chemicals, animal feeds, and cogenerated power) that eventually
can increase the feasibility of fuel production in a
biorefinery, including--
``(A) catalytic processing, including thermochemical
fuel production;
``(B) metabolic engineering, enzyme engineering, and
fermentation systems for biological production of
desired products or cogeneration of power;
``(C) product recovery;
``(D) power production technologies; and
``(E) integration into existing biomass processing
facilities, including starch ethanol plants, paper
mills, and power plants; and
``(4) analysis that provides strategic guidance for the
application of biomass technologies in accordance with
realization of improved sustainability and environmental
quality, cost effectiveness, security, and rural economic
development, usually featuring system-wide approaches.

``(e) Additional Considerations.--Within the technical areas
described in subsection (d), and in addition to advancing the purposes
described in subsection (c) and the objectives described in subsection
(b), the Secretaries shall support research and development--
``(1) to create continuously expanding opportunities for
participants in existing biofuels production by seeking
synergies and continuity with current technologies and
practices, such as the use of dried distillers grains as a
bridge feedstock;
``(2) to maximize the environmental, economic, and social
benefits of production of biobased fuels and biobased products

[[Page 877]]
119 STAT. 877

on a large scale through life-cycle economic and environmental
analysis and other means; and
``(3) to assess the potential of Federal land and land
management programs as feedstock resources for biobased fuels
and biobased products, consistent with the integrity of soil and
water resources and with other environmental considerations.

``(f) Eligible Entities.--To be eligible for a grant, contract, or
assistance under this section, an applicant shall be--
``(1) an institution of higher education;
``(2) a National Laboratory;
``(3) a Federal research agency;
``(4) a State research agency;
``(5) a private sector entity;
``(6) a nonprofit organization; or
``(7) a consortium of two or more entities described in
paragraphs (1) through (6).

``(g) Administration.--
``(1) In general.--After consultation with the Board, the
points of contact shall--
``(A) publish annually one or more joint requests
for proposals for grants, contracts, and assistance
under this section;
``(B) require that grants, contracts, and assistance
under this section be awarded competitively, on the
basis of merit, after the establishment of procedures
that provide for scientific peer review by an
independent panel of scientific and technical peers; and
``(C) give some preference to applications that--
``(i) involve a consortia of experts from
multiple institutions;
``(ii) encourage the integration of
disciplines and application of the best technical
resources; and
``(iii) increase the geographic diversity of
demonstration projects.
``(2) Distribution of funding by technical area.--Of the
funds authorized to be appropriated for activities described in
this section, funds shall be distributed for each of fiscal
years 2007 through 2010 so as to achieve an approximate
distribution of--
``(A) 20 percent of the funds to carry out
activities for feedstock production under subsection
(d)(1);
``(B) 45 percent of the funds to carry out
activities for overcoming recalcitrance of cellulosic
biomass under subsection (d)(2);
``(C) 30 percent of the funds to carry out
activities for product diversification under subsection
(d)(3); and
``(D) 5 percent of the funds to carry out activities
for strategic guidance under subsection (d)(4).
``(3) Distribution of funding within each technical area.--
Within each technical area described in paragraphs (1) through
(3) of subsection (d), funds shall be distributed for each of
fiscal years 2007 through 2010 so as to achieve an approximate
distribution of--
``(A) 15 percent of the funds for applied
fundamentals;
``(B) 35 percent of the funds for innovation; and
``(C) 50 percent of the funds for demonstration.

[[Page 878]]
119 STAT. 878

``(4) Matching funds.--
``(A) In general.--A minimum 20 percent funding
match shall be required for demonstration projects under
this title.
``(B) Commercial applications.--A minimum of 50
percent funding match shall be required for commercial
application projects under this title.
``(5) Technology and information transfer to agricultural
users.--The Administrator of the Cooperative State Research,
Education, and Extension Service and the Chief of the Natural
Resources Conservation Service shall ensure that applicable
research results and technologies from the Initiative are
adapted, made available, and disseminated through those
services, as appropriate.''.

(f) Annual Reports.--Section 309 of the Biomass Research and
Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is
amended--
(1) in subsection (b)--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking
``purposes described in section 307(b)'' and
inserting ``objectives, purposes, and additional
considerations described in subsections (b)
through (e) of section 307'';
(ii) in subparagraph (B), by striking ``and''
at the end;
(iii) by redesignating subparagraph (C) as
subparagraph (D); and
(iv) by inserting after subparagraph (B) the
following:
``(C) achieves the distribution of funds described
in paragraphs (2) and (3) of section 307(g); and''; and
(B) in paragraph (2), by striking ``industrial
products'' and inserting ``fuels and biobased
products''; and
(2) by adding at the end the following:

``(c) Updates.--The Secretary and the Secretary of Energy shall
update the Vision and Roadmap documents prepared for Federal biomass
research and development activities.''.
(g) Authorization of Appropriations.--Section 310(b) of the Biomass
Research and Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101
note) is amended by striking ``title $54,000,000 for each of fiscal
years 2002 through 2007'' and inserting ``title $200,000,000 for each of
fiscal years 2006 through 2015''.
(h) Repeal of Sunset Provision.--Section 311 of the Biomass Research
and Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is
repealed.

SEC. 942. NOTE: 42 USC 16251. PRODUCTION INCENTIVES FOR CELLULOSIC
BIOFUELS.

(a) Purpose.--The purpose of this section is to--
(1) accelerate deployment and commercialization of biofuels;
(2) deliver the first 1,000,000,000 gallons in annual
cellulosic biofuels production by 2015;
(3) ensure biofuels produced after 2015 are cost competitive
with gasoline and diesel; and
(4) ensure that small feedstock producers and rural small
businesses are full participants in the development of the
cellulosic biofuels industry.

[[Page 879]]
119 STAT. 879

(b) Definitions.--In this section:
(1) Cellulosic biofuels.--The term ``cellulosic biofuels''
means any fuel that is produced from cellulosic feedstocks.
(2) Eligible entity.--The term ``eligible entity'' means a
producer of fuel from cellulosic biofuels the production
facility of which--
(A) is located in the United States;
(B) meets all applicable Federal and State
permitting requirements; and
(C) meets any financial criteria established by the
Secretary.

(c) Program.--
(1) Establishment.--The Secretary, in consultation with the
Secretary of Agriculture, the Secretary of Defense, and the
Administrator of the Environmental Protection Agency, shall
establish an incentive program for the production of cellulosic
biofuels.
(2) Basis of incentives.--Under the program, the Secretary
shall award production incentives on a per gallon basis of
cellulosic biofuels from eligible entities, through--
(A) set payments per gallon of cellulosic biofuels
produced in an amount determined by the Secretary, until
initiation of the first reverse auction; and
(B) reverse auction thereafter.
(3) First reverse auction.--The NOTE: Deadlines. first
reverse auction shall be held on the earlier of--
(A) not later than 1 year after the first year of
annual production in the United States of 100,000,000
gallons of cellulosic biofuels, as determined by the
Secretary; or
(B) not later than 3 years after the date of
enactment of this Act.
(4) Reverse auction procedure.--
(A) In general.--On initiation of the first reverse
auction, and each year thereafter until the earlier of
the first year of annual production in the United States
of 1,000,000,000 gallons of cellulosic biofuels, as
determined by the Secretary, or 10 years after the date
of enactment of this Act, the Secretary shall conduct a
reverse auction at which--
(i) the Secretary shall solicit bids from
eligible entities;
(ii) eligible entities shall submit--
(I) a desired level of production
incentive on a per gallon basis; and
(II) an estimated annual production
amount in gallons; and
(iii) the Secretary shall issue awards for the
production amount submitted, beginning with the
eligible entity submitting the bid for the lowest
level of production incentive on a per gallon
basis and meeting such other criteria as are
established by the Secretary, until the amount of
funds available for the reverse auction is
committed.
(B) Amount of incentive received.--An eligible
entity selected by the Secretary through a reverse
auction shall receive the amount of performance
incentive

[[Page 880]]
119 STAT. 880

requested in the auction for each gallon produced and
sold by the entity during the first 6 years of
operation.
(C) Commencement
of NOTE: Deadline. Contracts. production of
cellulosic biofuels.--As a condition of the receipt of
an award under this section, an eligible entity shall
enter into an agreement with the Secretary under which
the eligible entity agrees to begin production of
cellulosic biofuels not later than 3 years after the
date of the reverse auction in which the eligible entity
participates.

(d) Limitations.--Awards under this section shall be limited to--
(1) a per gallon amount determined by the Secretary during
the first 4 years of the program;
(2) a declining per gallon cap over the remaining lifetime
of the program, to be established by the Secretary so that
cellulosic biofuels produced after the first year of annual
cellulosic biofuels production in the United States in excess of
1,000,000,000 gallons are cost competitive with gasoline and
diesel;
(3) not more than 25 percent of the funds committed within
each reverse auction to any 1 project;
(4) not more than $100,000,000 in any 1 year; and
(5) not more than $1,000,000,000 over the lifetime of the
program.

(e) Priority.--In selecting a project under the program, the
Secretary shall give priority to projects that--
(1) demonstrate outstanding potential for local and regional
economic development;
(2) include agricultural producers or cooperatives of
agricultural producers as equity partners in the ventures; and
(3) have a strategic agreement in place to fairly reward
feedstock suppliers.

(f) Authorizations of Appropriations.--There is authorized to be
appropriated to carry out this section $250,000,000.

SEC. 943. PROCUREMENT OF BIOBASED PRODUCTS.

(a) Federal Procurement.--
(1) Definition of procuring agency.--Section 9001 of the
Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8101)
is amended--
(A) by redesignating paragraphs (4), (5), and (6) as
paragraphs (5), (6), and (7), respectively; and
(B) by inserting after paragraph (3) the following:
``(4) Procuring agency.--The term `procuring agency' means--
``(A) any Federal agency that is using Federal funds
for procurement; or
``(B) any person contracting with any Federal agency
with respect to work performed under the contract.''.
(2) Procurement.--Section 9002 of the Farm Security and
Rural Investment Act of 2002 (7 U.S.C. 8102) is amended--
(A) by striking ``Federal agency'' each place it
appears (other than in subsections (f) and (g)) and
inserting ``procuring agency'';
(B) in subsection (c)(2)--
(i) by striking ``(2)'' and all that follows
through ``Notwithstanding'' and inserting the
following:

[[Page 881]]
119 STAT. 881

``(2) Flexibility.--Notwithstanding'';
(ii) by striking ``an agency'' and inserting
``a procuring agency''; and
(iii) by striking ``the agency'' and inserting
``the procuring agency'';
(C) in subsection (d), by striking ``procured by
Federal agencies'' and inserting ``procured by procuring
agencies''; and
(D) in subsection (f), by striking ``Federal
agencies'' and inserting ``procuring agencies''.

(b) Capitol Complex Procurement.--Section 9002 of the Farm Security
and Rural Investment Act of 2002 (7 U.S.C. 8102) (as amended by
subsection (a)(2)) is amended--
(1) by redesignating subsection (j) as subsection (k); and
(2) by inserting after subsection (i) the following:

``(j) Inclusion.--Not NOTE: Deadline. Procedures. later than 90
days after the date of enactment of the Energy Policy Act of 2005, the
Architect of the Capitol, the Sergeant at Arms of the Senate, and the
Chief Administrative Officer of the House of Representatives shall
establish procedures that apply the requirements of this section to
procurement for the Capitol Complex.''.

(c) NOTE: 42 USC 16252. Education.--
(1) In general.--The Architect of the Capitol shall
establish in the Capitol Complex a program of public education
regarding use by the Architect of the Capitol of biobased
products.
(2) Purposes.--The purposes of the program shall be--
(A) to establish the Capitol Complex as a showcase
for the existence and benefits of biobased products; and
(B) to provide access to further information on
biobased products to occupants and visitors.

(d) Procedure.--Requirements NOTE: 7 USC 8102 note. issued under
the amendments made by subsection (b) shall be made in accordance with
directives issued by the Committee on Rules and Administration of the
Senate and the Committee on House Administration of the House of
Representatives.

SEC. 944. NOTE: 42 USC 16253. SMALL BUSINESS BIOPRODUCT MARKETING
AND CERTIFICATION GRANTS.

(a) In General.--Using amounts made available under subsection (g),
the Secretary of Agriculture (referred to in this section as the
``Secretary'') shall make available on a competitive basis grants to
eligible entities described in subsection (b) for the biobased product
marketing and certification purposes described in subsection (c).
(b) Eligible Entities.--
(1) In general.--An entity eligible for a grant under this
section is any manufacturer of biobased products that--
(A) proposes to use the grant for the biobased
product marketing and certification purposes described
in subsection (c); and
(B) has not previously received a grant under this
section.
(2) Preference.--In making grants under this section, the
Secretary shall provide a preference to an eligible entity that
has fewer than 50 employees.

[[Page 882]]
119 STAT. 882

(c) Biobased Product Marketing and Certification Grant Purposes.--A
grant made under this section shall be used--
(1) to provide working capital for marketing of biobased
products; and
(2) to provide for the certification of biobased products
to--
(A) qualify for the label described in section
9002(h)(1) of the Farm Security and Rural Investment Act
of 2002 (7 U.S.C. 8102(h)(1)); or
(B) meet other biobased standards determined
appropriate by the Secretary.

(d) Matching Funds.--
(1) In general.--Grant recipients shall provide matching
non-Federal funds equal to the amount of the grant received.
(2) Expenditure.--Matching funds shall be expended in
advance of grant funding, so that for every dollar of grant that
is advanced, an equal amount of matching funds shall have been
funded prior to submitting the request for reimbursement.

(e) Amount.--A grant made under this section shall not exceed
$100,000.
(f) Administration.--The Secretary shall establish such
administrative requirements for grants under this section, including
requirements for applications for the grants, as the Secretary considers
appropriate.
(g) Authorizations of Appropriations.--There are authorized to be
appropriated to make grants under this section--
(1) $1,000,000 for fiscal year 2006; and
(2) such sums as are necessary for each of fiscal years 2007
through 2015.

SEC. 945. NOTE: 42 USC 16254. REGIONAL BIOECONOMY DEVELOPMENT
GRANTS.

(a) In General.--Using amounts made available under subsection (g),
the Secretary of Agriculture (referred to in this section as the
``Secretary'') shall make available on a competitive basis grants to
eligible entities described in subsection (b) for the purposes described
in subsection (c).
(b) Eligible Entities.--An entity eligible for a grant under this
section is any regional bioeconomy development association, agricultural
or energy trade association, or Land Grant institution that--
(1) proposes to use the grant for the purposes described in
subsection (c); and
(2) has not previously received a grant under this section.

(c) Regional Bioeconomy Development Association Grant Purposes.--A
grant made under this section shall be used to support and promote the
growth and development of the bioeconomy within the region served by the
eligible entity, through coordination, education, outreach, and other
endeavors by the eligible entity.
(d) Matching Funds.--
(1) In general.--Grant recipients shall provide matching
non-Federal funds equal to the amount of the grant received.
(2) Expenditure.--Matching funds shall be expended in
advance of grant funding, so that for every dollar of grant that
is advanced, an equal amount of matching funds shall have been
funded prior to submitting the request for reimbursement.

[[Page 883]]
119 STAT. 883

(e) Administration.--The NOTE: Requirements. Secretary shall
establish such administrative requirements for grants under this
section, including requirements for applications for the grants, as the
Secretary considers appropriate.

(f) Amount.--A grant made under this section shall not exceed
$500,000.
(g) Authorizations of Appropriations.--There are authorized to be
appropriated to make grants under this section--
(1) $1,000,000 for fiscal year 2006; and
(2) such sums as are necessary for each of fiscal years 2007
through 2015.

SEC. 946. NOTE: 42 USC 16255. PREPROCESSING AND HARVESTING
DEMONSTRATION GRANTS.

(a) In General.--The Secretary of Agriculture (referred to in this
section as the ``Secretary'') shall make grants available on a
competitive basis to enterprises owned by agricultural producers, for
the purposes of demonstrating cost-effective, cellulosic biomass
innovations in--
(1) preprocessing of feedstocks, including cleaning,
separating and sorting, mixing or blending, and chemical or
biochemical treatments, to add value and lower the cost of
feedstock processing at a biorefinery; or
(2) 1-pass or other efficient, multiple crop harvesting
techniques.

(b) Limitations on Grants.--
(1) Number of grants.--Not more than 5 demonstration
projects per fiscal year shall be funded under this section.
(2) Non-federal cost share.--The non-Federal cost share of a
project under this section shall be not less than 20 percent, as
determined by the Secretary.

(c) Condition of Grant.--To be eligible for a grant for a project
under this section, a recipient of a grant or a participating entity
shall agree to use the material harvested under the project--
(1) to produce ethanol; or
(2) for another energy purpose, such as the generation of
heat or electricity.

(d) Authorization for Appropriations.--There is authorized to be
appropriated to carry out this section $5,000,000 for each of fiscal
years 2006 through 2010.

SEC. 947. NOTE: 42 USC 16256. EDUCATION AND OUTREACH.

(a) In General.--The Secretary of Agriculture shall establish,
within the Department of Agriculture or through an independent
contracting entity, a program of education and outreach on biobased
fuels and biobased products consisting of--
(1) training and technical assistance programs for feedstock
producers to promote producer ownership, investment, and
participation in the operation of processing facilities; and
(2) public education and outreach to familiarize consumers
with the biobased fuels and biobased products.

(b) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $1,000,000 for each of fiscal
years 2006 through 2010.

SEC. 948. REPORTS.

(a) Biobased Product Potential.--Not later than 1 year after the
date of enactment of this Act, the Secretary of Agriculture

[[Page 884]]
119 STAT. 884

(referred to in this section as the ``Secretary'') shall submit to the
Committee on Agriculture of the House of Representatives and the
Committee on Agriculture, Nutrition, and Forestry of the Senate a report
that--
(1) describes the economic potential for the United States
of the widespread production and use of commercial and
industrial biobased products through calendar year 2025; and
(2) as the maximum extent practicable, identifies the
economic potential by product area.

(b) Analysis of Economic Indicators.--Not NOTE: Deadline. later
than 2 years after the date of enactment of this Act, the Secretary
shall submit to Congress an analysis of economic indicators of the
biobased economy.

Subtitle E--Nuclear Energy

SEC. 951. NOTE: 42 USC 16271. NUCLEAR ENERGY.

(a) In General.--The Secretary shall conduct programs of civilian
nuclear energy research, development, demonstration, and commercial
application, including activities described in this subtitle. Programs
under this subtitle shall take into consideration the following
objectives:
(1) Enhancing nuclear power's viability as part of the
United States energy portfolio.
(2) Providing the technical means to reduce the likelihood
of nuclear proliferation.
(3) Maintaining a cadre of nuclear scientists and engineers.
(4) Maintaining National Laboratory and university nuclear
programs, including their infrastructure.
(5) Supporting both individual researchers and
multidisciplinary teams of researchers to pioneer new approaches
in nuclear energy, science, and technology.
(6) Developing, planning, constructing, acquiring, and
operating special equipment and facilities for the use of
researchers.
(7) Supporting technology transfer and other appropriate
activities to assist the nuclear energy industry, and other
users of nuclear science and engineering, including activities
addressing reliability, availability, productivity, component
aging, safety, and security of nuclear power plants.
(8) Reducing the environmental impact of nuclear energy-
related activities.

(b) Authorization of Appropriations for Core Programs.--There are
authorized to be appropriated to the Secretary to carry out nuclear
energy research, development, demonstration, and commercial application
activities, including activities authorized under this subtitle, other
than those described in subsection (c)--
(1) $330,000,000 for fiscal year 2007;
(2) $355,000,000 for fiscal year 2008; and
(3) $495,000,000 for fiscal year 2009.

(c) Nuclear Infrastructure and Facilities.--There are authorized to
be appropriated to the Secretary to carry out activities under section
955--
(1) $135,000,000 for fiscal year 2007;
(2) $140,000,000 for fiscal year 2008; and
(3) $145,000,000 for fiscal year 2009.

[[Page 885]]
119 STAT. 885

(d) Allocations.--From amounts authorized under subsection (a), the
following sums are authorized:
(1) For activities under section 953--
(A) $150,000,000 for fiscal year 2007;
(B) $155,000,000 for fiscal year 2008; and
(C) $275,000,000 for fiscal year 2009.
(2) For activities under section 954--
(A) $43,600,000 for fiscal year 2007;
(B) $50,100,000 for fiscal year 2008; and
(C) $56,000,000 for fiscal year 2009.
(3) For activities under section 957, $6,000,000 for each of
fiscal years 2007 through 2009.

(e) Limitation.--None of the funds authorized under this section may
be used to decommission the Fast Flux Test Facility.

SEC. 952. NOTE: 42 USC 16272. 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 Systems Support Program.--The Secretary shall
carry out a Nuclear Energy Systems Support Program to support research
and development activities addressing reliability, availability,
productivity, component aging, safety, and security of existing nuclear
power plants.
(c) Nuclear Power 2010 Program.--
(1) In general.--The Secretary shall carry out a Nuclear
Power 2010 Program, consistent with recommendations of the
Nuclear Energy Research Advisory Committee of the Department in
the report entitled ``A Roadmap to Deploy New Nuclear Power
Plants in the United States by 2010'' and dated October 2001.
(2) Administration.--The Program shall include--
(A) use of the expertise and capabilities of
industry, institutions of higher education, and National
Laboratories in evaluation of advanced nuclear fuel
cycles and fuels testing;
(B) consideration of a variety of reactor designs
suitable for both developed and developing nations;
(C) participation of international collaborators in
research, development, and design efforts, as
appropriate; and
(D) encouragement for participation by institutions
of higher education and industry.

(d) Generation IV Nuclear Energy Systems Initiative.--
(1) In general.--The Secretary shall carry out a Generation
IV Nuclear Energy Systems Initiative to develop an overall
technology plan for and to support research and development
necessary to make an informed technical decision about the most
promising candidates for eventual commercial application.
(2) Administration.--In conducting the Initiative, the
Secretary shall examine advanced proliferation-resistant and
passively safe reactor designs, including designs that--
(A) are economically competitive with other electric
power generation plants;
(B) have higher efficiency, lower cost, and improved
safety compared to reactors in operation on the date of
enactment of this Act;

[[Page 886]]
119 STAT. 886

(C) use fuels that are proliferation resistant and
have substantially reduced production of high-level
waste per unit of output; and
(D) use improved instrumentation.

(e) Reactor Production of Hydrogen.--The Secretary shall carry out
research to examine designs for high-temperature reactors capable of
producing large-scale quantities of hydrogen.

SEC. 953. NOTE: 42 USC 16273. ADVANCED FUEL CYCLE INITIATIVE.

(a) In General.--The Secretary, acting through the Director of the
Office of Nuclear Energy, Science and Technology, shall conduct an
advanced fuel recycling technology research, development, and
demonstration program (referred to in this section as the ``program'')
to evaluate proliferation-resistant fuel recycling and transmutation
technologies that minimize environmental and 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.
(b) Annual Review.--The program shall be subject to annual review by
the Nuclear Energy Research Advisory Committee of the Department or
other independent entity, as appropriate.
(c) International Cooperation.--In carrying out the program, the
Secretary is encouraged to seek opportunities to enhance the progress of
the program through international cooperation.
(d) Reports.--The Secretary shall submit, as part of the annual
budget submission of the Department, a report on the activities of the
program.

SEC. 954. NOTE: 42 USC 16274. UNIVERSITY NUCLEAR SCIENCE AND
ENGINEERING SUPPORT.

(a) In General.--The Secretary shall conduct a program to invest in
human resources and infrastructure in the nuclear sciences and related
fields, including health physics, nuclear engineering, and
radiochemistry, consistent with missions of the Department related to
civilian nuclear research, development, demonstration, and commercial
application.
(b) Requirements.--In carrying out the program under this section,
the Secretary shall--
(1) conduct a graduate and undergraduate fellowship program
to attract new and talented students, which may include
fellowships for students to spend time at National Laboratories
in the areas of nuclear science, engineering, and health physics
with a member of the National Laboratory staff acting as a
mentor;
(2) conduct a junior faculty research initiation grant
program to assist universities in recruiting and retaining new
faculty in the nuclear sciences and engineering by awarding
grants to junior faculty for research on issues related to
nuclear energy engineering and science;
(3) support fundamental nuclear sciences, engineering, and
health physics research through a nuclear engineering education
and research program;
(4) encourage collaborative nuclear research among industry,
National Laboratories, and universities; and
(5) support communication and outreach related to nuclear
science, engineering, and health physics.

[[Page 887]]
119 STAT. 887

(c) University-National Laboratory Interactions.--The Secretary
shall conduct--
(1) a fellowship program for professors at universities to
spend sabbaticals 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.

(d) Strengthening University Research and Training Reactors and
Associated Infrastructure.--In carrying out the program under this
section, the Secretary may support--
(1) converting research reactors from high-enrichment fuels
to low-enrichment fuels and upgrading operational
instrumentation;
(2) consortia of universities to broaden access to
university research reactors;
(3) student training programs, in collaboration with the
United States nuclear industry, in relicensing and upgrading
reactors, including through the provision of technical
assistance; and
(4) reactor improvements as part of a taking into
consideration effort that emphasizes research, training, and
education, including through the Innovations in Nuclear
Infrastructure and Education Program or any similar program.

(e) Operations and Maintenance.--Funding for a project provided
under this section may be used for a portion of the operating and
maintenance costs of a research reactor at a university used in the
project.
(f) Definition.--In this section, the term ``junior faculty'' means
a faculty member who was awarded a doctorate less than 10 years before
receipt of an award from the grant program described in subsection
(b)(2).

SEC. 955. NOTE: 42 USC 16275. DEPARTMENT OF ENERGY CIVILIAN NUCLEAR
INFRASTRUCTURE AND FACILITIES.

(a) In General.--The Secretary shall operate and maintain
infrastructure and facilities to support the nuclear energy research,
development, demonstration, and commercial application programs,
including radiological facilities management, isotope production, and
facilities management.
(b) Duties.--In carrying out this section, the Secretary shall--
(1) develop an inventory of nuclear science and engineering
facilities, equipment, expertise, and other assets at all of the
National Laboratories;
(2) develop a prioritized list of nuclear science and
engineering plant and equipment improvements needed at each of
the National Laboratories;
(3) consider the available facilities and expertise at all
National Laboratories and emphasize investments which complement
rather than duplicate capabilities; and
(4) develop a timeline and a proposed budget for the
completion of deferred maintenance on plant and equipment, with
the goal of ensuring that Department programs under this
subtitle will be generally recognized to be among the best in
the world.

(c) Plan.--The Secretary shall develop a comprehensive plan for the
facilities at the Idaho National Laboratory, especially taking

[[Page 888]]
119 STAT. 888

into account the resources available at other National Laboratories. In
developing the plan, the Secretary shall--
(1) evaluate the facilities planning processes utilized by
other physical science and engineering research and development
institutions, both in the United States and abroad, that are
generally recognized as being among the best in the world, and
consider how those processes might be adapted toward developing
such facilities plan;
(2) avoid duplicating, moving, or transferring nuclear
science and engineering facilities, equipment, expertise, and
other assets that currently exist at other National
Laboratories;
(3) consider the establishment of a national transuranic
analytic chemistry laboratory as a user facility at the Idaho
National Laboratory;
(4) include a plan to develop, if feasible, the Advanced
Test Reactor and Test Reactor Area into a user facility that is
more readily accessible to academic and industrial researchers;
(5) consider the establishment of a fast neutron source as a
user facility;
(6) consider the establishment of new hot cells and the
configuration of hot cells most likely to advance research,
development, demonstration, and commercial application in
nuclear science and engineering, especially in the context of
the condition and availability of these facilities elsewhere in
the National Laboratories; and
(7) include a timeline and a proposed budget for the
completion of deferred maintenance on plant and equipment.

(d) Transmittal to Congress.--Not NOTE: Deadline. later than 1
year after the date of enactment of this Act, the Secretary shall
transmit the plan under subsection (c) to Congress.

SEC. 956. NOTE: 42 USC 16276. SECURITY OF NUCLEAR FACILITIES.

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

SEC. 957. NOTE: 42 USC 16277. ALTERNATIVES TO INDUSTRIAL RADIOACTIVE
SOURCES.

(a) Survey.--
(1) In general.--Not NOTE: Deadline. later than August
1, 2006, the Secretary shall submit to Congress the results of a
survey of industrial applications of large radioactive sources.
(2) Administration.--The survey shall--
(A) consider well-logging sources as one class of
industrial sources;
(B) include information on current domestic and
international Department, Department of Defense, State
Department, and commercial programs to manage and
dispose of radioactive sources; and
(C) analyze available disposal options for currently
deployed or future sources and, if deficiencies are
noted for either deployed or future sources, recommend
legislative options that Congress may consider to remedy
identified deficiencies.

[[Page 889]]
119 STAT. 889

(b) Plan.--
(1) In general.--In conjunction with the survey conducted
under subsection (a), the Secretary shall establish a research
and development program to develop alternatives to sources
described in subsection (a) that reduce safety, environmental,
or proliferation risks to either workers using the sources or
the public.
(2) Accelerators.--Miniaturized particle accelerators for
well-logging or other industrial applications and portable
accelerators for production of short-lived radioactive materials
at an industrial site shall be considered as part of the
research and development efforts.
(3) Report.--Not later than August 1, 2006, the Secretary
shall submit to Congress a report describing the details of the
program plan.

Subtitle F--Fossil Energy

SEC. 961. NOTE: 42 USC 16291. FOSSIL ENERGY.

(a) In General.--The Secretary shall carry out research,
development, demonstration, and commercial application programs in
fossil energy, including activities under this subtitle, with the goal
of improving the efficiency, effectiveness, and environmental
performance of fossil energy production, upgrading, conversion, and
consumption. Such programs take into consideration the following
objectives:
(1) Increasing the energy conversion efficiency of all forms
of fossil energy through improved technologies.
(2) Decreasing the cost of all fossil energy production,
generation, and delivery.
(3) Promoting diversity of energy supply.
(4) Decreasing the dependence of the United States on
foreign energy supplies.
(5) Improving United States energy security.
(6) Decreasing the environmental impact of energy-related
activities.
(7) Increasing the export of fossil energy-related
equipment, technology, and services from the United States.

(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out fossil energy research,
development, demonstration, and commercial application activities,
including activities authorized under this subtitle--
(1) $611,000,000 for fiscal year 2007;
(2) $626,000,000 for fiscal year 2008; and
(3) $641,000,000 for fiscal year 2009.

(c) Allocations.--From amounts authorized under subsection (a), the
following sums are authorized:
(1) For activities under section 962--
(A) $367,000,000 for fiscal year 2007;
(B) $376,000,000 for fiscal year 2008; and
(C) $394,000,000 for fiscal year 2009.
(2) For activities under section 964--
(A) $20,000,000 for fiscal year 2007;
(B) $25,000,000 for fiscal year 2008; and
(C) $30,000,000 for fiscal year 2009.
(3) For activities under section 966--

[[Page 890]]
119 STAT. 890

(A) $1,500,000 for fiscal year 2007; and
(B) $450,000 for each of fiscal years 2008 and 2009.
(4) For the Office of Arctic Energy under section 3197 of
the Floyd D. Spence National Defense Authorization Act for
Fiscal Year 2001 (42 U.S.C. 7144d) $25,000,000 for each of
fiscal years 2007 through 2009.

(d) Extended Authorization.--There are authorized to be appropriated
to the Secretary for the Office of Arctic Energy established under
section 3197 of the Floyd D. Spence National Defense Authorization Act
for Fiscal Year 2001 (42 U.S.C. 7144d) $25,000,000 for each of fiscal
years 2010 through 2012.
(e) Limitations.--
(1) Uses.--None of the funds authorized under this section
may be used for Fossil Energy Environmental Restoration or
Import/Export Authorization.
(2) Institutions of higher education.--Of the funds
authorized under subsection (c)(2), not less than 20 percent of
the funds appropriated for each fiscal year shall be dedicated
to research and development carried out at institutions of
higher education.

SEC. 962. NOTE: 42 USC 16292. COAL AND RELATED TECHNOLOGIES PROGRAM.

(a) In General.--In addition to the programs authorized under title
IV, the Secretary shall conduct a program of technology research,
development, demonstration, and commercial application for coal and
power systems, including programs to facilitate production and
generation of coal-based power through--
(1) innovations for existing plants (including mercury
removal);
(2) gasification systems;
(3) advanced combustion systems;
(4) turbines for synthesis gas derived from coal;
(5) carbon capture and sequestration research and
development;
(6) coal-derived chemicals and transportation fuels;
(7) liquid fuels derived from low rank coal water slurry;
(8) solid fuels and feedstocks;
(9) advanced coal-related research;
(10) advanced separation technologies; and
(11) fuel cells for the operation of synthesis gas derived
from coal.

(b) Cost and Performance Goals.--
(1) In general.--In carrying out programs authorized by this
section, during each of calendar years 2008, 2010, 2012, and
2016, and during each fiscal year beginning after September 30,
2021, the Secretary shall identify cost and performance goals
for coal-based technologies that would permit the continued
cost-competitive use of coal for the production of electricity,
chemical feedstocks, and transportation fuels.
(2) Administration.--In establishing the cost and
performance goals, the Secretary shall--
(A) consider activities and studies undertaken as of
the date of enactment of this Act by industry in
cooperation with the Department in support of the
identification of the goals;
(B) consult with interested entities, including--
(i) coal producers;

[[Page 891]]
119 STAT. 891

(ii) industries using coal;
(iii) organizations that promote coal and
advanced coal technologies;
(iv) environmental organizations;
(v) organizations representing workers; and
(vi) organizations representing consumers;
(C) NOTE: Deadline. Federal
Register, publication. not later than 120 days after
the date of enactment of this Act, publish in the
Federal Register proposed draft cost and performance
goals for public comments; and
(D) NOTE: Deadline. Reports. not later than 180
days after the date of enactment of this Act and every 4
years thereafter, submit to Congress a report describing
the final cost and performance goals for the
technologies that includes--
(i) a list of technical milestones; and
(ii) an explanation of how programs authorized
in this section will not duplicate the activities
authorized under the Clean Coal Power Initiative
authorized under title IV.

(c) Powder River Basin and Fort Union Lignite Coal Mercury
Removal.--
(1) In general.--In addition to the programs authorized by
subsection (a), the Secretary shall establish a program to test
and develop technologies to control and remove mercury emissions
from subbituminous coal mined in the Powder River Basin, and
Fort Union lignite coals, that are used for the generation of
electricity.
(2) Efficacy of mercury removal technology.--In carrying out
the program under paragraph (1), the Secretary shall examine the
efficacy of mercury removal technologies on coals described in
that paragraph that are blended with other types of coal.

(d) Fuel Cells.--
(1) In general.--The Secretary shall conduct a program of
research, development, demonstration, and commercial application
on fuel cells for low-cost, high-efficiency, fuel-flexible,
modular power systems.
(2) Demonstrations.--The demonstrations referred to in
paragraph (1) shall include solid oxide fuel cell technology for
commercial, residential, and transportation applications, and
distributed generation systems, using improved manufacturing
production and processes.

SEC. 963. NOTE: 42 USC 16293. CARBON CAPTURE RESEARCH AND
DEVELOPMENT PROGRAM.

(a) In General.--The Secretary shall carry out a 10-year carbon
capture research and development program to develop carbon dioxide
capture technologies on combustion-based systems for use--
(1) in new coal utilization facilities; and
(2) on the fleet of coal-based units in existence on the
date of enactment of this Act.

(b) Objectives.--The objectives of the program under subsection (a)
shall be--
(1) to develop carbon dioxide capture technologies,
including adsorption and absorption techniques and chemical
processes, to remove the carbon dioxide from gas streams
containing carbon dioxide potentially amenable to sequestration;

[[Page 892]]
119 STAT. 892

(2) to develop technologies that would directly produce
concentrated streams of carbon dioxide potentially amenable to
sequestration;
(3) to increase the efficiency of the overall system to
reduce the quantity of carbon dioxide emissions released from
the system per megawatt generated; and
(4) in accordance with the carbon dioxide capture program,
to promote a robust carbon sequestration program and continue
the work of the Department, in conjunction with the private
sector, through regional carbon sequestration partnerships.

(c) Authorization of Appropriations.--From amounts authorized under
section 961(b), the following sums are authorized for activities
described in subsection (a)(2):
(1) $25,000,000 for fiscal year 2006;
(2) $30,000,000 for fiscal year 2007; and
(3) $35,000,000 for fiscal year 2008.

SEC. 964. NOTE: 42 USC 16294. RESEARCH AND DEVELOPMENT FOR COAL
MINING TECHNOLOGIES.

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

SEC. 965. NOTE: 42 USC 16295. OIL AND GAS RESEARCH PROGRAMS.

(a) In General.--The Secretary shall conduct a program of research,
development, demonstration, and commercial application of oil and gas,
including--
(1) exploration and production;
(2) gas hydrates;
(3) reservoir life and extension;
(4) transportation and distribution infrastructure;
(5) ultraclean fuels;
(6) heavy oil, oil shale, and tar sands; and
(7) related environmental research.

[[Page 893]]
119 STAT. 893

(b) Objectives.--The objectives of this program shall include
advancing the science and technology available to domestic petroleum
producers, particularly independent operators, to minimize the economic
dislocation caused by the decline of domestic supplies of oil and
natural gas resources.
(c) Natural Gas and Oil Deposits Report.--Not later than 2 years
after the date of enactment of this Act and every 2 years thereafter,
the Secretary of the Interior, in consultation with other appropriate
Federal agencies, shall submit to Congress a report on the latest
estimates of natural gas and oil reserves, reserves growth, and
undiscovered resources in Federal and State waters off the coast of
Louisiana, Texas, Alabama, and Mississippi.
(d) Integrated Clean Power and Energy Research.--
(1) Establishment of center.--The Secretary shall establish
a national center or consortium of excellence in clean energy
and power generation, using the resources of the Clean Power and
Energy Research Consortium in existence on the date of enactment
of this Act, to address the critical dependence of the United
States on energy and the need to reduce emissions.
(2) Focus areas.--The center or consortium shall conduct a
program of research, development, demonstration, and commercial
application on integrating the following 6 focus areas:
(A) Efficiency and reliability of gas turbines for
power generation.
(B) Reduction in emissions from power generation.
(C) Promotion of energy conservation issues.
(D) Effectively using alternative fuels and
renewable energy.
(E) Development of advanced materials technology for
oil and gas exploration and use in harsh environments.
(F) Education on energy and power generation issues.

SEC. 966. NOTE: 42 USC 16296. LOW-VOLUME OIL AND GAS RESERVOIR
RESEARCH PROGRAM.

(a) Definition of GIS.--In this section, the term ``GIS'' means
geographic information systems technology that facilitates the
organization and management of data with a geographic component.
(b) Program.--The Secretary shall establish a program of research,
development, demonstration, and commercial application to maximize the
productive capacity of marginal wells and reservoirs.
(c) Data Collection.--Under the program, the Secretary shall collect
data on--
(1) the status and location of marginal wells and oil and
gas reservoirs;
(2) the production capacity of marginal wells and oil and
gas reservoirs;
(3) the location of low-pressure gathering facilities and
pipelines; and
(4) the quantity of natural gas vented or flared in
association with crude oil production.

(d) Analysis.--Under the program, the Secretary shall--
(1) estimate the remaining producible reserves based on
variable pipeline pressures; and

[[Page 894]]
119 STAT. 894

(2) recommend measures that will enable the continued
production of those resources.

(e) Study.--
(1) In general.--The Secretary may award a grant to an
organization of States that contain significant numbers of
marginal oil and natural gas wells to conduct an annual study of
low-volume natural gas reservoirs.
(2) Organization with no gis capabilities.--If an
organization receiving a grant under paragraph (1) does not have
GIS capabilities, the organization shall contract with an
institution of higher education with GIS capabilities.
(3) State geologists.--The organization receiving a grant
under paragraph (1) shall collaborate with the State geologist
of each State being studied.

(f) Public Information.--The Secretary may use the data collected
and analyzed under this section to produce maps and literature to
disseminate to States to promote conservation of natural gas reserves.

SEC. 967. COMPLEX NOTE: Establishment. 42 USC 16297. WELL TECHNOLOGY
TESTING FACILITY.

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

SEC. 968. METHANE NOTE: 30 USC 1902 note. HYDRATE RESEARCH.

(a) In General.--The Methane Hydrate Research and Development Act of
2000 (30 U.S.C. 1902 note; Public Law 106-193) is amended to read as
follows:

``SECTION 1. SHORT TITLE.

``This Act may be cited as the `Methane Hydrate Research and
Development Act of 2000'.

``SEC. 2. FINDINGS.

``Congress finds that--
``(1) in order to promote energy independence and meet the
increasing demand for energy, the United States will require a
diversified portfolio of substantially increased quantities of
electricity, natural gas, and transportation fuels;
``(2) according to the report submitted to Congress by the
National Research Council entitled `Charting the Future of
Methane Hydrate Research in the United States', the total United
States resources of gas hydrates have been estimated to be on
the order of 200,000 trillion cubic feet;
``(3) according to the report of the National Commission on
Energy Policy entitled `Ending the Energy Stalemate--A
Bipartisan Strategy to Meet America's Energy Challenge', and
dated December 2004, the United States may be endowed with over
one-fourth of the methane hydrate deposits in the world;
``(4) according to the Energy Information Administration, a
shortfall in natural gas supply from conventional and
unconventional sources is expected to occur in or about 2020;
and
``(5) the National Academy of Sciences states that methane
hydrate may have the potential to alleviate the projected
shortfall in the natural gas supply.

[[Page 895]]
119 STAT. 895

``SEC. 3. DEFINITIONS.

``In this Act:
``(1) Contract.--The term `contract' means a procurement
contract within the meaning of section 6303 of title 31, United
States Code.
``(2) Cooperative agreement.--The term `cooperative
agreement' means a cooperative agreement within the meaning of
section 6305 of title 31, United States Code.
``(3) Director.--The term `Director' means the Director of
the National Science Foundation.
``(4) Grant.--The term `grant' means a grant awarded under a
grant agreement (within the meaning of section 6304 of title 31,
United States Code).
``(5) Industrial enterprise.--The term `industrial
enterprise' means a private, nongovernmental enterprise that has
an expertise or capability that relates to methane hydrate
research and development.
``(6) Institution of higher education.--The term
`institution of higher education' means an institution of higher
education (as defined in section 102 of the Higher Education Act
of 1965 (20 U.S.C. 1002)).
``(7) Secretary.--The term `Secretary' means the Secretary
of Energy, acting through the Assistant Secretary for Fossil
Energy.
``(8) Secretary of commerce.--The term `Secretary of
Commerce' means the Secretary of Commerce, acting through the
Administrator of the National Oceanic and Atmospheric
Administration.
``(9) Secretary of defense.--The term `Secretary of Defense'
means the Secretary of Defense, acting through the Secretary of
the Navy.
``(10) Secretary of the interior.--The term `Secretary of
the Interior' means the Secretary of the Interior, acting
through the Director of the United States Geological Survey, the
Director of the Bureau of Land Management, and the Director of
the Minerals Management Service.

``SEC. 4. METHANE HYDRATE RESEARCH AND DEVELOPMENT PROGRAM.

``(a) In General.--
``(1) Commencement NOTE: Deadline.  of program.--Not
later than 90 days after the date of enactment of the Energy
Research, Development, Demonstration, and Commercial Application
Act of 2005, the Secretary, in consultation with the Secretary
of Commerce, the Secretary of Defense, the Secretary of the
Interior, and the Director, shall commence a program of methane
hydrate research and development in accordance with this
section.
``(2) Designations.--The Secretary, the Secretary of
Commerce, the Secretary of Defense, the Secretary of the
Interior, and the Director shall designate individuals to carry
out this section.
``(3) Coordination.--The individual designated by the
Secretary shall coordinate all activities within the Department
of Energy relating to methane hydrate research and development.
``(4) Meetings.--The NOTE: Deadlines. individuals
designated under paragraph (2) shall meet not later than 180
days after the date

[[Page 896]]
119 STAT. 896

of enactment of the Energy Research, Development, Demonstration,
and Commercial Application Act of 2005 and not less frequently
than every 180 days thereafter to--
``(A) review the progress of the program under
paragraph (1); and
``(B) coordinate interagency research and
partnership efforts in carrying out the program.

``(b) Grants, Contracts, Cooperative Agreements, Interagency Funds
Transfer Agreements, and Field Work Proposals.--
``(1) Assistance and coordination.--In carrying out the
program of methane hydrate research and development authorized
by this section, the Secretary may award grants to, or enter
into contracts or cooperative agreements with, institutions of
higher education, oceanographic institutions, and industrial
enterprises to--
``(A) conduct basic and applied research to
identify, explore, assess, and develop methane hydrate
as a commercially viable source of energy;
``(B) identify methane hydrate resources through
remote sensing;
``(C) acquire and reprocess seismic data suitable
for characterizing methane hydrate accumulations;
``(D) assist in developing technologies required for
efficient and environmentally sound development of
methane hydrate resources;
``(E) promote education and training in methane
hydrate resource research and resource development
through fellowships or other means for graduate
education and training;
``(F) conduct basic and applied research to assess
and mitigate the environmental impact of hydrate
degassing (including both natural degassing and
degassing associated with commercial development);
``(G) develop technologies to reduce the risks of
drilling through methane hydrates; and
``(H) conduct exploratory drilling, well testing,
and production testing operations on permafrost and non-
permafrost gas hydrates in support of the activities
authorized by this paragraph, including drilling of one
or more full-scale production test wells.
``(2) Competitive peer review.--Funds made available under
paragraph (1) shall be made available based on a competitive
process using external scientific peer review of proposed
research.

``(c) Methane Hydrates Advisory Panel.--
``(1) In general.--The NOTE: Establishment. Secretary
shall establish an advisory panel (including the hiring of
appropriate staff) consisting of representatives of industrial
enterprises, institutions of higher education, oceanographic
institutions, State agencies, and environmental organizations
with knowledge and expertise in the natural gas hydrates field,
to--
``(A) assist in developing recommendations and broad
programmatic priorities for the methane hydrate research
and development program carried out under subsection
(a)(1);

[[Page 897]]
119 STAT. 897

``(B) provide scientific oversight for the methane
hydrates program, including assessing progress toward
program goals, evaluating program balance, and providing
recommendations to enhance the quality of the program
over time; and
``(C) not NOTE: Deadline. later than 2 years
after the date of enactment of the Energy Research,
Development, Demonstration, and Commercial Application
Act of 2005, and at such later dates as the panel
considers advisable, submit to Congress--
``(i) an assessment of the methane hydrate
research program; and
``(ii) an assessment of the 5-year research
plan of the Department of Energy.
``(2) Conflicts of interest.--In appointing each member of
the advisory panel established under paragraph (1), the
Secretary shall ensure, to the maximum extent practicable, that
the appointment of the member does not pose a conflict of
interest with respect to the duties of the member under this
Act.
``(3) Meetings.--The advisory panel shall--
``(A) NOTE: Deadline. hold the initial meeting
of the advisory panel not later than 180 days after the
date of establishment of the advisory panel; and
``(B) meet biennially thereafter.
``(4) Coordination.--The advisory panel shall coordinate
activities of the advisory panel with program managers of the
Department of Energy at appropriate National Laboratories.

``(d) Construction Costs.--None of the funds made available to carry
out this section may be used for the construction of a new building or
the acquisition, expansion, remodeling, or alteration of an existing
building (including site grading and improvement and architect fees).
``(e) Responsibilities of the Secretary.--In carrying out subsection
(b)(1), the Secretary shall--
``(1) facilitate and develop partnerships among government,
industrial enterprises, and institutions of higher education to
research, identify, assess, and explore methane hydrate
resources;
``(2) undertake programs to develop basic information
necessary for promoting long-term interest in methane hydrate
resources as an energy source;
``(3) ensure that the data and information developed through
the program are accessible and widely disseminated as needed and
appropriate;
``(4) promote cooperation among agencies that are developing
technologies that may hold promise for methane hydrate resource
development;
``(5) NOTE: Reports. report annually to Congress on the
results of actions taken to carry out this Act; and
``(6) ensure, to the maximum extent practicable, greater
participation by the Department of Energy in international
cooperative efforts.

[[Page 898]]
119 STAT. 898

``SEC. 5. NATIONAL RESEARCH COUNCIL STUDY.

``(a) Agreement for Study.--The Secretary shall offer to enter into
an agreement with the National Research Council under which the National
Research Council shall--
``(1) conduct a study of the progress made under the methane
hydrate research and development program implemented under this
Act; and
``(2) make recommendations for future methane hydrate
research and development needs.

``(b) Report.--Not later than September 30, 2009, the Secretary
shall submit to Congress a report containing the findings and
recommendations of the National Research Council under this section.

``SEC. 6. REPORTS AND STUDIES FOR CONGRESS.

``The Secretary shall provide to the Committee on Science of the
House of Representatives and the Committee on Energy and Natural
Resources of the Senate copies of any report or study that the
Department of Energy prepares at the direction of any committee of
Congress relating to the methane hydrate research and development
program implemented under this Act.

``SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to the Secretary to carry
out this Act, to remain available until expended--
``(1) $15,000,000 for fiscal year 2006;
``(2) $20,000,000 for fiscal year 2007;
``(3) $30,000,000 for fiscal year 2008;
``(4) $40,000,000 for fiscal year 2009; and
``(5) $50,000,000 for fiscal year 2010.''.

(b) Reclassification.-- NOTE: 30 USC 2001 note. The Law Revision
Counsel shall reclassify the Methane Hydrate Research and Development
Act of 2000 (30 U.S.C. 1902 note; Public Law 106-193) to a new chapter
at the end of title 30, United States Code.

Subtitle G--Science

SEC. 971. NOTE: 42 USC 16311. SCIENCE.

(a) In General.--The Secretary shall conduct, through the Office of
Science, programs of research, development, demonstration, and
commercial application in high energy physics, nuclear physics,
biological and environmental research, basic energy sciences, advanced
scientific computing research, and fusion energy sciences, including
activities described in this subtitle. The programs shall include
support for facilities and infrastructure, education, outreach,
information, analysis, and coordination activities.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out research, development,
demonstration, and commercial application activities of the Office of
Science, including activities authorized under this subtitle (including
the amounts authorized under the amendment made by section 976(b) and
including basic energy sciences, advanced scientific and computing
research, biological and environmental research, fusion energy sciences,
high energy physics, nuclear physics, research analysis, and
infrastructure support)--
(1) $4,153,000,000 for fiscal year 2007;
(2) $4,586,000,000 for fiscal year 2008; and

[[Page 899]]
119 STAT. 899

(3) $5,200,000,000 for fiscal year 2009.

(c) Allocations.--From amounts authorized under subsection (b), the
following sums are authorized:
(1) For activities under the Fusion Energy Sciences program
(including activities under section 972)--
(A) $355,500,000 for fiscal year 2007;
(B) $369,500,000 for fiscal year 2008;
(C) $384,800,000 for fiscal year 2009; and
(D) in addition to the amounts authorized under
subparagraphs (A), (B), and (C), such sums as may be
necessary for ITER construction, consistent with the
limitations of section 972(c)(5).
(2) For activities under the catalysis research program
under section 973--
(A) $36,500,000 for fiscal year 2007;
(B) $38,200,000 for fiscal year 2008; and
(C) such sums as may be necessary for fiscal year
2009.
(3) For activities under the Systems Biology Program under
section 977 such sums as may be necessary for each of fiscal
years 2007 through 2009.
(4) For activities under the Energy and Water Supplies
program under section 979, $30,000,000 for each of fiscal years
2007 through 2009.
(5) For the energy research fellowships programs under
section 984, $40,000,000 for each of fiscal years 2007 through
2009.
(6) For the advanced scientific computing activities under
section 976--
(A) $270,000,000 for fiscal year 2007;
(B) $350,000,000 for fiscal year 2008; and
(C) $375,000,000 for fiscal year 2009.
(7) For the science and engineering education pilot program
under section 983--
(A) $4,000,000 for each of fiscal years 2007 and
2008; and
(B) $8,000,000 for fiscal year 2009.

(d) Integrated Bioenergy Research and Development.--In addition to
amounts otherwise authorized by this section, there are authorized to be
appropriated to the Secretary for integrated bioenergy research and
development programs, projects, and activities, $49,000,000 for each of
the fiscal years 2005 through 2009. Activities funded under this
subsection shall be coordinated with ongoing related programs of other
Federal agencies, including the Plant Genome Program of the National
Science Foundation. Of the funds authorized under this subsection, at
least $5,000,000 for each fiscal year shall be for training and
education targeted to minority and socially disadvantaged farmers and
ranchers.

SEC. 972. FUSION NOTE: 42 USC 16312. ENERGY SCIENCES PROGRAM.

(a) Declaration of Policy.--It shall be the policy of the United
States to conduct research, development, demonstration, and commercial
applications to provide for the scientific, engineering, and commercial
infrastructure necessary to ensure that the United States is competitive
with other countries in providing fusion energy for its own needs and
the needs of other countries, including by demonstrating electric power
or hydrogen

[[Page 900]]
119 STAT. 900

production for the United States energy grid using fusion energy at the
earliest date.
(b) Planning.--
(1) In NOTE: Deadline. general.--Not later than 180 days
after the date of enactment of this Act, the Secretary shall
submit to Congress a plan (with proposed cost estimates,
budgets, and lists of potential international partners) for the
implementation of the policy described in subsection (a) in a
manner that ensures that--
(A) existing fusion research facilities are more
fully used;
(B) fusion science, technology, theory, advanced
computation, modeling, and simulation are strengthened;
(C) new magnetic and inertial fusion research and
development facilities are selected based on scientific
innovation and cost effectiveness, and the potential of
the facilities to advance the goal of practical fusion
energy at the earliest date practicable;
(D) facilities that are selected are funded at a
cost-effective rate;
(E) communication of scientific results and methods
between the fusion energy science community and the
broader scientific and technology communities is
improved;
(F) inertial confinement fusion facilities are used
to the extent practicable for the purpose of inertial
fusion energy research and development;
(G) attractive alternative inertial and magnetic
fusion energy approaches are more fully explored; and
(H) to the extent practicable, the recommendations
of the Fusion Energy Sciences Advisory Committee in the
report on workforce planning, dated March 2004, are
carried out, including periodic reassessment of program
needs.
(2) Costs and schedules.--The plan shall also address the
status of and, to the extent practicable, costs and schedules
for--
(A) the design and implementation of international
or national facilities for the testing of fusion
materials; and
(B) the design and implementation of international
or national facilities for the testing and development
of key fusion technologies.

(c) United States Participation in ITER.--
(1) Definitions.--In this subsection:
(A) Construction.--
(i) In general.--The term ``construction''
means--
(I) the physical construction of the
ITER facility; and
(II) the physical construction,
purchase, or manufacture of equipment or
components that are specifically
designed for the ITER facility.
(ii) Exclusions.--The term ``construction''
does not include the design of the facility,
equipment, or components.
(B) ITER.--The term ``ITER'' means the international
burning plasma fusion research project in which the
President announced United States participation on
January 30, 2003, or any similar international project.

[[Page 901]]
119 STAT. 901

(2) Participation.--The United States may participate in the
ITER only in accordance with this subsection.
(3) Agreement.--
(A) In general.--The Secretary may negotiate an
agreement for United States participation in the ITER.
(B) Contents.--Any agreement for United States
participation in the ITER shall, at a minimum--
(i) clearly define the United States financial
contribution to construction and operating costs,
as well as any other costs associated with a
project;
(ii) ensure that the share of high-technology
components of the ITER manufactured in the United
States is at least proportionate to the United
States financial contribution to the ITER;
(iii) ensure that the United States will not
be financially responsible for cost overruns in
components manufactured in other ITER
participating countries;
(iv) guarantee the United States full access
to all data generated by the ITER;
(v) enable United States researchers to
propose and carry out an equitable share of the
experiments at the ITER;
(vi) provide the United States with a role in
all collective decisionmaking related to the ITER;
and
(vii) describe the process for discontinuing
or decommissioning the ITER and any United States
role in that process.
(4) Plan.--
(A) Development.--The Secretary, in consultation
with the Fusion Energy Sciences Advisory Committee,
shall develop a plan for the participation of United
States scientists in the ITER that shall include--
(i) the United States research agenda for the
ITER;
(ii) methods to evaluate whether the ITER is
promoting progress toward making fusion a reliable
and affordable source of power; and
(iii) a description of how work at the ITER
will relate to other elements of the United States
fusion program.
(B) Review.--The Secretary shall request a review of
the plan by the National Academy of Sciences.
(5) Limitation.-- NOTE: Reports. Deadlines. No Federal
funds shall be expended for the construction of the ITER until
the Secretary has submitted to Congress--
(A) the agreement negotiated in accordance with
paragraph (3) and 120 days have elapsed since that
submission;
(B) a report describing the management structure of
the ITER and providing a fixed dollar estimate of the
cost of United States participation in the construction
of the ITER, and 120 days have elapsed since that
submission;
(C) a report describing how United States
participation in the ITER will be funded without
reducing funding for other programs in the Office of
Science (including other fusion programs), and 60 days
have elapsed since that submission; and

[[Page 902]]
119 STAT. 902

(D) the plan required by paragraph (4) (but not the
National Academy of Sciences review of that plan), and
60 days have elapsed since that submission.
(6) Alternative to iter.--
(A) In general.--If at any time during the
negotiations on the ITER, the Secretary determines that
construction and operation of the ITER is unlikely or
infeasible, the Secretary shall submit to Congress,
along with the budget request of the President submitted
to Congress for the following fiscal year, a plan for
implementing a domestic burning plasma experiment such
as the Fusion Ignition Research Experiment, including
costs and schedules for the plan.
(B) Administration.--The Secretary shall--
(i) refine the plan in full consultation with
the Fusion Energy Sciences Advisory Committee; and
(ii) transmit the plan to the National Academy
of Sciences for review.

SEC. 973. NOTE: 42 USC 16313. CATALYSIS RESEARCH PROGRAM.

(a) Establishment.--The Secretary, acting through the Office of
Science, shall support a program of research and development in
catalysis science consistent with the statutory authorities of the
Department related to research and development.
(b) Components.--The program shall include efforts to--
(1) enable catalyst design using combinations of
experimental and mechanistic methodologies coupled with
computational modeling of catalytic reactions at the molecular
level;
(2) develop techniques for high throughput synthesis, assay,
and characterization at nanometer and subnanometer scales in-
situ under actual operating conditions;
(3) synthesize catalysts with specific site architectures;
(4) conduct research on the use of precious metals for
catalysis; and
(5) translate molecular understanding to the design of
catalytic compounds.

(c) Duties of the Office of Science.--In carrying out the program,
the Director of the Office of Science shall--
(1) support both individual investigators and
multidisciplinary teams of investigators to pioneer new
approaches in catalytic design;
(2) develop, plan, construct, acquire, share, or operate
special equipment or facilities for the use of investigators in
collaboration with national user facilities, such as nanoscience
and engineering centers;
(3) support technology transfer activities to benefit
industry and other users of catalysis science and engineering;
and
(4) coordinate research and development activities with
industry and other Federal agencies.

(d) Assessment.--Not NOTE: Deadline. later than 3 years after
the date of enactment of this Act, the Secretary shall enter into an
arrangement with the National Academy of Sciences to--
(1) review the catalysis program to measure--
(A) gains made in the fundamental science of
catalysis; and
(B) progress towards developing new fuels for energy
production and material fabrication processes; and

[[Page 903]]
119 STAT. 903

(2) submit NOTE: Reports. to Congress a report
describing the results of the review.

SEC. 974. NOTE: 42 USC 16314. HYDROGEN.

(a) In General.--The Secretary shall conduct a program of
fundamental research and development in support of programs authorized
under title VIII.
(b) Methods.--The program shall include support for methods of
generating hydrogen without the use of natural gas.

SEC. 975. NOTE: 42 USC 16315. SOLID STATE LIGHTING.

The Secretary shall conduct a program of fundamental research on
solid state lighting in support of the Next Generation Lighting
Initiative carried out under section 912.

SEC. 976. NOTE: 42 USC 16316. ADVANCED SCIENTIFIC COMPUTING FOR
ENERGY MISSIONS.

(a) Program.--
(1) In general.--The Secretary shall conduct an advanced
scientific computing research and development program that
includes activities related to applied mathematics and
activities authorized by the Department of Energy High-End
Computing Revitalization Act of 2004 (15 U.S.C. 5541 et seq.).
(2) Goal.--The Secretary shall carry out the program with
the goal of supporting departmental missions, and providing the
high-performance computational, networking, advanced
visualization technologies, and workforce resources, that are
required for world leadership in science.

(b) High-Performance Computing.--Section 203 of the High-Performance
Computing Act of 1991 (15 U.S.C. 5523) is amended to read as follows:

``SEC. 203. DEPARTMENT OF ENERGY ACTIVITIES.

``(a) General Responsibilities.--As part of the Program described in
title I, the Secretary of Energy shall--
``(1) conduct and support basic and applied research in
high-performance computing and networking to support fundamental
research in science and engineering disciplines related to
energy applications; and
``(2) provide computing and networking infrastructure
support, including--
``(A) the provision of high-performance computing
systems that are among the most advanced in the world in
terms of performance in solving scientific and
engineering problems; and
``(B) support for advanced software and applications
development for science and engineering disciplines
related to energy applications.

``(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Energy such sums as are necessary to
carry out this section.''.

SEC. 977. NOTE: 42 USC 16317. SYSTEMS BIOLOGY PROGRAM.

(a) Program.--
(1) Establishment.--The Secretary shall establish a
research, development, and demonstration program in microbial
and plant systems biology, protein science, and computational
biology to support the energy, national security, and
environmental missions of the Department.

[[Page 904]]
119 STAT. 904

(2) Grants.--The program shall support individual
researchers and multidisciplinary teams of researchers through
competitive, merit-reviewed grants.
(3) Consultation.--In carrying out the program, the
Secretary shall consult with other Federal agencies that conduct
genetic and protein research.

(b) Goals.--The program shall have the goal of developing
technologies and methods based on the biological functions of genomes,
microbes, and plants that--
(1) can facilitate the production of fuels, including
hydrogen;
(2) convert carbon dioxide to organic carbon;
(3) detoxify soils and water, including at facilities of the
Department, contaminated with heavy metals and radiological
materials; and
(4) address other Department missions as identified by the
Secretary.

(c) Plan.--
(1) Development NOTE: Deadline. of plan.--Not later than
1 year after the date of enactment of this Act, the Secretary
shall prepare and transmit to Congress a research plan
describing how the program authorized pursuant to this section
will be undertaken to accomplish the program goals established
in subsection (b).
(2) Review NOTE: Contracts. of plan.--The Secretary
shall contract with the National Academy of Sciences to review
the research plan developed under this
subsection. NOTE: Deadline. The Secretary shall transmit the
review to Congress not later than 18 months after transmittal of
the research plan under paragraph (1), along with the
Secretary's response to the recommendations contained in the
review.

(d) User Facilities and Ancillary Equipment.--Within the funds
authorized to be appropriated pursuant to this subtitle, amounts shall
be available for projects to develop, plan, construct, acquire, or
operate special equipment, instrumentation, or facilities, including
user facilities at National Laboratories, for researchers conducting
research, development, demonstration, and commercial application in
systems biology and proteomics and associated biological disciplines.
(e) Prohibition on Biomedical and Human Cell and Human Subject
Research.--
(1) No biomedical research.--In carrying out the program
under this section, the Secretary shall not conduct biomedical
research.
(2) Limitations.--Nothing in this section shall authorize
the Secretary to conduct any research or demonstrations--
(A) on human cells or human subjects; or
(B) designed to have direct application with respect
to human cells or human subjects.

SEC. 978. FISSION NOTE: 42 USC 16318. AND FUSION ENERGY MATERIALS
RESEARCH PROGRAM.

(a) In General.--Along with the budget request of the President
submitted to Congress for fiscal year 2007, the Secretary shall
establish a research and development program on material science issues
presented by advanced fission reactors and the fusion energy program of
the Department.

[[Page 905]]
119 STAT. 905

(b) Administration.--In carrying out the program, the Secretary
shall develop--
(1) a catalog of material properties required for
applications described in subsection (a);
(2) theoretical models for materials possessing the required
properties;
(3) benchmark models against existing data; and
(4) a roadmap to guide further research and development in
the area covered by the program.

SEC. 979. NOTE: 42 USC 16319. ENERGY AND WATER SUPPLIES.

(a) In General.--The Secretary shall carry out a program of
research, development, demonstration, and commercial application to--
(1) address energy-related issues associated with provision
of adequate water supplies, optimal management, and efficient
use of water;
(2) address water-related issues associated with the
provision of adequate supplies, optimal management, and
efficient use of energy; and
(3) assess the effectiveness of existing programs within the
Department and other Federal agencies to address these energy
and water related issues.

(b) Program Elements.--The program under this section shall
include--
(1) arsenic treatment;
(2) desalination; and
(3) planning, analysis, and modeling of energy and water
supply and demand.

(c) Collaboration.--In carrying out this section, the Secretary
shall consult with the Administrator of the Environmental Protection
Agency, the Secretary of the Interior, the Chief Engineer of the Army
Corps of Engineers, the Secretary of Commerce, the Secretary of Defense,
and other Federal agencies as appropriate.
(d) Facilities.--The Secretary may utilize all existing facilities
within the Department and may design and construct additional facilities
as needed to carry out the purposes of this program.
(e) Advisory NOTE: Establishment. Committee.--The Secretary
shall establish or utilize an advisory committee to provide independent
advice and review of the program.

(f) Reports.--Not later than 2 years after the date of enactment of
this Act, the Secretary shall submit to Congress a report on the
assessment described in subsection (b) and recommendations for future
actions.

SEC. 980. NOTE: 42 USC 16320. SPALLATION NEUTRON SOURCE.

(a) Definitions.--In this section:
(1) SING.--The term ``SING'' means the Spallation Neutron
Source Instruments Next Generation major item of equipment.
(2) SNS power upgrade.--The term ``SNS power upgrade'' means
the Spallation Neutron Source power upgrade described in the 20-
year facilities plan of the Office of Science of the Department.
(3) SNS second target station.--The term ``SNS second target
station'' means the Spallation Neutron Source second target
station described in the 20-year facilities plan of the Office
of Science of the Department.

[[Page 906]]
119 STAT. 906

(4) Spallation neutron source facility.--The terms
``Spallation Neutron Source Facility'' and ``Facility'' mean the
completed Spallation Neutron Source scientific user facility
located at Oak Ridge National Laboratory, Oak Ridge, Tennessee.
(5) Spallation neutron source project.--The terms
``Spallation Neutron Source Project'' and ``Project'' means
Department Project 99-E-334, Oak Ridge National Laboratory, Oak
Ridge, Tennessee.

(b) Spallation Neutron Source Project.--
(1) In NOTE: Reports. general.--The Secretary shall
submit to Congress, as part of the annual budget request of the
President submitted to Congress, a report on progress on the
Spallation Neutron Source Project.
(2) Contents.--The report shall include for the Project--
(A) a description of the achievement of milestones;
(B) a comparison of actual costs to estimated costs;
and
(C) any changes in estimated Project costs or
schedule.

(c) Spallation Neutron Source Facility Plan.--
(1) In general.--The Secretary shall develop an operational
plan for the Spallation Neutron Source Facility that ensures
that the Facility is employed to the full capability of the
Facility in support of the study of advanced materials,
nanoscience, and other missions of the Office of Science of the
Department.
(2) Plan.--The operational plan shall--
(A) include a plan for the operation of an effective
scientific user program that--
(i) is based on peer review of proposals
submitted for use of the Facility;
(ii) includes scientific and technical support
to ensure that external users, including
researchers based at institutions of higher
education, are able to make full use of a variety
of high quality scientific instruments; and
(iii) phases in systems upgrades to ensure
that the Facility remains at the forefront of
international scientific endeavors in the field of
the Facility throughout the operating life of the
Facility;
(B) include an ongoing program to develop new
instruments that builds on the high performance neutron
source and that allows neutron scattering techniques to
be applied to a growing range of scientific problems and
disciplines; and
(C) address the status of and, to the maximum extent
practicable, costs and schedules for--
(i) full user mode operations of the Facility;
(ii) instrumentation built at the Facility
during the operating phase through full use of the
experimental hall, including the SING;
(iii) the SNS power upgrade; and
(iv) the SNS second target station.

(d) Authorization of Appropriations.--

[[Page 907]]
119 STAT. 907

(1) Spallation neutron source project.--There is authorized
to be appropriated to carry out the Spallation Neutron Source
Project for the lifetime of the Project $1,411,700,000 for total
project costs, of which--
(A) $1,192,700,000 shall be used for the costs of
construction; and
(B) $219,000,000 shall be used for other Project
costs.
(2) Spallation neutron source facility.--
(A) In general.--Except as provided in subparagraph
(B), there is authorized to be appropriated for the
Spallation Neutron Source Facility for--
(i) the SING, $75,000,000 for each of fiscal
year 2007 through 2009; and
(ii) the SNS power upgrade, $160,000,000, to
remain available until expended.
(B) Insufficient stockpiles of heavy water.--If
stockpiles of heavy water of the Department are
insufficient to meet the needs of the Facility, there is
authorized to be appropriated for the Facility
$12,000,000 for fiscal year 2007.

SEC. 981. RARE NOTE: 42 USC 16321. ISOTOPE ACCELERATOR.

(a) Establishment.--The Secretary shall construct and operate a Rare
Isotope Accelerator. The Secretary shall NOTE: Deadline. commence
construction no later than September 30, 2008.

(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary such sums as may be necessary to carry out
this section. The Secretary shall not spend more than $1,100,000,000 in
Federal funds for all activities associated with the Rare Isotope
Accelerator, prior to operation of the Accelerator.

SEC. 982. NOTE: 42 USC 16322. OFFICE OF SCIENTIFIC AND TECHNICAL
INFORMATION.

The Secretary, through the Office of Scientific and Technical
Information, shall maintain within the Department publicly available
collections of scientific and technical information resulting from
research, development, demonstration, and commercial applications
activities supported by the Department.

SEC. 983. NOTE: 42 USC 16323. SCIENCE AND ENGINEERING EDUCATION
PILOT PROGRAM.

(a) Establishment NOTE: Grants. of Pilot Program.--The Secretary
shall award a grant to a Southeastern United States consortium of major
research universities that currently advances science and education by
partnering with National Laboratories, to establish a regional pilot
program of its SEEK-16 program for enhancing scientific, technological,
engineering, and mathematical literacy, creativity, and decision-making.
The consortium shall include leading research universities, one or more
universities that train substantial numbers of elementary and secondary
school teachers, and (where appropriate) National Laboratories.

(b) Program Elements.--The regional pilot program shall include--
(1) expanding strategic, formal partnerships among
universities with strength in research, universities that train
substantial numbers of elementary and secondary school teachers,
and the private sector;
(2) combining Department expertise with one or more National
Aeronautics and Space Administration Educator Resource Centers;

[[Page 908]]
119 STAT. 908

(3) developing programs to permit current and future
teachers to participate in ongoing research projects at National
Laboratories and research universities and to adapt lessons
learned to the classroom;
(4) designing and implementing course work;
(5) designing and implementing a strategy for measuring and
assessing progress under the program; and
(6) developing models for transferring knowledge gained
under the pilot program to other institutions and areas of the
United States.

(c) Categorization.--A grant under this section shall be considered
an authorized activity under section 3165 of the Department of Energy
Science Education Enhancement Act (42 U.S.C. 7381b).
(d) Report.--No later than 2 years after the award of the grant, the
Secretary shall transmit to Congress a report outlining lessons learned
and, if determined appropriate by the Secretary, containing a plan for
expanding the program throughout the United States.

SEC. 984. NOTE: 42 USC 16324. ENERGY RESEARCH FELLOWSHIPS.

(a) Postdoctoral Fellowship Program.--The Secretary shall establish
a program under which the Secretary provides fellowships to encourage
outstanding young scientists and engineers to pursue postdoctoral
research appointments in energy research and development at institutions
of higher education of their choice.
(b) Senior Research Fellowships.--
(1) In general.--The Secretary shall establish a program
under which the Secretary provides fellowships to allow
outstanding senior researchers and their research groups in
energy research and development to explore research and
development topics of their choosing for a period of not less
than 3 years, to be determined by the Secretary.
(2) Consideration.--In providing a fellowship under the
program described in paragraph (1), the Secretary shall
consider--
(A) the past scientific or technical accomplishment
of a senior researcher; and
(B) the potential for continued accomplishment by
the researcher during the period of the fellowship.

SEC. 984A. NOTE: 42 USC 16325. SCIENCE AND TECHNOLOGY SCHOLARSHIP
PROGRAM.

(a) In General.--The Secretary is authorized to establish a Science
and Technology Scholarship Program to award scholarships to individuals
that is designed to recruit and prepare students for careers in the
Department and National Laboratories.
(b) Service Requirement.--The Secretary may require that an
individual receiving a scholarship under this section serve as a full-
time employee of the Department or a National Laboratory for a fixed
period in return for receiving the scholarship.

Subtitle H--International Cooperation

SEC. 985. NOTE: 42 USC 16341. WESTERN HEMISPHERE ENERGY COOPERATION.

(a) Program.--The Secretary shall carry out a program to promote
cooperation on energy issues with countries of the Western Hemisphere.

[[Page 909]]
119 STAT. 909

(b) Activities.--Under the program, the Secretary shall fund
activities to work with countries of the Western Hemisphere to--
(1) increase the production of energy supplies;
(2) improve energy efficiency; and
(3) assist in the development and transfer of energy supply
and efficiency technologies that would have a beneficial impact
on world energy markets.

(c) Participation by Institutions of Higher Education.--To the
extent practicable, the Secretary shall carry out the program under this
section with the participation of institutions of higher education so as
to take advantage of the acceptance of institutions of higher education
by countries of the Western Hemisphere as sources of unbiased technical
and policy expertise when assisting the Secretary in--
(1) evaluating new technologies;
(2) resolving technical issues;
(3) working with those countries in the development of new
policies; and
(4) training policymakers, particularly in the case of
institutions of higher education that involve the participation
of minority students, such as--
(A) Hispanic-serving institutions; and
(B) part B institutions.

(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section--
(1) $10,000,000 for fiscal year 2007;
(2) $13,000,000 for fiscal year 2008; and
(3) $16,000,000 for fiscal year 2009.

SEC. 986. COOPERATION BETWEEN UNITED STATES AND ISRAEL.

(a) Findings.--Congress finds that--
(1) on February 1, 1996, the United States and Israel signed
the agreement entitled ``Agreement between the Department of
Energy of the United States of America and the Ministry of
Energy and Infrastructure of Israel Concerning Energy
Cooperation'' (referred to in this section as the
``Agreement''), to establish a framework for collaboration
between the United States and Israel in energy research and
development activities;
(2) the Agreement entered into force in February 2000;
(3) in February 2005, the Agreement was automatically
renewed for 1 additional 5-year period pursuant to Article X of
the Agreement; and
(4) under the Agreement, the United States and Israel may
cooperate in energy research and development in a variety of
alternative and advanced energy sectors.

(b) Report to Congress.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall submit to the Committee on
Energy and Natural Resources and the Committee on Foreign Relations of
the Senate and the Committee on Energy and Commerce and the Committee on
International Relations of the House of Representatives a report that
describes--
(1) the ways in which the United States and Israel have
cooperated on energy research and development activities under
the Agreement;
(2) projects initiated pursuant to the Agreement; and
(3) plans for future cooperation and joint projects under
the Agreement.

[[Page 910]]
119 STAT. 910

(c) Sense of Congress.--It is the sense of Congress that energy
cooperation between the Governments of the United States and Israel is
mutually beneficial in the development of energy technology.

SEC. 986A. NOTE: 42 USC 16342. INTERNATIONAL ENERGY TRAINING.

(a) In General.--The Secretary, in consultation with the Secretary
of Commerce, the Secretary of the Interior, and Secretary of State, and
the Federal Energy Regulatory Commission, shall coordinate training and
outreach efforts for international commercial energy markets in
countries with developing and restructuring economies.
(b) Components.--The training and outreach efforts referred to in
subsection (a) may include--
(1) production-related fiscal regimes;
(2) grid and network issues;
(3) energy user and demand side response;
(4) international trade of energy; and
(5) international transportation of energy.

(c) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $1,500,000 for each of fiscal
years 2007 through 2010.

Subtitle I--Research Administration and Operations

SEC. 987. NOTE: 42 USC 16351. AVAILABILITY OF FUNDS.

Funds authorized to be appropriated to the Department under this Act
or an amendment made by this Act shall remain available until expended.

SEC. 988. NOTE: 42 USC 16352. COST SHARING.

(a) Applicability.--Notwithstanding any other provision of law, in
carrying out a research, development, demonstration, or commercial
application program or activity that is initiated after the date of
enactment of this section, the Secretary shall require cost-sharing in
accordance with this section.
(b) Research and Development.--
(1) In general.--Except as provided in paragraphs (2) and
(3) and subsection (f), the Secretary shall require not less
than 20 percent of the cost of a research or development
activity described in subsection (a) to be provided by a non-
Federal source.
(2) Exclusion.--Paragraph (1) shall not apply to a research
or development activity described in subsection (a) that is of a
basic or fundamental nature, as determined by the appropriate
officer of the Department.
(3) Reduction.--The Secretary may reduce or eliminate the
requirement of paragraph (1) for a research and development
activity of an applied nature if the Secretary determines that
the reduction is necessary and appropriate.

(c) Demonstration and Commercial Application.--
(1) In general.--Except as provided in paragraph (2) and
subsection (f), the Secretary shall require that not less than

[[Page 911]]
119 STAT. 911

50 percent of the cost of a demonstration or commercial
application activity described in subsection (a) to be provided
by a non-Federal source.
(2) Reduction of non-federal share.--The Secretary may
reduce the non-Federal share required under paragraph (1) if the
Secretary determines the reduction to be necessary and
appropriate, taking into consideration any technological risk
relating to the activity.

(d) Calculation of Amount.--In calculating the amount of a non-
Federal contribution under this section, the Secretary--
(1) may include allowable costs in accordance with the
applicable cost principles, including--
(A) cash;
(B) personnel costs;
(C) the value of a service, other resource, or third
party in-kind contribution determined in accordance with
the applicable circular of the Office of Management and
Budget;
(D) indirect costs or facilities and administrative
costs; or
(E) any funds received under the power program of
the Tennessee Valley Authority (except to the extent
that such funds are made available under an annual
appropriation Act); and
(2) shall not include--
(A) revenues or royalties from the prospective
operation of an activity beyond the time considered in
the award;
(B) proceeds from the prospective sale of an asset
of an activity; or
(C) other appropriated Federal funds.

(e) Repayment of Federal Share.--The Secretary shall not require
repayment of the Federal share of a cost-shared activity under this
section as a condition of making an award.
(f) Exclusions.--This section shall not apply to--
(1) a cooperative research and development agreement under
the Stevenson-Wydler Technology Innovation Act of 1980 (15
U.S.C. 3701 et seq.);
(2) a fee charged for the use of a Department facility; or
(3) an award under--
(A) the small business innovation research program
under section 9 of the Small Business Act (15 U.S.C.
638); or
(B) the small business technology transfer program
under that section.

SEC. 989. NOTE: 42 USC 16353. MERIT REVIEW OF PROPOSALS.

(a) Awards.--Awards of funds authorized under this Act or an
amendment made by this Act shall be made only after an impartial review
of the scientific and technical merit of the proposals for the awards
has been carried out by or for the Department.
(b) Competition.--Competitive awards under this Act shall involve
competitions open to all qualified entities within one or more of the
following categories:
(1) Institutions of higher education.
(2) National Laboratories.
(3) Nonprofit and for-profit private entities.

[[Page 912]]
119 STAT. 912

(4) State and local governments.
(5) Consortia of entities described in paragraphs (1)
through (4).

(c) Sense of Congress.--It is the sense of Congress that research,
development, demonstration, and commercial application activities
carried out by the Department should be awarded using competitive
procedures, to the maximum extent practicable.

SEC. 990. NOTE: 42 USC 16354. EXTERNAL TECHNICAL REVIEW OF
DEPARTMENTAL PROGRAMS.

(a) National Energy Research and Development Advisory Boards.--
(1) Establishment.--The Secretary shall establish one or
more advisory boards to review research, development,
demonstration, and commercial application programs of the
Department in energy efficiency, renewable energy, nuclear
energy, and fossil energy.
(2) Alternatives.--The Secretary may--
(A) designate an existing advisory board within the
Department to fulfill the responsibilities of an
advisory board under this section; and
(B) enter into appropriate arrangements with the
National Academy of Sciences to establish such an
advisory board.

(b) Use of Existing Committees.--The Secretary shall continue to use
the scientific program advisory committees chartered under the Federal
Advisory Committee Act (5 U.S.C. App.) by the Office of Science to
oversee research and development programs under that Office.
(c) Membership.--Each advisory board under this section shall
consist of persons with appropriate expertise representing a diverse
range of interests.
(d) Meetings and Goals.--
(1) Meetings.--Each advisory board under this section shall
meet at least semiannually to review and advise on the progress
made by the respective one or more research, development,
demonstration, and commercial application programs.
(2) Goals.--The advisory board shall review the measurable
cost and performance-based goals for the programs as established
under section 902, and the progress on meeting the goals.

(e) Periodic Reviews and Assessments.--
(1) In general.--The Secretary shall enter into appropriate
arrangements with the National Academy of Sciences to conduct
periodic reviews and assessments of--
(A) the research, development, demonstration, and
commercial application programs authorized by this Act
and amendments made by this Act;
(B) the measurable cost and performance-based goals
for the programs as established under section 902, if
any; and
(C) the progress on meeting the goals.
(2) Timing.--The reviews and assessments shall be conducted
every 5 years or more often as the Secretary considers
necessary.

[[Page 913]]
119 STAT. 913

(3) Reports.--The Secretary shall submit to Congress reports
describing the results of all the reviews and assessments.

SEC. 991. NOTE: 42 USC 16355. NATIONAL LABORATORY DESIGNATION.

After the date of enactment of this Act, the Secretary shall not
designate a facility that is not listed in section 2(3) as a National
Laboratory.

SEC. 992. NOTE: 42 USC 16356. REPORT ON EQUAL EMPLOYMENT OPPORTUNITY
PRACTICES.

Not later than 12 months after the date of enactment of this Act,
and biennially thereafter, the Secretary shall transmit to Congress a
report on the equal employment opportunity practices at National
Laboratories. Such report shall include--
(1) a thorough review of each National Laboratory
contractor's equal employment opportunity policies, including
promotion to management and professional positions and pay
raises;
(2) a statistical report on complaints and their disposition
in the National Laboratories;
(3) a description of how equal employment opportunity
practices at the National Laboratories are treated in the
contract and in calculating award fees for each contractor;
(4) a summary of disciplinary actions and their disposition
by either the Department or the relevant contractors for each
National Laboratory;
(5) a summary of outreach efforts to attract women and
minorities to the National Laboratories;
(6) a summary of efforts to retain women and minorities in
the National Laboratories; and
(7) a summary of collaboration efforts with the Office of
Federal Contract Compliance Programs to improve equal employment
opportunity practices at the National Laboratories.

SEC. 993. NOTE: 42 USC 16357. STRATEGY AND PLAN FOR SCIENCE AND
ENERGY FACILITIES AND INFRASTRUCTURE.

(a) Facility and Infrastructure Policy.--
(1) In general.--The Secretary shall develop and implement a
strategy for facilities and infrastructure supported primarily
from the Office of Science, the Office of Energy Efficiency and
Renewable Energy, the Office of Fossil Energy, or the Office of
Nuclear Energy, Science and Technology Programs at all National
Laboratories and single-purpose research facilities.
(2) Strategy.--The strategy shall provide cost-effective
means for--
(A) maintaining existing facilities and
infrastructure;
(B) closing unneeded facilities;
(C) making facility modifications; and
(D) building new facilities.

(b) Report.--
(1) In general.--The Secretary shall prepare and submit,
along with the budget request of the President submitted to
Congress for fiscal year 2008, a report describing the strategy
developed under subsection (a).

[[Page 914]]
119 STAT. 914

(2) Contents.--For each National Laboratory and single-
purpose research facility that is primarily used for science and
energy research, the report shall contain--
(A) the current priority list of proposed facilities
and infrastructure projects, including cost and schedule
requirements;
(B) a current 10-year plan that demonstrates the
reconfiguration of its facilities and infrastructure to
meet its missions and to address its long-term
operational costs and return on investment;
(C) the total current budget for all facilities and
infrastructure funding; and
(D) the current status of each facility and
infrastructure project compared to the original baseline
cost, schedule, and scope.

SEC. 994. NOTE: 42 USC 16358. STRATEGIC RESEARCH PORTFOLIO ANALYSIS
AND COORDINATION PLAN.

(a) In General.--The Secretary shall periodically review all of the
science and technology activities of the Department in a strategic
framework that takes into account both the frontiers of science to which
the Department can contribute and the national needs relevant to the
Department's statutory missions.
(b) Coordination Analysis and Plan.--As part of the review under
subsection (a), the Secretary shall develop a coordination plan to
improve coordination and collaboration in research, development,
demonstration, and commercial application activities across Department
organizational boundaries.
(c) Plan Contents.--The plan shall describe--
(1) cross-cutting scientific and technical issues and
research questions that span more than one program or major
office of the Department;
(2) how the applied technology programs of the Department
are coordinating their activities, and addressing those
questions;
(3) ways in which the technical interchange within the
Department, particularly between the Office of Science and the
applied technology programs, can be enhanced, including ways in
which the research agendas of the Office of Science and the
applied programs can interact and assist each other;
(4) a description of how the Secretary will ensure that the
Department's overall research agenda include, in addition to
fundamental, curiosity-driven research, fundamental research
related to topics of concern to the applied programs, and
applications in Departmental technology programs of research
results generated by fundamental, curiosity-driven research.

(d) Plan NOTE: Deadlines. Transmittal.--Not later than 12 months
after the date of enactment of this Act, and every 4 years thereafter,
the Secretary shall transmit to Congress the results of the review under
subsection (a) and the coordination plan under subsection (b).

SEC. 995. NOTE: 42 USC 16359. COMPETITIVE AWARD OF MANAGEMENT
CONTRACTS.

None of the funds authorized to be appropriated to the Secretary by
this title may be used to award a management and operating contract for
a National Laboratory (excluding those named in subparagraphs (G), (H),
(N), and (O) of section 2 (3)), unless

[[Page 915]]
119 STAT. 915

such contract is competitively awarded, or the Secretary grants, on a
case-by-case basis, a waiver. NOTE: Reports. Deadline. The Secretary
may not delegate the authority to grant such a waiver and shall submit
to Congress a report notifying it of the waiver, and setting forth the
reasons for the waiver, at least 60 days prior to the date of the award
of such contract.

SEC. 996. NOTE: 42 USC 16360. WESTERN MICHIGAN DEMONSTRATION
PROJECT.

The Administrator of the Environmental Protection Agency, in
consultation with the State of Michigan and affected local officials,
shall conduct a demonstration project to address the effect of
transported ozone and ozone precursors in Southwestern Michigan. The
demonstration program shall address projected nonattainment areas in
Southwestern Michigan that include counties with design values for ozone
of less than .095 based on years 2000 to 2002 or the most current 3-year
period of air quality data. The Administrator shall assess any
difficulties such areas may experience in meeting the 8-hour national
ambient air quality standard for ozone due to the effect of transported
ozone or ozone precursors into the areas. The Administrator shall work
with State and local officials to determine the extent of ozone and
ozone precursor transport, to assess alternatives to achieve compliance
with the 8-hour standard apart from local controls, and to determine the
timeframe in which such compliance could take
place. NOTE: Deadline. The Administrator shall complete this
demonstration project no later than 2 years after the date of enactment
of this section and shall not impose any requirement or sanction under
the Clean Air Act (42 U.S.C. 7401 et seq.) that might otherwise apply
during the pendency of the demonstration project.

SEC. 997. NOTE: 42 USC 16361. ARCTIC ENGINEERING RESEARCH CENTER.

(a) In NOTE: Establishment. Grants. General.--The Secretary of
Transportation, in consultation with the Secretary and the United States
Arctic Research Commission, shall provide annual grants to a university
located adjacent to the Arctic Energy Office of the Department of
Energy, to establish and operate a university research center to be
headquartered in Fairbanks and to be known as the ``Arctic Engineering
Research Center'' (referred to in this section as the ``Center'').

(b) Purpose.--The purpose of the Center shall be to conduct research
on, and develop improved methods of, construction and use of materials
to improve the overall performance of roads, bridges, residential,
commercial, and industrial structures, and other infrastructure in the
Arctic region, with an emphasis on developing--
(1) new construction techniques for roads, bridges, rail,
and related transportation infrastructure and residential,
commercial, and industrial infrastructure that are capable of
withstanding the Arctic environment and using limited energy
resources as efficiently as practicable;
(2) technologies and procedures for increasing road, bridge,
rail, and related transportation infrastructure and residential,
commercial, and industrial infrastructure safety, reliability,
and integrity in the Arctic region;
(3) new materials and improving the performance and energy
efficiency of existing materials for the construction of roads,
bridges, rail, and related transportation infrastructure

[[Page 916]]
119 STAT. 916

and residential, commercial, and industrial infrastructure in
the Arctic region; and
(4) recommendations for new local, regional, and State
permitting and building codes to ensure transportation and
building safety and efficient energy use when constructing,
using, and occupying such infrastructure in the Arctic region.

(c) Objectives.--The Center shall carry out--
(1) basic and applied research in the subjects described in
subsection (b), the products of which shall be judged by peers
or other experts in the field to advance the body of knowledge
in road, bridge, rail, and infrastructure engineering in the
Arctic region; and
(2) an ongoing program of technology transfer that makes
research results available to potential users in a form that can
be implemented.

(d) Amount of Grant.--For each of fiscal years 2006 through 2011,
the Secretary shall provide a grant in the amount of $3,000,000 to the
institution specified in subsection (a) to carry out this section.
(e) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $3,000,000 for each of fiscal
years 2006 through 2011.

SEC. 998. NOTE: 42 USC 16362. BARROW GEOPHYSICAL RESEARCH FACILITY.

(a) Establishment.--The Secretary of Commerce, in consultation with
the Secretaries of Energy and the Interior, the Director of the National
Science Foundation, and the Administrator of the Environmental
Protection Agency, shall establish a joint research facility in Barrow,
Alaska, to be known as the ``Barrow Geophysical Research Facility'', to
support scientific research activities in the Arctic.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretaries of Commerce, Energy, and the Interior,
the Director of the National Science Foundation, and the Administrator
of the Environmental Protection Agency for the planning, design,
construction, and support of the Barrow Geophysical Research Facility,
$61,000,000.

Subtitle J--Ultra-Deepwater and Unconventional Natural Gas and Other
Petroleum Resources

SEC. 999A. NOTE: 42 USC 16371. PROGRAM AUTHORITY.

(a) In General.--The Secretary shall carry out a program under this
subtitle of research, development, demonstration, and commercial
application of technologies for ultra-deepwater and unconventional
natural gas and other petroleum resource exploration and production,
including addressing the technology challenges for small producers, safe
operations, and environmental mitigation (including reduction of
greenhouse gas emissions and sequestration of carbon).
(b) Program Elements.--The program under this subtitle shall address
the following areas, including improving safety and minimizing
environmental impacts of activities within each area:

[[Page 917]]
119 STAT. 917

(1) Ultra-deepwater architecture and technology, including
drilling to formations in the Outer Continental Shelf to depths
greater than 15,000 feet.
(2) Unconventional natural gas and other petroleum resource
exploration and production technology.
(3) The technology challenges of small producers.
(4) Complementary research performed by the National Energy
Technology Laboratory for the Department.

(c) Limitation on Location of Field Activities.--Field activities
under the program under this subtitle 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) Activities at the National Energy Technology Laboratory.--The
Secretary, through the National Energy Technology Laboratory, shall
carry out a program of research and other activities complementary to
and supportive of the research programs under subsection (b).
(e) Consultation With Secretary of the Interior.--In carrying out
this subtitle, the Secretary shall consult regularly with the Secretary
of the Interior.

SEC. 999B. NOTE: 42 USC 16372. ULTRA-DEEPWATER AND UNCONVENTIONAL
ONSHORE NATURAL GAS AND OTHER PETROLEUM RESEARCH AND
DEVELOPMENT PROGRAM.

(a) In General.--The Secretary shall carry out the activities under
section 999A, to maximize the value of natural gas and other petroleum
resources of the United States, by increasing the supply of such
resources, through reducing the cost and increasing the efficiency of
exploration for and production of such resources, while improving safety
and minimizing environmental impacts.
(b) 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
corporation that is structured as a consortium to administer the
programmatic activities outlined in this chapter. The program
consortium shall--
(A) administer the program pursuant to subsection
(f)(3), utilizing program administration funds only;
(B) issue research project solicitations upon
approval of the Secretary or the Secretary's designee;
(C) make project awards to research performers upon
approval of the Secretary or the Secretary's designee;
(D) disburse research funds to research performers
awarded under subsection (f) as directed by the
Secretary

[[Page 918]]
119 STAT. 918

in accordance with the annual plan under subsection (e);
and
(E) carry out other activities assigned to the
program consortium by this section.
(2) Limitation.--The Secretary may not assign any activities
to the program consortium except as specifically authorized
under this section.
(3) Conflict of interest.--
(A) Procedures.--The Secretary shall establish
procedures--
(i) to ensure that each board member, officer,
or employee of the program consortium who is in a
decisionmaking capacity under subsection (f)(3)
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 oversight under subsection (f)(4)
with respect to such applicant or recipient.
(B) Failure to comply.--The Secretary may disqualify
an application or revoke an award under this section if
a board member, officer, or employee has failed to
comply with procedures required under subparagraph
(A)(ii).

(d) Selection of the Program Consortium.--
(1) In general.--The Secretary shall select the program
consortium through an open, competitive process.
(2) Members.--The program consortium may include
corporations, trade associations, institutions of higher
education, National Laboratories, or other research
institutions. After submitting a proposal under paragraph (4),
the program consortium may not add members without the consent
of the Secretary.
(3) Requirement of section 501(c)(3) status.--The Secretary
shall not select a consortium under this section unless such
consortium is an organization described in section 501(c)(3) of
the Internal Revenue Code of 1986 and exempt from tax under such
section 501(a) of such Code.
(4) Schedule.-- NOTE: Deadlines. Not later than 90 days
after the date of enactment of this Act, the Secretary shall
solicit proposals from eligible consortia to perform the duties
in subsection (c)(1), which shall be submitted not later than
180 days after the date of enactment of this Act. The Secretary
shall select the program consortium not later than 270 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

[[Page 919]]
119 STAT. 919

(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
have collectively demonstrated capabilities and experience in
planning and managing research, development, demonstration, and
commercial application programs for ultra-deepwater and
unconventional natural gas or other petroleum exploration or
production.
(7) Focus areas for awards.--
(A) Ultra-deepwater resources.--Awards from
allocations under section 999H(d)(1) shall focus on the
development and demonstration of individual exploration
and production technologies as well as integrated
systems technologies including new architectures for
production in ultra-deepwater.
(B) Unconventional resources.--Awards from
allocations under section 999H(d)(2) shall focus on
areas including advanced coalbed methane, deep drilling,
natural gas production from tight sands, natural gas
production from gas shales, stranded gas, innovative
exploration and production techniques, enhanced recovery
techniques, and environmental mitigation of
unconventional natural gas and other petroleum resources
exploration and production.
(C) Small producers.--Awards from allocations under
section 999H(d)(3) shall be made to consortia consisting
of small producers or organized primarily for the
benefit of small producers, and shall focus on areas
including complex geology involving rapid changes in the
type and quality of the oil and gas reservoirs across
the reservoir; low reservoir pressure; unconventional
natural gas reservoirs in coalbeds, deep reservoirs,
tight sands, or shales; and unconventional oil
reservoirs in tar sands and oil shales.

(e) Annual Plan.--
(1) In general.--The program under this section shall be
carried out pursuant to an annual plan prepared by the Secretary
in accordance with paragraph (2).
(2) Development.--
(A) Solicitation of recommendations.--Before
drafting an annual plan under this subsection, the
Secretary shall solicit specific written recommendations
from the program consortium for each element to be
addressed in the plan, including those described in
paragraph (4). The program consortium shall submit its
recommendations in the form of a draft annual plan.
(B) Submission of recommendations; other comment.--
The Secretary shall submit the recommendations of the
program consortium under subparagraph (A) to the Ultra-
Deepwater Advisory Committee established under section
999D(a) and to the Unconventional Resources Technology
Advisory Committee established under section 999D(b),
and such Advisory Committees shall provide to the
Secretary written comments by a date determined by the
Secretary. The Secretary may also solicit comments from
any other experts.

[[Page 920]]
119 STAT. 920

(C) Consultation.--The Secretary shall consult
regularly with the program consortium throughout the
preparation of the annual plan.
(3) Publication.-- NOTE: Federal Register,
publication. The Secretary shall transmit to Congress and
publish in the Federal Register the annual plan, along with any
written comments received under paragraph (2)(A) and (B).
(4) Contents.--The annual plan shall describe the ongoing
and prospective activities of the program under this section and
shall include--
(A) a list of any solicitations for awards to carry
out research, development, demonstration, or commercial
application activities, including the topics for such
work, who would be eligible to apply, selection
criteria, and the duration of awards; and
(B) a description of the activities expected of the
program consortium to carry out subsection (f)(3).
(5) Estimates NOTE: Reports. of increased royalty
receipts.--The Secretary, in consultation with the Secretary of
the Interior, shall provide an annual report to Congress with
the President's budget on the estimated cumulative increase in
Federal royalty receipts (if any) resulting from the
implementation of this subtitle. The initial report under this
paragraph shall be submitted in the first President's budget
following the completion of the first annual plan required under
this subsection.

(f) Awards.--
(1) In general.--Upon approval of the Secretary the program
consortium shall make awards to research performers to carry out
research, development, demonstration, and commercial application
activities under the program under this section. The program
consortium shall not be eligible to receive such awards, but
provided that conflict of interest procedures in section
999B(c)(3) are followed, entities who are members of the program
consortium are not precluded from receiving research awards as
either individual research performers or as research performers
who are members of a research collaboration.
(2) Proposals.--Upon approval of the Secretary the program
consortium 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) Oversight.--
(A) In general.--The program consortium shall
oversee the implementation of awards under this
subsection, consistent with the annual plan under
subsection (e), including disbursing funds and
monitoring activities carried out under such awards for
compliance with the terms and conditions of the awards.
(B) Effect.--Nothing in subparagraph (A) shall limit
the authority or responsibility of the Secretary to
oversee awards, or limit the authority of the Secretary
to review or revoke awards.

(g) Administrative Costs.--
(1) In general.--To compensate the program consortium for
carrying out its activities under this section, the Secretary
shall provide to the program consortium funds sufficient to
administer the program. This compensation may include a

[[Page 921]]
119 STAT. 921

management fee consistent with Department of Energy contracting
practices and procedures.
(2) Advance.--The Secretary shall advance funds to the
program consortium upon selection of the consortium, which shall
be deducted from amounts to be provided under paragraph (1).

(h) Audit.--The Secretary shall retain an independent auditor, which
shall include a review by the General Accountability Office, 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 subtitle. NOTE: Reports. The auditor shall transmit a report
(including any review by the General Accountability Office) annually to
the Secretary, who shall transmit the report to Congress, along with a
plan to remedy any deficiencies cited in the report.

(i) Activities by the United States Geological Survey.--The
Secretary of the Interior, through the United States Geological Survey,
shall, where appropriate, carry out programs of long-term research to
complement the programs under this section.
(j) Program NOTE: Contracts. Review and Oversight.--The National
Energy Technology Laboratory, on behalf of the Secretary, shall (1)
issue a competitive solicitation for the program consortium, (2)
evaluate, select, and award a contract or other agreement to a qualified
program consortium, and (3) have primary review and oversight
responsibility for the program consortium, including review and approval
of research awards proposed to be made by the program consortium, to
ensure that its activities are consistent with the purposes and
requirements described in this subtitle. Up to 5 percent of program
funds allocated under paragraphs (1) through (3) of section 999H(d) may
be used for this purpose, including program direction and the
establishment of a site office if determined to be necessary to carry
out the purposes of this subsection.

SEC. 999C. NOTE: 42 USC 16373. ADDITIONAL REQUIREMENTS FOR AWARDS.

(a) Demonstration Projects.--An application for an award under this
subtitle 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 999A(c), a demonstration project under this
subtitle 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
subtitle 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.--Two and one-half percent of the amount of
each award made under this subtitle shall be designated for technology
transfer and outreach activities under this subtitle.
(e) Cost Sharing Reduction for Independent Producers.--In applying
the cost sharing requirements under section 988 to an award under this
subtitle the Secretary may reduce or eliminate the non-Federal
requirement if the Secretary determines that the

[[Page 922]]
119 STAT. 922

reduction is necessary and appropriate considering the technological
risks involved in the project.
(f) Information Sharing.--All results of the research administered
by the program consortium shall be made available to the public
consistent with Department policy and practice on information sharing
and intellectual property agreements.

SEC. 999D. NOTE: 42 USC 16374. ADVISORY COMMITTEES.

(a) Ultra-Deepwater Advisory Committee.--
(1) Establishment.-- NOTE: Deadline. Not later than 270
days after the date of enactment of this Act, the Secretary
shall establish an advisory committee to be known as the Ultra-
Deepwater Advisory Committee.
(2) Membership.--The Advisory Committee under this
subsection shall be composed of members appointed by the
Secretary, including--
(A) individuals with extensive research experience
or operational knowledge of offshore natural gas and
other petroleum exploration and production;
(B) individuals broadly representative of the
affected interests in ultra-deepwater natural gas and
other petroleum production, including interests in
environmental protection and safe operations;
(C) no individuals who are Federal employees; and
(D) no individuals who are board members, officers,
or employees of the program consortium.
(3) Duties.--The Advisory Committee under this subsection
shall--
(A) advise the Secretary on the development and
implementation of programs under this subtitle related
to ultra-deepwater natural gas and other petroleum
resources; and
(B) carry out section 999B(e)(2)(B).
(4) Compensation.--A member of the Advisory Committee under
this subsection shall serve without compensation but shall
receive travel expenses in accordance with applicable provisions
under subchapter I of chapter 57 of title 5, United States Code.

(b) Unconventional Resources Technology Advisory Committee.--
(1) Establishment.-- NOTE: Deadline. Not later than 270
days after the date of enactment of this Act, the Secretary
shall establish an advisory committee to be known as the
Unconventional Resources Technology Advisory Committee.
(2) Membership.--The Secretary shall endeavor to have a
balanced representation of members on the Advisory Committee to
reflect the breadth of geographic areas of potential gas supply.
The Advisory Committee under this subsection shall be composed
of members appointed by the Secretary, including--
(A) a majority of members who are employees or
representatives of independent producers of natural gas
and other petroleum, including small producers;
(B) individuals with extensive research experience
or operational knowledge of unconventional natural gas
and other petroleum resource exploration and production;

[[Page 923]]
119 STAT. 923

(C) individuals broadly representative of the
affected interests in unconventional natural gas and
other petroleum resource exploration and production,
including interests in environmental protection and safe
operations;
(D) individuals with expertise in the various
geographic areas of potential supply of unconventional
onshore natural gas and other petroleum in the United
States;
(E) no individuals who are Federal employees; and
(F) 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 activities under this subtitle related
to unconventional natural gas and other petroleum
resources; and
(B) carry out section 999B(e)(2)(B).
(4) Compensation.--A member of the Advisory Committee under
this subsection shall serve without compensation but shall
receive travel expenses in accordance with applicable provisions
under subchapter I of chapter 57 of title 5, United States Code.

(c) Prohibition.--No advisory committee established under this
section shall make recommendations on funding awards to particular
consortia or other entities, or for specific projects.

SEC. 999E. NOTE: 42 USC 16375. 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; and
(2) that either--
(A) the entity is a United States-owned entity
organized under the laws of the United States; or
(B) the entity is organized under the laws of the
United States and has a parent entity organized under
the laws of a country that affords--
(i) to United States-owned entities
opportunities, comparable to those afforded to any
other entity, to participate in any cooperative
research venture similar to those authorized under
this subtitle;
(ii) to United States-owned entities local
investment opportunities comparable to those
afforded to any other entity; and
(iii) adequate and effective protection for
the intellectual property rights of United States-
owned entities.

SEC. 999F. NOTE: 42 USC 16376. SUNSET.

The authority provided by this subtitle shall terminate on September
30, 2014.

SEC. 999G. NOTE: 42 USC 16377. DEFINITIONS.

In this subtitle:
(1) Deepwater.--The term ``deepwater'' means a water depth
that is greater than 200 but less than 1,500 meters.
(2) Independent producer of oil or gas.--

[[Page 924]]
119 STAT. 924

(A) In general.--The term ``independent producer of
oil or gas'' means any person that produces oil or gas
other than a person to whom subsection (c) of section
613A of the Internal Revenue Code of 1986 does not apply
by reason of paragraph (2) (relating to certain
retailers) or paragraph (4) (relating to certain
refiners) of section 613A(d) of such Code.
(B) Rules for applying paragraphs (2) and (4) of
section 613a(d).--For purposes of subparagraph (A),
paragraphs (2) and (4) of section 613A(d) of the
Internal Revenue Code of 1986 shall be applied by
substituting ``calendar year'' for ``taxable year'' each
place it appears in such paragraphs.
(3) Program administration funds.--The term ``program
administration funds'' means funds used by the program
consortium to administer the program under this subtitle, but
not to exceed 10 percent of the total funds allocated under
paragraphs (1) through (3) of section 999H(d).
(4) Program consortium.--The term ``program consortium''
means the consortium selected under section 999B(d).
(5) Program research funds.--The term ``program research
funds'' means funds awarded to research performers by the
program consortium consistent with the annual plan.
(6) 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.
(7) Small producer.--The term ``small producer'' means an
entity organized under the laws of the United States with
production levels of less than 1,000 barrels per day of oil
equivalent.
(8) Ultra-deepwater.--The term ``ultra-deepwater'' means a
water depth that is equal to or greater than 1,500 meters.
(9) 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.
(10) 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.
(11) Unconventional natural gas and other petroleum
resource.--The term ``unconventional natural gas and other
petroleum resource'' means natural gas and other petroleum
resource located onshore in an economically inaccessible
geological formation, including resources of small producers.

SEC. 999H. NOTE: 42 USC 16378. FUNDING.

(a) Oil and Gas Lease Income.--For each of fiscal years 2007 through
2017, from any Federal royalties, rents, and bonuses derived from
Federal onshore and offshore oil and gas leases issued under the Outer
Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) and the Mineral
Leasing Act (30 U.S.C. 181 et seq.) which are deposited in the Treasury,
and after distribution of any such funds as described in subsection (c),
$50,000,000 shall be deposited into the Ultra-Deepwater and
Unconventional Natural Gas and

[[Page 925]]
119 STAT. 925

Other Petroleum Research Fund (in this section referred to as the
``Fund''). For purposes of this section, the term ``royalties'' excludes
proceeds from the sale of royalty production taken in kind and royalty
production that is transferred under section 27(a)(3) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1353(a)(3)).
(b) Obligational Authority.--Monies in the Fund shall be available
to the Secretary for obligation under this part without fiscal year
limitation, to remain available until expended.
(c) Prior Distributions.--The distributions described in subsection
(a) are those required by law--
(1) to States and to the Reclamation Fund under the Mineral
Leasing Act (30 U.S.C. 191(a)); and
(2) to other funds receiving monies from Federal oil and gas
leasing programs, including--
(A) any recipients pursuant to section 8(g) of the
Outer Continental Shelf Lands Act (43 U.S.C. 1337(g));
(B) the Land and Water Conservation Fund, pursuant
to section 2(c) of the Land and Water Conservation Fund
Act of 1965 (16 U.S.C. 4601-5(c));
(C) the Historic Preservation Fund, pursuant to
section 108 of the National Historic Preservation Act
(16 U.S.C. 470h); and
(D) the coastal impact assistance program
established under section 31 of the Outer Continental
Shelf Lands Act (as amended by section 384).

(d) Allocation.--Amounts obligated from the Fund under subsection
(a)(1) in each fiscal year shall be allocated as follows:
(1) 35 percent shall be for activities under section
999A(b)(1).
(2) 32.5 percent shall be for activities under section
999A(b)(2).
(3) 7.5 percent shall be for activities under section
999A(b)(3).
(4) 25 percent shall be for complementary research under
section 999A(b)(4) and other activities under section 999A(b) to
include program direction funds, overall program oversight,
contract management, and the establishment and operation of a
technical committee to ensure that in-house research activities
funded under section 999A(b)(4) are technically complementary
to, and not duplicative of, research conducted under paragraphs
(1), (2), and (3) of section 999A(b).

(e) Authorization of Appropriations.--In addition to other amounts
that are made available to carry out this section, there is authorized
to be appropriated to carry out this section $100,000,000 for each of
fiscal years 2007 through 2016.
(f) Fund.--There is hereby established in the Treasury of the United
States a separate fund to be known as the ``Ultra-Deepwater and
Unconventional Natural Gas and Other Petroleum Research Fund''.

[[Page 926]]
119 STAT. 926

TITLE X--DEPARTMENT OF ENERGY MANAGEMENT

SEC. 1001. NOTE: 42 USC 16391. IMPROVED TECHNOLOGY TRANSFER OF
ENERGY TECHNOLOGIES.

(a) Technology NOTE: Establishment. Transfer Coordinator.--The
Secretary shall appoint a Technology Transfer Coordinator to be the
principal advisor to the Secretary on all matters relating to technology
transfer and commercialization.

(b) Qualifications.--The Coordinator shall be an individual who, by
reason of professional background and experience, is specially qualified
to advise the Secretary on matters pertaining to technology transfer at
the Department.
(c) Duties of the Coordinator.--The Coordinator shall oversee--
(1) the activities of the Technology Transfer Working Group
established under subsection (d);
(2) the expenditure of funds allocated for technology
transfer within the Department;
(3) the activities of each technology partnership ombudsman
appointed under section 11 of the Technology Transfer
Commercialization Act of 2000 (42 U.S.C. 7261c); and
(4) efforts to engage private sector entities, including
venture capital companies.

(d) Technology NOTE: Establishment. Transfer Working Group.--The
Secretary shall establish a Technology Transfer Working Group, which
shall consist of representatives of the National Laboratories and
single-purpose research facilities, to--
(1) coordinate technology transfer activities occurring at
National Laboratories and single-purpose research facilities;
(2) exchange information about technology transfer
practices, including alternative approaches to resolution of
disputes involving intellectual property rights and other
technology transfer matters; and
(3) develop and disseminate to the public and prospective
technology partners information about opportunities and
procedures for technology transfer with the Department,
including opportunities and procedures related to alternative
approaches to resolution of disputes involving intellectual
property rights and other technology transfer matters.

(e) Technology Commercialization Fund.--The Secretary shall
establish an Energy Technology Commercialization Fund, using 0.9 percent
of the amount made available to the Department for applied energy
research, development, demonstration, and commercial application for
each fiscal year, to be used to provide matching funds with private
partners to promote promising energy technologies for commercial
purposes.
(f) Technology Transfer Responsibility.--Nothing in this section
affects the technology transfer responsibilities of Federal employees
under the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C.
3701 et seq.).
(g) Planning and Reporting.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall submit to Congress a
technology transfer execution plan.

[[Page 927]]
119 STAT. 927

(2) Updates.--Each year after the submission of the plan
under paragraph (1), the Secretary shall submit to Congress an
updated execution plan and reports that describe progress toward
meeting goals set forth in the execution plan and the funds
expended under subsection (e).

SEC. 1002. NOTE: 42 USC 16392. TECHNOLOGY INFRASTRUCTURE PROGRAM.

(a) Definitions.--In this section:
(1) Program.--The term ``Program'' means the Technology
Infrastructure Program established under subsection (b).
(2) Technology cluster.--The term ``technology cluster''
means a concentration of technology-related business concerns,
institutions of higher education, or nonprofit institutions,
that reinforce each other's performance in the areas of
technology development through formal or informal relationships.
(3) Technology-related business concern.--The term
``technology-related business concern'' means a for-profit
corporation, company, association, firm, partnership, or small
business concern that--
(A) conducts scientific or engineering research;
(B) develops new technologies;
(C) manufactures products based on new technologies;
or
(D) performs technological services.

(b) Establishment.--The Secretary shall establish a Technology
Infrastructure Program in accordance with this section.
(c) Purpose.--The purpose of the Program shall be to improve the
ability of National Laboratories and single-purpose research facilities
to support departmental missions by--
(1) stimulating the development of technology clusters that
can support departmental missions at the National Laboratories
or single-purpose research facilities;
(2) improving the ability of National Laboratories and
single-purpose research facilities to leverage and benefit from
commercial research, technology, products, processes, and
services; and
(3) encouraging the exchange of scientific and technological
expertise between--
(A) National Laboratories or single-purpose research
facilities; and
(B) entities that can support departmental missions
at the National Laboratories or single-purpose research
facilities, such as--
(i) institutions of higher education;
(ii) technology-related business concerns;
(iii) nonprofit institutions; and
(iv) agencies of State, tribal, or local
governments.

(d) Projects.--The Secretary shall authorize the director of each
National Laboratory or single-purpose research facility to implement the
Program at the National Laboratory or facility through one or more
projects that meet the requirements of subsections (e) and (f).
(e) Program Requirements.--
(1) In general.--Each project funded under this section
shall meet the requirements of this subsection.
(2) Entities.--Each project shall include at least one of
each of the following entities:

[[Page 928]]
119 STAT. 928

(A) A business.
(B) An institution of higher education.
(C) A nonprofit institution.
(D) An agency of a State, local, or tribal
government.
(3) Cost-sharing.--
(A) In general.--The costs of carrying out projects
under this section shall be shared in accordance with
section 988.
(B) Sources.--The calculation of costs paid by the
non-Federal sources for a project shall include cash,
personnel, services, equipment, and other resources
expended on the project after the commencement of the
project.
(C) Research and development expenses.--Independent
research and development expenses of Government
contractors that qualify for reimbursement under section
31.205-18(e) of title 48, Code of Federal Regulations,
issued pursuant to section 25(c)(1) of the Office of
Federal Procurement Policy Act (41 U.S.C. 421(c)(1)),
may be credited towards costs paid by non-Federal
sources to a project, if the expenses meet the other
requirements of this section.
(4) Competitive selection.--A project under this section
shall be competitively selected using procedures determined by
the Secretary.
(5) Accounting.--Any participant that receives funds under
this section may use generally accepted accounting principles
for maintaining accounts, books, and records relating to the
project.
(6) Duration.--No Federal funds shall be made available
under this section for a construction project or for any project
with a duration of more than 5 years.

(f) Selection Criteria.--
(1) Departmental missions.--The Secretary shall allocate
funds under this section only if the Director of the National
Laboratory or single-purpose research facility managing the
project determines that the project is likely to improve the
ability of the National Laboratory or single-purpose research
facility to achieve technical success in meeting departmental
missions.
(2) Other criteria.--In selecting a project to receive
Federal funds, the Secretary shall consider--
(A) the potential of the project to promote the
development of a commercially sustainable technology
cluster following the period of investment by the
Department, which will derive most of the demand for its
products or services from the private sector, and which
will support departmental missions at the participating
National Laboratory or single-purpose research facility;
(B) the potential of the project to promote the use
of commercial research, technology, products, processes,
and services by the participating National Laboratory or
single-purpose research facility to achieve its mission
or the commercial development of technological
innovations made at the participating National
Laboratory or single-purpose research facility;
(C) the extent to which the project involves a wide
variety and number of institutions of higher education,

[[Page 929]]
119 STAT. 929

nonprofit institutions, and technology-related business
concerns that can support the missions of the
participating National Laboratory or single-purpose
research facility and that will make substantive
contributions to achieving the goals of the project;
(D) the extent to which the project focuses on
promoting the development of technology-related business
concerns that are small businesses or involves such
small businesses substantively in the project; and
(E) such other criteria as the Secretary determines
to be appropriate.

(g) Allocation.--In allocating funds for projects approved under
this section, the Secretary shall provide--
(1) the Federal share of the project costs; and
(2) additional funds to the National Laboratory or single-
purpose research facility managing the project to permit the
National Laboratory or single-purpose research facility to carry
out activities relating to the project, and to coordinate the
activities with the project.

(h) Report to Congress.--Not later than July 1, 2008, the Secretary
shall submit to Congress a report on whether the Program should be
continued and, if so, how the program should be managed.
(i) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for activities under this section
$10,000,000 for each of fiscal years 2006 through 2008.

SEC. 1003. NOTE: 42 USC 16393. SMALL BUSINESS ADVOCACY AND
ASSISTANCE.

(a) Small Business Advocate.--The Secretary shall require the
Director of each National Laboratory, and may require the Director of a
single-purpose research facility, to designate a small business advocate
to--
(1) increase the participation of small business concerns,
including socially and economically disadvantaged small business
concerns (as defined in section 8(a)(4) of the Small Business
Act (15 U.S.C. 637(a)(4))), in procurement, collaborative
research, technology licensing, and technology transfer
activities conducted by the National Laboratory or single-
purpose research facility;
(2) NOTE: Reports. report to the Director of the
National Laboratory or single-purpose research facility on the
actual participation of small business concerns in procurement
and collaborative research along with recommendations, if
appropriate, on how to improve participation;
(3) make available to small business concerns training,
mentoring, and information on how to participate in procurement
and collaborative research activities;
(4) increase the awareness inside the National Laboratory or
single-purpose research facility of the capabilities and
opportunities presented by small business concerns; and
(5) establish NOTE: Guidelines. Reports. guidelines for
the program under subsection (b) and report on the effectiveness
of the program to the Director of the National Laboratory or
single-purpose research facility.

(b) Establishment of Small Business Assistance Program.--The
Secretary shall require the Director of each National Laboratory, and
may require the Director of a single-purpose

[[Page 930]]
119 STAT. 930

research facility, to establish a program to provide small business
concerns with--
(1) assistance directed at making the small business
concerns more effective and efficient subcontractors or
suppliers to the National Laboratory or single-purpose research
facilities; or
(2) general technical assistance, the cost of which shall
not exceed $10,000 per instance of assistance, to improve the
products or services of the small business concern.

(c) Use of Funds.--None of the funds expended under subsection (b)
may be used for direct grants to small business concerns.
(d) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary for activities under this section
$5,000,000 for each of fiscal years 2006 through 2008.

SEC. 1004. NOTE: 42 USC 16394. OUTREACH.

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

SEC. 1005. NOTE: Applicability. 42 USC 16395. RELATIONSHIP TO OTHER
LAWS.

Except as otherwise provided in this Act or an amendment made by
this Act, the Secretary shall carry out the research, development,
demonstration, and commercial application programs, projects, and
activities authorized by this Act or an amendment made by this Act in
accordance with the applicable provisions of--
(1) the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.);
(2) the Federal Nonnuclear Energy Research and Development
Act of 1974 (42 U.S.C. 5901 et seq.);
(3) the Energy Policy Act of 1992 (42 U.S.C. 13201 et seq.);
(4) the Stevenson-Wydler Technology Innovation Act of 1980
(15 U.S.C. 3701 et seq.);
(5) chapter 18 of title 35, United States Code (commonly
known as the ``Bayh-Dole Act''); and
(6) any other Act under which the Secretary is authorized to
carry out the programs, projects, and activities.

SEC. 1006. NOTE: Government organization and employees. IMPROVED
COORDINATION AND MANAGEMENT OF CIVILIAN SCIENCE AND
TECHNOLOGY PROGRAMS.

(a) Effective Top-Level Coordination of Research and Development
Programs.--Section 202 of the Department of Energy Organization Act (42
U.S.C. 7132) is amended by striking subsection (b) and inserting the
following:
``(b)(1) There NOTE: President. shall be in the Department an
Under Secretary for Science, who shall be appointed by the President, by
and with the advice and consent of the Senate.

``(2) The Under Secretary shall be compensated at the rate provided
for level III of the Executive Schedule under section 5314 of title 5,
United States Code.
``(3) The Under Secretary for Science shall be appointed from among
persons who--

[[Page 931]]
119 STAT. 931

``(A) have extensive background in scientific or engineering
fields; and
``(B) are well qualified to manage the civilian research and
development programs of the Department.

``(4) The Under Secretary for Science shall--
``(A) serve as the Science and Technology Advisor to the
Secretary;
``(B) monitor the research and development programs of the
Department in order to advise the Secretary with respect to any
undesirable duplication or gaps in the programs;
``(C) advise the Secretary with respect to the well-being
and management of the multipurpose laboratories under the
jurisdiction of the Department;
``(D) advise the Secretary with respect to education and
training activities required for effective short- and long-term
basic and applied research activities of the Department;
``(E) advise the Secretary with respect to grants and other
forms of financial assistance required for effective short- and
long-term basic and applied research activities of the
Department;
``(F) advise the Secretary with respect to long-term
planning, coordination, and development of a strategic framework
for Department research and development activities; and
``(G) carry out such additional duties assigned to the Under
Secretary by the Secretary relating to basic and applied
research, including supervision or support of research
activities carried out by any of the Assistant Secretaries
designated by section 203 of this Act, as the Secretary
considers advantageous.''.

(b) Additional Assistant Secretary Position.--
(1) In general.--Section 203(a) of the Department of Energy
Organization Act (42 U.S.C. 7133(a)) is amended in the first
sentence by striking ``six Assistant Secretaries'' and inserting
``7 Assistant Secretaries''.
(2) Assistant secretary level.--It is the sense of Congress
that the leadership for departmental missions in nuclear energy
should be at the Assistant Secretary level.

(c) Technical and Conforming Amendments.--
(1) Section 202 of the Department of Energy Organization Act
(42 U.S.C. 7132) is amended by adding at the end the following:

``(d)(1) There NOTE: President. shall be in the Department an
Under Secretary, who shall be appointed by the President, by and with
the advice and consent of the Senate, and who shall perform such
functions and duties as the Secretary shall prescribe, consistent with
this section.

``(2) The Under Secretary shall be compensated at the rate provided
for level III of the Executive Schedule under section 5314 of title 5,
United States Code.
``(e)(1) There NOTE: President. shall be in the Department a
General Counsel, who shall be appointed by the President, by and with
the advice and consent of the Senate, and who shall perform such
functions and duties as the Secretary shall prescribe.

``(2) The General Counsel shall be compensated at the rate provided
for level IV of the Executive Schedule under section 5315 of title 5,
United States Code.''.

[[Page 932]]
119 STAT. 932

(2) Section 5314 of title 5, United States Code, is amended
by striking ``Under Secretaries of Energy (2)'' and inserting
``Under Secretaries of Energy (3)''.
(3) Section 5315 of title 5, United States Code, is amended
by striking ``Assistant Secretaries of Energy (6)'' and
inserting ``Assistant Secretaries of Energy (7)''.
(4) Section 209(b) of the Department of Energy Organization
Act (42 U.S.C. 7139(b)) is amended by striking paragraph (6) and
inserting the following:
``(6) to carry out such additional duties assigned to the
Office by the Secretary.''.

SEC. 1007. OTHER TRANSACTIONS AUTHORITY.

Section 646 of the Department of Energy Organization Act (42 U.S.C.
7256) is amended by adding at the end the following:
``(g)(1) In addition to authority granted to the Secretary under any
other provision of law, the Secretary may exercise the same authority to
enter into transactions (other than contracts, cooperative agreements,
and grants), subject to the same terms and conditions as the Secretary
of Defense under section 2371 of title 10, United States Code (other
than subsections (b) and (f) of that section).
``(2) In applying section 2371 of title 10, United States Code, to
the Secretary under paragraph (1)--
``(A) the term `basic' shall be replaced by the term
`research';
``(B) the term `applied' shall be replaced by the term
`development'; and
``(C) the terms `advanced research projects' and `advanced
research' shall be replaced by the term `demonstration
projects'.

``(3) The authority of the Secretary under paragraph (1) shall not
be subject to--
``(A) section 9 of the Federal Nonnuclear Energy Research
and Development Act of 1974 (42 U.S.C. 5908); or
``(B) section 152 of the Atomic Energy Act of 1954 (42
U.S.C. 2182).

``(4)(A) The Secretary shall use such competitive, merit-based
selection procedures in entering into transactions under paragraph (1),
as the Secretary determines in writing to be practicable.
``(B) A transaction under paragraph (1) shall relate to a research,
development, or demonstration project only if the Secretary determines
in writing that the use of a standard contract, grant, or cooperative
agreement for the project is not feasible or appropriate.
``(5) The Secretary may protect from disclosure, for up to 5 years
after the date on which the information is developed, any information
developed pursuant to a transaction under paragraph (1) that would be
protected from disclosure under section 552(b)(4) of title 5, United
States Code, if obtained from a person other than a Federal agency.
``(6)(A) Not NOTE: Deadline. Guidelines. later than 90 days
after the date of enactment of this subsection, the Secretary shall
issue guidelines for transactions under paragraph (1).

``(B) The NOTE: Federal Register, publication. guidelines shall
be published in the Federal Register for public comment in accordance
with rulemaking procedures of the Department.

[[Page 933]]
119 STAT. 933

``(C) The Secretary shall not have authority to carry out
transactions under paragraph (1) until the guidelines for transactions
required under subparagraph (A) are final.
``(7) The NOTE: Reports. annual report of the head of an
executive agency under section 2371(h) of title 10, United States Code,
shall be submitted to Congress.

``(8)(A) In this paragraph, the term `nontraditional Government
contractor' has the meaning given the term `nontraditional defense
contractor' in section 845(f) of the National Defense Authorization Act
for Fiscal Year 1994 (Public Law 103-160; 10 U.S.C. 2371 note).
``(B) Not NOTE: Deadline. Reports. later than 1 year after the
date on which the final guidelines are published under paragraph (6),
the Comptroller General of the United States shall submit to Congress a
report describing--
``(i) the use by the Department of authorities under this
section, including the ability to attract nontraditional
Government contractors; and
``(ii) whether additional safeguards are necessary to carry
out the authorities.

``(9) The authority of the Secretary under this subsection may be
delegated only to an officer of the Department who is appointed by the
President by and with the advice and consent of the Senate.
``(10) Notwithstanding NOTE: Termination date. any other
provision of law, the authority to enter into transactions under
paragraph (1) shall terminate on September 30, 2010.''.

SEC. 1008. NOTE: 42 USC 16396. PRIZES FOR ACHIEVEMENT IN GRAND
CHALLENGES OF SCIENCE AND TECHNOLOGY.

(a) Authority.--The Secretary may carry out a program to award cash
prizes in recognition of breakthrough achievements in research,
development, demonstration, and commercial application that have the
potential for application to the performance of the mission of the
Department.
(b) Competition Requirements.--The program under subsection (a) may
include prizes for the achievement of goals articulated by the Secretary
in a specific area through a widely advertised solicitation of
submission of results for research, development, demonstration, or
commercial application projects.
(c) Prizes for Processes and Technologies to Reduce Dependence on
Imported Oil.--The Secretary, in cooperation with the Freedom Prize
Foundation, shall support a program of awarding prizes, to be known as
Freedom Prizes, to encourage and recognize the development and
deployment of processes and technologies that serve to reduce the
dependence of the United States on imported oil.
(d) Relationship to Other Authority.--The program under subsection
(a) may be carried out in conjunction with or in addition to the
exercise of any other authority of the Secretary to acquire, support, or
stimulate research, development, demonstration, or commercial
application projects.
(e) Authorization of Appropriations.--There are authorized to be
appropriated--
(1) $10,000,000 to carry out the program under subsection
(a); and
(2) $5,000,000 to carry out the program under subsection
(c).

[[Page 934]]
119 STAT. 934

SEC. 1009. TECHNICAL CORRECTIONS.

(a) Coal Research and Development.--
(1) In general.--Public Law 86-599 (30 U.S.C. 661 et seq.)
is amended--
(A) by striking the first section (30 U.S.C. 661)
and inserting the following:

``Sec. 1. (a) This Act may be cited as the `Coal Research and
Development Act of 1960'.
``(b) In this Act:
``(1) The term `research' means scientific, technical, and
economic research and the practical application of that
research.
``(2) The term `Secretary' means the Secretary of Energy.'';
(B) in section 2 (30 U.S.C. 662), by striking
``shall establish within'' and all that follows through
``such Office'';
(C) by striking sections 3, 4, and 7 (30 U.S.C. 663,
664, 667); and
(D) by redesignating sections 5, 6, and 8 (30 U.S.C.
665, 666, 668) as sections 3, 4, and 5, respectively.
(2) Patents.--Section 210(a)(8) of title 35, United States
Code, is amended by striking ``Coal Research Development Act of
1960'' and inserting ``Coal Research and Development Act of
1960''.

(b) Nonnuclear Energy Research and Development.--
(1) Short title; definitions.--Section 1 of the Federal
Nonnuclear Energy Research and Development Act of 1974 (42
U.S.C. 5902) is amended to read as follows:


``SHORT TITLE AND DEFINITIONS


``Sec. 1. NOTE: 42 USC 5901 note. (a) This Act may be cited as
the `Federal Nonnuclear Energy Research and Development Act of 1974'.

``(b) In this Act:
``(1) The term `Department' means the Department of Energy.
``(2) The term `Secretary' means the Secretary of Energy.''.
(2) Statement of policy.--Section 3(b) of the Federal
Nonnuclear Energy Research and Development Act of 1974 (42
U.S.C. 5902(b)) is amended--
(A) in paragraph (1), by striking ``Energy Research
and Development Administration'' and inserting
``Department'';
(B) in paragraph (2), by striking ``Administrator of
the Energy Research and Development Administration
(hereinafter in this Act referred to as the
`Administrator')'' and inserting ``Secretary''; and
(C) in paragraph (3)--
(i) by striking ``Administrator'' and
inserting ``Secretary''; and
(ii) by inserting ``Demonstration'' after
``Cooling''.
(3) Duties and authorities.--Section 4 of the Federal
Nonnuclear Energy Research and Development Act of 1974 (42
U.S.C. 5903) is amended--
(A) by striking the section heading and inserting
the following: ``duties and authorities of the
secretary''; and
(B) in the matter preceding subsection (a), by
striking ``Administrator'' and inserting ``Secretary''.

[[Page 935]]
119 STAT. 935

(4) Comprehensive planning and programming.--Section 6 of
the Federal Nonnuclear Energy Research and Development Act of
1974 (42 U.S.C. 5905) is amended--
(A) by striking ``Administrator'' each place it
appears and inserting ``Secretary''; and
(B) in subsection (b)(3)--
(i) in subparagraph (I), by inserting
``Demonstration'' after ``Cooling''; and
(ii) in subparagraph (L), by inserting
``Energy'' after ``Solar''.
(5) Forms of federal assistance.--Section 7 of the Federal
Nonnuclear Energy Research and Development Act of 1974 (42
U.S.C. 5906) is amended--
(A) by striking ``Administrator'' each place it
appears and inserting ``Secretary''; and
(B) in subsection (a)(4), by striking ``of the
section''.
(6) Demonstrations.--Section 8 of the Federal Nonnuclear
Energy Research and Development Act of 1974 (42 U.S.C. 5907) is
amended--
(A) in subsections (a) through (c), by striking
``Administrator'' each place it appears and inserting
``Secretary'';
(B) in subsection (d)--
(i) in the first sentence of paragraph (1), by
inserting ``of the Energy Research and Development
Administration'' after ``Administrator''; and
(ii) in paragraph (3), by striking
``Administrator'' and inserting ``Secretary''; and
(C) in subsection (f)--
(i) by striking ``Administrator'' each place
it appears and inserting ``Secretary''; and
(ii) in the proviso of the first sentence, by
striking ``Administrator's'' and inserting
``Secretary's''.
(7) Patent policy.--Section 9 of the Federal Nonnuclear
Energy Research and Development Act of 1974 (42 U.S.C. 5908) is
amended--
(A) by striking ``Administration'' each place it
appears and inserting ``Department'';
(B) by striking ``Administrator'' each place it
appears and inserting ``Secretary''; and
(C) in subsection (c)(3), by striking
``Administration's'' and inserting ``Department's''.
(8) Acquisition of essential materials.--Section 12 of the
Federal Nonnuclear Energy Research and Development Act of 1974
(42 U.S.C. 5911) is amended by striking subsection (b) and
inserting the following:

``(b) A rule or order under subsection (a) shall be considered to be
a major rule subject to chapter 8 of title 5, United States Code.''.
(9) Water resource evaluation.--Section 13 of the Federal
Nonnuclear Energy Research and Development Act of 1974 (42
U.S.C. 5912) is amended by striking ``Administrator'' each place
it appears and inserting ``Secretary''.
(10) Authorization of appropriations.--Section 16 of the
Federal Nonnuclear Energy Research and Development Act of 1974
(42 U.S.C. 5915) is amended--
(A) by striking the section heading and inserting
the following: ``authorization of appropriations'';

[[Page 936]]
119 STAT. 936

(B) by striking ``(a) There may be appropriated to
the Administrator'' and inserting ``There may be
appropriated to the Secretary''; and
(C) by striking subsections (b) and (c).
(11) Central source of nonnuclear energy information.--
Section 17 of the Federal Nonnuclear Energy Research and
Development Act of 1974 (42 U.S.C. 5916) is amended--
(A) by striking ``Administrator'' each place it
appears and inserting ``Secretary'';
(B) in the first sentence, by striking
``Administrator's'';
(C) in the second sentence, by striking ``he'' and
inserting ``the Secretary'';
(D) in the third sentence--
(i) in paragraph (2) of the first proviso, by
striking ``section 1905 or title 18'' and
inserting ``section 1905 of title 18''; and
(ii) in subparagraph (B) of the second
proviso--
(I) by striking ``the Federal Energy
Administration,'';
(II) by striking ``the Federal Power
Commission,'' and inserting ``the
Federal Energy Regulatory Commission'';
and
(III) by striking ``General
Accounting Office'' and inserting
``Government Accountability Office'';
and
(E) in the last sentence, by inserting ``or ranking
minority member'' after ``chairman''.
(12) Energy information, loan guarantees, and financial
support.--Sections 18 through 20 of the Federal Nonnuclear
Energy Research and Development Act of 1974 (42 U.S.C. 5917
through 5920) are repealed.

(c) Stevenson-Wydler Technology Innovation Act of 1980.--Section 20
of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C.
3712) is amended by striking ``and the National Science Foundation'' and
inserting ``, the Secretary of Energy, and the Director of the National
Science Foundation''.

SEC. 1010. NOTE: Deadline. Reports.  UNIVERSITY COLLABORATION.

Not later than 2 years after the date of enactment of this Act, the
Secretary shall transmit to the Congress a report that examines the
feasibility of promoting collaborations between major universities and
other colleges and universities in grants, contracts, and cooperative
agreements made by the Secretary for energy projects. For purposes of
this section, major universities are schools listed by the Carnegie
Foundation as Doctoral Research Extensive Universities. The Secretary
shall also consider providing incentives to increase the inclusion of
small institutions of higher education, including minority-serving
institutions, in energy grants, contracts, and cooperative agreements.

SEC. 1011. SENSE OF CONGRESS.

It is the sense of Congress that--
(1) the Secretary should develop and implement more
stringent procurement and inventory controls, including controls
on the purchase card program, to prevent waste, fraud, and abuse
of taxpayer funds by employees and contractors of the
Department; and

[[Page 937]]
119 STAT. 937

(2) the Department's Inspector General should continue to
closely review purchase card purchases and other procurement and
inventory practices at the Department.

TITLE XI--PERSONNEL AND TRAINING

SEC. 1101. NOTE: 42 USC 16411.  WORKFORCE TRENDS AND TRAINEESHIP
GRANTS.

(a) Definitions.--In this section:
(1) Energy technology industry.--The term ``energy
technology industry'' includes--
(A) a renewable energy industry;
(B) a company that develops or commercializes a
device to increase energy efficiency;
(C) the oil and gas industry;
(D) the nuclear power industry;
(E) the coal industry;
(F) the electric utility industry; and
(G) any other industrial sector, as the Secretary
determines to be appropriate.
(2) Skilled technical personnel.--The term ``skilled
technical personnel'' means--
(A) journey- and apprentice-level workers who are
enrolled in, or have completed, a federally-recognized
or State-recognized apprenticeship program; and
(B) other skilled workers in energy technology
industries, as determined by the Secretary.

(b) Workforce Trends.--
(1) Monitoring.--The Secretary, in consultation with, and
using data collected by, the Secretary of Labor, shall monitor
trends in the workforce of--
(A) skilled technical personnel that support energy
technology industries; and
(B) electric power and transmission engineers.
(2) Report on trends.--Not later than 1 year after the date
of enactment of this Act, the Secretary shall submit to Congress
a report on current trends under paragraph (1), with
recommendations (as appropriate) to meet the future labor
requirements for the energy technology industries.
(3) Report on shortage.--As soon as practicable after the
date on which the Secretary identifies or predicts a significant
national shortage of skilled technical personnel in one or more
energy technology industries, the Secretary shall submit to
Congress a report describing the shortage.

(c) Traineeship Grants for Skilled Technical Personnel.--The
Secretary, in consultation with the Secretary of Labor, may establish
programs in the appropriate offices of the Department under which the
Secretary provides grants to enhance training (including distance
learning) for any workforce category for which a shortage is identified
or predicted under subsection (b)(2).
(d) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $20,000,000 for each of fiscal
years 2006 through 2008.

[[Page 938]]
119 STAT. 938

SEC. 1102. EDUCATIONAL PROGRAMS IN SCIENCE AND MATHEMATICS.

(a) Science Education Enhancement Fund.--Section 3164 of the
Department of Energy Science Education Enhancement Act (42 U.S.C. 7381a)
is amended by adding at the end:
``(c) Science Education Enhancement Fund.--The Secretary shall use
not less than 0.3 percent of the amount made available to the Department
for research, development, demonstration, and commercial application for
fiscal year 2006 and each fiscal year thereafter to carry out activities
authorized by this part.''.
(b) Authorized Education Activities.--Section 3165 of the Department
of Energy Science Education Enhancement Act (42 U.S.C. 7381b) is amended
by adding at the end the following:
``(14) Support competitive events for students under the
supervision of teachers, designed to encourage student interest
and knowledge in science and mathematics.
``(15) Support competitively-awarded, peer-reviewed programs
to promote professional development for mathematics teachers and
science teachers who teach in grades from kindergarten through
grade 12 at Department research and development facilities.
``(16) Support summer internships at Department research and
development facilities, for mathematics teachers and science
teachers who teach in grades from kindergarten through grade 12.
``(17) Sponsor and assist in educational and training
activities identified as critical skills needs for future
workforce development at Department research and development
facilities.''.

(c) Educational Partnerships.--Section 3166(b) of the Department of
Energy Science Education Enhancement Act (42 U.S.C. 7381c(b)) is
amended--
(1) by striking paragraph (1) and inserting the following:
``(1) loaning or transferring equipment to the
institution;'';
(2) in paragraph (5), by striking ``and'' at the end;
(3) in paragraph (6), by striking the period at the end and
inserting ``; and''; and
(4) by adding at the end the following:
``(7) providing funds to educational institutions to hire
personnel to facilitate interactions between local school
systems, Department research and development facilities, and
corporate and governmental entities.''.

(d) Definition of Department Research and Development Facilities.--
Section 3167(3) of the Department of Energy Science Education
Enhancement Act (42 U.S.C. 7381d(3)) is amended by striking ``from the
Office of Science of the Department of Energy'' and inserting ``by the
Department of Energy''.
(e) Study.--
(1) In general.--The Secretary, in consultation with the
Secretary of Education, shall enter into an arrangement with the
National Academy of Public Administration to conduct a study of
the priorities, quality, local and regional flexibility, and
plans for educational programs at Department research and
development facilities.
(2) Inclusion.--The study shall recommend measures that the
Secretary may take to improve Department-wide coordination of
educational, workforce development, and critical skills
development activities.

[[Page 939]]
119 STAT. 939

(3) Report.--Not later than 2 years after the date of
enactment of this Act, the Secretary shall submit to Congress a
report on the results of the study conducted under this
subsection.

SEC. 1103. TRAINING NOTE: 42 USC 16412. GUIDELINES FOR NONNUCLEAR
ELECTRIC ENERGY INDUSTRY PERSONNEL.

(a) In General.--The Secretary of Labor, in consultation with the
Secretary and in conjunction with the electric industry and recognized
employee representatives, shall develop model personnel training
guidelines to support the reliability and safety of the nonnuclear
electric system.
(b) Requirements.--The training guidelines under subsection (a)
shall, at a minimum--
(1) include training requirements for workers engaged in the
construction, operation, inspection, or maintenance of
nonnuclear electric generation, transmission, or distribution
systems, including requirements relating to--
(A) competency;
(B) certification; and
(C) assessment, including--
(i) initial and continuous evaluation of
workers;
(ii) recertification procedures; and
(iii) methods for examining or testing the
qualification of an individual who performs a
covered task; and
(2) consolidate training guidelines in existence on the date
on which the guidelines under subsection (a) are developed
relating to the construction, operation, maintenance, and
inspection of nonnuclear electric generation, transmission, and
distribution facilities, such as guidelines established by the
National Electric Safety Code and other industry consensus
standards.

SEC. 1104. NOTE: 42 USC 16413. NATIONAL CENTER FOR ENERGY MANAGEMENT
AND BUILDING TECHNOLOGIES.

The Secretary shall support the ongoing activities of and explore
opportunities for expansion of the National Center for Energy Management
and Building Technologies to carry out research, education, and training
activities to facilitate the improvement of energy efficiency, indoor
environmental quality, and security of industrial, commercial,
residential, and public buildings.

SEC. 1105. IMPROVED ACCESS TO ENERGY-RELATED SCIENTIFIC AND TECHNICAL
CAREERS.

(a) Science Education Programs.--Section 3164 of the Department of
Energy Science Education Enhancement Act (42 U.S.C. 7381a) (as amended
by section 1102(a)) is amended by adding at the end the following:
``(d) Programs for Students From Under-Represented Groups.--In
carrying out a program under subsection (a), the Secretary shall give
priority to activities that are designed to encourage students from
under-represented groups to pursue scientific and technical careers.''.
(b) Partnerships With Historically Black Colleges and Universities,
Hispanic-Servicing Institutions, and Tribal Colleges.--The Department of
Energy Science Education Enhancement Act (42 U.S.C. 7381 et seq.) is
amended--

[[Page 940]]
119 STAT. 940

(1) by redesignating sections 3167 and 3168 NOTE: 42 USC
7381d, 7381e. as sections 3168 and 3169, respectively; and
(2) by inserting after section 3166 the following:

``SEC. 3167. NOTE: 42 USC 7381c-1. PARTNERSHIPS WITH HISTORICALLY
BLACK COLLEGES AND UNIVERSITIES, HISPANIC-SERVING
INSTITUTIONS, AND TRIBAL COLLEGES.

``(a) Definitions.--In this section:
``(1) Hispanic-serving institution.--The term `Hispanic-
serving institution' has the meaning given the term in section
502(a) of the Higher Education Act of 1965 (20 U.S.C. 1101a(a)).
``(2) Historically black college or university.--The term
`historically Black college or university' has the meaning given
the term `part B institution' in section 322 of the Higher
Education Act of 1965 (20 U.S.C. 1061).
``(3) National laboratory.--The term `National Laboratory'
has the meaning given the term in section 2 of the Energy Policy
Act of 2005.
``(4) Science facility.--The term `science facility' has the
meaning given the term `single-purpose research facility' in
section 903 of the Energy Policy Act of 2005.
``(5) Tribal college.--The term `tribal college' has the
meaning given the term `tribally controlled college or
university' in section 2(a) of the Tribally Controlled College
Assistance Act of 1978 (25 U.S.C. 1801(a)).

``(b) Education Partnership.--The Secretary shall require the
director of each National Laboratory, and may require the head of any
science facility, to increase the participation of historically Black
colleges or universities, Hispanic-serving institutions, or tribal
colleges in any activity that increases the capacity of the historically
Black colleges or universities, Hispanic-serving institutions, or tribal
colleges to train personnel in science or engineering.
``(c) Activities.--An activity described in subsection (b)
includes--
``(1) collaborative research;
``(2) equipment transfer;
``(3) training activities carried out at a National
Laboratory or science facility; and
``(4) mentoring activities carried out at a National
Laboratory or science facility.

``(d) Report.--Not later than 2 years after the date of enactment of
this subsection, the Secretary shall submit to Congress a report
describing the activities carried out under this section.''.

SEC. 1106. NOTE: 42 USC 16414. NATIONAL POWER PLANT OPERATIONS
TECHNOLOGY AND EDUCATIONAL CENTER.

(a) Establishment.--The Secretary shall support the establishment of
a National Power Plant Operations Technology and Education Center
(referred to in this section as the ``Center''), to address the need for
training and educating certified operators and technicians for the
electric power industry.
(b) Location of Center.--The Secretary shall support the
establishment of the Center at an institution of higher education that
has--
(1) expertise in providing degree programs in electric power
generation, transmission, and distribution technologies;
(2) expertise in providing onsite and Internet-based
training; and

[[Page 941]]
119 STAT. 941

(3) demonstrated responsiveness to workforce and training
requirements in the electric power industry.

(c) Training and Continuing Education.--
(1) In general.--The Center shall provide training and
continuing education in electric power generation, transmission,
and distribution technologies and operations.
(2) Location.--The Center shall carry out training and
education activities under paragraph (1)--
(A) at the Center; and
(B) through Internet-based information technologies
that allow for learning at remote sites.

TITLE NOTE: Electricity Modernization Act of 2005. XII--ELECTRICITY

SEC. 1201. NOTE: 42 USC 15801 note. SHORT TITLE.

This title may be cited as the ``Electricity Modernization Act of
2005''.

Subtitle A--Reliability Standards

SEC. 1211. ELECTRIC RELIABILITY STANDARDS.

(a) In General.--Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) is amended by adding at the end the following:

``SEC. 215. NOTE: 16 USC 824o. 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, including cybersecurity protection, 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,
including a cybersecurity incident, or unanticipated failure of
system elements.

[[Page 942]]
119 STAT. 942

``(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).
``(8) The term `cybersecurity incident' means a malicious
act or suspicious event that disrupts, or was an attempt to
disrupt, the operation of those programmable electronic devices
and communication networks including hardware, software and data
that are essential to the reliable operation of the bulk power
system.

``(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) NOTE: Regulations. Deadline. The Commission shall issue a
final rule to implement the requirements of this section not later than
180 days after the date of enactment of this section.

``(c) Certification.--Following the issuance of a Commission rule
under subsection (b)(2), any person may submit an application to the
Commission for certification as the Electric Reliability Organization.
The Commission may certify one such ERO if the Commission determines
that such ERO--
``(1) has the ability to develop and enforce, subject to
subsection (e)(2), reliability standards that provide for an
adequate level of reliability of the bulk-power system; and
``(2) has established rules that--
``(A) assure its independence of the users and
owners and operators of the bulk-power system, while
assuring fair stakeholder representation in the
selection of its directors and balanced decisionmaking
in any ERO committee or subordinate organizational
structure;
``(B) allocate equitably reasonable dues, fees, and
other charges among end users for all activities under
this section;
``(C) provide fair and impartial procedures for
enforcement of reliability standards through the
imposition of penalties in accordance with subsection
(e) (including limitations on activities, functions, or
operations, or other appropriate sanctions);
``(D) provide for reasonable notice and opportunity
for public comment, due process, openness, and balance
of interests in developing reliability standards and
otherwise exercising its duties; and

[[Page 943]]
119 STAT. 943

``(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--

[[Page 944]]
119 STAT. 944

``(A) finds that the user or owner or operator has violated
a reliability standard approved by the Commission under
subsection (d); and
``(B) files notice and the record of the proceeding with the
Commission.

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

The Commission may modify such delegation. The ERO and the Commission
shall rebuttably presume that a proposal for delegation to a regional
entity organized on an Interconnection-wide basis promotes effective and
efficient administration of bulk-power system reliability and should be
approved. Such regulation may provide that the Commission may assign the
ERO's authority to enforce reliability standards under paragraph (1)
directly to a regional entity consistent with the requirements of this
paragraph.
``(5) The Commission may take such action as is necessary or
appropriate against the ERO or a regional entity to ensure compliance
with a reliability standard or any Commission order affecting the ERO or
a regional entity.

[[Page 945]]
119 STAT. 945

``(6) Any penalty imposed under this section shall bear a reasonable
relation to the seriousness of the violation and shall take into
consideration the efforts of such user, owner, or operator to remedy the
violation in a timely manner.
``(f) Changes in Electric Reliability Organization Rules.--The
Electric Reliability Organization shall file with the Commission for
approval any proposed rule or proposed rule change, accompanied by an
explanation of its basis and purpose. The Commission, upon its own
motion or complaint, may propose a change to the rules of the ERO. A
proposed rule or proposed rule change shall take effect upon a finding
by the Commission, after notice and opportunity for comment, that the
change is just, reasonable, not unduly discriminatory or preferential,
is in the public interest, and satisfies the requirements of subsection
(c).
``(g) Reliability Reports.--The ERO shall conduct periodic
assessments of the reliability and adequacy of the bulk-power system in
North America.
``(h) Coordination With Canada and Mexico.--The President is urged
to negotiate international agreements with the governments of Canada and
Mexico to provide for effective compliance with reliability standards
and the effectiveness of the ERO in the United States and Canada or
Mexico.
``(i) Savings Provisions.--(1) The ERO shall have authority to
develop and enforce compliance with reliability standards for only the
bulk-power system.
``(2) This section does not authorize the ERO or the Commission to
order the construction of additional generation or transmission capacity
or to set and enforce compliance with standards for adequacy or safety
of electric facilities or services.
``(3) Nothing in this section shall be construed to preempt any
authority of any State to take action to ensure the safety, adequacy,
and reliability of electric service within that State, as long as such
action is not inconsistent with any reliability standard, 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) NOTE: Deadline. Standards. Within 90 days of the
application of the Electric Reliability Organization or other affected
party, and after notice and opportunity for comment, the Commission
shall issue a final order determining whether a State action is
inconsistent with a reliability standard, taking into consideration any
recommendation of the ERO.

``(5) The Commission, after consultation with the ERO and the State
taking action, may stay the effectiveness of any State action, pending
the Commission's issuance of a final order.
``(j) NOTE: Establishment. 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 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

[[Page 946]]
119 STAT. 946

proposed to apply within the region is just, reasonable, not unduly
discriminatory or preferential, and in the public interest, whether fees
proposed to be assessed within the region are just, reasonable, not
unduly discriminatory or preferential, and in the public interest and
any other responsibilities requested by the Commission. The Commission
may give deference to the advice of any such regional advisory body if
that body is organized on an Interconnection-wide basis.

``(k) Alaska and Hawaii.--The provisions of this section do not
apply to Alaska or Hawaii.''.
(b) NOTE: 16 USC 824o note. Status of ERO.--The Electric
Reliability Organization certified by the Federal Energy Regulatory
Commission under section 215(c) of the Federal Power Act and any
regional entity delegated enforcement authority pursuant to section
215(e)(4) of that Act are not departments, agencies, or
instrumentalities of the United States Government.

(c) NOTE: 16 USC 824o note. Access Approvals by Federal
Agencies.--Federal agencies responsible for approving access to electric
transmission or distribution facilities located on lands within the
United States shall, in accordance with applicable law, expedite any
Federal agency approvals that are necessary to allow the owners or
operators of such facilities to comply with any reliability standard,
approved by the Commission under section 215 of the Federal Power Act,
that pertains to vegetation management, electric service restoration, or
resolution of situations that imminently endanger the reliability or
safety of the facilities.

Subtitle B--Transmission Infrastructure Modernization

SEC. 1221. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES.

(a) In General.--Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) is amended by adding at the end the following:

``SEC. 216. NOTE: 16 USC 824p. SITING OF INTERSTATE ELECTRIC
TRANSMISSION FACILITIES.

``(a) NOTE: Deadlines. Designation of National Interest Electric
Transmission Corridors.--(1) Not later than 1 year after the date of
enactment of this section and every 3 years thereafter, the Secretary of
Energy (referred to in this section as the `Secretary'), in consultation
with affected States, shall conduct a study of electric transmission
congestion.

``(2) NOTE: Reports. After considering alternatives and
recommendations from interested parties (including an opportunity for
comment from affected States), the Secretary shall issue a report, based
on the study, which may designate any geographic area experiencing
electric energy transmission capacity constraints or congestion that
adversely affects consumers as a national interest electric transmission
corridor.

``(3) The Secretary shall conduct the study and issue the report in
consultation with any appropriate regional entity referred to in section
215.
``(4) In determining whether to designate a national interest
electric transmission corridor under paragraph (2), the Secretary may
consider whether--

[[Page 947]]
119 STAT. 947

``(A) the economic vitality and development of the corridor,
or the end markets served by the corridor, may be constrained by
lack of adequate or reasonably priced electricity;
``(B)(i) economic growth in the corridor, or the end markets
served by the corridor, may be jeopardized by reliance on
limited sources of energy; and
``(ii) a diversification of supply is warranted;
``(C) the energy independence of the United States would be
served by the designation;
``(D) the designation would be in the interest of national
energy policy; and
``(E) the designation would enhance national defense and
homeland security.

``(b) Construction Permit.--Except as provided in subsection (i),
the Commission may, after notice and an opportunity for hearing, issue
one or more permits for the construction or modification of electric
transmission facilities in a national interest electric transmission
corridor designated by the Secretary under subsection (a) if the
Commission finds that--
``(1)(A) a State in which the transmission facilities are to
be constructed or modified does not have authority to--
``(i) approve the siting of the facilities; or
``(ii) consider the interstate benefits expected to
be achieved by the proposed construction or modification
of transmission facilities in the State;
``(B) the applicant for a permit is a transmitting utility
under this Act but does not qualify to apply for a permit or
siting approval for the proposed project in a State because the
applicant does not serve end-use customers in the State; or
``(C) a State commission or other entity that has authority
to approve the siting of the facilities has--
``(i) withheld approval for more than 1 year after
the filing of an application seeking approval pursuant
to applicable law or 1 year after the designation of the
relevant national interest electric transmission
corridor, whichever is later; or
``(ii) conditioned its approval in such a manner
that the proposed construction or modification will not
significantly reduce transmission congestion in
interstate commerce or is not economically feasible;
``(2) the facilities to be authorized by the permit will be
used for the transmission of electric energy in interstate
commerce;
``(3) the proposed construction or modification is
consistent with the public interest;
``(4) the proposed construction or modification will
significantly reduce transmission congestion in interstate
commerce and protects or benefits consumers;
``(5) the proposed construction or modification is
consistent with sound national energy policy and will enhance
energy independence; and
``(6) the proposed modification will maximize, to the extent
reasonable and economical, the transmission capabilities of
existing towers or structures.

``(c) Permit Applications.--(1) Permit applications under subsection
(b) shall be made in writing to the Commission.

[[Page 948]]
119 STAT. 948

``(2) NOTE: Regulations. The Commission shall issue rules
specifying--
``(A) the form of the application;
``(B) the information to be contained in the application;
and
``(C) the manner of service of notice of the permit
application on 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.--(1) 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 the 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.
``(2) Any right-of-way acquired under paragraph (1) shall be used
exclusively for the construction or modification of electric
transmission facilities within a reasonable period of time after the
acquisition.
``(3) The practice and procedure in any action or proceeding under
this subsection in the district court of the United States shall conform
as nearly as practicable to the practice and procedure in a similar
action or proceeding in the courts of the State in which the property is
located.
``(4) Nothing in this subsection shall be construed to authorize the
use of eminent domain to acquire a right-of-way for any purpose other
than the construction, modification, operation, or maintenance of
electric transmission facilities and related facilities. The right-of-
way cannot be used for any other purpose, and the right-of-way shall
terminate upon the termination of the use for which the right-of-way was
acquired.
``(f) Compensation.--(1) Any right-of-way acquired pursuant to
subsection (e) shall be considered a taking of private property for
which just compensation is due.
``(2) Just compensation shall be an amount equal to the fair market
value (including applicable severance damages) of the property taken on
the date of the exercise of eminent domain authority.
``(g) State Law.--Nothing in this section precludes any person from
constructing or modifying any transmission facility in accordance with
State law.
``(h) Coordination of Federal Authorizations for Transmission
Facilities.--(1) In this subsection:
``(A) The term `Federal authorization' means any
authorization required under Federal law in order to site a
transmission facility.
``(B) The term `Federal authorization' includes such
permits, special use authorizations, certifications, opinions,
or other

[[Page 949]]
119 STAT. 949

approvals as may be required under Federal law in order to site
a transmission facility.

``(2) The Department of Energy shall act as the lead agency for
purposes of coordinating all applicable Federal authorizations and
related environmental reviews of the facility.
``(3) To the maximum extent practicable under applicable Federal
law, the Secretary shall coordinate the Federal authorization and review
process under this subsection with any Indian tribes, multistate
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.
``(4)(A) As head of the lead agency, the Secretary, in consultation
with agencies responsible for Federal authorizations and, as
appropriate, with Indian tribes, multistate 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.
``(B) NOTE: Deadline. The Secretary shall ensure that, once an
application has been submitted with such data as the Secretary considers
necessary, all permit decisions and related environmental reviews under
all applicable Federal laws shall be completed--
``(i) within 1 year; or
``(ii) if a requirement of another provision of Federal law
does not permit compliance with clause (i), as soon thereafter
as is practicable.

``(C) NOTE: Deadline. The Secretary 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 not later than 60 days after the prospective
applicant submits a request for such information concerning--
``(i) the likelihood of approval for a potential facility;
and
``(ii) key issues of concern to the agencies and public.

``(5)(A) As lead agency head, the Secretary, 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.
``(B) The Secretary and the heads of other agencies shall streamline
the review and permitting of transmission within corridors designated
under section 503 of the Federal Land Policy and Management Act (43
U.S.C. 1763) by fully taking into account prior analyses and decisions
relating to the corridors.
``(C) The document shall include consideration by the relevant
agencies of any applicable criteria or other matters as required under
applicable law.
``(6)(A) If any agency has denied a Federal authorization required
for a transmission 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 President, who
shall, in consultation with the affected agency, review the denial or
failure to take action on the pending application.
``(B) Based on the overall record and in consultation with the
affected agency, the President may--

[[Page 950]]
119 STAT. 950

``(i) issue the necessary authorization with any appropriate
conditions; or
``(ii) deny the application.

``(C) NOTE: President. Deadline. The President shall issue a
decision not later than 90 days after the date of the filing of the
appeal.

``(D) NOTE: President. In making a decision under this
paragraph, the President shall comply with applicable requirements of
Federal law, including any requirements of--
``(i) the National Forest Management Act of 1976 (16 U.S.C.
472a et seq.);
``(ii) the Endangered Species Act of 1973 (16 U.S.C. 1531 et
seq.);
``(iii) the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.);
``(iv) the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.); and
``(v) the Federal Land Policy and Management Act of 1976 (43
U.S.C. 1701 et seq.).

``(7)(A) NOTE: Deadline. Regulations. Not later than 18 months
after the date of enactment of this section, the Secretary shall issue
any regulations necessary to implement this subsection.

``(B)(i) NOTE: Deadline. Memorandum. Not later than 1 year after
the date of enactment of this section, the Secretary and the heads of
all Federal agencies with authority to issue Federal authorizations
shall enter into a memorandum of understanding to ensure the timely and
coordinated review and permitting of electricity transmission
facilities.

``(ii) Interested Indian tribes, multistate entities, and State
agencies may enter the memorandum of understanding.
``(C) The head of each Federal agency with authority to issue a
Federal authorization shall designate a senior official responsible for,
and dedicate sufficient other staff and resources to ensure, full
implementation of the regulations and memorandum required under this
paragraph.
``(8)(A) Each Federal land use authorization for an electricity
transmission facility shall be issued--
``(i) for a duration, as determined by the Secretary,
commensurate with the anticipated use of the facility; and
``(ii) with appropriate authority to manage the right-of-way
for reliability and environmental protection.

``(B) On the expiration of the authorization (including an
authorization issued before the date of enactment of this section), the
authorization shall be reviewed for renewal taking fully into account
reliance on such electricity infrastructure, recognizing the importance
of the authorization for public health, safety, and economic welfare and
as a legitimate use of Federal land.
``(9) In exercising the responsibilities under this section, the
Secretary shall consult regularly with--
``(A) the Federal Energy Regulatory Commission;
``(B) electric reliability organizations (including related
regional entities) approved by the Commission; and
``(C) Transmission Organizations approved by the Commission.

``(i) Interstate Compacts.--(1) The consent of Congress is given for
three or more contiguous States to enter into an interstate compact,
subject to approval by Congress, establishing regional transmission
siting agencies to--

[[Page 951]]
119 STAT. 951

``(A) facilitate siting of future electric energy
transmission facilities within those States; and
``(B) carry out the electric energy transmission siting
responsibilities of those States.

``(2) The Secretary may provide technical assistance to regional
transmission siting agencies established under this subsection.
``(3) The regional transmission siting agencies shall have the
authority to review, certify, and permit siting of transmission
facilities, including facilities in national interest electric
transmission corridors (other than facilities on property owned by the
United States).
``(4) The Commission shall have no authority to issue a permit for
the construction or modification of an electric transmission facility
within a State that is a party to a compact, unless the members of the
compact are in disagreement and the Secretary makes, after notice and an
opportunity for a hearing, the finding described in subsection
(b)(1)(C).
``(j) Relationship to Other Laws.--(1) Except as specifically
provided, nothing in this section affects any requirement of an
environmental law of the United States, including the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
``(2) Subsection (h)(6) shall not apply to any unit of the National
Park System, the National Wildlife Refuge System, the National Wild and
Scenic Rivers System, the National Trails System, the National
Wilderness Preservation System, or a National Monument.
``(k) ERCOT.--This section shall not apply within the area referred
to in section 212(k)(2)(A).''.
(b) Reports to Congress on Corridors and Rights-of-Way on Federal
Lands.--Not later than 90 days after the date of enactment of this Act,
the Secretary of the Interior, the Secretary, the Secretary of
Agriculture, and the Chairman of the Council on Environmental Quality
shall submit to Congress a joint report identifying--
(1)(A) all existing designated transmission and distribution
corridors on Federal land and the status of work related to
proposed transmission and distribution corridor designations
under title V of the Federal Land Policy and Management Act of
1976 (43 U.S.C. 1761 et seq.);
(B) the schedule for completing the work;
(C) any impediments to completing the work; and
(D) steps that Congress could take to expedite the process;
(2)(A) the number of pending applications to locate
transmission facilities on Federal land;
(B) key information relating to each such facility;
(C) how long each application has been pending;
(D) the schedule for issuing a timely decision as to each
facility; and
(E) progress in incorporating existing and new such rights-
of-way into relevant land use and resource management plans or
the equivalent of those plans; and
(3)(A) the number of existing transmission and distribution
rights-of-way on Federal land that will come up for renewal
within the following 5-, 10-, and 15-year periods; and
(B) a description of how the Secretaries plan to manage the
renewals.

[[Page 952]]
119 STAT. 952

SEC. 1222. NOTE: 42 USC 16421. THIRD-PARTY FINANCE.

(a) Existing Facilities.--The Secretary, acting through the
Administrator of the Western Area Power Administration (hereinafter in
this section referred to as ``WAPA''), or through the Administrator of
the Southwestern Power Administration (hereinafter in this section
referred to as ``SWPA''), or both, may design, develop, construct,
operate, maintain, or own, or participate with other entities in
designing, developing, constructing, operating, maintaining, or owning,
an electric power transmission facility and related facilities
(``Project'') needed to upgrade existing transmission facilities owned
by SWPA or WAPA if the Secretary, in consultation with the applicable
Administrator, determines that the proposed Project--
(1)(A) is located in a national interest electric
transmission corridor designated under section 216(a) of the
Federal Power Act and will reduce congestion of electric
transmission in interstate commerce; or
(B) is necessary to accommodate an actual or projected
increase in demand for electric transmission capacity;
(2) is consistent with--
(A) transmission needs identified, in a transmission
expansion plan or otherwise, by the appropriate
Transmission Organization (as defined in the Federal
Power Act), if any, or approved regional reliability
organization; and
(B) efficient and reliable operation of the
transmission grid; and
(3) would be operated in conformance with prudent utility
practice.

(b) New Facilities.--The Secretary, acting through WAPA or SWPA, or
both, may design, develop, construct, operate, maintain, or own, or
participate with other entities in designing, developing, constructing,
operating, maintaining, or owning, a new electric power transmission
facility and related facilities (``Project'') located within any State
in which WAPA or SWPA operates if the Secretary, in consultation with
the applicable Administrator, determines that the proposed Project--
(1)(A) is located in an area designated under section 216(a)
of the Federal Power Act and will reduce congestion of electric
transmission in interstate commerce; or
(B) is necessary to accommodate an actual or projected
increase in demand for electric transmission capacity;
(2) is consistent with--
(A) transmission needs identified, in a transmission
expansion plan or otherwise, by the appropriate
Transmission Organization (as defined in the Federal
Power Act) if any, or approved regional reliability
organization; and
(B) efficient and reliable operation of the
transmission grid;
(3) will be operated in conformance with prudent utility
practice;
(4) will be operated by, or in conformance with the rules
of, the appropriate (A) Transmission Organization, if any, or
(B) if such an organization does not exist, regional reliability
organization; and

[[Page 953]]
119 STAT. 953

(5) will not duplicate the functions of existing
transmission facilities or proposed facilities which are the
subject of ongoing or approved siting and related permitting
proceedings.

(c) Other Funds.--
(1) In general.--In carrying out a Project under subsection
(a) or (b), the Secretary may accept and use funds contributed
by another entity for the purpose of carrying out the Project.
(2) Availability.--The contributed funds shall be available
for expenditure for the purpose of carrying out the Project--
(A) without fiscal year limitation; and
(B) as if the funds had been appropriated
specifically for that Project.
(3) Allocation of costs.--In carrying out a Project under
subsection (a) or (b), any costs of the Project not paid for by
contributions from another entity shall be collected through
rates charged to customers using the new transmission capability
provided by the Project and allocated equitably among these
project beneficiaries using the new transmission capability.

(d) Relationship to Other Laws.--Nothing in this section affects any
requirement of--
(1) any Federal environmental law, including the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.);
(2) any Federal or State law relating to the siting of
energy facilities; or
(3) any existing authorizing statutes.

(e) Savings Clause.--Nothing in this section shall constrain or
restrict an Administrator in the utilization of other authority
delegated to the Administrator of WAPA or SWPA.
(f) Secretarial Determinations.--Any determination made pursuant to
subsections (a) or (b) shall be based on findings by the Secretary using
the best available data.
(g) Maximum Funding Amount.--The Secretary shall not accept and use
more than $100,000,000 under subsection (c)(1) for the period
encompassing fiscal years 2006 through 2015.

SEC. 1223. NOTE: 42 USC 16422. ADVANCED TRANSMISSION TECHNOLOGIES.

(a) Definition of Advanced Transmission Technology.--In this
section, the term ``advanced transmission technology'' means a
technology that increases the capacity, efficiency, or reliability of an
existing or new transmission facility, including--
(1) high-temperature lines (including superconducting
cables);
(2) underground cables;
(3) advanced conductor technology (including advanced
composite conductors, high-temperature low-sag conductors, and
fiber optic temperature sensing conductors);
(4) high-capacity ceramic electric wire, connectors, and
insulators;
(5) optimized transmission line configurations (including
multiple phased transmission lines);
(6) modular equipment;
(7) wireless power transmission;
(8) ultra-high voltage lines;
(9) high-voltage DC technology;
(10) flexible AC transmission systems;

[[Page 954]]
119 STAT. 954

(11) energy storage devices (including pumped hydro,
compressed air, superconducting magnetic energy storage,
flywheels, and batteries);
(12) controllable load;
(13) distributed generation (including PV, fuel cells, and
microturbines);
(14) enhanced power device monitoring;
(15) direct system state sensors;
(16) fiber optic technologies;
(17) power electronics and related software (including real
time monitoring and analytical software);
(18) mobile transformers and mobile substations; and
(19) any other technologies the Commission considers
appropriate.

(b) Authority.--In carrying out the Federal Power Act (16 U.S.C.
791a et seq.) and the Public Utility Regulatory Policies Act of 1978 (16
U.S.C. 2601 et seq.), the Commission shall encourage, as appropriate,
the deployment of advanced transmission technologies.

SEC. 1224. NOTE: 42 USC 16423. ADVANCED POWER SYSTEM TECHNOLOGY
INCENTIVE PROGRAM.

(a) Program.--The Secretary is authorized to establish an Advanced
Power System Technology Incentive Program to support the deployment of
certain advanced power system technologies and to improve and protect
certain critical governmental, industrial, and commercial processes.
Funds provided under this section shall be used by the Secretary to make
incentive payments to eligible owners or operators of advanced power
system technologies to increase power generation through enhanced
operational, economic, and environmental performance. Payments under
this section may only be made upon receipt by the Secretary of an
incentive payment application establishing an applicant as either--
(1) a qualifying advanced power system technology facility;
or
(2) a qualifying security and assured power facility.

(b) Incentives.--Subject to availability of funds, a payment of 1.8
cents per kilowatt-hour shall be paid to the owner or operator of a
qualifying advanced power system technology facility under this section
for electricity generated at such facility. An additional 0.7 cents per
kilowatt-hour shall be paid to the owner or operator of a qualifying
security and assured power facility for electricity generated at such
facility. Any facility qualifying under this section shall be eligible
for an incentive payment for up to, but not more than, the first
10,000,000 kilowatt-hours produced in any fiscal year.
(c) Eligibility.--For purposes of this section:
(1) Qualifying advanced power system technology facility.--
The term ``qualifying advanced power system technology
facility'' means a facility using an advanced fuel cell,
turbine, or hybrid power system or power storage system to
generate or store electric energy.
(2) Qualifying security and assured power facility.--The
term ``qualifying security and assured power facility'' means a
qualifying advanced power system technology facility determined
by the Secretary, in consultation with the Secretary of Homeland
Security, to be in critical need of secure, reliable,

[[Page 955]]
119 STAT. 955

rapidly available, high-quality power for critical governmental,
industrial, or commercial applications.

(d) Authorization.--There are authorized to be appropriated to the
Secretary for the purposes of this section, $10,000,000 for each of the
fiscal years 2006 through 2012.

Subtitle C--Transmission Operation Improvements

SEC. 1231. OPEN NONDISCRIMINATORY ACCESS.

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

``SEC. 211A. NOTE: 16 USC 824j-1. OPEN ACCESS BY UNREGULATED
TRANSMITTING UTILITIES.

``(a) Definition of Unregulated Transmitting Utility.--In this
section, the term `unregulated transmitting utility' means an entity
that--
``(1) owns or operates facilities used for the transmission
of electric energy in interstate commerce; and
``(2) is an entity described in section 201(f).

``(b) Transmission Operation Services.--Subject to section 212(h),
the Commission may, by rule or order, require an unregulated
transmitting utility to provide transmission services--
``(1) at rates that are comparable to those that the
unregulated transmitting utility charges itself; and
``(2) on terms and conditions (not relating to rates) that
are comparable to those under which the unregulated transmitting
utility provides transmission services to itself and that are
not unduly discriminatory or preferential.

``(c) Exemption.--The Commission shall exempt from any rule or order
under this section any unregulated transmitting utility that--
``(1) sells not more than 4,000,000 megawatt hours of
electricity per year;
``(2) does not own or operate any transmission facilities
that are necessary for operating an interconnected transmission
system (or any portion of the system); or
``(3) meets other criteria the Commission determines to be
in the public interest.

``(d) Local Distribution Facilities.--The requirements of subsection
(b) shall not apply to facilities used in local distribution.
``(e) Exemption Termination.--If the Commission, after an
evidentiary hearing held on a complaint and after giving consideration
to reliability standards established under section 215, finds on the
basis of a preponderance of the evidence that any exemption granted
pursuant to subsection (c) unreasonably impairs the continued
reliability of an interconnected transmission system, the Commission
shall revoke the exemption granted to the transmitting utility.
``(f) Application to Unregulated Transmitting Utilities.--The rate
changing procedures applicable to public utilities under subsections (c)
and (d) of section 205 are applicable to unregulated transmitting
utilities for purposes of this section.

[[Page 956]]
119 STAT. 956

``(g) Remand.--In exercising authority under subsection (b)(1), the
Commission may remand transmission rates to an unregulated transmitting
utility for review and revision if necessary to meet the requirements of
subsection (b).
``(h) Other Requests.--The provision of transmission services under
subsection (b) does not preclude a request for transmission services
under section 211.
``(i) Limitation.--The Commission may not require a State or
municipality to take action under this section that would violate a
private activity bond rule for purposes of section 141 of the Internal
Revenue Code of 1986.
``(j) Transfer of Control of Transmitting Facilities.--Nothing in
this section authorizes the Commission to require an unregulated
transmitting utility to transfer control or operational control of its
transmitting facilities to a Transmission Organization that is
designated to provide nondiscriminatory transmission access.''.

SEC. 1232. NOTE: 42 USC 16431. FEDERAL UTILITY PARTICIPATION IN
TRANSMISSION ORGANIZATIONS.

(a) Definitions.--In this section:
(1) Appropriate federal regulatory authority.--The term
``appropriate Federal regulatory authority'' means--
(A) in the case of a Federal power marketing agency,
the Secretary, 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 the Federal power
marketing agency; and
(B) in the case of the Tennessee Valley Authority,
the Board of Directors of the Tennessee Valley
Authority.
(2) Federal power marketing agency.--The term ``Federal
power marketing agency'' has the meaning given the term in
section 3 of the Federal Power Act (16 U.S.C. 796).
(3) Federal utility.--The term ``Federal utility'' means--
(A) a Federal power marketing agency; or
(B) the Tennessee Valley Authority.
(4) Transmission organization.--The term ``Transmission
Organization'' has the meaning given the term in section 3 of
the Federal Power Act (16 U.S.C. 796).
(5) Transmission system.--The term ``transmission system''
means an electric transmission facility owned, leased, or
contracted for by the United States and operated by a Federal
utility.

(b) Transfer.--The appropriate Federal regulatory authority may
enter into a contract, agreement, or other arrangement transferring
control and use of all or part of the transmission system of a Federal
utility to a Transmission Organization.
(c) Contents.--The contract, agreement, or arrangement shall
include--
(1) performance standards for operation and use of the
transmission system that the head of the Federal utility
determines are necessary or appropriate, including standards
that ensure--
(A) recovery of all of the costs and expenses of the
Federal utility related to the transmission facilities
that

[[Page 957]]
119 STAT. 957

are the subject of the contract, agreement, or other
arrangement;
(B) consistency with existing contracts and third-
party financing arrangements; and
(C) consistency with the statutory authorities,
obligations, and limitations of the Federal utility;
(2) provisions for monitoring and oversight by the Federal
utility of the Transmission Organization's terms and conditions
of the contract, agreement, or other arrangement, including a
provision for the resolution of disputes through arbitration or
other means with the Transmission Organization or with other
participants, notwithstanding the obligations and limitations of
any other law regarding arbitration; and
(3) a provision that allows the Federal utility to withdraw
from the Transmission Organization and terminate the contract,
agreement, or other arrangement in accordance with its terms.

(d) Commission.--Neither this section, actions taken pursuant to
this section, nor any other transaction of a Federal utility
participating in a Transmission Organization shall confer on the
Commission jurisdiction or authority over--
(1) the electric generation assets, electric capacity, or
energy of the Federal utility that the Federal utility is
authorized by law to market; or
(2) the power sales activities of the Federal utility.

(e) Existing Statutory and Other Obligations.--
(1) System operation requirements.--No statutory provision
requiring or authorizing a Federal utility to transmit electric
power or to construct, operate, or maintain the transmission
system of the Federal utility prohibits a transfer of control
and use of the transmission system pursuant to, and subject to,
the requirements of this section.
(2) Other obligations.--This subsection does not--
(A) suspend, or exempt any Federal utility from, any
provision of Federal law in effect on the date of
enactment of this Act, including any requirement or
direction relating to the use of the transmission system
of the Federal utility, environmental protection, fish
and wildlife protection, flood control, navigation,
water delivery, or recreation; or
(B) authorize abrogation of any contract or treaty
obligation.
(3) Conforming amendment.--Section 311 of the Energy and
Water Development Appropriations Act, 2001 (16 U.S.C. 824n) is
repealed.

SEC. 1233. NATIVE LOAD SERVICE OBLIGATION.

(a) In General.--Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) is amended by adding at the end the following:

``SEC. 217. NOTE: 16 USC 824q. NATIVE LOAD SERVICE OBLIGATION.

``(a) Definitions.--In this section:
``(1) The term `distribution utility' means an electric
utility that has a service obligation to end-users or to a State
utility or electric cooperative that, directly or indirectly,
through one or more additional State utilities or electric
cooperatives, provides electric service to end-users.
``(2) The term `load-serving entity' means a distribution
utility or an electric utility that has a service obligation.

[[Page 958]]
119 STAT. 958

``(3) The term `service obligation' means a requirement
applicable to, or the exercise of authority granted to, an
electric utility under Federal, State, or local law or under
long-term contracts to provide electric service to end-users or
to a distribution utility.
``(4) The term `State utility' means a State or any
political subdivision of a State, or any agency, authority, or
instrumentality of any one or more of the foregoing, or a
corporation that is wholly owned, directly or indirectly, by any
one or more of the foregoing, competent to carry on the business
of developing, transmitting, utilizing, or distributing power.

``(b) NOTE: Applicability. Meeting Service Obligations.--(1)
Paragraph (2) applies to any load-serving entity that, as of the date of
enactment of this section--
``(A) owns generation facilities, markets the output of
Federal generation facilities, or holds rights under one or more
wholesale contracts to purchase electric energy, for the purpose
of meeting a service obligation; and
``(B) by reason of ownership of transmission facilities, or
one or more contracts or service agreements for firm
transmission service, holds firm transmission rights for
delivery of the output of the generation facilities or the
purchased energy to meet the service obligation.

``(2) Any load-serving entity described in paragraph (1) is entitled
to use the firm transmission rights, or, equivalent tradable or
financial transmission rights, in order to deliver the output or
purchased energy, or the output of other generating facilities or
purchased energy to the extent deliverable using the rights, to the
extent required to meet the service obligation of the load-serving
entity.
``(3)(A) To the extent that all or a portion of the service
obligation covered by the firm transmission rights or equivalent
tradable or financial transmission rights is transferred to another
load-serving entity, the successor load-serving entity shall be entitled
to use the firm transmission rights or equivalent tradable or financial
transmission rights associated with the transferred service obligation.
``(B) Subsequent transfers to another load-serving entity, or back
to the original load-serving entity, shall be entitled to the same
rights.
``(4) The Commission shall exercise the authority of the Commission
under this Act in a manner that facilitates the planning and expansion
of transmission facilities to meet the reasonable needs of load-serving
entities to satisfy the service obligations of the load-serving
entities, and enables load-serving entities to secure firm transmission
rights (or equivalent tradable or financial rights) on a long-term basis
for long-term power supply arrangements made, or planned, to meet such
needs.
``(c) Allocation of Transmission Rights.--Nothing in subsections
(b)(1), (b)(2), and (b)(3) of this section shall affect any existing or
future methodology employed by a Transmission Organization for
allocating or auctioning transmission rights if such Transmission
Organization was authorized by the Commission to allocate or auction
financial transmission rights on its system as of January 1, 2005, and
the Commission determines that any future allocation or auction is just,
reasonable and not unduly discriminatory or preferential, provided,
however, that if such a Transmission

[[Page 959]]
119 STAT. 959

Organization never allocated financial transmission rights on its system
that pertained to a period before January 1, 2005, with respect to any
application by such Transmission Organization that would change its
methodology the Commission shall exercise its authority in a manner
consistent with the Act and that takes into account the policies
expressed in subsections (b)(1), (b)(2), and (b)(3) as applied to firm
transmission rights held by a load-serving entity as of January 1, 2005,
to the extent the associated generation ownership or power purchase
arrangements remain in effect.
``(d) Certain Transmission Rights.--The Commission may exercise
authority under this Act to make transmission rights not used to meet an
obligation covered by subsection (b) available to other entities in a
manner determined by the Commission to be just, reasonable, and not
unduly discriminatory or preferential.
``(e) Obligation to Build.--Nothing in this Act relieves a load-
serving entity from any obligation under State or local law to build
transmission or distribution facilities adequate to meet the service
obligations of the load-serving entity.
``(f) Contracts.--Nothing in this section shall provide a basis for
abrogating any contract or service agreement for firm transmission
service or rights in effect as of the date of the enactment of this
subsection. If an ISO in the Western Interconnection had allocated
financial transmission rights prior to the date of enactment of this
section but had not done so with respect to one or more load-serving
entities' firm transmission rights held under contracts to which the
preceding sentence applies (or held by reason of ownership or future
ownership of transmission facilities), such load-serving entities may
not be required, without their consent, to convert such firm
transmission rights to tradable or financial rights, except where the
load-serving entity has voluntarily joined the ISO as a participating
transmission owner (or its successor) in accordance with the ISO tariff.
``(g) Water Pumping Facilities.--The Commission shall ensure that
any entity described in section 201(f) that owns transmission facilities
used predominately to support its own water pumping facilities shall
have, with respect to the facilities, protections for transmission
service comparable to those provided to load-serving entities pursuant
to this section.
``(h) ERCOT.--This section shall not apply within the area referred
to in section 212(k)(2)(A).
``(i) Jurisdiction.--This section does not authorize the Commission
to take any action not otherwise within the jurisdiction of the
Commission.
``(j) TVA Area.--(1) Subject to paragraphs (2) and (3), for purposes
of subsection (b)(1)(B), a load-serving entity that is located within
the service area of the Tennessee Valley Authority and that has a firm
wholesale power supply contract with the Tennessee Valley Authority
shall be considered to hold firm transmission rights for the
transmission of the power provided.
``(2) Nothing in this subsection affects the requirements of section
212(j).
``(3) The Commission shall not issue an order on the basis of this
subsection that is contrary to the purposes of section 212(j).
``(k) Effect of Exercising Rights.--An entity that to the extent
required to meet its service obligations exercises rights

[[Page 960]]
119 STAT. 960

described in subsection (b) shall not be considered by such action as
engaging in undue discrimination or preference under this Act.''.
(b) NOTE: Deadline. 16 USC 824q note. FERC Rulemaking on Long-
Term Transmission Rights in Organized Markets.--Within 1 year after the
date of enactment of this section and after notice and an opportunity
for comment, the Commission shall by rule or order, implement section
217(b)(4) of the Federal Power Act in Transmission Organizations, as
defined by that Act with organized electricity markets.

SEC. 1234. NOTE: 42 USC 16432. STUDY ON THE BENEFITS OF ECONOMIC
DISPATCH.

(a) Study.--The Secretary, 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 shall submit a report to Congress and the States on the
results of the study conducted under subsection (a), including
recommendations to Congress and the States for any suggested legislative
or regulatory changes.

SEC. 1235. PROTECTION OF TRANSMISSION CONTRACTS IN THE PACIFIC
NORTHWEST.

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

``SEC. 218. NOTE: 16 USC 824r. PROTECTION OF TRANSMISSION CONTRACTS
IN THE PACIFIC NORTHWEST.

``(a) Definition of Electric Utility or Person.--In this section,
the term `electric utility or person' means an electric utility or
person that--
``(1) as of the date of enactment of the Energy Policy Act
of 2005 holds firm transmission rights pursuant to contract or
by reason of ownership of transmission facilities; and
``(2) is located--
``(A) in the Pacific Northwest, as that region is
defined in section 3 of the Pacific Northwest Electric
Power Planning and Conservation Act (16 U.S.C. 839a); or
``(B) in that portion of a State included in the
geographic area proposed for a regional transmission
organization in Commission Docket Number RT01-35 on the
date on which that docket was opened.

``(b) Protection of Transmission Contracts.--Nothing in this Act
confers on the Commission the authority to require an electric utility
or person to convert to tradable or financial rights--

[[Page 961]]
119 STAT. 961

``(1) firm transmission rights described in subsection (a);
or
``(2) firm transmission rights obtained by exercising
contract or tariff rights associated with the firm transmission
rights described in subsection (a).''.

SEC. 1236. SENSE OF CONGRESS REGARDING LOCATIONAL INSTALLED CAPACITY
MECHANISM.

(a) Findings.--Congress finds that--
(1) in regard to a proposal to develop and implement a
specific type of locational installed capacity mechanism in New
England pending before the Federal Energy Regulatory Commission;
and
(2) the Governors of the States have objected to the
proposed mechanism, arguing that the mechanism--
(A) would not provide adequate assurance that
necessary electric generation capacity or reliability
will be provided; and
(B) would impose a high cost on consumers and have a
significant negative economic impact.

(b) Sense of Congress.--Congress--
(1) notes the concerns of the New England States to the
proposed mechanism; and
(2) declares that it is the sense of Congress that the
Federal Energy Regulatory Commission should carefully consider
the States' objections.

Subtitle D--Transmission Rate Reform

SEC. 1241. TRANSMISSION INFRASTRUCTURE INVESTMENT.

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

``SEC. 219. NOTE: 16 USC 824s. TRANSMISSION INFRASTRUCTURE
INVESTMENT.

``(a) NOTE: Deadline. Rulemaking Requirement.--Not later than 1
year after the date of enactment of this section, the Commission shall
establish, by rule, incentive-based (including performance-based) rate
treatments for the transmission of electric energy in interstate
commerce by public utilities for the purpose of benefitting consumers by
ensuring reliability and reducing the cost of delivered power by
reducing transmission congestion.

``(b) Contents.--The rule shall--
``(1) promote reliable and economically efficient
transmission and generation of electricity by promoting capital
investment in the enlargement, improvement, maintenance, and
operation of all facilities for the transmission of electric
energy in interstate commerce, regardless of the ownership of
the facilities;
``(2) provide a return on equity that attracts new
investment in transmission facilities (including related
transmission technologies);
``(3) encourage deployment of transmission technologies and
other measures to increase the capacity and efficiency of
existing transmission facilities and improve the operation of
the facilities; and
``(4) allow recovery of--

[[Page 962]]
119 STAT. 962

``(A) all prudently incurred costs necessary to
comply with mandatory reliability standards issued
pursuant to section 215; and
``(B) all prudently incurred costs related to
transmission infrastructure development pursuant to
section 216.

``(c) Incentives.--In the rule issued under this section, the
Commission shall, to the extent within its jurisdiction, provide for
incentives to each transmitting utility or electric utility that joins a
Transmission Organization. The Commission shall ensure that any costs
recoverable pursuant to this subsection may be recovered by such utility
through the transmission rates charged by such utility or through the
transmission rates charged by the Transmission Organization that
provides transmission service to such utility.
``(d) Just and Reasonable Rates.--All rates approved under the rules
adopted pursuant to this section, including any revisions to the rules,
are subject to the requirements of sections 205 and 206 that all rates,
charges, terms, and conditions be just and reasonable and not unduly
discriminatory or preferential.''.

SEC. 1242. NOTE: 42 USC 16441. FUNDING NEW INTERCONNECTION AND
TRANSMISSION UPGRADES.

The Commission may approve a participant funding plan that allocates
costs related to transmission upgrades or new generator interconnection,
without regard to whether an applicant is a member of a Commission-
approved Transmission Organization, if the plan results in rates that--
(1) are just and reasonable;
(2) are not unduly discriminatory or preferential; and
(3) are otherwise consistent with sections 205 and 206 of
the Federal Power Act (16 U.S.C. 824d, 824e).

Subtitle E--Amendments to PURPA

SEC. 1251. NET METERING AND ADDITIONAL STANDARDS.

(a) Adoption of Standards.--Section 111(d) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding
at the end the following:
``(11) Net metering.--Each electric utility shall make
available upon request net metering service to any electric
consumer that the electric utility serves. For purposes of this
paragraph, the term `net metering service' means service to an
electric consumer under which electric energy generated by that
electric consumer from an eligible on-site generating facility
and delivered to the local distribution facilities may be used
to offset electric energy provided by the electric utility to
the electric consumer during the applicable billing period.
``(12) Fuel sources.--Each electric utility shall develop a
plan to minimize dependence on 1 fuel source and to ensure that
the electric energy it sells to consumers is generated using a
diverse range of fuels and technologies, including renewable
technologies.
``(13) Fossil fuel generation efficiency.--Each electric
utility shall develop and implement a 10-year plan to increase
the efficiency of its fossil fuel generation.''.

[[Page 963]]
119 STAT. 963

(b) Compliance.--
(1) NOTE: Deadlines. Time limitations.--Section 112(b)
of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C.
2622(b)) is amended by adding at the end the following:

``(3)(A) Not later than 2 years after the enactment of this
paragraph, each State regulatory authority (with respect to each
electric utility for which it has ratemaking authority) and each
nonregulated electric utility shall commence the consideration referred
to in section 111, or set a hearing date for such consideration, with
respect to each standard established by paragraphs (11) through (13) of
section 111(d).
``(B) Not later than 3 years after the date of the enactment of this
paragraph, each State regulatory authority (with respect to each
electric utility for which it has ratemaking authority), and each
nonregulated electric utility, shall complete the consideration, and
shall make the determination, referred to in section 111 with respect to
each standard established by paragraphs (11) through (13) of section
111(d).''.
(2) Failure to comply.--Section 112(c) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended
by adding at the end the following: ``In the case of each
standard established by paragraphs (11) through (13) of section
111(d), the reference contained in this subsection to the date
of enactment of this Act shall be deemed to be a reference to
the date of enactment of such paragraphs (11) through (13).''.
(3) Prior state actions.--
(A) In general.--Section 112 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622) is
amended by adding at the end the following:

``(d) Prior State Actions.--Subsections (b) and (c) of this section
shall not apply to the standards established by paragraphs (11) through
(13) of section 111(d) in the case of any electric utility in a State
if, before the enactment of this subsection--
``(1) the State has implemented for such utility the
standard concerned (or a comparable standard);
``(2) the State regulatory authority for such State or
relevant nonregulated electric utility has conducted a
proceeding to consider implementation of the standard concerned
(or a comparable standard) for such utility; or
``(3) the State legislature has voted on the implementation
of such standard (or a comparable standard) for such utility.''.
(B) Cross reference.--Section 124 of such Act (16
U.S.C. 2634) is amended by adding the following at the
end thereof: ``In the case of each standard established
by paragraphs (11) through (13) of section 111(d), the
reference contained in this subsection to the date of
enactment of this Act shall be deemed to be a reference
to the date of enactment of such paragraphs (11) through
(13).''.

SEC. 1252. SMART METERING.

(a) In General.--Section 111(d) of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the end
the following:
``(14) NOTE: Deadline. Time-based metering and
communications.--(A) Not later than 18 months after the date of
enactment of this paragraph, each electric utility shall offer
each of its customer

[[Page 964]]
119 STAT. 964

classes, and provide individual customers upon customer request,
a time-based rate schedule under which the rate charged by the
electric utility varies during different time periods and
reflects the variance, if any, in the utility's costs of
generating and purchasing electricity at the wholesale level.
The time-based rate schedule shall enable the electric consumer
to manage energy use and cost through advanced metering and
communications technology.
``(B) The types of time-based rate schedules that may be
offered under the schedule referred to in subparagraph (A)
include, among others--
``(i) time-of-use pricing whereby electricity prices
are set for a specific time period on an advance or
forward basis, typically not changing more often than
twice a year, based on the utility's cost of generating
and/or purchasing such electricity at the wholesale
level for the benefit of the consumer. Prices paid for
energy consumed during these periods shall be pre-
established and known to consumers in advance of such
consumption, allowing them to vary their demand and
usage in response to such prices and manage their energy
costs by shifting usage to a lower cost period or
reducing their consumption overall;
``(ii) critical peak pricing whereby time-of-use
prices are in effect except for certain peak days, when
prices may reflect the costs of generating and/or
purchasing electricity at the wholesale level and when
consumers may receive additional discounts for reducing
peak period energy consumption;
``(iii) real-time pricing whereby electricity prices
are set for a specific time period on an advanced or
forward basis, reflecting the utility's cost of
generating and/or purchasing electricity at the
wholesale level, and may change as often as hourly; and
``(iv) credits for consumers with large loads who
enter into pre-established peak load reduction
agreements that reduce a utility's planned capacity
obligations.
``(C) Each electric utility subject to subparagraph (A)
shall provide each customer requesting a time-based rate with a
time-based meter capable of enabling the utility and customer to
offer and receive such rate, respectively.
``(D) For purposes of implementing this paragraph, any
reference contained in this section to the date of enactment of
the Public Utility Regulatory Policies Act of 1978 shall be
deemed to be a reference to the date of enactment of this
paragraph.
``(E) In a State that permits third-party marketers to sell
electric energy to retail electric consumers, such consumers
shall be entitled to receive the same time-based metering and
communications device and service as a retail electric consumer
of the electric utility.
``(F) NOTE: Deadline. Notwithstanding subsections (b)
and (c) of section 112, each State regulatory authority shall,
not later than 18 months after the date of enactment of this
paragraph conduct an investigation in accordance with section
115(i) and issue a decision whether it is appropriate to
implement the standards set out in subparagraphs (A) and (C).''.

[[Page 965]]
119 STAT. 965

(b) State Investigation of Demand Response and Time-Based
Metering.--Section 115 of the Public Utility Regulatory Policies Act of
1978 (16 U.S.C. 2625) is amended as follows:
(1) By inserting in subsection (b) after the phrase ``the
standard for time-of-day rates established by section
111(d)(3)'' the following: ``and the standard for time-based
metering and communications established by section 111(d)(14)''.
(2) By inserting in subsection (b) after the phrase ``are
likely to exceed the metering'' the following: ``and
communications''.
(3) By adding at the end the following:

``(i) Time-Based Metering and Communications.--In making a
determination with respect to the standard established by section
111(d)(14), the investigation requirement of section 111(d)(14)(F) shall
be as follows: Each State regulatory authority shall conduct an
investigation and issue a decision whether or not it is appropriate for
electric utilities to provide and install time-based meters and
communications devices for each of their customers which enable such
customers to participate in time-based pricing rate schedules and other
demand response programs.''.
(c) Federal Assistance on Demand Response.--Section 132(a) of the
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2642(a)) is
amended by striking ``and'' at the end of paragraph (3), striking the
period at the end of paragraph (4) and inserting ``; and'', and by
adding the following at the end thereof:
``(5) technologies, techniques, and rate-making methods
related to advanced metering and communications and the use of
these technologies, techniques and methods in demand response
programs.''.

(d) Federal Guidance.--Section 132 of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2642) is amended by adding the following
at the end thereof:
``(d) Demand Response.--The Secretary shall be responsible for--
``(1) educating consumers on the availability, advantages,
and benefits of advanced metering and communications
technologies, including the funding of demonstration or pilot
projects;
``(2) working with States, utilities, other energy providers
and advanced metering and communications experts to identify and
address barriers to the adoption of demand response programs;
and
``(3) NOTE: Deadline. Reports. not later than 180 days
after the date of enactment of the Energy Policy Act of 2005,
providing Congress with a report that identifies and quantifies
the national benefits of demand response and makes a
recommendation on achieving specific levels of such benefits by
January 1, 2007.''.

(e) NOTE: 16 USC 2642 note. Demand Response and Regional
Coordination.--
(1) In general.--It is the policy of the United States to
encourage States to coordinate, on a regional basis, State
energy policies to provide reliable and affordable demand
response services to the public.
(2) Technical assistance.--The Secretary 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;

[[Page 966]]
119 STAT. 966

(B) identifying and resolving problems in
transmission and distribution networks, including
through the use of demand response;
(C) developing plans and programs to use demand
response to respond to peak demand or emergency needs;
and
(D) identifying specific measures consumers can take
to participate in these demand response programs.
(3) Report.--Not later than 1 year after the date of
enactment of the Energy Policy Act of 2005, the Commission shall
prepare and publish an annual report, by appropriate region,
that assesses demand response resources, including those
available from all consumer classes, and which identifies and
reviews--
(A) saturation and penetration rate of advanced
meters and communications technologies, devices and
systems;
(B) existing demand response programs and time-based
rate programs;
(C) the annual resource contribution of demand
resources;
(D) the potential for demand response as a
quantifiable, reliable resource for regional planning
purposes;
(E) steps taken to ensure that, in regional
transmission planning and operations, demand resources
are provided equitable treatment as a quantifiable,
reliable resource relative to the resource obligations
of any load-serving entity, transmission provider, or
transmitting party; and
(F) regulatory barriers to improve customer
participation in demand response, peak reduction and
critical period pricing programs.

(f) Federal Encouragement of Demand Response Devices.--It is the
policy of the United States that time-based pricing and other forms of
demand response, whereby electricity customers are provided with
electricity price signals and the ability to benefit by responding to
them, shall be encouraged, the deployment of such technology and devices
that enable electricity customers to participate in such pricing and
demand response systems shall be facilitated, and unnecessary barriers
to demand response participation in energy, capacity and ancillary
service markets shall be eliminated. It is further the policy of the
United States that the benefits of such demand response that accrue to
those not deploying such technology and devices, but who are part of the
same regional electricity entity, shall be recognized.
(g) NOTE: Deadlines. Time Limitations.--Section 112(b) of the
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is
amended by adding at the end the following:
``(4)(A) Not later than 1 year after the enactment of this
paragraph, each State regulatory authority (with respect to each
electric utility for which it has ratemaking authority) and each
nonregulated electric utility shall commence the consideration
referred to in section 111, or set a hearing date for such
consideration, with respect to the standard established by
paragraph (14) of section 111(d).
``(B) Not later than 2 years after the date of the enactment
of this paragraph, each State regulatory authority (with respect
to each electric utility for which it has ratemaking authority),

[[Page 967]]
119 STAT. 967

and each nonregulated electric utility, shall complete the
consideration, and shall make the determination, referred to in
section 111 with respect to the standard established by
paragraph (14) of section 111(d).''.

(h) Failure to Comply.--Section 112(c) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended by adding
at the end the following:
``In the case of the standard established by paragraph (14) of
section 111(d), the reference contained in this subsection to the date
of enactment of this Act shall be deemed to be a reference to the date
of enactment of such paragraph (14).''.
(i) Prior State Actions Regarding Smart Metering Standards.--
(1) In general.--Section 112 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622) is amended by
adding at the end the following:

``(e) Prior State Actions.--Subsections (b) and (c) of this section
shall not apply to the standard established by paragraph (14) of section
111(d) in the case of any electric utility in a State if, before the
enactment of this subsection--
``(1) the State has implemented for such utility the
standard concerned (or a comparable standard);
``(2) the State regulatory authority for such State or
relevant nonregulated electric utility has conducted a
proceeding to consider implementation of the standard concerned
(or a comparable standard) for such utility within the previous
3 years; or
``(3) the State legislature has voted on the implementation
of such standard (or a comparable standard) for such utility
within the previous 3 years.''.
(2) Cross reference.--Section 124 of such Act (16 U.S.C.
2634) is amended by adding the following at the end thereof:
``In the case of the standard established by paragraph (14) of
section 111(d), the reference contained in this subsection to
the date of enactment of this Act shall be deemed to be a
reference to the date of enactment of such paragraph (14).''.

SEC. 1253. COGENERATION AND SMALL POWER PRODUCTION PURCHASE AND SALE
REQUIREMENTS.

(a) Termination of Mandatory Purchase and Sale Requirements.--
Section 210 of the Public Utility Regulatory Policies Act of 1978 (16
U.S.C. 824a-3) is amended by adding at the end the following:
``(m) Termination of Mandatory Purchase and Sale Requirements.--
``(1) Obligation to purchase.--After the date of enactment
of this subsection, no electric utility shall be required to
enter into a new contract or obligation to purchase electric
energy from a qualifying cogeneration facility or a qualifying
small power production facility under this section if the
Commission finds that the qualifying cogeneration facility or
qualifying small power production facility has nondiscriminatory
access to--
``(A)(i) independently administered, auction-based
day ahead and real time wholesale markets for the sale
of electric energy; and (ii) wholesale markets for long-
term sales of capacity and electric energy; or

[[Page 968]]
119 STAT. 968

``(B)(i) transmission and interconnection services
that are provided by a Commission-approved regional
transmission entity and administered pursuant to an open
access transmission tariff that affords
nondiscriminatory treatment to all customers; and (ii)
competitive wholesale markets that provide a meaningful
opportunity to sell capacity, including long-term and
short-term sales, and electric energy, including long-
term, short-term and real-time sales, to buyers other
than the utility to which the qualifying facility is
interconnected. In determining whether a meaningful
opportunity to sell exists, the Commission shall
consider, among other factors, evidence of transactions
within the relevant market; or
``(C) wholesale markets for the sale of capacity and
electric energy that are, at a minimum, of comparable
competitive quality as markets described in
subparagraphs (A) and (B).
``(2) Revised purchase and sale obligation for new
facilities.--(A) After the date of enactment of this subsection,
no electric utility shall be required pursuant to this section
to enter into a new contract or obligation to purchase from or
sell electric energy to a facility that is not an existing
qualifying cogeneration facility unless the facility meets the
criteria for qualifying cogeneration facilities established by
the Commission pursuant to the rulemaking required by subsection
(n).
``(B) For the purposes of this paragraph, the term `existing
qualifying cogeneration facility' means a facility that--
``(i) was a qualifying cogeneration facility on the
date of enactment of subsection (m); or
``(ii) had filed with the Commission a notice of
self-certification, self recertification or an
application for Commission certification under 18 CFR
292.207 prior to the date on which the Commission issues
the final rule required by subsection (n).
``(3) Commission review.--Any electric utility may file an
application with the Commission for relief from the mandatory
purchase obligation pursuant to this subsection on a service
territory-wide basis. Such application shall set forth the
factual basis upon which relief is requested and describe why
the conditions set forth in subparagraph (A), (B), or (C) of
paragraph (1) of this subsection have been
met. NOTE: Notice. Deadline. After notice, including
sufficient notice to potentially affected qualifying
cogeneration facilities and qualifying small power production
facilities, and an opportunity for comment, the Commission shall
make a final determination within 90 days of such application
regarding whether the conditions set forth in subparagraph (A),
(B), or (C) of paragraph (1) have been met.
``(4) Reinstatement of obligation to purchase.--At any time
after the Commission makes a finding under paragraph (3)
relieving an electric utility of its obligation to purchase
electric energy, a qualifying cogeneration facility, a
qualifying small power production facility, a State agency, or
any other affected person may apply to the Commission for an
order reinstating the electric utility's obligation to purchase
electric energy under this section. Such application shall set
forth the factual basis upon which the application is based and
describe

[[Page 969]]
119 STAT. 969

why the conditions set forth in subparagraph (A), (B), or (C) of
paragraph (1) of this subsection are no longer
met. NOTE: Notice. Deadline. After notice, including
sufficient notice to potentially affected utilities, and
opportunity for comment, the Commission shall issue an order
within 90 days of such application reinstating the electric
utility's obligation to purchase electric energy under this
section if the Commission finds that the conditions set forth in
subparagraphs (A), (B) or (C) of paragraph (1) which relieved
the obligation to purchase, are no longer met.
``(5) Obligation to sell.--After the date of enactment of
this subsection, no electric utility shall be required to enter
into a new contract or obligation to sell electric energy to a
qualifying cogeneration facility or a qualifying small power
production facility under this section if the Commission finds
that--
``(A) competing retail electric suppliers are
willing and able to sell and deliver electric energy to
the qualifying cogeneration facility or qualifying small
power production facility; and
``(B) the electric utility is not required by State
law to sell electric energy in its service territory.
``(6) No effect on existing rights and remedies.--Nothing in
this subsection affects the rights or remedies of any party
under any contract or obligation, in effect or pending approval
before the appropriate State regulatory authority or non-
regulated electric utility on the date of enactment of this
subsection, to purchase electric energy or capacity from or to
sell electric energy or capacity to a qualifying cogeneration
facility or qualifying small power production facility under
this Act (including the right to recover costs of purchasing
electric energy or capacity).
``(7) Recovery of costs.--(A) The Commission shall issue and
enforce such regulations as are necessary to ensure that an
electric utility that purchases electric energy or capacity from
a qualifying cogeneration facility or qualifying small power
production facility in accordance with any legally enforceable
obligation entered into or imposed under this section recovers
all prudently incurred costs associated with the purchase.
``(B) A regulation under subparagraph (A) shall be
enforceable in accordance with the provisions of law applicable
to enforcement of regulations under the Federal Power Act (16
U.S.C. 791a et seq.).

``(n) NOTE: Deadline. Rulemaking for New Qualifying
Facilities.--(1)(A) Not later than 180 days after the date of enactment
of this section, the Commission shall issue a rule revising the criteria
in 18 CFR 292.205 for new qualifying cogeneration facilities seeking to
sell electric energy pursuant to section 210 of this Act to ensure--
``(i) that the thermal energy output of a new qualifying
cogeneration facility is used in a productive and beneficial
manner;
``(ii) the electrical, thermal, and chemical output of the
cogeneration facility is used fundamentally for industrial,
commercial, or institutional purposes and is not intended
fundamentally for sale to an electric utility, taking into
account technological, efficiency, economic, and variable
thermal energy requirements, as well as State laws applicable to
sales of electric energy from a qualifying facility to its host
facility; and

[[Page 970]]
119 STAT. 970

``(iii) continuing progress in the development of efficient
electric energy generating technology.

``(B) NOTE: Applicability. The rule issued pursuant to paragraph
(1)(A) of this subsection shall be applicable only to facilities that
seek to sell electric energy pursuant to section 210 of this Act. For
all other purposes, except as specifically provided in subsection
(m)(2)(A), qualifying facility status shall be determined in accordance
with the rules and regulations of this Act.

``(2) NOTE: Applicability. Notwithstanding rule revisions under
paragraph (1), the Commission's criteria for qualifying cogeneration
facilities in effect prior to the date on which the Commission issues
the final rule required by paragraph (1) shall continue to apply to any
cogeneration facility that--
``(A) was a qualifying cogeneration facility on the date of
enactment of subsection (m), or
``(B) had filed with the Commission a notice of self-
certification, self-recertification or an application for
Commission certification under 18 CFR 292.207 prior to the date
on which the Commission issues the final rule required by
paragraph (1).''.

(b) Elimination of Ownership Limitations.--
(1) Qualifying small power production facility.--Section
3(17)(C) of the Federal Power Act (16 U.S.C. 796(17)(C)) is
amended to read as follows:
``(C) `qualifying small power production facility'
means a small power production facility that the
Commission determines, by rule, meets such requirements
(including requirements respecting fuel use, fuel
efficiency, and reliability) as the Commission may, by
rule, prescribe;''.
(2) Qualifying cogeneration facility.--Section 3(18)(B) of
the Federal Power Act (16 U.S.C. 796(18)(B)) is amended to read
as follows:
``(B) `qualifying cogeneration facility' means a
cogeneration facility that the Commission determines, by
rule, meets such requirements (including requirements
respecting minimum size, fuel use, and fuel efficiency)
as the Commission may, by rule, prescribe;''.

SEC. 1254. INTERCONNECTION.

(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:
``(15) Interconnection.--Each electric utility shall make
available, upon request, interconnection service to any electric
consumer that the electric utility serves. For purposes of this
paragraph, the term `interconnection service' means service to
an electric consumer under which an on-site generating facility
on the consumer's premises shall be connected to the local
distribution facilities. Interconnection services shall be
offered based upon the standards developed by the Institute of
Electrical and Electronics Engineers: IEEE Standard 1547 for
Interconnecting Distributed Resources with Electric Power
Systems, as they may be amended from time to time. In addition,
agreements and procedures shall be established whereby the
services are offered shall promote current best practices of
interconnection for distributed generation, including but not
limited to practices stipulated in model codes adopted by

[[Page 971]]
119 STAT. 971

associations of state regulatory agencies. All such agreements
and procedures shall be just and reasonable, and not unduly
discriminatory or preferential.''.

(b) Compliance.--
(1) NOTE: Deadlines. Time limitations.--Section 112(b)
of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C.
2622(b)) is amended by adding at the end the following:
``(5)(A) Not later than 1 year after the enactment of this
paragraph, each State regulatory authority (with respect to each
electric utility for which it has ratemaking authority) and each
nonregulated utility shall commence the consideration referred
to in section 111, or set a hearing date for consideration, with
respect to the standard established by paragraph (15) of section
111(d).
``(B) Not later than two years after the date of the
enactment of the this paragraph, each State regulatory authority
(with respect to each electric utility for which it has
ratemaking authority), and each nonregulated electric utility,
shall complete the consideration, and shall make the
determination, referred to in section 111 with respect to each
standard established by paragraph (15) of section 111(d).''.
(2) Failure to comply.--Section 112(d) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended
by adding at the end the following: ``In the case of the
standard established by paragraph (15), the reference contained
in this subsection to the date of enactment of this Act shall be
deemed to be a reference to the date of enactment of paragraph
(15).''.
(3) Prior state actions.--
(A) In general.--Section 112 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622) is
amended by adding at the end the following:

``(f) Prior State Actions.--Subsections (b) and (c) of this section
shall not apply to the standard established by paragraph (15) of section
111(d) in the case of any electric utility in a State if, before the
enactment of this subsection--
``(1) the State has implemented for such utility the
standard concerned (or a comparable standard);
``(2) the State regulatory authority for such State or
relevant nonregulated electric utility has conducted a
proceeding to consider implementation of the standard concerned
(or a comparable standard) for such utility; or
``(3) the State legislature has voted on the implementation
of such standard (or a comparable standard) for such utility.''.
(B) Cross reference.--Section 124 of such Act (16
U.S.C. 2634) is amended by adding the following at the
end thereof: ``In the case of each standard established
by paragraph (15) of section 111(d), the reference
contained in this subsection to the date of enactment of
the Act shall be deemed to be a reference to the date of
enactment of paragraph (15).''.

[[Page 972]]
119 STAT. 972

Subtitle NOTE: Public Utility Holding Company Act of 2005. F--Repeal
of PUHCA

SEC. 1261. NOTE: 42 USC 15801 note. SHORT TITLE.

This subtitle may be cited as the ``Public Utility Holding Company
Act of 2005''.

SEC. 1262. NOTE: 42 USC 16451. DEFINITIONS.

For purposes of this subtitle:
(1) Affiliate.--The term ``affiliate'' of a company means
any company, 5 percent or more of the outstanding voting
securities of which are owned, controlled, or held with power to
vote, directly or indirectly, by such company.
(2) Associate company.--The term ``associate company'' of a
company means any company in the same holding company system
with such company.
(3) Commission.--The term ``Commission'' means the Federal
Energy Regulatory Commission.
(4) Company.--The term ``company'' means a corporation,
partnership, association, joint stock company, business trust,
or any organized group of persons, whether incorporated or not,
or a receiver, trustee, or other liquidating agent of any of the
foregoing.
(5) Electric utility company.--The term ``electric utility
company'' means any company that owns or operates facilities
used for the generation, transmission, or distribution of
electric energy for sale.
(6) Exempt wholesale generator and foreign utility
company.--The terms ``exempt wholesale generator'' and ``foreign
utility company'' have the same meanings as in sections 32 and
33, respectively, of the Public Utility Holding Company Act of
1935 (15 U.S.C. 79z-5a, 79z-5b), as those sections existed on
the day before the effective date of this subtitle.
(7) Gas utility company.--The term ``gas utility company''
means any company that owns or operates facilities used for
distribution at retail (other than the distribution only in
enclosed portable containers or distribution to tenants or
employees of the company operating such facilities for their own
use and not for resale) of natural or manufactured gas for heat,
light, or power.
(8) Holding company.--
(A) In general.--The term ``holding company''
means--
(i) 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
(ii) 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,

[[Page 973]]
119 STAT. 973

duties, and liabilities imposed by this subtitle
upon holding companies.
(B) Exclusions.--The term ``holding company'' shall
not include--
(i) a bank, savings association, or trust
company, or their operating subsidiaries that own,
control, or hold, with the power to vote, public
utility or public utility holding company
securities so long as the securities are--
(I) held as collateral for a loan;
(II) held in the ordinary course of
business as a fiduciary; or
(III) acquired solely for purposes
of liquidation and in connection with a
loan previously contracted for and owned
beneficially for a period of not more
than two years; or
(ii) a broker or dealer that owns, controls,
or holds with the power to vote public utility or
public utility holding company securities so long
as the securities are--
(I) not beneficially owned by the
broker or dealer and are subject to any
voting instructions which may be given
by customers or their assigns; or
(II) acquired within 12 months in
the ordinary course of business as a
broker, dealer, or underwriter with the
bona fide intention of effecting
distribution of the specific securities
so acquired.
(9) Holding company system.--The term ``holding company
system'' means a holding company, together with its subsidiary
companies.
(10) Jurisdictional rates.--The term ``jurisdictional
rates'' means rates accepted or established by the Commission
for the transmission of electric energy in interstate commerce,
the sale of electric energy at wholesale in interstate commerce,
the transportation of natural gas in interstate commerce, and
the sale in interstate commerce of natural gas for resale for
ultimate public consumption for domestic, commercial,
industrial, or any other use.
(11) Natural gas company.--The term ``natural gas company''
means a person engaged in the transportation of natural gas in
interstate commerce or the sale of such gas in interstate
commerce for resale.
(12) Person.--The term ``person'' means an individual or
company.
(13) Public utility.--The term ``public utility'' means any
person who owns or operates facilities used for transmission of
electric energy in interstate commerce or sales of electric
energy at wholesale in interstate commerce.
(14) Public-utility company.--The term ``public-utility
company'' means an electric utility company or a gas utility
company.
(15) State commission.--The term ``State commission'' means
any commission, board, agency, or officer, by whatever name
designated, of a State, municipality, or other political
subdivision of a State that, under the laws of such State, has
jurisdiction to regulate public utility companies.

[[Page 974]]
119 STAT. 974

(16) Subsidiary company.--The term ``subsidiary company'' of
a holding company means--
(A) any company, 10 percent or more of the
outstanding voting securities of which are directly or
indirectly owned, controlled, or held with power to
vote, by such holding company; and
(B) any person, the management or policies of which
the Commission, after notice and opportunity for
hearing, determines to be subject to a controlling
influence, directly or indirectly, by such holding
company (either alone or pursuant to an arrangement or
understanding with one or more other persons) so as to
make it necessary for the rate protection of utility
customers with respect to rates that such person be
subject to the obligations, duties, and liabilities
imposed by this subtitle upon subsidiary companies of
holding companies.
(17) Voting security.--The term ``voting security'' means
any security presently entitling the owner or holder thereof to
vote in the direction or management of the affairs of a company.

SEC. 1263. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

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

SEC. 1264. NOTE: 42 USC 16452. FEDERAL ACCESS TO BOOKS AND RECORDS.

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

[[Page 975]]
119 STAT. 975

SEC. 1265. NOTE: 42 USC 16453. STATE ACCESS TO BOOKS AND RECORDS.

(a) In General.--Upon the written request of a State commission
having jurisdiction to regulate a public-utility company in a holding
company system, the holding company or any associate company or
affiliate thereof, other than such public-utility company, wherever
located, shall produce for inspection books, accounts, memoranda, and
other records that--
(1) have been identified in reasonable detail in a
proceeding before the State commission;
(2) the State commission determines are relevant to costs
incurred by such public-utility company; and
(3) are necessary for the effective discharge of the
responsibilities of the State commission with respect to such
proceeding.

(b) Limitation.--Subsection (a) does not apply to any person that is
a holding company solely by reason of ownership of 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. 1266. NOTE: 42 USC 16454. EXEMPTION AUTHORITY.

(a) NOTE: Deadline. Rulemaking.--Not later than 90 days after
the effective date of this subtitle, the Commission shall issue a final
rule to exempt from the requirements of section 1264 (relating to
Federal access to books and records) any person that is a holding
company, solely with respect to 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 1264 (relating to Federal
access to books and records) if, upon application or upon the motion of
the Commission--
(1) the Commission finds that the books, accounts,
memoranda, and other records of any person are not relevant to
the jurisdictional rates of a public utility or natural gas
company; or
(2) the Commission finds that any class of transactions is
not relevant to the jurisdictional rates of a public utility or
natural gas company.

[[Page 976]]
119 STAT. 976

SEC. 1267. NOTE: 42 USC 16455. AFFILIATE TRANSACTIONS.

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

SEC. 1268. NOTE: 42 USC 16456. APPLICABILITY.

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

SEC. 1269. NOTE: 42 USC 16457. EFFECT ON OTHER REGULATIONS.

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

SEC. 1270. NOTE: 42 USC 16458. ENFORCEMENT.

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

SEC. 1271. NOTE: 42 USC 16459. SAVINGS PROVISIONS.

(a) In General.--Nothing in this subtitle, or otherwise in the
Public Utility Holding Company Act of 1935, or rules, regulations, or
orders thereunder, prohibits a person from engaging in or continuing to
engage in activities or transactions in which it is legally engaged or
authorized to engage on the date of enactment of this Act, if that
person continues to comply with the terms (other than an expiration date
or termination date) of any such authorization, whether by rule or by
order.
(b) Effect on Other Commission Authority.--Nothing in this subtitle
limits the authority of the Commission under the Federal Power Act (16
U.S.C. 791a et seq.) or the Natural Gas Act (15 U.S.C. 717 et seq.).
(c) Tax Treatment.--Tax treatment under section 1081 of the Internal
Revenue Code of 1986 as a result of transactions ordered in compliance
with the Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et
seq.) shall not be affected in any manner due to the repeal of that Act
and the enactment of the Public Utility Holding Company Act of 2005.

[[Page 977]]
119 STAT. 977

SEC. 1272. NOTE: Deadline. 42 USC 16460. IMPLEMENTATION.

Not later than 4 months after the date of enactment of this
subtitle, the Commission shall--
(1) NOTE: Regulations. issue such regulations as may be
necessary or appropriate to implement this subtitle (other than
section 1265, relating to State access to books and records);
and
(2) submit to Congress detailed recommendations on technical
and conforming amendments to Federal law necessary to carry out
this subtitle and the amendments made by this subtitle.

SEC. 1273. TRANSFER NOTE: Records. 42 USC 16461. OF RESOURCES.

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

SEC. 1274. NOTE: 42 USC 16451 note. EFFECTIVE DATE.

(a) In General.--Except for section 1272 (relating to
implementation), this subtitle shall take effect 6 months after the date
of enactment of this subtitle.
(b) Compliance With Certain Rules.--If the Commission approves and
makes effective any final rulemaking modifying the standards of conduct
governing entities that own, operate, or control facilities for
transmission of electricity in interstate commerce or transportation of
natural gas in interstate commerce prior to the effective date of this
subtitle, any action taken by a public-utility company or utility
holding company to comply with the requirements of such rulemaking shall
not subject such public-utility company or utility holding company to
any regulatory requirement applicable to a holding company under the
Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et seq.).

SEC. 1275. NOTE: 42 USC 16462. SERVICE ALLOCATION.

(a) Definition of Public Utility.--In this section, the term
``public utility'' has the meaning given the term in section 201(e) of
the Federal Power Act (16 U.S.C. 824(e)).
(b) FERC Review.--In the case of non-power goods or administrative
or management services provided by an associate company organized
specifically for the purpose of providing such goods or services to any
public utility in the same holding company system, at the election of
the system or a State commission having jurisdiction over the public
utility, the Commission, after the effective date of this subtitle,
shall review and authorize the allocation of the costs for such goods or
services to the extent relevant to that associate company.
(c) Effect on Federal and State Law.--Nothing in this section shall
affect the authority of the Commission or a State commission under other
applicable law.
(d) NOTE: Deadline. Rules.--Not later than 4 months after the
date of enactment of this Act, the Commission shall issue rules (which
rules shall be effective no earlier than the effective date of this
subtitle) to exempt from the requirements of this section any company in
a holding company system whose public utility operations are confined
substantially to a single State and any other class of transactions that
the Commission finds is not relevant to the jurisdictional rates of a
public utility.

[[Page 978]]
119 STAT. 978

SEC. 1276. NOTE: 42 USC 16463. AUTHORIZATION OF APPROPRIATIONS.

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

SEC. 1277. CONFORMING AMENDMENTS TO THE FEDERAL POWER ACT.

(a) Conflict of Jurisdiction.--Section 318 of the Federal Power Act
(16 U.S.C. 825q) is repealed.
(b) Definitions.--(1) Section 201(g)(5) of the Federal Power Act (16
U.S.C. 824(g)(5)) is amended by striking ``1935'' and inserting
``2005''.
(2) Section 214 of the Federal Power Act (16 U.S.C. 824m) is amended
by striking ``1935'' and inserting ``2005''.

Subtitle G--Market Transparency, Enforcement, and Consumer Protection

SEC. 1281. ELECTRICITY MARKET TRANSPARENCY.

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

``SEC. 220. NOTE: 16 USC 824t. ELECTRICITY MARKET TRANSPARENCY
RULES.

``(a)(1) The Commission is directed to facilitate price transparency
in markets for the sale and transmission of electric energy in
interstate commerce, having due regard for the public interest, the
integrity of those markets, fair competition, and the protection of
consumers.
``(2) The Commission may prescribe such rules as the Commission
determines necessary and appropriate to carry out the purposes of this
section. The rules shall provide for the dissemination, on a timely
basis, of information about the availability and prices of wholesale
electric energy and transmission service to the Commission, State
commissions, buyers and sellers of wholesale electric energy, users of
transmission services, and the public.
``(3) The Commission may--
``(A) obtain the information described in paragraph (2) from
any market participant; and
``(B) rely on entities other than the Commission to receive
and make public the information, subject to the disclosure rules
in subsection (b).

``(4) In carrying out this section, the Commission shall consider
the degree of price transparency provided by existing price publishers
and providers of trade processing services, and shall rely on such
publishers and services to the maximum extent possible. The Commission
may establish an electronic information system if it determines that
existing price publications are not adequately providing price discovery
or market transparency. Nothing in this section, however, shall affect
any electronic information filing requirements in effect under this Act
as of the date of enactment of this section.
``(b)(1) Rules described in subsection (a)(2), if adopted, shall
exempt from disclosure information the Commission determines would, if
disclosed, be detrimental to the operation of an effective market or
jeopardize system security.
``(2) In determining the information to be made available under this
section and time to make the information available, the Commission shall
seek to ensure that consumers and competitive

[[Page 979]]
119 STAT. 979

markets are protected from the adverse effects of potential collusion or
other anticompetitive behaviors that can be facilitated by untimely
public disclosure of transaction-specific information.
``(c)(1) NOTE: Deadline. Within 180 days of enactment of this
section, the Commission shall conclude a memorandum of understanding
with the Commodity Futures Trading Commission relating to information
sharing, which shall include, among other things, provisions ensuring
that information requests to markets within the respective jurisdiction
of each agency are properly coordinated to minimize duplicative
information requests, and provisions regarding the treatment of
proprietary trading information.

``(2) Nothing in this section may be construed to limit or affect
the exclusive jurisdiction of the Commodity Futures Trading Commission
under the Commodity Exchange Act (7 U.S.C. 1 et seq.).
``(d) The Commission shall not require entities who have a de
minimis market presence to comply with the reporting requirements of
this section.
``(e)(1) Except as provided in paragraph (2), no person shall be
subject to any civil penalty under this section with respect to any
violation occurring more than 3 years before the date on which the
person is provided notice of the proposed penalty under section 316A.
``(2) Paragraph (1) shall not apply in any case in which the
Commission finds that a seller that has entered into a contract for the
sale of electric energy at wholesale or transmission service subject to
the jurisdiction of the Commission has engaged in fraudulent market
manipulation activities materially affecting the contract in violation
of section 222.
``(f) This section shall not apply to a transaction for the purchase
or sale of wholesale electric energy or transmission services within the
area described in section 212(k)(2)(A).''.

SEC. 1282. FALSE STATEMENTS.

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

``SEC. 221. NOTE: 16 USC 824u. PROHIBITION ON FILING FALSE
INFORMATION.

``No entity (including an entity described in section 201(f)) shall
willfully and knowingly report any information relating to the price of
electricity sold at wholesale or the availability of transmission
capacity, which information the person or any other entity knew to be
false at the time of the reporting, to a Federal agency with intent to
fraudulently affect the data being compiled by the Federal agency.''.

SEC. 1283. MARKET MANIPULATION.

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

``SEC. 222. NOTE: 16 USC 824v. PROHIBITION OF ENERGY MARKET
MANIPULATION.

``(a) In General.--It shall be unlawful for any entity (including an
entity described in section 201(f)), directly or indirectly, to use or
employ, in connection with the purchase or sale of electric energy or
the purchase or sale of transmission services subject to the
jurisdiction of the Commission, any manipulative or deceptive device or
contrivance (as those terms are used in section 10(b) of the Securities
Exchange Act of 1934 (15 U.S.C. 78j(b))), in contravention

[[Page 980]]
119 STAT. 980

of such rules and regulations as the Commission may prescribe as
necessary or appropriate in the public interest or for the protection of
electric ratepayers.
``(b) No Private Right of Action.--Nothing in this section shall be
construed to create a private right of action.''.

SEC. 1284. ENFORCEMENT.

(a) Complaints.--Section 306 of the Federal Power Act (16 U.S.C.
825e) is amended--
(1) by inserting ``electric utility,'' after ``Any
person,''; and
(2) by inserting ``, transmitting utility,'' after
``licensee'' each place it appears.

(b) Investigations.--Section 307(a) of the Federal Power Act (16
U.S.C. 825f(a)) is amended--
(1) by inserting ``, electric utility, transmitting utility,
or other entity'' after ``person'' each place it appears; and
(2) in the first sentence, by inserting before the period at
the end 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''.

(c) Review of Commission Orders.--Section 313(a) of the Federal
Power Act (16 U.S.C. 825l) is amended by inserting ``electric utility,''
after ``person,'' in the first 2 places it appears and by striking ``any
person unless such person'' and inserting ``any entity unless such
entity''.
(d) Criminal Penalties.--Section 316 of the Federal Power Act (16
U.S.C. 825o) is amended--
(1) in subsection (a)--
(A) by striking ``$5,000'' and inserting
``$1,000,000''; and
(B) by striking ``two years'' and inserting ``5
years'';
(2) in subsection (b), by striking ``$500'' and inserting
``$25,000''; and
(3) by striking subsection (c).

(e) Civil Penalties.--Section 316A of the Federal Power Act (16
U.S.C. 825o-1) is amended--
(1) 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''.

SEC. 1285. REFUND EFFECTIVE DATE.

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

[[Page 981]]
119 STAT. 981

why it has failed to do so and shall state its best estimate as
to when it reasonably expects to make such decision.''.

SEC. 1286. REFUND AUTHORITY.

Section 206 of the Federal Power Act (16 U.S.C. 824e) is amended by
adding at the end the following:
``(e)(1) In this subsection:
``(A) The term `short-term sale' means an agreement for the
sale of electric energy at wholesale in interstate commerce that
is for a period of 31 days or less (excluding monthly contracts
subject to automatic renewal).
``(B) The term `applicable Commission rule' means a
Commission rule applicable to sales at wholesale by public
utilities that the Commission determines after notice and
comment should also be applicable to entities subject to this
subsection.

``(2) If an entity described in section 201(f) voluntarily makes a
short-term sale of electric energy through an organized market in which
the rates for the sale are established by Commission-approved tariff
(rather than by contract) and the sale violates the terms of the tariff
or applicable Commission rules in effect at the time of the sale, the
entity shall be subject to the refund authority of the Commission under
this section with respect to the violation.
``(3) This section shall not apply to--
``(A) any entity that sells in total (including affiliates
of the entity) less than 8,000,000 megawatt hours of electricity
per year; or
``(B) an electric cooperative.

``(4)(A) The Commission shall have refund authority under paragraph
(2) with respect to a voluntary short term sale of electric energy by
the Bonneville Power Administration only if the sale is at an unjust and
unreasonable rate.
``(B) The Commission may order a refund under subparagraph (A) only
for short-term sales made by the Bonneville Power Administration at
rates that are higher than the highest just and reasonable rate charged
by any other entity for a short-term sale of electric energy in the same
geographic market for the same, or most nearly comparable, period as the
sale by the Bonneville Power Administration.
``(C) In the case of any Federal power marketing agency or the
Tennessee Valley Authority, the Commission shall not assert or exercise
any regulatory authority or power under paragraph (2) other than the
ordering of refunds to achieve a just and reasonable rate.''.

SEC. 1287. NOTE: 42 USC 16471. CONSUMER PRIVACY AND UNFAIR TRADE
PRACTICES.

(a) Privacy.--The Federal Trade Commission may issue rules
protecting the privacy of electric consumers from the disclosure of
consumer information obtained in connection with the sale or delivery of
electric energy to electric consumers.
(b) Slamming.--The Federal Trade Commission may issue rules
prohibiting the change of selection of an electric utility except with
the informed consent of the electric consumer or if approved by the
appropriate State regulatory authority.
(c) Cramming.--The Federal Trade Commission may issue rules
prohibiting the sale of goods and services to an electric consumer
unless expressly authorized by law or the electric consumer.

[[Page 982]]
119 STAT. 982

(d) Rulemaking.--The Federal Trade Commission shall proceed in
accordance with section 553 of title 5, United States Code, when
prescribing a rule under this section.
(e) State Authority.--If the Federal Trade Commission determines
that a State's regulations provide equivalent or greater protection than
the provisions of this section, such State regulations shall apply in
that State in lieu of the regulations issued by the Commission under
this section.
(f) Definitions.--For purposes of this section:
(1) State regulatory authority.--The term ``State regulatory
authority'' has the meaning given that term in section 3(21) of
the Federal Power Act (16 U.S.C. 796(21)).
(2) Electric consumer and electric utility.--The terms
``electric consumer'' and ``electric utility'' have the meanings
given those terms in section 3 of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2602).

SEC. 1288. AUTHORITY OF COURT TO PROHIBIT INDIVIDUALS FROM SERVING AS
OFFICERS, DIRECTORS, AND ENERGY TRADERS.

Section 314 of the Federal Power Act (16 U.S.C. 825m) is amended by
adding at the end the following:
``(d) In any proceedings under subsection (a), the court may
prohibit, conditionally or unconditionally, and permanently or for such
period of time as the court determines, any individual who is engaged or
has engaged in practices constituting a violation of section 221 (and
related rules and regulations) from--
``(1) acting as an officer or director of an electric
utility; or
``(2) engaging in the business of purchasing or selling--
``(A) electric energy; or
``(B) transmission services subject to the
jurisdiction of the Commission.''.

SEC. 1289. MERGER REVIEW REFORM.

(a) In General.--Section 203(a) of the Federal Power Act (16 U.S.C.
824b(a)) is amended to read as follows:
``(a)(1) No public utility shall, without first having secured an
order of the Commission authorizing it to do so--
``(A) sell, lease, or otherwise dispose of the whole
of its facilities subject to the jurisdiction of the
Commission, or any part thereof of a value in excess of
$10,000,000;
``(B) merge or consolidate, directly or indirectly,
such facilities or any part thereof with those of any
other person, by any means whatsoever;
``(C) purchase, acquire, or take any security with a
value in excess of $10,000,000 of any other public
utility; or
``(D) purchase, lease, or otherwise acquire an
existing generation facility--
``(i) that has a value in excess of
$10,000,000; and
``(ii) that is used for interstate wholesale
sales and over which the Commission has
jurisdiction for ratemaking purposes.
``(2) No holding company in a holding company system that
includes a transmitting utility or an electric utility shall
purchase, acquire, or take any security with a value in excess

[[Page 983]]
119 STAT. 983

of $10,000,000 of, or, by any means whatsoever, directly or
indirectly, merge or consolidate with, a transmitting utility,
an electric utility company, or a holding company in a holding
company system that includes a transmitting utility, or an
electric utility company, with a value in excess of $10,000,000
without first having secured an order of the Commission
authorizing it to do so.
``(3) NOTE: Notice. Upon receipt of an application for
such approval the Commission shall give reasonable notice in
writing to the Governor and State commission of each of the
States in which the physical property affected, or any part
thereof, is situated, and to such other persons as it may deem
advisable.
``(4) After notice and opportunity for hearing, the
Commission shall approve the proposed disposition,
consolidation, acquisition, or change in control, if it finds
that the proposed transaction will be consistent with the public
interest, and will not result in cross-subsidization of a non-
utility associate company or the pledge or encumbrance of
utility assets for the benefit of an associate company, unless
the Commission determines that the cross-subsidization, pledge,
or encumbrance will be consistent with the public interest.
``(5) NOTE: Regulations. Procedures. The Commission
shall, by rule, adopt procedures for the expeditious
consideration of applications for the approval of dispositions,
consolidations, or acquisitions, under this section. Such rules
shall identify classes of transactions, or specify criteria for
transactions, that normally meet the standards established in
paragraph (4). The Commission shall provide expedited review for
such transactions. NOTE: Deadlines. The Commission shall
grant or deny any other application for approval of a
transaction not later than 180 days after the application is
filed. If the Commission does not act within 180 days, such
application shall be deemed granted unless the Commission finds,
based on good cause, that further consideration is required to
determine whether the proposed transaction meets the standards
of paragraph (4) and issues an order tolling the time for acting
on the application for not more than 180 days, at the end of
which additional period the Commission shall grant or deny the
application.
``(6) For purposes of this subsection, the terms `associate
company', `holding company', and `holding company system' have
the meaning given those terms in the Public Utility Holding
Company Act of 2005.''.

(b) NOTE: 16 USC 824b note. Effective Date.--The amendments made
by this section shall take effect 6 months after the date of enactment
of this Act.

(c) Transition Provision.--The amendments made by subsection (a)
shall not apply to any application under section 203 of the Federal
Power Act (16 U.S.C. 824b) that was filed on or before the date of
enactment of this Act.

SEC. 1290. RELIEF FOR EXTRAORDINARY VIOLATIONS.

(a) Application.--This section applies to any contract entered into
the Western Interconnection prior to June 20, 2001, with a seller of
wholesale electricity that the Commission has--
(1) found to have manipulated the electricity market
resulting in unjust and unreasonable rates; and

[[Page 984]]
119 STAT. 984

(2) revoked the seller's authority to sell any electricity
at market-based rates.

(b) Relief.--Notwithstanding section 222 of the Federal Power Act
(as added by section 1262), any provision of title 11, United States
Code, or any other provision of law, in the case of a contract described
in subsection (a), the Commission shall have exclusive jurisdiction
under the Federal Power Act (16 U.S.C. 791a et seq.) to determine
whether a requirement to make termination payments for power not
delivered by the seller, or any successor in interest of the seller, is
not permitted under a rate schedule (or contract under such a schedule)
or is otherwise unlawful on the grounds that the contract is unjust and
unreasonable or contrary to the public interest.
(c) Applicability.--This section applies to any proceeding pending
on the date of enactment of this section involving a seller described in
subsection (a) in which there is not a final, nonappealable order by the
Commission or any other jurisdiction determining the respective rights
of the seller.

Subtitle H--Definitions

SEC. 1291. DEFINITIONS.

(a) NOTE: 42 USC 16481. Commission.--In this title, the term
``Commission'' means the Federal Energy Regulatory Commission.

(b) Amendment.--Section 3 of the Federal Power Act (16 U.S.C. 796)
is amended--
(1) by striking paragraphs (22) and (23) and inserting the
following:
``(22) Electric utility.--(A) The term `electric utility'
means a person or Federal or State agency (including an entity
described in section 201(f)) that sells electric energy.
``(B) The term `electric utility' includes the Tennessee
Valley Authority and each Federal power marketing
administration.
``(23) Transmitting utility.--The term `transmitting
utility' means an entity (including an entity described in
section 201(f)) that owns, operates, or controls facilities used
for the transmission of electric energy--
``(A) in interstate commerce;
``(B) for the sale of electric energy at
wholesale.''; and
(2) by adding at the end the following:
``(26) Electric cooperative.--The term `electric
cooperative' means a cooperatively owned electric utility.
``(27) RTO.--The term `Regional Transmission Organization'
or `RTO' means an entity of sufficient regional scope approved
by the Commission--
``(A) to exercise operational or functional control
of facilities used for the transmission of electric
energy in interstate commerce; and
``(B) to ensure nondiscriminatory access to the
facilities.
``(28) ISO.--The term `Independent System Operator' or `ISO'
means an entity approved by the Commission--
``(A) to exercise operational or functional control
of facilities used for the transmission of electric
energy in interstate commerce; and
``(B) to ensure nondiscriminatory access to the
facilities.

[[Page 985]]
119 STAT. 985

``(29) Transmission organization.--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.''.

(c) Applicability.--Section 201(f) of the Federal Power Act (16
U.S.C. 824(f)) is amended by striking ``political subdivision of a
state,'' and inserting ``political subdivision of a State, an electric
cooperative that receives financing under the Rural Electrification Act
of 1936 (7 U.S.C. 901 et seq.) or that sells less than 4,000,000
megawatt hours of electricity per year,''.

Subtitle I--Technical and Conforming Amendments

SEC. 1295. CONFORMING AMENDMENTS.

(a) Section 201 of the Federal Power Act (16 U.S.C. 824) is
amended--
(1) in subsection (b)(2)--
(A) in the first sentence--
(i) by striking ``The'' and inserting
``Notwithstanding section 201(f), the''; and
(ii) by striking ``210, 211, and 212'' and
inserting ``203(a)(2), 206(e), 210, 211, 211A,
212, 215, 216, 217, 218, 219, 220, 221, and 222'';
and
(B) in the second sentence--
(i) by inserting ``or rule'' after ``any
order''; and
(ii) by striking ``210 or 211'' and inserting
``203(a)(2), 206(e), 210, 211, 211A, 212, 215,
216, 217, 218, 219, 220, 221, or 222''; and
(2) in subsection (e), by striking ``210, 211, or 212'' and
inserting ``206(e), 206(f), 210, 211, 211A, 212, 215, 216, 217,
218, 219, 220, 221, or 222''.

(b) Section 206 of the Federal Power Act (16 U.S.C. 824e) is
amended--
(1) in the first sentence of subsection (a), by striking
``hearing had'' and inserting ``hearing held''; and
(2) in the seventh sentence of subsection (b), by striking
``the public utility to make''.

(c) Section 211 of the Federal Power Act (16 U.S.C. 824j) is
amended--
(1) in subsection (c)--
(A) by striking ``(2)'';
(B) by striking ``(A)'' and inserting ``(1)''
(C) by striking ``(B)'' and inserting ``(2)''; and
(D) by striking ``termination of modification'' and
inserting ``termination or modification''; and
(2) in the second sentence of subsection (d)(1), by striking
``electric utility'' the second place it appears and inserting
``transmitting utility''.

(d) Section 315(c) of the Federal Power Act (16 U.S.C. 825n(c)) is
amended by striking ``subsection'' and inserting ``section''.

[[Page 986]]
119 STAT. 986

Subtitle J--Economic Dispatch

SEC. 1298. ECONOMIC DISPATCH.

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

``SEC. 223. NOTE: 16 USC 824w. JOINT BOARDS ON ECONOMIC DISPATCH.

``(a) NOTE: Establishment. In General.--The Commission shall
convene joint boards on a regional basis pursuant to section 209 of this
Act to study the issue of security constrained economic dispatch for the
various market regions. The Commission shall designate the appropriate
regions to be covered by each such joint board for purposes of this
section.

``(b) Membership.--The Commission shall request each State to
nominate a representative for the appropriate regional joint board, and
shall designate a member of the Commission to chair and participate as a
member of each such board.
``(c) Powers.--The sole authority of each joint board convened under
this section shall be to consider issues relevant to what constitutes
`security constrained economic dispatch' and how such a mode of
operating an electric energy system affects or enhances the reliability
and affordability of service to customers in the region concerned and to
make recommendations to the Commission regarding such issues.
``(d) Report to the Congress.--Within 1 year after enactment of this
section, the Commission shall issue a report and submit such report to
the Congress regarding the recommendations of the joint boards under
this section and the Commission may consolidate the recommendations of
more than one such regional joint board, including any consensus
recommendations for statutory or regulatory reform.''.

TITLE NOTE: Energy Tax Incentives Act of 2005. XIII--ENERGY POLICY
TAX INCENTIVES

SEC. 1300. SHORT TITLE; AMENDMENT OF 1986 CODE.

(a) NOTE: 26 USC 1 note. Short Title.--This title may be cited
as the ``Energy Tax Incentives Act of 2005''.

(b) NOTE: 26 USC 1 et seq. Amendment of 1986 Code.--Except as
otherwise expressly provided, whenever in this title an amendment or
repeal is expressed in terms of an amendment to, or repeal of, a section
or other provision, the reference shall be considered to be made to a
section or other provision of the Internal Revenue Code of 1986.

Subtitle A--Electricity Infrastructure

SEC. 1301. EXTENSION AND MODIFICATION OF RENEWABLE ELECTRICITY
PRODUCTION CREDIT.

(a) NOTE: 26 USC 45. 2-Year Extension for Certain Facilities.--
Section 45(d) (relating to qualified facilities) is amended--
(1) by striking ``January 1, 2006'' each place it appears in
paragraphs (1), (2), (3), (5), (6), and (7) and inserting
``January 1, 2008'', and

[[Page 987]]
119 STAT. 987

(2) by striking ``January 1, 2006'' in paragraph (4) and
inserting ``January 1, 2008 (January 1, 2006, in the case of a
facility using solar energy)''.

(b) NOTE: 26 USC 45. Increase in Credit Period.--Section
45(b)(4)(B) (relating to credit period) is amended--
(1) by inserting ``or clause (iii)'' after ``clause (ii)''
in clause (i), and
(2) by adding at the end the following:
``(iii) Termination.--Clause (i) shall not
apply to any facility placed in service after the
date of the enactment of this clause.''.

(c) Expansion of Qualified Resources to Certain Hydropower.--
(1) In general.--Section 45(c)(1) (defining qualified energy
resources) is amended by striking ``and'' at the end of
subparagraph (F), by striking the period at the end of
subparagraph (G) and inserting ``, and'', and by adding at the
end the following new subparagraph:
``(H) qualified hydropower production.''.
(2) Credit rate.--Section 45(b)(4)(A) (relating to credit
rate) is amended by striking ``or (7)'' and inserting ``(7), or
(9)''.
(3) Definition of resources.--Section 45(c) (relating to
qualified energy resources and refined coal) is amended by
adding at the end the following new paragraph:
``(8) Qualified hydropower production.--
``(A) In general.--The term `qualified hydropower
production' means--
``(i) in the case of any hydroelectric dam
which was placed in service on or before the date
of the enactment of this paragraph, the
incremental hydropower production for the taxable
year, and
``(ii) in the case of any nonhydroelectric dam
described in subparagraph (C), the hydropower
production from the facility for the taxable year.
``(B) Determination of incremental hydropower
production.--
``(i) In general.--For purposes of
subparagraph (A), incremental hydropower
production for any taxable year shall be equal to
the percentage of average annual hydropower
production at the facility attributable to the
efficiency improvements or additions of capacity
placed in service after the date of the enactment
of this paragraph, determined by using the same
water flow information used to determine an
historic average annual hydropower production
baseline for such facility. Such percentage and
baseline shall be certified by the Federal Energy
Regulatory Commission.
``(ii) Operational changes disregarded.--For
purposes of clause (i), the determination of
incremental hydropower production shall not be
based on any operational changes at such facility
not directly associated with the efficiency
improvements or additions of capacity.
``(C) Nonhydroelectric dam.--For purposes of
subparagraph (A), a facility is described in this
subparagraph if--

[[Page 988]]
119 STAT. 988

``(i) the facility is licensed by the Federal
Energy Regulatory Commission and meets all other
applicable environmental, licensing, and
regulatory requirements,
``(ii) the facility was placed in service
before the date of the enactment of this paragraph
and did not produce hydroelectric power on the
date of the enactment of this paragraph, and
``(iii) turbines or other generating devices
are to be added to the facility after such date to
produce hydroelectric power, but only if there is
not any enlargement of the diversion structure, or
construction or enlargement of a bypass channel,
or the impoundment or any withholding of any
additional water from the natural stream
channel.''.
(4) Facilities.--Section 45(d) NOTE: 26 USC
45. (relating to qualified facilities) is amended by adding at
the end the following new paragraph:
``(9) Qualified hydropower facility.--In the case of a
facility producing qualified hydroelectric production described
in subsection (c)(8), the term `qualified facility' means--
``(A) in the case of any facility producing
incremental hydropower production, such facility but
only to the extent of its incremental hydropower
production attributable to efficiency improvements or
additions to capacity described in subsection (c)(8)(B)
placed in service after the date of the enactment of
this paragraph and before January 1, 2008, and
``(B) any other facility placed in service after the
date of the enactment of this paragraph and before
January 1, 2008.
``(C) Credit period.--In the case of a qualified
facility described in subparagraph (A), the 10-year
period referred to in subsection (a) shall be treated as
beginning on the date the efficiency improvements or
additions to capacity are placed in service.''.

(d) Indian Coal.--
(1) Production facilities.--Subsection (e) of section 45
(relating to definitions and special rules) is amended by adding
at the end the following new paragraph:
``(10) Indian coal production facilities.--
``(A) Determination of credit amount.--In the case
of a producer of Indian coal, the credit determined
under this section (without regard to this paragraph)
for any taxable year shall be increased by an amount
equal to the applicable dollar amount per ton of Indian
coal--
``(i) produced by the taxpayer at an Indian
coal production facility during the 7-year period
beginning on January 1, 2006, and
``(ii) sold by the taxpayer--
``(I) to an unrelated person, and
``(II) during such 7-year period and
such taxable year.
``(B) Applicable dollar amount.--
``(i) In general.--The term `applicable dollar
amount' for any taxable year beginning in a
calendar year means--

[[Page 989]]
119 STAT. 989

``(I) $1.50 in the case of calendar
years 2006 through 2009, and
``(II) $2.00 in the case of calendar
years beginning after 2009.
``(ii) Inflation adjustment.--In the case of
any calendar year after 2006, each of the dollar
amounts under clause (i) shall be equal to the
product of such dollar amount and the inflation
adjustment factor determined under paragraph
(2)(B) for the calendar year, except that such
paragraph shall be applied by substituting `2005'
for `1992'.
``(C) Application of rules.--Rules similar to the
rules of the subsection (b)(3) and paragraphs (1), (3),
(4), and (5) of this subsection shall apply for purposes
of determining the amount of any increase under this
paragraph.
``(D) NOTE: Effective date. Treatment as
specified credit.--The increase in the credit determined
under subsection (a) by reason of this paragraph with
respect to any facility shall be treated as a specified
credit for purposes of section 38(c)(4)(A) during the 4-
year period beginning on the later of January 1, 2006,
or the date on which such facility is placed in service
by the taxpayer.''.
(2) NOTE: 26 USC 45. Resource.--Subsection (c) of
section 45 (relating to qualified energy resources and refined
coal), as amended by this Act, is amended by adding at the end
the following new paragraph:
``(9) Indian coal.--
``(A) In general.--The term `Indian coal' means coal
which is produced from coal reserves which, on June 14,
2005--
``(i) were owned by an Indian tribe, or
``(ii) were held in trust by the United States
for the benefit of an Indian tribe or its members.
``(B) Indian tribe.--For purposes of this paragraph,
the term `Indian tribe' has the meaning given such term
by section 7871(c)(3)(E)(ii).''.
(3) Indian coal production facility.--Subsection (d) of
section 45, as amended by this Act, is amended by adding at the
end the following new paragraph:
``(10) Indian coal production facility.--The term `Indian
coal production facility' means a facility which is placed in
service before January 1, 2009.''.
(4) Conforming amendment.--The heading for section 45(c) is
amended by striking ``Qualified Energy Resources and Refined
Coal'' and inserting ``Resources''.

(e) Technical Amendment Related to Trash Combustion Facilities.--
Section 45(d)(7) (relating to trash combustion facilities) is amended by
adding at the end the following: ``Such term shall include a new unit
placed in service in connection with a facility placed in service on or
before the date of the enactment of this paragraph, but only to the
extent of the increased amount of electricity produced at the facility
by reason of such new unit.''.
(f) Additional Technical Amendments Related to Section 710 of the
American Jobs Creation Act of 2004.--
(1) Clause (ii) of section 45(b)(4)(B) is amended by
striking ``the date of the enactment of this Act'' and inserting
``January 1, 2005,''.

[[Page 990]]
119 STAT. 990

(2) NOTE: 26 USC 45. Clause (ii) of section 45(c)(3)(A)
is amended by inserting ``or any nonhazardous lignin waste
material'' after ``cellulosic waste material''.
(3) Subsection (e) of section 45 is amended by striking
paragraph (6).
(4)(A) Paragraph (9) of section 45(e) is amended to read as
follows:
``(9) Coordination with credit for producing fuel from a
nonconventional source.--
``(A) In general.--The term `qualified facility'
shall not include any facility which produces
electricity from gas derived from the biodegradation of
municipal solid waste if such biodegradation occurred in
a facility (within the meaning of section 29) the
production from which is allowed as a credit under
section 29 for the taxable year or any prior taxable
year.
``(B) Refined coal facilities.--The term `refined
coal production facility' shall not include any facility
the production from which is allowed as a credit under
section 29 for the taxable year or any prior taxable
year.''.
(B) Subparagraph (C) of section 45(e)(8) is amended by
striking ``and (9)''.
(5) NOTE: 26 USC 168. Subclause (I) of section
168(e)(3)(B)(vi) is amended to read as follows:
``(I) is described in subparagraph
(A) of section 48(a)(3) (or would be so
described if `solar and wind' were
substituted for `solar' in clause (i)
thereof and the last sentence of such
section did not apply to such
subparagraph),''.
(6) Paragraph (4) of section 710(g) of the American Jobs
Creation Act of 2004 NOTE: 26 USC 45 note.  is amended by
striking ``January 1, 2004'' and inserting ``January 1, 2005''.

(g) NOTE: 26 USC 45 note. Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall take effect of the date of
the enactment of this Act.
(2) Technical amendments.--The amendments made by
subsections (e) and (f) shall take effect as if included in the
amendments made by section 710 of the American Jobs Creation Act
of 2004.

SEC. 1302. APPLICATION OF SECTION 45 CREDIT TO AGRICULTURAL
COOPERATIVES.

(a) In General.--Section 45(e) (relating to definitions and special
rules), as amended by this Act, is amended by adding at the end the
following:
``(11) Allocation of credit to patrons of agricultural
cooperative.--
``(A) Election to allocate.--
``(i) In general.--In the case of an eligible
cooperative organization, any portion of the
credit determined under subsection (a) for the
taxable year may, at the election of the
organization, be apportioned among patrons of the
organization on the basis of the amount of
business done by the patrons during the taxable
year.

[[Page 991]]
119 STAT. 991

``(ii) Form and effect of election.--An
election under clause (i) for any taxable year
shall be made on a timely filed return for such
year. Such election, once made, shall be
irrevocable for such taxable year. Such election
shall not take effect unless the organization
designates the apportionment as such in a written
notice mailed to its patrons during the payment
period described in section 1382(d).
``(B) Treatment of organizations and patrons.--The
amount of the credit apportioned to any patrons under
subparagraph (A)--
``(i) shall not be included in the amount
determined under subsection (a) with respect to
the organization for the taxable year, and
``(ii) shall be included in the amount
determined under subsection (a) for the first
taxable year of each patron ending on or after the
last day of the payment period (as defined in
section 1382(d)) for the taxable year of the
organization or, if earlier, for the taxable year
of each patron ending on or after the date on
which the patron receives notice from the
cooperative of the apportionment.
``(C) Special rules for decrease in credits for
taxable year.--If the amount of the credit of a
cooperative organization determined under subsection (a)
for a taxable year is less than the amount of such
credit shown on the return of the cooperative
organization for such year, an amount equal to the
excess of--
``(i) such reduction, over
``(ii) the amount not apportioned to such
patrons under subparagraph (A) for the taxable
year,
shall be treated as an increase in tax imposed by this
chapter on the organization. Such increase shall not be
treated as tax imposed by this chapter for purposes of
determining the amount of any credit under this chapter.
``(D) Eligible cooperative defined.--For purposes of
this section the term `eligible cooperative' means a
cooperative organization described in section 1381(a)
which is owned more than 50 percent by agricultural
producers or by entities owned by agricultural
producers. For this purpose an entity owned by an
agricultural producer is one that is more than 50
percent owned by agricultural producers.''.

(b) Conforming Amendment.--The last sentence of section 55(c)(1)
is NOTE: 26 USC 55. amended by inserting ``45(e)(11)(C),'' after
``section''.

(c) NOTE: 26 USC 45 note. Effective Date.--The amendments made
by this section shall apply to taxable years of cooperative
organizations ending after the date of the enactment of this Act.

SEC. 1303. CLEAN RENEWABLE ENERGY BONDS.

(a) In General.--Part IV of subchapter A of chapter 1 (relating to
credits against tax) is amended by adding at the end the following new
subpart:

[[Page 992]]
119 STAT. 992

``Subpart H--Nonrefundable Credit to Holders of Certain Bonds

``Sec. 54. Credit to holders of clean renewable energy bonds.

``SEC. 54. CREDIT TO HOLDERS OF CLEAN RENEWABLE ENERGY BONDS.

``(a) Allowance of Credit.--If a taxpayer holds a clean renewable
energy bond on one or more credit allowance dates of the bond occurring
during any taxable year, there shall be allowed as a credit against the
tax imposed by this chapter for the taxable year an amount equal to the
sum of the credits determined under subsection (b) with respect to such
dates.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined under
this subsection with respect to any credit allowance date for a
clean renewable energy bond is 25 percent of the annual credit
determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any clean renewable energy bond is the product of--
``(A) the credit rate determined by the Secretary
under paragraph (3) for the day on which such bond was
sold, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Determination.--For purposes of paragraph (2), with
respect to any clean renewable energy bond, the Secretary shall
determine daily or cause to be determined daily a credit rate
which shall apply to the first day on which there is a binding,
written contract for the sale or exchange of the bond. The
credit rate for any day is the credit rate which the Secretary
or the Secretary's designee estimates will permit the issuance
of clean renewable energy bonds with a specified maturity or
redemption date without discount and without interest cost to
the qualified issuer.
``(4) Credit allowance date.--For purposes of this section,
the term `credit allowance date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term also includes the last day on which the bond is
outstanding.
``(5) Special rule for issuance and redemption.--In the case
of a bond which is issued during the 3-month period ending on a
credit allowance date, the amount of the credit determined under
this subsection with respect to such credit allowance date shall
be a ratable portion of the credit otherwise determined based on
the portion of the 3-month period during which the bond is
outstanding. A similar rule shall apply when the bond is
redeemed or matures.

``(c) Limitation Based on Amount of Tax.--The credit allowed under
subsection (a) for any taxable year shall not exceed the excess of--
``(1) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over

[[Page 993]]
119 STAT. 993

``(2) the sum of the credits allowable under this part
(other than subpart C and this section).

``(d) Clean Renewable Energy Bond.--For purposes of this section--
``(1) In general.--The term `clean renewable energy bond'
means any bond issued as part of an issue if--
``(A) the bond is issued by a qualified issuer
pursuant to an allocation by the Secretary to such
issuer of a portion of the national clean renewable
energy bond limitation under subsection (f)(2),
``(B) 95 percent or more of the proceeds of such
issue are to be used for capital expenditures incurred
by qualified borrowers for one or more qualified
projects,
``(C) the qualified issuer designates such bond for
purposes of this section and the bond is in registered
form, and
``(D) the issue meets the requirements of subsection
(h).
``(2) Qualified project; special use rules.--
``(A) In general.--The term `qualified project'
means any qualified facility (as determined under
section 45(d) without regard to paragraph (10) and to
any placed in service date) owned by a qualified
borrower.
``(B) Refinancing rules.--For purposes of paragraph
(1)(B), a qualified project may be refinanced with
proceeds of a clean renewable energy bond only if the
indebtedness being refinanced (including any obligation
directly or indirectly refinanced by such indebtedness)
was originally incurred by a qualified borrower after
the date of the enactment of this section.
``(C) NOTE: Deadlines. Reimbursement.--For
purposes of paragraph (1)(B), a clean renewable energy
bond may be issued to reimburse a qualified borrower for
amounts paid after the date of the enactment of this
section with respect to a qualified project, but only
if--
``(i) prior to the payment of the original
expenditure, the qualified borrower declared its
intent to reimburse such expenditure with the
proceeds of a clean renewable energy bond,
``(ii) not later than 60 days after payment of
the original expenditure, the qualified issuer
adopts an official intent to reimburse the
original expenditure with such proceeds, and
``(iii) the reimbursement is made not later
than 18 months after the date the original
expenditure is paid.
``(D) Treatment of changes in use.--For purposes of
paragraph (1)(B), the proceeds of an issue shall not be
treated as used for a qualified project to the extent
that a qualified borrower or qualified issuer takes any
action within its control which causes such proceeds not
to be used for a qualified project. The Secretary shall
prescribe regulations specifying remedial actions that
may be taken (including conditions to taking such
remedial actions) to prevent an action described in the
preceding sentence from causing a bond to fail to be a
clean renewable energy bond.

[[Page 994]]
119 STAT. 994

``(e) Maturity Limitations.--
``(1) Duration of term.--A bond shall not be treated as a
clean renewable energy bond if the maturity of such bond exceeds
the maximum term determined by the Secretary under paragraph (2)
with respect to such bond.
``(2) Maximum term.--During each calendar month, the
Secretary shall determine the maximum term permitted under this
paragraph for bonds issued during the following calendar month.
Such maximum term shall be the term which the Secretary
estimates will result in the present value of the obligation to
repay the principal on the bond being equal to 50 percent of the
face amount of such bond. Such present value shall be determined
without regard to the requirements of subsection (l)(6) and
using as a discount rate the average annual interest rate of
tax-exempt obligations having a term of 10 years or more which
are issued during the month. If the term as so determined is not
a multiple of a whole year, such term shall be rounded to the
next highest whole year.

``(f) Limitation on Amount of Bonds Designated.--
``(1) National limitation.--There is a national clean
renewable energy bond limitation of $800,000,000.
``(2) Allocation by secretary.--The Secretary shall allocate
the amount described in paragraph (1) among qualified projects
in such manner as the Secretary determines appropriate, except
that the Secretary may not allocate more than $500,000,000 of
the national clean renewable energy bond limitation to finance
qualified projects of qualified borrowers which are governmental
bodies.

``(g) Credit Included in Gross Income.--Gross income includes the
amount of the credit allowed to the taxpayer under this section
(determined without regard to subsection (c)) and the amount so included
shall be treated as interest income.
``(h) Special Rules Relating to Expenditures.--
``(1) In general.--An issue shall be treated as meeting the
requirements of this subsection if, as of the date of issuance,
the qualified issuer reasonably expects--
``(A) at least 95 percent of the proceeds of such
issue are to be spent for one or more qualified projects
within the 5-year period beginning on the date of
issuance of the clean energy bond,
``(B) a binding commitment with a third party to
spend at least 10 percent of the proceeds of such issue
will be incurred within the 6-month period beginning on
the date of issuance of the clean energy bond or, in the
case of a clean energy bond the proceeds of which are to
be loaned to two or more qualified borrowers, such
binding commitment will be incurred within the 6-month
period beginning on the date of the loan of such
proceeds to a qualified borrower, and
``(C) such projects will be completed with due
diligence and the proceeds of such issue will be spent
with due diligence.
``(2) Extension of period.--Upon submission of a request
prior to the expiration of the period described in paragraph
(1)(A), the Secretary may extend such period if the qualified

[[Page 995]]
119 STAT. 995

issuer establishes that the failure to satisfy the 5-year
requirement is due to reasonable cause and the related projects
will continue to proceed with due diligence.
``(3) Failure to spend required amount of bond proceeds
within 5 years.--To the extent that less than 95 percent of the
proceeds of such issue are expended by the close of the 5-year
period beginning on the date of issuance (or if an extension has
been obtained under paragraph (2), by the close of the extended
period), the qualified issuer shall redeem all of the
nonqualified bonds within 90 days after the end of such period.
For purposes of this paragraph, the amount of the nonqualified
bonds required to be redeemed shall be determined in the same
manner as under section 142.

``(i) Special Rules Relating to Arbitrage.--A bond which is part of
an issue shall not be treated as a clean renewable energy bond unless,
with respect to the issue of which the bond is a part, the qualified
issuer satisfies the arbitrage requirements of section 148 with respect
to proceeds of the issue.
``(j) Cooperative Electric Company; Qualified Energy Tax Credit Bond
Lender; Governmental Body; Qualified Borrower.--For purposes of this
section--
``(1) Cooperative electric company.--The term `cooperative
electric company' means a mutual or cooperative electric company
described in section 501(c)(12) or section 1381(a)(2)(C), or a
not-for-profit electric utility which has received a loan or
loan guarantee under the Rural Electrification Act.
``(2) Clean renewable energy bond lender.--The term `clean
renewable energy bond lender' means a lender which is a
cooperative which is owned by, or has outstanding loans to, 100
or more cooperative electric companies and is in existence on
February 1, 2002, and shall include any affiliated entity which
is controlled by such lender.
``(3) Governmental body.--The term `governmental body' means
any State, territory, possession of the United States, the
District of Columbia, Indian tribal government, and any
political subdivision thereof.
``(4) Qualified issuer.--The term `qualified issuer' means--
``(A) a clean renewable energy bond lender,
``(B) a cooperative electric company, or
``(C) a governmental body.
``(5) Qualified borrower.--The term `qualified borrower'
means--
``(A) a mutual or cooperative electric company
described in section 501(c)(12) or 1381(a)(2)(C), or
``(B) a governmental body.

``(k) Special Rules Relating to Pool Bonds.--No portion of a pooled
financing bond may be allocable to any loan unless the borrower has
entered into a written loan commitment for such portion prior to the
issue date of such issue.
``(l) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Bond.--The term `bond' includes any obligation.
``(2) Pooled financing bond.--The term `pooled financing
bond' shall have the meaning given such term by section
149(f)(4)(A).

[[Page 996]]
119 STAT. 996

``(3) Partnership; s NOTE: Applicability.  corporation;
and other pass-thru entities.--
``(A) In general.--
Under NOTE: Regulations. regulations prescribed by
the Secretary, in the case of a partnership, trust, S
corporation, or other pass-thru entity, rules similar to
the rules of section 41(g) shall apply with respect to
the credit allowable under subsection (a).
``(B) No basis adjustment.--In the case of a bond
held by a partnership or an S corporation, rules similar
to the rules under section 1397E(i) shall apply.
``(4) Bonds NOTE: Procedures. held by regulated
investment companies.--If any clean renewable energy bond is
held by a regulated investment company, the credit determined
under subsection (a) shall be allowed to shareholders of such
company under procedures prescribed by the Secretary.
``(5) Treatment for estimated tax purposes.--Solely for
purposes of sections 6654 and 6655, the credit allowed by this
section (determined without regard to subsection (c)) to a
taxpayer by reason of holding a clean renewable energy bond on a
credit allowance date shall be treated as if it were a payment
of estimated tax made by the taxpayer on such date.
``(6) Ratable principal amortization required.--A bond shall
not be treated as a clean renewable energy bond unless it is
part of an issue which provides for an equal amount of principal
to be paid by the qualified issuer during each calendar year
that the issue is outstanding.
``(7) Reporting.--Issuers of clean renewable energy bonds
shall submit reports similar to the reports required under
section 149(e).

``(m) Termination.--This section shall not apply with respect to any
bond issued after December 31, 2007.''.
(b) Reporting.--Subsection (d) of section 6049 (relating to returns
regarding payments of interest) is amended by adding at the end the
following new paragraph:
``(8) Reporting of credit on clean renewable energy bonds.--
``(A) In general.--For purposes of subsection (a),
the term `interest' includes amounts includible in gross
income under section 54(g) and such amounts shall be
treated as paid on the credit allowance date (as defined
in section 54(b)(4)).
``(B) Reporting to corporations, etc.--Except as
otherwise provided in regulations, in the case of any
interest described in subparagraph (A), subsection
(b)(4) shall be applied without regard to subparagraphs
(A), (H), (I), (J), (K), and (L)(i) of such subsection.
``(C) Regulatory authority.--The Secretary may
prescribe such regulations as are necessary or
appropriate to carry out the purposes of this paragraph,
including regulations which require more frequent or
more detailed reporting.''.

(c) Conforming Amendments.--
(1) The table of subparts for part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
item:

[[Page 997]]
119 STAT. 997

``Subpart H. Nonrefundable Credit to Holders of Certain Bonds.''.


(2) Section 1397E(c)(2) is amended by inserting ``, and
subpart H thereof'' after ``refundable credits''.
(3) Subsection (h) of section 1397E is amended to read as
follows:

``(h) Credit Treated as Nonrefundable Bondholder Credit.--For
purposes of this title, the credit allowed by this section shall be
treated as a credit allowable under subpart H of part IV of subchapter A
of this chapter.''.
(4) Section 6401(b)(1) is amended by striking ``and G'' and
inserting ``G, and H''.

(d) Issuance of Regulations.--The NOTE: Deadline. 26 USC 54
note. Secretary of the Treasury shall issue regulations required under
section 54 of the Internal Revenue Code of 1986 (as added by this
section) not later than 120 days after the date of the enactment of this
Act.

(e) Effective Date.--The NOTE: 26 USC 54 note. amendments made
by this section shall apply to bonds issued after December 31, 2005.

SEC. 1304. TREATMENT OF INCOME OF CERTAIN ELECTRIC COOPERATIVES.

(a) Elimination of Sunset on Treatment of Income From Open Access
and Nuclear Decommissioning Transactions.--Section 501(c)(12)(C) is
amended by striking the last sentence.
(b) Elimination of Sunset on Treatment of Income From Load Loss
Transactions.--Section 501(c)(12)(H) is amended by striking clause (x).
(c) Effective Date.--The NOTE: 26 USC 501 note. amendments made
by this section shall take effect on the date of the enactment of this
Act.

SEC. 1305. DISPOSITIONS OF TRANSMISSION PROPERTY TO IMPLEMENT FERC
RESTRUCTURING POLICY.

(a) In General.--Section 451(i)(3) (defining qualifying electric
transmission transaction) is amended by striking ``2007'' and inserting
``2008''.
(b) Technical Amendment Related to Section 909 of the American Jobs
Creation Act of 2004.--Clause (ii) of section 451(i)(4)(B) is amended by
striking ``the close of the period applicable under subsection (a)(2)(B)
as extended under paragraph (2)'' and inserting ``December 31, 2007''.
(c) Effective NOTE: 26 USC 451 note. Dates.--
(1) In general.--The amendment made by subsection (a) shall
apply to transactions occurring after the date of the enactment
of this Act.
(2) Technical amendment.--The amendment made by subsection
(b) shall take effect as if included in the amendments made by
section 909 of the American Jobs Creation Act of 2004.

SEC. 1306. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER FACILITIES.

(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business related credits) is amended by adding after
section 45I the following new section:

[[Page 998]]
119 STAT. 998

``SEC. 45J. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER
FACILITIES.

``(a) General Rule.--For purposes of section 38, the advanced
nuclear power facility production credit of any taxpayer for any taxable
year is equal to the product of--
``(1) 1.8 cents, multiplied by
``(2) the kilowatt hours of electricity--
``(A) produced by the taxpayer at an advanced
nuclear power facility during the 8-year period
beginning on the date the facility was originally placed
in service, and
``(B) sold by the taxpayer to an unrelated person
during the taxable year.

``(b) National Limitation.--
``(1) In general.--The amount of credit which would (but for
this subsection and subsection (c)) be allowed with respect to
any facility for any taxable year shall not exceed the amount
which bears the same ratio to such amount of credit as--
``(A) the national megawatt capacity limitation
allocated to the facility, bears to
``(B) the total megawatt nameplate capacity of such
facility.
``(2) Amount of national limitation.--The national megawatt
capacity limitation shall be 6,000 megawatts.
``(3) Allocation of limitation.--The Secretary shall
allocate the national megawatt capacity limitation in such
manner as the Secretary may prescribe.
``(4) Regulations.--Not NOTE: Deadline. later than 6
months after the date of the enactment of this section, the
Secretary shall prescribe such regulations as may be necessary
or appropriate to carry out the purposes of this subsection.
Such regulations shall provide a certification process under
which the Secretary, after consultation with the Secretary of
Energy, shall approve and allocate the national megawatt
capacity limitation.

``(c) Other Limitations.--
``(1) Annual limitation.--The amount of the credit allowable
under subsection (a) (after the application of subsection (b))
for any taxable year with respect to any facility shall not
exceed an amount which bears the same ratio to $125,000,000 as--
``(A) the national megawatt capacity limitation
allocated under subsection (b) to the facility, bears to
``(B) 1,000.
``(2) Other limitations.--Rules similar to the rules of
section 45(b)(1) shall apply for purposes of this section.

``(d) Advanced Nuclear Power Facility.--For purposes of this
section--
``(1) In general.--The term `advanced nuclear power
facility' means any advanced nuclear facility--
``(A) which is owned by the taxpayer and which uses
nuclear energy to produce electricity, and
``(B) which is placed in service after the date of
the enactment of this paragraph and before January 1,
2021.
``(2) Advanced nuclear facility.--For purposes of paragraph
(1), the term `advanced nuclear facility' means any nuclear
facility the reactor design for which is approved after December
31, 1993, by the Nuclear Regulatory Commission

[[Page 999]]
119 STAT. 999

(and such design or a substantially similar design of comparable
capacity was not approved on or before such date).

``(e) Other Rules To Apply.--Rules similar to the rules of
paragraphs (1), (2), (3), (4), and (5) of section 45(e) shall apply for
purposes of this section.''.
(b) Credit Treated as Business Credit.--Section 38(b), as amended by
the Transportation Equity Act: A Legacy for Users, is amended by
striking ``plus'' at the end of paragraph (19), by striking the period
at the end of paragraph (20) and inserting ``, plus'', and by adding at
the end the following:
``(21) the advanced nuclear power facility production credit
determined under section 45J(a).''.

(c) Clerical Amendment.--The table of sections for subpart D of part
IV of subchapter A of chapter 1 is amended by adding at the end the
following:

``Sec. 45J. Credit for production from advanced nuclear power
facilities.''.

(d) Effective Date.--The NOTE: 26 USC 38 note. amendments made
by this section shall apply to production in taxable years beginning
after the date of the enactment of this Act.

SEC. 1307. CREDIT FOR INVESTMENT IN CLEAN COAL FACILITIES.

(a) In General.--Section 46 (relating to amount of credit) is
amended by striking ``and'' at the end of paragraph (1), by striking the
period at the end of paragraph (2), and by adding at the end the
following new paragraphs:
``(3) the qualifying advanced coal project credit, and
``(4) the qualifying gasification project credit.''.

(b) Amount of Credits.--Subpart E of part IV of subchapter A of
chapter 1 (relating to rules for computing investment credit) is amended
by inserting after section 48 the following new sections:

``SEC. 48A. QUALIFYING ADVANCED COAL PROJECT CREDIT.

``(a) In General.--For purposes of section 46, the qualifying
advanced coal project credit for any taxable year is an amount equal
to--
``(1) 20 percent of the qualified investment for such
taxable year in the case of projects described in subsection
(d)(3)(B)(i), and
``(2) 15 percent of the qualified investment for such
taxable year in the case of projects described in subsection
(d)(3)(B)(ii).

``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the
qualified investment for any taxable year is the basis of
eligible property placed in service by the taxpayer during such
taxable year which is part of a qualifying advanced coal
project--
``(A)(i) the construction, reconstruction, or
erection of which is completed by the taxpayer, or
``(ii) which is acquired by the taxpayer if the
original use of such property commences with the
taxpayer, and
``(B) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable.
``(2) Special rule for certain subsidized property.--Rules
similar to section 48(a)(4) shall apply for purposes of this
section.
``(3) Certain qualified progress expenditures rules made
applicable.--Rules similar to the rules of subsections (c)(4)
and (d) of section 46 (as in effect on the day before

[[Page 1000]]
119 STAT. 1000

the enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of this section.

``(c) Definitions.--For purposes of this section--
``(1) Qualifying advanced coal project.--The term
`qualifying advanced coal project' means a project which meets
the requirements of subsection (e).
``(2) Advanced coal-based generation technology.--The term
`advanced coal-based generation technology' means a technology
which meets the requirements of subsection (f).
``(3) Eligible property.--The term `eligible property'
means--
``(A) in the case of any qualifying advanced coal
project using an integrated gasification combined cycle,
any property which is a part of such project and is
necessary for the gasification of coal, including any
coal handling and gas separation equipment, and
``(B) in the case of any other qualifying advanced
coal project, any property which is a part of such
project.
``(4) Coal.--The term `coal' means anthracite, bituminous
coal, subbituminous coal, lignite, and peat.
``(5) Greenhouse gas capture capability.--The term
`greenhouse gas capture capability' means an integrated
gasification combined cycle technology facility capable of
adding components which can capture, separate on a long-term
basis, isolate, remove, and sequester greenhouse gases which
result from the generation of electricity.
``(6) Electric generation unit.--The term `electric
generation unit' means any facility at least 50 percent of the
total annual net output of which is electrical power, including
an otherwise eligible facility which is used in an industrial
application.
``(7) Integrated gasification combined cycle.--The term
`integrated gasification combined cycle' means an electric
generation unit which produces electricity by converting coal to
synthesis gas which is used to fuel a combined-cycle plant which
produces electricity from both a combustion turbine (including a
combustion turbine/fuel cell hybrid) and a steam turbine.

``(d) Qualifying NOTE: Deadlines. Advanced Coal Project
Program.--
``(1) Establishment.--Not later than 180 days after the date
of enactment of this section, the Secretary, in consultation
with the Secretary of Energy, shall establish a qualifying
advanced coal project program for the deployment of advanced
coal-based generation technologies.
``(2) Certification.--
``(A) Application period.--Each applicant for
certification under this paragraph shall submit an
application meeting the requirements of subparagraph
(B). An applicant may only submit an application during
the 3-year period beginning on the date the Secretary
establishes the program under paragraph (1).
``(B) Requirements for applications for
certification.--An application under subparagraph (A)
shall contain such information as the Secretary may
require in order to make a determination to accept or
reject an application for certification as meeting the
requirements under subsection (e)(1). NOTE: Trade
secrets. Confidential information. Any information
contained in the

[[Page 1001]]
119 STAT. 1001

application shall be protected as provided in section
552(b)(4) of title 5, United States Code.
``(C) Time to act upon applications for
certification.--The Secretary shall issue a
determination as to whether an applicant has met the
requirements under subsection (e)(1) within 60 days
following the date of submittal of the application for
certification.
``(D) Time to meet criteria for certification.--Each
applicant for certification shall have 2 years from the
date of acceptance by the Secretary of the application
during which to provide to the Secretary evidence that
the criteria set forth in subsection (e)(2) have been
met.
``(E) Period of issuance.--An applicant which
receives a certification shall have 5 years from the
date of issuance of the certification in order to place
the project in service and if such project is not placed
in service by that time period then the certification
shall no longer be valid.
``(3) Aggregate credits.--
``(A) In general.--The aggregate credits allowed
under subsection (a) for projects certified by the
Secretary under paragraph (2) may not exceed
$1,300,000,000.
``(B) Particular projects.--Of the dollar amount in
subparagraph (A), the Secretary is authorized to
certify--
``(i) $800,000,000 for integrated gasification
combined cycle projects, and
``(ii) $500,000,000 for projects which use
other advanced coal-based generation technologies.
``(4) Review and redistribution.--
``(A) Review.--Not later than 6 years after the date
of enactment of this section, the Secretary shall review
the credits allocated under this section as of the date
which is 6 years after the date of enactment of this
section.
``(B) Redistribution.--The Secretary may reallocate
credits available under clauses (i) and (ii) of
paragraph (3)(B) if the Secretary determines that--
``(i) there is an insufficient quantity of
qualifying applications for certification pending
at the time of the review, or
``(ii) any certification made pursuant to
subsection paragraph (2) has been revoked pursuant
to subsection paragraph (2)(D) because the project
subject to the certification has been delayed as a
result of third party opposition or litigation to
the proposed project.
``(C) Reallocation.--If the Secretary determines
that credits under clause (i) or (ii) of paragraph
(3)(B) are available for reallocation pursuant to the
requirements set forth in paragraph (2), the Secretary
is authorized to conduct an additional program for
applications for certification.

``(e) Qualifying Advanced Coal Projects.--
``(1) Requirements.--For purposes of subsection (c)(1), a
project shall be considered a qualifying advanced coal project
that the Secretary may certify under subsection (d)(2) if the
Secretary determines that, at a minimum--
``(A) the project uses an advanced coal-based
generation technology--
``(i) to power a new electric generation unit;
or

[[Page 1002]]
119 STAT. 1002

``(ii) to retrofit or repower an existing
electric generation unit (including an existing
natural gas-fired combined cycle unit);
``(B) the fuel input for the project, when
completed, is at least 75 percent coal;
``(C) the project, consisting of one or more
electric generation units at one site, will have a total
nameplate generating capacity of at least 400 megawatts;
``(D) the applicant provides evidence that a
majority of the output of the project is reasonably
expected to be acquired or utilized;
``(E) the applicant provides evidence of ownership
or control of a site of sufficient size to allow the
proposed project to be constructed and to operate on a
long-term basis; and
``(F) the project will be located in the United
States.
``(2) Requirements for certification.--For the purpose of
subsection (d)(2)(D), a project shall be eligible for
certification only if the Secretary determines that--
``(A) the applicant for certification has received
all Federal and State environmental authorizations or
reviews necessary to commence construction of the
project; and
``(B) the applicant for certification, except in the
case of a retrofit or repower of an existing electric
generation unit, has purchased or entered into a binding
contract for the purchase of the main steam turbine or
turbines for the project, except that such contract may
be contingent upon receipt of a certification under
subsection (d)(2).
``(3) Priority for integrated gasification combined cycle
projects.--In determining which qualifying advanced coal
projects to certify under subsection (d)(2), the Secretary
shall--
``(A) certify capacity, in accordance with the
procedures set forth in subsection (d), in relatively
equal amounts to--
``(i) projects using bituminous coal as a
primary feedstock,
``(ii) projects using subbituminous coal as a
primary feedstock, and
``(iii) projects using lignite as a primary
feedstock, and
``(B) give high priority to projects which include,
as determined by the Secretary--
``(i) greenhouse gas capture capability,
``(ii) increased by-product utilization, and
``(iii) other benefits.

``(f) Advanced Coal-Based Generation Technology.--
``(1) In general.--For the purpose of this section, an
electric generation unit uses advanced coal-based generation
technology if--
``(A) the unit--
``(i) uses integrated gasification combined
cycle technology, or
``(ii) except as provided in paragraph (3),
has a design net heat rate of 8530 Btu/kWh (40
percent efficiency), and

[[Page 1003]]
119 STAT. 1003

``(B) the unit is designed to meet the performance
requirements in the following table:




Performance characteristic:         Design level for project:
SO2 (percent removal)...........  99 percent
NOx (emissions).................  0.07 lbs/MMBTU
PM* (emissions).................  0.015 lbs/MMBTU
Hg (percent removal)............  90 percent


``(2) Design net heat rate.--For purposes of this
subsection, design net heat rate with respect to an electric
generation unit shall--
``(A) be measured in Btu per kilowatt hour (higher
heating value),
``(B) be based on the design annual heat input to
the unit and the rated net electrical power, fuels, and
chemicals output of the unit (determined without regard
to the cogeneration of steam by the unit),
``(C) be adjusted for the heat content of the design
coal to be used by the unit--
``(i) if the heat content is less than 13,500
Btu per pound, but greater than 7,000 Btu per
pound, according to the following formula: design
net heat rate = unit net heat rate x [1-[((13,500-
design coal heat content, Btu per pound)/1,000)*
0.013, and
``(ii) if the heat content is less than or
equal to 7,000 Btu per pound, according to the
following formula: design net heat rate = unit net
heat rate x [1-[((13,500-design coal heat content,
Btu per pound)/1,000)* 0.018, and
``(D) be corrected for the site reference conditions
of--
``(i) elevation above sea level of 500 feet,
``(ii) air pressure of 14.4 pounds per square
inch absolute,
``(iii) temperature, dry bulb of 63F,
``(iv) temperature, wet bulb of 54F, and
``(v) relative humidity of 55 percent.
``(3) Existing units.--In the case of any electric
generation unit in existence on the date of the enactment of
this section, such unit uses advanced coal-based generation
technology if, in lieu of the requirements under paragraph
(1)(A)(ii), such unit achieves a minimum efficiency of 35
percent and an overall thermal design efficiency improvement,
compared to the efficiency of the unit as operated, of not less
than--
``(A) 7 percentage points for coal of more than
9,000 Btu,
``(B) 6 percentage points for coal of 7,000 to 9,000
Btu, or
``(C) 4 percentage points for coal of less than
7,000 Btu.

``(g) Applicability.--No use of technology (or level of emission
reduction solely by reason of the use of the technology), and no
achievement of any emission reduction by the demonstration of any
technology or performance level, by or at one or more facilities with
respect to which a credit is allowed under this section, shall

[[Page 1004]]
119 STAT. 1004

be considered to indicate that the technology or performance level is--
``(1) adequately demonstrated for purposes of section 111 of
the Clean Air Act (42 U.S.C. 7411);
``(2) achievable for purposes of section 169 of that Act (42
U.S.C. 7479); or
``(3) achievable in practice for purposes of section 171 of
such Act (42 U.S.C. 7501).

``SEC. 48B. QUALIFYING GASIFICATION PROJECT CREDIT.

``(a) In General.--For purposes of section 46, the qualifying
gasification project credit for any taxable year is an amount equal to
20 percent of the qualified investment for such taxable year.
``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the
qualified investment for any taxable year is the basis of
eligible property placed in service by the taxpayer during such
taxable year which is part of a qualifying gasification
project--
``(A)(i) the construction, reconstruction, or
erection of which is completed by the taxpayer, or
``(ii) which is acquired by the taxpayer if the
original use of such property commences with the
taxpayer, and
``(B) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable.
``(2) Special rule for certain subsidized property.--Rules
similar to section 48(a)(4) shall apply for purposes of this
section.
``(3) Certain qualified progress expenditures rules made
applicable.--Rules similar to the rules of subsections (c)(4)
and (d) of section 46 (as in effect on the day before the
enactment of the Revenue Reconciliation Act of 1990) shall apply
for purposes of this section.

``(c) Definitions.--For purposes of this section--
``(1) Qualifying gasification project.--The term `qualifying
gasification project' means any project which--
``(A) employs gasification technology,
``(B) will be carried out by an eligible entity, and
``(C) any portion of the qualified investment of
which is certified under the qualifying gasification
program as eligible for credit under this section in an
amount (not to exceed $650,000,000) determined by the
Secretary.
``(2) Gasification technology.--The term `gasification
technology' means any process which converts a solid or liquid
product from coal, petroleum residue, biomass, or other
materials which are recovered for their energy or feedstock
value into a synthesis gas composed primarily of carbon monoxide
and hydrogen for direct use or subsequent chemical or physical
conversion.
``(3) Eligible property.--The term `eligible property' means
any property which is a part of a qualifying gasification
project and is necessary for the gasification technology of such
project.
``(4) Biomass.--
``(A) In general.--The term `biomass' means any--
``(i) agricultural or plant waste,
``(ii) byproduct of wood or paper mill
operations, including lignin in spent pulping
liquors, and

[[Page 1005]]
119 STAT. 1005

``(iii) other products of forestry
maintenance.
``(B) Exclusion.--The term `biomass' does not
include paper which is commonly recycled.
``(5) Carbon capture capability.--The term `carbon capture
capability' means a gasification plant design which is
determined by the Secretary to reflect reasonable consideration
for, and be capable of, accommodating the equipment likely to be
necessary to capture carbon dioxide from the gaseous stream, for
later use or sequestration, which would otherwise be emitted in
the flue gas from a project which uses a nonrenewable fuel.
``(6) Coal.--The term `coal' means anthracite, bituminous
coal, subbituminous coal, lignite, and peat.
``(7) Eligible entity.--The term `eligible entity' means any
person whose application for certification is principally
intended for use in a domestic project which employs domestic
gasification applications related to--
``(A) chemicals,
``(B) fertilizers,
``(C) glass,
``(D) steel,
``(E) petroleum residues,
``(F) forest products, and
``(G) agriculture, including feedlots and dairy
operations.
``(8) Petroleum residue.--The term `petroleum residue' means
the carbonized product of high-boiling hydrocarbon fractions
obtained in petroleum processing.

``(d) Qualifying Gasification Project Program.--
``(1) In general.--Not NOTE: Deadline. later than 180
days after the date of the enactment of this section, the
Secretary, in consultation with the Secretary of Energy, shall
establish a qualifying gasification project program to consider
and award certifications for qualified investment eligible for
credits under this section to qualifying gasification project
sponsors under this section. The total amounts of credit that
may be allocated under the program shall not exceed $350,000,000
under rules similar to the rules of section 48A(d)(4).
``(2) Period of issuance.--A NOTE: Deadline. certificate
of eligibility under paragraph (1) may be issued only during the
10-fiscal year period beginning on October 1, 2005.
``(3) Selection criteria.--The Secretary shall not make a
competitive certification award for qualified investment for
credit eligibility under this section unless the recipient has
documented to the satisfaction of the Secretary that--
``(A) the award recipient is financially viable
without the receipt of additional Federal funding
associated with the proposed project,
``(B) the recipient will provide sufficient
information to the Secretary for the Secretary to ensure
that the qualified investment is spent efficiently and
effectively,
``(C) a market exists for the products of the
proposed project as evidenced by contracts or written
statements of intent from potential customers,
``(D) the fuels identified with respect to the
gasification technology for such project will comprise
at least 90 percent of the fuels required by the project
for the production

[[Page 1006]]
119 STAT. 1006

of chemical feedstocks, liquid transportation fuels, or
coproduction of electricity,
``(E) the award recipient's project team is
competent in the construction and operation of the
gasification technology proposed, with preference given
to those recipients with experience which demonstrates
successful and reliable operations of the technology on
domestic fuels so identified, and
``(F) the award recipient has met other criteria
established and published by the Secretary.

``(e) Denial of Double Benefit.--A credit shall not be allowed under
this section for any qualified investment for which a credit is allowed
under section 48A.''.
(c) Conforming Amendments.--
(1) Section 49(a)(1)(C) is amended by striking ``and'' at
the end of clause (ii), by striking clause (iii), and by adding
after clause (ii) the following new clauses:
``(iii) the basis of any property which is
part of a qualifying advanced coal project under
section 48A, and
``(iv) the basis of any property which is part
of a qualifying gasification project under section
48B.''.
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1 is amended by inserting after the item
relating to section 48 the following new items:

``Sec. 48A. Qualifying advanced coal project credit.
``Sec. 48B. Qualifying gasification project credit.''.

(d) Effective Date.--The NOTE: 26 USC 46 note. amendments made
by this section shall apply to periods after the date of the enactment
of this Act, under rules similar to the rules of section 48(m) of the
Internal Revenue Code of 1986 (as in effect on the day before the date
of the enactment of the Revenue Reconciliation Act of 1990).

SEC. 1308. ELECTRIC TRANSMISSION PROPERTY TREATED AS 15-YEAR PROPERTY.

(a) In General.--Subparagraph (E) of section 168(e)(3) (relating to
classification of certain property) is amended by striking ``and'' at
the end of clause (v), by striking the period at the end of clause (vi)
and inserting ``, and'', and by adding at the end the following new
clause:
``(vii) any section 1245 property (as defined
in section 1245(a)(3)) used in the transmission at
69 or more kilovolts of electricity for sale and
the original use of which commences with the
taxpayer after April 11, 2005.''.

(b) Alternative System.--The table contained in section 168(g)(3)(B)
(relating to special rule for certain property assigned to classes) is
amended by inserting after the item relating to subparagraph (E)(vi) the
following new item:




``(E)(vii).................................................        30''.



(c) Effective NOTE: 26 USC 168 note. Date.--
(1) In general.--The amendments made by this section shall
apply to property placed in service after April 11, 2005.

[[Page 1007]]
119 STAT. 1007

(2) Exception.--The amendments made by this section shall
not apply to any property with respect to which the taxpayer or
a related party has entered into a binding contract for the
construction thereof on or before April 11, 2005, or, in the
case of self-constructed property, has started construction on
or before such date.

SEC. 1309. EXPANSION OF AMORTIZATION FOR CERTAIN ATMOSPHERIC POLLUTION
CONTROL FACILITIES IN CONNECTION WITH PLANTS FIRST PLACED IN
SERVICE AFTER 1975.

(a) Eligibility of Post-1975 Pollution Control Facilities.--
Subsection (d) of section 169 (relating to definitions) is amended by
adding at the end the following:
``(5) Special rule relating to certain atmospheric pollution
control facilities.--In the case of any atmospheric pollution
control facility which is placed in service after April 11,
2005, and used in connection with an electric generation plant
or other property which is primarily coal fired--
``(A) paragraph (1) shall be applied without regard
to the phrase `in operation before January 1, 1976', and
``(B) this section shall be applied by substituting
`84' for `60' each place it appears in subsections (a)
and (b).''.

(b) Treatment as New Identifiable Treatment Facility.--Subparagraph
(B) of section 169(d)(4) is amended to read as follows:
``(B) Certain facilities placed in operation after
april 11, 2005.--In the case of any facility described
in paragraph (1) solely by reason of paragraph (5),
subparagraph (A) shall be applied by substituting `April
11, 2005' for `December 31, 1968' each place it appears
therein.''.

(c) Conforming Amendment.--The heading for section 169(d) is amended
by inserting ``and Special Rules'' after ``Definitions''.
(d) Technical Amendment.--Section 169(d)(3) is amended by striking
``Health, Education, and Welfare'' and inserting ``Health and Human
Services''.
(e) Effective Date.--The NOTE: 26 USC 169 note. amendments made
by this section shall apply to facilities placed in service after April
11, 2005.

SEC. 1310. MODIFICATIONS TO SPECIAL RULES FOR NUCLEAR DECOMMISSIONING
COSTS.

(a) Repeal of Limitation on Deposits Into Fund Based on Cost of
Service; Contributions After Funding Period.--Subsection (b) of section
468A (relating to special rules for nuclear decommissioning costs) is
amended to read as follows:
``(b) Limitation on Amounts Paid Into Fund.--The amount which a
taxpayer may pay into the Fund for any taxable year shall not exceed the
ruling amount applicable to such taxable year.''.
(b) Treatment of Certain Decommissioning Costs.--
(1) In general.--Section 468A is amended by redesignating
subsections (f) and (g) as subsections (g) and (h),
respectively, and by inserting after subsection (e) the
following new subsection:

``(f) Transfers Into Qualified Funds.--
``(1) In general.--Notwithstanding subsection (b), any
taxpayer maintaining a Fund to which this section applies with
respect to a nuclear power plant may transfer into such Fund not
more than an amount equal to the present value of the

[[Page 1008]]
119 STAT. 1008

portion of the total nuclear decommissioning costs with respect
to such nuclear power plant previously excluded for such nuclear
power plant under subsection (d)(2)(A) as in effect immediately
before the date of the enactment of this subsection.
``(2) Deduction for amounts transferred.--
``(A) In general.--Except as provided in
subparagraph (C), the deduction allowed by subsection
(a) for any transfer permitted by this subsection shall
be allowed ratably over the remaining estimated useful
life (within the meaning of subsection (d)(2)(A)) of the
nuclear power plant beginning with the taxable year
during which the transfer is made.
``(B) Denial of deduction for previously deducted
amounts.--No deduction shall be allowed for any transfer
under this subsection of an amount for which a deduction
was previously allowed to the taxpayer (or a
predecessor) or a corresponding amount was not included
in gross income of the taxpayer (or a predecessor). For
purposes of the preceding sentence, a ratable portion of
each transfer shall be treated as being from previously
deducted or excluded amounts to the extent thereof.
``(C) Transfers of qualified funds.--If--
``(i) any transfer permitted by this
subsection is made to any Fund to which this
section applies, and
``(ii) such Fund is transferred thereafter,
any deduction under this subsection for taxable years
ending after the date that such Fund is transferred
shall be allowed to the transferor for the taxable year
which includes such date.
``(D) Special rules.--
``(i) Gain or loss not recognized on transfers
to fund.--No gain or loss shall be recognized on
any transfer described in paragraph (1).
``(ii) Transfers of appreciated property to
fund.--If appreciated property is transferred in a
transfer described in paragraph (1), the amount of
the deduction shall not exceed the adjusted basis
of such property.
``(3) New ruling amount required.--Paragraph (1) shall not
apply to any transfer unless the taxpayer requests from the
Secretary a new schedule of ruling amounts in connection with
such transfer.
``(4) No basis in qualified funds.--Notwithstanding any
other provision of law, the taxpayer's basis in any Fund to
which this section applies shall not be increased by reason of
any transfer permitted by this subsection.''.
(2) New ruling amount to take into account total costs.--
Subparagraph (A) of section 468A(d)(2) (defining ruling amount)
is amended to read as follows:
``(A) fund the total nuclear decommissioning costs
with respect to such power plant over the estimated
useful life of such power plant, and''.

(c) New Ruling Amount Required Upon License Renewal.--Paragraph (1)
of section 468A(d) (relating to request required) is amended by adding
at the end the following new sentence: ``For purposes of the preceding
sentence, the taxpayer shall request a schedule of ruling amounts upon
each renewal of the operating license of the nuclear powerplant.''.

[[Page 1009]]
119 STAT. 1009

(d) Conforming Amendment.--Section 468A(e)(3) (relating to review of
amount) is amended by striking ``The Fund'' and inserting ``Except as
provided in subsection (f), the Fund''.
(e) Technical Amendments.--Section 468A(e)(2) (relating to taxation
of Fund) is amended--
(1) by striking ``rate set forth in subparagraph (B)'' in
subparagraph (A) and inserting ``rate of 20 percent'',
(2) by striking subparagraph (B), and
(3) by redesignating subparagraphs (C) and (D) as
subparagraphs (B) and (C), respectively.

(f) Effective Date.--The NOTE: 26 USC 468A note. amendments made
by this section shall apply to taxable years beginning after December
31, 2005.

SEC. 1311. FIVE-YEAR NET OPERATING LOSS CARRYOVER FOR CERTAIN LOSSES.

Paragraph (1) of section 172(b) (relating to net operating loss
carrybacks and carryovers) is amended by adding at the end the following
new subparagraph:
``(I) Transmission property and pollution control
investment.--
``(i) In general.--At the election of the
taxpayer in any taxable year ending after December
31, 2005, and before January 1, 2009, in the case
of a net operating loss in a taxable year ending
after December 31, 2002, and before January 1,
2006, there shall be a net operating loss
carryback to each of the 5 years preceding the
taxable year of such loss to the extent that such
loss does not exceed 20 percent of the sum of
electric transmission property capital
expenditures and pollution control facility
capital expenditures of the taxpayer for the
taxable year preceding the taxable year in which
such election is made.
``(ii) Limitations.--For purposes of this
subsection--
``(I) not more than one election may
be made under clause (i) with respect to
any net operating loss in a taxable
year, and
``(II) an election may not be made
under clause (i) for more than 1 taxable
year beginning in any calendar year.
``(iii) Coordination with ordering rule.--For
purposes of applying subsection (b)(2), the
portion of any loss which is carried back 5 years
by reason of clause (i) shall be treated in a
manner similar to the manner in which a specified
liability loss is treated.
``(iv) Application NOTE: Deadline. for
adjustment.--In the case of any portion of a net
operating loss to which an election under clause
(i) applies, an application under section 6411(a)
with respect to such loss shall not fail to be
treated as timely filed if filed within 24 months
after the due date specified under such section.
``(v) Special rules relating to refund.--For
purposes of a net operating loss to which an
election under clause (i) applies, references in
sections 6501(h), 6511(d)(2)(A), and 6611(f)(1) to
the taxable year in which such net operating loss
arises or result in a

[[Page 1010]]
119 STAT. 1010

net loss carryback shall be treated as references
to the taxable year in which such election occurs.
``(vi) Definitions.--For purposes of this
subparagraph--
``(I) Electric transmission property
capital expenditures.--The term
`electric transmission property capital
expenditures' means any expenditure,
chargeable to capital account, made by
the taxpayer which is attributable to
electric transmission property used by
the taxpayer in the transmission at 69
or more kilovolts of electricity for
sale. Such term shall not include any
expenditure which may be refunded or the
purpose of which may be modified at the
option of the taxpayer so as to cease to
be treated as an expenditure within the
meaning of such term.
``(II) Pollution control facility
capital expenditures.--The term
`pollution control facility capital
expenditures' means any expenditure,
chargeable to capital account, made by
an electric utility company (as defined
in section 2(3) of the Public Utility
Holding Company Act (15 U.S.C. 79b(3)),
as in effect on the day before the date
of the enactment of the Energy Tax
Incentives Act of 2005) which is
attributable to a facility which will
qualify as a certified pollution control
facility as determined under section
169(d)(1) by striking `before January 1,
1976,' and by substituting `an
identifiable' for `a new identifiable'.
Such term shall not include any
expenditure which may be refunded or the
purpose of which may be modified at the
option of the taxpayer so as to cease to
be treated as an expenditure within the
meaning of such term.''.

Subtitle B--Domestic Fossil Fuel Security

SEC. 1321. EXTENSION OF CREDIT FOR PRODUCING FUEL FROM A NONCONVENTIONAL
SOURCE FOR FACILITIES PRODUCING COKE OR COKE GAS.

(a) In General.--Section 29 (relating to credit for producing fuel
from a nonconventional source) is amended by adding at the end the
following new subsection:
``(h) Extension for Facilities Producing Coke or Coke Gas.--
Notwithstanding subsection (f)--
``(1) In general.--In the case of a facility for producing
coke or coke gas which was placed in service before January 1,
1993, or after June 30, 1998, and before January 1, 2010, this
section shall apply with respect to coke and coke gas produced
in such facility and sold during the period--
``(A) beginning on the later of January 1, 2006, or
the date that such facility is placed in service, and
``(B) ending on the date which is 4 years after the
date such period began.

[[Page 1011]]
119 STAT. 1011

``(2) Special rules.--In determining the amount of credit
allowable under this section solely by reason of this
subsection--
``(A) Daily limit.--The amount of qualified fuels
sold during any taxable year which may be taken into
account by reason of this subsection with respect to any
facility shall not exceed an average barrel-of-oil
equivalent of 4,000 barrels per day. Days before the
date the facility is placed in service shall not be
taken into account in determining such average.
``(B) Extension period to commence with unadjusted
credit amount.--For purposes of applying subsection
(b)(2) to the $3 amount in subsection (a), in the case
of fuels sold after 2005, subsection (d)(2)(B) shall be
applied by substituting `2004' for `1979'.
``(C) Denial of double benefit.--This subsection
shall not apply to any facility producing qualified
fuels for which a credit was allowed under this section
for the taxable year or any preceding taxable year by
reason of subsection (g).''.

(b) Effective Date.--The NOTE: 26 USC 29 note. amendment made by
this section shall apply to fuel produced and sold after December 31,
2005, in taxable years ending after such date.

SEC. 1322. MODIFICATION OF CREDIT FOR PRODUCING FUEL FROM A
NONCONVENTIONAL SOURCE.

(a) Treatment as Business Credit.--
(1) Credit moved to subpart relating to business related
credits.--The Internal Revenue Code of 1986 is amended by
redesignating section 29 as section 45K and by moving section
45K (as so redesignated) from subpart B of part IV of subchapter
A of chapter 1 to the end of subpart D of part IV of subchapter
A of chapter 1.
(2) Credit treated as business credit.--Section 38(b), as
amended by this Act, is amended by striking ``plus'' at the end
of paragraph (20), by striking the period at the end of
paragraph (21) and inserting ``, plus'', and by adding at the
end the following:
``(22) the nonconventional source production credit
determined under section 45K(a).''.
(3) Conforming amendments.--
(A) Section 30(b)(3)(A) is amended by striking
``sections 27 and 29'' and inserting ``section 27''.
(B) Sections 43(b)(2), 45I(b)(2)(C)(i), and
613A(c)(6)(C) are each amended by striking ``section
29(d)(2)(C)'' and inserting ``section 45K(d)(2)(C)''.
(C) Section 45(e)(9), as added by this Act, is
amended--
(i) by striking ``section 29'' each place it
appears and inserting ``section 45K'', and
(ii) by inserting ``(or under section 29, as
in effect on the day before the date of enactment
of the Energy Tax Incentives Act of 2005, for any
prior taxable year)'' before the period at the end
thereof.
(D) Section 45I is amended--
(i) in subsection (c)(2)(A) by striking
``section 29(d)(5))'' and inserting ``section
45K(d)(5))'', and

[[Page 1012]]
119 STAT. 1012

(ii) in subsection (d)(3) by striking
``section 29'' both places it appears and
inserting ``section 45K''.
(E) Section 45K(a), as redesignated by paragraph
(1), is amended by striking ``There shall be allowed as
a credit against the tax imposed by this chapter for the
taxable year'' and inserting ``For purposes of section
38, if the taxpayer elects to have this section apply,
the nonconventional source production credit determined
under this section for the taxable year is''.
(F) Section 45K(b), as so redesignated, is amended
by striking paragraph (6).
(G) Section 53(d)(1)(B)(iii) is amended by striking
``under section 29'' and all that follows through ``or
not allowed''.
(H) Section 55(c)(3) is amended by striking
``29(b)(6),''.
(I) Subsection (a) of section 772 is amended by
inserting ``and'' at the end of paragraph (9), by
striking paragraph (10), and by redesignating paragraph
(11) as paragraph (10).
(J) Paragraph (5) of section 772(d) is amended by
striking ``the foreign tax credit, and the credit
allowable under section 29'' and inserting ``and the
foreign tax credit''.
(K) The table of sections for subpart B of part IV
of subchapter A of chapter 1 is amended by striking the
item relating to section 29.
(L) The table of sections for subpart D of part IV
of subchapter A of chapter 1 is amended by inserting
after the item relating to section 45I the following new
item:

``Sec. 45K. Credit for producing fuel from a nonconventional source.''.

(b) Amendments Conforming to the Repeal of the Natural Gas Policy
Act of 1978.--
(1) In general.--Section 29(c)(2)(A) (before redesignation
under subsection (a) and as amended by section 1321) is
amended--
(A) by inserting ``(as in effect before the repeal
of such section)'' after ``1978'', and
(B) by striking subsection (e) and redesignating
subsections (f), (g), and (h) as subsections (e), (f),
and (g), respectively.
(2) Conforming amendments.--Section 29(g)(1) (before
redesignation under subsection (a) and paragraph (1) of this
subsection) is amended--
(A) in subparagraph (A) by striking ``subsection
(f)(1)(B)'' and inserting ``subsection (e)(1)(B)'', and
(B) in subparagraph (B) by striking ``subsection
(f)'' and inserting ``subsection (e)''.

(c) Effective NOTE: 26 USC 29 note. Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to credits
determined under the Internal Revenue Code of 1986 for taxable
years ending after December 31, 2005.
(2) Subsection (b).--The amendments made by subsection (b)
shall take effect on the date of the enactment of this Act.

[[Page 1013]]
119 STAT. 1013

SEC. 1323. TEMPORARY EXPENSING FOR EQUIPMENT USED IN REFINING OF LIQUID
FUELS.

(a) In General.--Part VI of subchapter B of chapter 1 is amended by
inserting after section 179B the following new section:

``SEC. 179C. ELECTION TO EXPENSE CERTAIN REFINERIES.

``(a) Treatment as Expenses.--A taxpayer may elect to treat 50
percent of the cost of any qualified refinery property as an expense
which is not chargeable to capital account. Any cost so treated shall be
allowed as a deduction for the taxable year in which the qualified
refinery property is placed in service.
``(b) Election.--
``(1) In general.--An election under this section for any
taxable year shall be made on the taxpayer's return of the tax
imposed by this chapter for the taxable year. Such election
shall be made in such manner as the Secretary may by regulations
prescribe.
``(2) Election irrevocable.--Any election made under this
section may not be revoked except with the consent of the
Secretary.

``(c) Qualified Refinery Property.--
``(1) In general.--The term `qualified refinery property'
means any portion of a qualified refinery--
``(A) the original use of which commences with the
taxpayer,
``(B) which is placed in service by the taxpayer
after the date of the enactment of this section and
before January 1, 2012,
``(C) in the case any portion of a qualified
refinery (other than a qualified refinery which is
separate from any existing refinery), which meets the
requirements of subsection (e),
``(D) which meets all applicable environmental laws
in effect on the date such portion was placed in
service,
``(E) no written binding contract for the
construction of which was in effect on or before June
14, 2005, and
``(F)(i) the construction of which is subject to a
written binding construction contract entered into
before January 1, 2008,
``(ii) which is placed in service before January 1,
2008, or
``(iii) in the case of self-constructed property,
the construction of which began after June 14, 2005, and
before January 1, 2008.
``(2) Special rule for sale-leasebacks.--For purposes of
paragraph (1)(A), if property is--
``(A) originally placed in service after the date of
the enactment of this section by a person, and
``(B) sold and leased back by such person within 3
months after the date such property was originally
placed in service,
such property shall be treated as originally placed in service
not earlier than the date on which such property is used under
the leaseback referred to in subparagraph (B).
``(3) Effect of waiver under clean air act.--A waiver under
the Clean Air Act shall not be taken into account in

[[Page 1014]]
119 STAT. 1014

determining whether the requirements of paragraph (1)(D) are
met.

``(d) Qualified Refinery.--For purposes of this section, the term
`qualified refinery' means any refinery located in the United States
which is designed to serve the primary purpose of processing liquid fuel
from crude oil or qualified fuels (as defined in section 45K(c)).
``(e) Production Capacity.--The requirements of this subsection are
met if the portion of the qualified refinery--
``(1) enables the existing qualified refinery to increase
total volume output (determined without regard to asphalt or
lube oil) by 5 percent or more on an average daily basis, or
``(2) enables the existing qualified refinery to process
qualified fuels (as defined in section 45K(c)) at a rate which
is equal to or greater than 25 percent of the total throughput
of such qualified refinery on an average daily basis.

``(f) Ineligible Refinery Property.--No deduction shall be allowed
under subsection (a) for any qualified refinery property--
``(1) the primary purpose of which is for use as a topping
plant, asphalt plant, lube oil facility, crude or product
terminal, or blending facility, or
``(2) which is built solely to comply with consent decrees
or projects mandated by Federal, State, or local governments.

``(g) Election to Allocate Deduction to Cooperative Owner.--
``(1) In general.--If--
``(A) a taxpayer to which subsection (a) applies is
an organization to which part I of subchapter T applies,
and
``(B) one or more persons directly holding an
ownership interest in the taxpayer are organizations to
which part I of subchapter T apply,
the taxpayer may elect to allocate all or a portion of the
deduction allowable under subsection (a) to such persons. Such
allocation shall be equal to the person's ratable share of the
total amount allocated, determined on the basis of the person's
ownership interest in the taxpayer. The taxable income of the
taxpayer shall not be reduced under section 1382 by reason of
any amount to which the preceding sentence applies.
``(2) Form and effect of election.--An election under
paragraph (1) for any taxable year shall be made on a timely
filed return for such year. Such election, once made, shall be
irrevocable for such taxable year.
``(3) Written notice to owners.--If any portion of the
deduction available under subsection (a) is allocated to owners
under paragraph (1), the cooperative shall provide any owner
receiving an allocation written notice of the amount of the
allocation. NOTE: Deadline. Such notice shall be provided
before the date on which the return described in paragraph (2)
is due.

``(h) Reporting.--No deduction shall be allowed under subsection (a)
to any taxpayer for any taxable year unless such taxpayer files with the
Secretary a report containing such information with respect to the
operation of the refineries of the taxpayer as the Secretary shall
require.''.
(b) Conforming Amendments.--
(1) Section 1245(a) is amended by inserting ``179C,'' after
``179B,'' both places it appears in paragraphs (2)(C) and
(3)(C).

[[Page 1015]]
119 STAT. 1015

(2) Section 263(a)(1) is amended by striking ``or'' at the
end of subparagraph (H), by striking the period at the end of
subparagraph (I) and inserting ``, or'', and by inserting after
subparagraph (I) the following new subparagraph:
``(J) expenditures for which a deduction is allowed
under section 179C.''.
(3) Section 312(k)(3)(B) is amended by striking ``179 179A,
or 179B'' each place it appears in the heading and text and
inserting ``179, 179A, 179B, or 179C''.
(4) The table of sections for part VI of subchapter B of
chapter 1 is amended by inserting after the item relating to
section 179B the following new item:

``Sec. 179C. Election to expense certain refineries.''.

(c) Effective Date.--The NOTE: 26 USC 179C note. amendments made
by this section shall apply to properties placed in service after the
date of the enactment of this Act.

SEC. 1324. PASS THROUGH TO OWNERS OF DEDUCTION FOR CAPITAL COSTS
INCURRED BY SMALL REFINER COOPERATIVES IN COMPLYING WITH
ENVIRONMENTAL PROTECTION AGENCY SULFUR REGULATIONS.

(a) In General.--Section 179B (relating to deduction for capital
costs incurred in complying with Environmental Protection Agency sulfur
regulations) is amended by adding at the end the following new
subsection:
``(e) Election to Allocate Deduction to Cooperative Owner.--
``(1) In general.--If--
``(A) a small business refiner to which subsection
(a) applies is an organization to which part I of
subchapter T applies, and
``(B) one or more persons directly holding an
ownership interest in the refiner are organizations to
which part I of subchapter T apply,
the refiner may elect to allocate all or a portion of the
deduction allowable under subsection (a) to such persons. Such
allocation shall be equal to the person's ratable share of the
total amount allocated, determined on the basis of the person's
ownership interest in the taxpayer. The taxable income of the
refiner shall not be reduced under section 1382 by reason of any
amount to which the preceding sentence applies.
``(2) Form and effect of election.--An election under
paragraph (1) for any taxable year shall be made on a timely
filed return for such year. Such election, once made, shall be
irrevocable for such taxable year.
``(3) Written notice to owners.--If any portion of the
deduction available under subsection (a) is allocated to owners
under paragraph (1), the cooperative shall provide any owner
receiving an allocation written notice of the amount of the
allocation. NOTE: Deadline. Such notice shall be provided
before the date on which the return described in paragraph (2)
is due.''.

(b) Effective Date.--The NOTE: 26 USC 179B note. amendment made
by this section shall take effect as if included in the amendment made
by section 338(a) of the American Jobs Creation Act of 2004.

[[Page 1016]]
119 STAT. 1016

SEC. 1325. NATURAL GAS DISTRIBUTION LINES TREATED AS 15-YEAR PROPERTY.

(a) In General.--Section 168(e)(3)(E) (defining 15-year property),
as amended by this Act, is amended by striking ``and'' at the end of
clause (vi), by striking the period at the end of clause (vii) and by
inserting ``, and'', and by adding at the end the following new clause:
``(viii) any natural gas distribution line the
original use of which commences with the taxpayer
after April 11, 2005, and which is placed in
service before January 1, 2011.''.

(b) Alternative System.--The table contained in section 168(g)(3)(B)
(relating to special rule for certain property assigned to classes), as
amended by this Act, is amended by inserting after the item relating to
subparagraph (E)(vii) the following new item:




``(E)(viii)................................................        35''.



(c) Effective NOTE: 26 USC 168 note. Date.--
(1) In general.--The amendments made by this section shall
apply to property placed in service after April 11, 2005.
(2) Exception.--The amendments made by this section shall
not apply to any property with respect to which the taxpayer or
a related party has entered into a binding contract for the
construction thereof on or before April 11, 2005, or, in the
case of self-constructed property, has started construction on
or before such date.

SEC. 1326. NATURAL GAS GATHERING LINES TREATED AS 7-YEAR PROPERTY.

(a) In General.--Subparagraph (C) of section 168(e)(3) (relating to
classification of certain property) is amended by striking ``and'' at
the end of clause (iii), by redesignating clause (iv) as clause (v), and
by inserting after clause (iii) the following new clause:
``(iv) any natural gas gathering line the
original use of which commences with the taxpayer
after April 11, 2005, and''.

(b) Natural Gas Gathering Line.--Subsection (i) of section 168 is
amended by inserting after paragraph (16) the following new paragraph:
``(17) Natural gas gathering line.--The term `natural gas
gathering line' means--
``(A) the pipe, equipment, and appurtenances
determined to be a gathering line by the Federal Energy
Regulatory Commission, and
``(B) the pipe, equipment, and appurtenances used to
deliver natural gas from the wellhead or a commonpoint
to the point at which such gas first reaches--
``(i) a gas processing plant,
``(ii) an interconnection with a transmission
pipeline for which a certificate as an interstate
transmission pipeline has been issued by the
Federal Energy Regulatory Commission,

[[Page 1017]]
119 STAT. 1017

``(iii) an interconnection with an intrastate
transmission pipeline, or
``(iv) a direct interconnection with a local
distribution company, a gas storage facility, or
an industrial consumer.''.

(c) Alternative System.--The table contained in section 168(g)(3)(B)
(relating to special rule for certain property assigned to classes), as
amended by this Act, is amended by inserting after the item relating to
subparagraph (C)(iii) the following new item:




``(C)(iv)..................................................        14''.



(d) Alternative Minimum Tax Exception.--Subparagraph (B) of section
56(a)(1) is amended by inserting before the period the following: ``, or
in section 168(e)(3)(C)(iv)''.
(e) Effective NOTE: 26 USC 56 note. Date.--
(1) In general.--The amendments made by this section shall
apply to property placed in service after April 11, 2005.
(2) Exception.--The amendments made by this section shall
not apply to any property with respect to which the taxpayer or
a related party has entered into a binding contract for the
construction thereof on or before April 11, 2005, or, in the
case of self-constructed property, has started construction on
or before such date.

SEC. 1327. ARBITRAGE RULES NOT TO APPLY TO PREPAYMENTS FOR NATURAL GAS.

(a) In General.--Subsection (b) of section 148 (relating to higher
yielding investments) is amended by adding at the end the following new
paragraph:
``(4) Safe harbor for prepaid natural gas.--
``(A) In general.--The term `investment-type
property' does not include a prepayment under a
qualified natural gas supply contract.
``(B) Qualified natural gas supply contract.--For
purposes of this paragraph, the term `qualified natural
gas supply contract' means any contract to acquire
natural gas for resale by a utility owned by a
governmental unit if the amount of gas permitted to be
acquired under the contract by the utility during any
year does not exceed the sum of--
``(i) the annual average amount during the
testing period of natural gas purchased (other
than for resale) by customers of such utility who
are located within the service area of such
utility, and
``(ii) the amount of natural gas to be used to
transport the prepaid natural gas to the utility
during such year.
``(C) Natural gas used to generate electricity.--
Natural gas used to generate electricity shall be taken
into account in determining the average under
subparagraph (B)(i)--
``(i) only if the electricity is generated by
a utility owned by a governmental unit, and

[[Page 1018]]
119 STAT. 1018

``(ii) only to the extent that the electricity
is sold (other than for resale) to customers of
such utility who are located within the service
area of such utility.
``(D) Adjustments NOTE: Contracts. for changes
in customer base.--
``(i) New business customers.--If--
``(I) after the close of the testing
period and before the date of issuance
of the issue, the utility owned by a
governmental unit enters into a contract
to supply natural gas (other than for
resale) for a business use at a property
within the service area of such utility,
and
``(II) the utility did not supply
natural gas to such property during the
testing period or the ratable amount of
natural gas to be supplied under the
contract is significantly greater than
the ratable amount of gas supplied to
such property during the testing period,
then a contract shall not fail to be treated as a
qualified natural gas supply contract by reason of
supplying the additional natural gas under the
contract referred to in subclause (I).
``(ii) Lost customers.--The average under
subparagraph (B)(i) shall not exceed the annual
amount of natural gas reasonably expected to be
purchased (other than for resale) by persons who
are located within the service area of such
utility and who, as of the date of issuance of the
issue, are customers of such utility.
``(E) Ruling requests.--The Secretary may increase
the average under subparagraph (B)(i) for any period if
the utility owned by the governmental unit establishes
to the satisfaction of the Secretary that, based on
objective evidence of growth in natural gas consumption
or population, such average would otherwise be
insufficient for such period.
``(F) Adjustment for natural gas otherwise on
hand.--
``(i) In general.--The amount otherwise
permitted to be acquired under the contract for
any period shall be reduced by--
``(I) the applicable share of
natural gas held by the utility on the
date of issuance of the issue, and
``(II) the natural gas (not taken
into account under subclause (I)) which
the utility has a right to acquire
during such period (determined as of the
date of issuance of the issue).
``(ii) Applicable share.--For purposes of the
clause (i), the term `applicable share' means,
with respect to any period, the natural gas
allocable to such period if the gas were allocated
ratably over the period to which the prepayment
relates.
``(G) Intentional acts.--Subparagraph (A) shall
cease to apply to any issue if the utility owned by the
governmental unit engages in any intentional act to
render the volume of natural gas acquired by such
prepayment to be in excess of the sum of--

[[Page 1019]]
119 STAT. 1019

``(i) the amount of natural gas needed (other
than for resale) by customers of such utility who
are located within the service area of such
utility, and
``(ii) the amount of natural gas used to
transport such natural gas to the utility.
``(H) Testing period.--For purposes of this
paragraph, the term `testing period' means, with respect
to an issue, the most recent 5 calendar years ending
before the date of issuance of the issue.
``(I) Service area.--For purposes of this paragraph,
the service area of a utility owned by a governmental
unit shall be comprised of--
``(i) any area throughout which such utility
provided at all times during the testing period--
``(I) in the case of a natural gas
utility, natural gas transmission or
distribution services, and
``(II) in the case of an electric
utility, electricity distribution
services,
``(ii) any area within a county contiguous to
the area described in clause (i) in which retail
customers of such utility are located if such area
is not also served by another utility providing
natural gas or electricity services, as the case
may be, and
``(iii) any area recognized as the service
area of such utility under State or Federal
law.''.

(b) Private Loan Financing Test Not to Apply to Prepayments for
Natural Gas.--Paragraph (2) of section 141(c) (providing exceptions to
the private loan financing test) is amended by striking ``or'' at the
end of subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``, or'', and by adding at the end the
following new subparagraph:
``(C) is a qualified natural gas supply contract (as
defined in section 148(b)(4)).''.

(c) Exception for Qualified Electric and Natural Gas Supply
Contracts.--Section 141(d) is amended by adding at the end the following
new paragraph:
``(7) Exception for qualified electric and natural gas
supply contracts.--The term `nongovernmental output property'
shall not include any contract for the prepayment of electricity
or natural gas which is not investment property under section
148(b)(2).''.

(d) Effective Date.--The NOTE: 26 USC 141 note. amendments made
by this section shall apply to obligations issued after the date of the
enactment of this Act.

SEC. 1328. DETERMINATION OF SMALL REFINER EXCEPTION TO OIL DEPLETION
DEDUCTION.

(a) In General.--Paragraph (4) of section 613A(d) (relating to
limitations on application of subsection (c)) is amended to read as
follows:
``(4) Certain refiners excluded.--If the taxpayer or one or
more related persons engages in the refining of crude oil,
subsection (c) shall not apply to the taxpayer for a taxable
year if the average daily refinery runs of the taxpayer and such
persons for the taxable year exceed 75,000 barrels. For purposes
of this paragraph, the average daily refinery runs

[[Page 1020]]
119 STAT. 1020

for any taxable year shall be determined by dividing the
aggregate refinery runs for the taxable year by the number of
days in the taxable year.''.

(b) Effective Date.--The NOTE: 26 USC 613A note. amendment made
by this section shall apply to taxable years ending after the date of
the enactment of this Act.

SEC. 1329. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.

(a) In General.--Section 167 (relating to depreciation) is amended
by redesignating subsection (h) as subsection (i) and by inserting after
subsection (g) the following new subsection:
``(h) Amortization of Geological and Geophysical Expenditures.--
``(1) In general.--Any geological and geophysical expenses
paid or incurred in connection with the exploration for, or
development of, oil or gas within the United States (as defined
in section 638) shall be allowed as a deduction ratably over the
24-month period beginning on the date that such expense was paid
or incurred.
``(2) Half-year convention.--For purposes of paragraph (1),
any payment paid or incurred during the taxable year shall be
treated as paid or incurred on the mid-point of such taxable
year.
``(3) Exclusive method.--Except as provided in this
subsection, no depreciation or amortization deduction shall be
allowed with respect to such payments.
``(4) Treatment upon abandonment.--If any property with
respect to which geological and geophysical expenses are paid or
incurred is retired or abandoned during the 24-month period
described in paragraph (1), no deduction shall be allowed on
account of such retirement or abandonment and the amortization
deduction under this subsection shall continue with respect to
such payment.''.

(b) Conforming Amendment.--Section 263A(c)(3) is amended by
inserting ``167(h),'' after ``under section''.
(c) Effective Date.--The NOTE: 26 USC 167 note. amendments made
by this section shall apply to amounts paid or incurred in taxable years
beginning after the date of the enactment of this Act.

Subtitle C--Conservation and Energy Efficiency Provisions

SEC. 1331. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

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

``SEC. 179D. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

``(a) In General.--There shall be allowed as a deduction an amount
equal to the cost of energy efficient commercial building property
placed in service during the taxable year.
``(b) Maximum Amount of Deduction.--The deduction under subsection
(a) with respect to any building for any taxable year shall not exceed
the excess (if any) of--

[[Page 1021]]
119 STAT. 1021

``(1) the product of--
``(A) $1.80, and
``(B) the square footage of the building, over
``(2) the aggregate amount of the deductions under
subsection (a) with respect to the building for all prior
taxable years.

``(c) Definitions.--For purposes of this section--
``(1) Energy efficient commercial building property.--The
term `energy efficient commercial building property' means
property--
``(A) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable,
``(B) which is installed on or in any building which
is--
``(i) located in the United States, and
``(ii) within the scope of Standard 90.1-2001,
``(C) which is installed as part of--
``(i) the interior lighting systems,
``(ii) the heating, cooling, ventilation, and
hot water systems, or
``(iii) the building envelope, and
``(D) which is certified in accordance with
subsection (d)(6) as being installed as part of a plan
designed to reduce the total annual energy and power
costs with respect to the interior lighting systems,
heating, cooling, ventilation, and hot water systems of
the building by 50 percent or more in comparison to a
reference building which meets the minimum requirements
of Standard 90.1-2001 using methods of calculation under
subsection (d)(2).
``(2) Standard 90.1-2001.--The term `Standard 90.1-2001'
means Standard 90.1-2001 of the American Society of Heating,
Refrigerating, and Air Conditioning Engineers and the
Illuminating Engineering Society of North America (as in effect
on April 2, 2003).

``(d) Special Rules.--
``(1) Partial allowance.--
``(A) In general.--Except as provided in subsection
(f), if--
``(i) the requirement of subsection (c)(1)(D)
is not met, but
``(ii) there is a certification in accordance
with paragraph (6) that any system referred to in
subsection (c)(1)(C) satisfies the energy-savings
targets established by the Secretary under
subparagraph (B) with respect to such system,
then the requirement of subsection (c)(1)(D) shall be
treated as met with respect to such system, and the
deduction under subsection (a) shall be allowed with
respect to energy efficient commercial building property
installed as part of such system and as part of a plan
to meet such targets, except that subsection (b) shall
be applied to such property by substituting `$.60' for
`$1.80'.
``(B) Regulations.--The Secretary, after
consultation with the Secretary of Energy, shall
establish a target for each system described in
subsection (c)(1)(C) which, if such targets were met for
all such systems, the building would meet the
requirements of subsection (c)(1)(D).

[[Page 1022]]
119 STAT. 1022

``(2) Methods of calculation.--
The NOTE: Regulations. Secretary, after consultation with
the Secretary of Energy, shall promulgate regulations which
describe in detail methods for calculating and verifying energy
and power consumption and cost, based on the provisions of the
2005 California Nonresidential Alternative Calculation Method
Approval Manual.
``(3) Computer software.--
``(A) In general.--Any calculation under paragraph
(2) shall be prepared by qualified computer software.
``(B) Qualified computer software.--For purposes of
this paragraph, the term `qualified computer software'
means software--
``(i) for which the software designer has
certified that the software meets all procedures
and detailed methods for calculating energy and
power consumption and costs as required by the
Secretary,
``(ii) which provides such forms as required
to be filed by the Secretary in connection with
energy efficiency of property and the deduction
allowed under this section, and
``(iii) which provides a notice form which
documents the energy efficiency features of the
building and its projected annual energy costs.
``(4) Allocation of deduction for public property.--In the
case of energy efficient commercial building property installed
on or in property owned by a Federal, State, or local government
or a political subdivision thereof, the Secretary shall
promulgate a regulation to allow the allocation of the deduction
to the person primarily responsible for designing the property
in lieu of the owner of such property. Such person shall be
treated as the taxpayer for purposes of this section.
``(5) Notice to owner.--Each certification required under
this section shall include an explanation to the building owner
regarding the energy efficiency features of the building and its
projected annual energy costs as provided in the notice under
paragraph (3)(B)(iii).
``(6) Certification.--
``(A) In general.--The Secretary shall prescribe the
manner and method for the making of certifications under
this section.
``(B) Procedures.--The Secretary shall include as
part of the certification process procedures for
inspection and testing by qualified individuals
described in subparagraph (C) to ensure compliance of
buildings with energy-savings plans and targets. Such
procedures shall be comparable, given the difference
between commercial and residential buildings, to the
requirements in the Mortgage Industry National
Accreditation Procedures for Home Energy Rating Systems.
``(C) Qualified individuals.--Individuals qualified
to determine compliance shall be only those individuals
who are recognized by an organization certified by the
Secretary for such purposes.

``(e) Basis Reduction.--For purposes of this subtitle, if a
deduction is allowed under this section with respect to any energy
efficient commercial building property, the basis of such property shall
be reduced by the amount of the deduction so allowed.

[[Page 1023]]
119 STAT. 1023

``(f) Interim Rules for Lighting Systems.--Until such time as the
Secretary issues final regulations under subsection (d)(1)(B) with
respect to property which is part of a lighting system--
``(1) In general.--The lighting system target under
subsection (d)(1)(A)(ii) shall be a reduction in lighting power
density of 25 percent (50 percent in the case of a warehouse) of
the minimum requirements in Table 9.3.1.1 or Table 9.3.1.2 (not
including additional interior lighting power allowances) of
Standard 90.1-2001.
``(2) Reduction in deduction if reduction less than 40
percent.--
``(A) In general.--If, with respect to the lighting
system of any building other than a warehouse, the
reduction in lighting power density of the lighting
system is not at least 40 percent, only the applicable
percentage of the amount of deduction otherwise
allowable under this section with respect to such
property shall be allowed.
``(B) Applicable percentage.--For purposes of
subparagraph (A), the applicable percentage is the
number of percentage points (not greater than 100) equal
to the sum of--
``(i) 50, and
``(ii) the amount which bears the same ratio
to 50 as the excess of the reduction of lighting
power density of the lighting system over 25
percentage points bears to 15.
``(C) Exceptions.--This subsection shall not apply
to any system--
``(i) the controls and circuiting of which do
not comply fully with the mandatory and
prescriptive requirements of Standard 90.1-2001
and which do not include provision for bilevel
switching in all occupancies except hotel and
motel guest rooms, store rooms, restrooms, and
public lobbies, or
``(ii) which does not meet the minimum
requirements for calculated lighting levels as set
forth in the Illuminating Engineering Society of
North America Lighting Handbook, Performance and
Application, Ninth Edition, 2000.

``(g) Regulations.--The Secretary shall promulgate such regulations
as necessary--
``(1) to take into account new technologies regarding energy
efficiency and renewable energy for purposes of determining
energy efficiency and savings under this section, and
``(2) to provide for a recapture of the deduction allowed
under this section if the plan described in subsection (c)(1)(D)
or (d)(1)(A) is not fully implemented.

``(h) Termination.--This section shall not apply with respect to
property placed in service after December 31, 2007.''.
(b) Conforming Amendments.--
(1) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (30), by striking the period at the end of
paragraph (31) and inserting ``, and'', and by adding at the end
the following new paragraph:
``(32) to the extent provided in section 179D(e).''.

[[Page 1024]]
119 STAT. 1024

(2) Section 1245(a), as amended by this Act, is amended by
inserting ``179D,'' after ``179C,'' both places it appears in
paragraphs (2)(C) and (3)(C).
(3) Section 1250(b)(3) is amended by inserting before the
period at the end of the first sentence ``or by section 179D''.
(4) Section 263(a)(1), as amended by this Act, is amended by
striking ``or'' at the end of subparagraph (I), by striking the
period at the end of subparagraph (J) and inserting ``, or'',
and by inserting after subparagraph (J) the following new
subparagraph:
``(K) expenditures for which a deduction is allowed
under section 179D.''.
(5) Section 312(k)(3)(B), as amended by this Act, is amended
by striking ``179, 179A, 179B, or 179C'' each place it appears
in the heading and text and inserting ``179, 179A, 179B, 179C,
or 179D''.

(c) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1, as amended by this Act, is amended by
inserting after section 179C the following new item:

``Sec. 179D. Energy efficient commercial buildings deduction.''.

(d) Effective Date.--The NOTE: 26 USC 179D note. amendments made
by this section shall apply to property placed in service after December
31, 2005.

SEC. 1332. CREDIT FOR CONSTRUCTION OF NEW ENERGY EFFICIENT HOMES.

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

``SEC. 45L. NEW ENERGY EFFICIENT HOME CREDIT.

``(a) Allowance of Credit.--
``(1) In general.--For purposes of section 38, in the case
of an eligible contractor, the new energy efficient home credit
for the taxable year is the applicable amount for each qualified
new energy efficient home which is--
``(A) constructed by the eligible contractor, and
``(B) acquired by a person from such eligible
contractor for use as a residence during the taxable
year.
``(2) Applicable amount.--For purposes of paragraph (1), the
applicable amount is an amount equal to--
``(A) in the case of a dwelling unit described in
paragraph (1) or (2) of subsection (c), $2,000, and
``(B) in the case of a dwelling unit described in
paragraph (3) of subsection (c), $1,000.

``(b) Definitions.--For purposes of this section--
``(1) Eligible contractor.--The term `eligible contractor'
means--
``(A) the person who constructed the qualified new
energy efficient home, or
``(B) in the case of a qualified new energy
efficient home which is a manufactured home, the
manufactured home producer of such home.
``(2) Qualified new energy efficient home.--The term
`qualified new energy efficient home' means a dwelling unit--
``(A) located in the United States,

[[Page 1025]]
119 STAT. 1025

``(B) the construction of which is substantially
completed after the date of the enactment of this
section, and
``(C) which meets the energy saving requirements of
subsection (c).
``(3) Construction.--The term `construction' includes
substantial reconstruction and rehabilitation.
``(4) Acquire.--The term `acquire' includes purchase.

``(c) Energy Saving Requirements.--A dwelling unit meets the energy
saving requirements of this subsection if such unit is--
``(1) certified--
``(A) to have a level of annual heating and cooling
energy consumption which is at least 50 percent below
the annual level of heating and cooling energy
consumption of a comparable dwelling unit--
``(i) which is constructed in accordance with
the standards of chapter 4 of the 2003
International Energy Conservation Code, as such
Code (including supplements) is in effect on the
date of the enactment of this section, and
``(ii) for which the heating and cooling
equipment efficiencies correspond to the minimum
allowed under the regulations established by the
Department of Energy pursuant to the National
Appliance Energy Conservation Act of 1987 and in
effect at the time of completion of construction,
and
``(B) to have building envelope component
improvements account for at least \1/5\ of such 50
percent,
``(2) a manufactured home which conforms to Federal
Manufactured Home Construction and Safety Standards (section
3280 of title 24, Code of Federal Regulations) and which meets
the requirements of paragraph (1), or
``(3) a manufactured home which conforms to Federal
Manufactured Home Construction and Safety Standards (section
3280 of title 24, Code of Federal Regulations) and which--
``(A) meets the requirements of paragraph (1)
applied by substituting `30 percent' for `50 percent'
both places it appears therein and by substituting `\1/
3\' for `\1/5\' in subparagraph (B) thereof, or
``(B) meets the requirements established by the
Administrator of the Environmental Protection Agency
under the Energy Star Labeled Homes program.

``(d) Certification.--
``(1) Method of certification.--A certification described in
subsection (c) shall be made in accordance with guidance
prescribed by the Secretary, after consultation with the
Secretary of Energy. Such guidance shall specify procedures and
methods for calculating energy and cost savings.
``(2) Form.--Any certification described in subsection (c)
shall be made in writing in a manner which specifies in readily
verifiable fashion the energy efficient building envelope
components and energy efficient heating or cooling equipment
installed and their respective rated energy efficiency
performance.

[[Page 1026]]
119 STAT. 1026

``(e) Basis Adjustment.--For purposes of this subtitle, if a credit
is allowed under this section in connection with any expenditure for any
property, the increase in the basis of such property which would (but
for this subsection) result from such expenditure shall be reduced by
the amount of the credit so determined.
``(f) Coordination With Investment Credit.--For purposes of this
section, expenditures taken into account under section 47 or 48(a) shall
not be taken into account under this section.
``(g) Termination.--This section shall not apply to any qualified
new energy efficient home acquired after December 31, 2007.''.
(b) Credit Made Part of General Business Credit.--Section 38(b)
(relating to current year business credit), as amended by this Act, is
amended by striking ``plus'' at the end of paragraph (21), by striking
the period at the end of paragraph (22) and inserting ``, plus'', and by
adding at the end the following new paragraph:
``(23) the new energy efficient home credit determined under
section 45L(a).''.

(c) Basis Adjustment.--Subsection (a) of section 1016, as amended by
this Act, is amended by striking ``and'' at the end of paragraph (31),
by striking the period at the end of paragraph (32) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(33) to the extent provided in section 45L(e), in the case
of amounts with respect to which a credit has been allowed under
section 45L.''.

(d) Deduction for Certain Unused Business Credits.--Section 196(c)
(defining qualified business credits) is amended by striking ``and'' at
the end of paragraph (11), by striking the period at the end of
paragraph (12) and inserting ``, and'', and by adding after paragraph
(12) the following new paragraph:
``(13) the new energy efficient home credit determined under
section 45L(a).''.

(e) Clerical Amendment.--The table of sections for subpart D of part
IV of subchapter A of chapter 1, as amended by this Act, is amended by
adding at the end the following new item:

``Sec. 45L. New energy efficient home credit.''.

(f) Effective Date.--The NOTE: 26 USC 38 note. amendments made
by this section shall apply to qualified new energy efficient homes
acquired after December 31, 2005, in taxable years ending after such
date.

SEC. 1333. CREDIT FOR CERTAIN NONBUSINESS ENERGY PROPERTY.

(a) In General.--Subpart A of part IV of subchapter A of chapter 1
(relating to nonrefundable personal credits) is amended by inserting
after section 25B the following new section:

``SEC. 25C. NONBUSINESS ENERGY PROPERTY.

``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter for
the taxable year an amount equal to the sum of--
``(1) 10 percent of the amount paid or incurred by the
taxpayer for qualified energy efficiency improvements installed
during such taxable year, and
``(2) the amount of the residential energy property
expenditures paid or incurred by the taxpayer during such
taxable year.

``(b) Limitations.--

[[Page 1027]]
119 STAT. 1027

``(1) Lifetime limitation.--The credit allowed under this
section with respect to any taxpayer for any taxable year shall
not exceed the excess (if any) of $500 over the aggregate
credits allowed under this section with respect to such taxpayer
for all prior taxable years.
``(2) Windows.--In the case of amounts paid or incurred for
components described in subsection (c)(3)(B) by any taxpayer for
any taxable year, the credit allowed under this section with
respect to such amounts for such year shall not exceed the
excess (if any) of $200 over the aggregate credits allowed under
this section with respect to such amounts for all prior taxable
years.
``(3) Limitation on residential energy property
expenditures.--The amount of the credit allowed under this
section by reason of subsection (a)(2) shall not exceed--
``(A) $50 for any advanced main air circulating fan,
``(B) $150 for any qualified natural gas, propane,
or oil furnace or hot water boiler, and
``(C) $300 for any item of energy-efficient building
property.

``(c) Qualified Energy Efficiency Improvements.--For purposes of
this section--
``(1) In general.--The term `qualified energy efficiency
improvements' means any energy efficient building envelope
component which meets the prescriptive criteria for such
component established by the 2000 International Energy
Conservation Code, as such Code (including supplements) is in
effect on the date of the enactment of this section (or, in the
case of a metal roof with appropriate pigmented coatings which
meet the Energy Star program requirements), if--
``(A) such component is installed in or on a
dwelling unit located in the United States and owned and
used by the taxpayer as the taxpayer's principal
residence (within the meaning of section 121),
``(B) the original use of such component commences
with the taxpayer, and
``(C) such component reasonably can be expected to
remain in use for at least 5 years.
``(2) Building envelope component.--The term `building
envelope component' means--
``(A) any insulation material or system which is
specifically and primarily designed to reduce the heat
loss or gain of a dwelling unit when installed in or on
such dwelling unit,
``(B) exterior windows (including skylights),
``(C) exterior doors, and
``(D) any metal roof installed on a dwelling unit,
but only if such roof has appropriate pigmented coatings
which are specifically and primarily designed to reduce
the heat gain of such dwelling unit.
``(3) Manufactured homes included.--The term `dwelling unit'
includes a manufactured home which conforms to Federal
Manufactured Home Construction and Safety Standards (section
3280 of title 24, Code of Federal Regulations).

``(d) Residential Energy Property Expenditures.--For purposes of
this section--

[[Page 1028]]
119 STAT. 1028

``(1) In general.--The term `residential energy property
expenditures' means expenditures made by the taxpayer for
qualified energy property which is--
``(A) installed on or in connection with a dwelling
unit located in the United States and owned and used by
the taxpayer as the taxpayer's principal residence
(within the meaning of section 121), and
``(B) originally placed in service by the taxpayer.
Such term includes expenditures for labor costs properly
allocable to the onsite preparation, assembly, or original
installation of the property.
``(2) Qualified energy property.--
``(A) In general.--The term `qualified energy
property' means--
``(i) energy-efficient building property,
``(ii) a qualified natural gas, propane, or
oil furnace or hot water boiler, or
``(iii) an advanced main air circulating fan.
``(B) Performance and quality standards.--Property
described under subparagraph (A) shall meet the
performance and quality standards, and the certification
requirements (if any), which--
``(i) have been prescribed by the Secretary by
regulations (after consultation with the Secretary
of Energy or the Administrator of the
Environmental Protection Agency, as appropriate),
and
``(ii) are in effect at the time of the
acquisition of the property, or at the time of the
completion of the construction, reconstruction, or
erection of the property, as the case may be.
``(C) Requirements for standards.--The standards and
requirements prescribed by the Secretary under
subparagraph (B)--
``(i) in the case of the energy efficiency
ratio (EER) for central air conditioners and
electric heat pumps--
``(I) shall require measurements to
be based on published data which is
tested by manufacturers at 95 degrees
Fahrenheit, and
``(II) may be based on the certified
data of the Air Conditioning and
Refrigeration Institute that are
prepared in partnership with the
Consortium for Energy Efficiency, and
``(ii) in the case of geothermal heat pumps--
``(I) shall be based on testing
under the conditions of ARI/ISO Standard
13256-1 for Water Source Heat Pumps or
ARI 870 for Direct Expansion GeoExchange
Heat Pumps (DX), as appropriate, and
``(II) shall include evidence that
water heating services have been
provided through a desuperheater or
integrated water heating system
connected to the storage water heater
tank.
``(3) Energy-efficient building property.--The term `energy-
efficient building property' means--
``(A) an electric heat pump water heater which
yields an energy factor of at least 2.0 in the standard
Department of Energy test procedure,

[[Page 1029]]
119 STAT. 1029

``(B) an electric heat pump which has a heating
seasonal performance factor (HSPF) of at least 9, a
seasonal energy efficiency ratio (SEER) of at least 15,
and an energy efficiency ratio (EER) of at least 13,
``(C) a geothermal heat pump which--
``(i) in the case of a closed loop product,
has an energy efficiency ratio (EER) of at least
14.1 and a heating coefficient of performance
(COP) of at least 3.3,
``(ii) in the case of an open loop product,
has an energy efficiency ratio (EER) of at least
16.2 and a heating coefficient of performance
(COP) of at least 3.6, and
``(iii) in the case of a direct expansion (DX)
product, has an energy efficiency ratio (EER) of
at least 15 and a heating coefficient of
performance (COP) of at least 3.5,
``(D) a central air conditioner which achieves the
highest efficiency tier established by the Consortium
for Energy Efficiency, as in effect on January 1, 2006,
and
``(E) a natural gas, propane, or oil water heater
which has an energy factor of at least 0.80.
``(4) Qualified natural gas, propane, or oil furnace or hot
water boiler.--The term `qualified natural gas, propane, or oil
furnace or hot water boiler' means a natural gas, propane, or
oil furnace or hot water boiler which achieves an annual fuel
utilization efficiency rate of not less than 95.
``(5) Advanced main air circulating fan.--The term `advanced
main air circulating fan' means a fan used in a natural gas,
propane, or oil furnace and which has an annual electricity use
of no more than 2 percent of the total annual energy use of the
furnace (as determined in the standard Department of Energy test
procedures).

``(e) Special Rules.--For purposes of this section--
``(1) Application of rules.--Rules similar to the rules
under paragraphs (4), (5), (6), (7), (8), and (9) of section
25D(e) shall apply.
``(2) Joint ownership of energy items.--
``(A) In general.--Any expenditure otherwise
qualifying as an expenditure under this section shall
not be treated as failing to so qualify merely because
such expenditure was made with respect to two or more
dwelling units.
``(B) Limits applied separately.--In the case of any
expenditure described in subparagraph (A), the amount of
the credit allowable under subsection (a) shall (subject
to paragraph (1)) be computed separately with respect to
the amount of the expenditure made for each dwelling
unit.

``(f) Basis Adjustments.--For purposes of this subtitle, if a credit
is allowed under this section for any expenditure with respect to any
property, the increase in the basis of such property which would (but
for this subsection) result from such expenditure shall be reduced by
the amount of the credit so allowed.
``(g) Termination.--This section shall not apply with respect to any
property placed in service after December 31, 2007.''.
(b) Conforming Amendments.--

[[Page 1030]]
119 STAT. 1030

(1) Subsection (a) of section 1016, as amended by this Act,
is amended by striking ``and'' at the end of paragraph (32), by
striking the period at the end of paragraph (33) and inserting
``, and'', and by adding at the end the following new paragraph:
``(34) to the extent provided in section 25C(e), in the case
of amounts with respect to which a credit has been allowed under
section 25C.''.
(2) The table of sections for subpart A of part IV of
subchapter A of chapter 1 is amended by inserting after the item
relating to section 25B the following new item:

``Sec. 25C. Nonbusiness energy property.''.

(c) Effective Dates.--The NOTE: 26 USC 25C note. amendments made
by this section shall apply to property placed in service after December
31, 2005.

SEC. 1334. CREDIT FOR ENERGY EFFICIENT APPLIANCES.

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

``SEC. 45M. ENERGY EFFICIENT APPLIANCE CREDIT.

``(a) General Rule.--
``(1) In general.--For purposes of section 38, the energy
efficient appliance credit determined under this section for any
taxable year is an amount equal to the sum of the credit amounts
determined under paragraph (2) for each type of qualified energy
efficient appliance produced by the taxpayer during the calendar
year ending with or within the taxable year.
``(2) Credit amounts.--The credit amount determined for any
type of qualified energy efficient appliance is--
``(A) the applicable amount determined under
subsection (b) with respect to such type, multiplied by
``(B) the eligible production for such type.

``(b) Applicable Amount.--
``(1) In general.--For purposes of subsection (a)--
``(A) Dishwashers.--The applicable amount is the
energy savings amount in the case of a dishwasher
which--
``(i) is manufactured in calendar year 2006 or
2007, and
``(ii) meets the requirements of the Energy
Star program which are in effect for dishwashers
in 2007.
``(B) Clothes washers.--The applicable amount is
$100 in the case of a clothes washer which--
``(i) is manufactured in calendar year 2006 or
2007, and
``(ii) meets the requirements of the Energy
Star program which are in effect for clothes
washers in 2007.
``(C) Refrigerators.--
``(i) 15 percent savings.--The applicable
amount is $75 in the case of a refrigerator
which--
``(I) is manufactured in calendar
year 2006, and
``(II) consumes at least 15 percent
but not more than 20 percent less
kilowatt hours per year than the 2001
energy conservation standards.

[[Page 1031]]
119 STAT. 1031

``(ii) 20 percent savings.--The applicable
amount is $125 in the case of a refrigerator
which--
``(I) is manufactured in calendar
year 2006 or 2007, and
``(II) consumes at least 20 percent
but not more than 25 percent less
kilowatt hours per year than the 2001
energy conservation standards.
``(iii) 25 percent savings.--The applicable
amount is $175 in the case of a refrigerator
which--
``(I) is manufactured in calendar
year 2006 or 2007, and
``(II) consumes at least 25 percent
less kilowatt hours per year than the
2001 energy conservation standards.
``(2) Energy savings amount.--For purposes of paragraph
(1)(A)--
``(A) In general.--The energy savings amount is the
lesser of--
``(i) the product of--
``(I) $3, and
``(II) 100 multiplied by the energy
savings percentage, or
``(ii) $100.
``(B) Energy savings percentage.--For purposes of
subparagraph (A), the energy savings percentage is the
ratio of--
``(i) the EF required by the Energy Star
program for dishwashers in 2007 minus the EF
required by the Energy Star program for
dishwashers in 2005, to
``(ii) the EF required by the Energy Star
program for dishwashers in 2007.

``(c) Eligible Production.--
``(1) In general.--Except as provided in paragraphs (2), the
eligible production in a calendar year with respect to each type
of energy efficient appliance is the excess of--
``(A) the number of appliances of such type which
are produced by the taxpayer in the United States during
such calendar year, over
``(B) the average number of appliances of such type
which were produced by the taxpayer (or any predecessor)
in the United States during the preceding 3-calendar
year period.
``(2) Special rule for refrigerators.--The eligible
production in a calendar year with respect to each type of
refrigerator described in subsection (b)(1)(C) is the excess
of--
``(A) the number of appliances of such type which
are produced by the taxpayer in the United States during
such calendar year, over
``(B) 110 percent of the average number of
appliances of such type which were produced by the
taxpayer (or any predecessor) in the United States
during the preceding 3-calendar year period.

``(d) Types of Energy Efficient Appliance.--For purposes of this
section, the types of energy efficient appliances are--
``(1) dishwashers described in subsection (b)(1)(A),
``(2) clothes washers described in subsection (b)(1)(B),

[[Page 1032]]
119 STAT. 1032

``(3) refrigerators described in subsection (b)(1)(C)(i),
``(4) refrigerators described in subsection (b)(1)(C)(ii),
and
``(5) refrigerators described in subsection (b)(1)(C)(iii).

``(e) Limitations.--
``(1) Aggregate credit amount allowed.--The aggregate amount
of credit allowed under subsection (a) with respect to a
taxpayer for any taxable year shall not exceed $75,000,000
reduced by the amount of the credit allowed under subsection (a)
to the taxpayer (or any predecessor) for all prior taxable
years.
``(2) Amount allowed for 15 percent savings refrigerators.--
In the case of refrigerators described in subsection
(b)(1)(C)(i), the aggregate amount of the credit allowed under
subsection (a) with respect to a taxpayer for any taxable year
shall not exceed $20,000,000.
``(3) Limitation based on gross receipts.--The credit
allowed under subsection (a) with respect to a taxpayer for the
taxable year shall not exceed an amount equal to 2 percent of
the average annual gross receipts of the taxpayer for the 3
taxable years preceding the taxable year in which the credit is
determined.
``(4) Gross receipts.--For NOTE: Applicability. purposes
of this subsection, the rules of paragraphs (2) and (3) of
section 448(c) shall apply.

``(f) Definitions.--For purposes of this section--
``(1) Qualified energy efficient appliance.--The term
`qualified energy efficient appliance' means--
``(A) any dishwasher described in subsection
(b)(1)(A),
``(B) any clothes washer described in subsection
(b)(1)(B), and
``(C) any refrigerator described in subsection
(b)(1)(C).
``(2) Dishwasher.--The term `dishwasher' means a residential
dishwasher subject to the energy conservation standards
established by the Department of Energy.
``(3) Clothes washer.--The term `clothes washer' means a
residential model clothes washer, including a residential style
coin operated washer.
``(4) Refrigerator.--The term `refrigerator' means a
residential model automatic defrost refrigerator-freezer which
has an internal volume of at least 16.5 cubic feet.
``(5) EF.--The term `EF' means the energy factor established
by the Department of Energy for compliance with the Federal
energy conservation standards.
``(6) Produced.--The term `produced' includes manufactured.
``(7) 2001 energy conservation standard.--The term `2001
energy conservation standard' means the energy conservation
standards promulgated by the Department of Energy and effective
July 1, 2001.

``(g) Special Rules.--For purposes of this section--
``(1) In general.--Rules NOTE: Applicability. similar to
the rules of subsections (c), (d), and (e) of section 52 shall
apply.
``(2) Controlled group.--
``(A) In general.--All persons treated as a single
employer under subsection (a) or (b) of section 52 or
subsection (m) or (o) of section 414 shall be treated as
a single producer.

[[Page 1033]]
119 STAT. 1033

``(B) Inclusion of NOTE: Applicability. foreign
corporations.--For purposes of subparagraph (A), in
applying subsections (a) and (b) of section 52 to this
section, section 1563 shall be applied without regard to
subsection (b)(2)(C) thereof.
``(3) Verification.--No amount shall be allowed as a credit
under subsection (a) with respect to which the taxpayer has not
submitted such information or certification as the Secretary, in
consultation with the Secretary of Energy, determines
necessary.''.

(b) Conforming Amendment.--Section 38(b) (relating to general
business credit), as amended by this Act, is amended by striking
``plus'' at the end of paragraph (22), by striking the period at the end
of paragraph (23) and inserting ``, plus'', and by adding at the end the
following new paragraph:
``(24) the energy efficient appliance credit determined
under section 45M(a).''.

(c) Clerical Amendment.--The table of sections for subpart D of part
IV of subchapter A of chapter 1, as amended by this Act, is amended by
adding at the end the following new item:

``Sec. 45M. Energy efficient appliance credit.''.

(d) Effective Date.--The NOTE: 26 USC 38 note. amendments made
by this section shall apply to appliances produced after December 31,
2005.

SEC. 1335. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

(a) In General.--Subpart A of part IV of subchapter A of chapter 1
(relating to nonrefundable personal credits), as amended by this Act, is
amended by inserting after section 25C the following new section:

``SEC. 25D. RESIDENTIAL ENERGY EFFICIENT PROPERTY.

``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter for
the taxable year an amount equal to the sum of--
``(1) 30 percent of the qualified photovoltaic property
expenditures made by the taxpayer during such year,
``(2) 30 percent of the qualified solar water heating
property expenditures made by the taxpayer during such year, and
``(3) 30 percent of the qualified fuel cell property
expenditures made by the taxpayer during such year.

``(b) Limitations.--
``(1) Maximum credit.--The credit allowed under subsection
(a) for any taxable year shall not exceed--
``(A) $2,000 with respect to any qualified
photovoltaic property expenditures,
``(B) $2,000 with respect to any qualified solar
water heating property expenditures, and
``(C) $500 with respect to each half kilowatt of
capacity of qualified fuel cell property (as defined in
section 48(c)(1)) for which qualified fuel cell property
expenditures are made.
``(2) Certification of solar water heating property.--No
credit shall be allowed under this section for an item of
property described in subsection (d)(1) unless such property is
certified for performance by the non-profit Solar Rating
Certification Corporation or a comparable entity endorsed by the
government of the State in which such property is installed.

[[Page 1034]]
119 STAT. 1034

``(c) Carryforward of Unused Credit.--If the credit allowable under
subsection (a) exceeds the limitation imposed by section 26(a) for such
taxable year reduced by the sum of the credits allowable under this
subpart (other than this section), such excess shall be carried to the
succeeding taxable year and added to the credit allowable under
subsection (a) for such succeeding taxable year.
``(d) Definitions.--For purposes of this section--
``(1) Qualified solar water heating property expenditure.--
The term `qualified solar water heating property expenditure'
means an expenditure for property to heat water for use in a
dwelling unit located in the United States and used as a
residence by the taxpayer if at least half of the energy used by
such property for such purpose is derived from the sun.
``(2) Qualified photovoltaic property expenditure.--The term
`qualified photovoltaic property expenditure' means an
expenditure for property which uses solar energy to generate
electricity for use in a dwelling unit located in the United
States and used as a residence by the taxpayer.
``(3) Qualified fuel cell property expenditure.--The term
`qualified fuel cell property expenditure' means an expenditure
for qualified fuel cell property (as defined in section
48(c)(1)) installed on or in connection with a dwelling unit
located in the United States and used as a principal residence
(within the meaning of section 121) by the taxpayer.

``(e) Special Rules.--For purposes of this section--
``(1) Labor costs.--Expenditures for labor costs properly
allocable to the onsite preparation, assembly, or original
installation of the property described in subsection (d) and for
piping or wiring to interconnect such property to the dwelling
unit shall be taken into account for purposes of this section.
``(2) Solar panels.--No expenditure relating to a solar
panel or other property installed as a roof (or portion thereof)
shall fail to be treated as property described in paragraph (1)
or (2) of subsection (d) solely because it constitutes a
structural component of the structure on which it is installed.
``(3) Swimming pools, etc., used as storage medium.--
Expenditures which are properly allocable to a swimming pool,
hot tub, or any other energy storage medium which has a function
other than the function of such storage shall not be taken into
account for purposes of this section.
``(4) Dollar amounts in case of joint occupancy.--In the
case of any dwelling unit which is jointly occupied and used
during any calendar year as a residence by two or more
individuals the following rules shall apply:
``(A) The amount of the credit allowable, under
subsection (a) by reason of expenditures (as the case
may be) made during such calendar year by any of such
individuals with respect to such dwelling unit shall be
determined by treating all of such individuals as 1
taxpayer whose taxable year is such calendar year.
``(B) There shall be allowable, with respect to such
expenditures to each of such individuals, a credit under
subsection (a) for the taxable year in which such
calendar year ends in an amount which bears the same
ratio to

[[Page 1035]]
119 STAT. 1035

the amount determined under subparagraph (A) as the
amount of such expenditures made by such individual
during such calendar year bears to the aggregate of such
expenditures made by all of such individuals during such
calendar year.
``(C) Subparagraphs (A) and
(B) NOTE: Applicability. shall be applied separately
with respect to expenditures described in paragraphs
(1), (2), and (3) of subsection (d).
``(5) Tenant-stockholder in cooperative housing
corporation.--In the case of an individual who is a tenant-
stockholder (as defined in section 216) in a cooperative housing
corporation (as defined in such section), such individual shall
be treated as having made his tenant-stockholder's proportionate
share (as defined in section 216(b)(3)) of any expenditures of
such corporation.
``(6) Condominiums.--
``(A) In general.--In the case of an individual who
is a member of a condominium management association with
respect to a condominium which the individual owns, such
individual shall be treated as having made the
individual's proportionate share of any expenditures of
such association.
``(B) Condominium management association.--For
purposes of this paragraph, the term `condominium
management association' means an organization which
meets the requirements of paragraph (1) of section
528(c) (other than subparagraph (E) thereof) with
respect to a condominium project substantially all of
the units of which are used as residences.
``(7) Allocation in certain cases.--If less than 80 percent
of the use of an item is for nonbusiness purposes, only that
portion of the expenditures for such item which is properly
allocable to use for nonbusiness purposes shall be taken into
account.
``(8) When expenditure made; amount of expenditure.--
``(A) In general.--Except as provided in
subparagraph (B), an expenditure with respect to an item
shall be treated as made when the original installation
of the item is completed.
``(B) Expenditures part of building construction.--
In the case of an expenditure in connection with the
construction or reconstruction of a structure, such
expenditure shall be treated as made when the original
use of the constructed or reconstructed structure by the
taxpayer begins.
``(9) Property financed by subsidized energy financing.--For
purposes of determining the amount of expenditures made by any
individual with respect to any dwelling unit, there shall not be
taken into account expenditures which are made from subsidized
energy financing (as defined in section 48(a)(4)(C)).

``(f) Basis Adjustments.--For purposes of this subtitle, if a credit
is allowed under this section for any expenditure with respect to any
property, the increase in the basis of such property which would (but
for this subsection) result from such expenditure shall be reduced by
the amount of the credit so allowed.

[[Page 1036]]
119 STAT. 1036

``(g) Termination.--The credit allowed under this section shall not
apply to property placed in service after December 31, 2007.''.
(b) Conforming Amendments.--
(1) Section 23(c) is amended by striking ``this section and
section 1400C'' and inserting ``this section, section 25D, and
section 1400C''.
(2) Section 25(e)(1)(C) is amended by striking ``this
section and sections 23 and 1400C'' and inserting ``other than
this section, section 23, section 25D, and section 1400C''.
(3) Section 1400C(d) is amended by striking ``this section''
and inserting ``this section and section 25D''.
(4) Section 1016(a), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (33), by striking the
period at the end of paragraph (34) and inserting ``, and'', and
by adding at the end the following new paragraph:
``(35) to the extent provided in section 25D(f), in the case
of amounts with respect to which a credit has been allowed under
section 25D.''.
(5) The table of sections for subpart A of part IV of
subchapter A of chapter 1, as amended by this Act, is amended by
inserting after the item relating to section 25C the following
new item:

``Sec. 25D. Residential energy efficient property.''.

(c) Effective Dates.--The NOTE: 26 USC 23 note. amendments made
by this section shall apply to property placed in service after December
31, 2005, in taxable years ending after such date.

SEC. 1336. CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL CELLS AND
STATIONARY MICROTURBINE POWER PLANTS.

(a) In General.--Section 48(a)(3)(A) (defining energy property) is
amended by striking ``or'' at the end of clause (i), by adding ``or'' at
the end of clause (ii), and by inserting after clause (ii) the following
new clause:
``(iii) qualified fuel cell property or
qualified microturbine property,''.

(b) Qualified Fuel Cell Property; Qualified Microturbine Property.--
Section 48 (relating to energy credit) is amended by adding at the end
the following new subsection:
``(c) Qualified Fuel Cell Property; Qualified Microturbine
Property.--For purposes of this subsection--
``(1) Qualified fuel cell property.--
``(A) In general.--The term `qualified fuel cell
property' means a fuel cell power plant which--
``(i) has a nameplate capacity of at least 0.5
kilowatt of electricity using an electrochemical
process, and
``(ii) has an electricity-only generation
efficiency greater than 30 percent.
``(B) Limitation.--In the case of qualified fuel
cell property placed in service during the taxable year,
the credit otherwise determined under paragraph (1) for
such year with respect to such property shall not exceed
an amount equal to $500 for each 0.5 kilowatt of
capacity of such property.
``(C) Fuel cell power plant.--The term `fuel cell
power plant' means an integrated system comprised of

[[Page 1037]]
119 STAT. 1037

a fuel cell stack assembly and associated balance of
plant components which converts a fuel into electricity
using electrochemical means.
``(D) Special rule.--The first sentence of the
matter in subsection (a)(3) which follows subparagraph
(D) thereof shall not apply to qualified fuel cell
property which is used predominantly in the trade or
business of the furnishing or sale of telephone service,
telegraph service by means of domestic telegraph
operations, or other telegraph services (other than
international telegraph services).
``(E) Termination.--The term `qualified fuel cell
property' shall not include any property for any period
after December 31, 2007.
``(2) Qualified microturbine property.--
``(A) In general.--The term `qualified microturbine
property' means a stationary microturbine power plant
which--
``(i) has a nameplate capacity of less than
2,000 kilowatts, and
``(ii) has an electricity-only generation
efficiency of not less than 26 percent at
International Standard Organization conditions.
``(B) Limitation.--In the case of qualified
microturbine property placed in service during the
taxable year, the credit otherwise determined under
paragraph (1) for such year with respect to such
property shall not exceed an amount equal $200 for each
kilowatt of capacity of such property.
``(C) Stationary microturbine power plant.--The term
`stationary microturbine power plant' means an
integrated system comprised of a gas turbine engine, a
combustor, a recuperator or regenerator, a generator or
alternator, and associated balance of plant components
which converts a fuel into electricity and thermal
energy. Such term also includes all secondary components
located between the existing infrastructure for fuel
delivery and the existing infrastructure for power
distribution, including equipment and controls for
meeting relevant power standards, such as voltage,
frequency, and power factors.
``(D) Special rule.--The first sentence of the
matter in subsection (a)(3) which follows subparagraph
(D) thereof shall not apply to qualified microturbine
property which is used predominantly in the trade or
business of the furnishing or sale of telephone service,
telegraph service by means of domestic telegraph
operations, or other telegraph services (other than
international telegraph services).
``(E) Termination.--The term `qualified microturbine
property' shall not include any property for any period
after December 31, 2007.''.

(c) Energy Percentage.--Section 48(a)(2)(A) (relating to energy
percentage) is amended to read as follows:
``(A) In general.--The energy percentage is--
``(i) in the case of qualified fuel cell
property, 30 percent, and
``(ii) in the case of any other energy
property, 10 percent.''.

[[Page 1038]]
119 STAT. 1038

(d) Conforming Amendment.--Section 48(a)(1) is amended by inserting
``except as provided in paragraph (1)(B) or (2)(B) of subsection (d),''
before ``the energy''.
(e) Effective Date.--The NOTE: 26 USC 48 note. amendments made
by this section shall apply to periods after December 31, 2005, in
taxable years ending after such date, under rules similar to the rules
of section 48(m) of the Internal Revenue Code of 1986 (as in effect on
the day before the date of the enactment of the Revenue Reconciliation
Act of 1990).

SEC. 1337. BUSINESS SOLAR INVESTMENT TAX CREDIT.

(a) Increase in Energy Percentage.--Section 48(a)(2)(A) (relating to
energy percentage), as amended by this Act, is amended to read as
follows:
``(A) In general.--The energy percentage is--
``(i) 30 percent in the case of--
``(I) qualified fuel cell property,
``(II) energy property described in
paragraph (3)(A)(i) but only with
respect to periods ending before January
1, 2008, and
``(III) energy property described in
paragraph (3)(A)(ii), and
``(ii) in the case of any energy property to
which clause (i) does not apply, 10 percent.''.

(b) Hybrid Solar Lighting Systems.--Subparagraph (A) of section
48(a)(3) is amended by striking ``or'' at the end of clause (i), by
redesignating clause (ii) as clause (iii), and by inserting after clause
(i) the following new clause:
``(ii) equipment which uses solar energy to
illuminate the inside of a structure using fiber-
optic distributed sunlight but only with respect
to periods ending before January 1, 2008, or''.

(c) Limitation on Use of Solar Energy to Heat Swimming Pools.--
Clause (i) of section 48(a)(3)(A) is amended by inserting ``excepting
property used to generate energy for the purposes of heating a swimming
pool,'' after ``solar process heat,''.
(d) Effective Date.--The NOTE: 26 USC 48 note. amendments made
by this section shall apply to periods after December 31, 2005, in
taxable years ending after such date, under rules similar to the rules
of section 48(m) of the Internal Revenue Code of 1986 (as in effect on
the day before the date of the enactment of the Revenue Reconciliation
Act of 1990).

Subtitle D--Alternative Motor Vehicles and Fuels Incentives

SEC. 1341. ALTERNATIVE MOTOR VEHICLE CREDIT.

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

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

``(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year an amount
equal to the sum of--

[[Page 1039]]
119 STAT. 1039

``(1) the new qualified fuel cell motor vehicle credit
determined under subsection (b),
``(2) the new advanced lean burn technology motor vehicle
credit determined under subsection (c),
``(3) the new qualified hybrid motor vehicle credit
determined under subsection (d), and
``(4) the new qualified alternative fuel motor vehicle
credit determined under subsection (e).

``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
qualified fuel cell motor vehicle credit determined under this
subsection with respect to a new qualified fuel cell motor
vehicle placed in service by the taxpayer during the taxable
year is--
``(A) $8,000 ($4,000 in the case of a vehicle placed
in service after December 31, 2009), if such vehicle has
a gross vehicle weight rating of not more than 8,500
pounds,
``(B) $10,000, if such vehicle has a gross vehicle
weight rating of more than 8,500 pounds but not more
than 14,000 pounds,
``(C) $20,000, if such vehicle has a gross vehicle
weight rating of more than 14,000 pounds but not more
than 26,000 pounds, and
``(D) $40,000, if such vehicle has a gross vehicle
weight rating of more than 26,000 pounds.
``(2) Increase for fuel efficiency.--
``(A) In general.--The amount determined under
paragraph (1)(A) with respect to a new qualified fuel
cell motor vehicle which is a passenger automobile or
light truck shall be increased by--
``(i) $1,000, if such vehicle achieves at
least 150 percent but less than 175 percent of the
2002 model year city fuel economy,
``(ii) $1,500, if such vehicle achieves at
least 175 percent but less than 200 percent of the
2002 model year city fuel economy,
``(iii) $2,000, if such vehicle achieves at
least 200 percent but less than 225 percent of the
2002 model year city fuel economy,
``(iv) $2,500, if such vehicle achieves at
least 225 percent but less than 250 percent of the
2002 model year city fuel economy,
``(v) $3,000, if such vehicle achieves at
least 250 percent but less than 275 percent of the
2002 model year city fuel economy,
``(vi) $3,500, if such vehicle achieves at
least 275 percent but less than 300 percent of the
2002 model year city fuel economy, and
``(vii) $4,000, if such vehicle achieves at
least 300 percent of the 2002 model year city fuel
economy.
``(B) 2002 model year city fuel economy.--For
purposes of subparagraph (A), the 2002 model year city
fuel economy with respect to a vehicle shall be
determined in accordance with the following tables:
``(i) In the case of a passenger automobile:


[[Page 1040]]
119 STAT. 1040


The 2002 model year city..................
``If vehicle inertiafuel economy is:..........................
class is:
1,500 or 1,750 lbs                              45.2 mpg
2,000 lbs                                       39.6 mpg
2,250 lbs                                       35.2 mpg
2,500 lbs                                       31.7 mpg
2,750 lbs                                       28.8 mpg
3,000 lbs                                       26.4 mpg
3,500 lbs                                       22.6 mpg
4,000 lbs                                       19.8 mpg
4,500 lbs                                       17.6 mpg
5,000 lbs                                       15.9 mpg
5,500 lbs                                       14.4 mpg
6,000 lbs                                       13.2 mpg
6,500 lbs                                       12.2 mpg
7,000 to 8,500 lbs                             11.3 mpg.

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

The 2002 model year city..................
``If vehicle inertiafuel economy is:..........................
class is:
1,500 or 1,750 lbs                              39.4 mpg
2,000 lbs                                       35.2 mpg
2,250 lbs                                       31.8 mpg
2,500 lbs                                       29.0 mpg
2,750 lbs                                       26.8 mpg
3,000 lbs                                       24.9 mpg
3,500 lbs                                       21.8 mpg
4,000 lbs                                       19.4 mpg
4,500 lbs                                       17.6 mpg
5,000 lbs                                       16.1 mpg
5,500 lbs                                       14.8 mpg
6,000 lbs                                       13.7 mpg
6,500 lbs                                       12.8 mpg
7,000 to 8,500 lbs                             12.1 mpg.

``(C) Vehicle inertia weight class.--For purposes of
subparagraph (B), the term `vehicle inertia weight
class' has the same meaning as when defined in
regulations prescribed by the Administrator of the
Environmental Protection Agency for purposes of the
administration of title II of the Clean Air Act (42
U.S.C. 7521 et seq.).
``(3) New qualified fuel cell motor vehicle.--For purposes
of this subsection, the term `new qualified fuel cell motor
vehicle' means a motor vehicle--
``(A) which is propelled by power derived from 1 or
more cells which convert chemical energy directly into
electricity by combining oxygen with hydrogen fuel which
is stored on board the vehicle in any form and may or
may not require reformation prior to use,
``(B) which, in the case of a passenger automobile
or light truck, has received on or after the date of the
enactment of this section a certificate that such
vehicle meets or exceeds the Bin 5 Tier II emission
level established in regulations prescribed by the
Administrator of the Environmental Protection Agency
under section 202(i) of the Clean Air Act for that make
and model year vehicle,
``(C) the original use of which commences with the
taxpayer,

[[Page 1041]]
119 STAT. 1041

``(D) which is acquired for use or lease by the
taxpayer and not for resale, and
``(E) which is made by a manufacturer.

``(c) New Advanced Lean Burn Technology Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
advanced lean burn technology motor vehicle credit determined
under this subsection for the taxable year is the credit amount
determined under paragraph (2) with respect to a new advanced
lean burn technology motor vehicle placed in service by the
taxpayer during the taxable year.
``(2) Credit amount.--
``(A) Fuel economy.--
``(i) In general.--The credit amount
determined under this paragraph shall be
determined in accordance with the following table:

``In the case of a vehicle whiThe credit amount is--....................
achieves a fuel economy (expressed
as a percentage of the 2002 model
year city fuel economy) of--
At least 125 percent but less than 150                              $400
percent
At least 150 percent but less than 175                              $800
percent
At least 175 percent but less than 200                            $1,200
percent
At least 200 percent but less than 225                            $1,600
percent
At least 225 percent but less than 250                            $2,000
percent
At least 250 percent                                             $2,400.

``(ii) 2002 model year city fuel economy.--For
purposes of clause (i), the 2002 model year city
fuel economy with respect to a vehicle shall be
determined on a gasoline gallon equivalent basis
as determined by the Administrator of the
Environmental Protection Agency using the tables
provided in subsection (b)(2)(B) with respect to
such vehicle.
``(B) Conservation credit.--The amount determined
under subparagraph (A) with respect to a new advanced
lean burn technology motor vehicle shall be increased by
the conservation credit amount determined in accordance
with the following table:

``In the case of a vehicle whiThe conservation credit amount is--.......
achieves a lifetime fuel savings
(expressed in gallons of gasoline)
of--
At least 1,200 but less than 1,800                                  $250
At least 1,800 but less than 2,400                                  $500
At least 2,400 but less than 3,000                                  $750
At least 3,000                                                   $1,000.

``(3) New advanced lean burn technology motor vehicle.--For
purposes of this subsection, the term `new advanced lean burn
technology motor vehicle' means a passenger automobile or a
light truck--
``(A) with an internal combustion engine which--
``(i) is designed to operate primarily using
more air than is necessary for complete combustion
of the fuel,
``(ii) incorporates direct injection,
``(iii) achieves at least 125 percent of the
2002 model year city fuel economy,

[[Page 1042]]
119 STAT. 1042

``(iv) for 2004 and later model vehicles, has
received a certificate that such vehicle meets or
exceeds--
``(I) in the case of a vehicle
having a gross vehicle weight rating of
6,000 pounds or less, the Bin 5 Tier II
emission standard established in
regulations prescribed by the
Administrator of the Environmental
Protection Agency under section 202(i)
of the Clean Air Act for that make and
model year vehicle, and
``(II) in the case of a vehicle
having a gross vehicle weight rating of
more than 6,000 pounds but not more than
8,500 pounds, the Bin 8 Tier II emission
standard which is so established,
``(B) the original use of which commences with the
taxpayer,
``(C) which is acquired for use or lease by the
taxpayer and not for resale, and
``(D) which is made by a manufacturer.
``(4) Lifetime fuel savings.--For purposes of this
subsection, the term `lifetime fuel savings' means, in the case
of any new advanced lean burn technology motor vehicle, an
amount equal to the excess (if any) of--
``(A) 120,000 divided by the 2002 model year city
fuel economy for the vehicle inertia weight class, over
``(B) 120,000 divided by the city fuel economy for
such vehicle.

``(d) New Qualified Hybrid Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
qualified hybrid motor vehicle credit determined under this
subsection for the taxable year is the credit amount determined
under paragraph (2) with respect to a new qualified hybrid motor
vehicle placed in service by the taxpayer during the taxable
year.
``(2) Credit amount.--
``(A) Credit amount for passenger automobiles and
light trucks.--In the case of a new qualified hybrid
motor vehicle which is a passenger automobile or light
truck and which has a gross vehicle weight rating of not
more than 8,500 pounds, the amount determined under this
paragraph is the sum of the amounts determined under
clauses (i) and (ii).
``(i) Fuel economy.--The amount determined
under this clause is the amount which would be
determined under subsection (c)(2)(A) if such
vehicle were a vehicle referred to in such
subsection.
``(ii) Conservation credit.--The amount
determined under this clause is the amount which
would be determined under subsection (c)(2)(B) if
such vehicle were a vehicle referred to in such
subsection.
``(B) Credit amount for other motor vehicles.--
``(i) In general.--In the case of any new
qualified hybrid motor vehicle to which
subparagraph (A) does not apply, the amount
determined under this paragraph is the amount
equal to the applicable percentage of the
qualified incremental hybrid cost of the vehicle
as certified under clause (v).

[[Page 1043]]
119 STAT. 1043

``(ii) Applicable percentage.--For purposes of
clause (i), the applicable percentage is--
``(I) 20 percent if the vehicle
achieves an increase in city fuel
economy relative to a comparable vehicle
of at least 30 percent but less than 40
percent,
``(II) 30 percent if the vehicle
achieves such an increase of at least 40
percent but less than 50 percent, and
``(III) 40 percent if the vehicle
achieves such an increase of at least 50
percent.
``(iii) Qualified incremental hybrid cost.--
For purposes of this subparagraph, the qualified
incremental hybrid cost of any vehicle is equal to
the amount of the excess of the manufacturer's
suggested retail price for such vehicle over such
price for a comparable vehicle, to the extent such
amount does not exceed--
``(I) $7,500, if such vehicle has a
gross vehicle weight rating of not more
than 14,000 pounds,
``(II) $15,000, if such vehicle has
a gross vehicle weight rating of more
than 14,000 pounds but not more than
26,000 pounds, and
``(III) $30,000, if such vehicle has
a gross vehicle weight rating of more
than 26,000 pounds.
``(iv) Comparable vehicle.--For purposes of
this subparagraph, the term `comparable vehicle'
means, with respect to any new qualified hybrid
motor vehicle, any vehicle which is powered solely
by a gasoline or diesel internal combustion engine
and which is comparable in weight, size, and use
to such vehicle.
``(v) Certification.--A certification
described in clause (i) shall be made by the
manufacturer and shall be determined in accordance
with guidance prescribed by the Secretary. Such
guidance shall specify procedures and methods for
calculating fuel economy savings and incremental
hybrid costs.
``(3) New qualified hybrid motor vehicle.--For purposes of
this subsection--
``(A) In general.--The term `new qualified hybrid
motor vehicle' means a motor vehicle--
``(i) which draws propulsion energy from
onboard sources of stored energy which are both--
``(I) an internal combustion or heat
engine using consumable fuel, and
``(II) a rechargeable energy storage
system,
``(ii) which, in the case of a vehicle to
which paragraph (2)(A) applies, has received a
certificate of conformity under the Clean Air Act
and meets or exceeds the equivalent qualifying
California low emission vehicle standard under
section 243(e)(2) of the Clean Air Act for that
make and model year, and
``(I) in the case of a vehicle
having a gross vehicle weight rating of
6,000 pounds or less, the Bin 5 Tier II
emission standard established in
regulations prescribed by the
Administrator of the Environmental
Protection Agency under section

[[Page 1044]]
119 STAT. 1044

202(i) of the Clean Air Act for that
make and model year vehicle, and
``(II) in the case of a vehicle
having a gross vehicle weight rating of
more than 6,000 pounds but not more than
8,500 pounds, the Bin 8 Tier II emission
standard which is so established,
``(iii) which has a maximum available power of
at least--
``(I)
4 NOTE: Applicability. percent in
the case of a vehicle to which paragraph
(2)(A) applies,
``(II) 10 percent in the case of a
vehicle which has a gross vehicle weight
rating of more than 8,500 pounds and not
more than 14,000 pounds, and
``(III) 15 percent in the case of a
vehicle in excess of 14,000 pounds,
``(iv) NOTE: Applicability. which, in the
case of a vehicle to which paragraph (2)(B)
applies, has an internal combustion or heat engine
which has received a certificate of conformity
under the Clean Air Act as meeting the emission
standards set in the regulations prescribed by the
Administrator of the Environmental Protection
Agency for 2004 through 2007 model year diesel
heavy duty engines or ottocycle heavy duty
engines, as applicable,
``(v) the original use of which commences with
the taxpayer,
``(vi) which is acquired for use or lease by
the taxpayer and not for resale, and
``(vii) which is made by a manufacturer.
Such term shall not include any vehicle which is not a
passenger automobile or light truck if such vehicle has
a gross vehicle weight rating of less than 8,500 pounds.
``(B) Consumable fuel.--For purposes of subparagraph
(A)(i)(I), the term `consumable fuel' means any solid,
liquid, or gaseous matter which releases energy when
consumed by an auxiliary power unit.
``(C) Maximum NOTE: Applicability. available
power.--
``(i) Certain passenger automobiles and light
trucks.--In the case of a vehicle to which
paragraph (2)(A) applies, the term `maximum
available power' means the maximum power available
from the rechargeable energy storage system,
during a standard 10 second pulse power or
equivalent test, divided by such maximum power and
the SAE net power of the heat engine.
``(ii) Other motor vehicles.--In the case of a
vehicle to which paragraph (2)(B) applies, the
term `maximum available power' means the maximum
power available from the rechargeable energy
storage system, during a standard 10 second pulse
power or equivalent test, divided by the vehicle's
total traction power. For purposes of the
preceding sentence, the term `total traction
power' means the sum of the peak power from the
rechargeable energy storage system and the heat
engine peak power of the vehicle, except that if
such storage system is the sole means by which the
vehicle

[[Page 1045]]
119 STAT. 1045

can be driven, the total traction power is the
peak power of such storage system.

``(e) New Qualified Alternative Fuel Motor Vehicle Credit.--
``(1) Allowance of credit.--Except as provided in paragraph
(5), the new qualified alternative fuel motor vehicle credit
determined under this subsection is an amount equal to the
applicable percentage of the incremental cost of any new
qualified alternative fuel motor vehicle placed in service by
the taxpayer during the taxable year.
``(2) Applicable percentage.--For purposes of paragraph (1),
the applicable percentage with respect to any new qualified
alternative fuel motor vehicle is--
``(A) 50 percent, plus
``(B) 30 percent, if such vehicle--
``(i) has received a certificate of conformity
under the Clean Air Act and meets or exceeds the
most stringent standard available for
certification under the Clean Air Act for that
make and model year vehicle (other than a zero
emission standard), or
``(ii) has received an order certifying the
vehicle as meeting the same requirements as
vehicles which may be sold or leased in California
and meets or exceeds the most stringent standard
available for certification under the State laws
of California (enacted in accordance with a waiver
granted under section 209(b) of the Clean Air Act)
for that make and model year vehicle (other than a
zero emission standard).
For purposes of the preceding sentence, in the case of any new
qualified alternative fuel motor vehicle which weighs more than
14,000 pounds gross vehicle weight rating, the most stringent
standard available shall be such standard available for
certification on the date of the enactment of the Energy Tax
Incentives Act of 2005.
``(3) Incremental cost.--For purposes of this subsection,
the incremental cost of any new qualified alternative fuel motor
vehicle is equal to the amount of the excess of the
manufacturer's suggested retail price for such vehicle over such
price for a gasoline or diesel fuel motor vehicle of the same
model, to the extent such amount does not exceed--
``(A) $5,000, if such vehicle has a gross vehicle
weight rating of not more than 8,500 pounds,
``(B) $10,000, if such vehicle has a gross vehicle
weight rating of more than 8,500 pounds but not more
than 14,000 pounds,
``(C) $25,000, if such vehicle has a gross vehicle
weight rating of more than 14,000 pounds but not more
than 26,000 pounds, and
``(D) $40,000, if such vehicle has a gross vehicle
weight rating of more than 26,000 pounds.
``(4) New qualified alternative fuel motor vehicle.--For
purposes of this subsection--
``(A) In general.--The term `new qualified
alternative fuel motor vehicle' means any motor
vehicle--
``(i) which is only capable of operating on an
alternative fuel,

[[Page 1046]]
119 STAT. 1046

``(ii) the original use of which commences
with the taxpayer,
``(iii) which is acquired by the taxpayer for
use or lease, but not for resale, and
``(iv) which is made by a manufacturer.
``(B) Alternative fuel.--The term `alternative fuel'
means compressed natural gas, liquefied natural gas,
liquefied petroleum gas, hydrogen, and any liquid at
least 85 percent of the volume of which consists of
methanol.
``(5) Credit for mixed-fuel vehicles.--
``(A) In general.--In the case of a mixed-fuel
vehicle placed in service by the taxpayer during the
taxable year, the credit determined under this
subsection is an amount equal to--
``(i) in the case of a 75/25 mixed-fuel
vehicle, 70 percent of the credit which would have
been allowed under this subsection if such vehicle
was a qualified alternative fuel motor vehicle,
and
``(ii) in the case of a 90/10 mixed-fuel
vehicle, 90 percent of the credit which would have
been allowed under this subsection if such vehicle
was a qualified alternative fuel motor vehicle.
``(B) Mixed-fuel vehicle.--For purposes of this
subsection, the term `mixed-fuel vehicle' means any
motor vehicle described in subparagraph (C) or (D) of
paragraph (3), which--
``(i) is certified by the manufacturer as
being able to perform efficiently in normal
operation on a combination of an alternative fuel
and a petroleum-based fuel,
``(ii) either--
``(I) has received a certificate of
conformity under the Clean Air Act, or
``(II) has received an order
certifying the vehicle as meeting the
same requirements as vehicles which may
be sold or leased in California and
meets or exceeds the low emission
vehicle standard under section 88.105-94
of title 40, Code of Federal
Regulations, for that make and model
year vehicle,
``(iii) the original use of which commences
with the taxpayer,
``(iv) which is acquired by the taxpayer for
use or lease, but not for resale, and
``(v) which is made by a manufacturer.
``(C) 75/25 mixed-fuel vehicle.--For purposes of
this subsection, the term `75/25 mixed-fuel vehicle'
means a mixed-fuel vehicle which operates using at least
75 percent alternative fuel and not more than 25 percent
petroleum-based fuel.
``(D) 90/10 mixed-fuel vehicle.--For purposes of
this subsection, the term `90/10 mixed-fuel vehicle'
means a mixed-fuel vehicle which operates using at least
90 percent alternative fuel and not more than 10 percent
petroleum-based fuel.

[[Page 1047]]
119 STAT. 1047

``(f) Limitation on Number of New Qualified Hybrid and Advanced
Lean-Burn Technology Vehicles Eligible for Credit.--
``(1) In general.--In the case of a qualified vehicle sold
during the phaseout period, only the applicable percentage of
the credit otherwise allowable under subsection (c) or (d) shall
be allowed.
``(2) Phaseout period.--For purposes of this subsection, the
phaseout period is the period beginning with the second calendar
quarter following the calendar quarter which includes the first
date on which the number of qualified vehicles manufactured by
the manufacturer of the vehicle referred to in paragraph (1)
sold for use in the United States after December 31, 2005, is at
least 60,000.
``(3) Applicable percentage.--For purposes of paragraph (1),
the applicable percentage is--
``(A) 50 percent for the first 2 calendar quarters
of the phaseout period,
``(B) 25 percent for the 3d and 4th calendar
quarters of the phaseout period, and
``(C) 0 percent for each calendar quarter
thereafter.
``(4) Controlled groups.--
``(A) In general.--For purposes of this subsection,
all persons treated as a single employer under
subsection (a) or (b) of section 52 or subsection (m) or
(o) of section 414 shall be treated as a single
manufacturer.
``(B) Inclusion of NOTE: Applicability. foreign
corporations.--For purposes of subparagraph (A), in
applying subsections (a) and (b) of section 52 to this
section, section 1563 shall be applied without regard to
subsection (b)(2)(C) thereof.
``(5) Qualified vehicle.--For purposes of this subsection,
the term `qualified vehicle' means any new qualified hybrid
motor vehicle (described in subsection (d)(2)(A)) and any new
advanced lean burn technology motor vehicle.

``(g) Application With Other Credits.--
``(1) Business credit treated as part of general business
credit.--So much of the credit which would be allowed under
subsection (a) for any taxable year (determined without regard
to this subsection) that is attributable to property of a
character subject to an allowance for depreciation shall be
treated as a credit listed in section 38(b) for such taxable
year (and not allowed under subsection (a)).
``(2) Personal credit.--The credit allowed under subsection
(a) (after the application of paragraph (1)) for any taxable
year shall not exceed the excess (if any) of--
``(A) the regular tax reduced by the sum of the
credits allowable under subpart A and sections 27 and
30, over
``(B) the tentative minimum tax for the taxable
year.

``(h) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Motor vehicle.--The term `motor vehicle' has the
meaning given such term by section 30(c)(2).
``(2) City fuel economy.--The city fuel economy with respect
to any vehicle shall be measured in a manner which is
substantially similar to the manner city fuel economy is
measured in accordance with procedures under part 600 of

[[Page 1048]]
119 STAT. 1048

subchapter Q of chapter I of title 40, Code of Federal
Regulations, as in effect on the date of the enactment of this
section.
``(3) Other terms.--The terms `automobile', `passenger
automobile', `medium duty passenger vehicle', `light truck', and
`manufacturer' have the meanings given such terms in regulations
prescribed by the Administrator of the Environmental Protection
Agency for purposes of the administration of title II of the
Clean Air Act (42 U.S.C. 7521 et seq.).
``(4) Reduction in basis.--For purposes of this subtitle,
the basis of any property for which a credit is allowable under
subsection (a) shall be reduced by the amount of such credit so
allowed (determined without regard to subsection (g)).
``(5) No double benefit.--The amount of any deduction or
other credit allowable under this chapter--
``(A) for any incremental cost taken into account in
computing the amount of the credit determined under
subsection (e) shall be reduced by the amount of such
credit attributable to such cost, and
``(B) with respect to a vehicle described under
subsection (b) or (c), shall be reduced by the amount of
credit allowed under subsection (a) for such vehicle for
the taxable year.
``(6) Property used by tax-exempt entity.--In the case of a
vehicle whose use is described in paragraph (3) or (4) of
section 50(b) and which is not subject to a lease, the person
who sold such vehicle to the person or entity using such vehicle
shall be treated as the taxpayer that placed such vehicle in
service, but only if such person clearly discloses to such
person or entity in a document the amount of any credit
allowable under subsection (a) with respect to such vehicle
(determined without regard to subsection (g)).
``(7) Property used outside united states, etc., not
qualified.--No credit shall be allowable under subsection (a)
with respect to any property referred to in section 50(b)(1) or
with respect to the portion of the cost of any property taken
into account under section 179.
``(8) Recapture.--The NOTE: Regulations. Secretary
shall, by regulations, provide for recapturing the benefit of
any credit allowable under subsection (a) with respect to any
property which ceases to be property eligible for such credit
(including recapture in the case of a lease period of less than
the economic life of a vehicle).
``(9) Election to not take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects to not have this section apply to such vehicle.
``(10) Interaction with air quality and motor vehicle safety
standards.--Unless otherwise provided in this section, a motor
vehicle shall not be considered eligible for a credit under this
section unless such vehicle is in compliance with--
``(A) the applicable provisions of the Clean Air Act
for the applicable make and model year of the vehicle
(or applicable air quality provisions of State law in
the case of a State which has adopted such provision
under a waiver under section 209(b) of the Clean Air
Act), and
``(B) the motor vehicle safety provisions of
sections 30101 through 30169 of title 49, United States
Code.

``(i) Regulations.--

[[Page 1049]]
119 STAT. 1049

``(1) In general.--Except as provided in paragraph (2), the
Secretary shall promulgate such regulations as necessary to
carry out the provisions of this section.
``(2) Coordination in prescription of certain regulations.--
The Secretary of the Treasury, in coordination with the
Secretary of Transportation and the Administrator of the
Environmental Protection Agency, shall prescribe such
regulations as necessary to determine whether a motor vehicle
meets the requirements to be eligible for a credit under this
section.

``(j) Termination.--This section shall not apply to any property
purchased after--
``(1) in the case of a new qualified fuel cell motor vehicle
(as described in subsection (b)), December 31, 2014,
``(2) in the case of a new advanced lean burn technology
motor vehicle (as described in subsection (c)) or a new
qualified hybrid motor vehicle (as described in subsection
(d)(2)(A)), December 31, 2010,
``(3) in the case of a new qualified hybrid motor vehicle
(as described in subsection (d)(2)(B)), December 31, 2009, and
``(4) in the case of a new qualified alternative fuel
vehicle (as described in subsection (e)), December 31, 2010.''.

(b) Conforming Amendments.--
(1) Section 38(b), as amended by this Act, is amended by
striking ``plus'' at the end of paragraph (23), by striking the
period at the end of paragraph (24) and inserting ``, and'', and
by adding at the end the following new paragraph:
``(25) the portion of the alternative motor vehicle credit
to which section 30B(g)(1) applies.''.
(2) Section 1016(a), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (34), by striking the
period at the end of paragraph (35) and inserting ``, and'', and
by adding at the end the following new paragraph:
``(36) to the extent provided in section 30B(h)(4).''.
(3) Section 55(c)(2), as amended by this Act, is amended by
inserting ``30B(g)(2),'' after ``30(b)(2),''.
(4) Section 6501(m) is amended by inserting ``30B(h)(9),''
after ``30(d)(4),''.
(5) The table of sections for subpart B of part IV of
subchapter A of chapter 1 is amended by inserting after the item
relating to section 30A the following new item:

``Sec. 30B. Alternative motor vehicle credit.''.

(c) Effective Date.--The NOTE: 26 USC 30B note. amendments made
by this section shall apply to property placed in service after December
31, 2005, in taxable years ending after such date.

SEC. 1342. CREDIT FOR INSTALLATION OF ALTERNATIVE FUELING STATIONS.

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

``SEC. 30C. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.

``(a) Credit Allowed.--There shall be allowed as a credit against
the tax imposed by this chapter for the taxable year an amount equal to
30 percent of the cost of any qualified alternative

[[Page 1050]]
119 STAT. 1050

fuel vehicle refueling property placed in service by the taxpayer during
the taxable year.
``(b) Limitation.--The credit allowed under subsection (a) with
respect to any alternative fuel vehicle refueling property shall not
exceed--
``(1) $30,000 in the case of a property of a character
subject to an allowance for depreciation, and
``(2) $1,000 in any other case.

``(c) Qualified Alternative Fuel Vehicle Refueling Property.--
``(1) In general.--Except as provided in paragraph (2), the
term `qualified alternative fuel vehicle refueling property' has
the meaning given to such term by section 179A(d), but only with
respect to any fuel--
``(A) at least 85 percent of the volume of which
consists of one or more of the following: ethanol,
natural gas, compressed natural gas, liquefied natural
gas, liquefied petroleum gas, or hydrogen, or
``(B) any mixture of biodiesel (as defined in
section 40A(d)(1)) and diesel fuel (as defined in
section 4083(a)(3)), determined without regard to any
use of kerosene and containing at least 20 percent
biodiesel.
``(2) Residential property.--In the case of any property
installed on property which is used as the principal residence
(within the meaning of section 121) of the taxpayer, paragraph
(1) of section 179A(d) shall not apply.

``(d) Application With Other Credits.--
``(1) Business credit treated as part of general business
credit.--So much of the credit which would be allowed under
subsection (a) for any taxable year (determined without regard
to this subsection) that is attributable to property of a
character subject to an allowance for depreciation shall be
treated as a credit listed in section 38(b) for such taxable
year (and not allowed under subsection (a)).
``(2) Personal credit.--The credit allowed under subsection
(a) (after the application of paragraph (1)) for any taxable
year shall not exceed the excess (if any) of--
``(A) the regular tax reduced by the sum of the
credits allowable under subpart A and sections 27, 30,
and 30B, over
``(B) the tentative minimum tax for the taxable
year.

``(e) Special Rules.--For purposes of this section--
``(1) Basis reduction.--The basis of any property shall be
reduced by the portion of the cost of such property taken into
account under subsection (a).
``(2) Property used by tax-exempt entity.--In the case of
any qualified alternative fuel vehicle refueling property the
use of which is described in paragraph (3) or (4) of section
50(b) and which is not subject to a lease, the person who sold
such property to the person or entity using such property shall
be treated as the taxpayer that placed such property in service,
but only if such person clearly discloses to such person or
entity in a document the amount of any credit allowable under
subsection (a) with respect to such property (determined without
regard to subsection (d)).
``(3) Property used outside united states not qualified.--No
credit shall be allowable under subsection (a) with

[[Page 1051]]
119 STAT. 1051

respect to any property referred to in section 50(b)(1) or with
respect to the portion of the cost of any property taken into
account under section 179.
``(4) Election not to take credit.--No credit shall be
allowed under subsection (a) for any property if the taxpayer
elects not to have this section apply to such property.
``(5) Recapture rules.--
Rules NOTE: Applicability. similar to the rules of section
179A(e)(4) shall apply.

``(f) Regulations.--The Secretary shall prescribe such regulations
as necessary to carry out the provisions of this section.
``(g) Termination.--This section shall not apply to any property
placed in service--
``(1) in the case of property relating to hydrogen, after
December 31, 2014, and
``(2) in the case of any other property, after December 31,
2009.''.

(b) Conforming Amendments.--
(1) Section 38(b), as amended by this Act, is amended by
striking ``plus'' at the end of paragraph (24), by striking the
period at the end of paragraph (25) and inserting ``, and'', and
by adding at the end the following new paragraph:
``(26) the portion of the alternative fuel vehicle refueling
property credit to which section 30C(d)(1) applies.''.
(2) Section 1016(a), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (35), by striking the
period at the end of paragraph (36) and inserting ``, and'', and
by adding at the end the following new paragraph:
``(37) to the extent provided in section 30C(f).''.
(3) Section 55(c)(2), as amended by this Act, is amended by
inserting ``30C(d)(2),'' after ``30B(g)(2),''.
(4) Section 6501(m) is amended by inserting ``30C(e)(5),''
after ``30B(h)(9),''.
(5) The table of sections for subpart B of part IV of
subchapter A of chapter 1, as amended by this Act, is amended by
inserting after the item relating to section 30B the following
new item:

``Sec. 30C. Clean-fuel vehicle refueling property credit.''.

(c) Effective Date.--The NOTE: 26 USC 30C note. amendments made
by this section shall apply to property placed in service after December
31, 2005, in taxable years ending after such date.

SEC. 1343. REDUCED MOTOR FUEL EXCISE TAX ON CERTAIN MIXTURES OF DIESEL
FUEL.

(a) In General.--Paragraph (2) of section 4081(a) is amended by
adding at the end the following:
``(D) Diesel-water fuel emulsion.--
In NOTE: Applicability. the case of diesel-water
fuel emulsion at least 14 percent of which is water and
with respect to which the emulsion additive is
registered by a United States manufacturer with the
Environmental Protection Agency pursuant to section 211
of the Clean Air Act (as in effect on March 31, 2003),
subparagraph (A)(iii) shall be applied by substituting
`19.7 cents' for `24.3 cents'. The preceding sentence
shall not apply to the removal, sale, or use of diesel-
water fuel emulsion unless the person so removing,
selling, or using such fuel is registered under section
4101.''.

(b) Special Rules for Diesel-Water Fuel Emulsions.--

[[Page 1052]]
119 STAT. 1052

(1) Refunds for tax-paid purchases.--Section NOTE: 26 USC
6427. 6427 is amended by redesignating subsections (m) through
(p) as subsections (n) through (q), respectively, and by
inserting after subsection (l) the following new subsection:

``(m) Diesel Fuel Used to Produce Emulsion.--
``(1) In general.--Except as provided in subsection (k), if
any diesel fuel on which tax was imposed by section 4081 at the
regular tax rate is used by any person in producing an emulsion
described in section 4081(a)(2)(D) which is sold or used in such
person's trade or business, the Secretary shall pay (without
interest) to such person an amount equal to the excess of the
regular tax rate over the incentive tax rate with respect to
such fuel.
``(2) Definitions.--For purposes of paragraph (1)--
``(A) Regular tax rate.--The term `regular tax rate'
means the aggregate rate of tax imposed by section 4081
determined without regard to section 4081(a)(2)(D).
``(B) Incentive tax rate.--The term `incentive tax
rate' means the aggregate rate of tax imposed by section
4081 determined with regard to section 4081(a)(2)(D).''.
(2) Later separation of fuel.--Section 4081 (relating to
imposition of tax) is amended by inserting after subsection (b)
the following new subsection:

``(c) Later Separation of Fuel From Diesel-Water Fuel Emulsion.--If
any person separates the taxable fuel from a diesel-water fuel emulsion
on which tax was imposed under subsection (a) at a rate determined under
subsection (a)(2)(D) (or with respect to which a credit or payment was
allowed or made by reason of section 6427), such person shall be treated
as the refiner of such taxable fuel. The amount of tax imposed on any
removal of such fuel by such person shall be reduced by the amount of
tax imposed (and not credited or refunded) on any prior removal or entry
of such fuel.''.
(3) Credit claims.--Paragraphs (1) and (2) of section
6427(i) are both amended by inserting ``(m),'' after ``(l),''.

(c) Effective Date.--The NOTE: 26 USC 4081 note. amendments made
by this section shall take effect on January 1, 2006.

SEC. 1344. EXTENSION OF EXCISE TAX PROVISIONS AND INCOME TAX CREDIT FOR
BIODIESEL.

(a) In General.--Sections 40A(e), 6426(c)(6), and 6427(e)(4)(B) are
each amended by striking ``2006'' and inserting ``2008''.
(b) Effective Date.--The NOTE: 26 USC 40A note. amendments made
by this section shall take effect on the date of the enactment of this
Act.

SEC. 1345. SMALL AGRI-BIODIESEL PRODUCER CREDIT.

(a) In General.--Subsection (a) of section 40A (relating to
biodiesel used as a fuel) is amended to read as follows:
``(a) General Rule.--For purposes of section 38, the biodiesel fuels
credit determined under this section for the taxable year is an amount
equal to the sum of--
``(1) the biodiesel mixture credit, plus
``(2) the biodiesel credit, plus
``(3) in the case of an eligible small agri-biodiesel
producer, the small agri-biodiesel producer credit.''.

(b) Small Agri-Biodiesel Producer Credit Defined.--Section 40A(b)
(relating to definition of biodiesel mixture credit and

[[Page 1053]]
119 STAT. 1053

biodiesel credit) is amended by adding at the end the following new
paragraph:
``(5) Small agri-biodiesel producer credit.--
``(A) In general.--The small agri-biodiesel producer
credit of any eligible small agri-biodiesel producer for
any taxable year is 10 cents for each gallon of
qualified agri-biodiesel production of such producer.
``(B) Qualified agri-biodiesel production.--For
purposes of this paragraph, the term `qualified agri-
biodiesel production' means any agri-biodiesel
(determined without regard to the last sentence of
subsection (d)(2)) which is produced by an eligible
small agri-biodiesel producer, and which during the
taxable year--
``(i) is sold by such producer to another
person--
``(I) for use by such other person
in the production of a qualified
biodiesel mixture in such other person's
trade or business (other than casual
off-farm production),
``(II) for use by such other person
as a fuel in a trade or business, or
``(III) who sells such agri-
biodiesel at retail to another person
and places such agri-biodiesel in the
fuel tank of such other person, or
``(ii) is used or sold by such producer for
any purpose described in clause (i).
``(C) Limitation.--The qualified agri-biodiesel
production of any producer for any taxable year shall
not exceed 15,000,000 gallons.''.

(c) Definitions and Special Rules.--Section 40A is amended by
redesignating subsection (e) as subsection (f) and by inserting after
subsection (d) the following new subsection:
``(e) Definitions and Special Rules for Small Agri-Biodiesel
Producer Credit.--For purposes of this section--
``(1) Eligible small agri-biodiesel producer.--The term
`eligible small agri-biodiesel producer' means a person who, at
all times during the taxable year, has a productive capacity for
agri-biodiesel not in excess of 60,000,000 gallons.
``(2) Aggregation rule.--For purposes of the 15,000,000
gallon limitation under subsection (b)(5)(C) and the 60,000,000
gallon limitation under paragraph (1), all members of the same
controlled group of corporations (within the meaning of section
267(f)) and all persons under common control (within the meaning
of section 52(b) but determined by treating an interest of more
than 50 percent as a controlling interest) shall be treated as 1
person.
``(3) Partnership, s NOTE: Applicability. corporation,
and other pass-thru entities.--In the case of a partnership,
trust, S corporation, or other pass-thru entity, the limitations
contained in subsection (b)(5)(C) and paragraph (1) shall be
applied at the entity level and at the partner or similar level.
``(4) Allocation.--For purposes of this subsection, in the
case of a facility in which more than 1 person has an interest,
productive capacity shall be allocated among such persons in
such manner as the Secretary may prescribe.
``(5) Regulations.--The Secretary may prescribe such
regulations as may be necessary--

[[Page 1054]]
119 STAT. 1054

``(A) to prevent the credit provided for in
subsection (a)(3) from directly or indirectly benefiting
any person with a direct or indirect productive capacity
of more than 60,000,000 gallons of agri-biodiesel during
the taxable year, or
``(B) to prevent any person from directly or
indirectly benefiting with respect to more than
15,000,000 gallons during the taxable year.
``(6) Allocation of small agri-biodiesel credit to patrons
of cooperative.--
``(A) Election to allocate.--
``(i) In general.--In the case of a
cooperative organization described in section
1381(a), any portion of the credit determined
under subsection (a)(3) for the taxable year may,
at the election of the organization, be
apportioned pro rata among patrons of the
organization on the basis of the quantity or value
of business done with or for such patrons for the
taxable year.
``(ii) Form and effect of election.--An
election under clause (i) for any taxable year
shall be made on a timely filed return for such
year. Such election, once made, shall be
irrevocable for such taxable year. Such election
shall not take effect unless the organization
designates the apportionment as such in a written
notice mailed to its patrons during the payment
period described in section 1382(d).
``(B) Treatment of organizations and patrons.--
``(i) Organizations.--The amount of the credit
not apportioned to patrons pursuant to
subparagraph (A) shall be included in the amount
determined under subsection (a)(3) for the taxable
year of the organization.
``(ii) Patrons.--The amount of the credit
apportioned to patrons pursuant to subparagraph
(A) shall be included in the amount determined
under such subsection for the first taxable year
of each patron ending on or after the last day of
the payment period (as defined in section 1382(d))
for the taxable year of the organization or, if
earlier, for the taxable year of each patron
ending on or after the date on which the patron
receives notice from the cooperative of the
apportionment.
``(iii) Special rules for decrease in credits
for taxable year.--If the amount of the credit of
the organization determined under such subsection
for a taxable year is less than the amount of such
credit shown on the return of the organization for
such year, an amount equal to the excess of--
``(I) such reduction, over
``(II) the amount not apportioned to
such patrons under subparagraph (A) for
the taxable year, shall be treated as an
increase in tax imposed by this chapter
on the organization. Such increase shall
not be treated as tax imposed by this
chapter for purposes of determining the
amount of any

[[Page 1055]]
119 STAT. 1055

credit under this chapter or for
purposes of section 55.''.

(d) Conforming Amendments.--
(1) Paragraph (4) of section 40A(b) is amended by striking
``this section'' and inserting ``paragraph (1) or (2) of
subsection (a)''.
(2) The heading of subsection (b) of section 40A is amended
by striking ``and Biodiesel Credit'' and inserting ``, Biodiesel
Credit, and Small Agri-biodiesel Producer Credit''.
(3) Paragraph (3) of section 40A(d) is amended by
redesignating subparagraph (C) as subparagraph (D) and by
inserting after subparagraph (B) the following new subparagraph:
``(C) Producer credit.--If--
``(i) any credit was determined under
subsection (a)(3), and
``(ii) any person does not use such fuel for a
purpose described in subsection (b)(5)(B), then
there is hereby imposed on such person a tax equal
to 10 cents a gallon for each gallon of such agri-
biodiesel.''.

(e) Effective Date.--The NOTE: 26 USC 40A note. amendments made
by this section shall apply to taxable years ending after the date of
the enactment of this Act.

SEC. 1346. RENEWABLE DIESEL.

(a) In General.--Section 40A (relating to biodiesel used as fuel),
as amended by this Act, is amended by redesignating subsection (f) as
subsection (g) and by inserting after subsection (e) the following new
subsection:
``(f) Renewable Diesel.--For purposes of this title--
``(1) Treatment in the same manner as biodiesel.--Except as
provided in paragraph (2), renewable diesel shall be treated in
the same manner as biodiesel.
``(2) Exceptions.--
``(A) Rate of NOTE: Applicability. credit.--
Subsections (b)(1)(A) and (b)(2)(A) shall be applied
with respect to renewable diesel by substituting `$1.00'
for `50 cents'.
``(B) Nonapplication of certain credits.--
Subsections (b)(3) and (b)(5) shall not apply with
respect to renewable diesel.
``(3) Renewable diesel defined.--The term `renewable diesel'
means diesel fuel derived from biomass (as defined in section
45K(c)(3)) using a thermal depolymerization process which
meets--
``(A) the registration requirements for fuels and
fuel additives established by the Environmental
Protection Agency under section 211 of the Clean Air Act
(42 U.S.C. 7545), and
``(B) the requirements of the American Society of
Testing and Materials D975 or D396.''.

(b) Clerical Amendments.--
(1) The heading for section 40A is amended by inserting
``and renewable diesel'' after ``biodiesel''.
(2) The item in the table of contents for subpart D of part
IV of subchapter A of chapter 1 relating to section 40A is
amended to read as follows:

``Sec. 40A. Biodiesel and renewable diesel used as fuel.''.


[[Page 1056]]
119 STAT. 1056



(c) Effective Date.--The NOTE: 26 USC 40A note. amendment made
by subsection (a) shall apply with respect to fuel sold or used after
December 31, 2005.

SEC. 1347. MODIFICATION OF SMALL ETHANOL PRODUCER CREDIT.

(a) Definition of Small Ethanol Producer.--Section 40(g) (relating
to definitions and special rules for eligible small ethanol producer
credit) is amended by striking ``30,000,000'' each place it appears and
inserting ``60,000,000''.
(b) Written Notice of Election to Allocate Credit to Patrons.--
Section 40(g)(6)(A)(ii) (relating to form and effect of election) is
amended by adding at the end the following new sentence: ``Such election
shall not take effect unless the organization designates the
apportionment as such in a written notice mailed to its patrons during
the payment period described in section 1382(d).''.
(c) Effective Date.--The NOTE: 26 USC 40 note. amendments made
by this section shall apply to taxable years ending after the date of
the enactment of this Act.

SEC. 1348. SUNSET OF DEDUCTION FOR CLEAN-FUEL VEHICLES AND CERTAIN
REFUELING PROPERTY.

Subsection (f) of section 179A (relating to termination) is amended
by striking ``December 31, 2006'' and inserting ``December 31, 2005''.

Subtitle E--Additional Energy Tax Incentives

SEC. 1351. EXPANSION OF RESEARCH CREDIT.

(a) Credit for Expenses Attributable to Certain Collaborative Energy
Research Consortia.--
(1) In general.--Section 41(a) (relating to credit for
increasing research activities) is amended by striking ``and''
at the end of paragraph (1), by striking the period at the end
of paragraph (2) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(3) 20 percent of the amounts paid or incurred by the
taxpayer in carrying on any trade or business of the taxpayer
during the taxable year (including as contributions) to an
energy research consortium.''.
(2) Energy research consortium defined.--Section 41(f)
(relating to special rules) is amended by adding at the end the
following new paragraph:
``(6) Energy research consortium.--
``(A) In general.--The term `energy research
consortium' means any organization--
``(i) which is--
``(I) described in section 501(c)(3)
and is exempt from tax under section
501(a) and is organized and operated
primarily to conduct energy research, or
``(II) organized and operated
primarily to conduct energy research in
the public interest (within the meaning
of section 501(c)(3)),
``(ii) which is not a private foundation,

[[Page 1057]]
119 STAT. 1057

``(iii) to which at least 5 unrelated persons
paid or incurred during the calendar year in which
the taxable year of the organization begins
amounts (including as contributions) to such
organization for energy research, and
``(iv) to which no single person paid or
incurred (including as contributions) during such
calendar year an amount equal to more than 50
percent of the total amounts received by such
organization during such calendar year for energy
research.
``(B) Treatment of persons.--All persons treated as
a single employer under subsection (a) or (b) of section
52 shall be treated as related persons for purposes of
subparagraph (A)(iii) and as a single person for
purposes of subparagraph (A)(iv).''.
(3) Conforming amendment.--Section 41(b)(3)(C) is amended by
inserting ``(other than an energy research consortium)'' after
``organization''.

(b) Repeal of Limitation on Contract Research Expenses Paid to Small
Businesses, Universities, and Federal Laboratories.--Section 41(b)(3)
(relating to contract research expenses) is amended by adding at the end
the following new subparagraph:
``(D) Amounts paid to eligible small businesses,
universities, and federal laboratories.--
``(i) In general.--In the case of amounts paid
by the taxpayer to--
``(I) an eligible small business,
``(II) an institution of higher
education (as defined in section
3304(f)), or
``(III)
an NOTE: Applicability. organization
which is a Federal laboratory,
for qualified research which is energy research,
subparagraph (A) shall be applied by substituting
`100 percent' for `65 percent'.
``(ii) Eligible small business.--For purposes
of this subparagraph, the term `eligible small
business' means a small business with respect to
which the taxpayer does not own (within the
meaning of section 318) 50 percent or more of--
``(I) in the case of a corporation,
the outstanding stock of the corporation
(either by vote or value), and
``(II) in the case of a small
business which is not a corporation, the
capital and profits interests of the
small business.
``(iii) Small business.--For purposes of this
subparagraph--
``(I) In general.--The term `small
business' means, with respect to any
calendar year, any person if the annual
average number of employees employed by
such person during either of the 2
preceding calendar years was 500 or
fewer. For purposes of the preceding
sentence, a preceding calendar year may
be taken into account only if the person
was in existence throughout the year.

[[Page 1058]]
119 STAT. 1058

``(II) Startups, controlled groups,
and predecessors.--Rules similar to the
rules of subparagraphs (B) and (D) of
section 220(c)(4) shall apply for
purposes of this clause.
``(iv) Federal laboratory.--For purposes of
this subparagraph, the term `Federal laboratory'
has the meaning given such term by section 4(6) of
the Stevenson-Wydler Technology Innovation Act of
1980 (15 U.S.C. 3703(6)), as in effect on the date
of the enactment of the Energy Tax Incentives Act
of 2005.''.

(c) Effective Date.--The amendments made by this section shall apply
to amounts paid or incurred after the date of the enactment of this Act,
in taxable years ending after such date.

SEC. 1352. NOTE: 26 USC 41 note. NATIONAL ACADEMY OF SCIENCES STUDY
AND REPORT.

(a) Study.--Not NOTE: Contracts. later than 60 days after the
date of the enactment of this Act, the Secretary of the Treasury shall
enter into an agreement with the National Academy of Sciences under
which the National Academy of Sciences shall conduct a study to define
and evaluate the health, environmental, security, and infrastructure
external costs and benefits associated with the production and
consumption of energy that are not or may not be fully incorporated into
the market price of such energy, or into the Federal tax or fee or other
applicable revenue measure related to such production or consumption.

(b) Report.--Not later than 2 years after the date on which the
agreement under subsection (a) is entered into, the National Academy of
Sciences shall submit to Congress a report on the study conducted under
subsection (a).

SEC. 1353. RECYCLING STUDY.

(a) Study.--The Secretary of the Treasury, in consultation with the
Secretary of Energy, shall conduct a study--
(1) to determine and quantify the energy savings achieved
through the recycling of glass, paper, plastic, steel, aluminum,
and electronic devices, and
(2) to identify tax incentives which would encourage
recycling of such material.

(b) Report.--Not later than 1 year after the date of the enactment
of this Act, the Secretary of the Treasury shall submit to Congress a
report on the study conducted under subsection (a).

Subtitle F--Revenue Raising Provisions

SEC. 1361. OIL SPILL LIABILITY TRUST FUND FINANCING RATE.

Section 4611(f) (relating to application of oil spill liability
trust fund financing rate) is amended to read as follows:
``(f) Application of Oil Spill Liability Trust Fund Financing
Rate.--
``(1) In general.--Except NOTE: Effective date. as
provided in paragraphs (2) and (3), the Oil Spill Liability
Trust Fund financing rate under subsection (c) shall apply on
and after April 1, 2006, or if later, the date which is 30 days
after the last day of any calendar quarter for which the
Secretary estimates that, as of the close of that quarter, the
unobligated balance in the Oil Spill Liability Trust Fund is
less than $2,000,000,000.

[[Page 1059]]
119 STAT. 1059

``(2) Fund balance.--The Oil Spill Liability Trust Fund
financing rate shall not apply during a calendar quarter if the
Secretary estimates that, as of the close of the preceding
calendar quarter, the unobligated balance in the Oil Spill
Liability Trust Fund exceeds $2,700,000,000.
``(3) Termination.--The Oil Spill Liability Trust Fund
financing rate shall not apply after December 31, 2014.''.

SEC. 1362. EXTENSION OF LEAKING UNDERGROUND STORAGE TANK TRUST FUND
FINANCING RATE.

(a) In General.--Paragraph (3) of section 4081(d) (relating to
Leaking Underground Storage Tank Trust Fund financing rate) is amended
by striking ``2005'' and inserting ``2011''.
(b) No Exemptions From Tax Except for Exports.--
(1) In general.--Section 4082(a) (relating to exemptions for
diesel fuel and kerosene) is amended by inserting ``(other than
such tax at the Leaking Underground Storage Tank Trust Fund
financing rate imposed in all cases other than for export)''
after ``section 4081''.
(2) Amendments relating to section 4041.--
(A) Subsections (a)(1)(B), (a)(2)(A), and (c)(2) of
section 4041 are each amended by inserting ``(other than
such tax at the Leaking Underground Storage Tank Trust
Fund financing rate)'' after ``section 4081''.
(B) Section 4041(b)(1)(A) is amended by striking
``or (d)(1))''.
(C) Section 4041(d) is amended by adding at the end
the following new paragraph:
``(5) Nonapplication of exemptions other than for exports.--
For purposes of this section, the tax imposed under this
subsection shall be determined without regard to subsections
(f), (g) (other than with respect to any sale for export under
paragraph (3) thereof), (h), and (l).''.
(3) No refund.--
(A) In general.--Subchapter B of chapter 65 is
amended by adding at the end the following new section:

``SEC. 6430. TREATMENT OF TAX IMPOSED AT LEAKING UNDERGROUND STORAGE
TANK TRUST FUND FINANCING RATE.

``No refunds, credits, or payments shall be made under this
subchapter for any tax imposed at the Leaking Underground Storage Tank
Trust Fund financing rate, except in the case of fuels destined for
export.''.
(B) Clerical amendment.--The table of sections for
subchapter B of chapter 65 is amended by adding at the
end the following new item:

``Sec. 6430. Treatment of tax imposed at Leaking Underground Storage
Tank Trust Fund financing rate.''.

(c) Certain Refunds and Credits Not Charged to LUST Trust Fund.--
Subsection (c) of section 9508 (relating to Leaking Underground Storage
Tank Trust Fund) is amended to read as follows:
``(c) Expenditures.--Amounts in the Leaking Underground Storage Tank
Trust Fund shall be available, as provided in appropriation Acts, only
for purposes of making expenditures to carry out section 9003(h) of the
Solid Waste Disposal Act as in effect

[[Page 1060]]
119 STAT. 1060

on the date of the enactment of the Superfund Amendments and
Reauthorization Act of 1986.''.
(d) Effective NOTE: 26 USC 4041 note. Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall take effect on October 1,
2005.
(2) No exemption.--The amendments made by subsection (b)
shall apply to fuel entered, removed, or sold after September
30, 2005.

SEC. 1363. MODIFICATION OF RECAPTURE RULES FOR AMORTIZABLE SECTION 197
INTANGIBLES.

(a) In General.--Subsection (b) of section 1245 (relating to gain
from dispositions of certain depreciable property) is amended by adding
at the end the following new paragraph:
``(9) Disposition of amortizable section 197 intangibles.--
``(A) In general.--If a taxpayer disposes of more
than 1 amortizable section 197 intangible (as defined in
section 197(c)) in a transaction or a series of related
transactions, all such amortizable 197 intangibles shall
be treated as 1 section 1245 property for purposes of
this section.
``(B) Exception.--Subparagraph (A) shall not apply
to any amortizable section 197 intangible (as so
defined) with respect to which the adjusted basis
exceeds the fair market value.''.

(b) Effective Date.--The NOTE: 26 USC 1245 note. amendment made
by this section shall apply to dispositions of property after the date
of the enactment of this Act.

SEC. 1364. CLARIFICATION OF TIRE EXCISE TAX.

(a) In General.--Section 4072(e) (defining super single tire) is
amended by adding at the end the following: ``Such term shall not
include any tire designed for steering.''
(b) Effective Date.--The NOTE: 26 USC 4072 note. amendment made
by this section shall take effect as if included in section 869 of the
American Jobs Creation Act of 2004.

(c) Study.--
(1) In general.--With NOTE: Effective date. respect to
the 1-year period beginning on January 1, 2006, the Secretary of
the Treasury shall conduct a study to determine--
(A) the amount of tax collected during such period
under section 4071 of the Internal Revenue Code of 1986
with respect to each class of tire, and
(B) the number of tires in each such class on which
tax is imposed under such section during such period.
(2) Report.--Not later than July 1, 2007, the Secretary of
the Treasury shall submit to Congress a report on the study
conducted under paragraph (1).

[[Page 1061]]
119 STAT. 1061

TITLE XIV--MISCELLANEOUS

Subtitle A--In General

SEC. 1401. SENSE OF CONGRESS ON RISK ASSESSMENTS.

Subtitle B of title XXX of the Energy Policy Act of 1992 is amended
by adding at the end the following new section:

``SEC. 3022. NOTE: 42 USC 13557. SENSE OF CONGRESS ON RISK
ASSESSMENTS.

``It is the sense of Congress that Federal agencies conducting
assessments of risks to human health and the environment from energy
technology, production, transport, transmission, distribution, storage,
use, or conservation activities shall use sound and objective scientific
practices in assessing such risks, shall consider the best available
science (including peer reviewed studies), and shall include a
description of the weight of the scientific evidence concerning such
risks.''.

SEC. 1402. NOTE: 42 USC 16491. ENERGY PRODUCTION INCENTIVES.

(a) In General.--A State may provide to any entity--
(1) a credit against any tax or fee owed to the State under
a State law, or
(2) any other tax incentive,

determined by the State to be appropriate, in the amount calculated
under and in accordance with a formula determined by the State, for
production described in subsection (b) in the State by the entity that
receives such credit or such incentive.
(b) Eligible Entities.--Subsection
(a) NOTE: Applicability. shall apply with respect to the production
in the State of electricity from coal mined in the State and used in a
facility, if such production meets all applicable Federal and State laws
and if such facility uses scrubbers or other forms of clean coal
technology.

(c) Effect on Interstate Commerce.--Any action taken by a State in
accordance with this section with respect to a tax or fee payable, or
incentive applicable, for any period beginning after the date of the
enactment of this Act shall--
(1) be considered to be a reasonable regulation of commerce;
and
(2) not be considered to impose an undue burden on
interstate commerce or to otherwise impair, restrain, or
discriminate, against interstate commerce.

SEC. 1403. NOTE: 42 USC 16492. REGULATION OF CERTAIN OIL USED IN
TRANSFORMERS.

Notwithstanding any other provision of law, or rule promulgated by
the Environmental Protection Agency, vegetable oil made from soybeans
and used in electric transformers as thermal insulation shall not be
regulated as an oil identified under section 2(a)(1)(B) of the Edible
Oil Regulatory Reform Act (33 U.S.C. 2720(a)(1)(B)).

SEC. 1404. PETROCHEMICAL AND OIL REFINERY FACILITY HEALTH ASSESSMENT.

(a) Establishment.--The Secretary shall conduct a study of direct
and significant health impacts to persons resulting from living in
proximity to petrochemical and oil refinery facilities. The Secretary
shall consult with the Director of the National Cancer Institute and
other Federal Government bodies with expertise in

[[Page 1062]]
119 STAT. 1062

the field it deems appropriate in the design of such study. The study
shall be conducted according to sound and objective scientific practices
and present the weight of the scientific evidence. The Secretary shall
obtain scientific peer review of the draft study.
(b) Report to Congress.--The Secretary shall transmit the results of
the study to Congress within 6 months of the enactment of this section.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for activities under this section such
sums as are necessary for the completion of the study.

SEC. 1405. NOTE: 42 USC 16493. NATIONAL PRIORITY PROJECT
DESIGNATION.

(a) Designation of National Priority Projects.--
(1) In general.--There is established the National Priority
Project Designation (referred to in this section as the
``Designation''), which shall be evidenced by a medal bearing
the inscription ``National Priority Project''.
(2) Design and materials.--The medal shall be of such design
and materials and bear such additional inscriptions as the
President may prescribe.

(b) Making NOTE: President. and Presentation of Designation.--
(1) In general.--The President, on the basis of
recommendations made by the Secretary, shall annually designate
organizations that have--
(A) advanced the field of renewable energy
technology and contributed to North American energy
independence; and
(B) NOTE: Certification. been certified by the
Secretary under subsection (e).
(2) Presentation.--The President shall designate projects
with such ceremonies as the President may prescribe.
(3) Use of designation.--An organization that receives a
Designation under this section may publicize the Designation of
the organization as a National Priority Project in advertising.
(4) Categories in which the designation may be given.--
Separate Designations shall be made to qualifying projects in
each of the following categories:
(A) Wind and biomass energy generation projects.
(B) Photovoltaic and fuel cell energy generation
projects.
(C) Energy efficient building and renewable energy
projects.
(D) First-in-Class projects.

(c) Selection Criteria.--
(1) In general.--Certification and selection of the projects
to receive the Designation shall be based on criteria
established under this subsection.
(2) Wind, biomass, and building projects.--In the case of a
wind, biomass, or building project, the project shall
demonstrate that the project will install not less than 30
megawatts of renewable energy generation capacity.
(3) Solar photovoltaic and fuel cell projects.--In the case
of a solar photovoltaic or fuel cell project, the project shall
demonstrate that the project will install not less than 3
megawatts of renewable energy generation capacity.

[[Page 1063]]
119 STAT. 1063

(4) Energy efficient building and renewable energy
projects.--In the case of an energy efficient building or
renewable energy project, in addition to meeting the criteria
established under paragraph (2), each building project shall
demonstrate that the project will--
(A) comply with third-party certification standards
for high-performance, sustainable buildings;
(B) use whole-building integration of energy
efficiency and environmental performance design and
technology, including advanced building controls;
(C) use renewable energy for at least 50 percent of
the energy consumption of the project;
(D) comply with applicable Energy Star standards;
and
(E) include at least 5,000,000 square feet of
enclosed space.
(5) First-in-class use.--Notwithstanding paragraphs (2)
through (4), a new building project may qualify under this
section if the Secretary determines that the project--
(A) represents a First-In-Class use of renewable
energy; or
(B) otherwise establishes a new paradigm of building
integrated renewable energy use or energy efficiency.

(d) Application.--
(1) Initial applications.--No NOTE: Deadline. Federal
Register, publication. Guidelines. later than 120 days after
the date of enactment of this Act, and annually thereafter, the
Secretary shall publish in the Federal Register an invitation
and guidelines for submitting applications, consistent with this
section.
(2) Contents.--The application shall describe the project,
or planned project, and the plans to meet the criteria
established under subsection (c).

(e) Certification.--
(1) In general.--Not NOTE: Deadline. later than 60 days
after the application period described in subsection (d), and
annually thereafter, the Secretary shall certify projects that
are reasonably expected to meet the criteria established under
subsection (c).
(2) Certified projects.--The Secretary shall designate
personnel of the Department to work with persons carrying out
each certified project and ensure that the personnel--
(A) provide each certified project with guidance in
meeting the criteria established under subsection (c);
(B) identify programs of the Department, including
National Laboratories and Technology Centers, that will
assist each project in meeting the criteria established
under subsection (c); and
(C) ensure that knowledge and transfer of the most
current technology between the applicable resources of
the Federal Government (including the National
Laboratories and Technology Centers, the Department, and
the Environmental Protection Agency) and the certified
projects is being facilitated to accelerate
commercialization of work developed through those
resources.

(f) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section for
each of fiscal years 2006 through 2010.

[[Page 1064]]
119 STAT. 1064

SEC. 1406. COLD CRACKING.

(a) Study.--The Secretary shall conduct a study of the application
of radiation to petroleum at standard temperature and pressure to refine
petroleum products, whose objective shall be to increase the economic
yield from each barrel of oil.
(b) Goals.--The goals of the study shall include--
(1) increasing the value of our current oil supply;
(2) reducing the capital investment cost for cracking oil;
(3) reducing the operating energy cost for cracking oil; and
(4) reducing sulfur content using an environmentally
responsible method.

(c) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $250,000 for fiscal year 2006.

SEC. 1407. NOTE: 42 USC 16494. OXYGEN-FUEL.

(a) Program.--The Secretary shall establish a program on oxygen-fuel
systems. If feasible, the program shall include renovation of at least
one existing large unit and one existing small unit, and construction of
one new large unit and one new small unit.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for carrying out this section--
(1) $100,000,000 for fiscal year 2006;
(2) $100,000,000 for fiscal year 2007; and
(3) $100,000,000 for fiscal year 2008.

(c) Definitions.--For purposes of this section--
(1) the term ``large unit'' means a unit with a generating
capacity of 100 megawatts or more;
(2) the term ``oxygen-fuel systems'' means systems that
utilize fuel efficiency benefits of oil, gas, coal, and biomass
combustion using substantially pure oxygen, with high flame
temperatures and the exclusion of air from the boiler, in
industrial or electric utility steam generating units; and
(3) the term ``small unit'' means a unit with a generating
capacity in the 10-50 megawatt range.

Subtitle B--Set NOTE: Set America Free Act of
2005. Canada. Mexico. America Free

SEC. 1421. SHORT TITLE.

This subtitle may be cited as the ``Set America Free Act of 2005''
or the ``SAFE Act''.

SEC. 1422. PURPOSE.

The purpose of this subtitle is to establish a United States
commission to make recommendations for a coordinated and comprehensive
North American energy policy that will achieve energy self-sufficiency
by 2025 within the three contiguous North American nation area of
Canada, Mexico, and the United States.

SEC. 1423. UNITED STATES COMMISSION ON NORTH AMERICAN ENERGY FREEDOM.

(a) Establishment.--There is hereby established the United States
Commission on North American Energy Freedom (in this subtitle referred
to as the ``Commission''). The Federal Advisory

[[Page 1065]]
119 STAT. 1065

Committee Act (5 U.S.C. App.), except sections 3, 7, and 12, does not
apply to the Commission.
(b) NOTE: President. Membership.--
(1) Appointment.--The Commission shall be composed of 16
members appointed by the President from among individuals
described in paragraph (2) who are knowledgeable on energy
issues, including oil and gas exploration and production, crude
oil refining, oil and gas pipelines, electricity production and
transmission, coal, unconventional hydrocarbon resources, fuel
cells, motor vehicle power systems, nuclear energy, renewable
energy, biofuels, energy efficiency, and energy conservation.
The membership of the Commission shall be balanced by area of
expertise to the extent consistent with maintaining the highest
level of expertise on the Commission. Members of the Commission
may be citizens of Canada, Mexico, or the United States, and the
President shall ensure that citizens of all three nations are
appointed to the Commission.
(2) Nominations.--The NOTE: Deadline. President shall
appoint the members of the Commission within 60 days after the
effective date of this Act, including individuals nominated as
follows:
(A) Four members shall be appointed from amongst
individuals independently determined by the President to
be qualified for appointment.
(B) Four members shall be appointed from a list of
eight individuals who shall be nominated by the majority
leader of the Senate in consultation with the chairman
of the Committee on Energy and Natural Resources of the
Senate.
(C) Four members shall be appointed from a list of
eight individuals who shall be nominated by the Speaker
of the House of Representatives in consultation with the
chairmen of the Committees on Energy and Commerce and
Resources of the House of Representatives.
(D) Two members shall be appointed from a list of
four individuals who shall be nominated by the minority
leader of the Senate in consultation with the ranking
Member of the Committee on Energy and Natural Resources
of the Senate.
(E) Two members shall be appointed from a list of
four individuals who shall be nominated by the minority
leader of the House in consultation with the ranking
Members of the Committees on Energy and Commerce and
Resources of the House of Representatives.
(3) Chairman.--The chairman of the Commission shall be
selected by the President. The chairman of the Commission shall
be responsible for--
(A) the assignment of duties and responsibilities
among staff personnel and their continuing supervision;
and
(B) the use and expenditure of funds available to
the Commission.
(4) Vacancies.--Any vacancy on the Commission shall be
filled in the same manner as the original incumbent was
appointed.

(c) Resources.--In carrying out its functions under this section,
the Commission--
(1) is authorized to secure directly from any Federal agency
or department any information it deems necessary to carry

[[Page 1066]]
119 STAT. 1066

out its functions under this Act, and each such agency or
department is authorized to cooperate with the Commission and,
to the extent permitted by law, to furnish such information
(other than information described in section 552(b)(1)(A) of
title 5, United States Code) to the Commission, upon the request
of the Commission;
(2) may enter into contracts, subject to the availability of
appropriations for contracting, and employ such staff experts
and consultants as may be necessary to carry out the duties of
the Commission, as provided by section 3109 of title 5, United
States Code; and
(3) NOTE: Establishment. shall establish a
multidisciplinary science and technical advisory panel of
experts in the field of energy to assist the Commission in
preparing its report, including ensuring that the scientific and
technical information considered by the Commission is based on
the best scientific and technical information available.

(d) Staffing.--The chairman of the Commission may, without regard to
the civil service laws and regulations, appoint and terminate an
executive director and such other additional personnel as may be
necessary for the Commission to perform its duties. The executive
director shall be compensated at a rate not to exceed the rate payable
for Level IV of the Executive Schedule under chapter 5136 of title 5,
United States Code. The chairman shall select staff from among qualified
citizens of Canada, Mexico, and the United States of America.
(e) Meetings.--
(1) Administration.--All meetings of the Commission shall be
open to the public, except that a meeting or any portion of it
may be closed to the public if it concerns matters or
information described in section 552b(c) of title 5, United
States Code. Interested persons shall be permitted to appear at
open meetings and present oral or written statements on the
subject matter of the meeting. The Commission may administer
oaths or affirmations to any person appearing before it.
(2) Notice; minutes; public availability of documents.--
(A) Notice.--All open meetings of the Commission
shall be preceded by timely public notice in the Federal
Register of the time, place, and subject of the meeting.
(B) Minutes.--Minutes of each meeting shall be kept
and shall contain a record of the people present, a
description of the discussion that occurred, and copies
of all statements filed. Subject to section 552 of title
5, United States Code, the minutes and records of all
meetings and other documents that were made available to
or prepared for the Commission shall be available for
public inspection and copying at a single location in
the offices of the Commission.
(3) Initial meeting.--The NOTE: Deadline. Commission
shall hold its first meeting within 30 days after all 16 members
have been appointed.

(f) Report.--Within 12 months after the effective date of this Act,
the Commission shall submit to Congress and the President a final report
of its findings and recommendations regarding North American energy
freedom.

[[Page 1067]]
119 STAT. 1067

(g) Administrative Procedure for Report and Review.--Chapter 5 and
chapter 7 of title 5, United States Code, do not apply to the
preparation, review, or submission of the report required by subsection
(f).
(h) Termination.--The Commission shall cease to exist 90 days after
the date on which it submits its final report.
(i) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this chapter a total of $10,000,000 for the 2
fiscal-year period beginning with fiscal year 2005, such sums to remain
available until expended.

SEC. 1424. NOTE: Deadline. President. NORTH AMERICAN ENERGY FREEDOM
POLICY.

Within 90 days after receiving and considering the report and
recommendations of the Commission under section 1423, the President
shall submit to Congress a statement of proposals to implement or
respond to the Commission's recommendations for a coordinated,
comprehensive, and long-range national policy to achieve North American
energy freedom by 2025.

TITLE XV--ETHANOL AND MOTOR FUELS

Subtitle A--General Provisions

SEC. 1501. RENEWABLE CONTENT OF GASOLINE.

(a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545)
is amended--
(1) by redesignating subsection (o) as subsection (r); 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.
The term also includes any ethanol produced in
facilities where animal wastes or other waste materials
are digested or otherwise used to displace 90 percent or
more of the fossil fuel normally used in the production
of ethanol.
``(B) Waste derived ethanol.--The term `waste
derived ethanol' means ethanol derived from--
``(i) animal wastes, including poultry fats
and poultry wastes, and other waste materials; or
``(ii) municipal solid waste.
``(C) Renewable fuel.--

[[Page 1068]]
119 STAT. 1068

``(i) In general.--The term `renewable fuel'
means motor vehicle fuel that--
``(I)(aa) is produced from grain,
starch, oilseeds, vegetable, animal, or
fish materials including fats, greases,
and oils, sugarcane, sugar beets, sugar
components, tobacco, potatoes, 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--
``(I) cellulosic biomass ethanol and
`waste derived ethanol'; and
``(II) 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).
``(D) Small refinery.--The term `small refinery'
means a refinery for which the average aggregate daily
crude oil throughput for a 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) Regulations.--
``(i) In general.--
Not NOTE: Deadline. later than 1 year after
the date of enactment of this paragraph, the
Administrator shall promulgate regulations to
ensure that gasoline sold or introduced into
commerce in the United States (except in
noncontiguous States or territories), on an annual
average basis, contains the applicable volume of
renewable fuel determined in accordance with
subparagraph (B).
``(ii) Noncontiguous state opt-in.--
``(I) In general.--On the petition
of a noncontiguous State or territory,
the Administrator may allow the
renewable fuel program established under
this subsection to apply in the
noncontiguous State or territory at the
same time or any time after the
Administrator promulgates regulations
under this subparagraph.
``(II) Other actions.--In carrying
out this clause, the Administrator may--
``(aa) issue or revise
regulations under this
paragraph;
``(bb) establish applicable
percentages under paragraph (3);

[[Page 1069]]
119 STAT. 1069

``(cc) provide for the
generation of credits under
paragraph (5); and
``(dd) take such other
actions as are necessary to
allow for the application of the
renewable fuels program in a
noncontiguous State or
territory.
``(iii) Provisions of regulations.--Regardless
of the date of promulgation, the regulations
promulgated under clause (i)--
``(I) shall contain compliance
provisions applicable to refineries,
blenders, distributors, and importers,
as appropriate, to ensure that the
requirements of this paragraph are met;
but
``(II) shall not--
``(aa) restrict geographic
areas in which renewable fuel
may be used; or
``(bb) impose any per-gallon
obligation for the use of
renewable fuel.
``(iv) Requirement in case of failure to
promulgate regulations.--If the Administrator does
not promulgate regulations under clause (i), the
percentage of renewable fuel in gasoline sold or
dispensed to consumers in the United States, on a
volume basis, shall be 2.78 percent for calendar
year 2006.
``(B) Applicable volume.--
``(i) Calendar years 2006 through 2012.--For
the purpose of subparagraph (A), the applicable
volume for any of calendar years 2006 through 2012
shall be determined in accordance with the
following table:

Applicable volume of renewable fuel.......
``Calendar yea(in billions of gallons):.................
2006                                                 4.0
2007                                                 4.7
2008                                                 5.4
2009                                                 6.1
2010                                                 6.8
2011                                                 7.4
2012                                                7.5.

``(ii) Calendar year 2013 and thereafter.--
Subject to clauses (iii) and (iv), for the
purposes of subparagraph (A), the applicable
volume for calendar year 2013 and each calendar
year thereafter shall be determined by the
Administrator, in coordination with the Secretary
of Agriculture and the Secretary of Energy, based
on a review of the implementation of the program
during calendar years 2006 through 2012, including
a review of--
``(I) the impact of the use of
renewable fuels on the environment, air
quality, energy security, job creation,
and rural economic development; and
``(II) the expected annual rate of
future production of renewable fuels,
including cellulosic ethanol.

[[Page 1070]]
119 STAT. 1070

``(iii) Minimum quantity derived from
cellulosic biomass.--For calendar year 2013 and
each calendar year thereafter--
``(I) the applicable volume referred
to in clause (ii) shall contain a
minimum of 250,000,000 gallons that are
derived from cellulosic biomass; and
``(II) the 2.5-to-1 ratio referred
to in paragraph (4) shall not apply.
``(iv) Minimum applicable volume.--For the
purpose of subparagraph (A), the applicable volume
for calendar year 2013 and each calendar year
thereafter shall be equal to the product obtained
by multiplying--
``(I) the number of gallons of
gasoline that the Administrator
estimates will be sold or introduced
into commerce in the calendar year; and
``(II) the ratio that--
``(aa) 7,500,000,000 gallons
of renewable fuel; bears to
``(bb) the number of gallons
of gasoline sold or introduced
into commerce in calendar year
2012.
``(3) Applicable NOTE: Deadlines. percentages.--
``(A) Provision of estimate of volumes of gasoline
sales.--Not later than October 31 of each of calendar
years 2005 through 2011, the Administrator of the Energy
Information Administration shall provide to the
Administrator of the Environmental Protection Agency an
estimate, with respect to the following calendar year,
of the volumes of gasoline projected to be sold or
introduced into commerce in the United States.
``(B) Determination of applicable percentages.--
``(i) In general.--Not later than November 30
of each of calendar years 2005 through 2012, based
on the estimate provided under subparagraph (A),
the Administrator of the Environmental Protection
Agency shall determine and publish in the Federal
Register, with respect to the following calendar
year, the renewable fuel obligation that ensures
that the requirements of paragraph (2) are met.
``(ii) Required elements.--The renewable fuel
obligation determined for a calendar year under
clause (i) shall--
``(I) be applicable to refineries,
blenders, and importers, as appropriate;
``(II) be expressed in terms of a
volume percentage of gasoline sold or
introduced into commerce in the United
States; and
``(III) subject to subparagraph
(C)(i), consist of a single applicable
percentage that applies to all
categories of persons specified in
subclause (I).
``(C) Adjustments.--In determining the applicable
percentage for a calendar year, the Administrator shall
make adjustments--
``(i) to prevent the imposition of redundant
obligations on any person specified in
subparagraph (B)(ii)(I); and

[[Page 1071]]
119 STAT. 1071

``(ii) to account for the use of renewable
fuel during the previous calendar year by small
refineries that are exempt under paragraph (9).
``(4) Cellulosic biomass ethanol or waste derived ethanol.--
For the purpose of paragraph (2), 1 gallon of cellulosic biomass
ethanol or waste derived ethanol shall be considered to be the
equivalent of 2.5 gallons of renewable fuel.
``(5) Credit program.--
``(A) In general.--The regulations promulgated under
paragraph (2)(A) shall provide--
``(i) 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);
``(ii) for the generation of an appropriate
amount of credits for biodiesel; and
``(iii) for the generation of credits by small
refineries in accordance with paragraph (9)(C).
``(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) Duration of credits.--A credit generated under
this paragraph shall be valid to show compliance for the
12 months as of the date of generation.
``(D) Inability to generate or purchase sufficient
credits.--The regulations promulgated under paragraph
(2)(A) shall include provisions allowing any person that
is unable to generate or purchase sufficient credits to
meet the requirements of paragraph (2) to carry forward
a renewable fuel deficit on condition that the person,
in the calendar year following the year in which the
renewable fuel deficit is created--
``(i) achieves compliance with the renewable
fuel requirement under paragraph (2); and
``(ii) generates or purchases additional
renewable fuel credits to offset the renewable
fuel deficit of the previous year.
``(6) Seasonal variations in renewable fuel use.--
``(A) Study.--For each of calendar years 2006
through 2012, the Administrator of the Energy
Information Administration shall conduct a study of
renewable fuel blending to determine whether there are
excessive seasonal variations in the use of renewable
fuel.
``(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 of the
Environmental Protection Agency shall promulgate
regulations to ensure that 25 percent or more of the
quantity of renewable fuel necessary to meet the
requirements of paragraph (2) is used during each of the
2 periods specified in subparagraph (D) of each
subsequent calendar year.
``(C) Determinations.--The determinations referred
to in subparagraph (B) are that--

[[Page 1072]]
119 STAT. 1072

``(i) less than 25 percent of the quantity of
renewable fuel necessary to meet the requirements
of paragraph (2) has been used during 1 of the 2
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 25 percent or more
seasonal use of renewable fuels will not prevent
or interfere with the attainment of national
ambient air quality standards or significantly
increase the price of motor fuels to the consumer.
``(D) Periods.--The 2 periods referred to in this
paragraph are--
``(i) April through September; and
``(ii) January through March and October
through December.
``(E) Exclusion.--Renewable fuel blended or consumed
in calendar year 2006 in a State that has received a
waiver under section 209(b) shall not be included in the
study under subparagraph (A).
``(F) State exemption from seasonality
requirements.--Notwithstanding any other provision of
law, the seasonality requirement relating to renewable
fuel use established by this paragraph shall not apply
to any State that has received a waiver under section
209(b) or any State dependent on refineries in such
State for gasoline supplies.
``(7) Waivers.--
``(A) In general.--The Administrator, in
consultation with the Secretary of Agriculture and the
Secretary of Energy, may waive the requirements 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 paragraph (2)--
``(i) based on a determination by the
Administrator, after public notice and opportunity
for comment, that implementation of the
requirement would severely harm the economy or
environment of a State, a region, or the United
States; or
``(ii) based on a determination by the
Administrator, after public notice and opportunity
for comment, that there is an inadequate domestic
supply.
``(B) Petitions for waivers.--
The NOTE: Deadline. 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 requirements of paragraph (2) within 90
days after the date on which the petition is received by
the Administrator.
``(C) Termination of waivers.--A waiver granted
under subparagraph (A) shall terminate after 1 year, but
may be renewed by the Administrator after consultation
with the Secretary of Agriculture and the Secretary of
Energy.
``(8) Study and waiver for initial year of program.--

[[Page 1073]]
119 STAT. 1073

``(A) In general.--Not NOTE: Deadline. later
than 180 days after the date of enactment of this
paragraph, the Secretary of Energy shall conduct for the
Administrator a study assessing whether the renewable
fuel requirement under paragraph (2) will likely result
in significant adverse impacts on consumers in 2006, on
a national, regional, or State basis.
``(B) Required evaluations.--The study shall
evaluate renewable fuel--
``(i) supplies and prices;
``(ii) blendstock supplies; and
``(iii) supply and distribution system
capabilities.
``(C) Recommendations by the secretary.--Based on
the results of the study, the Secretary of Energy shall
make specific recommendations to the Administrator
concerning waiver of the requirements of paragraph (2),
in whole or in part, to prevent any adverse impacts
described in subparagraph (A).
``(D) Waiver.--
``(i) In general.--
Not NOTE: Deadline. later than 270 days after
the date of enactment of this paragraph, the
Administrator shall, if and to the extent
recommended by the Secretary of Energy under
subparagraph (C), waive, in whole or in part, the
renewable fuel requirement under paragraph (2) by
reducing the national quantity of renewable fuel
required under paragraph (2) in calendar year
2006.
``(ii) No effect on waiver authority.--Clause
(i) does not limit the authority of the
Administrator to waive the requirements of
paragraph (2) in whole, or in part, under
paragraph (7).
``(9) Small refineries.--
``(A) Temporary exemption.--
``(i) In general.--The requirements of
paragraph (2) shall not apply to small refineries
until calendar year 2011.
``(ii) Extension of exemption.--
``(I) NOTE: Deadline. Study by
secretary of energy.--Not later than
December 31, 2008, the Secretary of
Energy shall conduct for the
Administrator a study to determine
whether compliance with the requirements
of paragraph (2) would impose a
disproportionate economic hardship on
small refineries.
``(II) Extension of exemption.--In
the case of a small refinery that the
Secretary of Energy determines under
subclause (I) would be subject to a
disproportionate economic hardship if
required to comply with paragraph (2),
the Administrator shall extend the
exemption under clause (i) for the small
refinery for a period of not less than 2
additional years.
``(B) Petitions based on disproportionate economic
hardship.--
``(i) Extension of exemption.--A small
refinery may at any time petition the
Administrator for an extension of the exemption
under subparagraph (A) for the reason of
disproportionate economic hardship.

[[Page 1074]]
119 STAT. 1074

``(ii) Evaluation of petitions.--In evaluating
a petition under clause (i), the Administrator, in
consultation with the Secretary of Energy, shall
consider the findings of the study under
subparagraph (A)(ii) and other economic factors.
``(iii) 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 date of receipt of
the petition.
``(C) Credit program.--If a small refinery notifies
the Administrator that the small refinery waives the
exemption under subparagraph (A), the regulations
promulgated under paragraph (2)(A) shall provide for the
generation of credits by the small refinery under
paragraph (5) beginning in the calendar year following
the date of notification.
``(D) Opt-in for small refineries.--A small refinery
shall be subject to the requirements of paragraph (2) if
the small refinery notifies the Administrator that the
small refinery waives the exemption under subparagraph
(A).
``(10) Ethanol market concentration analysis.--
``(A) Analysis.--
``(i) In general.--
Not NOTE: Deadline. later than 180 days after
the date of enactment of this paragraph, and
annually thereafter, the Federal Trade Commission
shall perform a market concentration analysis of
the ethanol production industry using the
Herfindahl-Hirschman Index to determine whether
there is sufficient competition among industry
participants to avoid price-setting and other
anticompetitive behavior.
``(ii) Scoring.--For the purpose of scoring
under clause (i) using the Herfindahl-Hirschman
Index, all marketing arrangements among industry
participants shall be considered.
``(B) Report.--Not later than December 1, 2005, and
annually thereafter, the Federal Trade Commission shall
submit to Congress and the Administrator a report on the
results of the market concentration analysis performed
under subparagraph (A)(i).''.

(b) Penalties and Enforcement.--Section 211(d) of the Clean Air Act
(42 U.S.C. 7545(d)) is amended--
(1) in paragraph (1)--
(A) in the first sentence, by striking ``or (n)''
each place it appears and inserting ``(n), or (o)''; and
(B) in the second sentence, by striking ``or (m)''
and inserting ``(m), or (o)''; and
(2) in the first sentence of paragraph (2), by striking
``and (n)'' each place it appears and inserting ``(n), and
(o)''.

(c) Exclusion From Ethanol Waiver.--Section 211(h) of the Clean Air
Act (42 U.S.C. 7545(h)) is amended--
(1) by redesignating paragraph (5) as paragraph (6); and
(2) by inserting after paragraph (4) the following:
``(5) Exclusion from ethanol waiver.--
``(A) Promulgation
of NOTE: Notification. regulations.--Upon
notification, accompanied by supporting documentation,
from the Governor of a State that the Reid vapor
pressure limitation established by paragraph (4) will
increase emissions that contribute to air pollution in
any area in the State, the

[[Page 1075]]
119 STAT. 1075

Administrator shall, by regulation, apply, in lieu of
the Reid vapor pressure limitation established by
paragraph (4), the Reid vapor pressure limitation
established by paragraph (1) to all fuel blends
containing gasoline and 10 percent denatured anhydrous
ethanol that are sold, offered for sale, dispensed,
supplied, offered for supply, transported, or introduced
into commerce in the area during the high ozone season.
``(B) Deadline for promulgation.--The Administrator
shall promulgate regulations under subparagraph (A) not
later than 90 days after the date of receipt of a
notification from a Governor under that subparagraph.
``(C) Effective date.--
``(i) In general.--With respect to an area in
a State for which the Governor submits a
notification under subparagraph (A), the
regulations under that subparagraph shall take
effect on the later of--
``(I) the first day of the first
high ozone season for the area that
begins after the date of receipt of the
notification; or
``(II) 1 year after the date of
receipt of the notification.
``(ii) Extension of effective date based on
determination of insufficient supply.--
``(I) In general.--
If, NOTE: Regulations. after receipt
of a notification with respect to an
area from a Governor of a State under
subparagraph (A), the Administrator
determines, on the Administrator's own
motion or on petition of any person and
after consultation with the Secretary of
Energy, that the promulgation of
regulations described in subparagraph
(A) would result in an insufficient
supply of gasoline in the State, the
Administrator, by regulation--
``(aa) shall extend the
effective date of the
regulations under clause (i)
with respect to the area for not
more than 1 year; and
``(bb) may renew the
extension under item (aa) for
two additional periods, each of
which shall not exceed 1 year.
``(II) Deadline for action on
petitions.--The Administrator shall act
on any petition submitted under
subclause (I) not later than 180 days
after the date of receipt of the
petition.''.

(d) Survey NOTE: 47 USC 7545 note. 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 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

[[Page 1076]]
119 STAT. 1076

(iv) reformulated gasoline containing
renewable fuel; and
(B) submit to Congress, and make publicly available,
a report on the results of the survey under subparagraph
(A).
(2) Recordkeeping and reporting requirements.--The
Administrator of the Environmental Protection Agency
(hereinafter in this subsection referred to as the
``Administrator'') may require any refiner, blender, or importer
to keep such records and make such reports as are necessary to
ensure that the survey conducted under paragraph (1) is
accurate. The Administrator, to avoid duplicative requirements,
shall rely, to the extent practicable, on existing reporting and
recordkeeping requirements and other information available to
the Administrator including gasoline distribution patterns that
include multistate use areas.
(3) Applicable law.--Activities carried out under this
subsection shall be conducted in a manner designed to protect
confidentiality of individual responses.

SEC. 1502. NOTE: 42 USC 7545 note. FINDINGS.

Congress finds that--
(1) since 1979, methyl tertiary butyl ether (hereinafter in
this section referred to as ``MTBE'') has been used nationwide
at low levels in gasoline to replace lead as an octane booster
or anti-knocking agent;
(2) Public Law 101-549 (commonly known as the ``Clean Air
Act Amendments of 1990'') (42 U.S.C. 7401 et seq.) established a
fuel oxygenate standard under which reformulated gasoline must
contain at least 2 percent oxygen by weight; and
(3) 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.

SEC. 1503. NOTE: 42 USC 7545 note. CLAIMS FILED AFTER ENACTMENT.

Claims and legal actions filed after the date of enactment of this
Act related to allegations involving actual or threatened contamination
of methyl tertiary butyl ether (MTBE) may be removed to the appropriate
United States district court.

SEC. 1504. 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); and
(C) in paragraph (7)--

[[Page 1077]]
119 STAT. 1077

(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).
(2) Applicability.--The NOTE: Effective dates. 42 USC 7545
note. amendments made by paragraph (1) apply--
(A) in the case of a State that has received a
waiver under section 209(b) of the Clean Air Act (42
U.S.C. 7543(b)), beginning on the date of enactment of
this Act; and
(B) in the case of any other State, beginning 270
days after the date of enactment of this 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 NOTE: Deadline. 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) Definition of padd.--In this
subparagraph the term `PADD' means a Petroleum
Administration for Defense District.
``(ii)
Regulations NOTE: Deadline. concerning
emissions of toxic air pollutants.--Not later than
270 days after the date of enactment of this
subparagraph, the Administrator shall establish by
regulation, for each refinery or importer (other
than a refiner or importer in a State that has
received a waiver under section 209(b) with
respect to gasoline produced for use in that
State), standards for toxic air pollutants from
use of the reformulated gasoline produced or
distributed by the refiner or importer that
maintain the reduction of the average annual
aggregate emissions of toxic air pollutants for
reformulated gasoline produced or distributed by
the refiner or importer during calendar years 2001
and 2002 (as determined on the basis of data
collected by the Administrator with respect to the
refiner or importer).
``(iii) Standards applicable to specific
refineries or importers.--
``(I) Applicability of standards.--
For any calendar year, the standards
applicable to a refiner or importer
under clause (ii) shall apply to the
quantity of gasoline produced or
distributed by the refiner 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 refiner or importer
during calendar years 2001 and 2002.

[[Page 1078]]
119 STAT. 1078

``(II) Applicability of other
standards.--For any calendar year, the
quantity of gasoline produced or
distributed by a refiner or importer
that is in excess of the quantity
subject to subclause (I) shall be
subject to standards for emissions of
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 NOTE: Deadlines. Federal
Register, publication. Reports. 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 2001 and
2002; 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 2001 and 2002, 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) NOTE: Effective
dates. Regulations. 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 refiner or importer
shall meet the standards
applicable under clause (iii)(I)
beginning not later than April 1
of the calendar year following
publication of the report under
subclause (I) and in each
calendar year thereafter.
``(vi) NOTE: Deadline. Regulations. Not
later than July 1, 2007, the Administrator shall
promulgate final regulations to control hazardous

[[Page 1079]]
119 STAT. 1079

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), and as authorized under section
202(1) of the Clean Air Act. If the Administrator
promulgates by such date, final regulations to
control hazardous air pollutants from motor
vehicles and motor vehicle fuels that achieve and
maintain greater overall reductions in emissions
of air toxics from reformulated gasoline than the
reductions that would be achieved under section
211(k)(1)(B) of the Clean Air Act as amended by
this clause, then sections 211(k)(1)(B)(i) through
211(k)(1)(B)(v) shall be null and void and
regulations promulgated thereunder shall be
rescinded and have no further effect.''.

(c) Consolidation in NOTE: Deadline. Reformulated Gasoline
Regulations.--Not later than 180 days after the date of enactment of
this Act, the Administrator of the Environmental Protection Agency shall
revise the reformulated gasoline regulations under subpart D of part 80
of title 40, Code of Federal Regulations, to consolidate the regulations
applicable to VOC-Control Regions 1 and 2 under section 80.41 of that
title by eliminating the less stringent requirements applicable to
gasoline designated for VOC-Control Region 2 and instead applying the
more stringent requirements applicable to gasoline designated for VOC-
Control Region 1.

(d) Savings NOTE: 42 USC 7545 note. Clause.--
(1) In general.--Nothing in this section or any amendment
made by this section affects or prejudices any legal claim or
action with respect to regulations promulgated by the
Administrator before the date of enactment of this Act
regarding--
(A) emissions of toxic air pollutants from motor
vehicles; or
(B) the adjustment of standards applicable to a
specific refinery or importer made under those
regulations.
(2) Adjustment of standards.--
(A) Applicability.--The Administrator may apply any
adjustments to the standards applicable to a refinery or
importer under subparagraph (B)(iii)(I) of section
211(k)(1) of the Clean Air Act (as added by subsection
(b)(2)), except that--
(i) the Administrator shall revise the
adjustments to be based only on calendar years
1999 and 2000;
(ii) 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 and 2000; and
(iii) in the case of an adjustment based on
toxic air pollutant emissions from reformulated
gasoline significantly below the national annual
average emissions of toxic air pollutants from all
reformulated gasoline--
(I) the Administrator may revise the
adjustment to take account of the scope
of the prohibition on methyl tertiary
butyl ether imposed by a State; and

[[Page 1080]]
119 STAT. 1080

(II) any such adjustment shall
require the refiner or importer, to the
maximum extent practicable, to maintain
the reduction achieved during calendar
years 1999 and 2000 in the average
annual aggregate emissions of toxic air
pollutants from reformulated gasoline
produced or distributed by the refiner
or importer.

SEC. 1505. PUBLIC HEALTH AND ENVIRONMENTAL IMPACTS OF FUELS AND FUEL
ADDITIVES.

Section 211(b) of the Clean Air Act (42 U.S.C. 7545(b)) is amended--
(1) in paragraph (2)--
(A) by striking ``may also'' and inserting ``shall,
on a regular basis,''; and
(B) by striking subparagraph (A) and inserting the
following:
``(A) to conduct tests to determine potential public
health and environmental effects of the fuel or additive
(including carcinogenic, teratogenic, or mutagenic
effects); and''; and
(2) by adding at the end the following:
``(4) Study on certain fuel additives and blendstocks.--
``(A) In general.--Not NOTE: Deadline. later
than 2 years after the date of enactment of this
paragraph, the Administrator shall--
``(i) conduct a study on the effects on public
health (including the effects on children,
pregnant women, minority or low-income
communities, and other sensitive populations), air
quality, and water resources of increased use of,
and the feasibility of using as substitutes for
methyl tertiary butyl ether in gasoline--
``(I) ethyl tertiary butyl ether;
``(II) tertiary amyl methyl ether;
``(III) di-isopropyl ether;
``(IV) tertiary butyl alcohol;
``(V) other ethers and heavy
alcohols, as determined by then
Administrator;
``(VI) ethanol;
``(VII) iso-octane; and
``(VIII) alkylates; and
``(ii) conduct a study on the effects on
public health (including the effects on children,
pregnant women, minority or low-income
communities, and other sensitive populations), air
quality, and water resources of the adjustment for
ethanol-blended reformulated gasoline to the
volatile organic compounds performance
requirements that are applicable under paragraphs
(1) and (3) of section 211(k); and
``(iii) NOTE: Reports. submit to the
Committee on Environment and Public Works of the
Senate and the Committee on Energy and Commerce of
the House of Representatives a report describing
the results of the studies under clauses (i) and
(ii).

[[Page 1081]]
119 STAT. 1081

``(B) Contracts for study.--In carrying out this
paragraph, the Administrator may enter into one or more
contracts with nongovernmental entities such as--
``(i) the national energy laboratories; and
``(ii) institutions of higher education (as
defined in section 101 of the Higher Education Act
of 1965 (20 U.S.C. 1001)).''.

SEC. 1506. NOTE: Deadlines. ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by
inserting after subsection (p) the following:
``(q) Analyses of NOTE: Publication. Motor Vehicle Fuel Changes
and Emissions Model.--
``(1) Anti-backsliding analysis.--
``(A) Draft analysis.--Not NOTE: Public
information. 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
the Energy Policy Act of 2005.
``(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 section,
not later than 4 years after the date of enactment of this
paragraph, the Administrator shall develop and finalize an
emissions model that reflects, to the maximum extent
practicable, the effects of gasoline characteristics or
components on emissions from vehicles in the motor vehicle fleet
during calendar year 2007.
``(3) Permeation effects study.--
``(A) In general.--Not later than 1 year after the
date of enactment of this paragraph, the Administrator
shall conduct a study, and report to Congress the
results of the study, on the effects of ethanol content
in gasoline on permeation, the process by which fuel
molecules migrate through the elastomeric materials
(rubber and plastic parts) that make up the fuel and
fuel vapor systems of a motor vehicle.
``(B) Evaporative emissions.--The study shall
include estimates of the increase in total evaporative
emissions likely to result from the use of gasoline with
ethanol content in a motor vehicle, and the fleet of
motor vehicles, due to permeation.''.

SEC. 1507. ADDITIONAL OPT-IN AREAS UNDER REFORMULATED GASOLINE PROGRAM.

Section 211(k)(6) of the Clean Air Act (42 U.S.C. 7545(k)(6)) is
amended--
(1) by striking ``(6) Opt-in areas.--(A) Upon'' and
inserting the following:
``(6) Opt-in areas.--
``(A) Classified areas.--
``(i) In general.--Upon'';
(2) in subparagraph (B), by striking ``(B) If'' and
inserting the following:

[[Page 1082]]
119 STAT. 1082

``(ii) Effect of insufficient domestic
capacity to produce reformulated gasoline.--If'';
(3) in subparagraph (A)(ii) (as redesignated by paragraph
(2))--
(A) in the first sentence, by striking
``subparagraph (A)'' and inserting ``clause (i)''; and
(B) in the second sentence, by striking ``this
paragraph'' and inserting ``this subparagraph''; and
(4) by adding at the end the following:
``(B) Ozone NOTE: Deadlines. transport region.--
``(i) Application of prohibition.--
``(I) In general.--On application of
the Governor of a State in the ozone
transport region established by section
184(a), the Administrator, not later
than 180 days after the date of receipt
of the application, shall apply the
prohibition specified in paragraph (5)
to any area in the State (other than an
area classified as a marginal, moderate,
serious, or severe ozone nonattainment
area under subpart 2 of part D of title
I) unless the Administrator determines
under clause (iii) that there is
insufficient capacity to supply
reformulated gasoline.
``(II) Publication
of NOTE: Federal
Register, publication. application.--
As soon as practicable after the date of
receipt of an application under
subclause (I), the Administrator shall
publish the application in the Federal
Register.
``(ii) Period of applicability.--Under clause
(i), the prohibition specified in paragraph (5)
shall apply in a State--
``(I) commencing as soon as
practicable but not later than 2 years
after the date of approval by the
Administrator of the application of the
Governor of the State; and
``(II) ending not earlier than 4
years after the commencement date
determined under subclause (I).
``(iii) Extension of commencement date based
on insufficient capacity.--
``(I) In general.--If, after receipt
of an application from a Governor of a
State under clause (i), the
Administrator determines, on the
Administrator's own motion or on
petition of any person, after
consultation with the Secretary of
Energy, that there is insufficient
capacity to supply reformulated
gasoline, the Administrator, by
regulation--
``(aa) shall extend the
commencement date with respect
to the State under clause
(ii)(I) for not more than 1
year; and
``(bb) may renew the
extension under item (aa) for 2
additional periods, each of
which shall not exceed 1 year.

[[Page 1083]]
119 STAT. 1083

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

SEC. 1508. DATA COLLECTION.

Section 205 of the Department of Energy Organization Act (42 U.S.C.
7135) is amended by adding at the end the following:
``(m) Renewable Fuels Survey.--(1) NOTE: Publication. In order
to improve the ability to evaluate the effectiveness of the Nation's
renewable fuels mandate, the Administrator shall conduct and publish the
results of a survey of renewable fuels demand in the motor vehicle fuels
market in the United States monthly, and in a manner designed to protect
the confidentiality of individual responses. In conducting the survey,
the Administrator shall collect information both on a national and
regional basis, including each of the following:
``(A) The quantity of renewable fuels produced.
``(B) The quantity of renewable fuels blended.
``(C) The quantity of renewable fuels imported.
``(D) The quantity of renewable fuels demanded.
``(E) Market price data.
``(F) Such other analyses or evaluations as the
Administrator finds are necessary to achieve the purposes of
this section.

``(2) The Administrator shall also collect or estimate information
both on a national and regional basis, pursuant to subparagraphs (A)
through (F) of paragraph (1), for the 5 years prior to implementation of
this subsection.
``(3) This subsection does not affect the authority of the
Administrator to collect data under section 52 of the Federal Energy
Administration Act of 1974 (15 U.S.C. 790a).''.

SEC. 1509. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.

(a) Study.--
(1) In general.--The Administrator of the Environmental
Protection Agency and the Secretary 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 the consumer;
(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 (including the
protection of children, pregnant women, minority
or low-income communities, and other sensitive
populations);
(C) the effect of Federal, State, and local motor
vehicle fuel regulations, including multiple motor
vehicle fuel requirements, on--

[[Page 1084]]
119 STAT. 1084

(i) domestic refiners;
(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, refiners, and
fuel handling facilities;
(E) the feasibility of developing national or
regional motor vehicle fuel slates for the 48 contiguous
States that, while protecting and improving air quality
at the national, regional, and local levels, 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, and the
need for the development of national standards
necessary, 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, on-
road and off-road diesel rules, the reformulated
gasoline program, the renewable content requirements
established by this subtitle, State programs regarding
gasoline volatility, and any other requirements imposed
by the Federal Government, States or localities
affecting the composition of motor fuel.

(b) Report.--
(1) In general.--Not later than June 1, 2008, the
Administrator of the Environmental Protection Agency and the
Secretary 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 shall consult with--
(A) the Governors of the States;
(B) automobile manufacturers;
(C) State and local air pollution control
regulators;
(D) public health experts;
(E) motor vehicle fuel producers and distributors;
and
(F) the public.

[[Page 1085]]
119 STAT. 1085

SEC. 1510. NOTE: 42 USC 16501. COMMERCIAL BYPRODUCTS FROM MUNICIPAL
SOLID WASTE AND CELLULOSIC BIOMASS LOAN GUARANTEE PROGRAM.

(a) Definition of Municipal Solid Waste.--In this section, the term
``municipal solid waste'' has the meaning given the term ``solid waste''
in section 1004 of the Solid Waste Disposal Act (42 U.S.C. 6903).
(b) Establishment of Program.--The Secretary shall establish a
program to provide guarantees of loans by private institutions for the
construction of facilities for the processing and conversion of
municipal solid waste and cellulosic biomass into fuel ethanol and other
commercial byproducts.
(c) Requirements.--The Secretary may provide a loan guarantee under
subsection (b) to an applicant if--
(1) without a loan guarantee, credit is not available to the
applicant under reasonable terms or conditions sufficient to
finance the construction of a facility described in subsection
(b);
(2) the prospective earning power of the applicant and the
character and value of the security pledged provide a reasonable
assurance of repayment of the loan to be guaranteed in
accordance with the terms of the loan; and
(3) the loan bears interest at a rate determined by the
Secretary to be reasonable, taking into account the current
average yield on outstanding obligations of the United States
with remaining periods of maturity comparable to the maturity of
the loan.

(d) Criteria.--In selecting recipients of loan guarantees from among
applicants, the Secretary shall give preference to proposals that--
(1) meet all applicable Federal and State permitting
requirements;
(2) are most likely to be successful; and
(3) are located in local markets that have the greatest need
for the facility because of--
(A) the limited availability of land for waste
disposal;
(B) the availability of sufficient quantities of
cellulosic biomass; or
(C) a high level of demand for fuel ethanol or other
commercial byproducts of the facility.

(e) Maturity.--A loan guaranteed under subsection (b) shall have a
maturity of not more than 20 years.
(f) Terms and Conditions.--The loan agreement for a loan guaranteed
under subsection (b) shall provide that no provision of the loan
agreement may be amended or waived without the consent of the Secretary.
(g) Assurance of Repayment.--The Secretary shall require that an
applicant for a loan guarantee under subsection (b) provide an assurance
of repayment in the form of a performance bond, insurance, collateral,
or other means acceptable to the Secretary in an amount equal to not
less than 20 percent of the amount of the loan.
(h) Guarantee Fee.--The recipient of a loan guarantee under
subsection (b) shall pay the Secretary an amount determined by the
Secretary to be sufficient to cover the administrative costs of the
Secretary relating to the loan guarantee.

[[Page 1086]]
119 STAT. 1086

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

SEC. 1511. RENEWABLE FUEL.

The Clean Air Act is amended by inserting after section 211 (42
U.S.C. 7411) the following:

``SEC. 212. NOTE: 42 USC 7546. RENEWABLE FUEL.

``(a) Definitions.--In this section:
``(1) Municipal solid waste.--The term `municipal solid
waste' has the meaning given the term `solid waste' in section
1004 of the Solid Waste Disposal Act (42 U.S.C. 6903).
``(2) RFG state.--The term `RFG State' means a State in
which is located one or more covered areas (as defined in
section 211(k)(10)(D)).
``(3) Secretary.--The term `Secretary' means the Secretary
of Energy.

``(b) Cellulosic Biomass Ethanol and Municipal Solid Waste Loan
Guarantee Program.--
``(1) In general.--Funds may be provided for the cost (as
defined in the Federal Credit Reform Act of 1990 (2 U.S.C. 661
et seq.)) of loan guarantees issued under title XIV of the
Energy Policy Act to carry out commercial demonstration projects
for celluosic biomass and sucrose-derived ethanol.
``(2) Demonstration projects.--
``(A) In general.--The Secretary shall issue loan
guarantees under this section to carry out not more than
4 projects to commercially demonstrate the feasibility
and viability of producing cellulosic biomass ethanol or
sucrose-derived ethanol, including at least 1 project
that uses cereal straw as a feedstock and 1 project that
uses municipal solid waste as a feedstock.
``(B) Design capacity.--Each project shall have a
design capacity to produce at least 30,000,000 gallons
of cellulosic biomass ethanol each year.
``(3) Applicant assurances.--An applicant for a loan
guarantee under this section shall provide assurances,
satisfactory to the Secretary, that--
``(A) the project design has been validated through
the operation of a continuous process facility with a
cumulative output of at least 50,000 gallons of ethanol;
``(B) the project has been subject to a full
technical review;

[[Page 1087]]
119 STAT. 1087

``(C) the project is covered by adequate project
performance guarantees;
``(D) the project, with the loan guarantee, is
economically viable; and
``(E) there is a reasonable assurance of repayment
of the guaranteed loan.
``(4) Limitations.--
``(A) Maximum guarantee.--Except as provided in
subparagraph (B), a loan guarantee under this section
may be issued for up to 80 percent of the estimated cost
of a project, but may not exceed $250,000,000 for a
project.
``(B) Additional guarantees.--
``(i) In general.--The Secretary may issue
additional loan guarantees for a project to cover
up to 80 percent of the excess of actual project
cost over estimated project cost but not to exceed
15 percent of the amount of the original
guarantee.
``(ii) Principal and interest.--Subject to
subparagraph (A), the Secretary shall guarantee
100 percent of the principal and interest of a
loan made under subparagraph (A).
``(5) Equity contributions.--To be eligible for a loan
guarantee under this section, an applicant for the loan
guarantee shall have binding commitments from equity investors
to provide an initial equity contribution of at least 20 percent
of the total project cost.
``(6) Insufficient amounts.--If the amount made available to
carry out this section is insufficient to allow the Secretary to
make loan guarantees for 3 projects described in subsection (b),
the Secretary shall issue loan guarantees for one or more
qualifying projects under this section in the order in which the
applications for the projects are received by the Secretary.
``(7) Approval.--An NOTE: Deadline. application for a
loan guarantee under this section shall be approved or
disapproved by the Secretary not later than 90 days after the
application is received by the Secretary.

``(c) Authorization
of NOTE: Mississippi. Oklahoma. Appropriations for Resource
Center.--There is authorized to be appropriated, for a resource center
to further develop bioconversion technology using low-cost biomass for
the production of ethanol at the Center for Biomass-Based Energy at the
Mississippi State University and the Oklahoma State University,
$4,000,000 for each of fiscal years 2005 through 2007.

``(d) Renewable Fuel Production Research and Development Grants.--
``(1) In general.--The Administrator shall provide grants
for the research into, and development and implementation of,
renewable fuel production technologies in RFG States with low
rates of ethanol production, including low rates of production
of cellulosic biomass ethanol.
``(2) Eligibility.--
``(A) In general.--The entities eligible to receive
a grant under this subsection are academic institutions
in RFG States, and consortia made up of combinations of
academic institutions, industry, State government
agencies, or local government agencies in RFG States,
that have

[[Page 1088]]
119 STAT. 1088

proven experience and capabilities with relevant
technologies.
``(B) Application.--To be eligible to receive a
grant under this subsection, an eligible entity shall
submit to the Administrator an application in such
manner and form, and accompanied by such information, as
the Administrator may specify.
``(3) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection $25,000,000 for
each of fiscal years 2006 through 2010.

``(e) Cellulosic Biomass Ethanol Conversion Assistance.--
``(1) In general.--The Secretary may provide grants to
merchant producers of cellulosic biomass ethanol in the United
States to assist the producers in building eligible production
facilities described in paragraph (2) for the production of
cellulosic biomass ethanol.
``(2) Eligible production facilities.--A production facility
shall be eligible to receive a grant under this subsection if
the production facility--
``(A) is located in the United States; and
``(B) uses cellulosic biomass feedstocks derived
from agricultural residues or municipal solid waste.
``(3) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection--
``(A) $250,000,000 for fiscal year 2006; and
``(B) $400,000,000 for fiscal year 2007.''.

SEC. 1512. CONVERSION ASSISTANCE FOR CELLULOSIC BIOMASS, WASTE-DERIVED
ETHANOL, APPROVED RENEWABLE FUELS.

Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by
adding at the end the following:
``(r) Conversion Assistance for Cellulosic Biomass, Waste-Derived
Ethanol, Approved Renewable Fuels.--
``(1) In general.--The Secretary of Energy may provide
grants to merchant producers of cellulosic biomass ethanol,
waste-derived ethanol, and approved renewable fuels in the
United States to assist the producers in building eligible
production facilities described in paragraph (2) for the
production of ethanol or approved renewable fuels.
``(2) Eligible production facilities.--A production facility
shall be eligible to receive a grant under this subsection if
the production facility--
``(A) is located in the United States; and
``(B) uses cellulosic or renewable biomass or waste-
derived feedstocks derived from agricultural residues,
wood residues, municipal solid waste, or agricultural
byproducts.
``(3) Authorization of appropriations.--There are authorized
to be appropriated the following amounts to carry out this
subsection:
``(A) $100,000,000 for fiscal year 2006.
``(B) $250,000,000 for fiscal year 2007.
``(C) $400,000,000 for fiscal year 2008.
``(4) Definitions.--For the purposes of this subsection:
``(A) The term `approved renewable fuels' are fuels
and components of fuels that have been approved by the
Department of Energy, as defined in section 301 of the
Energy

[[Page 1089]]
119 STAT. 1089

Policy Act of 1992 (42 U.S.C. 13211), which have been
made from renewable biomass.
``(B) The term `renewable biomass' is, as defined in
Presidential Executive Order 13134, published in the
Federal Register on August 16, 1999, any organic matter
that is available on a renewable or recurring basis
(excluding old-growth timber), including dedicated
energy crops and trees, agricultural food and feed crop
residues, aquatic plants, animal wastes, wood and wood
residues, paper and paper residues, and other vegetative
waste materials. Old-growth timber means timber of a
forest from the late successional stage of forest
development.''.

SEC. 1513. BLENDING OF COMPLIANT REFORMULATED GASOLINES.

Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended by
adding at the end the following:
``(s) Blending of Compliant Reformulated Gasolines.--
``(1) In general.--Notwithstanding subsections (h) and (k)
and subject to the limitations in paragraph (2) of this
subsection, it shall not be a violation of this subtitle for a
gasoline retailer, during any month of the year, to blend at a
retail location batches of ethanol-blended and non-ethanol-
blended reformulated gasoline, provided that--
``(A) each batch of gasoline to be blended has been
individually certified as in compliance with subsections
(h) and (k) prior to being blended;
``(B) the retailer notifies the Administrator prior
to such blending, and identifies the exact location of
the retail station and the specific tank in which such
blending will take place;
``(C) the retailer retains and, as requested by the
Administrator or the Administrator's designee, makes
available for inspection such certifications accounting
for all gasoline at the retail outlet; and
``(D) the retailer does not, between June 1 and
September 15 of each year, blend a batch of VOC-
controlled, or `summer', gasoline with a batch of non-
VOC-controlled, or `winter', gasoline (as these terms
are defined under subsections (h) and (k)).
``(2) Limitations.--
``(A) Frequency limitation.--A retailer shall only
be permitted to blend batches of compliant reformulated
gasoline under this subsection a maximum of two blending
periods between May 1 and September 15 of each calendar
year.
``(B) Duration of blending period.--Each blending
period authorized under subparagraph (A) shall extend
for a period of no more than 10 consecutive calendar
days.
``(3) Surveys.--A sample of gasoline taken from a retail
location that has blended gasoline within the past 30 days and
is in compliance with subparagraphs (A), (B), (C), and (D) of
paragraph (1) shall not be used in a VOC survey mandated by 40
CFR Part 80.
``(4) State implementation plans.--A State shall be held
harmless and shall not be required to revise its State
implementation plan under section 110 to account for the
emissions from blended gasoline authorized under paragraph (1).

[[Page 1090]]
119 STAT. 1090

``(5) Preservation of state law.--Nothing in this subsection
shall--
``(A) preempt existing State laws or regulations
regulating the blending of compliant gasolines; or
``(B) prohibit a State from adopting such
restrictions in the future.
``(6) Regulations.--
The NOTE: Notice. Deadline. Administrator shall promulgate,
after notice and comment, regulations implementing this
subsection within 1 year after the date of enactment of this
subsection.
``(7) Effective date.--This subsection shall become
effective 15 months after the date of its enactment and shall
apply to blended batches of reformulated gasoline on or after
that date, regardless of whether the implementing regulations
required by paragraph (6) have been promulgated by the
Administrator by that date.
``(8) Liability.--No person other than the person
responsible for blending under this subsection shall be subject
to an enforcement action or penalties under subsection (d)
solely arising from the blending of compliant reformulated
gasolines by the retailers.
``(9) Formulation of gasoline.--This subsection does not
grant authority to the Administrator or any State (or any
subdivision thereof) to require reformulation of gasoline at the
refinery to adjust for potential or actual emissions increases
due to the blending authorized by this subsection.''.

SEC. 1514. NOTE: 42 USC 16502. ADVANCED BIOFUEL TECHNOLOGIES
PROGRAM.

(a) In General.--Subject to the availability of appropriations under
subsection (d), the Administrator of the Environmental Protection Agency
shall, in consultation with the Secretary of Agriculture and the Biomass
Research and Development Technical Advisory Committee established under
section 306 of the Biomass Research and Development Act of 2000 (Public
Law 106-224; 7 U.S.C. 8101 note), establish a program, to be known as
the ``Advanced Biofuel Technologies Program'', to demonstrate advanced
technologies for the production of alternative transportation fuels.
(b) Priority.--In carrying out the program under subsection (a), the
Administrator shall give priority to projects that enhance the
geographical diversity of alternative fuels production and utilize
feedstocks that represent 10 percent or less of ethanol or biodiesel
fuel production in the United States during the previous fiscal year.
(c) Demonstration Projects.--
(1) In general.--As part of the program under subsection
(a), the Administrator shall fund demonstration projects--
(A) to develop not less than 4 different conversion
technologies for producing cellulosic biomass ethanol;
and
(B) to develop not less than 5 technologies for
coproducing value-added bioproducts (such as
fertilizers, herbicides, and pesticides) resulting from
the production of biodiesel fuel.
(2) Administration.--Demonstration projects under this
subsection shall be--
(A) conducted based on a merit-reviewed, competitive
process; and

[[Page 1091]]
119 STAT. 1091

(B) subject to the cost-sharing requirements of
section 988.

(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $110,000,000 for each of fiscal
years 2005 through 2009.

SEC. 1515. WASTE-DERIVED ETHANOL AND BIODIESEL.

Section 312(f)(1) of the Energy Policy Act of 1992 (42 U.S.C.
13220(f)(1)) is amended--
(1) by striking `` `biodiesel' means'' and inserting the
following: `` `biodiesel'--
``(A) means''; and
(2) in subparagraph (A) (as designated by paragraph (1)) by
striking ``and'' at the end and inserting the following:
``(B) includes biodiesel derived from--
``(i) animal wastes, including poultry fats
and poultry wastes, and other waste materials; or
``(ii) municipal solid waste and sludges and
oils derived from wastewater and the treatment of
wastewater; and''.

SEC. 1516. NOTE: 42 USC 16503. SUGAR ETHANOL LOAN GUARANTEE PROGRAM.

(a) In General.--Funds may be provided for the cost (as defined in
section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of
loan guarantees issued under title XIV to carry out commercial
demonstration projects for ethanol derived from sugarcane, bagasse, and
other sugarcane byproducts.
(b) Demonstration Projects.--The Secretary may issue loan guarantees
under this section to projects to demonstrate commercially the
feasibility and viability of producing ethanol using sugarcane,
sugarcane bagasse, and other sugarcane byproducts as a feedstock.
(c) Requirements.--An applicant for a loan guarantee under this
section may provide assurances, satisfactory to the Secretary, that--
(1) the project design has been validated through the
operation of a continuous process facility;
(2) the project has been subject to a full technical review;
(3) the project, with the loan guarantee, is economically
viable; and
(4) there is a reasonable assurance of repayment of the
guaranteed loan.

(d) Limitations.--
(1) Maximum guarantee.--Except as provided in paragraph (2),
a loan guarantee under this section--
(A) may be issued for up to 80 percent of the
estimated cost of a project; but
(B) shall not exceed $50,000,000 for any 1 project.
(2) Additional guarantees.--
(A) In general.--The Secretary may issue additional
loan guarantees for a project to cover--
(i) up to 80 percent of the excess of actual
project costs; but
(ii) not to exceed 15 percent of the amount of
the original loan guarantee.

[[Page 1092]]
119 STAT. 1092

(B) Principal and interest.--Subject to subparagraph
(A), the Secretary shall guarantee 100 percent of the
principal and interest of a loan guarantee made under
subparagraph (A).

Subtitle B--Underground NOTE: Underground Storage Tank Compliance
Act. Storage Tank Compliance

SEC. 1521. NOTE: 42 USC 6901 note. SHORT TITLE.

This subtitle may be cited as the ``Underground Storage Tank
Compliance Act''.

SEC. 1522. LEAKING UNDERGROUND STORAGE TANKS.

(a) In General.--Section 9004 of the Solid Waste Disposal Act (42
U.S.C. 6991c) is amended by adding at the end the following:
``(f) Trust Fund Distribution.--
``(1) In general.--
``(A) Amount and permitted uses of distribution.--
The Administrator shall distribute to States not less
than 80 percent of the funds from the Trust Fund that
are made available to the Administrator under section
9014(2)(A) for each fiscal year for use in paying the
reasonable costs, incurred under a cooperative agreement
with any State for--
``(i) corrective actions taken by the State
under section 9003(h)(7)(A);
``(ii) necessary administrative expenses, as
determined by the Administrator, that are directly
related to State fund or State assurance programs
under subsection (c)(1); or
``(iii) enforcement, by a State or a local
government, of State or local regulations
pertaining to underground storage tanks regulated
under this subtitle.
``(B) Use of funds for enforcement.--In addition to
the uses of funds authorized under subparagraph (A), the
Administrator may use funds from the Trust Fund that are
not distributed to States under subparagraph (A) for
enforcement of any regulation promulgated by the
Administrator under this subtitle.
``(C) Prohibited uses.--Funds provided to a State by
the Administrator under subparagraph (A) shall not be
used by the State to provide financial assistance to an
owner or operator to meet any requirement relating to
underground storage tanks under subparts B, C, D, H, and
G of part 280 of title 40, Code of Federal Regulations
(as in effect on the date of enactment of this
subsection).
``(2) Allocation.--
``(A) Process.--Subject to subparagraphs (B) and
(C), in the case of a State with which the Administrator
has entered into a cooperative agreement under section
9003(h)(7)(A), the Administrator shall distribute funds
from the Trust Fund to the State using an allocation
process developed by the Administrator.
``(B) Diversion of state funds.--The Administrator
shall not distribute funds under subparagraph (A)(iii)
of subsection (f)(1) to any State that has diverted
funds from

[[Page 1093]]
119 STAT. 1093

a State fund or State assurance program for purposes
other than those related to the regulation of
underground storage tanks covered by this subtitle, with
the exception of those transfers that had been completed
earlier than the date of enactment of this subsection.
``(C) Revisions to process.--The Administrator may
revise the allocation process referred to in
subparagraph (A) after--
``(i) consulting with State agencies
responsible for overseeing corrective action for
releases from underground storage tanks; and
``(ii) taking into consideration, at a
minimum, each of the following:
``(I) The number of confirmed
releases from federally regulated
leaking underground storage tanks in the
States.
``(II) The number of federally
regulated underground storage tanks in
the States.
``(III) The performance of the
States in implementing and enforcing the
program.
``(IV) The financial needs of the
States.
``(V) The ability of the States to
use the funds referred to in
subparagraph (A) in any year.
``(3) Distributions to state agencies.--Distributions from
the Trust Fund under this subsection shall be made directly to a
State agency that--
``(A) enters into a cooperative agreement referred
to in paragraph (2)(A); or
``(B) is enforcing a State program approved under
this section.''.

(b) Withdrawal of Approval of State Funds.--Section 9004(c) of the
Solid Waste Disposal Act (42 U.S.C. 6991c(c)) is amended by inserting
the following new paragraph at the end thereof:
``(6) Withdrawal of approval.--After an opportunity for good
faith, collaborative efforts to correct financial deficiencies
with a State fund, the Administrator may withdraw approval of
any State fund or State assurance program to be used as a
financial responsibility mechanism without withdrawing approval
of a State underground storage tank program under section
9004(a).''.

(c) Ability to Pay.--Section 9003(h)(6) of the Solid Waste Disposal
Act (42 U.S.C. 6591a(h)(6)) is NOTE: 42 USC 6991b. amended by adding
the following new subparagraph at the end thereof:
``(E) Inability or limited ability to pay.--
``(i) In general.--In determining the level of
recovery effort, or amount that should be
recovered, the Administrator (or the State
pursuant to paragraph (7)) shall consider the
owner or operator's ability to pay. An inability
or limited ability to pay corrective action costs
must be demonstrated to the Administrator (or the
State pursuant to paragraph (7)) by the owner or
operator.
``(ii) Considerations.--In determining whether
or not a demonstration is made under clause (i),
the Administrator (or the State pursuant to
paragraph (7)) shall take into consideration the
ability of the

[[Page 1094]]
119 STAT. 1094

owner or operator to pay corrective action costs
and still maintain its basic business operations,
including consideration of the overall financial
condition of the owner or operator and
demonstrable constraints on the ability of the
owner or operator to raise revenues.
``(iii) Information.--An owner or operator
requesting consideration under this subparagraph
shall promptly provide the Administrator (or the
State pursuant to paragraph (7)) with all relevant
information needed to determine the ability of the
owner or operator to pay corrective action costs.
``(iv) Alternative payment methods.--The
Administrator (or the State pursuant to paragraph
(7)) shall consider alternative payment methods as
may be necessary or appropriate if the
Administrator (or the State pursuant to paragraph
(7)) determines that an owner or operator cannot
pay all or a portion of the costs in a lump sum
payment.
``(v) Misrepresentation.--If an owner or
operator provides false information or otherwise
misrepresents their financial situation under
clause (ii), the Administrator (or the State
pursuant to paragraph (7)) shall seek full
recovery of the costs of all such actions pursuant
to the provisions of subparagraph (A) without
consideration of the factors in subparagraph
(B).''.

SEC. 1523. INSPECTION OF UNDERGROUND STORAGE TANKS.

(a) Inspection Requirements.--Section 9005 of the Solid Waste
Disposal Act (42 U.S.C. 6991d) is amended by inserting the following new
subsection at the end thereof:
``(c) Inspection Requirements.--
``(1) Uninspected tanks.--In NOTE: Deadline. the case of
underground storage tanks regulated under this subtitle that
have not undergone an inspection since December 22, 1998, not
later than 2 years after the date of enactment of this
subsection, the Administrator or a State that receives funding
under this subtitle, as appropriate, shall conduct on-site
inspections of all such tanks to determine compliance with this
subtitle and the regulations under this subtitle (40 CFR 280) or
a requirement or standard of a State program developed under
section 9004.
``(2) Periodic inspections.--After completion of all
inspections required under paragraph (1), the Administrator or a
State that receives funding under this subtitle, as appropriate,
shall conduct on-site inspections of each underground storage
tank regulated under this subtitle at least once every 3 years
to determine compliance with this subtitle and the regulations
under this subtitle (40 CFR 280) or a requirement or standard of
a State program developed under section 9004. The Administrator
may extend for up to one additional year the first 3-year
inspection interval under this paragraph if the State
demonstrates that it has insufficient resources to complete all
such inspections within the first 3-year period.
``(3) Inspection authority.--Nothing in this section shall
be construed to diminish the Administrator's or a State's
authorities under section 9005(a).''.

[[Page 1095]]
119 STAT. 1095

(b) Study of NOTE: Reports. Deadline. Alternative Inspection
Programs.--The Administrator of the Environmental Protection Agency, in
coordination with a State, shall gather information on compliance
assurance programs that could serve as an alternative to the inspection
programs under section 9005(c) of the Solid Waste Disposal Act (42
U.S.C. 6991d(c)) and shall, within 4 years after the date of enactment
of this Act, submit a report to the Congress containing the results of
such study.

SEC. 1524. OPERATOR TRAINING.

(a) In General.--Section 9010 of the Solid Waste Disposal Act (42
U.S.C. 6991i) is amended to read as follows:

``SEC. 9010. OPERATOR TRAINING.

``(a) NOTE: Deadline. Notification. Public
information. Publication. Guidelines.--
``(1) In general.--Not later than 2 years after the date of
enactment of the Underground Storage Tank Compliance Act, in
consultation and cooperation with States and after public notice
and opportunity for comment, the Administrator shall publish
guidelines that specify training requirements for--
``(A) persons having primary responsibility for on-
site operation and maintenance of underground storage
tank systems;
``(B) persons having daily on-site responsibility
for the operation and maintenance of underground storage
tanks systems; and
``(C) daily, on-site employees having primary
responsibility for addressing emergencies presented by a
spill or release from an underground storage tank
system.
``(2) Considerations.--The guidelines described in paragraph
(1) shall take into account--
``(A) State training programs in existence as of the
date of publication of the guidelines;
``(B) training programs that are being employed by
tank owners and tank operators as of the date of
enactment of the Underground Storage Tank Compliance
Act;
``(C) the high turnover rate of tank operators and
other personnel;
``(D) the frequency of improvement in underground
storage tank equipment technology;
``(E) the nature of the businesses in which the tank
operators are engaged;
``(F) the substantial differences in the scope and
length of training needed for the different classes of
persons described in subparagraphs (A), (B), and (C) of
paragraph (1); and
``(G) such other factors as the Administrator
determines to be necessary to carry out this section.

``(b) State NOTE: Deadline. Programs.--
``(1) In general.--Not later than 2 years after the date on
which the Administrator publishes the guidelines under
subsection (a)(1), each State that receives funding under this
subtitle shall develop State-specific training requirements that
are consistent with the guidelines developed under subsection
(a)(1).
``(2) Requirements.--State requirements described in
paragraph (1) shall--
``(A) be consistent with subsection (a);

[[Page 1096]]
119 STAT. 1096

``(B) be developed in cooperation with tank owners
and tank operators;
``(C) take into consideration training programs
implemented by tank owners and tank operators as of the
date of enactment of this section; and
``(D) be appropriately communicated to tank owners
and operators.
``(3) Financial incentive.--The Administrator may award to a
State that develops and implements requirements described in
paragraph (1), in addition to any funds that the State is
entitled to receive under this subtitle, not more than $200,000,
to be used to carry out the requirements.

``(c) Training.--All persons that are subject to the operator
training requirements of subsection (a) shall--
``(1) meet the training requirements developed under
subsection (b); and
``(2) repeat the applicable requirements developed under
subsection (b), if the tank for which they have primary daily
on-site management responsibilities is determined to be out of
compliance with--
``(A) a requirement or standard promulgated by the
Administrator under section 9003; or
``(B) a requirement or standard of a State program
approved under section 9004.''.

(b) State Program Requirement.--Section 9004(a) of the Solid Waste
Disposal Act (42 U.S.C. 6991c(a)) is amended by striking ``and'' at the
end of paragraph (7), by striking the period at the end of paragraph (8)
and inserting ``; and'', and by adding the following new paragraph at
the end thereof:
``(9) State-specific training requirements as required by
section 9010.''.

(c) Enforcement.--Section 9006(d)(2) of such Act (42 U.S.C. 6991e)
is amended as follows:
(1) By striking ``or'' at the end of subparagraph (B).
(2) By adding the following new subparagraph after
subparagraph (C):
``(D) the training requirements established by States
pursuant to section 9010 (relating to operator training); or''.

(d) Table of Contents.--The item relating to section 9010 in the
table of contents for the Solid Waste Disposal Act is amended to read as
follows:

``Sec. 9010. Operator training.''.

SEC. 1525. REMEDIATION FROM OXYGENATED FUEL ADDITIVES.

Section 9003(h) of the Solid Waste Disposal Act (42 U.S.C. 6991b(h))
is amended as follows:
(1) In paragraph (7)(A)--
(A) by striking ``paragraphs (1) and (2) of this
subsection'' and inserting ``paragraphs (1), (2), and
(12)''; and
(B) by striking ``and including the authorities of
paragraphs (4), (6), and (8) of this subsection'' and
inserting ``and the authority under sections 9011 and
9012 and paragraphs (4), (6), and (8),''.
(2) By adding at the end the following:
``(12) Remediation of oxygenated fuel contamination.--

[[Page 1097]]
119 STAT. 1097

``(A) In general.--The Administrator and the States
may use funds made available under section 9014(2)(B) to
carry out corrective actions with respect to a release
of a fuel containing an oxygenated fuel additive that
presents a threat to human health or welfare or the
environment.
``(B) Applicable authority.--
The NOTE: Contracts. Administrator or a State shall
carry out subparagraph (A) in accordance with paragraph
(2), and in the case of a State, in accordance with a
cooperative agreement entered into by the Administrator
and the State under paragraph (7).''.

SEC. 1526. RELEASE PREVENTION, COMPLIANCE, AND ENFORCEMENT.

(a) Release Prevention and Compliance.--Subtitle I of the Solid
Waste Disposal Act (42 U.S.C. 6991 et seq.) is amended by adding at the
end the following:

``SEC. 9011. NOTE: 42 USC 6991j. USE OF FUNDS FOR RELEASE PREVENTION
AND COMPLIANCE.

``Funds made available under section 9014(2)(D) from the Trust Fund
may be used to conduct inspections, issue orders, or bring actions under
this subtitle--
``(1) by a State, in accordance with a grant or cooperative
agreement with the Administrator, of State regulations
pertaining to underground storage tanks regulated under this
subtitle; and
``(2) by the Administrator, for tanks regulated under this
subtitle (including under a State program approved under section
9004).''.

(b) Government-Owned Tanks.--Section 9003 of the Solid Waste
Disposal Act (42 U.S.C. 6991b) is amended by adding at the end the
following:
``(i) Government-Owned Tanks.--
``(1) State compliance report.--(A) NOTE: Deadline. Not
later than 2 years after the date of enactment of this
subsection, each State that receives funding under this subtitle
shall submit to the Administrator a State compliance report
that--
``(i) lists the location and owner of each
underground storage tank described in subparagraph (B)
in the State that, as of the date of submission of the
report, is not in compliance with section 9003; and
``(ii) specifies the date of the last inspection and
describes the actions that have been and will be taken
to ensure compliance of the underground storage tank
listed under clause (i) with this subtitle.
``(B) An underground storage tank described in this
subparagraph is an underground storage tank that is--
``(i) regulated under this subtitle; and
``(ii) owned or operated by the Federal, State, or
local government.
``(C) The Administrator shall make each report, received
under subparagraph (A), available to the public through an
appropriate media.
``(2) Financial incentive.--The Administrator may award to a
State that develops a report described in paragraph (1), in
addition to any other funds that the State is entitled to
receive under this subtitle, not more than $50,000, to be used
to carry out the report.

[[Page 1098]]
119 STAT. 1098

``(3) Not a safe harbor.--This subsection does not relieve
any person from any obligation or requirement under this
subtitle.''.

(c) Public Record.--Section 9002 of the Solid Waste Disposal Act (42
U.S.C. 6991a) is amended by adding at the end the following:
``(d) Public Record.--
``(1) In general.--The Administrator shall require each
State that receives Federal funds to carry out this subtitle to
maintain, update at least annually, and make available to the
public, in such manner and form as the Administrator shall
prescribe (after consultation with States), a record of
underground storage tanks regulated under this subtitle.
``(2) Considerations.--To the maximum extent practicable,
the public record of a State, respectively, shall include, for
each year--
``(A) the number, sources, and causes of underground
storage tank releases in the State;
``(B) the record of compliance by underground
storage tanks in the State with--
``(i) this subtitle; or
``(ii) an applicable State program approved
under section 9004; and
``(C) data on the number of underground storage tank
equipment failures in the State.''.

(d) Incentive for Performance.--Section 9006 of the Solid Waste
Disposal Act (42 U.S.C. 6991e) is amended by adding at the end the
following:
``(e) Incentive for Performance.--Both of the following may be taken
into account in determining the terms of a civil penalty under
subsection (d):
``(1) The compliance history of an owner or operator in
accordance with this subtitle or a program approved under
section 9004.
``(2) Any other factor the Administrator considers
appropriate.''.

(e) Table of Contents.--The table of contents for such subtitle I is
amended by adding the following new item at the end thereof:

``Sec. 9011. Use of funds for release prevention and compliance.''.

SEC. 1527. DELIVERY PROHIBITION.

(a) In General.--Subtitle I of the Solid Waste Disposal Act (42
U.S.C. 6991 et seq.) is amended by adding at the end the following:

``SEC. 9012. NOTE: 42 USC 6991k. DELIVERY PROHIBITION.

``(a) Requirements.--
``(1) Prohibition NOTE: Effective date. of delivery or
deposit.--Beginning 2 years after the date of enactment of this
section, it shall be unlawful to deliver to, deposit into, or
accept a regulated substance into an underground storage tank at
a facility which has been identified by the Administrator or a
State implementing agency to be ineligible for such delivery,
deposit, or acceptance.
``(2) Guidance.--Within 1 NOTE: Deadline. year after the
date of enactment of this section, the Administrator shall, in
consultation with the States, underground storage tank owners,
and product delivery industries, publish guidelines detailing
the specific

[[Page 1099]]
119 STAT. 1099

processes and procedures they will use to implement the
provisions of this section. The processes and procedures
include, at a minimum--
``(A) the criteria for determining which underground
storage tank facilities are ineligible for delivery,
deposit, or acceptance of a regulated substance;
``(B) the mechanisms for identifying which
facilities are ineligible for delivery, deposit, or
acceptance of a regulated substance to the underground
storage tank owning and fuel delivery industries;
``(C) the process for reclassifying ineligible
facilities as eligible for delivery, deposit, or
acceptance of a regulated substance;
``(D) one or more processes for providing adequate
notice to underground storage tank owners and operators
and supplier industries that an underground storage tank
has been determined to be ineligible for delivery,
deposit, or acceptance or a regulated substance; and
``(E) a delineation of, or a process for
determining, the specified geographic areas subject to
paragraph (4).
``(3) Compliance.--States that receive funding under this
subtitle shall, at a minimum, comply with the processes and
procedures published under paragraph (2).
``(4) Consideration.--
``(A) Rural and remote areas.--Subject to
subparagraph (B), the Administrator or a State may
consider not treating an underground storage tank as
ineligible for delivery, deposit, or acceptance of a
regulated substance if such treatment would jeopardize
the availability of, or access to, fuel in any rural and
remote areas unless an urgent threat to public health,
as determined by the Administrator, exists.
``(B) Applicability.--Subparagraph (A) shall apply
only during the 180-day period following the date of a
determination by the Administrator or the appropriate
State under subparagraph (A).

``(b) Effect on State Authority.--Nothing in this section shall
affect or preempt the authority of a State to prohibit the delivery,
deposit, or acceptance of a regulated substance to an underground
storage tank.
``(c) Defense to Violation.--A person shall not be in violation of
subsection (a)(1) if the person has not been provided with notice
pursuant to subsection (a)(2)(D) of the ineligibility of a facility for
delivery, deposit, or acceptance of a regulated substance as determined
by the Administrator or a State, as appropriate, under this section.''.
(b) Enforcement.--Section 9006(d)(2) of such Act (42 U.S.C.
6991e(d)(2)) is amended as follows:
(1) By adding the following new subparagraph after
subparagraph (D):
``(E) the delivery prohibition requirement established by
section 9012,''.
(2) By adding the following new sentence at the end thereof:
``Any person making or accepting a delivery or deposit of a
regulated substance to an underground storage tank at an
ineligible facility in violation of section 9012 shall also be
subject to the same civil penalty for each day of such
violation.''.

[[Page 1100]]
119 STAT. 1100

(c) Table of Contents.--The table of contents for such subtitle I is
amended by adding the following new item at the end thereof:

``Sec. 9012. Delivery prohibition.''.

SEC. 1528. FEDERAL FACILITIES.

Section 9007 of the Solid Waste Disposal Act (42 U.S.C. 6991f) is
amended to read as follows:

``SEC. 9007. NOTE: Penalties. Exemptions. FEDERAL FACILITIES.

``(a) In General.--Each department, agency, and instrumentality of
the executive, legislative, and judicial branches of the Federal
Government (1) having jurisdiction over any underground storage tank or
underground storage tank system, or (2) engaged in any activity
resulting, or which may result, in the installation, operation,
management, or closure of any underground storage tank, release response
activities related thereto, or in the delivery, acceptance, or deposit
of any regulated substance to an underground storage tank or underground
storage tank system shall be subject to, and comply with, all Federal,
State, interstate, and local requirements, both substantive and
procedural (including any requirement for permits or reporting or any
provisions for injunctive relief and such sanctions as may be imposed by
a court to enforce such relief), respecting underground storage tanks in
the same manner, and to the same extent, as any person is subject to
such requirements, including the payment of reasonable service charges.
The Federal, State, interstate, and local substantive and procedural
requirements referred to in this subsection include, but are not limited
to, all administrative orders and all civil and administrative penalties
and fines, regardless of whether such penalties or fines are punitive or
coercive in nature or are imposed for isolated, intermittent, or
continuing violations. The United States hereby expressly waives any
immunity otherwise applicable to the United States with respect to any
such substantive or procedural requirement (including, but not limited
to, any injunctive relief, administrative order or civil or
administrative penalty or fine referred to in the preceding sentence, or
reasonable service charge). The reasonable service charges referred to
in this subsection include, but are not limited to, fees or charges
assessed in connection with the processing and issuance of permits,
renewal of permits, amendments to permits, review of plans, studies, and
other documents, and inspection and monitoring of facilities, as well as
any other nondiscriminatory charges that are assessed in connection with
a Federal, State, interstate, or local underground storage tank
regulatory program. Neither the United States, nor any agent, employee,
or officer thereof, shall be immune or exempt from any process or
sanction of any State or Federal Court with respect to the enforcement
of any such injunctive relief. No agent, employee, or officer of the
United States shall be personally liable for any civil penalty under any
Federal, State, interstate, or local law concerning underground storage
tanks with respect to any act or omission within the scope of the
official duties of the agent, employee, or officer. An agent, employee,
or officer of the United States shall be subject to any criminal
sanction (including, but not limited to, any fine or imprisonment) under
any Federal or State law concerning underground storage tanks, but no
department, agency, or instrumentality of the executive, legislative, or
judicial branch of the Federal Government shall be subject to any

[[Page 1101]]
119 STAT. 1101

such sanction. The President may exempt any underground storage tank of
any department, agency, or instrumentality in the executive branch from
compliance with such a requirement if he determines it to be in the
paramount interest of the United States to do so. No such exemption
shall be granted due to lack of appropriation unless the President shall
have specifically requested such appropriation as a part of the
budgetary process and the Congress shall have failed to make available
such requested appropriation. Any exemption shall be for a period not in
excess of 1 year, but additional exemptions may be granted for periods
not to exceed 1 year upon the President's making a new
determination. NOTE: President. Reports. The President shall report
each January to the Congress all exemptions from the requirements of
this section granted during the preceding calendar year, together with
his reason for granting each such exemption.

``(b) Review of and Report on Federal Underground Storage Tanks.--
``(1) NOTE: Deadline. Review.--Not later than 12 months
after the date of enactment of the Underground Storage Tank
Compliance Act, each Federal agency that owns or operates one or
more underground storage tanks, or that manages land on which
one or more underground storage tanks are located, shall submit
to the Administrator, the Committee on Energy and Commerce of
the United States House of Representatives, and the Committee on
the Environment and Public Works of the Senate a compliance
strategy report that--
``(A) lists the location and owner of each
underground storage tank described in this paragraph;
``(B) lists all tanks that are not in compliance
with this subtitle that are owned or operated by the
Federal agency;
``(C) specifies the date of the last inspection by a
State or Federal inspector of each underground storage
tank owned or operated by the agency;
``(D) lists each violation of this subtitle
respecting any underground storage tank owned or
operated by the agency;
``(E) describes the operator training that has been
provided to the operator and other persons having
primary daily on-site management responsibility for the
operation and maintenance of underground storage tanks
owned or operated by the agency; and
``(F) describes the actions that have been and will
be taken to ensure compliance for each underground
storage tank identified under subparagraph (B).
``(2) Not a safe harbor.--This subsection does not relieve
any person from any obligation or requirement under this
subtitle.''.

SEC. 1529. TANKS ON TRIBAL LANDS.

(a) In General.--Subtitle I of the Solid Waste Disposal Act (42
U.S.C. 6991 et seq.) is amended by adding the following at the end
thereof:

``SEC. 9013. NOTE: 42 USC 6991l. TANKS ON TRIBAL LANDS.

``(a) Strategy.--The NOTE: Deadline. Administrator, in
coordination with Indian tribes, shall, not later than 1 year after the
date of enactment of this section, develop and implement a strategy--
``(1) giving priority to releases that present the greatest
threat to human health or the environment, to take necessary

[[Page 1102]]
119 STAT. 1102

corrective action in response to releases from leaking
underground storage tanks located wholly within the boundaries
of--
``(A) an Indian reservation; or
``(B) any other area under the jurisdiction of an
Indian tribe; and
``(2) to implement and enforce requirements concerning
underground storage tanks located wholly within the boundaries
of--
``(A) an Indian reservation; or
``(B) any other area under the jurisdiction of an
Indian tribe.

``(b) Report.--Not later than 2 years after the date of enactment of
this section, the Administrator shall submit to Congress a report that
summarizes the status of implementation and enforcement of this subtitle
in areas located wholly within--
``(1) the boundaries of Indian reservations; and
``(2) any other areas under the jurisdiction of an Indian
tribe.

The Administrator NOTE: Public information. shall make the report
under this subsection available to the public.

``(c) Not a Safe Harbor.--This section does not relieve any person
from any obligation or requirement under this subtitle.
``(d) State Authority.--Nothing in this section applies to any
underground storage tank that is located in an area under the
jurisdiction of a State, or that is subject to regulation by a State, as
of the date of enactment of this section.''.
(b) Table of Contents.--The table of contents for such subtitle I is
amended by adding the following new item at the end thereof:

``Sec. 9013. Tanks on Tribal lands.''.

SEC. 1530. ADDITIONAL MEASURES TO PROTECT GROUNDWATER.

(a) In General.--Section 9003 of the Solid Waste Disposal Act (42
U.S.C. 6991b) is amended by adding the following new subsection at the
end:
``(i) Additional Measures to Protect Groundwater From
Contamination.--The Administrator shall require each State that receives
funding under this subtitle to require one of the following:
``(1) Tank and piping secondary containment.--(A) Each new
underground storage tank, or piping connected to any such new
tank, installed after the effective date of this subsection, or
any existing underground storage tank, or existing piping
connected to such existing tank, that is replaced after the
effective date of this subsection, shall be secondarily
contained and monitored for leaks if the new or replaced
underground storage tank or piping is within 1,000 feet of any
existing community water system or any existing potable drinking
water well.
``(B) In the case of a new underground storage tank system
consisting of one or more underground storage tanks and
connected by piping, subparagraph (A) shall apply to all
underground storage tanks and connected pipes comprising such
system.
``(C) In the case of a replacement of an existing
underground storage tank or existing piping connected to the
underground storage tank, subparagraph (A) shall apply only to
the specific underground storage tank or piping being replaced,

[[Page 1103]]
119 STAT. 1103

not to other underground storage tanks and connected pipes
comprising such system.
``(D) Each installation of a new motor fuel dispenser
system, after the effective date of this subsection, shall
include under-dispenser spill containment if the new dispenser
is within 1,000 feet of any existing community water system or
any existing potable drinking water well.
``(E) This paragraph shall not apply to repairs to an
underground storage tank, piping, or dispenser that are meant to
restore a tank, pipe, or dispenser to operating condition.
``(F) As used in this subsection:
``(i) The term `secondarily contained' means a
release detection and prevention system that meets the
requirements of 40 CFR 280.43(g), but shall not include
under-dispenser spill containment or control systems.
``(ii) The term `underground storage tank' has the
meaning given to it in section 9001, except that such
term does not include tank combinations or more than a
single underground pipe connected to a tank.
``(iii) The term `installation of a new motor fuel
dispenser system' means the installation of a new motor
fuel dispenser and the equipment necessary to connect
the dispenser to the underground storage tank system,
but does not mean the installation of a motor fuel
dispenser installed separately from the equipment need
to connect the dispenser to the underground storage tank
system.
``(2) Evidence of financial responsibility and
certification.--
``(A) Manufacturer and installer financial
responsibility.--A person that manufactures an
underground storage tank or piping for an underground
storage tank system or that installs an underground
storage tank system is required to maintain evidence of
financial responsibility under section 9003(d) in order
to provide for the costs of corrective actions directly
related to releases caused by improper manufacture or
installation unless the person can demonstrate
themselves to be already covered as an owner or operator
of an underground storage tank under section 9003.
``(B) Installer certification.--The Administrator
and each State that receives funding under this
subtitle, as appropriate, shall require that a person
that installs an underground storage tank system is--
``(i) certified or licensed by the tank and
piping manufacturer;
``(ii) certified or licensed by the
Administrator or a State, as appropriate;
``(iii) has their underground storage tank
system installation certified by a registered
professional engineer with education and
experience in underground storage tank system
installation;
``(iv) has had their installation of the
underground storage tank inspected and approved by
the Administrator or the State, as appropriate;
``(v) compliant with a code of practice
developed by a nationally recognized association
or independent

[[Page 1104]]
119 STAT. 1104

testing laboratory and in accordance with the
manufacturer's instructions; or
``(vi) compliant with another method that is
determined by the Administrator or a State, as
appropriate, to be no less protective of human
health and the environment.
``(C) Savings clause.--Nothing in subparagraph (A)
alters or affects the liability of any owner or operator
of an underground storage tank.''.

(b) Effective Date.--This NOTE: 42 USC 6991b note. subsection
shall take effect 18 months after the date of enactment of this
subsection.

(c) Promulgation of NOTE: 42 USC 6991b note. Regulations or
Guidelines.--The Administrator shall issue regulations or guidelines
implementing the requirements of this subsection, including guidance to
differentiate between the terms ``repair'' and ``replace'' for the
purposes of section 9003(i)(1) of the Solid Waste Disposal Act.

(d) Penalties.--Section 9006(d)(2) of such Act (42 U.S.C.
6991e(d)(2)) is amended as follows:
(1) By striking ``or'' at the end of subparagraph (B).
(2) By inserting ``; or'' at the end of subparagraph (C).
(3) By adding the following new subparagraph after
subparagraph (C):
``(D) the requirements established in section
9003(i),''.

SEC. 1531. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--Subtitle I of the Solid Waste Disposal Act (42
U.S.C. 6991 et seq.) is amended by adding at the end the following:

``SEC. 9014. NOTE: 42 USC 6991m. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to the Administrator the
following amounts:
``(1) To carry out subtitle I (except sections 9003(h),
9005(c), 9011, and 9012) $50,000,000 for each of fiscal years
2005 through 2009.
``(2) From the Trust Fund, notwithstanding section
9508(c)(1) of the Internal Revenue Code of 1986--
``(A) to carry out section 9003(h) (except section
9003(h)(12)) $200,000,000 for each of fiscal years 2005
through 2009;
``(B) to carry out section 9003(h)(12), $200,000,000
for each of fiscal years 2005 through 2009;
``(C) to carry out sections 9003(i), 9004(f), and
9005(c) $100,000,000 for each of fiscal years 2005
through 2009; and
``(D) to carry out sections 9010, 9011, 9012, and
9013 $55,000,000 for each of fiscal years 2005 through
2009.''.

(b) Table of Contents.--The table of contents for such subtitle I is
amended by adding the following new item at the end thereof:

``Sec. 9014. Authorization of appropriations.''.

SEC. 1532. CONFORMING AMENDMENTS.

(a) In General.--Section 9001 of the Solid Waste Disposal Act (42
U.S.C. 6991) is amended as follows:
(1) By striking ``For the purposes of this subtitle--'' and
inserting ``In this subtitle:''.

[[Page 1105]]
119 STAT. 1105

(2) By redesignating paragraphs (1), (2), (3), (4), (5),
(6), (7), and (8) as paragraphs (10), (7), (4), (3), (8), (5),
(2), and (6), respectively.
(3) By inserting before paragraph (2) (as redesignated by
paragraph (2) of this subsection) the following:
``(1) Indian tribe.--
``(A) In general.--The term `Indian tribe' means any
Indian tribe, band, nation, or other organized group or
community that is recognized as being eligible for
special programs and services provided by the United
States to Indians because of their status as Indians.
``(B) Inclusions.--The term `Indian tribe' includes
an Alaska Native village, as defined in or established
under the Alaska Native Claims Settlement Act (43 U.S.C.
1601 et seq.); and''.
(4) By inserting after paragraph (8) (as redesignated by
paragraph (2) of this subsection) the following:
``(9) Trust fund.--The term `Trust Fund' means the Leaking
Underground Storage Tank Trust Fund established by section 9508
of the Internal Revenue Code of 1986.''.

(b) Conforming Amendments.--The Solid Waste Disposal Act (42 U.S.C.
6901 and following) is amended as follows:
(1) Section 9003(f) (42 U.S.C. 6991b(f)) is amended--
(A) in paragraph (1), by striking ``9001(2)(B)'' and
inserting ``9001(7)(B)''; and
(B) in paragraphs (2) and (3), by striking
``9001(2)(A)'' each place it appears and inserting
``9001(7)(A)''.
(2) Section 9003(h) (42 U.S.C. 6991b(h)) is amended in
paragraphs (1), (2)(C), (7)(A), and (11) by striking ``Leaking
Underground Storage Tank Trust Fund'' each place it appears and
inserting ``Trust Fund''.
(3) Section 9009 (42 U.S.C. 6991h) is amended--
(A) in subsection (a), by striking ``9001(2)(B)''
and inserting ``9001(7)(B)''; and
(B) in subsection (d), by striking ``section 9001(1)
(A) and (B)'' and inserting ``subparagraphs (A) and (B)
of section 9001(10)''.

SEC. 1533. TECHNICAL AMENDMENTS.

The Solid Waste Disposal Act is amended as follows:
(1) Section 9001(4)(A) (42 U.S.C. 6991(4)(A)) is amended by
striking ``sustances'' and inserting ``substances''.
(2) Section 9003(f)(1) (42 U.S.C. 6991b(f)(1)) is amended by
striking ``subsection (c) and (d) of this section'' and
inserting ``subsections (c) and (d)''.
(3) Section 9004(a) (42 U.S.C. 6991c(a)) is amended by
striking ``in 9001(2) (A) or (B) or both'' and inserting ``in
subparagraph (A) or (B) of section 9001(7)''.
(4) Section 9005 (42 U.S.C. 6991d) is amended--
(A) in subsection (a), by striking ``study taking''
and inserting ``study, taking'';
(B) in subsection (b)(1), by striking ``relevent''
and inserting ``relevant''; and
(C) in subsection (b)(4), by striking
``Evironmental'' and inserting ``Environmental''.

[[Page 1106]]
119 STAT. 1106

Subtitle C--Boutique Fuels

SEC. 1541. REDUCING THE PROLIFERATION OF BOUTIQUE FUELS.

(a) Temporary Waivers During Supply Emergencies.--Section
211(c)(4)(C) of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)) is amended
by inserting ``(i)'' after ``(C)'' and by adding the following new
clauses at the end thereof:
``(ii) The Administrator may temporarily waive a control or
prohibition respecting the use of a fuel or fuel additive required or
regulated by the Administrator pursuant to subsection (c), (h), (i),
(k), or (m) of this section or prescribed in an applicable
implementation plan under section 110 approved by the Administrator
under clause (i) of this subparagraph if, after consultation with, and
concurrence by, the Secretary of Energy, the Administrator determines
that--
``(I) extreme and unusual fuel or fuel additive supply
circumstances exist in a State or region of the Nation which
prevent the distribution of an adequate supply of the fuel or
fuel additive to consumers;
``(II) such extreme and unusual fuel and fuel additive
supply circumstances are the result of a natural disaster, an
Act of God, a pipeline or refinery equipment failure, or another
event that could not reasonably have been foreseen or prevented
and not the lack of prudent planning on the part of the
suppliers of the fuel or fuel additive to such State or region;
and
``(III) it is in the public interest to grant the waiver
(for example, when a waiver is necessary to meet projected
temporary shortfalls in the supply of the fuel or fuel additive
in a State or region of the Nation which cannot otherwise be
compensated for).

``(iii) If the Administrator makes the determinations required under
clause (ii), such a temporary extreme and unusual fuel and fuel additive
supply circumstances waiver shall be permitted only if--
``(I) the waiver applies to the smallest geographic area
necessary to address the extreme and unusual fuel and fuel
additive supply circumstances;
``(II) the waiver is effective for a period of 20 calendar
days or, if the Administrator determines that a shorter waiver
period is adequate, for the shortest practicable time period
necessary to permit the correction of the extreme and unusual
fuel and fuel additive supply circumstances and to mitigate
impact on air quality;
``(III) the waiver permits a transitional period, the exact
duration of which shall be determined by the Administrator (but
which shall be for the shortest practicable period), after the
termination of the temporary waiver to permit wholesalers and
retailers to blend down their wholesale and retail inventory;
``(IV) the waiver applies to all persons in the motor fuel
distribution system; and
``(V) the Administrator has given public notice to all
parties in the motor fuel distribution system, and local and
State regulators, in the State or region to be covered by the
waiver.

The term `motor fuel distribution system' as used in this clause shall
be defined by the Administrator through rulemaking.

[[Page 1107]]
119 STAT. 1107

``(iv) NOTE: Regulations. Deadline. Within 180 days of the date
of enactment of this clause, the Administrator shall promulgate
regulations to implement clauses (ii) and (iii).

``(v) Nothing in this subparagraph shall--
``(I) limit or otherwise affect the application of any other
waiver authority of the Administrator pursuant to this section
or pursuant to a regulation promulgated pursuant to this
section; and
``(II) subject any State or person to an enforcement action,
penalties, or liability solely arising from actions taken
pursuant to the issuance of a waiver under this subparagraph.''.

(b) Limit on Number of Boutique Fuels.--Section 211(c)(4)(C) of the
Clean Air Act (42 U.S.C. 7545(c)(4)(C)), as amended by subsection (a),
is further amended by adding at the end the following:
``(v)(I) The Administrator shall have no authority, when considering
a State implementation plan or a State implementation plan revision, to
approve under this paragraph any fuel included in such plan or revision
if the effect of such approval increases the total number of fuels
approved under this paragraph as of September 1, 2004, in all State
implementation plans.
``(II) NOTE: Deadline. Federal Register, publication. Public
information. The Administrator, in consultation with the Secretary of
Energy, shall determine the total number of fuels approved under this
paragraph as of September 1, 2004, in all State implementation plans and
shall publish a list of such fuels, including the States and Petroleum
Administration for Defense District in which they are used, in the
Federal Register for public review and comment no later than 90 days
after enactment.

``(III) The Administrator shall remove a fuel from the list
published under subclause (II) if a fuel ceases to be included in a
State implementation plan or if a fuel in a State implementation plan is
identical to a Federal fuel formulation implemented by the
Administrator, but the Administrator shall not reduce the total number
of fuels authorized under the list published under subclause (II).
``(IV) Subclause (I) shall not limit the Administrator's authority
to approve a control or prohibition respecting any new fuel under this
paragraph in a State implementation plan or revision to a State
implementation plan if such new fuel--
``(aa) completely replaces a fuel on the list published
under subclause (II); or
``(bb) does not increase the total number of fuels on the
list published under subclause (II) as of September 1, 2004.

In the NOTE: Supply. Federal Register, publication. event that the
total number of fuels on the list published under subclause (II) at the
time of the Administrator's consideration of a control or prohibition
respecting a new fuel is lower than the total number of fuels on such
list as of September 1, 2004, the Administrator may approve a control or
prohibition respecting a new fuel under this subclause if the
Administrator, after consultation with the Secretary of Energy,
publishes in the Federal Register after notice and comment a finding
that, in the Administrator's judgment, such control or prohibition
respecting a new fuel will not cause fuel supply or distribution
interruptions or have a significant adverse impact on fuel producibility
in the affected area or contiguous areas.

``(V) The Administrator shall have no authority under this
paragraph, when considering any particular State's implementation

[[Page 1108]]
119 STAT. 1108

plan or a revision to that State's implementation plan, to approve any
fuel unless that fuel was, as of the date of such consideration,
approved in at least one State implementation plan in the applicable
Petroleum Administration for Defense District. However, the
Administrator may approve as part of a State implementation plan or
State implementation plan revision a fuel with a summertime Reid Vapor
Pressure of 7.0 psi. In no event shall such approval by the
Administrator cause an increase in the total number of fuels on the list
published under subclause (II).
``(VI) Nothing in this clause shall be construed to have any effect
regarding any available authority of States to require the use of any
fuel additive registered in accordance with subsection (b), including
any fuel additive registered in accordance with subsection (b) after the
enactment of this subclause.''.
(c) Study and Report to Congress on Boutique Fuels.--
(1) Joint study.--The Administrator of the Environmental
Protection Agency and the Secretary shall undertake a study of
the effects on air quality, on the number of fuel blends, on
fuel availability, on fuel fungibility, and on fuel costs of the
State plan provisions adopted pursuant to section 211(c)(4)(C)
of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)).
(2) Focus of study.--The primary focus of the study required
under paragraph (1) shall be to determine how to develop a
Federal fuels system that maximizes motor fuel fungibility and
supply, addresses air quality requirements, and reduces motor
fuel price volatility including that which has resulted from the
proliferation of boutique fuels, and to recommend to Congress
such legislative changes as are necessary to implement such a
system. The study should include the impacts on overall energy
supply, distribution, and use as a result of the legislative
changes recommended.
(3) Conduct of study.--In NOTE: Science and
technology. carrying out their joint duties under this
section, the Administrator and the Secretary shall use sound
science and objective science practices, shall consider the best
available science, shall use data collected by accepted means
and shall consider and include a description of the weight of
the scientific evidence. The Administrator and the Secretary
shall coordinate the study required by this section with other
studies required by the Act.
(4) Responsibility of administrator.--In carrying out the
study required by this section, the Administrator shall
coordinate obtaining comments from affected parties interested
in the air quality impact assessment portion of the study.
(5) Responsibility of secretary.--In carrying out the study
required by this section, the Secretary shall coordinate
obtaining comments from affected parties interested in the fuel
availability, number of fuel blends, fuel fungibility, and fuel
costs portion of the study.
(6) Report to congress.--
The NOTE: Deadline. Administrator and the Secretary jointly
shall submit the results of the study required by this section
in a report to the Congress not later than 12 months after the
date of the enactment of this Act, together with any recommended
regulatory and legislative changes. Such report shall be
submitted to the Committee on Energy and Commerce of the United
States House of Representatives and the Committees on Energy and
Natural Resources and on Environment and Public Works of the
Senate.

[[Page 1109]]
119 STAT. 1109

(7) Authorization of appropriations.--There is authorized to
be appropriated jointly to the Administrator and the Secretary
$500,000 for the completion of the study required under this
subsection.

(d) Definitions.--In this section:
(1) The term ``Administrator'' means the Administrator of
the Environmental Protection Agency.
(2) The term ``fuel'' means gasoline, diesel fuel, and any
other liquid petroleum product commercially known as gasoline
and diesel fuel for use in highway and nonroad motor vehicles.
(3) The term ``a control or prohibition respecting a new
fuel'' means a control or prohibition on the formulation,
composition, or emissions characteristics of a fuel that would
require the increase or decrease of a constituent in gasoline or
diesel fuel.

TITLE XVI--CLIMATE CHANGE

Subtitle A--National Climate Change Technology Deployment

SEC. 1601. GREENHOUSE GAS INTENSITY REDUCING TECHNOLOGY STRATEGIES.

Title XVI of the Energy Policy Act of 1992 (42 U.S.C. 13381 et seq.)
is amended by adding at the end the following:

``SEC. 1610. NOTE: 42 USC 13389. GREENHOUSE GAS INTENSITY REDUCING
STRATEGIES.

``(a) Definitions.--In this section:
``(1) Advisory committee.--The term `Advisory Committee'
means the Climate Change Technology Advisory Committee
established under subsection (f)(1).
``(2) Carbon sequestration.--The term `carbon sequestration'
means the capture of carbon dioxide through terrestrial,
geological, biological, or other means, which prevents the
release of carbon dioxide into the atmosphere.
``(3) Committee.--The term `Committee' means the Committee
on Climate Change Technology established under subsection
(b)(1).
``(4) Developing country.--The term `developing country' has
the meaning given the term in section 1608(m).
``(5) Greenhouse gas.--The term `greenhouse gas' means--
``(A) carbon dioxide;
``(B) methane;
``(C) nitrous oxide;
``(D) hydrofluorocarbons;
``(E) perfluorocarbons; and
``(F) sulfur hexafluoride.
``(6) Greenhouse gas intensity.--The term `greenhouse gas
intensity' means the ratio of greenhouse gas emissions to
economic output.
``(7) National laboratory.--The term `National Laboratory'
has the meaning given the term in section 3(3) of the Energy
Policy Act of 2005.

``(b) Committee on NOTE: Establishment. Deadline. Climate Change
Technology.--

[[Page 1110]]
119 STAT. 1110

``(1) In general.--Not later than 180 days after the date of
enactment of this section, the President shall establish a
Committee on Climate Change Technology to--
``(A) integrate current Federal climate reports; and
``(B) coordinate Federal climate change technology
activities and programs carried out in furtherance of
the strategy developed under subsection (c)(1).
``(2) Membership.--The Committee shall be composed of at
least 7 members, including--
``(A) the Secretary, who shall chair the Committee;
``(B) the Secretary of Commerce;
``(C) the Chairman of the Council on Environmental
Quality;
``(D) the Secretary of Agriculture;
``(E) the Administrator of the Environmental
Protection Agency;
``(F) the Secretary of Transportation;
``(G) the Director of the Office of Science and
Technology Policy; and
``(H) other representatives as may be determined by
the President.
``(3) Staff.--The members of the Committee shall provide
such personnel as are necessary to enable the Committee to
perform its duties.

``(c) National NOTE: Research and development. Deadline. Climate
Change Technology Policy.--
``(1) In general.--Not later than 18 months after the date
of enactment of this section, the Committee shall, based on
applicable Federal climate reports, submit to the Secretary and
the President a national strategy to promote the deployment and
commercialization of greenhouse gas intensity reducing
technologies and practices developed through research and
development programs conducted by the National Laboratories,
other Federal research facilities, institutions of higher
education, and the private sector.
``(2) Updates.--The Committee shall--
``(A) NOTE: Public information. at the time of
submission of the strategy to the President under
paragraph (1), also make the strategy available to the
public; and
``(B) update the strategy every 5 years, or more
frequently as the Committee determines to be necessary.

``(d) Climate NOTE: Establishment. Deadline. Change Technology
Program.--Not later than 180 days after the date on which the Committee
is established under subsection (b)(1), the Secretary, in consultation
with the Committee, shall establish within the Department of Energy the
Climate Change Technology Program to--
``(1) assist the Committee in the interagency coordination
of climate change technology research, development,
demonstration, and deployment to reduce greenhouse gas
intensity; and
``(2) carry out the programs authorized under this section.

``(e) Technology Inventory.--
``(1) In general.--The NOTE: Public
information. Secretary shall conduct and make public an
inventory and evaluation of greenhouse gas intensity reducing
technologies that have been developed, or are under development,
by the National Laboratories, other Federal research facilities,
institutions of higher education, and the private sector to
determine which technologies are suitable for commercialization
and deployment.

[[Page 1111]]
119 STAT. 1111

``(2) Report.--Not later than 180 days after the completion
of the inventory under paragraph (1), the Secretary shall submit
to Congress a report that includes the results of the completed
inventory and any recommendations of the Secretary.
``(3) Use.--The Secretary shall use the results of the
inventory as guidance in the commercialization and deployment of
greenhouse gas intensity reducing technologies.
``(4) Updated inventory.--The Secretary shall--
``(A) periodically update the inventory under
paragraph (1), including when determined necessary by
the Committee; and
``(B) make the updated inventory available to the
public.

``(f) Climate Change Technology Advisory Committee.--
``(1) In general.--The Secretary, in consultation with the
Committee, may establish under section 624 of the Department of
Energy Organization Act (42 U.S.C. 7234) a Climate Change
Technology Advisory Committee to identify statutory, regulatory,
economic, and other barriers to the commercialization and
deployment of greenhouse gas intensity reducing technologies and
practices in the United States.
``(2) Composition.--The Advisory Committee shall be composed
of the following members, to be appointed by the Secretary, in
consultation with the Committee:
``(A) 1 representative shall be appointed from each
National Laboratory.
``(B) 3 members shall be representatives of energy-
producing trade organizations.
``(C) 3 members shall represent energy-intensive
trade organizations.
``(D) 3 members shall represent groups that
represent end-use energy and other consumers.
``(E) 3 members shall be employees of the Federal
Government who are experts in energy technology,
intellectual property, and tax.
``(F) 3 members shall be representatives of
institutions of higher education with expertise in
energy technology development that are recommended by
the National Academy of Engineering.
``(3) Report.--Not later than 1 year after the date of
enactment of this section and annually thereafter, the Advisory
Committee shall submit to the Committee a report that
describes--
``(A) the findings of the Advisory Committee; and
``(B) any recommendations of the Advisory Committee
for the removal or reduction of barriers to
commercialization, deployment, and increasing the use of
greenhouse gas intensity reducing technologies and
practices.

``(g) Greenhouse Gas Intensity Reducing Technology Deployment.--
``(1) In general.--Based on the strategy developed under
subsection (c)(1), the technology inventory conducted under
subsection (e)(1), the greenhouse gas intensity reducing
technology study report submitted under subsection (e)(2), and
reports under subsection (f)(3), if any, the Committee shall
develop recommendations that would provide for the removal of

[[Page 1112]]
119 STAT. 1112

domestic barriers to the commercialization and deployment of
greenhouse gas intensity reducing technologies and practices.
``(2) Requirements.--In developing the recommendations under
paragraph (1), the Committee shall consider in the aggregate--
``(A) the cost-effectiveness of the technology;
``(B) fiscal and regulatory barriers;
``(C) statutory and other barriers; and
``(D) intellectual property issues.
``(3) Demonstration projects.--In developing recommendations
under paragraph (1), the Committee may identify the need for
climate change technology demonstration projects.
``(4) Report.--Not later than 18 months after the date of
enactment of this section, the Committee shall submit to the
President and Congress a report that--
``(A) identifies, based on the report submitted
under subsection (f)(3), any barriers to, and commercial
risks associated with, the deployment of greenhouse gas
intensity reducing technologies; and
``(B) includes a plan for carrying out demonstration
projects.
``(5) Updates.--The Committee shall--
``(A) NOTE: Public information. at the time of
submission of the report to Congress under paragraph
(4), also make the report available to the public; and
``(B) update the report every 5 years, or more
frequently as the Committee determines to be necessary.

``(h) Procedures for NOTE: Notification. Public
information. Calculating, Monitoring, and Analyzing Greenhouse Gas
Intensity.--The Secretary, in collaboration with the Committee and the
National Institute of Standards and Technology, and after public notice
and opportunity for comment, shall develop standards and best practices
for calculating, monitoring, and analyzing greenhouse gas intensity.

``(i) Demonstration Projects.--
``(1) In general.--The Secretary shall, subject to the
availability of appropriations, support demonstration projects
that--
``(A) increase the reduction of the greenhouse gas
intensity to levels below that which would be achieved
by technologies being used in the United States as of
the date of enactment of this section;
``(B) maximize the potential return on Federal
investment;
``(C) demonstrate distinct roles in public-private
partnerships;
``(D) produce a large-scale reduction of greenhouse
gas intensity if commercialization occurred; and
``(E) support a diversified portfolio to mitigate
the uncertainty associated with a single technology.
``(2) Cost sharing.--In supporting a demonstration project
under this subsection, the Secretary shall require cost-sharing
in accordance with section 988 of the Energy Policy Act of 2005.
``(3) Authorization of appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out this
subsection.

[[Page 1113]]
119 STAT. 1113

``(j) Cooperative Research and Development Agreements.--In carrying
out greenhouse gas intensity reduction research and technology
deployment activities under this subtitle, the Secretary may enter into
cooperative research and development agreements under section 12 of the
Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a).''.

Subtitle B--Climate Change Technology Deployment in Developing Countries

SEC. 1611. CLIMATE CHANGE TECHNOLOGY DEPLOYMENT IN DEVELOPING COUNTRIES.

The Global Environmental Protection Assistance Act of 1989 (Public
Law 101-240; 103 Stat. 2521) is amending by adding at the end the
following:

``PART C--TECHNOLOGY DEPLOYMENT IN DEVELOPING COUNTRIES

``SEC. 731. NOTE: 22 USC 7901. DEFINITIONS.

``In this part:
``(1) Carbon sequestration.--The term `carbon sequestration'
means the capture of carbon dioxide through terrestrial,
geological, biological, or other means, which prevents the
release of carbon dioxide into the atmosphere.
``(2) Greenhouse gas.--The term `greenhouse gas' means
carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride.
``(3) Greenhouse gas intensity.--The term `greenhouse gas
intensity' means the ratio of greenhouse gas emissions to
economic output.

``SEC. 732. NOTE: 22 USC 7902. REDUCTION OF GREENHOUSE GAS
INTENSITY.

``(a) Lead Agency.--
``(1) In general.--The Department of State shall act as the
lead agency for integrating into United States foreign policy
the goal of reducing greenhouse gas intensity in developing
countries.
``(2) Reports.--
``(A) Initial report.--Not later than 180 days after
the date of enactment of this part, the Secretary of
State shall submit to the appropriate authorizing and
appropriating committees of Congress an initial report,
based on the most recent information available to the
Secretary from reliable public sources, that identifies
the 25 developing countries that are the largest
greenhouse gas emitters, including for each country--
``(i) an estimate of the quantity and types of
energy used;
``(ii) an estimate of the greenhouse gas
intensity of the energy, manufacturing,
agricultural, and transportation sectors;
``(iii) a description the progress of any
significant projects undertaken to reduce
greenhouse gas intensity;

[[Page 1114]]
119 STAT. 1114

``(iv) a description of the potential for
undertaking projects to reduce greenhouse gas
intensity;
``(v) a description of any obstacles to the
reduction of greenhouse gas intensity; and
``(vi) a description of the best practices
learned by the Agency for International
Development from conducting previous pilot and
demonstration projects to reduce greenhouse gas
intensity.
``(B) Update.--Not later than 18 months after the
date on which the initial report is submitted under
subparagraph (A), the Secretary shall submit to the
appropriate authorizing and appropriating committees of
Congress, based on the best information available to the
Secretary, an update of the information provided in the
initial report.
``(C) Use.--
``(i) Initial report.--The Secretary of State
shall use the initial report submitted under
subparagraph (A) to establish baselines for the
developing countries identified in the report with
respect to the information provided under clauses
(i) and (ii) of that subparagraph.
``(ii) Annual reports.--The Secretary of State
shall use the annual reports prepared under
subparagraph (B) and any other information
available to the Secretary to track the progress
of the developing countries with respect to
reducing greenhouse gas intensity.

``(b) Projects.--The Secretary of State, in coordination with
Administrator of the United States Agency for International Development,
shall (directly or through agreements with the World Bank, the
International Monetary Fund, the Overseas Private Investment
Corporation, and other development institutions) provide assistance to
developing countries specifically for projects to reduce greenhouse gas
intensity, including projects to--
``(1) leverage, through bilateral agreements, funds for
reduction of greenhouse gas intensity;
``(2) increase private investment in projects and activities
to reduce greenhouse gas intensity; and
``(3) expedite the deployment of technology to reduce
greenhouse gas intensity.

``(c) Focus.--In providing assistance under subsection (b), the
Secretary of State shall focus on--
``(1) promoting the rule of law, property rights, contract
protection, and economic freedom; and
``(2) increasing capacity, infrastructure, and training.

``(d) Priority.--In providing assistance under subsection (b), the
Secretary of State shall give priority to projects in the 25 developing
countries identified in the report submitted under subsection (a)(2)(A).

``SEC. 733. NOTE: 22 USC 7903. TECHNOLOGY INVENTORY FOR DEVELOPING
COUNTRIES.

``(a) In General.--The Secretary of Energy, in coordination with the
Secretary of State and the Secretary of Commerce, shall conduct an
inventory of greenhouse gas intensity reducing technologies that are
developed, or under development in the United States, to identify
technologies that are suitable for transfer to, deployment in, and
commercialization in the developing countries identified in the report
submitted under section 732(a)(2)(A).

[[Page 1115]]
119 STAT. 1115

``(b) Report.--Not later than 180 days after the completion of the
inventory under subsection (a), the Secretary of State and the Secretary
of Energy shall jointly submit to Congress a report that--
``(1) includes the results of the completed inventory;
``(2) identifies obstacles to the transfer, deployment, and
commercialization of the inventoried technologies;
``(3) includes results from previous Federal reports related
to the inventoried technologies; and
``(4) includes an analysis of market forces related to the
inventoried technologies.

``SEC. 734. NOTE: 22 USC 7904. TRADE-RELATED BARRIERS TO EXPORT OF
GREENHOUSE GAS INTENSITY REDUCING TECHNOLOGIES.

``(a) In General.--Not NOTE: Deadline. later than 1 year after
the date of enactment of this part, the United States Trade
Representative shall (as appropriate and consistent with applicable
bilateral, regional, and mutual trade agreements)--
``(1) identify trade-relations barriers maintained by
foreign countries to the export of greenhouse gas intensity
reducing technologies and practices from the United States to
the developing countries identified in the report submitted
under section 732(a)(2)(A); and
``(2) negotiate with foreign countries for the removal of
those barriers.

``(b) Annual Report.--Not later than 1 year after the date on which
a report is submitted under subsection (a)(1) and annually thereafter,
the United States Trade Representative shall submit to Congress a report
that describes any progress made with respect to removing the barriers
identified by the United States Trade Representative under subsection
(a)(1).

``SEC. 735. NOTE: 22 USC 7905. GREENHOUSE GAS INTENSITY REDUCING
TECHNOLOGY EXPORT INITIATIVE.

``(a) In General.--There is NOTE: Establishment. established an
interagency working group to carry out a Greenhouse Gas Intensity
Reducing Technology Export Initiative to--
``(1) promote the export of greenhouse gas intensity
reducing technologies and practices from the United States;
``(2) identify developing countries that should be
designated as priority countries for the purpose of exporting
greenhouse gas intensity reducing technologies and practices,
based on the report submitted under section 732(a)(2)(A);
``(3) identify potential barriers to adoption of exported
greenhouse gas intensity reducing technologies and practices
based on the reports submitted under section 734; and
``(4) identify previous efforts to export energy
technologies to learn best practices.

``(b) Composition.--The working group shall be composed of--
``(1) the Secretary of State, who shall act as the head of
the working group;
``(2) the Administrator of the United States Agency for
International Development;
``(3) the United States Trade Representative;
``(4) a designee of the Secretary of Energy;
``(5) a designee of the Secretary of Commerce; and
``(6) a designee of the Administrator of the Environmental
Protection Agency.

[[Page 1116]]
119 STAT. 1116

``(c) Performance Reviews and Reports.--Not later than 180 days
after the date of enactment of this part and each year thereafter, the
interagency working group shall--
``(1) conduct a performance review of actions taken and
results achieved by the Federal Government (including each of
the agencies represented on the interagency working group) to
promote the export of greenhouse gas intensity reducing
technologies and practices from the United States; and
``(2) submit to the appropriate authorizing and
appropriating committees of Congress a report that describes the
results of the performance reviews and evaluates progress in
promoting the export of greenhouse gas intensity reducing
technologies and practices from the United States, including any
recommendations for increasing the export of the technologies
and practices.

``SEC. 736. NOTE: 22 USC 7906. TECHNOLOGY DEMONSTRATION PROJECTS.

``(a) In General.--The Secretary of State, in coordination with the
Secretary of Energy and the Administrator of the United States Agency
for International Development, shall promote the adoption of
technologies and practices that reduce greenhouse gas intensity in
developing countries in accordance with this section.
``(b) Demonstration Projects.--
``(1) In general.--The Secretaries and the Administrator
shall plan, coordinate, and carry out, or provide assistance for
the planning, coordination, or carrying out of, demonstration
projects under this section in at least 10 eligible countries,
as determined by the Secretaries and the Administrator.
``(2) Eligibility.--A country shall be eligible for
assistance under this subsection if the Secretaries and the
Administrator determine that the country has demonstrated a
commitment to--
``(A) just governance, including--
``(i) promoting the rule of law;
``(ii) respecting human and civil rights;
``(iii) protecting private property rights;
and
``(iv) combating corruption; and
``(B) economic freedom, including economic policies
that--
``(i) encourage citizens and firms to
participate in global trade and international
capital markets;
``(ii) promote private sector growth and the
sustainable management of natural resources; and
``(iii) strengthen market forces in the
economy.
``(3) Selection.--In determining which eligible countries to
provide assistance to under paragraph (1), the Secretaries and
the Administrator shall consider--
``(A) the opportunity to reduce greenhouse gas
intensity in the eligible country; and
``(B) the opportunity to generate economic growth in
the eligible country.
``(4) Types of projects.--Demonstration projects under this
section may include--
``(A) coal gasification, coal liquefaction, and
clean coal projects;
``(B) carbon sequestration projects;
``(C) cogeneration technology initiatives;

[[Page 1117]]
119 STAT. 1117

``(D) renewable projects; and
``(E) lower emission transportation.

``SEC. 737. NOTE: 22 USC 7907. FELLOWSHIP AND EXCHANGE PROGRAMS.

``The Secretary of State, in coordination with the Secretary of
Energy, the Secretary of Commerce, and the Administrator of the
Environmental Protection Agency, shall carry out fellowship and exchange
programs under which officials from developing countries visit the
United States to acquire expertise and knowledge of best practices to
reduce greenhouse gas intensity in their countries.

``SEC. 738. NOTE: 22 USC 7908. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated such sums as are necessary
to carry out this part.

``SEC. 739. NOTE: 22 USC 7901 note. EFFECTIVE DATE.

``Except as otherwise provided in this part, this part takes effect
on October 1, 2005.''.

TITLE XVII--INCENTIVES FOR INNOVATIVE TECHNOLOGIES

SEC. 1701. NOTE: 22 USC 16511. DEFINITIONS.

In this title:
(1) Commercial technology.--
(A) In general.--The term ``commercial technology''
means a technology in general use in the commercial
marketplace.
(B) Inclusions.--The term ``commercial technology''
does not include a technology solely by use of the
technology in a demonstration project funded by the
Department.
(2) Cost.--The term ``cost'' has the meaning given the term
``cost of a loan guarantee'' within the meaning of section
502(5)(C) of the Federal Credit Reform Act of 1990 (2 U.S.C.
661a(5)(C)).
(3) Eligible project.--The term ``eligible project'' means a
project described in section 1703.
(4) Guarantee.--
(A) In general.--The term ``guarantee'' has the
meaning given the term ``loan guarantee'' in section 502
of the Federal Credit Reform Act of 1990 (2 U.S.C.
661a).
(B) Inclusion.--The term ``guarantee'' includes a
loan guarantee commitment (as defined in section 502 of
the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)).
(5) Obligation.--The term ``obligation'' means the loan or
other debt obligation that is guaranteed under this section.

SEC. 1702. NOTE: 22 USC 16512. TERMS AND CONDITIONS.

(a) In General.--Except for division C of Public Law 108-324, the
Secretary shall make guarantees under this or any other Act for projects
on such terms and conditions as the Secretary determines, after
consultation with the Secretary of the Treasury, only in accordance with
this section.
(b) Specific Appropriation or Contribution.--No guarantee shall be
made unless--
(1) an appropriation for the cost has been made; or

[[Page 1118]]
119 STAT. 1118

(2) the Secretary has received from the borrower a payment
in full for the cost of the obligation and deposited the payment
into the Treasury.

(c) Amount.--Unless otherwise provided by law, a guarantee by the
Secretary shall not exceed an amount equal to 80 percent of the project
cost of the facility that is the subject of the guarantee, as estimated
at the time at which the guarantee is issued.
(d) Repayment.--
(1) In general.--No guarantee shall be made unless the
Secretary determines that there is reasonable prospect of
repayment of the principal and interest on the obligation by the
borrower.
(2) Amount.--No guarantee shall be made unless the Secretary
determines that the amount of the obligation (when combined with
amounts available to the borrower from other sources) will be
sufficient to carry out the project.
(3) Subordination.--The obligation shall be subject to the
condition that the obligation is not subordinate to other
financing.

(e) Interest Rate.--An obligation shall bear interest at a rate that
does not exceed a level that the Secretary determines appropriate,
taking into account the prevailing rate of interest in the private
sector for similar loans and risks.
(f) Term.--The term of an obligation shall require full repayment
over a period not to exceed the lesser of--
(1) 30 years; or
(2) 90 percent of the projected useful life of the physical
asset to be financed by the obligation (as determined by the
Secretary).

(g) Defaults.--
(1) Payment by secretary.--
(A) In general.--If a borrower defaults on the
obligation (as defined in regulations promulgated by the
Secretary and specified in the guarantee contract), the
holder of the guarantee shall have the right to demand
payment of the unpaid amount from the Secretary.
(B) Payment required.--Within such period as may be
specified in the guarantee or related agreements, the
Secretary shall pay to the holder of the guarantee the
unpaid interest on, and unpaid principal of the
obligation as to which the borrower has defaulted,
unless the Secretary finds that there was no default by
the borrower in the payment of interest or principal or
that the default has been remedied.
(C) Forbearance.--Nothing in this subsection
precludes any forbearance by the holder of the
obligation for the benefit of the borrower which may be
agreed upon by the parties to the obligation and
approved by the Secretary.
(2) Subrogation.--
(A) In general.--If the Secretary makes a payment
under paragraph (1), the Secretary shall be subrogated
to the rights of the recipient of the payment as
specified in the guarantee or related agreements
including, where appropriate, the authority
(notwithstanding any other provision of law) to--

[[Page 1119]]
119 STAT. 1119

(i) complete, maintain, operate, lease, or
otherwise dispose of any property acquired
pursuant to such guarantee or related agreements;
or
(ii) permit the borrower, pursuant to an
agreement with the Secretary, to continue to
pursue the purposes of the project if the
Secretary determines this to be in the public
interest.
(B) Superiority of rights.--The rights of the
Secretary, with respect to any property acquired
pursuant to a guarantee or related agreements, shall be
superior to the rights of any other person with respect
to the property.
(C) Terms and conditions.--A guarantee agreement
shall include such detailed terms and conditions as the
Secretary determines appropriate to--
(i) protect the interests of the United States
in the case of default; and
(ii) have available all the patents and
technology necessary for any person selected,
including the Secretary, to complete and operate
the project.
(3) Payment of principal and interest by secretary.--With
respect to any obligation guaranteed under this section, the
Secretary may enter into a contract to pay, and pay, holders of
the obligation, for and on behalf of the borrower, from funds
appropriated for that purpose, the principal and interest
payments which become due and payable on the unpaid balance of
the obligation if the Secretary finds that--
(A)(i) the borrower is unable to meet the payments
and is not in default;
(ii) it is in the public interest to permit the
borrower to continue to pursue the purposes of the
project; and
(iii) the probable net benefit to the Federal
Government in paying the principal and interest will be
greater than that which would result in the event of a
default;
(B) the amount of the payment that the Secretary is
authorized to pay shall be no greater than the amount of
principal and interest that the borrower is obligated to
pay under the agreement being guaranteed; and
(C) the borrower agrees to reimburse the Secretary
for the payment (including interest) on terms and
conditions that are satisfactory to the Secretary.
(4) Action by attorney general.--
(A) Notification.--If the borrower defaults on an
obligation, the Secretary shall notify the Attorney
General of the default.
(B) Recovery.--On notification, the Attorney General
shall take such action as is appropriate to recover the
unpaid principal and interest due from--
(i) such assets of the defaulting borrower as
are associated with the obligation; or
(ii) any other security pledged to secure the
obligation.

(h) Fees.--
(1) In general.--The Secretary shall charge and collect fees
for guarantees in amounts the Secretary determines are
sufficient to cover applicable administrative expenses.

[[Page 1120]]
119 STAT. 1120

(2) Availability.--Fees collected under this subsection
shall--
(A) be deposited by the Secretary into the Treasury;
and
(B) remain available until expended, subject to such
other conditions as are contained in annual
appropriations Acts.

(i) Records; Audits.--
(1) In general.--A recipient of a guarantee shall keep such
records and other pertinent documents as the Secretary shall
prescribe by regulation, including such records as the Secretary
may require to facilitate an effective audit.
(2) Access.--The Secretary and the Comptroller General of
the United States, or their duly authorized representatives,
shall have access, for the purpose of audit, to the records and
other pertinent documents.

(j) Full Faith and Credit.--The full faith and credit of the United
States is pledged to the payment of all guarantees issued under this
section with respect to principal and interest.

SEC. 1703. NOTE: 42 USC 16513. ELIGIBLE PROJECTS.

(a) In General.--The Secretary may make guarantees under this
section only for projects that--
(1) avoid, reduce, or sequester air pollutants or
anthropogenic emissions of greenhouse gases; and
(2) employ new or significantly improved technologies as
compared to commercial technologies in service in the United
States at the time the guarantee is issued.

(b) Categories.--Projects from the following categories shall be
eligible for a guarantee under this section:
(1) Renewable energy systems.
(2) Advanced fossil energy technology (including coal
gasification meeting the criteria in subsection (d)).
(3) Hydrogen fuel cell technology for residential,
industrial, or transportation applications.
(4) Advanced nuclear energy facilities.
(5) Carbon capture and sequestration practices and
technologies, including agricultural and forestry practices that
store and sequester carbon.
(6) Efficient electrical generation, transmission, and
distribution technologies.
(7) Efficient end-use energy technologies.
(8) Production facilities for fuel efficient vehicles,
including hybrid and advanced diesel vehicles.
(9) Pollution control equipment.
(10) Refineries, meaning facilities at which crude oil is
refined into gasoline.

(c) Gasification Projects.--The Secretary may make guarantees for
the following gasification projects:
(1) Integrated gasification combined cycle projects.--
Integrated gasification combined cycle plants meeting the
emission levels under subsection (d), including--
(A) projects for the generation of electricity--
(i) for which, during the term of the
guarantee--
(I) coal, biomass, petroleum coke,
or a combination of coal, biomass, and
petroleum coke will

[[Page 1121]]
119 STAT. 1121

account for at least 65 percent of
annual heat input; and
(II) electricity will account for at
least 65 percent of net useful annual
energy output;
(ii) that have a design that is determined by
the Secretary to be capable of accommodating the
equipment likely to be necessary to capture the
carbon dioxide that would otherwise be emitted in
flue gas from the plant;
(iii) that have an assured revenue stream that
covers project capital and operating costs
(including servicing all debt obligations covered
by the guarantee) that is approved by the
Secretary and the relevant State public utility
commission; and
(iv) on which construction commences not later
than the date that is 3 years after the date of
the issuance of the guarantee;
(B) a project to produce energy from coal (of not
more than 13,000 Btu/lb and mined in the western United
States) using appropriate advanced integrated
gasification combined cycle technology that minimizes
and offers the potential to sequester carbon dioxide
emissions and that--
(i) may include repowering of existing
facilities;
(ii) may be built in stages;
(iii) shall have a combined output of at least
100 megawatts;
(iv) shall be located in a western State at an
altitude greater than 4,000 feet; and
(v) shall demonstrate the ability to use coal
with an energy content of not more than 9,000 Btu/
lb;
(C) a project located in a taconite-producing region
of the United States that is entitled under the law of
the State in which the plant is located to enter into a
long-term contract approved by a State public utility
commission to sell at least 450 megawatts of output to a
utility;
(D) facilities that--
(i) generate one or more hydrogen-rich and
carbon monoxide-rich product streams from the
gasification of coal or coal waste; and
(ii) use those streams to facilitate the
production of ultra clean premium fuels through
the Fischer-Tropsch process; and
(E) a project to produce energy and clean fuels,
using appropriate coal liquefaction technology, from
Western bituminous or subbituminous coal, that--
(i) is owned by a State government; and
(ii) may include tribal and private coal
resources.
(2) Industrial gasification projects.--Facilities that
gasify coal, biomass, or petroleum coke in any combination to
produce synthesis gas for use as a fuel or feedstock and for
which electricity accounts for less than 65 percent of the
useful energy output of the facility.
(3) Petroleum coke NOTE: Loans. gasification projects.--
The Secretary is encouraged to make loan guarantees under this
title available for petroleum coke gasification projects.

[[Page 1122]]
119 STAT. 1122

(4) Liquefaction project.--Notwithstanding any other
provision of law, funds awarded under the clean coal power
initiative under subtitle A of title IV for coal-to-oil
liquefaction projects may be used to finance the cost of loan
guarantees for projects awarded such funds.

(d) Emission Levels.--In addition to any other applicable Federal or
State emission limitation requirements, a project shall attain at
least--
(1) total sulfur dioxide emissions in flue gas from the
project that do not exceed 0.05 lb/MMBtu;
(2) a 90-percent removal rate (including any fuel
pretreatment) of mercury from the coal-derived gas, and any
other fuel, combusted by the project;
(3) total nitrogen oxide emissions in the flue gas from the
project that do not exceed 0.08 lb/MMBtu; and
(4) total particulate emissions in the flue gas from the
project that do not exceed 0.01 lb/MMBtu.

(e) Qualification of Facilities Receiving Tax Credits.--A project
that receives tax credits for clean coal technology shall not be
disqualified from receiving a guarantee under this title.

SEC. 1704. NOTE: 42 USC 16514. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There are authorized to be appropriated such sums
as are necessary to provide the cost of guarantees under this title.
(b) Use of Other Appropriated Funds.--The Department may use amounts
awarded under the clean coal power initiative under subtitle A of title
IV to carry out the project described in section 1703(c)(1)(C), on the
request of the recipient of such award, for a loan guarantee, to the
extent that the amounts have not yet been disbursed to, or have been
repaid by, the recipient.

TITLE XVIII--STUDIES

SEC. 1801. STUDY ON INVENTORY OF PETROLEUM AND NATURAL GAS STORAGE.

(a) Definition.--For purposes of this section ``petroleum'' means
crude oil, motor gasoline, jet fuel, distillates, and propane.
(b) Study.--The Secretary shall conduct a study on petroleum and
natural gas storage capacity and operational inventory levels,
nationwide and by major geographical regions.
(c) Contents.--The study shall address--
(1) historical normal ranges for petroleum and natural gas
inventory levels;
(2) historical and projected storage capacity trends;
(3) estimated operation inventory levels below which
outages, delivery slowdown, rationing, interruptions in service,
or other indicators of shortage begin to appear;
(4) explanations for inventory levels dropping below normal
ranges; and
(5) the ability of industry to meet United States demand for
petroleum and natural gas without shortages or price spikes,
when inventory levels are below normal ranges.

(d) Report to Congress.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall submit a report

[[Page 1123]]
119 STAT. 1123

to Congress on the results of the study, including findings and any
recommendations for preventing future supply shortages.

SEC. 1802. NOTE: Deadline. STUDY OF ENERGY EFFICIENCY STANDARDS.

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

SEC. 1803. TELECOMMUTING STUDY.

(a) Study Required.--The Secretary, in consultation with the
Commission, the Director of the Office of Personnel Management, the
Administrator of General Services, and the Administrator of NTIA, shall
conduct a study of the energy conservation implications of the
widespread adoption of telecommuting by Federal employees in the United
States.
(b) Required Subjects of Study.--The study required by subsection
(a) shall analyze the following subjects in relation to the energy
saving potential of telecommuting by Federal employees:
(1) Reductions of energy use and energy costs in commuting
and regular office heating, cooling, and other operations.
(2) Other energy reductions accomplished by telecommuting.
(3) Existing regulatory barriers that hamper telecommuting,
including barriers to broadband telecommunications services
deployment.
(4) Collateral benefits to the environment, family life, and
other values.

(c) Report Required.--The Secretary shall submit to the President
and Congress a report on the study required by this section not later
than 6 months after the date of enactment of this Act. Such report shall
include a description of the results of the analysis of each of the
subjects described in subsection (b).
(d) Definitions.--As used in this section:
(1) Commission.--The term ``Commission'' means the Federal
Communications Commission.
(2) NTIA.--The term ``NTIA'' means the National
Telecommunications and Information Administration of the
Department of Commerce.
(3) Telecommuting.--The term ``telecommuting'' means the
performance of work functions using communications technologies,
thereby eliminating or substantially reducing the need to
commute to and from traditional worksites.
(4) Federal employee.--The term ``Federal employee'' has the
meaning provided the term ``employee'' by section 2105 of title
5, United States Code.

SEC. 1804. LIHEAP REPORT.

Not later than 1 year after the date of enactment of this Act, the
Secretary of Health and Human Services shall transmit to Congress a
report on how the Low-Income Home Energy Assistance Program could be
used more effectively to prevent loss of

[[Page 1124]]
119 STAT. 1124

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. 1805. OIL BYPASS FILTRATION TECHNOLOGY.

The Secretary and the Administrator of the Environmental Protection
Agency shall--
(1) conduct a joint study of the benefits of oil bypass
filtration technology in reducing demand for oil and protecting
the environment;
(2) examine the feasibility of using oil bypass filtration
technology in Federal motor vehicle fleets; and
(3) include in such study, prior to any determination of the
feasibility of using oil bypass filtration technology, the
evaluation of products and various manufacturers.

SEC. 1806. 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. 1807. NOTE: 42 USC 16521. REPORT ON ENERGY INTEGRATION WITH
LATIN AMERICA.

The Secretary shall submit an annual report to the Committee on
Energy and Commerce of the United States House of Representatives and to
the Committee on Energy and Natural Resources of the Senate concerning
the status of energy export development in Latin America and efforts by
the Secretary and other departments and agencies of the United States to
promote energy integration with Latin America. NOTE: Mexico. The
report shall contain a detailed analysis of the status of energy export
development in Mexico and a description of all significant efforts by
the Secretary and other departments and agencies to promote a
constructive relationship with Mexico regarding the development of that
nation's energy capacity. In particular this report shall outline
efforts the Secretary and other departments and agencies have made to
ensure that regulatory approval and oversight of United States/Mexico
border projects that result in the expansion of Mexican energy capacity
are effectively coordinated across departments and with the Mexican
government.

SEC. 1808. NOTE: 42 USC 16522. LOW-VOLUME GAS RESERVOIR STUDY.

(a) Study.--The NOTE: Grants. Secretary shall make a grant to an
organization of oil and gas producing States, specifically those
containing significant numbers of marginal oil and natural gas wells,
for conducting an annual study of low-volume natural gas reservoirs.
Such organization shall work with the State geologist of each State
being studied.

(b) Contents.--The studies under this section shall--
(1) determine the status and location of marginal wells and
gas reservoirs;
(2) gather the production information of these marginal
wells and reservoirs;
(3) estimate the remaining producible reserves based on
variable pipeline pressures;

[[Page 1125]]
119 STAT. 1125

(4) locate low-pressure gathering facilities and pipelines;
(5) recommend incentives which will enable the continued
production of these resources;
(6) produce maps and literature to disseminate to States to
promote conservation of natural gas reserves; and
(7) evaluate the amount of natural gas that is being wasted
through the practice of venting or flaring of natural gas
produced in association with crude oil well production.

(c) Data Analysis.--Data development and analysis under this section
shall be performed by an institution of higher education with GIS
capabilities. If the organization receiving the grant under subsection
(a) does not have GIS capabilities, such organization shall contract
with one or more entities with--
(1) technological capabilities and resources to perform
advanced image processing, GIS programming, and data analysis;
and
(2) the ability to--
(A) process remotely sensed imagery with high
spatial resolution;
(B) deploy global positioning systems;
(C) process and synthesize existing, variable-format
gas well, pipeline, gathering facility, and reservoir
data;
(D) create and query GIS databases with
infrastructure location and attribute information;
(E) write computer programs to customize relevant
GIS software;
(F) generate maps, charts, and graphs which
summarize findings from data research for presentation
to different audiences; and
(G) deliver data in a variety of formats, including
Internet Map Server for query and display, desktop
computer display, and access through handheld personal
digital assistants.

(d) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for carrying out this section--
(1) $1,500,000 for fiscal year 2006; and
(2) $450,000 for each of the fiscal years 2007 through 2010.

(e) Definitions.--For purposes of this section, the term ``GIS''
means geographic information systems technology that facilitates the
organization and management of data with a geographic component.

SEC. 1809. INVESTIGATION OF GASOLINE PRICES.

(a) Investigation.--Not NOTE: Deadline. later than 90 days after
the date of enactment of this Act, the Federal Trade Commission shall
conduct an investigation to determine if the price of gasoline is being
artificially manipulated by reducing refinery capacity or by any other
form of market manipulation or price gouging practices.

(b) Evaluation and Analysis.--The Secretary shall direct the
National Petroleum Council to conduct an evaluation and analysis to
determine whether, and to what extent, environmental and other
regulations affect new domestic refinery construction and significant
expansion of existing refinery capacity.
(c) Reports to Congress.--

[[Page 1126]]
119 STAT. 1126

(1) Investigation.--On completion of the investigation under
subsection (a), the Federal Trade Commission shall submit to
Congress a report that describes--
(A) the results of the investigation; and
(B) any recommendations of the Federal Trade
Commission.
(2) Evaluation and analysis.--On completion of the
evaluation and analysis under subsection (b), the Secretary
shall submit to Congress a report that describes--
(A) the results of the evaluation and analysis; and
(B) any recommendations of the National Petroleum
Council.

SEC. 1810. NOTE: Reports. Deadlines. 42 USC 16523. ALASKA NATURAL
GAS PIPELINE.

Not later than 180 days after the date of enactment of this Act, and
every 180 days thereafter until the Alaska natural gas pipeline
commences operation, the Federal Energy Regulatory Commission shall
submit to Congress a report describing--
(1) the progress made in licensing and constructing the
pipeline; and
(2) any issue impeding that progress.

SEC. 1811. NOTE: State listing. COAL BED METHANE STUDY.

(a) Study.--
(1) In general.--The NOTE: Contracts. Secretary of the
Interior, in consultation with the Administrator of the
Environmental Protection Agency, shall enter into an arrangement
under which the National Academy of Sciences shall conduct a
study on the effect of coal bed natural gas production on
surface and ground water resources, including ground water
aquifiers, in the States of Montana, Wyoming, Colorado, New
Mexico, North Dakota, and Utah.
(2) Matters to be addressed.--The study shall address the
effectiveness of--
(A) the management of coal bed methane produced
water;
(B) the use of best management practices; and
(C) various production techniques for coal bed
methane natural gas in minimizing impacts on water
resources.

(b) Data Analysis.--The study shall analyze available hydrologic,
geologic and water quality data, along with--
(1) production techniques, produced water management
techniques, best management practices, and other factors that
can mitigate effects of coal bed methane development;
(2) the costs associated with mitigation techniques;
(3) effects on surface or ground water resources, including
drinking water, associated with surface or subsurface disposal
of waters produced during extraction of coal bed methane; and
(4) any other significant effects on surface or ground water
resources associated with production of coal bed methane.

(c) Recommendations.--The study shall analyze the effectiveness of
current mitigation practices of coal bed methane produced water handling
in relation to existing Federal and State laws and regulations, and make
recommendations as to changes, if any, to Federal law necessary to
address adverse impacts to surface or ground water resources associated
with coal bed methane development.

[[Page 1127]]
119 STAT. 1127

(d) Completion of Study.--The NOTE: Public information. National
Academy of Sciences shall submit the findings and recommendations of the
study to the Secretary of the Interior and the Administrator of the
Environmental Protection Agency within 12 months after the date of
enactment of this Act, and shall upon completion make the results of the
study available to the public.

(e) Report to Congress.--The Secretary of the Interior and the
Administrator of the Environmental Protection Agency, after consulting
with States, shall report to the Congress within 6 months after
receiving the results of the study on--
(1) the findings and recommendations of the study;
(2) the agreement or disagreement of the Secretary of the
Interior and the Administrator of the Environmental Protection
Agency with each of its findings and recommendations; and
(3) any recommended changes in funding to address the
effects of coal bed methane production on surface and ground
water resources.

SEC. 1812. BACKUP FUEL CAPABILITY STUDY.

(a) Study.--
(1) In general.--The Secretary shall conduct a study of the
effect of obtaining and maintaining liquid and other fuel backup
capability at--
(A) gas-fired power generation facilities; and
(B) other gas-fired industrial facilities.
(2) Contents.--The study under paragraph (1) shall address--
(A) the costs and benefits of adding a different
fuel capability to a power gas-fired power generating or
industrial facility, taking into consideration regional
differences;
(B) methods of the Federal Government and State
governments to encourage gas-fired power generators and
industries to develop the capability to power the
facilities using a backup fuel;
(C) the effect on the supply and cost of natural gas
of--
(i) a balanced portfolio of fuel choices in
power generation and industrial applications; and
(ii) State regulations that permit agencies in
the State to carry out policies that encourage the
use of other backup fuels in gas-fired power
generation; and
(D) changes required in the Clean Air Act (42 U.S.C.
7401 et seq.) to allow natural gas generators to add
clean backup fuel capabilities.

(b) Report to Congress.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall submit to Congress a report
on the results of the study under subsection (a), including
recommendations regarding future activity of the Federal Government
relating to backup fuel capability.

SEC. 1813. INDIAN LAND RIGHTS-OF-WAY.

(a) Study.--
(1) In general.--The Secretary and the Secretary of the
Interior (referred to in this section as the ``Secretaries'')
shall jointly conduct a study of issues regarding energy rights-
of-way on tribal land (as defined in section 2601 of the Energy
Policy Act of 1992 (as amended by section 503)) (referred to in
this section as ``tribal land'').

[[Page 1128]]
119 STAT. 1128

(2) Consultation.--In conducting the study under paragraph
(1), the Secretaries shall consult with Indian tribes, the
energy industry, appropriate governmental entities, and affected
businesses and consumers.

(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Secretaries shall submit to Congress a report on the
findings of the study, including--
(1) an analysis of historic rates of compensation paid for
energy rights-of-way on tribal land;
(2) recommendations for appropriate standards and procedures
for determining fair and appropriate compensation to Indian
tribes for grants, expansions, and renewals of energy rights-of-
way on tribal land;
(3) an assessment of the tribal self-determination and
sovereignty interests implicated by applications for the grant,
expansion, or renewal of energy rights-of-way on tribal land;
and
(4) an analysis of relevant national energy transportation
policies relating to grants, expansions, and renewals of energy
rights-of-way on tribal land.

SEC. 1814. NOTE: Reports. Deadline. MOBILITY OF SCIENTIFIC AND
TECHNICAL PERSONNEL.

Not later than 2 years after the date of enactment of this section,
the Secretary shall transmit to Congress a report that--
(1) identifies any policies or procedures of a contractor
operating a National Laboratory or single-purpose research
facility that create disincentives to the temporary or permanent
transfer of scientific and technical personnel among the
contractor-operated National Laboratories or contractor-operated
single-purpose research facilities; and
(2) provides recommendations for improving interlaboratory
exchange of scientific and technical personnel.

SEC. 1815. INTERAGENCY REVIEW OF COMPETITION IN THE WHOLESALE AND RETAIL
MARKETS FOR ELECTRIC ENERGY.

(a) Task Force.--There is NOTE: Establishment. established an
inter-agency task force, to be known as the ``Electric Energy Market
Competition Task Force'' (referred to in this section as the ``task
force''), consisting of five members--
(1) one of whom shall be an employee of the Department of
Justice, to be appointed by the Attorney General of the United
States;
(2) one of whom shall be an employee of the Federal Energy
Regulatory Commission, to be appointed by the Chairperson of
that Commission;
(3) one of whom shall be an employee of the Federal Trade
Commission, to be appointed by the Chairperson of that
Commission;
(4) one of whom shall be an employee of the Department, to
be appointed by the Secretary; and
(5) one of whom shall be an employee of the Rural Utilities
Service, to be appointed by the Secretary of Agriculture.

(b) Study and Report.--
(1) Study.--The task force shall conduct a study and
analysis of competition within the wholesale and retail market
for electric energy in the United States.
(2) Report.--

[[Page 1129]]
119 STAT. 1129

(A) Final report.--Not later than 1 year after the
date of enactment of this Act, the task force shall
submit to Congress a final report on the findings of the
task force under paragraph (1).
(B) Public comment.--Not later than the date that is
60 days before a final report is submitted to Congress
under subparagraph (A), the task force shall--
(i) NOTE: Federal
Register, publication. publish in the Federal
Register a draft of the report; and
(ii) provide an opportunity for public comment
on the report.

(c) Consultation.--In conducting the study under subsection (b), the
task force shall consult with and solicit comments from any advisory
entity of the task force, the States, representatives of the electric
power industry, and the public.

SEC. 1816. STUDY OF RAPID ELECTRICAL GRID RESTORATION.

(a) Study.--
(1) In general.--The Secretary shall conduct a study of the
benefits of using mobile transformers and mobile substations to
rapidly restore electrical service to areas subjected to
blackouts as a result of--
(A) equipment failure;
(B) natural disasters;
(C) acts of terrorism; or
(D) war.
(2) Contents.--The study under paragraph (1) shall contain
an analysis of--
(A) the feasibility of using mobile transformers and
mobile substations to reduce dependence on foreign
entities for key elements of the electrical grid system
of the United States;
(B) the feasibility of using mobile transformers and
mobile substations to rapidly restore electrical power
to--
(i) military bases;
(ii) the Federal Government;
(iii) communications industries;
(iv) first responders; and
(v) other critical infrastructures, as
determined by the Secretary;
(C) the quantity of mobile transformers and mobile
substations necessary--
(i) to eliminate dependence on foreign sources
for key electrical grid components in the United
States;
(ii) to rapidly deploy technology to fully
restore full electrical service to prioritized
Governmental functions; and
(iii) to identify manufacturing sources in
existence on the date of enactment of this Act
that have previously manufactured specialized
mobile transformer or mobile substation products
for Federal agencies.

(b) Report.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall submit to the
President and Congress a report on the study under subsection
(a).

[[Page 1130]]
119 STAT. 1130

(2) Inclusion.--The report shall include a description of
the results of the analysis under subsection (a)(2).

SEC. 1817. STUDY OF DISTRIBUTED GENERATION.

(a) Study.--
(1) In general.--
(A) Potential benefits.--The Secretary, in
consultation with the Federal Energy Regulatory
Commission, shall conduct a study of the potential
benefits of cogeneration and small power production.
(B) Recipients.--The benefits described in
subparagraph (A) include benefits that are received
directly or indirectly by--
(i) an electricity distribution or
transmission service provider;
(ii) other customers served by an electricity
distribution or transmission service provider; and
(iii) the general public in the area served by
the public utility in which the cogenerator or
small power producer is located.
(2) Inclusions.--The study shall include an analysis of--
(A) the potential benefits of--
(i) increased system reliability;
(ii) improved power quality;
(iii) the provision of ancillary services;
(iv) reduction of peak power requirements
through onsite generation;
(v) the provision of reactive power or volt-
ampere reactives;
(vi) an emergency supply of power;
(vii) offsets to investments in generation,
transmission, or distribution facilities that
would otherwise be recovered through rates;
(viii) diminished land use effects and right-
of-way acquisition costs; and
(ix) reducing the vulnerability of a system to
terrorism; and
(B) any rate-related issue that may impede or
otherwise discourage the expansion of cogeneration and
small power production facilities, including a review of
whether rates, rules, or other requirements imposed on
the facilities are comparable to rates imposed on
customers of the same class that do not have
cogeneration or small power production.
(3) Valuation of benefits.--In carrying out the study, the
Secretary shall determine an appropriate method of valuing
potential benefits under varying circumstances for individual
cogeneration or small power production units.

(b) Report.--Not later than 18 months after the date of enactment of
this Act, the Secretary shall--
(1) complete the study;
(2) NOTE: Public information. provide an opportunity for
public comment on the results of the study; and
(3) submit to the President and Congress a report
describing--
(A) the results of the study; and

[[Page 1131]]
119 STAT. 1131

(B) information relating to the public comments
received under paragraph (2).

(c) Publication.--After submission of the report under subsection
(b) to the President and Congress, the Secretary shall publish the
report.

SEC. 1818. NATURAL GAS SUPPLY SHORTAGE REPORT.

(a) In General.--Not later than 180 days after the date of enactment
of this Act, the Secretary shall submit to Congress a report on natural
gas supplies and demand.
(b) Purpose.--The purpose of the report under subsection (a) is to
develop recommendations for achieving a balance between natural gas
supply and demand in order to--
(1) provide residential consumers with natural gas at
reasonable and stable prices;
(2) accommodate long-term maintenance and growth of domestic
natural gas-dependent industrial, manufacturing, and commercial
enterprises;
(3) facilitate the attainment of national ambient air
quality standards under the Clean Air Act (43 U.S.C. 7401 et
seq.);
(4) achieve continued progress in reducing the emissions
associated with electric power generation; and
(5) support the development of the preliminary phases of
hydrogen-based energy technologies.

(c) Comprehensive Analysis.--The report shall include a
comprehensive analysis of, for the period beginning on January 1, 2004,
and ending on December 31, 2015, natural gas supply and demand in the
United States, including--
(1) estimates of annual domestic demand for natural gas,
taking into consideration the effect of Federal policies and
actions that are likely to increase or decrease the demand for
natural gas;
(2) projections of annual natural gas supplies, from
domestic and foreign sources, under Federal policies in
existence on the date of enactment of this Act;
(3) an identification of estimated natural gas supplies that
are not available under those Federal policies;
(4) scenarios for decreasing natural gas demand and
increasing natural gas supplies that compare the relative
economic and environmental impacts of Federal policies that--
(A) encourage or require the use of natural gas to
meet air quality, carbon dioxide emission reduction, or
energy security goals;
(B) encourage or require the use of energy sources
other than natural gas, including coal, nuclear, and
renewable sources;
(C) support technologies to develop alternative
sources of natural gas and synthetic gas, including coal
gasification technologies;
(D) encourage or require the use of energy
conservation and demand side management practices; and
(E) affect access to domestic natural gas supplies;
and
(5) recommendations for Federal actions to achieve the
purposes described in subsection (b), including recommendations
that--

[[Page 1132]]
119 STAT. 1132

(A) encourage or require the use of energy sources
other than natural gas, including coal, nuclear, and
renewable sources;
(B) encourage or require the use of energy
conservation or demand side management practices;
(C) support technologies for the development of
alternative sources of natural gas and synthetic gas,
including coal gasification technologies; and
(D) would improve access to domestic natural gas
supplies.

(d) Consultation.--In preparing the report under subsection (a), the
Secretary shall consult with--
(1) experts in natural gas supply and demand; and
(2) representatives of--
(A) State and local governments;
(B) tribal organizations; and
(C) consumer and other organizations.

(e) Hearings.--In preparing the report under subsection (a), the
Secretary may hold public hearings and provide other opportunities for
public comment, as the Secretary considers appropriate.

SEC. 1819. NOTE: Reports. Deadline. HYDROGEN PARTICIPATION STUDY.

Not later than 1 year after the date of enactment of this Act, the
Secretary shall submit to Congress a report evaluating methodologies to
ensure the widest participation practicable in setting goals and
milestones under the hydrogen program of the Department, including
international participants.

SEC. 1820. OVERALL EMPLOYMENT IN A HYDROGEN ECONOMY.

(a) Study.--
(1) In general.--The Secretary shall carry out a study of
the likely effects of a transition to a hydrogen economy on
overall employment in the United States.
(2) Contents.--In completing the study, the Secretary shall
take into consideration--
(A) the replacement effects of new goods and
services;
(B) international competition;
(C) workforce training requirements;
(D) multiple possible fuel cycles, including usage
of raw materials;
(E) rates of market penetration of technologies; and
(F) regional variations based on geography.

(b) Report.--Not later than 18 months after the date of enactment of
this Act, the Secretary shall submit to Congress a report describing the
findings, conclusions, and recommendations of the study under subsection
(a).

SEC. 1821. STUDY OF BEST MANAGEMENT PRACTICES FOR ENERGY RESEARCH AND
DEVELOPMENT PROGRAMS.

(a) In General.--The Secretary shall enter into an arrangement with
the National Academy of Public Administration under which the Academy
shall conduct a study to assess management practices for research,
development, and demonstration programs at the Department.
(b) Scope of the Study.--The study shall consider--
(1) management practices that act as barriers between the
Office of Science and offices conducting mission-oriented
research;

[[Page 1133]]
119 STAT. 1133

(2) recommendations for management practices that would
improve coordination and bridge the innovation gap between the
Office of Science and offices conducting mission-oriented
research;
(3) the applicability of the management practices used by
the Department of Defense Advanced Research Projects Agency to
research programs at the Department;
(4) the advisability of creating an agency within the
Department modeled after the Department of Defense Advanced
Research Projects Agency;
(5) recommendations for management practices that could best
encourage innovative research and efficiency at the Department;
and
(6) any other relevant considerations.

(c) Report.--Not later than 18 months after the date of enactment of
this Act, the Secretary shall submit to Congress a report on the study
conducted under this section.

SEC. 1822. NOTE: Contracts. Deadline. EFFECT OF ELECTRICAL
CONTAMINANTS ON RELIABILITY OF ENERGY PRODUCTION SYSTEMS.

Not later than 180 days after the date of enactment of this Act, the
Secretary shall enter into a contract with the National Academy of
Sciences under which the National Academy of Sciences shall determine
the effect that electrical contaminants (such as tin whiskers) may have
on the reliability of energy production systems, including nuclear
energy.

SEC. 1823. ALTERNATIVE FUELS REPORTS.

(a) In General.--Not later than 1 year after the date of enactment
of this Act, the Secretary shall submit to Congress reports on the
potential for each of biodiesel and hythane to become major,
sustainable, alternative fuels.
(b) Biodiesel Report.--The report relating to biodiesel submitted
under subsection (a) shall--
(1) provide a detailed assessment of--
(A) potential biodiesel markets and manufacturing
capacity; and
(B) environmental and energy security benefits with
respect to the use of biodiesel;
(2) identify any impediments, especially in infrastructure
needed for production, distribution, and storage, to biodiesel
becoming a substantial source of fuel for conventional diesel
and heating oil applications;
(3) identify strategies to enhance the commercial deployment
of biodiesel; and
(4) include an examination and recommendations, as
appropriate, of the ways in which biodiesel may be modified to
be a cleaner-burning fuel.

(c) Hythane Report.--The report relating to hythane submitted under
subsection (a) shall--
(1) provide a detailed assessment of potential hythane
markets and the research and development activities that are
necessary to facilitate the commercialization of hythane as a
competitive, environmentally friendly transportation fuel;
(2) address--
(A) the infrastructure necessary to produce, blend,
distribute, and store hythane for widespread commercial
purposes; and

[[Page 1134]]
119 STAT. 1134

(B) other potential market barriers to the
commercialization of hythane;
(3) examine the viability of producing hydrogen using
energy-efficient, environmentally friendly methods so that the
hydrogen can be blended with natural gas to produce hythane; and
(4) include an assessment of the modifications that would be
required to convert compressed natural gas vehicle engines to
engines that use hythane as fuel.

(d) Grants for Report Completion.--The Secretary may use such sums
as are available to the Secretary to provide, to one or more colleges or
universities selected by the Secretary, grants for use in carrying out
research to assist the Secretary in preparing the reports required to be
submitted under subsection (a).

SEC. 1824. FINAL ACTION ON REFUNDS FOR EXCESSIVE CHARGES.

The Federal Energy Regulatory Commission (FERC) shall--
(1) seek to conclude its investigation into the unjust or
unreasonable charges incurred by California during the 2000-2001
electricity crisis as soon as possible;
(2) NOTE: California. seek to ensure that refunds the
Commission determines are owed to the State of California are
paid to the State of California; and
(3) NOTE: Reports. Deadline. submit to Congress a report
by December 31, 2005, describing the actions taken by the
Commission to date under this section and timetables for further
actions.

SEC. 1825. FUEL CELL AND HYDROGEN TECHNOLOGY STUDY.

(a) In General.--As NOTE: Contracts. soon as practicable after
the date of enactment of this Act, the Secretary shall enter into a
contract with the National Academy of Sciences and the National Research
Council to carry out a study of fuel cell technologies that provides a
budget roadmap for the development of fuel cell technologies and the
transition from petroleum to hydrogen in a significant percentage of the
vehicles sold by 2020.

(b) Requirements.--In carrying out the study, the National Academy
of Sciences and the National Research Council shall--
(1) establish as a goal the maximum percentage practicable
of vehicles that the National Academy of Sciences and the
National Research Council determines can be fueled by hydrogen
by 2020;
(2) determine the amount of Federal and private funding
required to meet the goal established under paragraph (1);
(3) determine what actions are required to meet the goal
established under paragraph (1);
(4) examine the need for expanded and enhanced Federal
research and development programs, changes in regulations, grant
programs, partnerships between the Federal Government and
industry, private sector investments, infrastructure investments
by the Federal Government and industry, educational and public
information initiatives, and Federal and State tax incentives to
meet the goal established under paragraph (1);
(5) consider whether other technologies would be less
expensive or could be more quickly implemented than fuel cell
technologies to achieve significant reductions in carbon dioxide
emissions;
(6) take into account any reports relating to fuel cell
technologies and hydrogen-fueled vehicles, including--

[[Page 1135]]
119 STAT. 1135

(A) the report prepared by the National Academy of
Engineering and the National Research Council in 2004
entitled ``Hydrogen Economy: Opportunities, Costs,
Barriers, and R&D Needs''; and
(B) the report prepared by the U.S. Fuel Cell
Council in 2003 entitled ``Fuel Cells and Hydrogen: The
Path Forward'';
(7) consider the challenges, difficulties, and potential
barriers to meeting the goal established under paragraph (1);
and
(8) with respect to the budget roadmap--
(A) specify the amount of funding required on an
annual basis from the Federal Government and industry to
carry out the budget roadmap; and
(B) specify the advantages and disadvantages to
moving toward the transition to hydrogen in vehicles in
accordance with the timeline established by the budget
roadmap.

SEC. 1826. PASSIVE SOLAR TECHNOLOGIES.

(a) Definition of Passive Solar Technology.--In this section, the
term ``passive solar technology'' means a passive solar technology,
including daylighting, that--
(1) is used exclusively to avoid electricity use; and
(2) can be metered to determine energy savings.

(b) Study.--The Secretary shall conduct a study to determine--
(1) the range of levelized costs of avoided electricity for
passive solar technologies;
(2) the quantity of electricity displaced using passive
solar technologies in the United States as of the date of
enactment of this Act; and
(3) the projected energy savings from passive solar
technologies in 5, 10, 15, 20, and 25 years after the date of
enactment of this Act if--
(A) incentives comparable to the incentives provided
for electricity generation technologies were provided
for passive solar technologies; and
(B) no new incentives for passive solar technologies
were provided.

(c) Report.--Not later than 120 days after the date of enactment of
this Act, the Secretary shall submit to Congress a report that describes
the results of the study under subsection (b).

SEC. 1827. STUDY OF LINK BETWEEN ENERGY SECURITY AND INCREASES IN
VEHICLE MILES TRAVELED.

(a) In General.--The Secretary shall enter into an arrangement with
the National Academy of Sciences under which the Academy shall conduct a
study to assess the implications on energy use and efficiency of land
development patterns in the United States.
(b) Scope.--The study shall consider--
(1) the correlation, if any, between land development
patterns and increases in vehicle miles traveled;
(2) whether petroleum use in the transportation sector can
be reduced through changes in the design of development
patterns;
(3) the potential benefits of--

[[Page 1136]]
119 STAT. 1136

(A) information and education programs for State and
local officials (including planning officials) on the
potential for energy savings through planning, design,
development, and infrastructure decisions;
(B) incorporation of location efficiency models in
transportation infrastructure planning and investments;
and
(C) transportation policies and strategies to help
transportation planners manage the demand for the number
and length of vehicle trips, including trips that
increase the viability of other means of travel; and
(4) such other considerations relating to the study topic as
the National Academy of Sciences finds appropriate.

(c) Report.--Not later than 2 years after the date of enactment of
this Act, the National Academy of Sciences shall submit to the Secretary
and Congress a report on the study conducted under this section.

SEC. 1828. SCIENCE STUDY ON CUMULATIVE IMPACTS OF MULTIPLE OFFSHORE
LIQUEFIED NATURAL GAS FACILITIES.

(a) In General.--The Secretary (in consultation with the National
Oceanic Atmospheric Administration, the Commandant of the Coast Guard,
affected recreational and commercial fishing industries, and affected
energy and transportation stakeholders) shall carry out a study and
compile existing science (including studies and data) to determine the
risks or benefits presented by cumulative impacts of multiple offshore
liquefied natural gas facilities reasonably assumed to be constructed in
an area of the Gulf of Mexico using the open-rack vaporization system.
(b) Accuracy.--In carrying out subsection (a), the Secretary shall
verify the accuracy of available science and develop a science-based
evaluation of significant short-term and long-term cumulative impacts,
both adverse and beneficial, of multiple offshore liquefied natural gas
facilities reasonably assumed to be constructed in an area of the Gulf
of Mexico using or proposing the open-rack vaporization system on the
fisheries and marine populations in the vicinity of the facility.

SEC. 1829. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL BUILDINGS.

(a) In General.--The Architect of the Capitol, as part of the
process of updating the Master Plan Study for the Capitol complex,
shall--
(1) carry out a study to evaluate the energy infrastructure
of the Capitol complex to determine how to augment the
infrastructure to become more energy efficient--
(A) by using unconventional and renewable energy
resources;
(B) by--
(i) incorporating new technologies to
implement effective green building solutions;
(ii) adopting computer-based building
management systems; and
(iii) recommending strategies based on end-
user behavioral changes to implement low-cost
environmental gains; and

[[Page 1137]]
119 STAT. 1137

(C) in a manner that would enable the Capitol
complex to have reliable utility service in the event of
power fluctuations, shortages, or outages;
(2) carry out a study to explore the feasibility of
installing energy and water conservation measures on the rooftop
of the Dirksen Senate Office Building, including the area
directly above the food service facilities in the center of the
building, including the installation of--
(A) a vegetative covering area, using native species
to the maximum extent practicable, to--
(i) insulate and increase the energy
efficiency of the building;
(ii) reduce precipitation runoff and conserve
water for landscaping or other uses;
(iii) increase, and provide more efficient use
of, available outdoor space through management of
the rooftop of the center of the building as a
park or garden area for occupants of the building;
and
(iv) improve the aesthetics of the building;
and
(B) onsite renewable energy and other state-of-the-
art technologies to--
(i) improve the energy efficiency and energy
security of the building or the Capitol complex by
providing additional or backup sources of power in
the event of a power shortage or other emergency;
(ii) reduce the use of resources by the
building; or
(iii) enhance worker productivity; and
(C) NOTE: Reports. Deadline. not later than 180
days after the date of enactment of this Act, submit to
Congress a report describing the findings and
recommendations of the study under subparagraph (B).

(b) Authorization of Appropriations.--There is authorized to be
appropriated to the Architect of the Capitol to carry out this section
$2,000,000 for each of fiscal years 2006 through 2010.

SEC. 1830. STUDY OF AVAILABILITY OF SKILLED WORKERS.

(a) In General.--The Secretary shall enter into an arrangement with
the National Academy of Sciences under which the National Academy of
Sciences shall conduct a study of the short-term and long-term
availability of skilled workers to meet the energy and mineral security
requirements of the United States.
(b) Inclusions.--The study shall include an analysis of--
(1) the need for and availability of workers for the oil,
gas, and mineral industries;
(2) the availability of skilled labor at both entry level
and more senior levels; and
(3) recommendations for future actions needed to meet future
labor requirements.

(c) Report.--Not later than 2 years after the date of enactment of
this Act, the Secretary shall submit to Congress a report that describes
the results of the study.

SEC. 1831. REVIEW OF ENERGY POLICY ACT OF 1992 PROGRAMS.

(a) In General.--Not NOTE: Deadline. later than 180 days after
the date of enactment of this section, the Secretary shall complete a
study to determine the effect that titles III, IV, and V of the Energy
Policy Act of 1992 (42 U.S.C. 13211 et seq.) have had on--

[[Page 1138]]
119 STAT. 1138

(1) the development of alternative fueled vehicle
technology;
(2) the availability of that technology in the market; and
(3) the cost of alternative fueled vehicles.

(b) Topics.--As part of the study under subsection (a), the
Secretary shall specifically identify--
(1) the number of alternative fueled vehicles acquired by
fleets or covered persons required to acquire alternative fueled
vehicles;
(2) the quantity, by type, of alternative fuel actually used
in alternative fueled vehicles acquired by fleets or covered
persons;
(3) the quantity of petroleum displaced by the use of
alternative fuels in alternative fueled vehicles acquired by
fleets or covered persons;
(4) the direct and indirect costs of compliance with
requirements under titles III, IV, and V of the Energy Policy
Act of 1992 (42 U.S.C. 13211 et seq.), including--
(A) vehicle acquisition requirements imposed on
fleets or covered persons;
(B) administrative and recordkeeping expenses;
(C) fuel and fuel infrastructure costs;
(D) associated training and employee expenses; and
(E) any other factors or expenses the Secretary
determines to be necessary to compile reliable estimates
of the overall costs and benefits of complying with
programs under those titles for fleets, covered persons,
and the national economy;
(5) the existence of obstacles preventing compliance with
vehicle acquisition requirements and increased use of
alternative fuel in alternative fueled vehicles acquired by
fleets or covered persons; and
(6) the projected impact of amendments to the Energy Policy
Act of 1992 made by this title.

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

SEC. 1832. NOTE: 42 USC 16524. STUDY ON THE BENEFITS OF ECONOMIC
DISPATCH.

(a) Study.--The Secretary, 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

[[Page 1139]]
119 STAT. 1139

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 shall submit a report to Congress and the States on the
results of the study conducted under subsection (a), including
recommendations to Congress and the States for any suggested legislative
or regulatory changes.

SEC. 1833. RENEWABLE ENERGY ON FEDERAL LAND.

(a) National NOTE: Contracts. Deadline. Academy of Sciences
Study.--Not later than 90 days after the date of enactment of this Act,
the Secretary of the Interior shall enter into a contract with the
National Academy of Sciences under which the National Academy of
Sciences shall--
(1) study the potential of developing wind, solar, and ocean
energy resources (including tidal, wave, and thermal energy) on
Federal land available for those uses under current law and the
outer Continental Shelf;
(2) assess any Federal law (including regulations) relating
to the development of those resources that is in existence on
the date of enactment of this Act; and
(3) recommend statutory and regulatory mechanisms for
developing those resources.

(b) Submission to Congress.--Not later than 2 years after the date
of enactment of this Act, the Secretary of the Interior shall submit to
Congress the results of the study under subsection (a).

SEC. 1834. INCREASED HYDROELECTRIC GENERATION AT EXISTING FEDERAL
FACILITIES.

(a) In General.--The Secretary of the Interior, the Secretary, and
the Secretary of the Army shall jointly conduct a study of the potential
for increasing electric power production capability at federally owned
or operated water regulation, storage, and conveyance facilities.
(b) Content.--The study under this section shall include
identification and description in detail of each facility that is
capable, with or without modification, of producing additional
hydroelectric power, including estimation of the existing potential for
the facility to generate hydroelectric power.
(c) Report.--The Secretaries shall submit to the Committees on
Energy and Commerce, Resources, and Transportation and Infrastructure of
the House of Representatives and the Committee on Energy and Natural
Resources of the Senate a report on the findings, conclusions, and
recommendations of the study under this section by not later than 18
months after the date of the enactment of this Act. The report shall
include each of the following:
(1) The identifications, descriptions, and estimations
referred to in subsection (b).
(2) A description of activities currently conducted or
considered, or that could be considered, to produce additional
hydroelectric power from each identified facility.
(3) A summary of prior actions taken by the Secretaries to
produce additional hydroelectric power from each identified
facility.
(4) The costs to install, upgrade, or modify equipment or
take other actions to produce additional hydroelectric power

[[Page 1140]]
119 STAT. 1140

from each identified facility and the level of Federal power
customer involvement in the determination of such costs.
(5) The benefits that would be achieved by such
installation, upgrade, modification, or other action, including
quantified estimates of any additional energy or capacity from
each facility identified under subsection (b).
(6) A description of actions that are planned, underway, or
might reasonably be considered to increase hydroelectric power
production by replacing turbine runners, by performing generator
upgrades or rewinds, or construction of pumped storage
facilities.
(7) The impact of increased hydroelectric power production
on irrigation, water supply, fish, wildlife, Indian tribes,
river health, water quality, navigation, recreation, fishing,
and flood control.
(8) Any additional recommendations to increase hydroelectric
power production from, and reduce costs and improve efficiency
at, federally owned or operated water regulation, storage, and
conveyance facilities.

SEC. 1835. SPLIT-ESTATE FEDERAL OIL AND GAS LEASING AND DEVELOPMENT
PRACTICES.

(a) Review.--In consultation with affected private surface owners,
oil and gas industry, and other interested parties, the Secretary of the
Interior shall undertake a review of the current policies and practices
with respect to management of Federal subsurface oil and gas development
activities and their effects on the privately owned surface. This review
shall include--
(1) a comparison of the rights and responsibilities under
existing mineral and land law for the owner of a Federal mineral
lease, the private surface owners and the Department;
(2) a comparison of the surface owner consent provisions in
section 714 of the Surface Mining Control and Reclamation Act of
1977 (30 U.S.C. 1304) concerning surface mining of Federal coal
deposits and the surface owner consent provisions for oil and
gas development, including coalbed methane production; and
(3) recommendations for administrative or legislative action
necessary to facilitate reasonable access for Federal oil and
gas activities while addressing surface owner concerns and
minimizing impacts to private surface.

(b) Report.--The Secretary of the Interior shall report the results
of such review to Congress not later than 180 days after the date of
enactment of this Act.

SEC. 1836. RESOLUTION OF FEDERAL RESOURCE DEVELOPMENT CONFLICTS IN THE
POWDER RIVER BASIN.

(a) Review.--The NOTE: Wyoming. Montana. Secretary of the
Interior shall review Federal and State laws in existence on the date of
enactment of this Act in order to resolve any conflict relating to the
Powder River Basin in Wyoming and Montana between--
(1) the development of Federal coal; and
(2) the development of Federal and non-Federal coalbed
methane.

(b) Report.--Not later than 180 days after the date of enactment of
this Act, the Secretary of the Interior shall submit to Congress a
report that--

[[Page 1141]]
119 STAT. 1141

(1) describes methods of resolving a conflict described in
subsection (a); and
(2) identifies a method preferred by the Secretary of the
Interior, including proposed legislative language, if any,
required to implement the method.

SEC. 1837. NOTE: China. NATIONAL SECURITY REVIEW OF INTERNATIONAL
ENERGY REQUIREMENTS.

(a) Study.--The Secretary, in consultation with the Secretary of
Defense and Secretary of Homeland Security, shall conduct a study of the
growing energy requirements of the People's Republic of China and the
implications of such growth on the political, strategic, economic, or
national security interests of the United States, including--
(1) an assessment of the type, nationality, and location of
energy assets that have been sought for investment by entities
located in the People's Republic of China;
(2) an assessment of the extent to which investment in
energy assets by entities located in the People's Republic of
China has been on market-based terms and free from subsidies
from the People's Republic of China;
(3) an assessment of the effect of investment in energy
assets by entities located in the People's Republic of China on
the control by the United States of dual-use and export-
controlled technologies, including the effect on current and
future access to foreign and domestic sources of rare earth
elements used to produce such technologies;
(4) an assessment of the relationship between the Government
of the People's Republic of China and energy-related businesses
located in the People's Republic of China;
(5) an assessment of the impact on the world energy market
of the common practice of entities located in the People's
Republic of China of removing the energy assets owned or
controlled by such entities from the competitive market, with
emphasis on the effect if such practice expands along with the
growth in energy consumption of the People's Republic of China;
(6) an examination of the United States energy policy and
foreign policy as it relates to ensuring a competitive global
energy market;
(7) an examination of the relationship between the United
States and the People's Republic of China as it relates to
pursuing energy interests in a manner that avoids conflicts; and
(8) a comparison of the appropriate laws and regulations of
other nations to determine whether a United States company would
be permitted to purchase, acquire, merge, or otherwise establish
a joint relationship with an entity whose primary place of
business is in that other nation, including the laws and
regulations of the People's Republic of China.

(b) Report and Recommendations.--Not later than 120 days after the
date of the enactment of this Act, the Secretary, in consultation with
the Secretary of Defense, shall report to the President and the Congress
on the findings of the study described in subsection (a) and any
recommendations the Secretaries consider appropriate.

[[Page 1142]]
119 STAT. 1142

(c) Regulatory Effect.--Notwithstanding NOTE: President. Effective
date. any other provision of law, any instrumentality of the United
States vested with authority to review a transaction that includes an
investment in a United States domestic corporation may not conclude a
national security review related to an investment in the energy assets
of a United States domestic corporation by an entity owned or controlled
by the government of the People's Republic of China for 21 days after
the report to the President and the Congress, and until the President
certifies that he has received the report described in subsection (b).

SEC. 1838. USED OIL RE-REFINING STUDY.

The Secretary, in consultation with the Administrator of the
Environmental Protection Agency, shall undertake a study of the energy
and environmental benefits of the re-refining of used lubricating oil
and report to Congress within 90 days after enactment of this Act
including recommendations of specific steps that can be taken to improve
collections of used lubricating oil and increase re-refining and other
beneficial re-use of such oil.

SEC. 1839. NOTE: Deadline. Reports. TRANSMISSION SYSTEM MONITORING.

Within 6 months after the date of enactment of this Act, the
Secretary and the Federal Energy Regulatory Commission shall study and
report to Congress on the steps which must be taken to establish a
system to make available to all transmission system owners and Regional
Transmission Organizations (as defined in the Federal Power Act) within
the Eastern and Western Interconnections real-time information on the
functional status of all transmission lines within such
Interconnections. In such study, the Commission shall assess technical
means for implementing such transmission information system and identify
the steps the Commission or Congress must take to require the
implementation of such system.

SEC. 1840. REPORT IDENTIFYING AND DESCRIBING THE STATUS OF POTENTIAL
HYDROPOWER FACILITIES.

(a) Report Requirement.--Not later than 90 days after the date of
enactment of this Act, the Secretary of the Interior, acting through the
Bureau of Reclamation, shall submit to the Committee on Resources of the
House of Representatives and the Committee on Energy and Natural
Resources of the Senate a report identifying and describing the status
of potential hydropower facilities included in water surface storage
studies undertaken by the Secretary for projects that have not been
completed or authorized for construction.
(b) Report Contents.--The report shall include the following:
(1) Identification of all surface storage studies authorized
by Congress since the enactment of the Reclamation Project Act
of 1939 (43 U.S.C. 485 et seq.).
(2) The purposes of each project included within each study
identified under paragraph (1).
(3) The status of each study identified under paragraph (1),
including for each study--
(A) whether the study is completed or, if not
completed, still authorized;
(B) the level of analyses conducted at the
feasibility and reconnaissance levels of review;

[[Page 1143]]
119 STAT. 1143

(C) identifiable environmental impacts of each
project included in the study, including to fish and
wildlife, water quality, and recreation;
(D) projected water yield from each such project;
(E) beneficiaries of each such project;
(F) the amount authorized and expended;
(G) projected funding needs and timelines for
completing the study (if applicable);
(H) anticipated costs of each such project; and
(I) other factors that might interfere with
construction of any such project.
(4) An identification of potential hydroelectric facilities
that might be developed pursuant to each study identified under
paragraph (1).
(5) Applicable costs and benefits associated with potential
hydroelectric production pursuant to each study.

Approved August 8, 2005.

LEGISLATIVE HISTORY--H.R. 6:
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HOUSE REPORTS: No. 109-190 (Comm. of Conference).
CONGRESSIONAL RECORD, Vol. 151 (2005):
Apr. 20, 21, considered and passed House.
June 14-16, 20-23, 28, considered and passed Senate,
amended.
July 28, House agreed to conference report.
July 29, Senate agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 41 (2005):
Aug. 8, Presidential remarks and statement.