To establish a Fund for Environmental Priorities to be funded by a portion of the consumer savings resulting from retail electricity choice, and for other purposes.

Summary: Environmental Priorities Act of 2003 - Requires providers of retail electric services to contribute to the fiscal agent for the Environmental Priorities Board (established by this Act) ten percent of the total consumer savings for the consumer sector for that calendar year.Requires the Administrator of the Environmental Protection Agency to establish a National Environmental Priorities Board to establish regulations governing creation of an Environmental Priorities Program.Authorizes States in which retail electric service choice has been established for any consumer sector to establish public purpose programs and apply for matching funding to support environmental priorities programs.

SECTION 1. SHORT TITLE.

     This Act may be cited as the ``Environmental Priorities Act of 
2003''.

SEC. 2. RECAPTURE OF SAVINGS FROM RETAIL ELECTRICITY COMPETITION.

    (a) Effective Date.--This Act shall take effect for a consumer 
sector in any State on January 1 of the first year after all State 
regulated electric utilities and all nonregulated electric utilities in 
that State have been determined by the Secretary of Energy to have 
established retail electric service choice for customers in that 
sector, but not earlier than January 1, 2004. The Secretary shall 
annually review the laws and regulations of each State relating to 
retail electric service regulation and make such determinations on 
January 1, 2004, and January 1 of each year thereafter.
    (b) 10 Percent of Consumer Savings.--For each State, on December 31 
of the first full calendar year following the effective date of this 
Act for any consumer sector in the State, and on December 31 of each 
subsequent calendar year, each provider of retail electric services in 
the State shall contribute to the fiscal agent for the Environmental 
Priorities Board established under section 2 an amount equal to 10 
percent of the total consumer savings for that sector for that calendar 
year.
    (c) Definitions.--For purposes of this section:
            (1) Consumer savings.--For any provider of retail electric 
        services in a State, for any consumer sector in the State, the 
        term ``consumer savings'' means, for any calendar year, the 
        amount (if any) by which the potential rate for electric energy 
        provided by that provider to that sector exceeds the current 
        rate for that sector, multiplied by that sector's total 
        consumption (in kilowatt-hours) during that calendar year.
            (2) Current rate.--For any provider of retail electric 
        services in a State, for any consumer sector in the State, the 
        term ``current rate'' means, for the 12 months following the 
        effective date of this Act for that sector in that State, the 
        average kilowatt-hour rate paid by customers of the provider in 
        that consumer sector in that State, as calculated by the 
        provider and recalculated annually.
            (3) Potential rate.--
                    (A) General rule.--For any provider of retail 
                electric services in a State, for any consumer sector 
                in the State, the term ``potential rate'' means, for 
                each calendar year following the effective date of this 
                act for that sector in that State, the average 
                kilowatt-hour rate paid by the provider's customers in 
                that sector during the 12-month period preceding the 
                date on which retail electric service choice for 
                customers in that sector was established, adjusted for 
                inflation. The adjustment for inflation shall be made 
                using a methodology to be determined by the Secretary 
                of Energy. The Secretary of Energy shall recalculate 
                the potential rate annually to adjust it for inflation.
                    (B) Special rules.-- For all sectors not serviced 
                by the provider during any period, the average 
                kilowatt-hour rate for that sector shall be estimated 
                or measured by the Secretary of Energy. In any case 
                where retail choice in a State or sector did not all 
                occur on one effective date but was phased-in over 
                time, the Secretary of Energy shall establish 
                regulations to fairly establish the potential rate. In 
                any cases where, for the 12-month period preceding the 
                date on which retail electric service choice for 
                customers in that sector was established, a provider 
                served a sector in the State but did not serve it for 
                the full period, the Secretary of Energy shall 
                establish regulations to fairly establish the potential 
                rate.

SEC. 3. USE OF CONTRIBUTIONS FOR ENVIRONMENTAL PRIORITIES.

    (a) National Environmental Priorities Board.--The Administrator of 
the Environmental Protection Agency (hereinafter in this section 
referred to as the ``Administrator'') shall establish a National 
Environmental Priorities Board to carry out the functions and 
responsibilities specified in this section. The Board shall be composed 
of 3 persons who are officers or employees of the United States, and 4 
State commissioners nominated by the national organization of the State 
commissions and appointed by the Administrator. The Administrator shall 
appoint one member of the Board to serve as Chairman.
    (b) Rules.--Within 180 days after the enactment of this Act, the 
Administrator shall promulgate a final rule containing the rules and 
procedures of the Board, including the rules and procedures for 
selecting a non-Federal fiscal agent under subsection (e). The 
Administrator shall have oversight responsibilities over the Board.
    (c) Environmental Priorities Program.--
            (1) Regulations.--Within 90 days after the promulgation of 
        the Administrator's rules under subsection (b), the Board shall 
        institute a proceeding to establish regulations governing 
        creation and administration of an Environmental Priorities 
        Program. Such regulations shall include criteria and methods of 
        selecting State projects to receive support under the Program. 
        Such support may include direct loans, loan guarantees, grants, 
        capitalization grants for State revolving funds, and other 
        assistance. The State projects may include--
                    (A) lowering borrowing costs for municipal and 
                regional governments constructing wastewater treatment 
                plants;
                    (B) increasing the use of filter strips and 
                riparian buffers in protecting rivers and streams;
                    (C) mitigating the deleterious effect of 
                electricity production on air quality;
                    (D) supporting the preservation of open space for 
                resource conservation, wildlife protection, or 
                recreation; and
                    (E) such other projects furthering national 
                environmental priorities as may be established by the 
                Board.
            (2) Agent.--The Board shall enter into arrangements with a 
        non-Federal fiscal agent who shall be authorized to receive the 
        contributions made under section 2(b) and to disburse such 
        contributions as provided in subsection (d).
            (3) Programs.--Any State in which retail electric service 
        choice has been established for any consumer sector may 
        establish one or more public purpose programs and apply for 
        matching funding under this section for projects to be funded 
        under such program. A participating State may use matching 
        funds received under this section only to support one or more 
        eligible environmental priorities programs meeting the 
        selection criteria established under paragraph (1). The Board 
        shall regularly audit the expenditures of matching funds 
        received by a participating State under this section.
            (4) State option.--At no time shall a State be required, 
        pursuant to this section, to participate in the Environmental 
        Priorities Program, nor may a State be required by the Board to 
        fund a particular project.
    (d) Fund for Environmental Priorities.--
            (1) Distribution.--The fiscal agent shall distribute 
        contributions received by the fiscal agent under section 2(b) 
        to States (or entities designated by the States) under this 
        subsection in accordance with the criteria established by the 
        Board under subsection (c) to carry out eligible projects under 
        environmental priorities programs established by the States. 
        For each calendar year after the year 2002, the Board shall 
        solicit applications from States for matching funds to carry 
        out eligible environmental priorities programs. The 
        applications for assistance during any calendar year must be 
        received by the Board before the commencement of such year. In 
        its application, the State shall certify that the moneys will 
        be used for one or more eligible public purpose programs and 
        shall specify the amount of State support which is projected 
        for the coming calendar year for the programs concerned.
            (2) Calculation.--Upon receipt of all State requests for 
        matching funds submitted pursuant to paragraph (1) for any 
        calendar year, the Board shall calculate the funds necessary to 
        match the level of projected States funds for eligible 
        environmental priorities programs for that calendar year.
            (3) Reduction.--Following the calculation of the amount of 
        matching funds required under paragraph (2) for all States 
        requesting funds for any calendar year, the Board shall 
        communicate that amount to the fiscal agent. Expenditures by 
        the fiscal agent for any calendar year may not exceed the total 
        balance. To the extent the matching funds requested by all such 
        States for a calendar year exceed the total amount received by 
        the fiscal agent during the prior calendar year and available 
        to the fiscal agent at the commencement of the calendar year 
        concerned, the matching funds distributed to each such State 
        shall be reduced pro rata so that the percentage of State funds 
        matched by funds provided under this section is the same for 
        all States requesting funds.
            (4) Use of funds.--The fiscal agent shall distribute 
        matching funds to the States (or to an entity or entities 
        designated by the State to receive payments) to be used for 
        eligible environmental priorities programs designated under 
        subsection (c). All funds received shall be used only for the 
        eligible environmental priorities programs designated by the 
        State.